EXECUTION COPY
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JLA FUNDING CORPORATION III,
Issuer
JLA CREDIT CORPORATION,
Servicer
LTCB TRUST COMPANY,
Trustee
THE BANK OF NEW YORK,
Backup Trustee
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INDENTURE
Dated as of March 30, 1998
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$200,000,000 ASSET-BACKED NOTES
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TABLE OF CONTENTS
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RECITALS OF THE COMPANY .................................................................................. 1
GRANTING CLAUSE .......................................................................................... 1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01. Definitions ...................................................................... 2
SECTION 1.02. Compliance Certificates and Opinions ............................................. 19
SECTION 1.03. Form of Documents Delivered to Trustee ........................................... 20
SECTION 1.04. Acts of Noteholders, etc. ........................................................ 21
SECTION 1.05. Notices .......................................................................... 21
SECTION 1.06. Notice to Noteholders; Waiver .................................................... 22
SECTION 1.07. Table of Contents, Headings etc .................................................. 23
SECTION 1.08. Successors and Assigns ........................................................... 23
SECTION 1.09. Severability Clause .............................................................. 23
SECTION 1.10. Benefits of Indenture ............................................................ 23
SECTION 1.11. Governing Law .................................................................... 23
SECTION 1.12. Legal Holidays ................................................................... 23
SECTION 1.13. Execution in Counterparts ........................................................ 23
SECTION 1.14. Inspection ....................................................................... 23
SECTION 1.15. Survival of Representations and Warranties........................................ 24
SECTION 1.16. Communications with Noteholders .................................................. 24
SECTION 1.17. Statements Required in Officer's Certificate...................................... 24
SECTION 1.18. When Treasury Securities Disregarded.............................................. 25
SECTION 1.19. Rules by Trustee ................................................................. 25
SECTION 1.20. No Adverse Interpretation of Other Agreements..................................... 25
SECTION 1.21. No Recourse Against Others ....................................................... 25
SECTION 1.22. Independence of Covenants ........................................................ 25
SECTION 1.23. Consent to Jurisdiction .......................................................... 25
SECTION 1.24. No Bankruptcy Petition ........................................................... 26
ARTICLE II
THE NOTES
SECTION 2.01. General Provisions................................................................ 26
SECTION 2.02. Issuances During the Note Issuance Period ........................................ 27
SECTION 2.03. Execution, Authentication, Delivery and Dating.................................... 28
SECTION 2.04. Registration, Transfer and Exchange .............................................. 29
SECTION 2.05. Mutilated, Destroyed, Lost and Stolen Notes....................................... 30
SECTION 2.06. Restrictions on Transfer and Exchange of Notes; Compliance with Rule 144A......... 31
SECTION 2.07. Payment of Interest and Principal; Rights Preserved .............................. 32
SECTION 2.08. Persons Deemed Owners............................................................. 32
SECTION 2.09. Cancellation ..................................................................... 32
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SECTION 2.10. Subordination of Subordinated Notes............................................... 32
SECTION 2.11. Noteholder Lists.................................................................. 33
ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS
SECTION 3.01. Accounts; Investments by Trustee.................................................. 33
SECTION 3.02. Collections; Applications......................................................... 35
SECTION 3.03. Additional Deposits............................................................... 36
SECTION 3.04. Daily Deposits.................................................................... 37
SECTION 3.05. Reserve Account................................................................... 37
SECTION 3.06. Payahead Account ................................................................. 37
SECTION 3.07. Collection Account ............................................................... 38
SECTION 3.08. Contract Purchase Account ........................................................ 40
SECTION 3.09. Reports, Notices of Certain Payments ............................................. 41
SECTION 3.10. Trustee May Rely on Certain Information .......................................... 41
ARTICLE IV
CONTRACTS AND EQUIPMENT
SECTION 4.01. Representations and Warranties of the Company .................................... 42
SECTION 4.02. Purchase upon Breach; Sale and Servicing Agreement ............................... 42
SECTION 4.03. Release of Contracts and Equipment Following Substitution or Repurchase........... 43
SECTION 4.04. Release of Contracts and Equipment Upon Final Contract Payment ................... 43
SECTION 4.05. Execution of Documents ........................................................... 43
ARTICLE V
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 5.01. Servicer Events of Default ....................................................... 44
SECTION 5.02. [RESERVED] ....................................................................... 44
SECTION 5.03. Notification to Noteholders ...................................................... 44
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
SECTION 6.01. Events of Default ................................................................ 44
SECTION 6.02. Acceleration of Maturity; Rescission and Annulment.................. ............. 46
SECTION 6.03. Other Remedies ................................................................... 47
SECTION 6.04. Trustee May File Proofs of Claim ................................................. 47
SECTION 6.05. Trustee May Enforce Claims Without Possession of Notes............................ 48
SECTION 6.06. Application of Money Collected ................................................... 48
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SECTION 6.07. Limitation on Suits ............................................................... 49
SECTION 6.08. Unconditional Right of Noteholders to Receive Payment ............................. 49
SECTION 6.09. Restoration of Rights and Remedies ................................................ 50
SECTION 6.10. Rights and Remedies Cumulative .................................................... 50
SECTION 6.11. Delay or Omission Not Waiver ...................................................... 50
SECTION 6.12. Control by Noteholders ............................................................ 50
SECTION 6.13. Waiver of Defaults and Events of Default........................................... 51
SECTION 6.14. Waiver of Stay or Extension Laws................................................... 51
SECTION 6.15. Sale of Trust Property............................................................. 51
SECTION 6.16. Undertaking for Costs.............................................................. 52
ARTICLE VII
THE TRUSTEE
SECTION 7.01. Certain Duties and Responsibilities............................................... 53
SECTION 7.02. Notice of Defaults or Events of Default .......................................... 54
SECTION 7.03. Certain Rights of Trustee ........................................................ 54
SECTION 7.04. Trustee's Disclaimer ............................................................. 55
SECTION 7.05. Money Held in Trust .............................................................. 55
SECTION 7.06. Compensation, Reimbursement, etc . ............................................... 55
SECTION 7.07. Trustee; Eligibility; Disqualification . . . . . . ............................... 56
SECTION 7.08. Resignation and Removal; Appointment of Successor ................................ 57
SECTION 7.09. Acceptance of Appointment by Successor............................................ 58
SECTION 7.10. Merger, Conversion, Consolidation or Succession to Business ...................... 58
SECTION 7.11. Co-trustees and Separate Trustees ................................................ 59
SECTION 7.12. Servicer to Hold Contracts ....................................................... 60
SECTION 7.13. Financing Statements ..............................................................60
SECTION 7.14. Reports by Trustee to Noteholders................................................. 60
SECTION 7.15. Limitation on Duty of Trustee in Respect of Trust Property........................ 61
ARTICLE VIII
COVENANTS
SECTION 8.01. Payment of Principal and Interest ................................................ 62
SECTION 8.02. Maintenance of Office or Agency, Chief Executive Office .......................... 62
SECTION 8.03. Money for Payments to Noteholders to Be Held in Trust ............................ 62
SECTION 8.04. Corporate Existence; etc ......................................................... 63
SECTION 8.05. Protection of Trust Property; Further Assurances ................................. 64
SECTION 8.06. Compliance Certificates .......................................................... 65
SECTION 8.07. Performance of Obligations; Sale and Servicing Agreement.......................... 65
SECTION 8.08. Negative Covenants ............................................................... 66
SECTION 8.09. Information as to the Company ................................................... 67
SECTION 8.10. Payment of Taxes and Other Claims ................................................ 67
SECTION 8.11. Indemnification .................................................................. 68
SECTION 8.12. Use of Proceeds .................................................................. 68
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ARTICLE IX
AMENDMENTS AND SUPPLEMENTAL INDENTURES'
SECTION 9.01. Amendments and Supplemental Indentures ........................................... 68
SECTION 9.02. Execution of Amendments and Supplemental Indentures............................... 69
SECTION 9.03. Effect of Amendments and Supplemental Indentures ................................. 69
SECTION 9.04. Reference in Notes to Amendments and Supplemental Indentures ..................... 69
SECTION 9.05. Revocation and Effect of Consents ................................................ 69
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Optional Redemption; Election to Redeem........................................... 70
SECTION 10.02. Notice to Trustee ................................................................ 70
SECTION 10.03. Notice of Redemption by the Company .............................................. 70
SECTION 10.04. Deposit of the Redemption Price .................................................. 71
SECTION 10.05. Notes Payable on Redemption Date ................................................. 71
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of Indenture .......................................... 71
SECTION 11.02. Application of Trust Money ....................................................... 72
SECTION 11.03. Reinstatement .................................................................... 72
ARTICLE XII
HEDGE AGREEMENTS
SECTION 12.01. Hedge Agreements ................................................................. 73
SECTION 12.02. Fixed Rate Hedge ................................................................. 73
SECTION 12.03. Floating Rate Hedge .............................................................. 73
SECTION 12.04. Substitution of Floating Rate Hedge .............................................. 74
SECTION 12.05. Hedge Provider ................................................................... 74
SECTION 12.06. Rights of Swap Provider .......................................................... 74
SECTION 12.07. Over-Issuance Condition .......................................................... 74
SCHEDULES
Schedule I - Maximum Note Principal Balance
EXHIBITS
Exhibit A-1 - Form of Class A-FL Note
Exhibit A-2 - Form of Class A-FX Note
Exhibit B-1 - Form of Class B-FL Note
Exhibit B-2 - Form of Class B-FX Note
Exhibit C - Form of Transferee Letter
Exhibit D - Form of Issuer Order
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INDENTURE
This INDENTURE dated as of March 30, 1998 (the
"Closing Date"), is by and among JLA FUNDING CORPORATION III, a Delaware
corporation (herein called the "Company"), JLA CREDIT CORPORATION, a Delaware
corporation (herein called "JLACC" or the "Servicer"), LTCB TRUST COMPANY, a New
York trust company, as trustee (herein called the "Trustee") and THE BANK OF NEW
YORK, a New York banking corporation, as backup trustee (herein called the
"Backup Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the issuance, from time to
time during the Note Issuance Period (as defined herein), of up to $200,000,000
in aggregate principal amount of its Asset-Backed Notes (the "Notes"), of
substantially the tenor hereinafter set forth, and to provide therefor the
Company has duly authorized the execution and delivery of this Indenture.
All things necessary to make the Notes, when executed by the
Company and authenticated and delivered hereunder, the valid obligations of the
Company, and to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Notes by the holders thereof, it is mutually covenanted and agreed, for the
benefit of all Noteholders, as follows:
GRANTING CLAUSE
The Company hereby Grants to the Trustee, for the benefit and
security of the Noteholders, the Trustee and (except as to clause (i) of this
paragraph) each Swap Provider as their interests appear herein, all of the
Company's right, title and interest in and to (a) any and all Contracts
(including Substitute Contracts) acquired by the Company at any time or from
time to time on or after the Closing Date (including any Purchase Option
Payments), and all Contract Payments, Retransfer Amounts and other amounts due
or becoming due with respect thereto (other than any payments due pursuant to
the terms of any Contract on or before the related Cut-Off Date for such
Contract), (b) all rights of the Company to or under any guarantees of or
collateral for the Obligor's obligations under any Contract, (c) all moneys from
time to time held by the Trustee pursuant to Section 3.01 pending deposit in one
of the accounts referred to therein, (d) the amounts representing Security
Deposit Offsets applied to unpaid Contract Payments and Purchase Option Payments
due on or to become due after the applicable Cut-Off Dates, any guaranty
relating to a Contract and all moneys from time to time on deposit in the
Lock-Box Account, Collection Account and Reserve Account, including all
investments and income from the investment of such moneys, (e) the Payahead
Account and the right to receive payments of funds deposited therein under the
circumstances described in this Indenture, (f) the Contract Purchase Account and
the rights to receive payment of all funds deposited therein and all rights of
the Company under the Sale and Servicing Agreement, (g) the Contract Files and
all documents therein and all rights of the Company under any program agreement,
purchase agreement, assignment agreement, or other document pursuant to which
the Company acquired an interest in any Contract and the Equipment subject
thereto and any support agreements or guarantees related thereto, and (h) each
Insurance Policy, if any, covering Equipment, including all rights to any
Insurance Proceeds received pursuant to such Insurance Policy after the
applicable Cut-Off Date, (i) all
Hedge Agreements, including all Hedge Proceeds, (j) any credit enhancement with
respect to any Class or Classes of Notes, and (k) all proceeds of any of the
foregoing. The Company also hereby Grants to the Trustee, for the benefit and
security of the Noteholders, the Trustee and each Swap Provider, a security
interest in (A) all of the Company's right, title and interest in and to the
Equipment at any time subject to any Contract and (B) any and all proceeds of
such Equipment.
The Grants of the Trust Property effected by this Indenture
shall include all rights, powers, and options (but none of the obligations) of
the Company with respect thereto, including, without limitation, the immediate
and continuing right to claim for, collect, receive, and give receipts for
Contract Payments in respect of the Contracts and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers, amendments or other agreements, to exercise all rights and options, to
bring judicial proceedings in the name of the Company or otherwise, to terminate
a Contract pursuant to the terms thereof, and generally to do and receive
anything that the Company is or may be entitled to do or receive thereunder or
with respect thereto. Such Grants are made in trust to secure (1) the payment of
all amounts due on the Notes in accordance with their terms, equally and ratably
without prejudice, priority, or distinction between any Note of the same class
and any other Note of the same class by reason of differences in time of
issuance or otherwise, except as otherwise may be provided in this Indenture,
and the payment of all amounts due under each Swap Agreement, if any, including
(without limitation) all Swap Payment Amounts and each Swap Termination Amount,
if any, (ii) the payment of all other sums payable under this Indenture and
(iii) compliance with the provisions of this Indenture with respect to the
Notes.
The Trustee acknowledges such Grants, accepts the trusts
hereunder in accordance with the provisions hereof, and agrees to perform the
duties herein required to the best of its ability and to the end that the
respective interests of the Noteholders and each Swap Provider may be adequately
and effectively protected as hereinafter provided.
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01. Definitions.
(a) General Definitions. Except as otherwise specified or as
the context may otherwise require, the following terms have the meanings set
forth below for all purposes of this Indenture, and the definitions of such
terms are applicable to the singular as well as the plural forms of such terms
and to the masculine as well as to the feminine and neuter genders of such
terms. Any capitalized term used but not defined herein shall have the meaning
given such term in Sale and Servicing Agreement.
"Account" means each of the Collection Account, the Reserve
Account, the Payahead Account and the Contract Purchase Account.
"Act" has the meaning specified in Section 1.04.
"Administrative Fees" means, with respect to any Contract on
any date, any late, prepayment, extension, insurance, property tax or
administrative fees or similar charges paid by the Obligor pursuant to the terms
of such Contract.
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"Affiliate" means, with respect to any specified Person, any
other Person (i) which directly or indirectly controls, or whose directors or
officers directly or indirectly control, or is controlled by, or is under common
control with, such specified Person, (ii) which beneficially owns or holds, or
whose directors or officers beneficially own or hold, 5% or more of any class of
the voting stock (or, in the case of an entity that is not a corporation, 5% of
the equity interest) of such specified Person, or (iii) 5% or more of the voting
stock (or, in the case of an entity that is not a corporation, 5% of the equity
interest) of which is owned or held by such specified Person. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Aggregate Note Principal Balance" means, on any date, the
aggregate Note Principal Balances of all outstanding Notes as of such date.
"Assumed Longest Amortization" has the meaning specified in
Section 12.07.
"Authorized Officer" means, with respect to any matter, any
officer of or other Person representing the Company, the Seller, the Servicer,
the Trustee or a Noteholder as the case may be, who is authorized to act for
that party and named on a list which shall be provided to the Trustee from time
to time by each respective Person.
"Available Payment Amount" has the meaning specified in
Section 3.07(b).
"Available Reserve Amount" shall mean, with respect to any
Monthly Payment Date, the lesser of (a) the amount on deposit in the Reserve
Account (excluding all income from the investment of funds therein) and (b) the
Required Reserve Amount.
"Backup Trustee Fee" means (i) with respect to the Closing
Date, the "Acceptance Fee" plus the "Stand-By Trustee Annual Administration
Fee," each as specified in the Backup Trustee Fee Letter and (ii) on the Monthly
Payment Date occurring in April of each calendar year, the "Stand-By Trustee
Annual Administration Fee" as specified in the Backup Trustee Fee Letter.
"Backup Trustee Fee Letter" means the letter dated February
17, 1998 from The Bank of New York to Daiwa Securities America and JLA Funding
Corporation III setting forth the fees payable to The Bank of New York under
this Indenture.
"Business Day" means any day that is a London Banking Day and
that is not a Saturday, a Sunday or a day on which banking institutions in New
York City or in the city in which the Corporate Trust Office is located are
authorized or required by law or executive order to be closed.
"Capital Stock" means the Company's common stock, $.10 par
value per share.
"Class" means any of the four classes of Notes which may be
issued pursuant to this Indenture, which classes are "Class A-FL," "Class A-FX,"
"Class B-FL," and "Class B-FX."
"Class A-FL Floating Rate Margin" has the meaning specified in
the applicable Note Purchase Agreement.
"Class A-FL Note" means any one of the Floating Rate
Asset-Backed Notes, Class A-FL, authorized by, and authenticated and delivered
under, this Agreement in substantially the form set forth in Exhibit A-1.
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"Class A-FL Note Principal Balance" means, on any date, the
aggregate Note Principal Balances of all outstanding Class A-FL Notes as of such
date.
"Class A-FL Noteholder" means, at any time, any Person in
whose name a Class A-FL Note is registered in the Note Register.
"Class A-FL Percentage" means, as of any date, the quotient
(expressed as a percentage) obtained by dividing (i) the Class A-FL Note
Principal Balance as of such date by (ii) the Aggregate Note Principal Balance
as of such date.
"Class A-FL Rate" means, with respect to the Class A-FL Notes,
the variable per annum rate of interest that for each Interest Period is equal
to the sum of LIBOR plus the Class A-FL Floating Rate Margin.
"Class A-FX Note" means any one of the Fixed Rate Asset-Backed
Notes, Class A-FX, authorized by, and authenticated and delivered under, this
Agreement in substantially the form set forth in Exhibit A-2.
"Class A-FX Note Principal Balance" means, on any date, the
aggregate Note Principal Balances of all outstanding Class A-FX Notes as of such
date.
"Class A-FX Noteholder" means, at any time, any Person in
whose name a Class A-FX Note is registered in the Note Register.
"Class A-FX Percentage" means, as of any date, the quotient
(expressed as a percentage) obtained by dividing (i) the Class A-FX Note
Principal Balance as of such date by (ii) the Aggregate Note Principal Balance
as of such date.
"Class A-FX Rate" means, with respect to any Class A-FX Note,
a per annum fixed rate that is equal to the Fixed Rate Benchmark applicable to
such Class A-FX Note plus any Pricing Premium applicable to such Class A-FX
Note.
"Class B-FL Floating Rate Margin" has the meaning specified in
the applicable Note Purchase Agreement.
"Class B-FL Note" means any one of the Floating Rate
Asset-Backed Notes, Class B-FL, authorized by, and authenticated and delivered
under, this Agreement in substantially, the form set forth in Exhibit B-1.
"Class B-FL Note Principal Balance" means, on any date, the
aggregate Note Principal Balances of all outstanding Class B-FL Notes as of
such date.
"Class B-FL Noteholder" means, at any time, any Person in
whose name a Class B-FL Note is registered in the Note Register.
"Class B-FL Percentage" means, as of any date, the quotient
(expressed as a percentage) obtained by dividing (i) the Class B-FL Note
Principal Balance as of such date by (ii) the Aggregate Note Principal Balance
as of such date.
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"Class B-FL Rate" means, with respect to the Class B-FL
Notes, the variable per annum rate of interest that for each Interest Period is
equal to the sum of LIBOR plus the Class B-FL Floating Rate Margin.
"Class B-FX Note" means any one of the Fixed Rate
Asset-Backed Notes, Class B-FX, authorized by, and authenticated and delivered
under, this Agreement in substantially the form set forth in Exhibit B-2.
"Class B-FX Note Principal Balance" means, on any date, the
aggregate Note Principal Balances of all outstanding Class B-FX Notes as of such
date.
"Class B-FX Noteholder" means, at any time, any Person in
whose name a Class B-FX Note is registered in the Note Register.
"Class B-FX Percentage" means, as of any date, the quotient
(expressed as a percentage) obtained by dividing (a) the Class B-FX Note
Principal Balance as of such date by (ii) the Aggregate Note Principal Balance
as of such date.
"Class B-FX Rate" means, with respect to any Class B-FX Note,
a per annum fixed rate that is equal to the Fixed Rate Benchmark applicable to
such Class B-FX Note Plus any Pricing Premium applicable to such Class B-FX
Note.
"Class Percentage" means (i) with respect to the Class A-FL
Note, the Class A-FL Percentage, (ii) with respect to the Class A-FX Notes, the
Class A-FX Percentage, (ii) with respect to the Class B-FL Notes, the Class B-FL
Percentage, (iv) with respect to the Class B-FX Notes, the Class B-FX
Percentage.
"Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time, or any successor statute thereto, and applicable
regulations of the U.S. Department of the Treasury promulgated thereunder.
"Collection Account" means the segregated account or accounts
by that name established and maintained by the Trustee pursuant to Section 3.01.
"Collection Period" means, as to any Monthly Payment Date, the
calendar month preceding the month in which such Monthly Payment Date occurs.
"Committed Investor" means each purchaser of Notes that is
contractually committed to purchase and fund Notes during the Note Issuance
Period.
"Company" means JLA Funding Corporation III, a corporation
organized and existing under the laws of the State of Delaware, and its
successors.
"Company Order" or "Company Request" means a written order or
request delivered to the Trustee and signed in the name of the Company by an
Authorized Officer.
"Contract" means, for any applicable Contract Purchase Date,
each commercial loan contract or equipment finance lease, secured by commercial
and/or industrial equipment, including any amendment or modification of such
contract and any schedules and promissory notes incorporated therein (including,
without limitation, all rights to receive Contract Payments) sold and
transferred to the Company on such
5
Contract Purchase Date pursuant to the Sale and Servicing Agreement, as
identified in the related Xxxx of Sale.
"Contract Assets" means the Contracts (exclusive of any
Administrative Fees and all amounts due or becoming due under such Contracts
prior to the applicable Cut-Off Dates), together with (i) a perfected security
interest, if any, in the Equipment; (ii) certain rights, remedies and interests
under the Sale and Servicing Agreement, (iii) amounts representing Security
Deposit Offsets applied to unpaid Contract Payments due after the Cut-Off Date;
(iv) any guaranty relating to a Contract; (v) each Insurance Policy, if any,
covering Equipment, including all rights to any Insurance Proceeds received on
or after the applicable Cut-Off Date; (vi) the interest of the Seller in any
funds to be deposited in the Collection Account; (vii) all documents contained
in the Contract Files (of which JLA will retain possession only as agent of the
Company); (viii) all payments and proceeds with respect to the Contracts and the
other Contract Assets (including any Recoveries on the Contracts) held by the
Servicer or any subservicer; and (ix) all proceeds of the foregoing.
"Contract Files" means the documents specified in Section 3.04
of the Sale and Servicing Agreement.
"Contract Payment" means, with respect to each Contract, the
scheduled monthly payment for the Equipment leased to or otherwise financed by
the Obligor under such Contract, consisting of an Interest Component and a
Principal Component.
"Contract Proceeds" means collectively (i) the Contract
Payments, (ii) any Retransfer Amounts paid by the Seller or the Servicer
pursuant to Section 3.03 of the Sale and Servicing Agreement and (iii) any
prepayments in full of a Contract.
"Contract Purchase Account" means the account by that name
established and maintained by the Trustee pursuant to Section 3.01.
"Contract Purchase Date" means each date during the Note
Issuance Period that is designated by the Company to the Seller upon not less
than five Business Days' prior notice to the Seller and the Trustee, and
approved by the Seller, on which additional Contracts are to be purchased by the
Company pursuant to the Sale and Servicing Agreement.
"Contract Rate" of a Contract means the interest rate stated
or implied in such Contract.
"Corporate Trust Office" means the principal office of the
Trustee at which its corporate trust business shall be administered, which
office at the date of execution of this Agreement is located at 000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust Administration, facsimile
(000) 000-0000, or such office at some other address or such other person as the
Trustee may designate from time to time by notice to the Noteholders, the
Company and the Servicer.
"Credit and Collection Policy" means those receivable credit
and collection policies and practices of the Servicer as in effect from time to
time and maintained in compliance with the requirements of the Sale and
Servicing Agreement.
"Current Amount" means with respect to any Contract (other
than a Defaulted Contract, a Retransferred Contract, or a Contract which,
together with amounts, if any, on deposit in the Payahead Account with respect
to such Contract is prepaid in full (a "Prepaid Contract") from and after the
Collection Period in which such Contract became a Defaulted, Retransferred or
Prepaid Contract) for any Collection
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Period and the related Monthly Payment Date, the portion of any Payahead Amount
which is allocated by the Servicer to such Collection Period or any prior
Collection Period and, with respect to a Defaulted Contract, Retransferred
Contract or Prepaid Contract, means the entire Payahead Amount.
"Cut-Off Date" means, as to any Contract, the last day of the
calendar month immediately preceding the applicable Contract Purchase Date of
such Contract, as specified in the related Xxxx of Sale delivered pursuant to
the Sale and Servicing Agreement.
"Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Indenture Event of Default.
"Default Ratio" means the ratio (expressed as an annualized
percentage) computed, as of the last day of each calendar month, by dividing (i)
the aggregate outstanding Principal Balance of all Contracts that were Defaulted
Contracts on such day or that would have been Defaulted Contracts on such day
had they not been written off the books of the Servicer or placed into the
pending writeoff or workout category during such calendar month (in each case
without (for purposes of this definition) giving effect to any withdrawal from
the Trust Property of any Defaulted Contract pursuant to Article IV or the
inclusion in the Trust Property of any Substitute Contract), net of any
Recoveries received by the Servicer with respect to such Contracts during such
calendar month by (ii) the aggregate outstanding Principal Balance of all
Contracts on such day (without (for purposes of this definition) giving effect
to any withdrawal from the Trust Property of any Defaulted Contract pursuant to
Article IV or the inclusion in the Trust Property of any Substitute Contract);
provided, however, that for purposes of the foregoing ratio the Principal
Balance of a Substitute Contract that becomes a Defaulted Contract shall be
included if such Substitute Contract becomes a Defaulted Contract during the
Note Issuance Period but shall not be included if such Substitute Contract
becomes a Defaulted Contract after the Note Issuance Period.
"Defaulted Contract" means, with respect to a Monthly Payment
Date, a Contract (other than a Retransferred Contract) (i) as to which the
Servicer has, in accordance with its customary servicing procedures, during the
Collection Period preceding such Monthly Payment Date, written off any amount to
be paid thereunder as uncollectible or placed into the pending writeoff or
workout category or (ii) as to which any payment remains unpaid for 181 days or
more from the original due date for such payment or (iii) rejected by or on
behalf of the related Obligor in a bankruptcy proceeding.
"Delinquency Ratio" means the ratio (expressed as a
percentage) computed as of the last day of each calendar month by dividing (i)
the aggregate outstanding Principal Balance of all Contracts that were
Delinquent Contracts on such day by (ii) the aggregate outstanding Principal
Balance of all Contracts on such day.
"Delinquent Contract" with respect to any Monthly Payment Date
means any Contract that is not a Defaulted Contract and under which any payment
remains unpaid, as of the last day of the Collection Period preceding such
Monthly Payment Date, for 61 days or more from the original due date for such
payment.
"Deposit Date" means, with respect to any Monthly Payment
Date, the Business Day immediately preceding such related Monthly Payment Date.
"Early Amortization Event" means the occurrence of any
Indenture Event of Default.
"Eligibility Criteria" has the meaning specified in the Sale
and Servicing Agreement.
7
"Eligible Contract" has the meaning specified in Section 3.02
of the Sale and Servicing Agreement.
"Eligible Deposit Account" means either (x) a segregated trust
account in the corporate trust department at a Qualified Institution with
corporate trust powers or (y) a segregated demand deposit account at a Qualified
Institution whose short-term unsecured deposits are rated A-1+ by Standard &
Poor's.
"Eligible Provider" means, with respect to any Hedge
Agreement, a bank, other depository institution or other Person (i) the
long-term debt obligations of which are rated by Standard & Poor's not less
than AA (or such other minimum rating level, if any, as Standard & Poor's
confirms in writing will not result in a reduction or withdrawal of the
then-current rating of any Class of Notes by Standard & Poor's), the rating of
which does not have a "t" highlighter affixed to it and (ii) having the power
and authority to execute, deliver and perform the Hedge Agreement.
"Equipment" means any new or used equipment, together with all
accessions thereto and replacement parts, accessories and repairs with respect
thereto, which is the subject of a Contract.
"Equity Base means, with respect to the Company on any date,
the amount equal to the excess of (i) the Pool Balance of the Contracts owned by
the Company on such date plus the amount on deposit in the Reserve Account
(after giving effect to all required deposits and withdrawals therefrom, if any,
on such date), over (ii) the Aggregate Note Principal Balance on such date.
"Equity Threshold Amount" has the meaning specified in Section
3.07(b)(x).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Excess Collections" means, for any Monthly Payment Date,
the amounts remaining in the Collection Account with respect to the related
Collection Period and available for distribution to or upon the order of the
Company pursuant to Section 3.07(b)(xiii).
"Fixed Rate Benchmark" means, with respect to any Fixed Rate
Note, the interpolated rate for United States Treasury securities having a
maturity comparable to the expected average life of such Note, determined as of
a Fixed Rate Determination Date. Interest on the Fixed Rate Notes will be
computed on the basis of a 360-day year consisting of twelve 30-day months.
"Fixed Rate Determination Date" means a date that is two
Business Days (or such greater number of Business Days, but in no event more
than 10 Business Days, as may be agreed between the Company and a Note purchaser
in any particular instance) prior to the related Note Issuance Date.
"Fixed Rate Hedge" means an interest rate hedge agreement
entered into by the Company with a Hedge Provider in connection with an issuance
of the Fixed Rate Notes, pursuant to which the Company shall not have any
periodic and scheduled payment obligations to the Hedge Provider under the terms
thereof.
"Fixed Rate Notes" means the Class A-FX Notes and the Class
B-FX Notes.
"Floating Rate Cap" means an interest rate hedge agreement
entered into by the Company with a Hedge Provider in connection with an issuance
of the Floating Rate Notes, pursuant to which the Company shall not have any
periodic and scheduled payment obligations to the Hedge Provider under the terms
thereof.
8
"Floating Rate Hedge" means either a Floating Rate Cap or a
Swap Agreement.
"Floating Rate Notes" means the Class A-FL Notes and the Class
B-FL Notes.
"Grant" means to grant, bargain, sell, convey, assign,
transfer, mortgage, pledge, create and grant a security interest in and right of
set-off against, deposit, set over and confirm.
"Hedge Agreement" means any Fixed Rate Hedge or Floating Rate
Hedge.
"Hedge Agreements" means, collectively, all Fixed Rate Xxxxxx
and Floating Rate Xxxxxx.
"Hedge Proceeds" means, with respect to any Hedge Agreement
on any date, all amounts due and owing by the Hedge Provider to the Company on
such date pursuant to the Hedge Agreement (including any amount owing by reason
of a Swap Termination).
"Hedge Provider" means, with respect to any Hedge Agreement,
the counter party providing such Hedge Agreement.
"Indenture" or "this Indenture" means this instrument as
originally executed and as from time to time supplemented or amended pursuant to
the applicable provisions hereof.
"Indenture Event of Default" means an "Event of Default" as
defined in Section 6.01.
"Insurance Policies" means all theft and physical damage and
all other insurance policies covering the Equipment.
"Insurance Proceeds" means proceeds paid pursuant to any
Insurance Policy and amounts (exclusive of rebated premiums or amounts used to
restore or repair the Equipment) paid by any insurer under any other insurance
policy related to the Equipment.
"Interest Component" means, with respect to any Contract on a
Monthly Payment Date, the portion of the Contract Payments thereon received
during the related Collection Period which represents the interest on the
purchase price paid by JLACC for the related Equipment.
"Interest Determination Date" means, with respect to any
Interest Period, the second Business Day preceding the first day of such
Interest Period.
"Interest Period" means, with respect to any Note and any
Monthly Payment Date, the period from and including the previous Monthly Payment
Date (or, in the case of the first Monthly Payment Date for such Note, from and
including the Note Issuance Date for such Note), to but excluding such Monthly
Payment Date; provided, however, that, with respect to calculation of any
accrued Non-Utilization Premium accrued prior to the first Monthly Payment Date,
"Interest Period" means the period from and including the Closing Date to but
excluding the first Monthly Payment Date.
"Issuer Order" means an order substantially in the form of
Exhibit D hereto signed by the president, the treasurer or the secretary of the
Company and delivered to the Trustee by the Company, directing the Trustee to
authenticate and deliver the Notes specified therein in the manner specified
therein.
"JLACC" means JLA Credit Corporation, a Delaware corporation,
and its successors in interest.
9
"LIBOR" means with respect to any Interest Period, the, per
annum rate for deposits in United States dollars for a one-month period which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Interest
Determination Date. If such rate does not appear on Telerate Page 3750 on such
day, the rate will be determined on the basis of the rates at which deposits in
U.S. dollars are offered by the Reference Banks at approximately 11:00 a.m.,
London time, on the related Interest Determination Date to prime banks in the
London interbank market for a period of one month. The Trustee will request the
principal London office of each of the Reference Banks to provide a quotation
of its rate. If at least two such quotations are provided, the rate for that
Interest Determination Date will be the arithmetic mean of the quotations. If
fewer then two quotations are provided as requested, the rate for that Interest
Determination Date will be the arithmetic mean of the rates rounded upwards to
the nearest 1/16 of 1.0% (one per cent) quoted by two or more major banks in
New York City, selected by the Trustee in its sole discretion, at approximately
11:00 a.m., New York City time, on that Interest Determination Date for loans in
U.S. dollars to leading banks in London interbank market for a period of one
month. "Reference Banks" shall mean Barclays Bank PLC, Citibank, N.A., The Chase
Manhattan Bank and Deutsche Bank AG.
"Lien" means a security interest, lien, charge, pledge or
encumbrance of any kind.
"Lock-Box Account" means the account for JLA Funding
Corporation III designated as such, established and maintained pursuant to the
Lock Box Agreement and in accordance with Section 5.01 of the Sale and Servicing
Agreement.
"Lock-Box Agreement" means the master lock-box agreement,
dated as of March 30, 1998, by and among the Purchaser, Bank of America National
Trust and Savings Association, as Lock Box Bank, and the Trustee, pursuant to
which the Lock-Box Account is established and maintained.
"Lock-Box Bank" means, as of any date, the bank or trust
company at which the Lock-Box Account is established and maintained as of such
date.
"London Banking Day" means any Business Day on which dealings
in deposits in United States dollars are transacted in the London interbank
market.
"Monthly Interest" means, for any Monthly Payment Date, (i)
with respect to each Class A-FL Note, the product of (a) the product of (1) the
actual number of days in each Interest Period for such Note divided by 360 times
(2) the Class A-FL Rate for the related Interest Period for such, Note and (b)
the Class A-FL Note Principal Balance, (ii) with respect to each Class A-FX
Note, the product of (a) the applicable Class A-FX Rate, (b) the Class A-FX Note
Principal Balance and (c) 1/12, (iii) with respect to each Class B-FL Note, the
product of (a) the product of (1) the actual number of days in each Interest
Period for such Note divided by 360 times (2) the Class B-FL Rate for the
related Interest Period for such Note times (b) the Class B-FL Note Principal
Balance of the Class B-FL Note and (iv) with respect to each Class B-FX Note,
the product of (a) the applicable Class B-FX Rate, (b) the Class B-FX Note
Principal Balance and (c) 1/12.
"Monthly Payment Date" means the 16th day of each month (or if
such date is not a Business Day, the next succeeding Business Day), commencing
in the calendar month immediately succeeding the first Note Issuance Date, and
ending with the Scheduled Final Payment Date.
"Monthly Principal" means for any Monthly Payment Date, an
amount equal to the relevant Class Percentage multiplied by the sum of the
following amounts: (i) to the extent received during the related Collection
Period, the Principal Component of all Contract Payments other than any amounts
received
10
with respect to future Collection Periods, which will be deposited in the
Payahead Account and will constitute Contract Payments in the Collection Period
such payments are scheduled to be received; (ii) with respect to any Contract
that first became a Defaulted Contract during the related Collection Period, the
Principal Balance of such Defaulted Contract; (iii) to the extent received
during the related Collection Period, the Principal Component of any Retransfer
Amounts; (iv) to the extent received during the related Collection Period, the
Principal Component of any prepayments in full of a Contract; and (v) to the
extent received during the related Collection Period, any Insurance Proceeds.
"Monthly Servicer Report" means a report in the form attached
as Exhibit B to the Sale and Servicing Agreement.
"Non-Utilization Premium" means the fee set forth in the
applicable Note Purchase Agreement, which shall commence accruing as of the
Closing Date and shall be payable pursuant to the Note Purchase Agreement to
each Committed Investor of Floating Rate Notes on each Monthly Payment Date
during (and immediately following) the Note Issuance Period in an amount that is
equal to the product of (i) the Non-Utilization Premium Rate (computed on the
basis of the actual number of days elapsed during the related Interest Period
and a 360-day year) and (ii) the daily weighted average principal amount of
Notes the purchases of which are committed to but not yet funded by the
Committed Investors; provided however, that the calculation of any
Non-Utilization Premium shall be subject to any additional conditions and
restrictions, if any, set forth in the related Note Purchase Agreement.
"Non-Utilization Premium Rate" means 0.10% per annum.
"Note Amortization Period" means the period from (and
including) the date that is the earlier of (i) the first day following the end
of the Note Issuance Period and (ii) the date (if any) on which any Early
Amortization Event or Indenture Event of Default shall have occurred, to (and
including) the Scheduled Final Payment Date.
"Note Issuance Date" means each Business Day (not more
frequently than one per month) on which any Notes are issued during the Note
Issuance Period.
"Note Issuance Period" means the period commencing on the
Closing Date and ending (unless sooner terminated pursuant to Section 6.02) on
the date that is the earlier of (i) January 16, 1999 and (ii) the date (if any)
on which the aggregate outstanding principal amount of the Notes equals
$200,000,000.
"Note Principal Balance" means, with respect to any Note or
Class of Notes, (i) as of any date prior to the first Monthly Payment Date, the
outstanding principal balance of the applicable Class of Notes on the initial
Note Issuance Date, (ii) as of any other date prior to the Scheduled Final
Payment Date (or other final payment date on the Notes), the outstanding
principal balance of the applicable Class of Notes as of the preceding Monthly
Payment Date, and (iii) as of the Scheduled Final Payment Date (or other final
payment date on the Notes), the outstanding principal balance of such Class of
Notes on such date; provided that the term "Note Principal Balance" as of any
Monthly Payment Date on which a payment in respect of principal has been made,
shall mean the outstanding principal balance of the applicable Class of Notes on
such date after giving effect to any distributions of Monthly Principal and
overdue Monthly Principal on such date.
"Note Purchase Agreement" means any Note Purchase Agreement
among JLACC, the Company and each initial Noteholder, executed in connection
with the issuance of the Notes.
11
"Note Register" has the meaning specified in Section 2.04.
"Note Registrar" has the meaning specified in Section 2.04.
"Noteholder" means, at any time, any Person in whose name a
Note is registered in the Note Register except that, solely for the purpose of
giving any consent, request or waiver pursuant to this Indenture, the interest
evidenced by any Note registered in the name of the Company or any other obligor
on the Notes, the Servicer, any subservicer or any Affiliate of any of them
shall not be deemed a Noteholder for the purpose of determining whether the
requisite percentage necessary to effect any such consent, request or waiver
shall have been obtained. The Trustee may request, obtain and conclusively rely
upon a certificate of the Servicer or the Company to determine whether Notes are
registered to the Company, the Servicer, any subservicer or any other Person
controlling, controlled by, or under common control with any of them.
"Notes" means the Class A-FL Notes, the Class A-FX Notes, the
Class B-FL Notes and the Class B-FX Notes.
"Obligor" means each obligor under a Contract and its
permitted assigns.
"Officer's Certificate" means a certificate signed by the
chairman of the board, the president, any vice chairman of the board, or a vice
president of the Company, the Seller or the Servicer, as appropriate, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel (who
may be in-house counsel for the Seller or Servicer), acceptable in form and
substance to the Trustee.
"Over-Issuance Condition" has the meaning specified in
Section 12.07
"Overdue Monthly Interest" means any interest on a Note which
was to have been distributed, and was not distributed, on a Monthly Payment
Date.
"Overdue Monthly Principal" means any principal on a Note
which was to have been distributed, and was not distributed, on a Monthly
Payment Date.
"Payahead Account" means the account by that name established
and maintained pursuant to Section 3.01.
"Payahead Amount" means, with respect to any Contract, the
amount of any payment by an Obligor in excess of the Current Amount.
"Payahead Draw Amount" means, with respect to any Monthly
Payment Date, the aggregate of a11 Current Amounts for all Obligors.
"Permitted Investments" means, at any time, any one or more of
the following obligations and securities:
(a) obligations of the United States or any agency thereof,
provided such obligations are guaranteed as to the timely payment of
principal and interest by the full faith and credit of the United
States;
12
(b) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia then assigned a
rating of AAA or A-1 + by Standard & Poor's or such lower rating (as
approved in writing by Standard & Poor's) as will not result in the
qualification, downgrading or withdrawal of the rating then assigned to
the Notes of any Class by Standard & Poor's;
(c) interests in any money market fund (including funds for
which the Trustee or the Backup Trustee or any of their respective
affiliates serve as investment manager or advisor) which invests
exclusively in any of the obligations described in (a) or (b) above and
which at the date of acquisition of the interests in such funds has a
rating of AAAm-G by Standard & Poor's or is otherwise approved in
writing by Standard & Poor's;
(d) commercial paper which is then rated A-1 + by Standard &
Poor's or such lower rating (as approved in writing by Standard &
Poor's) as will not result in the qualification, downgrading or
withdrawal of the rating then assigned to the Notes of any Class by
Standard & Poor's;
(e) certificates of deposit, demand or time deposits, federal
funds or banker's acceptances issued by any depository institution or
trust company incorporated under the laws of the United States or of
any state thereof or incorporated under the laws of a foreign
jurisdiction with a branch or agency located in the United States and
subject to supervision and examination by federal or state banking
authorities, provided that the short-term unsecured deposit obligations
of such depository institution or trust company have a rating of A-1 +
by Standard & Poor's, or such lower rating category (as approved in
writing by Standard & Poor's) as will not result in the qualification,
downgrading or withdrawal of the rating then assigned to the Notes of
any Class by Standard & Poor's;
(f) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation (as approved in writing by
Standard & Poor's) as will not result in the qualification, downgrading
or withdrawal of the rating then assigned to the Notes of any Class by
Standard & Poor's;
(g) repurchase obligations with respect to any security
described in clauses (a) or (b) hereof or any security issued or
guaranteed by the Federal National Mortgage Association or any agency
or instrumentality of the United States which is backed by the full
faith and credit of the United States, in either case entered into with
a federal agency or a depository institution or trust company (acting
as principal) described in clause (e) above;
(h) interests in any open-end or closed-end management type
investment company or investment trust (x) registered under the
Investment Company Act of 1940, the portfolio of which is limited to
the obligations of, or guaranteed by, the United States and to
agreements to repurchase such obligations, which agreements, with
respect to principal and interest, are at least 100% collateralized by
such obligations marked to market on a daily basis and the investment
company or investment trust shall take delivery of such obligations
either directly or through an independent custodian designated in
accordance with the Investment Company Act of 1940, and (y) as will not
result in the qualification, downgrading or withdrawal of the rating
then assigned to the Notes of any Class by Standard & Poor's (as
approved in writing by Standard & Poor's); and
13
(i) such other investments (a) where the short-term unsecured
debt of the obligor is rated A-1+ by Standard & Poor's or (b) which
are acceptable to Standard & Poor's (as approved in writing by Standard
& Poor's) and as will not result in the qualification, downgrading or
withdrawal of the rating assigned to the Notes of any Class by Standard
& Poor's,
Notwithstanding the foregoing, Permitted Investments shall not include (i)
"stripped securities" and investments which contractually may return less than
the purchase price therefor, and (ii) instruments with a purchase price greater
than par if such instrument may be prepaid or called at a price less than its
purchase price prior to its stated maturity.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, trust (including any beneficiary thereof), unincorporated organization,
or government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Plan" has the meaning specified in Section 2.04(f).
"Pool Balance" as of any date means the aggregate Principal
Balance of the Contracts as of such date.
"Predecessor Notes" means, with respect to any particular
Note, every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under Section 2.05 in lieu of a lost, destroyed
or stolen Note (or a mutilated Note surrendered to the Trustee) shall be deemed
to evidence the same debt as the lost, destroyed or stolen Note (or a mutilated
Note surrendered to the Trustee).
"Pricing Premium" means (i) 0.00% with respect to any Fixed
Rate Notes issued from the Closing Date through June 30, 1998, (ii) 0.05% with
respect to any Fixed Rate Notes issued from July 1, 1998 through September 30,
1998 and (iii) 0.10% with respect to any Fixed Rate Notes issued from October 1,
1998 through the last day of the Note Issuance Period; provided however, that
the determination of any Pricing Premium shall be subject to any additional
conditions and restrictions, if any, set forth in the related Note Purchase
Agreement.
"Principal Balance" means, with respect to any Contract on any
day, (i) the unamortized portion of the purchase price paid by JLACC for the
related Equipment, and amounts paid by JLACC in respect of taxes and origination
costs and fees, as of the related Cut-Off Date, minus (ii) the sum of the
following with respect to such Contract: (a) the Principal Component of all
Contract Payments since the applicable Cut-Off Date received by the Servicer and
deposited in the Collection Account other than the Principal Component of any
payments received with respect to future Collection Periods, which will be
deposited in the Payahead Account and will constitute Contract Payments in the
Collection Period such payments are scheduled to be received; and (b) the
proceeds of any Insurance Policies; provided, however, that for any day
following the Monthly Payment Date on which the proceeds of a prepayment in full
of a Contract or a Retransferred Contract are payable to Noteholders under the
definition of Monthly Principal or a Defaulted Contract first becomes a
Defaulted Contract, the Principal Balance of any such Contract shall be zero.
"Principal Component" shall mean, with respect to Contract
Payments, that portion of such payments which represents the amortization of the
purchase price paid by JLACC for the related Equipment.
14
"Purchase Option Payment" shall mean, with respect to any,
Contract, any payment (received on or after the applicable Cut-Off Date for such
Contract) made by an Obligor to purchase the Equipment subject to the Contract.
"Qualified Institution" means a depository institution
organized under the laws of the United States or any state thereof and whose
deposits are insured by the Federal Deposit Insurance Corporation.
"Rate" means (i) with respect to the Class A-FL Notes, the
Class A-FL Rate, (ii) with respect to the Class A-FX Notes, the Class A-FX Rate,
(iii) with respect to the Class B-FL Notes, the Class B-FL Rate or (iv) with
respect to the Class B-FX Notes, the Class B-FX Rate.
"Rating Agency" means Standard & Poor's and any successor
thereto.
"Ratings Effect" means a reduction or withdrawal of a rating
on a Class of Notes by the Rating Agency.
"Record Date" means, with respect to any Monthly Payment
Date, the last day of the month preceding the month in which such Monthly
Payment Date occurs (or in the case of the initial Monthly Payment Date, the
initial Note Issuance Date).
"Recoveries" means, with respect to any Defaulted Contract,
all payments and proceeds received by the Servicer or the Company in the
process of recovery, repossession and liquidation of the related Equipment,
other than the amounts reimbursed to the Servicer for all reasonable expenses
related to such process.
"Redemption Date" means, with respect to any redemption of
the Notes, a Monthly Payment Date fixed as the date on which the Notes are to be
redeemed at the option of the Company pursuant to Section 10.01.
"Redemption Price" means, with respect to any Note, and as of
any Redemption Date fixed by the Company, the Note Principal Balance of such
Note, together with interest accrued thereon to but not including such
Redemption Date at the applicable Rate.
"Redemption Record Date" means, with respect to any
redemption of the Notes, a date fixed pursuant to Section 10.01.
"Required Deposit Rating" shall be a short-term unsecured
deposit rating of A-1+ by Standard & Poor's.
"Required Reserve Amount" means, with respect to any Monthly
Payment Date, an amount equal to the product of (i) the Required Reserve
Percentage and (ii) the aggregate Note Principal Balance of all Notes (after
giving effect to all payments of principal on such Monthly Payment Date).
"Required Reserve Percentage" means one percent (1%);
provided that if during the Note Amortization Period the Weighted Average Yield
of the Contracts in the Trust Property for any Collection Period is less than
9.25% per annum, then on the related Monthly Payment Date and on each Monthly
Payment Date thereafter until the Weighted Average Yield of the Contracts in the
Trust Property for a related Collection Period is equal to or greater than 9.25%
per annum, "Required Reserve Percentage" shall instead mean the sum of (i) one
and one-half percent (1.5%) plus (ii) ten percent (10%) minus the Weighted
Average Yield of the Contracts in the Trust Property for the related Collection
Period.
15
"Required Support Percentage" means, on any date, the
greater of (i) 10.5% and (ii) the amount (expressed as a percentage) that is the
quotient obtained by dividing (x) the aggregate Principal Balance of all
Contracts having Obligors that are the ten largest Obligors (by aggregate,
Contract Balance) represented by the Pool Balance, by (y) the Pool Balance, all
computed as of such date.
"Replacement Date" has the meaning specified in Section 7.07.
"Reserve Account" means the segregated account by that name
established and maintained by the Trustee pursuant to Section 3.01.
"Reserve Account Surplus" means, as of any Monthly Payment
Date, the amount, if any, by which the amount on deposit in the Reserve Account,
including all net income from the investment of funds therein and after taking
into account any deposits and any payments pursuant to Sections 3.05 and 3.07
hereof on such Monthly Payment Date, exceeds the Required Reserve Amount for the
next Monthly Payment Date.
"Reserve Draw Amount" has the meaning specified in Section
3.05(b).
"Residual Amount" means, with respect to any Contract, the
amount (if any) received in respect of such Contract and the related Equipment
(through Obligor payments, Recoveries, Purchase Option Payments or otherwise)
that is in excess of the amount required for the payment of all amounts owing
under such Contract.
"Responsible Officer" means, when used with respect to the
Trustee, (a) any officer within the corporate trust department of the Trustee
including any vice president, assistant vice president, secretary, assistant
secretary, treasurer, assistant treasurer, trust officer or any other officer of
the Trustee who customarily performs functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject and (b) who shall have direct
responsibility for the administration of this Agreement.
"Retransfer Amount" means, with respect to any Contract, the
price equal to the Principal Balance of such Contract (prior to any amendment,
modification or exchange) on the first day of the month following the date on
which the reacquisition obligation with respect to such Contract arose, plus
accrued interest on the Principal Balance of such Contract, at a rate equal to
1/12 of the sum of (i) the weighted average Rate of all outstanding
Subordinated Notes and (ii) the Servicing Fee Rate, to the date that is the date
of payment of such Retransfer Amount, less the amount, if any, on deposit in the
Payahead Account with respect to such Contract.
"Retransferred Contract" means, for any Collection Period, a
Contract which has been retransferred to the Seller or Servicer as of the last
day of such Collection Period pursuant to Section 4.02 hereof or Section 3.03 or
4.06 of the Sale and Servicing Agreement.
"Retransferred Contract Receivables" means, for any
Collection Period, the Contract receivables under Contracts which have been
retransferred to the Seller or Servicer as of the last day of such Collection
Period pursuant to Section 3.03 or 4.06 of the Sale and Servicing Agreement.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement, dated as of the date hereof, between the Company and JLACC, pursuant
to which the Company will purchase Contracts and certain related Trust Property
from JLACC on one or more Contract Purchase Dates, and JLACC
16
agrees to act as Servicer for all purchased Contracts, as the same may be
amended or modified from time to time in accordance with the provisions hereof
and thereof.
"Schedule of Contracts" means, as of any date, the schedule
of Contracts included in the Trust Property on such date. As of each Note
Issuance Date, a Schedule of Contracts in respect of the Contracts purchased on
such date shall set forth, as to each such Contract as of the related Cut-Off
Date, among other things, (a) its identifying number and the name of the related
Obligor; (b) its date of origination; (c) the remaining term of the Contract;
(d) the stated termination date of the Contract; (e) the original Principal
Balance at inception of the Contract; (f) the Principal Balance as of the
applicable Cut-Off Date; (g) the location where the related Contract File is
kept, if other than 00000 Xxxxxxx Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx or 000 Xxxx
000xx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000; (h) the Contract Rate; and
(i) the scheduled monthly Contract Payment.
"Scheduled Final Payment Date" means, with respect to the
Notes, the Monthly Payment Date occurring in the ninety-sixth (96th) calendar
month following the expiration (or earlier termination) of the Note Issuance
Period (subject to earlier final payment of the Notes pursuant to the terms of
this Indenture).
"Securities Act" means the Securities Act of 1933, as
amended.
"Security Deposit Offset" shall mean the application by JLACC
to one or more Contract Payments under a Defaulted Contract of the amount
required to be deposited with JLACC by the Obligor as security for payment of
amounts due under such Contract.
"Seller" means JLACC in its capacity as Seller of Contracts
under the Sale and Servicing Agreement, and each successor to JLACC (in the same
capacity) pursuant to Section 6.02 thereof.
"Senior Note Principal Balance" means, on any date, the
aggregate Note Principal Balances of all outstanding Senior Notes as of such
date.
"Senior Note Percentage" means, as of any date, the quotient
(expressed as a percentage) obtained by dividing (i) the Senior Note Principal
Balance as of such date by (ii) the Aggregate Note Principal Balance as of such
date.
"Senior Noteholder" means, at any time, any Person in whose
name a Senior Note is registered in the Note Register.
"Senior Notes" means, collectively, the Class A-FL Notes and
the Class A-FX Notes.
"Servicer" means JLACC, as the servicer of the Contracts
under the Sale and Servicing Agreement, and each successor to JLACC (in the same
capacity) pursuant to the Sale and Servicing Agreement.
"Servicer Event of Default" means "Event of Default" as
defined in Section 8.01 of the Sale and Servicing Agreement.
"Servicer Notice" means a written request, instruction or
other notice delivered to the Trustee and signed in the name of the Servicer by
a Servicing Officer.
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"Servicing Fee" with regard to a Collection Period means the
fee payable to the Servicer for services rendered during such Collection Period,
determined pursuant to Section 4.07 of the Sale and Servicing Agreement.
"Servicing Officer" means any officer of the Servicer or any
subservicer involved in, or responsible for, the administration and servicing of
the Contracts whose name appears on a list of servicing officers annexed to an
Officer's Certificate furnished to the Trustee on the date of execution of this
Agreement by the Servicer, or as such list may from time to time be amended.
"Standard & Poor's" means Standard & Poor's, a division of
XxXxxx-Xxxx, and its successors in interest.
"Subordinated Note Percentage" means, as of any date, the
quotient (expressed as a percentage) obtained by dividing (i) the Subordinated
Note Principal Balance as of such date by (ii) the Aggregate Note Principal
Balance as of such date.
"Subordinated Note Principal Balance" means, on any date, the
aggregate Note Principal Balances of all outstanding Subordinated Notes as of
such date.
"Subordinated Noteholder" means, at any time, any Person in
whose name a Subordinated Note is registered in the Note Register.
"Subordinated Notes" means, collectively, the Class B-FL
Notes and the Class B-FX Notes.
"Substitute Contract" has the meaning specified in Section
3.08 of the Sale and Servicing Agreement.
"Swap Agreement" means any interest rate swap agreement (or
other similar hedge agreement) entered into by the Company with a Hedge Provider
in connection with the issuance of the Floating Rate Notes, pursuant to which
the Company shall have periodic or other scheduled payment obligations to the
Hedge Provider under the terms thereof.
"Swap Payment Amount" means, with respect to any Monthly
Payment Date, the amount due and owing by the Company to any Swap Provider on
such date pursuant to the related Swap Agreement.
"Swap Provider" means any Hedge Provider providing a Swap
Agreement.
"Swap Termination" means any early termination of a Swap
Agreement pursuant to the terms thereof.
"Swap Termination Amount" means the amount (if any) due and
owing to any Swap Provider in connection with a Swap Termination.
"Three-Month Average Default Ratio" as of the last day of any
calendar month means the arithmetic average of the Default Ratios as of the last
day of such calendar month and the two immediately preceding calendar months.
"Three-Month Average Delinquency Ratio" as of the last day of
any calendar month means the arithmetic average of the Delinquency Ratios as of
the last day of such calendar month and the two immediately preceding calendar
months.
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"Trust Property" means all Contracts, Equipment, Accounts,
money, instruments, accounts, general intangibles, contract rights and other
assets and property that is described in the Granting Clause of this Indenture
and subject to or intended to be subject to the lien of this Indenture,
including all proceeds thereof.
"Trustee" shall have the meaning given such term in Section
7.07 hereof.
"Trustee Fee" means (i) if the Trustee is LTCB Trust Company,
the fee payable to the Trustee hereunder in an amount that, for each Monthly
Payment Date (and for the date on which the final payment of principal is made),
is equal to the sum of (A) the wire transfer fees and reimbursable out-of-pocket
expenses referred to in the Trustee Fee Letter plus (B) the amount that is the
product of (x) the rate per annum specified in the Trustee Fee Letter and (y)
the Aggregate Note Principal Balance as of the previous Monthly Payment Date
(after giving effect to all payments of principal on such date) (or, in the case
of the first Monthly Payment Date, as of the Initial Note Issuance Date) or (ii)
if the Trustee is The Bank of New York, the "Trustee Annual Administration Fee"
specified in the Backup Trustee Fee Letter payable in advance on the Replacement
Date and, annually, on each Monthly Payment Date occurring on or immediately
before each anniversary of the Replacement Date.
"Trustee Fee Letter" means the letter dated February 19, 1998
from LTCB Trust Company to JLA Credit Corporation setting forth the fees payable
to LTCB Trust Company under this Indenture.
"Trustee's Certificate" means a statement completed and
executed by a Responsible Officer pursuant to Section 7.14.
"Trustee Fee Cap" means $40,000 per annum.
"Uniform Commercial Code" or "UCC" means, with respect to a
particular jurisdiction, the Uniform Commercial Code, as in effect from time to
time in such jurisdiction, or any successor statute, thereto.
"Weighted Average Yield" means, with respect to the Contracts
included in the Trust Property and any Collection Period, the weighted average
yield of such Contracts during such period (expressed as an annualized
percentage).
SECTION 1.02. Compliance Certificates and Opinions.
Subject to the terms hereof, upon any application or request
by the Company to the Trustee, to take any action under any provision of this
Indenture, other than any request expressly provided herein that (i) the Trustee
authenticate the Notes specified in such request, (ii) the Trustee invest moneys
in the Collection Account, the Reserve Account, the Payahead Account or the
Contract Purchase Account pursuant to the written directions specified in such
request, or (iii) the Trustee pay moneys due and payable to the Company
hereunder to the Company's assignee specified in such request, the Trustee may
require the Company to furnish to the Trustee an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such requested action as to
which other evidence of satisfaction of the conditions precedent thereto is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
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SECTION 1.03. Form of Documents Delivered to Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion of,
only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person may certify or give an opinion as to such matters in one or several
documents.
Any Officer's Certificate delivered to the Trustee may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such Officer's Certificate or opinion and any Opinion of Counsel
may be based, insofar as it, relates to factual matters, upon a certificate or
opinion of, or representations by, an Authorized Officer or Authorized Officers
of the Company as to such factual matters unless such Authorized Officer or
Counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous. Any Opinion of Counsel may be based on the written opinion of other
counsel, in which event such Opinion of Counsel shall be accompanied by a copy
of such other counsel's opinion and shall include a statement to the effect that
such counsel believes that such counsel and the Trustee may reasonably rely upon
the opinion of such other counsel.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Wherever in this Indenture, in connection with any
application or certificate or report to the Trustee, it is provided that the
Company shall deliver any document as a condition of the granting of such
application, or as evidence of compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Company to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Section
7.01(a)(ii).
Whenever in this Indenture it is provided that the absence of
the occurrence and continuation of a Default or an Indenture Event of Default
or a Servicer Event of Default or an Early Amortization Event is a condition
precedent to the taking of any action by the Trustee at the request or direction
of the Company, then, notwithstanding that the satisfaction of such condition is
a condition precedent to the Company's right to make such request or direction,
the Trustee shall be protected in acting in accordance with such request or
direction if it has not been notified in writing, prior to the date of such
request or direction, of the occurrence and continuation of such Default or
Indenture Event of Default or Servicer Event of Default or Early Amortization
Event. For all purposes of this Indenture, the Trustee shall not be deemed to
have knowledge of any Default or Indenture Event of Default (other than an
Indenture Event of Default of the kind described in clause (i) of Section 6.01)
or Servicer Event of Default or Early Amortization Event unless a Responsible
Officer of the Trustee shall have been notified in writing thereof by the
Company, the Servicer or any Noteholder.
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SECTION 1.04. Acts of Noteholders, etc.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing (pursuant to appointments previously delivered to the
Trustee, in form and substance reasonably satisfactory to the Trustee); and,
except as herein otherwise expressly, provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee, with
a copy (or if expressly required an original) to the Company and the Servicer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 7.01) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section
1.04.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the holder of any Note shall bind every future
holder of the same Note and the holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Note.
(d) By accepting the Notes issued pursuant to this Indenture,
each Noteholder irrevocably appoints the Trustee hereunder as the special
attorney-in-fact for such Noteholder vested with full power on behalf of such
Noteholder to effect and enforce the rights of such Noteholder pursuant hereto
and the provisions hereof for the benefit of such Noteholder.
(e) Each holder of a Note, by acceptance of its Note, agrees
to treat the Note as indebtedness of the Company for federal income tax
purposes.
SECTION 1.05. Notices.
Any request, demand, authorization, direction, notice,
consent, waiver, Act of Noteholders, or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with, the
Trustee, the Company or the Servicer shall be sufficient for every purpose
hereunder if in writing and telexed, telecopied (with a copy of the telexed or
telecopied material sent to the recipient by overnight courier on the day of the
telex or telecopy), mailed, first-class postage prepaid, or hand delivered.
Unless otherwise specifically provided herein, no such request, demand,
authorization, direction, notice, consent, waiver, Act of Noteholders or other
document shall be effective until received and any provision hereof requiring
the making, giving, furnishing, or filing of the same on any date shall be
interpreted as requiring the same to be sent or delivered in such fashion that
it will be received on such
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date. Any such request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders, or other document shall be sent or delivered to the
following addresses:
(i) if to the Trustee, at the Corporate Trust Office,
Attention: Corporate Trust Administration (Number for telecopy:
(000) 000-0000).
(ii) if to the Backup Trustee, at 000 Xxxxxxx Xxxxxx,
Xxxxx 00 Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust-Asset
Backed Finance Unit.
(iii) if to the Company, at 00000 Xxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000 (Number for telecopy:
(000) 000-0000), or at any other address previously furnished in
writing to the Trustee and the Servicer by the Company;
(iv) if to the Seller, at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx
000, Xxx Xxxxx, Xxxxxxxxxx 00000 (Number for telecopy: (510)
327-0225), or at any other address previously furnished in
writing to the Trustee, the Company and the Servicer by the
Seller;
(v) if to the Servicer, at 00000 Xxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000 (Number for telecopy:
(000) 000-0000), or at any other address previously furnished in
writing to the Trustee, the Company and the Seller by the
Servicer; and
(vi) if to Standard & Poor's, at 00 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, Attention: Surveillance Group (Number for
telecopy: (000) 000-0000), or at any such other address
previously furnished in writing to the Trustee, the Company and
the Seller by Standard & Poor's.
SECTION 1.06. Notice to Noteholders; Waiver.
(a) Where this Indenture provides for notice to Noteholders
of any event, or the mailing of any report to Noteholders, such notice or report
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first class postage prepaid, or sent by private courier or
confirmed telecopy (with a copy of the telecopied material sent to the recipient
by overnight courier on the day of the telecopy) to each Noteholder affected by
such event or to whom such report is required to be mailed, at its address as it
appears in the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Noteholders is mailed,
neither the failure to mail such notice or report, nor any defect in any notice
or report so mailed, to any particular Noteholder shall affect the sufficiency
of such notice or report with respect to other Noteholders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Noteholders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
(b) In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to mail or
send notice to Noteholders, in accordance with Section 1.06(a), of any event or
any report to Noteholders when such notice or report is required to be delivered
pursuant to any provision of this Indenture, then such notification or delivery
as shall be made with the approval of the Trustee shall constitute a sufficient
notification for every purpose hereunder.
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SECTION 1.07. Table of Contents, Headings, etc.
The Table of Contents and the Article and Section headings
are for convenience only and shall in no way modify or restrict any of the terms
or provisions hereof.
SECTION 1.08. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
or the Trustee shall bind its respective successors and permitted assigns,
whether so expressed or not.
SECTION 1.09. Severability Clause.
In case any provision in this Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.10. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any separate trustee or co-trustee appointed under Section
7.11 and the Noteholders, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 1.11. Governing Law.
This Indenture and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the conflict of laws principles thereof.
SECTION 1.12. Legal Holidays.
In any case where any Monthly Payment Date or the Scheduled
Final Payment Date or any other date on which principal of or interest on any
Note is proposed to be paid shall not be a Business Day, then (notwithstanding
any other provision of this Indenture or of the Notes) such payment shall be
made on the next succeeding Business Day and no interest shall accrue for the
intervening period.
SECTION 1.13. Execution in Counterparts.
This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 1.14. Inspection.
The Company agrees that, on reasonable prior notice, it will
permit the representatives of the Trustee or any Noteholder, during the
Company's normal business hours, to examine all of the books of account,
records, reports and other papers of the Company, to make copies thereof and
extracts therefrom, to cause such books to be audited by independent accountants
selected by the Company and reasonably acceptable to the Trustee or such
Noteholder, as the case may be, and to discuss its affairs, finances and
accounts with its officers, employees and independent accountants with an
Authorized Officer of the Company present (and by this provision the Company
hereby authorizes its accountants to discuss
23
with such representatives such affairs, finances and accounts), all at such
reasonable times and as often as may be reasonably requested for the purpose of
reviewing or evaluating the financial condition or affairs of the Company or the
performance of and compliance with the covenants and undertakings of the Company
in this Indenture, the Sale and Servicing Agreement, the Hedge Agreements, the
Note Purchase Agreement or any of the other documents referred to herein or
therein. Subject entirely to the priorities of payment specified in Section
3.07(b) and 6.06 hereof and to the availability of funds to the Company in
accordance therewith, any expense incident to the exercise by the Trustee or any
Noteholder of any right set forth in this Section 1.14 during the continuance
of any Default or Indenture Event of Default (including, without limitation, any
Servicer Event of Default) shall be borne by the Company, but any expense due to
the exercise of a right by any such Person prior to the occurrence of a Default
or Indenture Event of Default (including, without limitation, any Servicer Event
of Default) shall be borne (subject to the other provisions of this Indenture)
by such Person; provided, however, that any insufficiency of funds available to
the Company for the payment of any amount otherwise owing by the Company under
this Section will not represent a claim against the Company.
SECTION 1.15. Survival of Representations and Warranties.
The representations, warranties and certifications of the
Company made in this Indenture or in any certificate or other writing delivered
by the Company pursuant hereto shall survive the Closing Date and the
authentication and delivery of the Notes issued on each Note Issuance Date
hereunder, but unless explicitly provided to the contrary, such representations,
warranties and certifications are made only as of the Closing Date and each
such Note Issuance Date.
SECTION 1.16. Communications with Noteholders
Within 15 days' receipt of written request from the
Servicer, the Trustee, acting as Note Registrar, will provide to the Servicer a
list of the names and addresses of all Noteholders of record as of the most
recent Record Date. The Trustee, upon written request by one or more Noteholders
aggregating not less than 25% of the Aggregate Note Principal Balance, will
obtain from the Note Registrar (if other than the Trustee) and afford such
Noteholders access during business hours to the current list of Noteholders for
purposes of communicating with other Noteholders with respect to their rights
under the Indenture (provided such Noteholders (i) state that they wish to
communicate with other Noteholders with respect to their rights under the
Indenture or under the Notes and (ii) provide the Trustee and Servicer with a
copy of the proposed communication).
SECTION 1.17. Statements Required in Officer's Certificate.
Each Officer's Certificate with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that the Person making such certificate
has read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained
in such certificate are based;
(iii) a statement that, in the opinion of such Person,
he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
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(iv) a statement as to whether or not, in the opinion of
such Person, such covenant or condition has been complied with.
SECTION 1.18. When Treasury Securities Disregarded.
In determining whether the Noteholders of the required Note
Principal Balance of Notes have concurred in any request, waiver or consent
pursuant to this Indenture, Notes registered in the name of the Company or any
other obligor on the Notes or registered in the name of the Servicer or any
subservicer or in the name of any Affiliate of the Company, such obligor or such
Servicer or subservicer shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded. Notes so owned
which have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Notes and that the pledgee is not the Company or any other
obligor upon the Notes or the Servicer or any subservicer or any Affiliate of
the Company, such obligor, such Servicer or such subservicer.
SECTION 1.19. Rules by Trustee.
The Trustee may make reasonable rules for action by or at a
meeting of Noteholders.
SECTION 1.20. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or an Affiliate of the Company.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 1.21. No Recourse Against Others.
All liability described in the Notes of any director,
officer, employee or shareholder, as such, of the Company is waived and
released.
SECTION 1.22. Independence of Covenants.
All covenants and agreements in this Indenture shall be
given independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant shall
not avoid the occurrence of a Default or an Indenture Event of Default or an
Early Amortization Event if such action is taken or condition exists.
SECTION 1.23. Consent to Jurisdiction.
Each of the Company, the Servicer and the Trustee irrevocably
submits to the non-exclusive jurisdiction of any New York State or Federal court
sitting in the Borough of Manhattan in the City of New York over any suit,
action or proceeding arising out of or relating to this Indenture or any Note.
Each of the Company, the Servicer and the Trustee irrevocably waives, to the
fullest extent permitted by applicable law, any objection which it may have to
the laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in any inconvenient forum. Each of the Company, the
Servicer and the Trustee agrees that final judgment in any such suit, action or
proceeding brought in such a court shall be conclusive
25
and binding upon the Company, the Servicer or the Trustee, as the case may
be, and may be enforced in the courts of New York (or any other courts to the
jurisdiction of which the Company, the Servicer or the Trustee, as the case may
be, is subject) by a suit upon such judgment, provided that service of process
is effected upon the Company as permitted by law; provided, however, that each
of the Company, the Servicer and the Trustee does not waive, and the foregoing
provisions of this sentence shall not constitute or be deemed to constitute a
waiver of, (i) any right to appeal any such judgment, to seek any stay or
otherwise to seek reconsideration or review of any such judgment or (ii) any
stay of execution or levy pending an appeal from, or a suit, action or
proceeding for reconsideration or review of, any such judgment. The Company
hereby irrevocably designates and appoints Corporation Service Company (the
"Agent"), which on the date hereof has an office located at 00 Xxxxx Xxxxxx,
Xxxxxx, Xxx Xxxx 00000, Tel.: (000) 000-0000, Fax: (000) 000-0000, as its
authorized agent upon whom process may be served in any such suit or proceeding.
The Company further agrees that, to the extent permitted by applicable law,
service of process upon the Agent shall be deemed in every respect effective
service of process upon the Company in any such suit or proceeding, The Servicer
hereby irrevocably designates and appoints the Agent, as its authorized agent
upon whom process may be served in any suit or proceeding related to the
transactions contemplated by this Indenture. The Servicer further agrees that,
to the extent permitted by applicable law, service of process upon the Agent
shall be deemed in every respect effective service of process upon the Servicer
in any suit or proceeding related to the transactions contemplated by this
Indenture.
SECTION 1.24. No Bankruptcy Petition.
Notwithstanding any provision contained herein, each of the
Noteholders and the Trustee covenants and agrees that, prior to the date which
is one year and one day after the payment in full of all Notes issued by the
Company and payment of all other amounts due under this Indenture, it will not
institute against, or join any other Person in instituting against, the Company
any bankruptcy, reorganization, receivership, arrangement, insolvency or
liquidation proceedings, or other similar proceedings under any federal or state
bankruptcy or similar law. The Company represents, warrants, and covenants that
it has obtained, and will in the future obtain, a no-petition agreement from
each and every Person that enters into any agreement of any kind with the
Company. Nothing in this Section shall constitute a waiver by the Trustee or any
Noteholder of any right to receive amounts owing to it under this Indenture or
(in the case of the Noteholders) the Notes. This Section 1.24 shall survive the
termination of this Indenture.
ARTICLE II
THE NOTES
SECTION 2.01. General Provisions.
(a) The Notes issuable hereunder shall be issued as
registered Notes without coupons in four Classes on such date or dates during
the Note Issuance Period as from time to time shall be authorized by the
Company. The Notes of all Classes shall be known and entitled generally as the
"JLA Funding Corporation III Asset-Backed Notes." The Notes of each Class shall
have further particular designation as specified below, and each Note issued
hereunder shall bear upon the face thereof the designation so specified for the
Class to which it belongs. Subject to the provisions of Section 2.02, the
Trustee shall be authorized and directed, upon the delivery by the Company of an
Issuer Order, to authenticate and deliver Notes to be issued hereunder on each
Note Issuance Date in classes entitled "Floating Rate Asset-Backed Notes, Class
A-FL," "Fixed Rate Asset-Backed Notes, Class A-FX," "Floating Rate Asset-Backed
Notes, Class B-FL and/or "Fixed Rate Asset-Backed Notes, Class B-FX,"
respectively. The forms of the Class A-FL Notes, the Class A-FX Notes, the Class
B-FL Notes and the Class B-FX Notes, and of
26
the Trustee's certificate of authentication, shall be in substantially the
forms set forth in Exhibits X-0, X-0, X-0 and B-2 hereto, respectively, with
such appropriate insertions, omissions, substitutions, and other variations as
are required or permitted by this Indenture. The aggregate principal amount of
Notes which may be authenticated and delivered under this Indenture is limited
to $200,000,000 (of which the aggregate principal amount of the Senior Notes
shall be not greater than $188,421,000 and the aggregate principal amount of the
Subordinated Notes shall not be greater than $11,579,000, except for Notes
authenticated and delivered upon registration of, transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 2.04, 2.05, or 9.04. The
Notes shall be issuable only in registered form and only in denominations of at
least $1,000,000 and integral multiples of $1,000 in excess thereof, provided
that the foregoing shall not restrict or prevent the transfer or issuance in
accordance with Section 2.04 or 2,05 of any Note having a remaining outstanding
principal amount of less than $1,000,000.
(b) During the Note Issuance Period no principal will be due
and payable on the Notes. During the Note Amortization Period, the aggregate
amount of principal due and payable on each Class of Notes on each Monthly
Payment Date shall be equal to the Monthly Principal for such Class. Except (i)
for optional redemption pursuant to Section 10.01, (ii) for Retransfer Amounts,
or (iii) as otherwise provided in Section 6.02, no part of the principal of any
Note shall be paid prior to the Monthly Payment Date on which such principal is
due in accordance with the preceding provisions of this Section 2.01(b). Unless
earlier paid, the entire unpaid Senior Note Principal Balance and the entire
unpaid Subordinated Note Principal Balance will be due and payable on the
Scheduled Final Payment Date.
(c) Interest on each Note shall accrue from the Note Issuance
Date of such Note. Interest on the Note Principal Balance of each Note shall be
payable on each Monthly Payment Date, commencing on the Monthly Payment Date
occurring in the calendar month immediately succeeding the month in which the
applicable Note Issuance Date occurs, to Noteholders of record as of the
applicable Record Date. Interest on the Notes of each Class is required to be
paid to Noteholders in an amount equal to the Monthly Interest for such Class of
Notes. Interest on the Floating Rate Notes will be computed on the basis of the
actual number of days elapsed during the related Interest Period and a 360-day
year. Interest on the Fixed Rate Notes will be computed on the basis of a
360-day year consisting of twelve 30-day months.
(d) All payments made with respect to any Note shall be made
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts and shall be
applied in the manner specified in Article III.
(e) All Notes of the same Class issued under this Indenture
shall be in all respects equally and ratably entitled to the benefits hereof and
thereof without preference, priority or distinction on account of the actual
time or times of authentication and delivery, all in accordance with the terms
and provisions of this Indenture. Payments of principal and interest on Notes of
the same Class shall be made pro rata among all outstanding Notes of such Class,
without preference or priority of any kind. The Notes are limited recourse
obligations of the Company. The sole source of payment of the Notes will be the
assets comprising the Trust Property.
SECTION 2.02. Issuances During the Note Issuance Period.
The Company may issue Notes on any one or more Business Days
during the Note Issuance Period (not more frequently than once per month), in
each case subject to the provisions of this Indenture, including the following
conditions precedent:
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(i) at the time of such issuance (and after giving
effect thereto) (a) no Default, Indenture Event of Default,
Servicer Event of Default or Early Amortization Event shall have
occurred or be continuing, (b) the Equity Base is not less than
5% of the Pool Balance and the sum of the Equity Base and the
Subordinated Note Principal Balance is not less than the Required
Support Percentage of the Pool Balance (in each case both before
and after giving effect to any purchase of Contracts to occur on
such date), and (c) the aggregate Note Principal Balance is not
greater than 95% of the Company's total assets and the aggregate
Senior Note Principal Balance is not greater than 89.5% of the
Company's total assets;
(ii) the net proceeds of such issuance of Notes are
applied by the Company on such Note Issuance Date to the purchase
of additional Eligible Contracts pursuant to the Sale and
Servicing Agreement at an aggregate purchase price that is not
greater than the aggregate Principal Balance (excluding any
Residual Amounts) of all Contracts purchased, and all conditions
precedent to the purchase of Contracts and the related Contract
Assets pursuant to Article II of the Sale and Servicing Agreement
have been satisfied and complied with as of the applicable
Contract Purchase Date (provided that no failure of compliance
thereunder shall affect the validity of any Note issued
hereunder);
(iii) such additional Contracts (and all related
Contract Assets) are included in the Trust Property and subject
to a perfected security interest in favor of the Trustee;
(iv) the Company is in compliance with its obligations
under the Note Purchase Agreement and under each Hedge Agreement;
(v) the Company shall deliver or cause to be delivered
to the Trustee a written collateral assignment of the Contracts
and related Contract Assets to be included in the Trust Property
on such date, duly executed and completed, together with an
attached duly prepared Schedule of Contracts identifying all such
Contracts;
(vi) to the extent necessary under applicable law, the
Company shall record and file a UCC financing statement in the
office of the Secretary of State of California and in each other
jurisdiction, if any, executed by and naming the Company as
debtor and the Trustee as secured party and identifying the
Contracts and the related Contract Assets as collateral. The
Company shall deliver a file-stamped copy, or other evidence of
filing, of each such financing statement to the Trustee;
(vii) the Company will take or cause to be taken such
actions as are necessary so that computer files maintained for
the Contracts and related Contract Assets included in the Trust
Property are appropriately adjusted to indicate that such
Contracts and related Contract Assets have been assigned and
pledged to the Trustee pursuant to the Indenture; and
(viii) the Company shall deliver to the Trustee an
Issuer Order, which shall include a statement that each of the
conditions precedent to the issuance of Notes on such date that
are set forth in this Section 2.02 has been satisfied.
SECTION 2.03. Execution, Authentication, Delivery and Dating.
(a) The Notes shall be manually executed on behalf of the
Company by its President or one of its Vice Presidents.
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(b) Any Note bearing the signature of an individual who was
at the time of execution thereof a proper officer of the Company shall bind the
Company, notwithstanding that such individual ceases to hold such office prior
to the authentication and delivery of such Note or did not hold such office at
the date of such Note.
(c) No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Note a certificate of authentication substantially in the form provided for
herein, executed by the Trustee by manual signature, and such certificate upon
any Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder. Each Note shall be dated the
date of its authentication.
(d) The Notes may from time to time be executed by the
Company and delivered to the Trustee for authentication together with a Company
Request to the Trustee directing the authentication and delivery of such Notes
and thereupon the same shall be authenticated and delivered by the Trustee in
accordance with such Company Request.
SECTION 2.04. Registration, Transfer and Exchange.
(a) The Company shall cause to be kept at the Corporate Trust
Office a register (the "Note Register") in which, subject to such reasonable
regulations as the Trustee may prescribe, the Company shall provide for the
registration of Notes and of transfers of Notes. The Trustee is hereby
appointed initial "Note Registrar", and the Trustee hereby accepts such
appointment, for the purpose of registering Notes and transfers of Notes as
herein provided. In the event that, subsequent to the initial Note Issuance
Date, the Trustee is unable to act as Note Registrar, the Company shall appoint
a bank or trust company acceptable to the Company, agreeing to act in accordance
with the provisions of this Indenture applicable to it, to act as successor Note
Registrar under this Indenture pursuant to a note registrar agreement
acceptable to the Company. In performing such duties any such Note Registrar
shall have the same benefit of the provisions of this Indenture as the Trustee
itself would have if it were performing such duties.
(b) Subject to compliance with the provisions of Section
2.06, upon surrender for registration of transfer of any Note at the office of
the Company designated pursuant to Section 8.02 for such purpose, the Company
shall execute and the Trustee upon a Company Request shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes of the same class, of any authorized denominations and of a like
aggregate original principal amount. The Trustee shall make a notation on any
such new Note of the amount of principal, if any, that has been paid on such
Note and shall make the appropriate entries in the Note Register.
(c) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
(d) Every Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed, by the holder thereof
or his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of
transfer or exchange of Notes but the Company or the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer, or exchange of Notes,
but this provision shall not apply to any exchange pursuant to Section 9.04 not
involving any transfer.
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(f) Each prospective initial Noteholder acquiring a Note,
each prospective transferee acquiring a Note and each prospective owner of a
beneficial interest in Notes acquiring such beneficial interest (the prospective
initial Noteholder, the prospective transferee and the prospective beneficial
owner, each, a "Prospective Owner"), shall, in the event of such an acquisition,
be deemed to have represented, in any case in which the Notes are acquired with
the assets of an "employee benefit plan" within the meaning of Section 3(3) of
ERISA or a "plan" within the meaning of Section 4975(e)(1) of the Code (any such
plan or employee benefit plan, a "Plan") and for any period for which a Note is
(or is deemed for ERISA purposes to be) assets of a Plan, that the acquisition
or transfer, and subsequent holding, will not constitute, cause or otherwise
give rise to a transaction described in Section 406 of ERISA or Section 4975 of
the Code for which a statutory or administrative exemption is unavailable.
SECTION 2.05. Mutilated, Destroyed, Lost and Stolen Notes.
(a) If any mutilated Note is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a replacement Note of the same class, of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the destruction, loss or theft of
any Note (provided that any Noteholder's affidavit shall be sufficient evidence
for such purpose) and (ii) such security or indemnity as may be required by them
to save each of them and any agent of either of them harmless, then, in the
absence of actual notice to the Company or the Trustee that such Note has been
acquired by a bona fide purchaser, the Company shall execute and upon a Company
Request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Note, a replacement Note of the same class, of like
tenor and principal amount and bearing a number not contemporaneously
outstanding. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, the Company and the Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Company or the Trustee in connection therewith.
(c) In case the final installment of principal on any such
mutilated, destroyed, lost or stolen Note has become or will at the next Monthly
Payment Date become due and payable, the Company in its discretion may, instead
of issuing a replacement Note, pay such Note.
(d) Upon the issuance of any replacement Note under this
Section, the Company or the Trustee may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed as a result of
the issuance of such replacement Note plus reasonable costs and expenses of the
Trustee in connection therewith.
(e) Every replacement Note issued pursuant to this Section in
lieu of any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Notes of the same class, duly issued hereunder.
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(f) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment Of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Restrictions on Transfer and Exchange of Notes;
Compliance with Rule 144A.
(a) The Notes have not been registered under the Securities
Act or any state securities law. Each Noteholder agrees to offer, sell or
otherwise convey a Note or any interest therein only (A) to (i) a Person it
reasonably believes is a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act in a transaction meeting the requirements of Rule 144A
or (ii) an institutional investor that is an "accredited investor" as defined
under paragraph (1), (2), (3) or (7) of Rule 501(a) under the Securities Act (an
"Institutional Accredited Investor") pursuant to another available exemption
from the registration requirements of the Securities Act and any applicable
state securities laws and (B) if the Trustee and the Company receive a
Transferee Letter substantially in the form of Exhibit C hereto from the
transferee, in form satisfactory to the Trustee and the Company, with respect to
any transfer made pursuant to Rule 144A or such other exemption. The Notes shall
bear legends to the effect set forth in the forms of Class A-FL Note, Class A-FX
Note, Class B-FL Note and Class B-FX Note attached as Exhibit X-0, Xxxxxxx X-0,
Xxxxxxx X-0 and Exhibit B-2, respectively. In the event that the, Transferee
Letter from an Institutional Accredited Investor, provided pursuant to this
Section 2.06 does not, in the reasonable judgment of the Company or the Trustee,
on its face establish the availability of an exemption under the Securities Act
and of continued exemption of the Company under the Investment Company Act, the
Company or the Trustee may require an Opinion of Counsel (which may be internal
counsel) reasonably satisfactory to the Seller or the Trustee, as the case may
be, that such transfer may be made pursuant to an exemption from the Securities
Act; provided, however, that no Opinion of Counsel shall be required in
connection with a direct transfer by an initial Noteholder to an Affiliate or a
wholly-owned subsidiary or affiliated asset-backed commercial paper conduit so
long as such Affiliate, wholly-owned subsidiary or affiliated asset-backed
commercial paper conduit is a qualified institutional buyer or an Institutional
Accredited Investor and (in each case) delivers a Transferee Letter to the
Trustee and the Company. Any such Opinion Of Counsel shall be obtained at the
expense of the prospective transferor or transferee, and not at the expense of
the Company, the Seller, the Servicer or the Trustee, and shall be delivered to
the Company and the Trustee prior to any such transfer. Neither the Company nor
the Trustee is obligated to register the Notes under the Securities Act or to
take any other action not otherwise required under this Agreement to permit the
transfer of Notes without registration. In addition, no transfer of any Note or
any interest therein may be made if the Company or the Trustee reasonably
believes that as a result of such transfer, the Notes would be "beneficially
owned," as such term is defined in the Investment Company Act of 1940, as
amended, by more than one hundred Persons.
(b) For so long as the Notes are "restricted securities"
within the meaning of Rule 144A of the Securities Act, the Seller, the Trustee
and the Servicer agree to cooperate with each other to provide to any Noteholder
and to any prospective purchaser of Notes designated by such a Noteholder, upon
the request of such Noteholder or prospective purchaser, any information that is
required to be provided to such Noteholder or prospective purchaser to satisfy
Rule 144A(d)(4) (or any successor provision) under the Securities Act. Any
recipient of information provided pursuant to this Section 2.06(b) shall agree
that such information shall not be disclosed or used for any purpose other than
the evaluation of the Notes by the prospective purchaser. The Servicer will be
responsible for the physical delivery of the information requested pursuant to
this Section 2.06(b).
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SECTION 2.07. Payment of Interest and Principal; Rights
Preserved.
(a) Any installment of interest or principal payable on any
Note that is paid or duly provided for by the Company on the applicable Monthly
Payment Date shall be paid to the Person in whose name such Note was registered
at the close of business on the Record Date for such Monthly Payment Date by
wire transfer of immediately available funds to the account and number specified
in the Note Register on such Record Date for such Person or, if no such account
or number is so specified, then by check mailed to such Person's address as it
appears in the Note Register on such Record Date.
(b) All reductions in the principal amount of a Note effected
by payments of installments of principal made on any Monthly Payment Date shall
be binding upon all holders of such Note and of any Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. All payments on the Notes
shall be paid without any requirement of presentment but each holder of any Note
shall be deemed to agree, by its acceptance of the same, to surrender such Note
at the Corporate Trust Office for the payment of the final installment of
principal of and interest on such Note.
SECTION 2.08. Persons Deemed Owners.
Prior to due presentment of a Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Noteholder as the owner of such Note for the purpose of receiving
payment of principal of and interest on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
SECTION 2.09. Cancellation.
All Notes surrendered for registration of transfer or
exchange or final payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes held by the Trustee
may be disposed of in the normal course of its business or as directed by a
Company Order; provided, however, that the Trustee shall not be required to
destroy such cancelled Notes.
SECTION 2.10. Subordination of Subordinated Notes.
(a) Notwithstanding the provisions of this Indenture and any
Subordinated Note, each Noteholder of a Subordinated Note, by his acceptance
thereof, covenants and agrees that the rights of the Noteholder of such
Subordinated Notes in and claims to the assets of the Company, the Subordinated
Notes and the Trust Property shall be subordinate and junior in right of
payment, in accordance with the provisions of this Section and to the extent and
in the manner set forth in Sections 3.07(b) and 6.06 and the other provisions of
this Indenture, to the prior payment in full of the Senior Notes (subject to the
provisions of such Sections). For purposes of this Indenture, the Senior Notes
shall not be deemed to have been paid in full until the holders or owners of the
Senior Notes shall have received full payment of the Senior Notes in cash.
32
(b) Each Noteholder of a Subordinated Note, by its acceptance
thereof, authorizes and directs the Company and the Trustee to take such actions
on his behalf as may be necessary or appropriate to effectuate, as between the
holders of the Senior Notes and the Subordinated Notes, the subordination as
provided in this Section 2.10 and appoints the Company as its attorney-in-fact
for any and all such purposes.
(c) In the event that, notwithstanding paragraphs (a) and (b)
of this Section, any Noteholder shall have received any payment or distribution
in respect of a Subordinated Note contrary to such provisions, then such payment
or distribution shall be received and held in trust for the holders or owners of
the Senior Notes and shall be paid over or delivered to the Trustee on behalf of
the Senior Noteholders or their representatives, as the case may be, for
application to (in the case of cash) or as collateral for (in the case of
non-cash property or securities) the payment or prepayment of the Senior Notes
after giving effect to any concurrent payment or distribution to the holders or
owners of such Senior Notes.
SECTION 2.11. Noteholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Noteholders. If the Trustee is not the Note Registrar, the Company
or other obligor, if any, shall furnish to the Trustee at least five Business
Days prior to each Record Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Noteholders.
ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS
SECTION 3.01. Accounts; Investments by Trustee.
(a) The Servicer, pursuant to the Lock-Box Agreement, shall
maintain the Lock-Box Account, which account shall be maintained as an Eligible
Deposit Account, in the name of the Company for the benefit of the Trustee and
the Noteholders. The Lock-Box Account shall be an account maintained with Bank
of America or such other Lock-Box Bank as the Servicer may select; provided,
however, that the Servicer shall give the Trustee at least 30 days' prior
written notice of any change in the location of the Lock-Box Account, shall not
make any such change without the consent of the Trustee and shall give at least
60 days' prior written notice of the new location to each Obligor.
In addition, on or before the Closing Date, the Trustee shall
establish, in the name of the Trustee for the benefit of the Noteholders as
provided in this Indenture, the following accounts, which accounts shall be
segregated trust accounts maintained at the Corporate Trust Office:
(i) Collection Account;
(ii) Reserve Account;
(iii) Payahead Account; and
(iv) Contract Purchase Account,
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Each of such Accounts shall be established and maintained as an Eligible Deposit
Account. Subject to the further provisions of this Section 3.01(a), the Trustee
shall, upon receipt or upon transfer from another account, as the case may be,
deposit into such Accounts all amounts received by it which are required to be
deposited therein in accordance with the provisions of this Indenture. All such
amounts and all investments made with such amounts, including all income and
other gain from such investments, shall be held by the Trustee in such Accounts
as part of the Trust Property as herein provided, subject to withdrawal by the
Trustee in accordance with, and for the purposes specified in the provisions of,
this Indenture.
(b) The Trustee shall hold in trust but shall not be required
to deposit in any Account specified in Section 3.01(a) any payment received by
it until such time as the Trustee shall have identified to its reasonable
satisfaction the nature of such payment and, on the basis thereof, the proper
account or accounts into which such payment is to be deposited. In determining
into which of the Accounts, if any, any amount received by the Trustee is to be
deposited, the Trustee may conclusively rely (in the absence of gross negligence
or wilful misconduct on the part of the Trustee) on the written instructions of
the Servicer. Unless otherwise advised in writing by the Servicer, the Trustee
shall assume that any amount remitted to it is to be deposited into the
Collection Account pursuant to Section 3.02. The Trustee may establish from time
to time such deadline or deadlines as it shall determine are reasonable or
necessary in the administration of the Trust Property after which all amounts
received or collected by the Trustee on any day shall not be deemed to have been
received or collected until the next succeeding Business Day.
(c) The Trustee shall have no right of set-off with respect
to the Lock-Box Account, the Collection Account, the Reserve Account, the
Payahead Account or the Contract Purchase Account, or any investment therein,
whether or not commingled. If at any time any Account ceases to be an Eligible
Deposit Account, as determined by the Servicer, the Trustee shall within 10
Business Days after receipt of written notice from the Servicer (or such longer
period, not to exceed 30 calendar days, as to which Standard & Poor's may
consent) establish a new Account meeting the conditions specified in this
Section, and shall transfer any cash and/or any investments in the old Account
to such new Account.
(d) So long as no Default or Indenture Event of Default shall
have occurred and be continuing, the amounts In the Collection Account, the
Reserve Account, the Payahead Account and the Contract Purchase Account shall be
invested and reinvested by the Trustee pursuant to a Servicer Notice in one or
more Permitted Investments. Subject to the restrictions on the maturity of
investments set forth in Section 3.01(f), each such Servicer Notice may
authorize the Trustee to make the specific Permitted Investments set forth
therein, to make Permitted Investments from time to time consistent with the
general instructions set forth therein, or to make specific Permitted
Investments pursuant to instructions received in writing or by telegraph or
facsimile transmission from the employees or agents of the Servicer identified
therein, in each case in such amounts as such Servicer Notice shall specify. The
Company agrees to report as income for financial reporting and tax purposes (to
the extent reportable) all investment earnings on amounts in the Collection
Account, the Reserve Account, the Payahead Account and the Contract Purchase
Account.
(e) In the event that either (i) the Servicer shall have
failed to give investment directions to the Trustee by 12:00 P.M. New York time
on any Business Day on which there may be uninvested cash or (ii) a Default or
Indenture Event of Default shall have occurred and be continuing, then the
Trustee shall invest and reinvest the funds then in the Collection Account, the
Reserve Account, the Payahead Account and the Contract Purchase Account, as the
case may be, to the fullest extent practicable in one or more Permitted
Investments as specified in paragraph (c) of the definition of Permitted
Investments. All investments made by the Trustee shall mature no later than the
maturity date therefor permitted by Section 3.01(f).
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(f) No investment of any amount held in the Collection
Account, the Reserve Account, the Payahead Account or the Contract Purchase
Account shall mature later than the second Business Day immediately preceding
the Monthly Payment Date which is scheduled to occur immediately following the
date of investment. All income or other gains from the investment of moneys
deposited in the Collection Account, the Reserve Account, the Payahead Account
and the Contract Purchase Account shall be deposited by the Trustee in such
account immediately upon receipt. Any net loss of principal (determined on a
month by month basis) resulting from such investment of amounts in the
Collection Account, the Reserve Account, the Payahead Account or the Contract
Purchase Account shall be charged to the respective Account.
(g) Any investment of any funds in the Collection Account,
the Reserve Account, the Payahead Account or the Contract Purchase Account, and
any sale of any investment held in such accounts, shall be made under the
following terms and conditions:
(i) each such investment shall be made in the name of
the Trustee (in its capacity as such) for the benefit of the
Noteholders or in the name of a nominee of the Trustee;
(ii) the investment earnings of any investment shall be
credited to the Account for which such investment was made;
(iii) any certificate or other instrument evidencing
such investment shall be delivered directly to the Trustee or its
agent and the Trustee shall have sole possession of such
instrument and all income on such investment; and
(iv) the proceeds of any sale of an investment shall be
remitted by the purchaser thereof directly to the Trustee for
deposit in the Account in which such investment was held.
(h) If any amounts are needed for disbursement from the
Collection Account, the Reserve Account, the Payahead Account or the Contract
Purchase Account, and sufficient uninvested funds are not collected and
available therein to make such disbursement, in the absence of a Servicer Order
for the liquidation of investments held therein in an amount sufficient to
provide the required funds, the Trustee shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in such Account
selected by it in its absolute discretion and shall not be liable for any loss
resulting therefrom.
(i) The Trustee shall not in any way be held liable by reason
of any insufficiency in the Collection Account, the Reserve Account, the
Payahead Account or the Contract Purchase Account, resulting from losses on
investments (including from liquidations thereof) made in accordance with the
provisions of this Section 3.01 (but the institution serving as Trustee shall at
all times remain liable for its own debt obligations, if any, constituting part
of such investments). The Trustee shall not be liable for any investment (or
liquidation) made by it in accordance with this Section 3.01 on the grounds
that it could have made a more favorable investment (or liquidation).
SECTION 3.02. Collections; Applications.
(a) If (i)(A) the Servicer's short-term unsecured debt has
been rated A-1 or higher by Standard & Poor's or (B) a Servicer letter of credit
issued by an institution rated A-1 or higher by Standard & Poor's has been
obtained by the Servicer and (ii) the Trustee has received confirmation from the
Rating Agency that there would not be a reduction in the then-current rating of
the Senior Notes or of the Subordinated Notes, the Servicer shall on or before
each Deposit Date remit, or cause the Lock-Box Bank to remit, to the Collection
Account all payments by the Obligors on the Contracts (including any Purchase
Option Payment, any prepayments in full of a Contract and any applicable
Payahead Amounts
35
related to such Collection Period), other than Servicing Fees (to the extent
that sufficient funds are allocated and available therefor as provided in
Section 3.07) and Administrative Fees (which may be retained by the Servicer),
and all Recoveries and Insurance Proceeds, as collected during the Collection
Period.
(b) Unless the conditions in Section 3.02(a) have been
satisfied, or if at any time a Servicer Event of Default has occurred and is
continuing and no successor Servicer has been appointed, the Servicer shall
remit or cause the Lock-Box Bank to remit the amounts referred to in Section
3.02(a) into the Collection Account (including any such amounts then held by the
Servicer) as soon as practicable, but in no event later than the close of
business on the second Business Day after receipt thereof. As of the date
hereof, the provisions of this paragraph (b) are applicable and the Servicer
will notify the Company, and the Company will thereupon promptly notify the
Trustee, if paragraph (a) of this Section becomes applicable at any time after
the date hereof.
(c) Notwithstanding the provisions of subsections (a) and (b)
hereof the Servicer may retain, or will be entitled to be reimbursed from,
amounts otherwise payable into, or on deposit in, the Collection Account with
respect to a Collection Period, amounts previously deposited in the Collection
Account but later determined to have resulted from mistaken deposits or payments
due before the applicable Cut-Off Date or postings or checks returned for
insufficient funds (provided that the Servicer accounts for such amounts in the
Monthly Servicer Report for the related Collection Period). The amount to be
retained or reimbursed hereunder shall not be included in funds available for
distribution with respect to the related Monthly Payment Date. The Trustee may
fully rely upon notice as to such matters from the Company or the Servicer.
(d) In those cases where a subservicer is servicing a
Contract pursuant to a subservicing agreement and where required by the Rating
Agency to maintain the ratings on the Notes, the Servicer shall cause the
subservicer to remit to the Collection Account as soon as practicable, but in no
event later than the close of business on the second Business Day after receipt
thereof by the subservicer (but subject to the provisions of Section 3.02(c) of
this Agreement), the amounts referred to in Section 3.02(a) in respect of a
Contract being serviced by the subservicer.
(e) Pending their deposit into the Collection Account, all
collections, Insurance Proceeds, Recoveries and Liquidation Proceeds shall be
segregated by book-entry or similar form of identification on the Servicer's
books and records and identified as the property of the Company subject to the
lien of the Trustee.
(f) If at any time the Company shall receive any payment on
or in respect of any Contract, Equipment (including any Residual Amount) or
other Trust Property, it shall hold such payment in trust for the benefit of the
Trustee and the Noteholders, shall segregate such payment from the other
property of the Company, and shall, within two Business Days of receipt, deliver
such payment in the form received (with any necessary endorsement) by it to the
Trustee,
(g) All Hedge Proceeds received by the Issuer and/or the
Trustee shall be deposited into the Collection Account.
SECTION 3.03. Additional Deposits.
The Company shall be required to deposit into the Collection
Account the aggregate Retransfer Amount pursuant to Section 4.02 in accordance
with the provisions of such Section. All remittances shall be made to the
Collection Account, in Automated Clearinghouse Corporation next-day funds or
immediately available funds, not later than 3:00 p.m., New York time, on the
related Deposit
36
Date. The Trustee shall deposit in the Collection Account the aggregate of any
Reserve Draw Amounts pursuant to Section 3.05, the aggregate of any amounts
received from JLACC under the Sale and Servicing Agreement, and the Payahead
Draw Amount due pursuant to Section 3.06, in each case on the Deposit Date or
Monthly Payment Date, as applicable.
SECTION 3.04. Daily Deposits.
The Servicer is required to make deposits into the
Collection Account on a daily basis pursuant to Section 3.02(b) and not
monthly pursuant to Section 3.02(a) as of the date hereof and shall continue
to be so obligated until such date (if any) on which the Servicer by Servicer
Notice certifies to the Trustee that the conditions precedent to the
applicability of Section 3.02(a) have been satisfied. For so long as the
Servicer is so obligated to make deposits on a daily basis, not later than
3:00 p.m. (New York time) on the first Business Day of each week, commencing
in the week following the initial Contract Purchase Date, the Servicer will
deliver to the Company and the Trustee a written statement verifying the
amount delivered by the Servicer from the Lock Box Account to the Trustee for
deposit into the Collection Account on each Business Day during the preceding
week.
SECTION 3.05. Reserve Account.
(a) On each Note Issuance Date, the Company shall deposit or
cause to be deposited into the Reserve Account, by wire transfer in
immediately available funds, such amount, if any, as is required to make the
balance of amounts in the Reserve Account be not less than 1% of the
Aggregate Note Principal Balance (after giving effect to any issuance of Notes
on such Note Issuance Date).
(b) On each Monthly Payment Date, the Trustee shall
transfer from the Reserve Account to the Collection Account immediately
available funds in the amount of the Reserve Draw Amount, if any, in
accordance with the instructions contained in the applicable Monthly Servicer
Report for such Monthly Payment Date. "Reserve Draw Amount" shall mean the
excess of (i) the amount necessary to make distributions on such Monthly
Payment Date pursuant to clauses (i) through (iv) of Section 3.07(b) over (ii)
amounts in the Collection Account available for distribution on such Monthly
Payment Date as set forth in the Monthly Servicer Report for the related
Collection Period, but in no event will the Reserve Draw Amount be greater
than the Available Reserve Amount with respect to such Monthly Payment Date.
(c) On each Monthly Payment Date, if no Indenture Event of
Default has occurred and is continuing, the Trustee shall withdraw from the
Reserve Account and transfer to the Seller by wire transfer of immediately
available funds the Reserve Account Surplus, if any.
(d) Upon the first date on which the Notes are paid in full,
the Trustee, after the payment of all amounts payable from the Reserve Account
as provided herein and after payment of all amounts due to the Trustee
hereunder, shall withdraw from the Reserve Account all amounts on deposit in
the Reserve Account and pay such amounts to or upon the instructions of the
Company.
SECTION 3.06. Payahead Account.
(a) The Trustee shall withdraw and transfer amounts in the
Collection Account that represent the Payahead Amounts from the Collection
Account into the Payahead Account on each Monthly Payment Date.
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(b) The Trustee shall withdraw from the Payahead Account and
transfer to the Collection Account on each Deposit Date in immediately
available funds the Payahead Draw Amount for the following Monthly Payment
Date.
(c) On each Monthly Payment Date, all interest (including
accrued discount realized on liquidation of any Permitted Investment purchased
at a discount) and earnings (net of losses and investment expenses, if any)
accrued since the preceding Monthly payment Date on funds on deposit in the
Payahead Account shall be transferred to the Collection Account.
(d) Notwithstanding the foregoing, if (i) (a) the Servicer's
short-term unsecured debt has been rated A-1 or higher by Standard & Poor's or
(b) a Servicer letter of credit issued by an institution rated A-1 or higher
by Standard & Poor's has been obtained by the Servicer and (ii) the Trustee
has received confirmation from the Rating Agency that there would not be a
reduction in the then-current rating of the Senior Notes or of the
Subordinated Notes, then the Servicer may hold the Payahead Amounts together
with its own funds rather than deposit such amounts into the Payahead Account,
and shall pay the Payahead Draw Amount to the Trustee in next day funds on or
prior to each Deposit Date. As of the date hereof, the provisions of this
paragraph are not applicable and the Servicer will notify the Company, and the
Company will thereupon promptly notify the Trustee, if this paragraph becomes
applicable at any time after the date hereof.
(e) Upon the earlier to occur of (i) the Scheduled Final
Monthly Payment Date, and (ii) the date on which the Notes are paid in full,
the Trustee, after the payment of all amounts payable from the Payahead
Account as provided herein (and after payment of all amounts due to the
Trustee hereunder), shall withdraw from the Payahead Account all amounts on
deposit in such account and pay such amounts to the Company or its designee.
SECTION 3.07. Collection Account.
(a) The Trustee shall deposit the following into the
Collection Account promptly upon receipt thereof by the Trustee:
(i) each Contract Payment (including all Contract
Payments deposited with the Trustee by the Company on each Contract
Purchase Date);
(ii) any Retransfer Amount and any other proceeds of
any repurchase of Contracts and Equipment pursuant to Section 4.02
that are received by the Trustee;
(iii) each prepayment of any Contract received by the
Trustee;
(iv) all Security Deposit Offsets (if any) and
Recoveries (if any) and Liquidation Proceeds (if any) on any Contract,
in each case received by the Trustee;
(v) all earnings on Permitted Investments in the
Reserve Account and the Contract Purchase Account;
(vi) all proceeds received by the Trustee pursuant to
any Insurance Policy covering Equipment or any other amounts received
by the Trustee relating to a Contract or Equipment;
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(vii) all Hedge Proceeds, if any, received by the
Trustee pursuant to the Hedge Agreements; and
(viii) any other amount required to be deposited in the
Collection Account pursuant to Section 3.02.
Upon any transfer by the Servicer to the Trustee of any
amount required to be deposited into the Collection Account by the Trustee
pursuant to this Section 3.07(a), the Servicer shall specify to the Trustee
the type of payment included in such amount (with a description substantially
similar to the descriptions set forth in the above clauses).
(b) Unless the Notes have been declared due and payable
pursuant to Section 6.02 and moneys collected by the Trustee are being applied
in accordance with Section 6.06, the Trustee shall by 3:00 P.M. (New York City
time) on the Business Day prior to each Monthly Payment Date allocate all
available funds on deposit in the Collection Account and attributable to the
related Collection Period (or, in the case of any Hedge Proceeds, attributable
to such Monthly Payment Date) (including any investment income with respect to
funds on deposit in the Collection Account) (collectively, the "Available
Payment Amount") in the amounts required for application, and, subject to
Section 3.07(c) below, on such Monthly Payment Date shall make payments, in
the following order of priority:
(i) on a pro rata basis, (A) to the payment to the
Trustee of the Trustee Fee (including any overdue Trustee Fee) plus
all other amounts due to the Trustee hereunder and (B) to the Backup
Trustee, payment of the applicable Backup Trustee Fee; provided,
however, that the aggregate amount payable under this clause (i) in
any single year will not exceed the Trustee Fee Cap; then
(ii) to the payment on each Monthly Payment Date to
the Servicer, the Servicing Fee (including any overdue Servicing Fee)
due to the Servicer on such Monthly Payment Date; then
(iii) on a pro rata basis, (A) to the payment of
Monthly Interest with respect to the Senior Notes, including any
Overdue Monthly Interest to the Senior Noteholders, and (B) to each
Swap Provider, payment of the applicable Swap Payment Amount, if any,
and the applicable Swap Termination Amount, if any; then
(iv) to the payment of Monthly Interest, including any
Overdue Monthly Interest, to the Subordinated Noteholders; then
(v) solely during the Note Issuance Period (and on the
Monthly Payment Date immediately following the last day of the Note
Issuance Period), to the payment of the Non-Utilization Premium, to
the Committed Investors of Class A-FL Notes, pro rata in accordance
with the respective amounts thereof owing to such investors; then
(vi) solely during the Note Issuance Period (and on the
Monthly Payment Date immediately following the last day of the Note
Issuance Period), to the payment of the Non-Utilization Premium to
the Committed Investors of Class B-FL Notes, pro rata in accordance
with the respective amounts thereof owing to such investors; then
39
(vii) solely during the Note Issuance Period, to the
Reserve Account an amount that is equal to the amount necessary to
increase the amount on deposit therein (exclusive of interest and
earnings) to the Required Reserve Amount; then
(viii) solely during the Note Issuance Period, to the
deposit of any Principal Component of all Contract Payments into the
Contract Purchase Account; then
(ix) solely during the Note Amortization Period, to the
payment of Monthly Principal, including any Overdue Monthly
Principal, to the Senior Noteholders; then
(x) solely during the Note Amortization Period, if the
sum of the Equity Base and the Subordinated Note Principal Balance
(before giving effect to any payments of principal on such date) is
less than an amount equal to 25% of the product of (1) the Aggregate
Note Principal Balance plus the Equity Base, determined as of the
first day of the Note Amortization Period, and (2) the Required
Support Percentage (as defined herein) (such product, the "Equity
Threshold Amount"), then on a pari passu basis, to the payment to the
Senior Noteholders of an amount equal to the lesser of (i) the
remaining Available Payment Amount and (ii) the Senior Note Principal
Balance; then
(xi) solely during the Note Amortization Period, to the
payment of Monthly Principal, including any Overdue Monthly
Principal, to the Subordinated Noteholders; then
(xii) solely during the Note Amortization Period, to the
Reserve Account an amount that is equal to the lesser of (i) the
amount necessary to increase the amount on deposit therein to the
Required Reserve Amount and (ii) the Interest Component of the
Contract Payments received during the related Collection Period; then
(xiii) to the payment to the Trustee of the Trustee Fee
(including any overdue Trustee Fee) plus all other amounts due to the
Trustee hereunder, to the extent (if any) not paid pursuant to clause
(i) above; then
(xiv) all remaining funds, if any, to or upon the order
of the Company;
provided, however, that if an Indenture Event of Default shall have occurred
and be continuing on such Monthly Payment Date, any amounts otherwise payable
under clauses (vii), (viii), (xi), (xii), (xiii) and (xiv) shall be paid to
the Senior Noteholders until the Senior Note Principal Balance has been
reduced to zero and all amounts owing on the Senior Notes have been paid in
full.
Distributions to Noteholders on a Monthly Payment Date will
be made pro rata to the Noteholders of record of each Class as of the Record
Date preceding such Monthly Payment Date. On any Monthly Payment Date,
Noteholders will not be entitled to any amount in excess of Monthly Interest
and Monthly Principal (including any Overdue Monthly Interest and Overdue
Monthly Principal), except as described above.
(c) During any period on which a Swap Agreement is in
effect, the amount that would be payable by the Trustee on each Monthly
Payment Date to each Swap Provider pursuant to Section 3.07(b)(iii) in
accordance with the priorities of Section 3.07(b) shall instead be paid by the
Trustee to each Swap Provider on the third Business Day prior to such Monthly
Payment Date.
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SECTION 3.08. Contract Purchase Account.
(a) On each Note Issuance Date, the Trustee shall deposit in
the Contract Purchase Account an amount equal to all of the net proceeds to
the Company received from the issuance of Notes on such Note Issuance Date. On
each Monthly Payment Date, the Trustee shall deposit in the Contract Purchase
Account all amounts required to be so deposited pursuant to Section
3.07(b)(vii).
(b) On each Contract Purchase Date during the Note Issuance
Period, the Trustee shall pay from the Contract Purchase Account to the Seller
directly on behalf of the Company, an amount equal to the applicable purchase
price for the Contracts sold to the Company on such Contract Purchase Date.
(c) If the Contract Purchase Account has not been reduced to
zero on the last day of the Note Issuance Period, the Trustee shall transfer
any amount remaining in the Contract Purchase Account on such date to the
Collection Account and such amount shall be distributed on the Monthly Payment
Date concurrent with or immediately following such date. Upon such
distribution, the Contract Purchase Account shall be closed.
SECTION 3.09. Reports; Notices of Certain Payments.
(a) Concurrently with each payment to the Noteholders on a
Monthly Payment Date, the Trustee shall mail to the Servicer (except that with
respect to clause (i) below no report shall be delivered to the Servicer), the
Rating Agency and each Noteholder the following information:
(i) the Monthly Servicer Report furnished to the
Trustee by the Servicer relating to such Monthly Payment Date (or if
such report has not been received, a written statement to such
effect); and
(ii) the amount on deposit as of such Monthly Payment
Date in the Collection Account, the Reserve Account, the Payahead
Account and the Contract Purchase Account, in each case after giving
effect to all of the withdrawals and applications or transfers
required on such Monthly Payment Date pursuant to this Article III.
(b) The Trustee shall within five Business Days after the
request of the Company or the Servicer, deliver to the Company and the
Servicer a written report setting forth the amounts on deposit in the
Collection Account, the Reserve Account, the Payahead Account and the Contract
Purchase Account, and identifying the investments included therein.
SECTION 3.10. Trustee May Rely on Certain Information.
Pursuant to the Sale and Servicing Agreement, the Company,
the Seller and the Servicer are required to furnish to the Trustee from time
to time certain information and make various calculations which are relevant
to the performance of the Trustee's duties in this Article III and in Article
IV and in Section 7.14 of this Indenture. The Servicer shall provide the
Trustee with a revised amortization schedule within 10 Business Days following
the termination of the Note Issuance Period and on the Business Day preceding
each Interest Determination Date thereafter. In making distributions from any
of the Accounts and any transfer of amounts between such Accounts the Trustee
may fully rely on information provided to it as specified herein by the
Seller, the Servicer or the Company in writing, whether by way of a
certificate, report or otherwise, or failing delivery thereof on such other
information as the Trustee reasonably determines appropriate.
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ARTICLE IV
CONTRACTS AND EQUIPMENT
SECTION 4.01. Representations and Warranties of the
Company.
The Company hereby makes, as to itself, to the Trustee for
the benefit of the Noteholders and the Trustee (i) the representations and
warranties set forth in Section 3.01 of the Sale and Servicing Agreement and
(ii) the representations and warranties made by the Seller in Section 3.02 of
the Sale and Servicing Agreement with respect to the Contracts and related
Contract Assets. The Trustee shall rely on such representations and warranties
in authenticating Notes to be issued on each Note Issuance Date and in
accepting in trust the Contracts, the related Contract Assets and the other
Trust Property delivered to the Trustee upon the purchase thereof by the
Company on each Contract Purchase Date pursuant to the Sale and Servicing
Agreement. Such representations and warranties shall speak as of the date
hereof, as of the Closing Date and as of each Contract Purchase Date, as
applicable.
SECTION 4.02. Purchase upon Breach; Sale and Servicing
Agreement.
The Company and the Servicer, as the case may be, shall
promptly inform the Trustee, and thereafter the Trustee shall promptly inform
the Noteholders, in writing, upon the discovery of a breach of any of the
Seller's or Company's representations and warranties set forth in or referred
to in Section 4.01, or of the Seller's breach of the representations
and warranties set forth in Section 3.02 of the Sale and Servicing Agreement
or the Servicer's breach of the covenants set forth in Section 4.05 of the
Sale and Servicing Agreement, which materially and adversely affects the
interest of the Noteholders in any Contract. Each such notice shall include a
statement that such breach materially and adversely affects the interest of
the Noteholders in such Contract. As of the Deposit Date in the month
following the month (or, if the Seller or the Servicer (as applicable) elects
under the Sale and Servicing Agreement, the last day of the month) in which
the Company, the Seller or the Servicer (as applicable) becomes aware or
receives such written notice of such breach, the Company, unless the Seller or
the Servicer cures such breach, shall replace in the Trust Property each such
Contract that is materially and adversely affected by such breach) by
delivering the Retransfer Amount to the Trustee for inclusion in the Trust
Property (or, if the Seller shall have delivered to the Company a Substitute
Contract subject to and in accordance with the Sale and Servicing Agreement,
such Substitute Contract) and, upon receipt of the Retransfer Amount (or such
Substitute Contract), the Trustee shall release and retransfer such Contract
from the Trust Property. The Company shall remit to the Trustee the Retransfer
Amount of such Contract (or, if such Contract is then a Defaulted Contract, an
amount equal to the Retransfer Amount computed as of the date such Contract
first became a Defaulted Contract) upon the earlier of (i) receipt thereof
from the Seller or the Servicer (as the case may be) and (ii) 11:00 a.m. (New
York City time) on the Deposit Date in the calendar month immediately
following the month in which the Company became obligated to reacquire such
Contract from the Trust Property. The Trustee shall deposit all such amounts
so delivered to and received by it in the Collection Account promptly
following receipt thereof from the Company. Except as provided in Section
8.11, the sole remedy of the Trustee or the Noteholders against the Company
with respect to a breach of a representation or a warranty set forth in
Section 4.01 or any matter set forth in this Section 4.02 shall be to require
the Company to pay into the Trust Property the Retransfer Amount of each
applicable Contract pursuant to this Section 4.02 (or, in the circumstances
referred to above, to deliver into the Trust Property one or more Substitute
Contracts in lieu of such Retransfer Amount).
Concurrently with the execution and delivery of this
Indenture, the Company and the Seller have entered into the Sale and Servicing
Agreement, the rights of the Company under which have been assigned by the
Company to the Trustee. Under the Sale and Servicing Agreement, the Seller has
agreed
42
that in the event that the Company is required to purchase a Contract
hereunder by reason of a breach of a representation and warranty made by it
pursuant to Section 4.01, the Seller will purchase such Contract from the
Company contemporaneously with the Company's reacquisition of the Contract
from the Trust Property, in exchange for the purchase price paid by the
Seller. The obligation of the Company to acquire any such Contract from the
Trust Property is subject to the Seller's acquisition of such Contract from
the Company. In the event that the Company fails to purchase any Contract it
is required to purchase hereunder, the Trustee shall enforce directly the
Company's rights against the Seller under and in accordance with the terms of
the Sale and Servicing Agreement, as assigned to the Trustee, to require the
purchase of such Contract.
SECTION 4.03. Release of Contracts and Equipment
Following Substitution or Repurchase.
In the event that (i) the Seller shall have substituted a
Substitute Contract and the Equipment subject thereto for a Contract and the
Equipment subject thereto in accordance with the Sale and Servicing
Agreement, or (ii) the Company (or the Seller) shall have purchased a Contract
and the related Equipment in accordance with Section 4.02 (or Section 3.03 of
the Sale and Servicing Agreement), the retransferred Contract, and the
Equipment subject thereto, shall be released from the lien of this Indenture
when the Trustee shall have (i) deposited in the Collection Account all
amounts received pursuant to Section 4.02 (or Section 3.03 or 3.08 of the Sale
and Servicing Agreement) and (ii) received a copy of a duly executed
assignment to the Company by the Seller of any Substitute Contract.
SECTION 4.04. Release of Contracts and Equipment Upon
Final Contract Payment.
(a) In the event that the Trustee shall have received
written certification from an Authorized Officer of the Servicer that the
Trustee has received from amounts paid by the Obligor or from the proceeds of
the Equipment subject to any Contract (i) the final Contract Payment due and
payable under any Contract (excluding, if applicable, any Purchase Option
Payment), or (ii) a Retransfer Amount or prepayment in respect of any Contract
and, following such final Contract Payment or Retransfer Amount or prepayment,
no further payments on or in respect of such Contract are or will be due and
payable, such Contract and the related Contract Assets shall be released from
the lien of this Indenture.
(b) If an Early Amortization Event or Event of Default shall
have occurred and be continuing, then each Contract and related Contract
Assets which would otherwise be released from the lien of this Indenture
pursuant to this Section 4.04 shall instead remain subject to such lien and
all of the provisions of this Indenture, including without limitation Article
VI hereof.
SECTION 4.05. Execution of Documents.
The Trustee shall, at the Company's cost and expense,
promptly execute and deliver such documents (which shall be furnished to the
Trustee by the Company) and take such other actions as the Company, by Company
Request, may reasonably request to fully effectuate the release from this
Indenture of any Contract and Equipment required to be so released pursuant to
Sections 4.03 and 4.04.
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ARTICLE V
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 5.01. Servicer Events of Default.
If a Servicer Event of Default shall have occurred and be
continuing, the Trustee shall, upon the written request of the Noteholders of
Notes evidencing not less than 66-2/3% of the Aggregate Note Principal
Balance, give written notice to the Servicer of the termination of all of the
rights and obligations of the Servicer (but none of the Seller's obligations
thereunder or hereunder, which shall survive any such termination) under the
Sale and Servicing Agreement and this Indenture and the Trustee shall, subject
to and in accordance with the terms and conditions set forth in Section 8.02
of the Sale and Servicing Agreement, act as successor Servicer.
SECTION 5.02. Successor Servicer
Notwithstanding the provisions of Section 5.01, the Trustee
may appoint a successor Servicer in accordance with the provisions of Section
8.02 of the Sale and Servicing Agreement.
SECTION 5.03. Notification to Noteholders.
Upon any termination of the Servicer or appointment of a
Successor Servicer, the Trustee shall give prompt notice of such termination
or appointment, together with the conditions of default, to the Rating Agency,
each Swap Provider and each Noteholder in the manner provided herein.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
SECTION 6.01. Events of Default.
"Indenture Event of Default," wherever used herein, means any
one of the following (whatever the reason for such Indenture Event of Default
and whether it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(i) default in the payment of (a) any interest upon
any outstanding Note when it becomes due and payable or (b) any
principal of any outstanding Note when it becomes due and payable;
(ii) default in the performance, or breach, of any
covenant set forth in (a) Section 8.04, 8.07(c), 8.08, 8.10 or (b)
Section 12.07;
(iii) default in the performance, or breach, of any
covenant of the Company in the Notes or this Indenture (other than a
covenant described in clause (i) or (ii) above) or in the Note
Purchase Agreement or the Sale and Servicing Agreement and
continuance of such default or breach for a period of 30 days after
the earliest of (A) any officer of the Company first acquiring
knowledge thereof, or (B) written notice being given to the Company
by the Trustee itself or upon
44
the request of Noteholders of Notes evidencing not less than 51% of
the Aggregate Note Principal Balance;
(iv) if any representation or warranty of the Company or
the Seller made in this Indenture, in the Note Purchase Agreement or
in the Sale and Servicing Agreement or any other writing provided to
the Noteholders in connection with the foregoing documents shall
prove to be incorrect in any material respect as of the time when the
same shall have been made; provided, however, that the breach of any
representation or warranty made by the Seller in Section 3.02 of the
Sale and Servicing Agreement with respect to any of the Contracts or
the Equipment subject thereto shall not constitute an Indenture Event
of Default if the Seller cures such breach within the period
permitted by, or repurchases a Contract and the related Equipment in
accordance with, Section 3.03 of the Sale and Servicing Agreement;
(v) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization, or other
similar law or (B) a decree or order adjudging the Company a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition of or in
respect of the Company under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 90 consecutive days;
(vi) the commencement by the Company of a voluntary case
or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization,
or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under
any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee,
sequestrator, or similar official of the Company or of any
substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the Company's failure to
pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such action;
(vii) the Company becomes obligated to register as an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended;
(viii) on two consecutive Monthly Payment Dates during
the Note Issuance Period (a) the Equity Base is less than 5% of the
Pool Balance or (b) the sum of the Equity Base and the Subordinated
Note Principal Balance is less than the Required Support Percentage
of the Pool Balance (in each case both before and after giving effect
to any purchase of Contracts to occur on such date);
(ix) any Over-Issuance Condition, if applicable,
occurs;
45
(x) on two consecutive Monthly Payment Dates after the
Note Issuance Period, the amount in the Reserve Account is below the
Required Reserve Amount (after giving effect to all withdrawals from
and deposits to the Reserve Fund on such dates);
(xi) any Servicer Event of Default occurs; or
(xii) any Swap Agreement is terminated by the Company or
the Swap Provider for any reason and, within 30 days following such
termination, the Company shall not have entered into a successor Swap
Agreement on substantially the same terms with an Eligible Provider.
SECTION 6.02. Acceleration of Maturity; Rescission and
Annulment.
(a) If an Indenture Event of Default occurs and is
continuing, then and in every such case the Note Issuance Period (unless
earlier terminated) shall immediately terminate and the Trustee, with the
consent of the Noteholders of Notes evidencing not less than 66-2/3% of the
Aggregate Note Principal Balance, may declare the unpaid principal amount of
all the Notes to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Noteholders), and upon any such
declaration such principal amount shall become immediately due and payable
together with all accrued and unpaid interest thereon, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Company; provided, that in the case of any of the Events of Default
specified in clause (i)(a), (ii)(b), (v), (vi), (vii) or (ix) of Section 6.01
with respect to the Company, without any notice to the Trustee or the Company,
the Notes (together with accrued interest thereon) shall become immediately
due and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company.
(b) At any time after such a declaration of acceleration has
been made and before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article provided, the
Noteholders of Notes evidencing not less than 66-2/3% of the Aggregate Note
Principal Balance, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a
sum sufficient to pay:
(A) all principal of the Notes which has
become due otherwise than by such declaration of
acceleration, and interest thereon from the date when the
same first became due at the applicable Rate for each such
Note;
(B) all interest which has became due with
respect to the Notes and, to the extent that payment of such
interest is lawful, interest upon overdue interest from the
date when the same first became due at a rate per annum
equal to the applicable Rate for each such Note;
(C) all sums paid or advanced, together
with interest thereon, by the Trustee hereunder and the
reasonable compensation, expenses, disbursements, and
advances of the Trustee and its agents and counsel;
(ii) all Indenture Events of Default, other than the
non-payment of the aggregate principal amount of the Notes which has
become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 6.13; and
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(iii) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction.
No such rescission shall affect any subsequent Indenture Event of Default or
impair any right consequent thereon.
SECTION 6.03. Other Remedies.
(a) If an Indenture Event of Default occurs and is
continuing of which a Responsible Officer of the Trustee has received written
notice (other than a payment default as described in clause (i) of Section
6.01), the Trustee shall give notice to each Noteholder as set forth in
Section 7.02. The Trustee shall then take such action, if any, as may be
directed by the Noteholders of Notes evidencing not less than 66-2/3% of the
Aggregate Principal Note Balance.
(b) Following any acceleration of the Notes, the Trustee
shall have all of the rights, powers and remedies with respect to the Trust
Property set forth herein or as are otherwise available to secured parties
under the Uniform Commercial Code or other applicable law. Such rights, powers
and remedies may be exercised by the Trustee in its own name as trustee of an
express trust.
SECTION 6.04. Trustee May File Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other judicial proceeding relative to the Company, the Seller, the Servicer
or any other obligor upon the Notes or the other obligations secured hereby or
relating to the property of the Company, the Seller, the Servicer or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Notes shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Company, the Seller or the Servicer for the
payment of overdue principal or overdue interest or any such other obligation)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(i) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Notes and
any other obligation secured hereby and to file such other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee and
its agents and counsel) and of the Noteholders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute
the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Noteholders to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee and its
agents and counsel, and any other amounts due the Trustee under Section 7.06.
(b) Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Noteholder or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such
proceeding.
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SECTION 6.05. Trustee May Enforce Claims Without
Possession of Notes.
All rights of action and claims under this Indenture or the
Notes may be prosecuted and enforced by the Trustee without the possession of
any of the Notes or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Noteholders in respect of which such judgment has been
recovered.
SECTION 6.06. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article,
and any moneys that may then be held or thereafter received by the Trustee,
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of the entire amount due on account
of principal or interest, upon presentation of the Notes and surrender
thereof:
first, on a pro rata basis, (A) to the payment of the Trustee
Fee and all costs and expenses of collection incurred by the Trustee
(including the reasonable fees and expenses of any counsel to the
Trustee) and all other amounts due the Trustee under Section 7.06 (the
parties hereto agree that when the Trustee renders services following
an Indenture Event of Default under Section 6.01 (v) or (vi),
compensation for such services and expenses in connection therewith
are intended to constitute administrative expenses under applicable
bankruptcy law) and (B) to the Back-up Trustee, payment of the
applicable Backup Trustee Fee; provided that the aggregate amount
payable under this clause first shall not exceed the Trustee Fee Cap;
second, if the Person then acting as Servicer is not the
Seller or an Affiliate of the Seller, to the payment of all
unreimbursed Servicing Fees due to the Servicer;
third, to the payment, pro rata, of (i) all accrued and
unpaid interest on the outstanding Senior Note Principal Balance to
the date of payment thereof, without preference or priority of any
kind, and (ii) the Swap Termination Amount, if any, to each
applicable Swap Provider;
fourth, to the payment of all accrued and unpaid interest on
the outstanding Subordinated Note Principal Balance to the date of
payment thereof, without preference or priority of any kind;
fifth, solely during the Note Issuance Period, to the
payment of the Non-Utilization Premium, if any, to the Committed
Investors of Class A-FL Notes ratably, without preference or priority
of any kind;
sixth, solely during the Note Issuance Period, to the
payment of the Non-Utilization Premium, if any, to the Committed
Investors of Class B-FL Notes ratably, without preference or priority
of any kind;
seventh, to the payment of the outstanding Senior Note
Principal Balance, and any other amounts due to the Senior
Noteholders ratably, without preference or priority of any kind;
eighth, to the payment of the outstanding Subordinated Note
Principal Balance, and any other amounts due to the Subordinated
Noteholders ratably, without preference or priority of any kind;
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ninth, to the payment of all amounts specified in clause
first to the extent not paid thereunder (due to the limitation
imposed by the proviso therein);
tenth, if the Person then acting as Servicer is the Seller
or an Affiliate of the Seller, to the payment of all unreimbursed
Servicing Fees due to the Servicer; and
eleventh, to the payment of the remainder, if any, to or
upon the instructions of the Company.
SECTION 6.07. Limitation on Suits.
No Noteholder shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture or the
Notes, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Noteholder has previously given written
notice to the Trustee of a continuing Indenture Event of Default;
(ii) the Noteholders of Notes evidencing not less
than 66-2/3% of the Aggregate Note Principal Balance shall have made
written request to the Trustee to institute proceedings in respect of
such Indenture Event of Default in its own name as Trustee hereunder;
(iii) such Noteholder or Noteholders have offered to
the Trustee adequate indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
(iv) the Trustee for 30 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and
(v) so long as any of the Notes remain outstanding, no
direction inconsistent with such written request has been given to
the Trustee during such 30-day period by the Noteholders of Notes
evidencing not less than 51% of the Aggregate Note Principal
Balance;
it being understood and intended that no one or more Noteholder shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb, or prejudice the rights of any other
Noteholder, or to obtain or to seek to obtain priority or preference over any
other Noteholder or to enforce any right under this Indenture, except in the
manner herein provided. It is further understood and intended that so long as
any portion of the Notes remains outstanding, the Servicer shall not have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture (other than for the enforcement of Section 4.04(a)) or for the
appointment of a receiver or trustee, or for any other remedy hereunder.
SECTION 6.08. Unconditional Right of Noteholders to
Receive Payment.
Notwithstanding any other provision in this Indenture, other
than the provisions hereof establishing priorities of payment or limiting the
right to recover amounts due on the Notes to recoveries from the property of
the Trust Property, the holder of any Note shall have the absolute and
unconditional right to receive payment of the principal of and interest on
such Note as such principal and interest becomes due on the Monthly Payment
Dates for such payments, including the Scheduled Final Payment Date, and,
subject to the terms of Section 6.07, to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Noteholder.
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SECTION 6.09. Restoration of Rights and Remedies.
If the Trustee or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Noteholder, then and in every
such case, subject to any determination in such proceeding, the Company, the
Trustee and the Noteholders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Noteholders shall continue as though no such proceeding had
been instituted.
SECTION 6.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost, or stolen Notes in the last
paragraph of Section 2.05, no right or remedy herein conferred upon or
reserved to the Trustee or to the Noteholders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.
SECTION 6.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any holder of any
Note to exercise any right or remedy accruing upon any Indenture Event of
Default shall impair any such right or remedy or constitute a waiver of any
such Indenture Event of Default or an acquiescence therein. Every right and
remedy given by this Article or by law to the Trustee or to the Noteholders
may be exercised from time to time, and as often as may be deemed expedient,
by the Trustee or by the Noteholders, as the case may be.
SECTION 6.12. Control by Noteholders.
Except as may otherwise be provided in this Indenture, until
such time as the conditions specified in Section 11.01 have been satisfied in
full, the Noteholders of Notes evidencing not less than 66-2/3% of the
Aggregate Note Principal Balance shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee, subject (in
each case) to the Trustee being indemnified to its reasonable satisfaction.
Notwithstanding the foregoing:
(i) no such direction shall be in conflict with any
rule of law or with this Indenture;
(ii) the Trustee shall not be required to follow any
such direction which the Trustee reasonably believes might result in
any personal liability on the part of the Trustee for which the
Trustee is, in its reasonable judgment, not adequately indemnified;
and
(iii) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with any such
direction; provided that the Trustee shall give notice of any such
action to each Noteholder.
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SECTION 6.13. Waiver of Defaults and Events of Default.
(a) Subject to the provisions of Sections 6.08 and 9.01, the
Noteholders of Notes evidencing not less than 66-2/3% of the Aggregate Note
Principal Balance, may, by one or more instruments in writing, waive an
existing Default or Indenture Event of Default hereunder and its consequences,
except a continuing Indenture Event of Default:
(i) in respect of the payment of the principal of or
interest on any outstanding Note (which may only be waived by the
holder of such Note),
(ii) in respect of a covenant or provision hereof
which under Article IX cannot be modified or amended without the
consent of the holder of each outstanding Note affected (which may be
waived only by the holders of all outstanding Notes affected), or
(iii) in respect of any payment owing to the Trustee
or covenant or provision in its favor (which may be waived only by
the Trustee);
(b) A copy of each waiver pursuant to Section 6.13(a) shall
be furnished by the Company to the Trustee. Upon any such waiver, such
Indenture Event of Default shall cease to exist and shall be deemed to have
been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Indenture Event of Default or impair any
right consequent thereon.
SECTION 6.14. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
SECTION 6.15. Sale of Trust Property.
(a) The power to effect any sale of any portion of the Trust
Property pursuant to Section 6.03 shall not be exhausted by any one or more
sales as to any portion of the Trust Property remaining unsold, but shall
continue unimpaired until the entire Trust Property shall have been sold or
all amounts payable on the Notes shall have been paid. The Trustee may from
time to time, upon directions in accordance with Section 6.12, postpone any
public sale by public announcement made at the time and place of such sale.
(b) To the extent permitted by applicable law, the Trustee
shall not in any private sale sell the Trust Property, or any portion thereof,
unless either (i) until such time as the conditions specified in Section
11.01(a) have been satisfied in full, the Noteholders of Notes evidencing
66-2/3% of the Aggregate Note Principal Balance, consent to or direct the
Trustee to make such sale; or (ii) the proceeds of such sale would be not less
than the sum of all amounts due to the Trustee hereunder and the entire unpaid
Aggregate Note Principal Balance of such Notes and interest due or to become
due thereon in accordance with Section 6.06 on the Monthly Payment Date next
succeeding the date of such sale.
(c) In connection with a sale of all or any portion of the
Trust Property:
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(i) any one or more Noteholders or the Trustee may
bid for and purchase the property offered for sale, and upon
compliance with the terms of sale may hold, retain, and possess and
dispose of such property, without further accountability, and any
Noteholder may, in paying the purchase money therefor, deliver in
lieu of cash any outstanding Notes or claims for interest thereon for
credit in the amount that shall, upon distribution of the net
proceeds of such sale, be payable thereon, and such Notes, in case
the amounts so payable thereon shall be less than the amount due
thereon, shall be returned to the Noteholders after being
appropriately stamped to show such partial payment;
(ii) the Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Property in connection with a sale thereof;
(iii) the Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Company to transfer and convey its
interest in any portion of the Trust Property in connection with a
sale thereof, and to take all action necessary to effect such sale;
and
(iv) no purchaser or transferee at such a sale shall
be bound to ascertain the Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any moneys.
(d) The method, mariner, time, place and terms of any sale
of all or any portion of the Trust Property shall be commercially reasonable.
(e) The provisions of this Section 6.15 shall not be
construed to restrict the ability of the Trustee to exercise any rights and
powers against the Company or the Trust Property that are vested in the
Trustee by this Indenture or pursuant to applicable law, including, without
limitation, the power of the Trustee to proceed against the collateral subject
to the lien of this Indenture and to institute judicial proceedings for the
collection of any deficiency remaining thereafter.
SECTION 6.16. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court may in its discretion require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 6.16 does not apply to a suit by the Trustee, a
suit by a Noteholder pursuant to Section 6.08, or a suit by any Noteholder or
group of Noteholders of more than 10% in principal amount of the Notes then
outstanding.
ARTICLE VII
THE TRUSTEE
SECTION 7.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Indenture Event of
Default:
52
(i) the Trustee undertakes to perform only those
duties that are specifically set forth in this Indenture and no
others and no covenants or duties shall be implied herein in
connection with the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. The Trustee, however, shall examine
the same to determine whether or not they conform on their face to
the requirements of this Indenture, but the Trustee shall not be
required to determine, confirm or recalculate information contained
in such certificates or opinions.
(b) If an Indenture Event of Default has occurred and is
continuing, the Trustee shall exercise its rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise as
a prudent person would exercise or use under the circumstances in the conduct
of his own affairs.
(c) The Trustee shall not be liable for any action taken or
omitted by it in good faith in connection with the performance of its duties
hereunder, except for its own willful misconduct or gross negligence. In
particular, but without limiting the generality of the foregoing:
(i) the Trustee shall not be liable for any error in
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts;
(ii) the Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the directions received by it from the Noteholders in
accordance with this Indenture; and
(iii) the Trustee shall not be liable for acting in
good faith reliance on the information provided to the Trustee as
described in Section 3.10.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any personal financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(e) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee (solely in its role as Trustee and
not in its role as substitute Servicer) shall be subject to the provisions of
this Section.
(f) The Trustee is hereby authorized to execute and deliver
the Sale and Servicing Agreement by duly executing the consent and agreement
line at the end of the Sale and Servicing Agreement.
SECTION 7.02. Notice of Defaults or Events of Default.
Within one Business Day after a Responsible Officer receives
written notice of the occurrence of any Default or Indenture Event of Default
hereunder or Servicer Event of Default under the Sale and Servicing Agreement,
the Trustee shall transmit by certified mail return receipt requested, hand
delivery or overnight courier, to all Noteholders, as their names and
addresses appear in the Note Register, the
53
Company, the Servicer, the Rating Agency and the Seller notice of such
Default, Indenture Event of Default or Servicer Event of Default hereunder
known to the Trustee, unless such Default, Indenture Event of Default or
Servicer Event of Default shall have been cured or waived.
In the absence of actual knowledge of a Responsible Officer
of the Trustee, the Trustee will not be deemed to have knowledge of any
Servicer Event of Default or Indenture Event of Default or Default unless
notified thereof in writing by the Company, a Noteholder, a Committed Investor
or a Swap Provider.
SECTION 7.03. Certain Rights of Trustee.
Subject to the provisions of Section 7.01:
(i) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, note, debenture, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) any request or direction of the Company
mentioned herein shall be sufficiently evidenced by a Company Request
or Company Order and any action of the Company may be sufficiently
evidenced by a Company Order;
(iii) whenever in the administration of this
Indenture the Trustee shall deem it desirable that a matter be proved
or established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon
an Officer's Certificate;
(iv) the Trustee may consult with counsel as to legal
matters and the advice or opinion of any such counsel selected by the
Trustee with due care shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(v) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture
at the request or direction of any of the Noteholders pursuant to
this Indenture, unless such Noteholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction;
(vi) except as provided in Section 7.01, the Trustee
shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, note,
debenture, other evidence of indebtedness, or other paper or
document, other than to examine such documents to determine whether
they conform as to form to the requirements of this Indenture, unless
requested in writing to do so by the Noteholders of Notes evidencing
not less than 51% of the Aggregate Note Principal Balance; provided
that, if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require reasonable
indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such examination shall
be paid by the Company, subject to the priorities of payment in
Section 3.07(b) and 6.06 hereof and to the
54
other requirements and restrictions on payments specified in Article
III or, if paid by the Trustee or any predecessor trustee, shall be
promptly repaid by the Company upon demand, subject to the priorities
of payment in Section 3.07(b) and 6.06 hereof and to the other
requirements and restrictions on payments specified in Article III;
provided that any insufficiency of amounts available for such
payments will not represent a claim against the Company and no
provision of this paragraph shall limit the Servicer's obligations
under Section 7.06;
(vii) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or
by or through agents, custodians, nominees or attorneys and the
Trustee shall not be responsible for any misconduct or negligence on
the part of any agent, custodian, nominee or attorney appointed with
due care by it hereunder; and
(viii) the Trustee shall not be liable for any action
it takes or omits to take if it believes in good faith that such
action or inaction is authorized or within its rights or powers.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture (except as against itself), the Sale and Servicing
Agreement, any Xxxx of Sale, the Hedge Agreements, the Note Purchase
Agreement, the Notes or the Trust Property and it shall not be responsible for
any statement in the Notes other than its certificate of authentication or in
any document used in the sale of the Notes other than any statement in writing
provided by the Trustee for use in such document. The Trustee shall have no
responsibility for, or duty, or liability in connection with (i) performance
by the Servicer, and shall have no obligation to monitor the performance of
the Servicer or (ii) the use of the Note proceeds. The Trustee makes no
representations about, and has no responsibility or liability with respect to,
the tax consequences of the transactions contemplated by this Indenture,
including, without limiting the generality of the foregoing, the tax status of
the Trust Property and the Notes and the tax consequences to the Servicer, the
Seller, the Company or the Noteholders of any such transactions.
SECTION 7.05. Money Held in Trust.
Money and investments held by the Trustee or other paying
agent shall be held in trust in one or more trust accounts as required
hereunder.
SECTION 7.06. Compensation, Reimbursement, etc.
The Servicer agrees:
(i) to pay, to the extent that such amounts are not
paid pursuant to Section 3.07(b), to the Trustee from time to time
compensation for all services rendered by it hereunder as specified
by the Trustee Fee Letter (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an
express trust), such payment to be made independent of the other
payment obligations of the Servicer hereunder; and
(ii) except as otherwise expressly provided herein,
to reimburse, to the extent that such amounts are not paid pursuant
to Section 3.07(b), the Trustee upon its request for all reasonable
expenses, disbursements, and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement, or
advance as may be attributable to its gross negligence or bad faith.
55
(iii) to pay the Backup Trustee the Backup Trustee
Fee payable on the Closing Date;
(iv) to pay the Trustee all indemnified amounts
specified in Section 8.11;
(v) to indemnify and hold the Trustee harmless from
any and all claims, damages, losses, costs or expenses (including,
without limitation attorneys' fees and disbursements) incurred by the
Trustee in any manner or way related to the Lock Box Account or the
Lock Box Agreement; and
(vi) to pay the reasonable fees and expenses of the
Trustee's counsel on the Closing Date, subject to the limit specified
in the Trustee Fee Letter.
Limitations specified in this Indenture as to rights to
collect payments from the Company or out of the Trust Property are not
intended to limit in any respect the obligations of the Servicer pursuant to
this Section. The provisions of this Section 7.06 shall survive any
termination of this Indenture in accordance with Section 11.01 hereof and the
payments and indemnities provided for herein shall be provided to the
Trustee by the initial Servicer irrespective of any resignation or removal of
it as the initial Servicer.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 6.01(v) or
Section 6.01 (vi), the expenses (including the reasonable charges and expenses
of its counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable Federal or state
bankruptcy, insolvency or other similar law.
SECTION 7.07. Trustee; Eligibility; Disqualification.
(a) "Trustee" shall mean, initially, LTCB Trust Company and,
upon the occurrence of a Trustee Replacement Event, then the Backup Trustee.
Notwithstanding any provision in this Agreement to the contrary, if a Trustee
Replacement Event occurs, (i) the Back-up Trustee shall become the Trustee
hereunder five Business Days (the "Replacement Date") after the Backup
Trustee's receipt of a notice from the Company, the Trustee, any Noteholder or
any Committed Investor of the occurrence of such Trustee Replacement Event and
(ii) LTCB Trust Company shall be deemed to be removed as of the Replacement
Date. A "Trustee Replacement Event" means, at any time, any of the following:
(i) the unsecured long-term obligations of LTCB Trust Company are not rated at
least "Baa3" by Moody's or "BBB-" by S&P; (ii) the New York branch of LTCB
Trust Company closes or otherwise ceases its corporate trust operations; (iii)
either LTCB Trust Company or its New York office files a petition for
bankruptcy, reorganization, receivership, arrangement, insolvency or
liquidation proceedings, or other similar proceedings under any federal or
state bankruptcy or similar law or any such petition is filed against either
of them; (iv) LTCB Trust Company does not meet the requirements under Section
7.07(c); or (v) the Trustee fails to perform any of its material duties and
obligations hereunder and such failure continues for five (5) Business Days
after notice of such failure is delivered by the Issuer, the Servicer or any
Noteholder. If a Trustee Replacement Event occurs, then the Backup Trustee
shall become the Trustee for all purposes of this Indenture and shall be
entitled to the same benefits, protections, privileges and rights provided to
the Trustee hereunder and shall have all of the obligations of the initial
Trustee hereunder as of the Replacement Date, including the obligation of the
Trustee to act as a successor Servicer as set forth in Article V hereof.
(b) The Backup Trustee shall be paid the Backup Trustee Fees
on the Closing Date and on each applicable Monthly Payment Date.
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(c) The Trustee hereunder shall at all times be a
corporation organized and doing business under the laws of the United States
of America, any state thereof or the District of Columbia authorized under
such laws to exercise corporate trust powers, be acceptable to the Rating
Agency, have a combined capital and surplus of at least $50,000,000 or shall
be a member of a bank holding system, the aggregate combined capital and
surplus of which is at least $50,000,000, provided that the Trustee, or the
bank holding company system of which the Trustee is a member shall be subject
to supervision or examination by Federal or state authority and, in the case
of any successor Trustee, subject to regulations regarding fiduciary funds on
deposit substantially similar to 12 C.F.R. ss. 9.10(b). If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 7.07, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section 7.07, the Trustee shall resign immediately in the manner and with
the effect specified in Section 7.08.
SECTION 7.08. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by a successor Trustee under
Section 7.09.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company and by mailing notice of resignation by
first-class mail, postage prepaid, to the Rating Agency and the Noteholders at
their addresses appearing on the Note Register.
(c) The Trustee may be removed at any time by the Act of the
Noteholders of Notes evidencing not less than 66-2/3% of the Aggregate Note
Principal Balance of the Notes, delivered to the Trustee and the Company. The
Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.07(c);
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge
of the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
(d) Subject to Section 7.07(a), if the Trustee shall resign,
be removed, or become incapable of acting, or if a vacancy shall occur in the
office of Trustee for any cause, the Company, with the consent of each Swap
Provider and the Noteholders of Notes evidencing not less than 66-2/3% of the
Aggregate Note Principal Balance, by an act of the Company, shall promptly
appoint a successor Trustee.
(e) If no successor Trustee shall have been so appointed by
the Company as hereinbefore provided and accepted appointment in the manner
hereinafter provided within 30 days after any such resignation or removal,
existence of incapability, or occurrence of such vacancy, the Trustee or any
Noteholder or each Swap Provider may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such event by first-class mail,
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postage prepaid, to all Noteholders, as their names and addresses appear in
the Note Register, to the Rating Agency and to each Swap Provider. Each notice
shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
(g) Any liability of any Trustee arising hereunder prior to
the resignation or removal of such Trustee shall survive the appointment of a
successor Trustee.
SECTION 7.09. Acceptance of Appointment by Successor.
(a) Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder. Upon request
of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
(b) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article and the effectiveness of such appointment will
not, as evidenced by confirmation in writing by the Rating Agency, result in
any reduction or withdrawal of the then current rating of the Senior Notes or
of the Subordinated Notes by the Rating Agency.
SECTION 7.10. Merger, Conversion, Consolidation or
Succession to Business.
Any Person into which the Trustee may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of
the Trustee, shall be the successor of the Trustee hereunder, provided such
Person shall be otherwise qualified and eligible under this Article, without
the execution or filing of any paper or any further act on the part of any of
the parties hereto. In case any Notes shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion,
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Notes so authenticated with the same effect as if such
successor Trustee had itself authenticated such Notes.
SECTION 7.11. Co-trustees and Separate Trustees.
(a) At any time or times, for the purpose of meeting the
legal requirements of any jurisdiction in which any of the Trust Property may
at the time be located or for any other purpose, the Company and the Trustee
shall have power to appoint, and, upon the written request of the Trustee, the
Trustee, any Swap Provider or the Noteholders of Notes evidencing not less
than 51% of the Aggregate Note Principal Balance, the Company shall for such
purpose join with the Trustee in the execution, delivery, and performance of
all instruments and agreements necessary or proper to appoint one or more
Persons approved by the Trustee either to act as co-trustee, jointly with the
Trustee, of all or any part of such Trust Property, or to act as separate
trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such Person or
Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this
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Section. If the Company does not join in such appointment within 15 days after
the receipt by it of a request so to do, or in case an Indenture Event of
Default has occurred and is continuing, the Trustee alone shall have power to
make such appointment.
(b) Should any written instrument from the Company be
required by any co-trustee or separate trustee so appointed for more fully
confirming to such co-trustee or separate trustee such property, title, right,
or power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Company.
(c) Every co-trustee or separate trustee shall, to the
extent permitted by law, but to such extent only, be appointed subject to the
following terms:
(i) The Notes shall be authenticated and delivered
and all rights, powers, duties, and obligations hereunder in respect
of the custody of securities, cash and other personal property held
by, or required to be deposited or pledged with, the Trustee
hereunder, shall be exercised solely by the Trustee.
(ii) The rights, powers, duties, and obligations
hereby conferred or imposed upon the Trustee in respect of any
property covered by such appointment shall be conferred or imposed
upon and exercised or performed by such co-trustee or separate
trustee, as shall be provided in the instrument appointing such
co-trustee or separate trustee.
(iii) The Trustee at any time, by an instrument in
writing executed by it, with the concurrence of the Company evidenced
by a Company Order, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section, and, in
case an Indenture Event of Default has occurred and is continuing,
the Trustee shall have power to accept the resignation of, or remove,
any such co-trustee or separate trustee without the concurrence of
the Company. Upon the written request of the Trustee, the Company
shall join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee
or separate trustee so resigned or removed may be appointed in the
manner provided in this Section.
(iv) No co-trustee or separate trustee hereunder
shall be personally liable by reason of any act or omission of the
Trustee or any other such trustee hereunder and the Trustee shall not
be personally liable by reason of any act or omission of any
co-trustee or other such separate trustee hereunder.
(v) Any Act of Noteholders delivered to the Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 7.12. Servicer to Hold Contracts.
The Servicer may hold the sole original, manually executed
counterpart of each Contract that constitutes chattel paper, together with any
documents relating thereto that may from time to time be delivered to the
Servicer, until such time as such Contract is released from the lien of this
Indenture pursuant to the provisions hereof; provided that upon a Servicer
Event of Default, the Trustee may take possession of such original copies as
necessary to protect the Noteholders' rights, powers and remedies with respect
to the Trust Property. The Servicer will cause the electronic ledger to be
clearly and unambiguously marked to show that such Contracts have been
transferred by the Seller to the Company and pledged by the Company to the
Trustee for the benefit of the Noteholders; Provided, however, if the
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Servicer elects not to hold the above documents, the Servicer shall cause the
Trustee to hold the Contract File and the List of Contracts, and in such case
the electronic ledger will be marked to show that such Contract has been sold
by the Seller to the Company and pledged by the Company to the Trustee for the
benefit of the Noteholders.
SECTION 7.13. Financing Statements.
The Trustee shall execute such UCC financing statements and
continuation statements as shall have been prepared by the Servicer and shall
furnish the Servicer with such limited powers of attorney or other documents
necessary or appropriate to enable the Servicer to fulfill its obligations
under Section 7.06 of the Sale and Servicing Agreement and to carry out its
servicing and administration duties under the Sale and Servicing Agreement.
SECTION 7.14. Reports by Trustee to Noteholders. At least
three Business Days prior to each Monthly Payment Date, the Servicer shall
prepare and deliver to the Trustee and the Rating Agency for distribution to
each Noteholder, and, upon receipt thereof from the Servicer, the Trustee
shall deliver to each Noteholder, a statement setting forth for the related
Collection Period the following information (which in the case of items (ii),
(iii) and (iv) shall be based on a Note in a principal amount of $1,000):
(i) the total amount available in the Collection
Account on the Monthly Payment Date;
(ii) the amount of the distribution allocable to
principal, including Overdue Monthly Principal, on each of the Notes;
(iii) the amount of the distribution allocable to
interest, including any Overdue Monthly Interest, on each of the
Notes, and each Swap Payment Amount, the Hedge Proceeds and each Swap
Termination Amount (if any) for such Monthly Payment Date;
(iv) the Servicing Fee, including any overdue
Servicing Fee;
(v) the Pool Balance as of the end of the related
Collection Period;
(vi) the Available Reserve Amount, after giving
effect to any deposit or withdrawal from the Reserve Account with
respect to such Monthly Payment Date, and specifying the amount of
each such deposit or withdrawal, and such Available Reserve Amount
expressed as a percentage of the Pool Balance and any change in the
Required Reserve Amount;
(vii) the total Principal Balance of Defaulted
Contracts as of the last day of the related Collection Period;
(viii) the Senior Note Principal Balance and
Subordinated Note Principal Balance as of such Monthly Payment Date
(after giving effect to any distributions on such Monthly Payment
Date);
(ix) the Three-Month Average Delinquency Ratio as of
the last day of the end of the related Collection Period and the
Delinquency Ratio as of the last day of the related Collection
Period;
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(x) the Three-Month Average Default Ratio as of the
last day of the related Collection Period and the Default Ratio as of
the last day of the related Collection Period;
(xi) the amount of all prepayments in full of the
Contracts as of the end of the related Collection Period;
(xii) the aggregate Payahead Amount with respect to
the Contracts as of the end of the related Collection Period;
(xiii) the past due experience of the Contracts (with
respect to the different aging categories set forth in the
Confidential Private Placement Memorandum dated February 1998, as
amended and supplemented by the Company as of the Closing Date) as of
the last day of the end of the related Collection Period; and
(xiv) the occurrence of any substitution of
Contracts, if any, in accordance with the Sale and Servicing
Agreement and all applicable information as to compliance of such
substitution with the requirements under the Sale and Servicing
Agreement.
Within a reasonable period of time after the end of each
calendar year, but not later than the latest date permitted by law, the
Servicer shall deliver to the Trustee, and the Trustee shall furnish, to each
Person who at any time during such calendar year shall have been a Noteholder,
a statement, prepared by the Servicer and delivered to the Trustee, containing
the sum of the amounts determined in clauses (ii) and (iii) for such calendar
year, or, in the event such Person shall have been a Noteholder during a
portion of such calendar year, for the applicable portion of such year, for
the purposes of such Noteholder's preparation of federal income tax returns
and, to the extent requested by a Noteholder to comply with applicable law,
such additional information as will enable the Noteholder to prepare its state
and local income and franchise tax returns. In addition, any Committed
Investor, Noteholder or Swap Provider may obtain from the Trustee, by written
request to the Trustee, a copy of any Monthly Servicer Report or any annual
compliance statement pursuant to Section 4.09 of the Sale and Servicing
Agreement that has been delivered to the Trustee.
SECTION 7.15. Limitation on Duty of Trustee in Respect of
Trust Property.
(a) Beyond the exercise of reasonable care in the custody
thereof, the Trustee shall have no duty as to any Trust Property in its
possession or control or in the possession or control of any agent or bailee
or any income thereon or as to preservation of rights against prior parties or
any other rights pertaining thereto and the Trustee shall not be responsible
for filing any financing or continuation statements or recording any documents
or instruments in any public office at any time or times or otherwise
perfecting or maintaining the perfection of any security interest in the Trust
Property. The Trustee shall be deemed to have exercised reasonable care in the
custody of the Trust Property in its possession if the Trust Property is
accorded treatment substantially equal to that which it accords its own
property and shall not be liable or responsible for any loss or diminution in
the value of any of the Trust Property, by reason of the act or omission of
any carrier, forwarding agency or other agent or bailee selected by the
Trustee in good faith.
(b) The Trustee shall not be responsible for the existence,
genuineness or value of any of the Trust Property or for the validity,
perfection, priority or enforceability of the Liens in any of the Trust
Property, whether impaired by operation of law or by reason of any action or
omission to act on its part hereunder, except to the extent such action or
omission constitutes gross negligence, bad faith or wilful misconduct on the
part of the Trustee, for the validity or sufficiency of the Trust Property or
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any agreement or assignment contained therein, for the validity of the title
of the Company to the Trust Property, for insuring the Trust Property or for
the payment of taxes, charges, assessments or Liens upon the Trust Property or
otherwise as to the maintenance of the Trust Property.
ARTICLE VIII
COVENANTS
SECTION 8.01. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of
and interest on the Notes in accordance with the terms of the Notes and this
Indenture. An installment of interest shall be considered paid on the date it
is due if the Trustee holds on that date money designated for and sufficient
to pay the installment.
SECTION 8.02. Maintenance of Office or Agency; Chief
Executive Office.
(a) The Company will maintain in the State of California an
office or agency where notices and demands to or upon the Company in respect
of the Notes and this Indenture may be served.
(b) The chief executive office of the Company, and the
office at which the Company maintains its records with respect to the
Contracts, the Equipment, and the transactions contemplated hereby, is located
in San Ramon, California. The Company will not change the location of such
office without giving the Trustee, the Rating Agency and each Noteholder at
least 60 days' prior written notice thereof.
SECTION 8.03. Money for Payments to Noteholders to Be
Held in Trust.
(a) All payments of amounts due and payable with respect to
any Notes that are to be made from amounts withdrawn from the Collection
Account, the Reserve Account, the Payahead Account or the Contract Purchase
Account pursuant to Section 3.07(b) or Section 6.06 shall be made on behalf of
the Company by the Trustee, and no amounts so withdrawn from the Collection
Account, the Reserve Account, the Payahead Account or the Contract Purchase
Account for payments of Notes shall be paid over to the Company under any
circumstances except as provided in this Section 8.03.
(b) In making payments hereunder, the Trustee will:
(i) allocate all sums received for payment to the
Noteholders on each Monthly Payment Date in accordance with the terms
of this Indenture;
(ii) hold all sums held by it for the payment of
amounts due with respect to the Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay such sums
to such Persons as herein provided; and
(iii) comply with all requirements of the Internal
Revenue Code of 1986, as amended (or any successor statutes), and all
regulations thereunder, with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting
requirements in connection therewith.
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(c) Except as required by applicable law, any money held by
the Trustee in trust for the payment of any amount due with respect to any
Note shall be held in a non-interest bearing account and if the same remains
unclaimed for three years after such amount has become due and payable to the
Noteholder, the Trustee shall be discharged from such trust and, subject to
applicable escheat laws, paid to the Company upon request; and such Noteholder
shall thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee with respect to such
trust money shall thereupon cease.
SECTION 8.04. Corporate Existence; etc.
(a) The Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate
existence and the rights, licenses and franchises of the Company, and will
obtain and preserve its qualification to do business as a foreign corporation
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Indenture, the Notes, or any of
the Contracts.
(b) The Company shall at all times observe and comply in all
material respects with (i) all laws, regulations and court orders applicable
to it, (ii) all requirements of law in the declaration and payment of
dividends on its Capital Stock, and (iii) all requisite and appropriate
corporate and other formalities (including, without limitation, annual and all
other appropriate meetings of the Company's board of directors and, if
required by law, its charter or otherwise, meetings and votes of shareholders
to authorize corporate action) in the management of its business and affairs
and the conduct of the transactions contemplated hereby and by the Sale and
Servicing Agreement.
(c) The Company will, at all times: (i) maintain (A)
corporate and financial books and records separate from those of any other
Person and (B) minutes of the meetings and other proceedings of its
shareholders and board of directors; (ii) continuously maintain the
resolutions, agreements and other instruments underlying the transactions
contemplated hereby and by the Sale and Servicing Agreement as official
records of the Company; (iii) act solely in its corporate name and through its
duly authorized officers or agents to maintain an arm's-length relationship
with the Seller and its Affiliates; (iv) pay all of its operating expenses and
liabilities from its own funds (including any funds advanced to it by the
Servicer); (v) maintain office space separate from that of the Seller on the
premises currently rented by the Seller and (vi) maintain its assets
separately from the assets of the Seller.
(d) The Company shall conduct its business solely in its own
name through its duly authorized officers or agents so as to not mislead
others as to the identity of the corporation with which those others are
concerned, and particularly will avoid the appearance of conducting business
on behalf of the Seller or any of its Affiliates or that the assets of the
Company are available to pay the creditors of the Seller or any of its
Affiliates. Without limiting the generality of the foregoing, all oral and
written communications, including without limitation, letters, invoices,
purchase orders, contracts, statements and loan applications, will be made
solely in the name of the Company.
(e) The Company will be operated so as not to be
substantively consolidated for bankruptcy purposes with the Seller.
(f) At least one director of the Company shall at all times
be a person who is not a director, officer or employee of any direct or
ultimate parent or Affiliate of the Seller.
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(g) The Company will not initiate or approve any amendment
to its Certificate of Incorporation without the prior written consent of the
Trustee and written confirmation by the Rating Agency that the adoption of
such amendment will not result in a reduction or withdrawal of the
then-current rating by such Rating Agency of the Senior Notes or the
Subordinated Notes.
(h) The Company will pay all reasonable costs and expenses
of the Rating Agency to maintain its ratings on the Notes.
SECTION 8.05. Protection of Trust Property; Further
Assurances.
The Company will from time to time execute and deliver all
such supplements and amendments hereto and all such UCC financing statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:
(i) grant more effectively all or any portion of the
Trust Property;
(ii) maintain or preserve the lien of this Indenture
or carry out more effectively the purposes hereof;
(iii) publish notice of, or protect the validity of,
any Grant made or to be made by this Indenture and perfect the
security interest contemplated hereby in favor of the Trustee in the
Contracts and the related Equipment and the other property
constituting the Trust Property;
(iv) enforce or cause the Servicer to enforce any of
the Contracts;
(v) preserve and defend title to any Contract
(including the right to receive all payments due or to become due
thereunder), Equipment, or other property included in the Trust
Property and preserve and defend the rights of the Trustee and the
Noteholders in such Contract (including the right to receive all
payments due or to become due thereunder), Equipment and other
property against the claims of all persons and parties; or
(vi) if the Servicer elects to hold the Contract
Files and the related documents, cause the electronic ledger, with
respect to each Contract and the Schedule of Contracts, to clearly
and unambiguously show that such Contract has been pledged by the
Company to the Trustee for the benefit of the Noteholders.
The Company, upon the Company's failure to do so, hereby designates the
Trustee its agent and attorney-in-fact to execute any UCC financing statement,
continuation statement or other document or instrument required pursuant to
this Section 8.05; provided, however, that such designation shall not be
deemed to create a duty in the Trustee to monitor the compliance of the
Company with the foregoing covenants, and provided further that the duty of
the Trustee to execute any instrument required pursuant to this Section 8.05
shall arise only if a Responsible Officer of the Trustee has actual knowledge
of any failure of the Company to comply with the provisions of this Section
8.05.
SECTION 8.06. Compliance Certificates.
The Company will deliver to the Trustee, the Rating Agency
and each Swap Provider within 90 days after the end of each fiscal year, a
written statement signed by the President or a Vice President and by the Chief
Financial Officer of the Company, stating, in addition to the statements
required by Section 1.17 (i)-(iv), as to each signer thereof, that
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(i) a review of the activities of the Company during
such year and of performance under this Indenture has been made under
his supervision and
(ii) to the best of such officers' knowledge, based
on such review, the Servicer has fulfilled all of its obligations
under this Indenture throughout such year.
(iii) whether the officer knows of any Defaults by
the Company under this Indenture throughout such year or, if there
has been a Default in the fulfillment of any such obligation,
specifying each such Default known to him and the nature and status
thereof and the nature of the action taken with respect thereto.
SECTION 8.07. Performance of Obligations; Sale and
Servicing Agreement.
(a) The Company will punctually perform and observe all of
its obligations and agreements contained in this Indenture, the Notes, the
Note Purchase Agreement, the Sale and Servicing Agreement and the Hedge
Agreements.
(b) The Company will clearly xxxx its books and records to
reflect each assignment and transfer of Contracts and the related Equipment
subject thereto from the Seller.
(c) If any Authorized Officer shall have knowledge of the
occurrence of a default under the Sale and Servicing Agreement or any Swap
Agreement, the Company shall promptly notify the Trustee, the Rating Agency
and the Noteholders thereof, and shall specify in such notice the action, if
any, the Company is taking in respect of such default. Unless consented to by
the Noteholders of Notes evidencing not less than 66-2/3% of Aggregate Note
Principal Balance, the Company may not waive any default under or amend the
Sale and Servicing Agreement or any Swap Agreement.
SECTION 8.08. Negative Covenants.
The Company will not:
(i) sell, transfer, exchange or otherwise dispose of
any portion of the Trust Property except as expressly permitted by
this Indenture;
(ii) claim any credit on, or make any deduction from,
the principal of, or interest on, any of the Notes by reason of the
payment of any taxes levied or assessed upon any portion of the Trust
Property;
(iii) engage in any business or activity other than
in connection with, or relating to the ownership of, the Contracts
and the Equipment, the issuance of the Notes, the specific
transactions contemplated hereby, and similar activities with respect
to ownership and financing of other pools of receivables;
(iv) seek dissolution or liquidation in whole or in
part or reorganization of its business or affairs;
(v) (A) permit the validity or effectiveness of this
Indenture or any Grant hereby to be impaired, or permit the lien of
this Indenture to be amended, hypothecated, subordinated, terminated
or discharged, or permit any Person to be released from any covenants
or obligations under this Indenture, except as may be expressly
permitted hereby, (B) permit any lien, charge,
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security interest, mortgage or other encumbrance to be created on or
to extend to or otherwise arise upon or burden the Trust Property or
any part thereof or any interest therein or the proceeds thereof
other than the lien of this Indenture and the rights of Obligors, or
(C) permit the lien of this Indenture not to constitute a valid first
priority perfected security interest in the Contracts and a valid
perfected security interest in the Seller's (and the Company's)
interests in the Equipment and the other Trust Property;
(vi) conduct its business or engage in any activity
in violation of the provisions contained in its Certificate of
Incorporation or make any material change in its business or incur
any indebtedness to any Person other than as expressly contemplated
by the Notes, this Indenture, the Sale and Servicing Agreement and
documents relating thereto;
(vii) at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay
or extension law or other law that would prohibit or forgive the
Company from paying all or any portion of the principal of or
interest on the Notes as contemplated herein or in the Notes,
wherever enacted, now or at any time hereafter in force, or that may
affect the covenants or the performance of this Indenture; and (to
the extent that it may lawfully do so) the Company hereby expressly
waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein
granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted;
(viii) issue or register the transfer of any of its
Capital Stock to any Person other than the Seller;
(ix) merge or consolidate with any other Person
except on terms, if any, approved in writing by the Trustee, each
Noteholder and the Rating Agency;
(x) take any action or permit any action to be taken
by others which would release any Person from any of such Person's
covenants or obligations under any Contract or any other instrument
included in the Trust Property other than any such release occasioned
by the early termination of a Contract after receipt of the
Retransfer Amount, or which would result in the amendment,
hypothecation, subordination, termination, or discharge of, or impair
the validity or effectiveness of, any Contract or such other
instrument, except as expressly provided in this Indenture or the
Sale and Servicing Agreement; or
(xi) purchase any Contract on any date unless at the
time of such purchase (and after giving effect thereto) (a) no
Default, Indenture Event of Default, Servicer Event of Default or
Early Amortization Event shall occur or be continuing, (b) the Equity
Base is not less than 5% of the Pool Balance and the sum of the
Equity Base and the Subordinated Note Principal Balance is not less
than the Required Support Percentage of the Pool Balance (in each
case both before and after giving effect to the purchase of Contracts
to occur on such date), and (c) the Company is in compliance with its
obligations under the Note Purchase Agreement and under the Hedge
Agreements.
SECTION 8.09. Information as to the Company. The Company
shall deliver to the Trustee, each Swap Provider, each Noteholder and the
Rating Agency:
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(a) immediately upon becoming aware of the existence of any
condition or event which constitutes a Default or an Indenture Event of
Default, a written notice describing its nature and period of existence and
what action the Company is taking or proposes to take with respect thereto;
and
(b) promptly upon the Company's becoming aware of (i) any
proposed or pending investigation of it by any governmental authority or
agency, or (ii) any pending or proposed court or administrative proceeding
which (in either case) involves or may involve the possibility, individually
or in the aggregate, of materially and adversely affecting the properties,
business, profits or condition (financial or otherwise) of the Company, a
written notice specifying the nature of such investigation or proceeding and
what action the Company is taking or proposes to take with respect thereto and
evaluating its merits.
SECTION 8.10. Payment of Taxes and Other Claims.
Subject to the priorities of payment and other restrictions
and limitations specified in Article III and the other provisions hereof, the
Company will pay or discharge or cause to be paid or discharged, before any
penalty accrues from the failure to so pay or discharge, (1) all taxes,
assessments and governmental charges levied or imposed upon the Company or
upon the income, profits or property (including any property that is part of
the Trust Property) of the Company and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company; provided, however, that the (i) Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim the amount, applicability or validity of which is
being contested in good faith by appropriate proceedings and for which
adequate provision has been made or where the failure to effect such payment
or discharge is not adverse in any material respect to the Noteholders and
(ii) the Company shall not apply to any such payments any funds constituting
Trust Property other than amounts (if any) constituting Excess Collections.
The Company shall be included as a consolidated entity in the federal tax
returns filed by the Seller.
SECTION 8.11. Indemnification.
The Company agrees to indemnify and hold harmless the
Trustee, (which shall include its directors, officers, employees and agents)
and each Noteholder (each an "Indemnified Party") against any and all
liabilities, losses, damages, penalties, costs and expenses (including the
fees and expenses of counsel and the costs of defense and legal fees and
expenses) which may be incurred or suffered by such Indemnified Party without
gross negligence, bad faith or willful misconduct on its part as a result of
claims, actions, suits or judgments asserted or imposed against it and arising
out of the transactions contemplated hereby or by the Sale and Servicing
Agreement, including, without limitation, any claims resulting from any use,
operation, maintenance, repair, storage or transportation of any item of
Equipment, whether or not in the Company's possession or under its control,
and any tort claims and any fines or penalties arising from any violation of
the laws or regulations of the United States or any state or local government
or governmental authority including, without limitation, securities laws, and,
in the case of the Trustee, in connection with the acceptance or
administration of this trust, including all costs and expenses of defending
itself against any claim in connection with the exercise or performance (or
inaction) of any of its powers or duties hereunder. The provisions of this
Section 8.11 shall survive the termination of this Indenture in accordance
with Section 11.01 hereof.
SECTION 8.12. Use of Proceeds. The Company will use the net
proceeds from the issuance of Notes on each Note Issuance Date to make a
purchase of Contracts and Contract Assets pursuant to and in accordance with
the Sale and Servicing Agreement.
67
ARTICLE IX
AMENDMENTS AND SUPPLEMENTAL INDENTURES
SECTION 9.01. Amendments and Supplemental Indentures.
This Indenture or the Notes may be amended or supplemented
by the parties hereto, without notice to or consent of the Noteholders, but
with notice to the Rating Agency and confirmation by such Rating Agency that
no reduction or withdrawal of the rating of any Class of Notes would be caused
by such amendment or supplement, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or the Notes or of modifying in any manner the rights of such
Noteholders, provided that such action will not, in the opinion of counsel
reasonably satisfactory to the Trustee, materially and adversely affect the
interests of any such Noteholders and that such action will not materially and
adversely affect the interests of any Swap Provider. This Indenture or the
Notes may also be amended or supplemented by the Company and the Trustee with
the consent of the Noteholders of Notes evidencing at least 51% of the
Aggregate Note Principal Balance for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of such Noteholders;
provided, however, that, no amendment to this Indenture or any supplemental
indenture may (i) cause a reduction in the then current rating of the Senior
Notes or the Subordinated Notes, (ii) increase or reduce in any manner the
amount of, or accelerate or delay the timing of collections of payments on the
related Contracts or distributions that are required to be made for the
benefit of such Noteholders, (iii) reduce the aforesaid percentage of the
Notes which is required to consent to any such amendment or waiver, (iv)
change the Scheduled Final Payment Date or (v) release any of the Trust
Property from the lien hereof (except as otherwise permitted herein) or modify
Section 2.06, 3.07, 6.06, 6.08, 6.13 or 9.01, without the consent of each
affected Noteholder. Furthermore, any amendment, modification or waiver of the
Indenture that affects the rights, duties or obligations of the Trustee may
only be effected with the Trustee's prior written consent. Notwithstanding
anything herein to the contrary, no amendment to this Indenture or any
supplemental indenture shall be required to cause a substitution of the
Floating Rate Hedge pursuant to Section 12.04 hereof so long as all
requirements for such substitution set forth in Section 12.04 are met.
It shall not be necessary for the consent of the Noteholders
under this Section to approve the particular form of any proposed amendment or
supplement, but it shall be sufficient if such consent approves the substance
thereof. The Trustee shall, promptly upon execution thereof, send a copy of
each amendment of or supplement to this Indenture or the Notes to each Swap
Provider.
SECTION 9.02. Execution of Amendments and Supplemental
Indentures.
In executing any amendment to this Indenture, the Notes or
any supplemental indenture pursuant to Section 9.01 of this Indenture, the
Trustee shall be entitled to receive, and (subject to Section 7.01) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such amendment to this Indenture, the Notes or any supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any supplemental indenture which affects
the Trustee's own rights, duties, protections, or immunities under this
Indenture or otherwise.
SECTION 9.03. Effect of Amendments and Supplemental
Indentures.
Upon the execution of any amendment to this Indenture, the
Notes or any supplemental indenture under this Article, this Indenture, the
Notes or any supplemental indenture shall be modified in accordance therewith,
and such amendment or supplemental indenture shall form a part of this
Indenture,
68
the Notes or any supplemental indenture for all purposes, and every Noteholder
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby. After an amendment or supplement under this Section becomes
effective, the Company shall mail to the Noteholders affected thereby and to
the Rating Agency a notice briefly describing the amendment or supplement. Any
failure of the Company to mail such notice, or any defects therein, shall not,
however, in any way impair or affect the validity of such amendment or
supplement.
SECTION 9.04. Reference in Notes to Amendments and
Supplemental Indentures.
Notes authenticated and delivered after the execution of any
amendment to this Indenture or any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such amendment or
supplemental indenture. If the Company shall so determine, new Notes so
modified as to conform, in the opinion of the Trustee and the Company, to any
such amendment or supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
outstanding Notes.
SECTION 9.05. Revocation and Effect of Consents.
Subject to this Indenture, each amendment, waiver or
instrument evidencing other action shall become effective in accordance with
its terms. Until an amendment, waiver or other action becomes effective, a
consent to it by a Noteholder is a continuing consent by the Noteholder even
if notation of the consent is not made on any Security.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Noteholders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then those Persons
who were Noteholders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to consent to such amendment,
supplement or waiver or to revoke any consent previously given, whether or not
such Persons continue to be Noteholders after such record date. No such
consent shall be valid or effective for more than 90 days after such record
date.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Optional Redemption; Election to Redeem.
(a) The Notes may be redeemed by the Company, in whole but
not in part, at the Redemption Price on any Monthly Payment Date on which the
Aggregate Note Principal Balance is less than 10% of the Aggregate Note
Principal Balance as of the first day of the Note Amortization Period (after
giving effect to payments of principal on such Monthly Payment Date).
(b) The Company, by an Authorized Officer, shall set the
Redemption Date and the Record Date (which shall be the Record Date that would
otherwise be applicable for the Monthly Payment Date on which such Redemption
Date is to occur) and shall give notice thereof to the Trustee pursuant to
Section 10.02.
69
SECTION 10.02. Notice to Trustee.
In the case of any redemption pursuant to Section 10.01, the
Company shall, at least 35 days prior to the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee), notify the Trustee, each Swap
Provider and the Rating Agency of such Redemption Date and the principal
amount of Notes to be redeemed. The notice shall be accompanied by an
Officer's Certificate stating that the redemption complies with the provisions
of this Indenture.
SECTION 10.03. Notice of Redemption by the Company.
Notice of redemption pursuant to Section 10.01 shall be
given by first class mail, postage prepaid, mailed at least 30 days but not
more than 60 days prior to the applicable Redemption Date, to each Noteholder
at its address in the Note Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) that on the Redemption Date, the Redemption
Price will become due and payable upon each
such Note, and that interest thereon shall
cease to accrue if payment is made on such
date; and
(4) the CUSIP number, if any, of the Notes of
each Class.
(5) Corporate Trust Office where Notes are to
be surrendered for payment of the
Redemption Price.
Notice of redemption of Notes shall be given by the Company,
by an Authorized Officer, or, at the request of such Authorized Officer, by
the Trustee in the name and at the expense of the Company. Failure to give
notice of redemption, or any defect therein, to any holder of an Note shall
not impair or affect the validity of the redemption of any other Note. If a
CUSIP number is listed in such notice or printed on the Note, the notice may
state that no representation is made as to the correctness or accuracy of such
CUSIP number.
SECTION 10.04. Deposit of the Redemption Price.
On or before the Business Day next preceding any Redemption
Date, the Company shall deposit with the Trustee an amount of monies
sufficient to pay the Redemption Price of all Notes outstanding on such
Redemption Date (less any portion of such payment to be made from monies in
the Collection Account and from the Reserve Account).
SECTION 10.05. Notes Payable on Redemption Date.
Notice of redemption having been given as provided in
Section 10.03, the Notes shall, on the applicable Redemption Date, become due
and payable at the Redemption Price and on such Redemption Date (unless the
Company shall default in the payment of the Redemption Price) such Notes shall
cease to bear interest. The Noteholders shall be paid the Redemption Price by
the Trustee on behalf of the Company; provided, however, that installments of
principal and interest which are due on or prior
70
to the Redemption Date shall be payable to the Noteholders registered as such
on the relevant Record Dates according to their terms and the provisions of
Section 2.07. If the holders of any Note called for redemption shall not be so
paid upon surrender, the principal and interest shall, until paid, bear
interest from the Redemption Date at the related Rate.
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of Indenture.
(a) This Indenture shall cease to be of further effect
(except as to any surviving rights herein expressly provided for), and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture, when
each of the following conditions are satisfied:
(i) either:
(A) all Notes theretofore authenticated and
delivered (other than (x) Notes which have been destroyed,
lost, or stolen and which have been replaced or paid as
provided in Section 2.05 and (y) Notes for whose payment
money has theretofore been deposited in trust or segregated
and held in trust by the Company and thereafter repaid to the
Company or discharged from such trust, as provided in Section
8.03(c)) have been irrevocably paid and delivered to the
Trustee for cancellation; or
(B) the final installments of principal on
all such Notes not theretofore delivered to the Trustee for
cancellation:
(1) have become due and payable,
or
(2) will become due and payable at
their Scheduled Final Payment Date within one year,
and the Company has deposited or caused to be deposited with
the Trustee as trust funds in trust for such purpose an
amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation, for principal and interest to the
date of such deposit (in the case of Notes which have become
due and payable) or to the Scheduled Final Payment Date
thereof;
(ii) all amounts payable hereunder for the benefit of
the Trustee and the Noteholders have been paid in full and all
amounts due and payable pursuant to each Swap Agreement have been
paid in full; and
(iii) the Company has delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that
all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with.
71
At such time, the Trustee shall deliver to the Company or, upon Company Order,
its assignee, all cash, securities and other property held by it as part of
the Trust Property other than funds deposited with the Trustee pursuant to
Section 11.01 (a)(i)(B) for the payment and discharge of the Notes.
(b) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company under Sections 7.06 and 8.11, and,
if money shall have been deposited with the Trustee pursuant to Section
11.01(a)(i)(B), the obligations of the Trustee under Section 11.02 and Section
8.03(c) shall survive.
SECTION 11.02. Application of Trust Money.
Subject to the provisions of Section 8.03(c), all money
deposited with the Trustee pursuant to Sections 11.01 and 8.03 shall be held
in trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment to the Persons entitled thereto of the
principal and interest for whose payment such money has been deposited with
the Trustee.
SECTION 11.03. Reinstatement.
If the Trustee is unable to apply any money in accordance
with Section 11.01 by reason of any legal proceeding or by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 11.01 until such time as the Trustee is
permitted to apply all such money in accordance with Section 11.01.
ARTICLE XII
HEDGE AGREEMENTS
SECTION 12.01 Hedge Apreements.
In connection with the issuance of any Notes, the Company
shall enter into Hedge Agreements described below with respect to the issued
Notes with Eligible Providers for the purpose of limiting the Company's
exposure to changes in market interest rates. The Company's rights under each
Hedge Agreement shall be collaterally assigned by the Company to the Trustee
for the benefit of the Noteholders.
SECTION 12.02 Fixed Rate Hedge.
(a) In connection with the issuance of any Fixed Rate Notes,
the Company shall enter into a Fixed Rate Hedge with a Hedge Provider for the
purpose of limiting the Company's exposure to changes in market interest rates
during the Note Issuance Period.
(b) The Fixed Rate Hedge shall provide for payments by the
Hedge Provider to the Company in the event the Fixed Rate Benchmark for either
class of Fixed Rate Notes exceeds certain rates specified in the Fixed Rate
Hedge during the Note Issuance Period. These payments shall supplement amounts
available to pay interest on the Notes if such Fixed Rate Benchmark is
exceeded.
SECTION 12.03 Floating Rate Hedge.
72
(a) In connection with the issuance of any Floating Rate
Notes, the Company shall enter into one or more hedging agreements, each of
which shall be either a Floating Rate Cap or a Swap Agreement with an Eligible
Provider for the purpose of limiting the Company's exposure to changes in
market interest rates during the period from the Note Issuance Date of the
related Floating Rate Notes through the Scheduled Final Payment Date.
(b) A Floating Rate Cap, if any, will provide for payments
by the Hedge Provider to the Company in the event LIBOR (as defined herein)
for any Interest Period exceeds a certain rate specified therein.
(c) Pursuant to each Swap Agreement, if any, each Swap
Provider (subject to the terms thereof) shall be obligated to pay to the
Trustee, in connection with each Monthly Payment Date (as defined herein) and
on the Scheduled Final Payment Date (as defined herein), an amount equal to
the product of a rate specified therein and a notional amount specified
therein, and the Trustee shall be obligated to pay to each such Swap Provider
(but solely with funds available to the Trustee in the Trust Property), in
connection with each Monthly Payment Date and on the Scheduled Final Payment
Date, the related Swap Payment Amount, if any. Any Swap Agreement shall be
subject to termination by either party under the circumstances specified
therein prior to the Scheduled Final Payment Date.
SECTION 12.04 Substitution of Floating Rate Hedge.
At any time during the Note Issuance Period, the Company
may, at its option, simultaneously terminate any Floating Rate Cap that is in
effect at such time and enter into a Swap Agreement in a form satisfactory to
Standard & Poor's and Noteholders of Notes evidencing not less than 66-2/3% of
the Aggregate Note Principal Balance. After the Note Issuance Period, any
termination or substitution of the Floating Rate Hedge at the option of the
Company must be approved by Noteholders of Notes evidencing not less than
66-2/3% of the Aggregate Note Principal Balance.
SECTION 12.05 Hedge Provider.
If on any day a Hedge Provider shall cease to be an Eligible
Provider and within 30 days thereafter no Hedge Provider Transfer (as defined
below) shall have occurred, then within 30 days thereafter (or such longer
period, if any, as the Rating Agency confirms in writing would not result in a
reduction or withdrawal of the rating of the Notes of any Class by the Rating
Agency), the Company shall have the right (but not the obligation) to (a)
cause the replacement of the Hedge Provider with a substitute Person that is
an Eligible Provider, or (b) obtain a supporting letter of credit or other
credit enhancement for the existing Hedge Provider such that the Hedge
Provider (after giving effect to such enhancement) is an Eligible Provider,
and (in each case) obtain confirmation in writing by the Rating Agency that,
based on such actions, no reduction or withdrawal of the then-current rating
of any Class of Notes would occur. "Hedge Provider Transfer" means an exercise
by the Hedge Provider of its rights under the Hedge Agreement to effect a
transfer of its rights and obligations under the Hedge Agreement to another
Person, or to obtain credit enhancement or to deliver collateral, such that
(in any such case) after giving effect thereto, no reduction or withdrawal of
the then-current rating of any Class of Notes by the Rating Agency would
occur.
SECTION 12.06 Rights of Swap Provider.
This Indenture and the Trust Property (except the Company's
rights under the Swap Agreements) secures the obligations of the Company to
each Swap Provider under each Swap Agreement. Notwithstanding any provision to
the contrary contained in this Indenture, if a Swap Termination Amount is at
any time owing by the Company, or if the Company fails to pay all amounts due
to the applicable
73
Swap Provider upon the scheduled termination of the related Swap Agreement,
then for all purposes of exercising the rights and remedies of Noteholders
under this Indenture (including, without limitation, all voting rights), each
applicable Swap Provider shall be treated as the holder of a Note with an
outstanding Note Principal Amount equal to the related Swap Termination Amount
as advised in writing to the Trustee by each such Swap Provider, and the
Senior Note Principal Amount shall be treated as having been increased on a
pro tanto basis. Notwithstanding the foregoing, all payments to all Swap
Providers shall be made in accordance with Articles Three and Six.
SECTION 12.07 Over-Issuance Condition.
The Company shall not cause or permit to exist an
Over-Issuance Condition (as defined below). On any date, if the Assumed
Longest Amortization of all Contracts included in the Trust Property will
result in the aggregate Note Principal Balance of all Notes which are subject
to a Fixed Rate Hedge or a Floating Rate Cap exceeding the aggregate notional
amounts of all such Fixed Rate Xxxxxx and Floating Rate Caps, then an
"Over-Issuance Condition" shall be deemed to exist on such date. For purposes
of this Section, "Assumed Longest Amortization" means the amortization of the
Principal Balance of the Contracts assuming that (i) no Contract is or becomes
a Defaulted Contract and (ii) no prepayment occurs on any Contract, (iii) no
Contract is subject to repurchase by the Seller or purchase by the Servicer
pursuant to the Sale and Servicing Agreement and (iv) the payment schedule for
each Contract is extended for three months immediately after giving effect to
the purchase of such Contract by the Company.
74
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and witnessed, all as of the day and year first above
written.
JLA FUNDING CORPORATION III
By:/s/ Xxxxxx X. Xxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
JLA CREDIT CORPORATION
By:/s/ Mitsumasa Sakka
-------------------------------------------
Name: Mitsumasa Sakka
Title: President
LTCB TRUST COMPANY, as Trustee
By:
-------------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Backup Trustee
By:
-------------------------------------------
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and witnessed, all as of the day and year first above
written.
JLA FUNDING CORPORATION III
By:
-------------------------------------------
Name:
Title:
JLA CREDIT CORPORATION
By:
-------------------------------------------
Name:
Title:
LTCB TRUST COMPANY, as Trustee
By:/s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK, as Backup Trustee
By:
-------------------------------------------
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and witnessed, all as of the day and year first above
written.
JLA FUNDING CORPORATION III
By:
-------------------------------------------
Name:
Title:
JLA CREDIT CORPORATION
By:
-------------------------------------------
Name:
Title:
LTCB TRUST COMPANY, as Trustee
By:
-------------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Backup Trustee
By:/s/ Xxxxx X. Xxxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
EXHIBIT A-1
[FORM OF CLASS A-FL NOTE)
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE SECURITIES LAWS. THE NOTEHOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE ONLY
(A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE ACT, (B) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE ACT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A OR (C) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT SUBJECT, IN THE CASE
OF CLAUSES (B) OR (C) ABOVE, TO COMPLIANCE BY THE NOTEHOLDER AND THE
TRANSFEREE WITH THE PROVISIONS OF THE INDENTURE, DATED AS OF MARCH 30, 1998,
AMONG JLA FUNDING CORPORATION III (THE "COMPANY"), JLA CREDIT CORPORATION, AS
SERVICER, LTCB TRUST COMPANY, AS TRUSTEE (THE "TRUSTEE"), AND THE BANK OF NEW
YORK, AS BACKUP TRUSTEE (THE "BACKUP TRUSTEE"), APPLICABLE TO SUCH TRANSFER.
BY ACCEPTANCE OF THIS NOTE, THE NOTEHOLDER AGREES TO TREAT THIS NOTE AS
INDEBTEDNESS FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES. THIS NOTE OR
ANY INTEREST HEREIN SHALL NOT BE TRANSFERRED TO ANY PERSON UNLESS SUCH PERSON
SHALL HAVE PROVIDED TO THE COMPANY AND THE TRUSTEE A CERTIFICATION, IN THE
FORM APPROVED BY THE COMPANY AND THE TRUSTEE, (I) THAT IT IS NOT AND FOR SO
LONG AS IT HOLDS NOTES WILL NOT BE A BENEFIT PLAN INVESTOR (AS DEFINED IN 29
C.F.R. ss. 2510.3-101 OR ANY SUCCESSOR PROVISION), OR (II) THAT (A) IN ANY
CASE IN WHICH THE NOTES ARE ACQUIRED BY SUCH PURCHASER WITH THE ASSETS OF AN
"EMPLOYEE BENEFIT PLAN" WITHIN THE MEANING OF SECTION 3(3) OF ERISA OR A
"PLAN" WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE CODE (ANY SUCH PLAN OR
EMPLOYEE BENEFIT PLAN, A "PLAN") AND FOR ANY PERIOD FOR WHICH A NOTE IS (OR IS
DEEMED FOR ERISA PURPOSES TO BE) ASSETS OF A PLAN, THAT THE ACQUISITION OR
TRANSFER, AND SUBSEQUENT HOLDING, WILL NOT CONSTITUTE, CAUSE OR OTHERWISE GIVE
RISE TO A TRANSACTION DESCRIBED IN SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE, AND (B)
NO VIOLATION OF STATE, LOCAL OR OTHER APPLICABLE LAW WILL ARISE BY VIRTUE OF
SUCH PERSON'S ACQUISITION, HOLDING AND SUBSEQUENT TRANSFER OF A NOTE.
No. Note Principal Balance $
Cusip No.
FLOATING RATE ASSET-BACKED NOTE, CLASS A-FL
JLA Funding Corporation III, a Delaware corporation (the
"Company"), for value received, hereby promises to pay to __________________
_________________ or registered assigns, the principal sum of
_______________________ (_____________), which shall be payable in monthly
installments to the extent of available funds pursuant to the Indenture (as
defined below), each equal to the sum of (i) the Monthly Principal allocable
to this Class A-FL Note and (ii) the Overdue Monthly Principal allocable to
this Class A-FL Note, on the 16th day of each month commencing in the first
calendar month following the end of the Note Issuance Period and ending not
later than the Scheduled Final Payment Date, when all remaining principal and
interest are due and payable in their entirety (each, a "Monthly Payment
Date"),
A-1
and to pay interest (computed on the basis of a 360-day year and the actual
number of days elapsed) accruing from the Note Issuance Date hereof. Interest
on this Note will be payable on each Monthly Payment Date on the Class A-FL
Note Principal Balance hereof commencing on the Monthly Payment Date occurring
in the calendar month immediately succeeding the month in which the Note
Issuance Date of this Note occurs, at a per annum rate that, for each Interest
Period, will equal the sum of LIBOR plus the Class A-FL Floating Rate Margin.
As used herein, "LIBOR" means, with respect to any Interest Period, the per
annum rate for deposits in United States dollars for a one-month period which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Interest
Determination Date. If such rate does not appear on Telerate Page 3750 on such
day, the rate will be determined on the basis of the rates at which deposits
in U.S. dollars are offered by the Reference Banks at approximately 11:00
a.m., London time, on the related Interest Determination Date to prime banks
in the London interbank market for a period of one month. The Trustee will
request the principal London office of each of the Reference Banks to provide
a quotation of its rate. If at least two such quotations are provided, the
rate for that Interest Determination Date will be the arithmetic mean of the
quotations. If fewer then two quotations are provided as requested, the rate
for that Interest Determination Date will be the arithmetic mean of the rates
rounded upwards to the nearest 1/16 of 1.0% (one percent) quoted by two or
more major banks in New York City, selected by the Trustee in its sole
discretion, at approximately 11:00 a.m., New York City time, on that Interest
Determination Date for loans in U.S. dollars to leading banks in London
interbank market for a period of one month. "Interest Determination Date"
means, with respect to any Interest Period, the second Business Day preceding
the first day of such Interest Period. "Reference Banks" shall mean Barclays
Bank PLC, Citibank, N.A., Chase Manhattan Bank and Deutsche Bank AG. "Interest
Period" means, with respect to any Note and any Monthly Payment Date, the
period from and including the previous Monthly Payment Date (or, in the case
of the first Monthly Payment Date for such Note, from and including the Note
Issuance Date for such Note), to but excluding such Monthly Payment Date.
Payments of principal and interest on this Note shall be made
on each Monthly Payment Date in such coin or currency of the United States of
America as at such time is legal tender for payment of public and private
debts to the Person in whose name this Note (or one or more predecessor Notes)
is registered at the close of business on the Record Date for such Monthly
Payment Date, which shall be the last day of the month preceding the month in
which the Monthly Payment Date occurs (or in the case of the initial Monthly
Payment Date, the Note Issuance Date hereof), by wire transfer of immediately
available funds to the account and number specified in the Note Register on
such Record Date for such Person or, if no such account or number is so
specified, then by check mailed to such Person's address as it appears in the
Note Register on such Record Date. The holder hereof shall surrender this Note
at the principal Corporate Trust Office of the Trustee for the final
installment of principal of this Note.
This Note is one of a duly authorized issue of Class A-FL
Notes of the Company designated as its Floating Rate Asset-Backed Notes, Class
A-FL, which are being or have been issued on any date or dates during the Note
Issuance Period (as defined in the Indenture) under an Indenture, dated as of
March 30, 1998 (as may be amended from time to time, the "Indenture"), among
the Company, the Servicer, LTCB Trust Company, as trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), and
The Bank of New York, as backup trustee, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, and immunities thereunder of
the Company, the Trustee, and the holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. The
Subordinated Notes are subordinated to the Senior Notes as and to the extent
set forth in the Indenture. The Trust Property secures all of the Notes
equally and ratably without preference, priority, or distinction between any
Note of the same Class and any other Note of the same Class by reason of
difference in time or times of issuance and delivery or otherwise, and also
secures the payment of certain other amounts and certain other obligations as
set forth in the Indenture.
A-2
If an Indenture Event of Default shall occur and be
continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.
As provided in the Indenture and subject to restrictions on
transfer and the other limitations set forth therein and above, the transfer
of this Note is registrable in the Note Register, upon surrender of this Note
for registration of transfer at the office or agency designated by the Company
pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and
for the same original aggregate principal amount, will, in accordance with the
Indenture, be issued to the designated transferee or transferees.
The Notes may be redeemed by the Company, in whole but not
in part, at the Redemption Price on any Monthly Payment Date on which the
Aggregate Note Principal Balance is less than 10% of the Aggregate Note
Principal Balance as of the first day of the Note Amortization Period (after
giving effect to payments of principal on such Monthly Payment Date) in the
manner provided in the Indenture.
The Notes are issuable only in registered form without
coupons in denominations as provided in the Indenture and subject to certain
limitations therein set forth. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Notes are limited recourse obligations of the Company.
The sole source of payment of the Notes will be the assets comprising the
Trust Property. The Notes do not represent an obligation of, or an interest
in, the Seller, the Servicer or any affiliate of any of them. The Notes are
limited in right of payment to certain collections and recoveries respecting
the Contracts and certain payments from the Collection Account, the Reserve
Account and the Payahead Account, all as more specifically set forth in the
Indenture. A copy of the Indenture may be examined during normal business
hours at the office of the Servicer, and at such other places, if any,
designated by the Trustee, by any Noteholder upon request.
The Indenture permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights of the
Noteholders under the Indenture at any time by the Seller, the Servicer and
the Trustee with the consent of the Noteholders of Notes evidencing not less
than 51% of the Aggregate Note Principal Balance and, in certain
circumstances, each affected Noteholder. Any such consent by the Noteholder of
this Note shall be conclusive and binding on such Noteholder and on all future
Noteholders of this Note and of any Note issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Note. The Indenture also permits the amendment thereof, in
certain limited circumstances, without prior notice to or the consent of the
Noteholders of any of the Notes.
Each Noteholder, by its acceptance of a Note, covenants and
agrees that such Noteholder will not, at any time prior to the day that is one
year and one day following the payment in full of all amounts owing pursuant
to the Notes and the Indenture, institute against the Seller or the Company,
or join in any institution against the Seller or the Company of, any
bankruptcy, reorganization, arrangement,
A-3
insolvency or liquidation proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations under or relating
to the Notes or the Indenture.
By accepting this Note, the holder hereof irrevocably
appoints the Trustee under the Indenture as the special attorney-in-fact for
the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Indenture for the
benefit of the holder. The preceding provision in no way shall limit the right
of the holder hereof to demand payment hereunder or bring an action to enforce
payment hereof.
Capitalized terms used and not defined in this Note which
are defined in the Indenture have the meanings specified in the Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State
of New York, without regard to the conflict of laws principles thereof.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, JLA Funding Corporation III has caused
this instrument to be duly executed.
JLA FUNDING CORPORATION III
By:______________________________
Title:
CERTIFICATE OF AUTHENTICATION
Dated:____________________
This is one of the Notes
referred to in the within
mentioned Indenture.
LTCB TRUST COMPANY,
not in its individual
capacity but solely in
its capacity as Trustee
By:_______________________________
Authorized Signatory
A-4
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
___________________
___________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_______________________________________________________
______________________________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
______________________________________
Date:_________________________________________________________________________
Your signature:_______________________________________________________________
(Sign exactly as your name appears on the other side
of this Note)
Signature(s) Guaranteed by:___________________________________________________
(All signatures must be guaranteed by a
member of a Signature Guarantee Medallion
Program.)
X-0
XXXXXXX X-0
[FORM OF CLASS A-FX NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE SECURITIES LAWS. THE NOTEHOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE ONLY
(A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE ACT, (B) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE ACT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A OR (C) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT SUBJECT, IN THE CASE
OF CLAUSES (B) OR (C) ABOVE, TO COMPLIANCE BY THE NOTEHOLDER AND THE
TRANSFEREE WITH THE PROVISIONS OF THE INDENTURE, DATED AS OF MARCH 30, 1998,
AMONG JLA FUNDING CORPORATION III (THE "COMPANY"), JLA CREDIT CORPORATION, AS
SERVICER, LTCB TRUST COMPANY, AS TRUSTEE (THE "TRUSTEE"), AND THE BANK OF NEW
YORK, AS BACKUP TRUSTEE (THE "BACKUP TRUSTEE"), APPLICABLE TO SUCH TRANSFER.
BY ACCEPTANCE OF THIS NOTE, THE NOTEHOLDER AGREES TO TREAT THIS NOTE AS
INDEBTEDNESS FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES. THIS NOTE OR
ANY INTEREST HEREIN SHALL NOT BE TRANSFERRED TO ANY PERSON UNLESS SUCH PERSON
SHALL HAVE PROVIDED TO THE COMPANY AND THE TRUSTEE A CERTIFICATION, IN THE
FORM APPROVED BY THE COMPANY AND THE TRUSTEE, (I) THAT IT IS NOT AND FOR SO
LONG AS IT HOLDS NOTES WILL NOT BE A BENEFIT PLAN INVESTOR (AS DEFINED IN 29
C.F.R. ss. 2510.3-101 OR ANY SUCCESSOR PROVISION), OR (II) THAT (A) IN ANY
CASE IN WHICH THE NOTES ARE ACQUIRED BY SUCH PURCHASER WITH THE ASSETS OF AN
"EMPLOYEE BENEFIT PLAN" WITHIN THE MEANING OF SECTION 3(3) OF ERISA OR A
"PLAN" WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE CODE (ANY SUCH PLAN OR
EMPLOYEE BENEFIT PLAN, A "PLAN") AND FOR ANY PERIOD FOR WHICH A NOTE IS (OR IS
DEEMED FOR ERISA PURPOSES TO BE) ASSETS OF A PLAN, THAT THE ACQUISITION OR
TRANSFER, AND SUBSEQUENT HOLDING, WILL NOT CONSTITUTE, CAUSE OR OTHERWISE GIVE
RISE TO A TRANSACTION DESCRIBED IN SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE, AND (B)
NO VIOLATION OF STATE, LOCAL OR OTHER APPLICABLE LAW WILL ARISE BY VIRTUE OF
SUCH PERSON'S ACQUISITION, HOLDING AND SUBSEQUENT TRANSFER OF A NOTE.
No. Note Principal Balance $
Cusip No.
FIXED RATE ASSET-BACKED NOTE, CLASS A-FX
JLA Funding Corporation III, a Delaware corporation (the
"Company"), for value received, hereby promises to pay to __________________
_______________ or registered assigns, the principal sum of
______________________ (_________________), which shall be payable in monthly
installments to the extent of available funds pursuant to the Indenture (as
defined below), each equal to the sum of (i) the Monthly Principal allocable
to this Class A-FX Note and (ii) the Overdue Monthly Principal allocable to
this Class A-FX Note, on the 16th day of each month commencing in the first
calendar month following the end of the Note Issuance Period and ending not
later than the Scheduled Final Payment Date, when
A-1
all remaining principal and interest are due and payable in their entirety
(each, a "Monthly Payment Date") and to pay interest (computed on the basis of
a 360-day year consisting of twelve 30-day months) accruing from the Note
Issuance Date hereof. Interest on this Note will be payable on each Monthly
Payment Date on the Class A-FX Note Principal Balance hereof commencing on the
Monthly Payment Date occurring in the calendar month immediately succeeding
the month in which the Note Issuance Date of this Note occurs, at a per annum
rate of __%, for each Interest Period. "Interest Period" means, with respect
to any Note and any Monthly Payment Date, the period from and including the
previous Monthly Payment Date (or, in the case of the first Monthly Payment
Date for such Note, from and including the Note Issuance Date for such Note),
to but excluding such Monthly Payment Date.
Payments of principal and interest on this Note shall be
made on each Monthly Payment Date in such coin or currency of the United
States of America as at such time is legal tender for payment of public and
private debts to the Person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the Record Date
for such Monthly Payment Date, which shall be the last day of the month
preceding the month in which the Monthly Payment Date occurs (or in the case
of the initial Monthly Payment Date, the Note Issuance Date hereof), by wire
transfer of immediately available funds to the account and number specified in
the Note Register on such Record Date for such Person or, if no such account
or number is so specified, then by check mailed to such Person's address as it
appears in the Note Register on such Record Date. The holder hereof shall
surrender this Note at the principal Corporate Trust Office of the Trustee for
the final installment of principal of this Note.
This Note is one of a duly authorized issue of Class A-FX
Notes of the Company designated as its Fixed Rate Asset-Backed Notes, Class
A-FX, which are being or have been issued on any date or dates during the Note
Issuance Period (as defined in the Indenture) under an Indenture, dated as of
March 30, 1998 (as may be amended from time to time, the "Indenture"), among
the Company, the Servicer, LTCB Trust Company, as trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), and
The Bank of New York, as back-up trustee, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, and immunities
thereunder of the Company, the Trustee, and the holders of the Notes and of
the terms upon which the Notes are, and are to be, authenticated and
delivered. The Subordinated Notes are subordinated to the Senior Notes as and
to the extent set forth in the Indenture. The Trust Property secures all of
the Notes equally and ratably without preference, priority, or distinction
between any Note of the same Class and any other Note of the same Class by
reason of difference in time or times of issuance and delivery or otherwise,
and also secures the payment of certain other amounts and certain other
obligations as set forth in the Indenture.
If an Indenture Event of Default shall occur and be
continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.
As provided in the Indenture and subject to restrictions on
transfer and the other limitations set forth therein and above, the transfer
of this Note is registrable in the Note Register, upon surrender of this Note
for registration of transfer at the office or agency designated by the Company
pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and
for the same original aggregate principal amount, will, in accordance with the
Indenture, be issued to the designated transferee or transferees.
The Notes may be redeemed by the Company, in whole but not
in part, at the Redemption Price on any Monthly Payment Date on which the
outstanding Aggregate Note Principal Balance of the
A-2
Notes is less than 10% of the Aggregate Note Principal Balance as of the first
day of the Note Amortization Period (after giving effect to payments of
principal on such Monthly Payment Date) in the manner provided in the
Indenture.
The Notes are issuable only in registered form without
coupons in denominations as provided in the Indenture and subject to certain
limitations therein set forth. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Notes are limited recourse obligations of the Company.
The sole source of payment of the Notes will be the assets comprising the
Trust Property. The Notes do not represent an obligation of, or an interest
in, the Seller, the Servicer or any affiliate of any of them. The Notes are
limited in right of payment to certain collections and recoveries respecting
the Contracts and certain payments from the Collection Account, the Reserve
Account and the Payahead Account, all as more specifically set forth in the
Indenture. A copy of the Indenture may be examined during normal business
hours at the office of the Servicer, and at such other places, if any,
designated by the Trustee, by any Noteholder upon request.
The Indenture permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights of the
Noteholders under the Indenture at any time by the Seller, the Servicer and
the Trustee with the consent of the Noteholders of Notes evidencing not less
than 51% of the Aggregate Note Principal Balance and, in certain
circumstances, each affected Noteholder. Any such consent by the Noteholder of
this Note shall be conclusive and binding on such Noteholder and on all future
Noteholders of this Note and of any Note issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Note. The Indenture also permits the amendment thereof, in
certain limited circumstances, without prior notice to or the consent of the
Noteholders of any of the Notes.
Each Noteholder, by its acceptance of a Note, covenants and
agrees that such Noteholder will not, at any time prior to the day that is one
year and one day following the payment in full of all amounts owing pursuant
to the Notes and the Indenture, institute against the Seller or the Company,
or join in any institution against the Seller or the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in
connection with any obligations under or relating to the Notes or the
Indenture.
By accepting this Note, the holder hereof irrevocably
appoints the Trustee under the Indenture as the special attorney-in-fact for
the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Indenture for the
benefit of the holder. The preceding provision in no way shall limit the right
of the holder hereof to demand payment hereunder or bring an action to enforce
payment hereof.
Capitalized terms used and not defined in this Note which are
defined in the Indenture have the meanings specified in the Indenture.
A-3
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State
of New York, without regard to the conflict of laws principles thereof.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, JLA Funding Corporation III has caused
this instrument to be duly executed.
JLA FUNDING CORPORATION III
By:__________________________
Title:
CERTIFICATE OF AUTHENTICATION
Dated:_______________________
This is one of the Notes
referred to in the within
mentioned Indenture.
LTCB TRUST COMPANY,
not in its individual
capacity but solely in
its capacity as Trustee
By:_______________________________
Authorized Signatory
A-4
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
___________________
___________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_______________________________________________________
______________________________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
______________________________________
Date:_________________________________________________________________________
Your signature:_______________________________________________________________
(Sign exactly as your name appears on the other side
of this Note)
Signature(s) Guaranteed by:___________________________________________________
(All signatures must be guaranteed by a
member of a Signature Guarantee Medallion
Program.)
X-0
XXXXXXX X-0
[FORM OF CLASS B-FL NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE SECURITIES LAWS. THE NOTEHOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE ONLY
(A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE ACT, (B) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE ACT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A OR (C) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT SUBJECT, IN THE CASE
OF CLAUSES (B) OR (C) ABOVE, TO COMPLIANCE BY THE NOTEHOLDER AND THE
TRANSFEREE WITH THE PROVISIONS OF THE INDENTURE, DATED AS OF MARCH 30, 1998,
AMONG JLA FUNDING CORPORATION III (THE "COMPANY"), JLA CREDIT CORPORATION, AS
SERVICER, LTCB TRUST COMPANY, AS TRUSTEE (THE "TRUSTEE"), AND THE BANK OF NEW
YORK, AS BACKUP TRUSTEE (THE "BACKUP TRUSTEE"), APPLICABLE TO, SUCH TRANSFER.
BY ACCEPTANCE OF THIS NOTE, THE NOTEHOLDER AGREES TO TREAT THIS NOTE AS
INDEBTEDNESS FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES. THIS NOTE OR
ANY INTEREST HEREIN SHALL NOT BE TRANSFERRED TO ANY PERSON UNLESS SUCH PERSON
SHALL HAVE PROVIDED TO THE COMPANY AND THE TRUSTEE A CERTIFICATION, IN THE
FORM APPROVED BY THE COMPANY AND THE TRUSTEE, (I) THAT IT IS NOT AND FOR SO
LONG AS IT HOLDS NOTES WILL NOT BE A BENEFIT PLAN INVESTOR (AS DEFINED IN 29
C.F.R. ss. 2510.3-101 OR ANY SUCCESSOR PROVISION), OR (II) THAT (A) IN ANY
CASE IN WHICH THE NOTES ARE ACQUIRED BY SUCH PURCHASER WITH THE ASSETS OF AN
"EMPLOYEE BENEFIT PLAN" WITHIN THE MEANING OF SECTION 3(3) OF ERISA OR A
"PLAN" WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE CODE (ANY SUCH PLAN OR
EMPLOYEE BENEFIT PLAN, A "PLAN") AND FOR ANY PERIOD FOR WHICH A NOTE IS (OR IS
DEEMED FOR ERISA PURPOSES TO BE) ASSETS OF A PLAN, THAT THE ACQUISITION OR
TRANSFER, AND SUBSEQUENT HOLDING, WILL NOT CONSTITUTE, CAUSE OR OTHERWISE GIVE
RISE TO A TRANSACTION DESCRIBED IN SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE, AND (B)
NO VIOLATION OF STATE, LOCAL OR OTHER APPLICABLE LAW WILL ARISE BY VIRTUE OF
SUCH PERSON'S ACQUISITION, HOLDING AND SUBSEQUENT TRANSFER OF A NOTE.
No. Note Principal Balance $
Cusip No.
FLOATING RATE ASSET-BACKED NOTE, CLASS B-FL
JLA Funding Corporation 111, a Delaware corporation (the
"Company"), for value received, hereby promises to pay to ______________
______________ or registered assigns, the principal sum of ___________________
(______________), which shall be payable in monthly installments to the extent
of available funds pursuant to the Indenture (as defined below), each equal to
the sum of (i) the Monthly Principal allocable to this Class B-FL Note and
(ii) the Overdue Monthly Principal allocable to this Class B-FL Note, on the
16th day of each month commencing in the first calendar month following the
end of the Note Issuance Period and ending not later than the Scheduled Final
Payment Date, when all remaining principal and interest are due and payable in
their entirety (each, a "Monthly Payment Date"),
B-1
and to pay interest (computed on the basis of a 360-day year and the actual
number of days elapsed) accruing from the Note Issuance Date hereof. Interest
on this Note will be payable on each Monthly Payment Date on the Class B-FL
Note Principal Balance hereof commencing on the Monthly Payment Date occurring
in the calendar month immediately succeeding the month in which the Note
Issuance Date of this Note occurs, at a per annum rate that, for each Interest
Period, will equal the sum of LIBOR plus the Class Floating Rate Margin. As
used herein, "LIBOR" means, with respect to any Interest Period, the per annum
rate for deposits in United States dollars for a one-month period which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Interest
Determination Date. If such rate does not appear on Telerate Page 3750 on such
day, the rate will be determined on the basis of the rates at which deposits
in U.S. dollars are offered by the Reference Banks at approximately 11:00
a.m., London time, on the related Interest Determination Date to prime banks
in the London interbank market for a period of one month. The Trustee will
request the principal London office of each of the Reference Banks to provide
a quotation of its rate. If at least two such quotations are provided, the
rate for that Interest Determination Date will be the arithmetic mean of the
quotations. If fewer then two quotations are provided as requested, the rate
for that Interest Determination Date will be the arithmetic mean of the rates
rounded upwards to the nearest 1/16 of 1.0% (one percent) quoted by two or
more major banks in New York City, selected by the Trustee in its sole
discretion, at approximately 11:00 a.m., New York City time, on that Interest
Determination Date for loans in U.S. dollars to leading banks in London
interbank market for a period of one month. "Interest Determination Date"
means, with respect to any Interest Period, the second Business Day preceding
the first day of such Interest Period. "Reference Banks" shall mean Barclays
Bank PLC, Citibank, N.A., Chase Manhattan Bank and Deutsche Bank AG. "Interest
Period" means, with respect to any Note and any Monthly Payment Date, the
period from and including the previous Monthly Payment Date (or, in the case
of the first Monthly Payment Date for such Note, from and including the Note
Issuance Date for such Note), to but excluding such Monthly Payment Date.
THE RIGHTS TO RECEIVE PAYMENTS WITH RESPECT TO THIS CLASS
B-FL NOTE ARE SUBORDINATE TO THE PRIOR PAYMENT IN FULL ON EACH MONTHLY PAYMENT
DATE OF ALL AMOUNTS OF PRINCIPAL AND INTEREST DUE AND PAYABLE ON THE SENIOR
NOTES AS PROVIDED IN THE INDENTURE.
Payments of principal and interest on this Note shall be
made on each Monthly Payment Date in such coin or currency of the United
States of America as at such time is legal tender for payment of public and
private debts to the Person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the Record Date
for such Monthly Payment Date, which shall be the last day of the month
preceding the month in which the Monthly Payment Date occurs (or in the case
of the initial Monthly Payment Date, the Note Issuance Date hereof), by wire
transfer of immediately available funds to the account and number specified in
the Note Register on such Record Date for such Person or, if no such account
or number is so specified, then by check mailed to such Person's address as it
appears in the Note Register on such Record Date. The holder hereof shall
surrender this Note at the principal Corporate Trust Office of the Trustee for
the final installment of principal of this Note.
This Note is one of a duly authorized issue of Class B-FL
Notes of the Company designated as its Floating Rate Asset-Backed Notes, Class
B-FL, which are being or have been issued on any date or dates during the Note
Issuance Period (as defined in the Indenture) under an Indenture, dated as of
March 30, 1998 (as may be amended from time to time, the "Indenture"), among
the Company, the Servicer, LTCB Trust Company, as trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), and
The Bank of New York, as backup trustee, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, and immunities thereunder of
the Company, the Trustee, and the holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. The
Subordinated Notes are
B-2
subordinated to the Senior Notes as and to the extent set forth in the
Indenture. The Trust Property secures all of the Notes equally and ratably
without preference, priority, or distinction between any Note of the same
Class and any other Note of the same Class by reason of difference in time or
times of issuance and delivery or otherwise, and also secures the payment of
certain other amounts and certain other obligations as set forth in the
Indenture.
If an Indenture Event of Default shall occur and be
continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.
As provided in the Indenture and subject to restrictions on
transfer and the other limitations set forth therein and above, the transfer
of this Note is registrable in the Note Register, upon surrender of this Note
for registration of transfer at the office or agency designated by the Company
pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and
for the same original aggregate principal amount, will, in accordance with the
Indenture, be issued to the designated transferee or transferees.
The Notes may be redeemed by the Company, in whole but not
in part, at the Redemption Price on any Monthly Payment Date on which the
Aggregate Note Principal Balance is less than 10% of the Aggregate Note
Principal Balance as of the first day of the Note Amortization Period (after
giving effect to payments of principal on such Monthly Payment Date) in the
manner provided in the Indenture.
The Notes are issuable only in registered form without
coupons in denominations as provided in the Indenture and subject to certain
limitations therein set forth. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
The Notes are limited recourse obligations of the Company.
The sole source of payment of the Notes will be the assets comprising the
Trust Property. The Notes do not represent an obligation of, or an interest
in, the Seller, the Servicer or any affiliate of any of them. The Notes are
limited in right of payment to certain collections and recoveries respecting
the Contracts and certain payments from the Collection Account, the Reserve
Account and the Payahead Account, all as more specifically set forth in the
Indenture. A copy of the Indenture may be examined during normal business
hours at the office of the Servicer, and at such other places, if any,
designated by the Trustee, by any Noteholder upon request.
The Indenture permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights of the
Noteholders under the Indenture at any time by the Seller, the Servicer and
the Trustee with the consent of the Noteholders of Notes evidencing not less
than 51% of the Aggregate Note Principal Balance and, in certain
circumstances, each affected Noteholder. Any such consent by the Noteholder of
this Note shall be conclusive and binding on such Noteholder and on all future
Noteholders of this Note and of any Note issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Note. The Indenture also permits the amendment thereof, in
certain limited circumstances, without prior notice to or the consent of the
Noteholders of any of the Notes.
B-3
Each Noteholder, by its acceptance of a Note, covenants and
agrees that such Noteholder will not, at any time prior to the day that is one
year and one day following the payment in full of all amounts owing pursuant
to the Notes and the Indenture, institute against the Seller or the Company,
or join in any institution against the Seller or the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in
connection with any obligations under or relating to the Notes or the
Indenture.
By accepting this Note, the holder hereof irrevocably
appoints the Trustee under the Indenture as the special attorney-in-fact for
the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Indenture for the
benefit of the holder. The preceding provision in no way shall limit the right
of the holder hereof to demand payment hereunder or bring an action to enforce
payment hereof.
Capitalized terms used and not defined in this Note which
are defined in the Indenture have the meanings specified in the Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State
of New York, without regard to the conflict of laws principles thereof.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, JLA Funding Corporation III has caused
this instrument to be duly executed.
JLA FUNDING CORPORATION III
By:_______________________
Title:
CERTIFICATE OF AUTHENTICATION
Dated:________________________
This is one of the Notes
referred to in the within
mentioned Indenture.
LTCB TRUST COMPANY,
not in its individual
capacity but solely in
its capacity as Trustee
By:_______________________________
Authorized Signatory
B-4
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
___________________
___________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_______________________________________________________
______________________________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
______________________________________
Date:_________________________________________________________________________
Your signature:_______________________________________________________________
(Sign exactly as your name appears on the other side
of this Note)
Signature(s) Guaranteed by:___________________________________________________
(All signatures must be guaranteed by a
member of a Signature Guarantee Medallion
Program.)
B-5
EXHIBIT B-2
[FORM OF CLASS B-FX NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE SECURITIES LAWS. THE NOTEHOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE ONLY
(A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE ACT, (B) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE ACT IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A OR (C) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT SUBJECT, IN THE CASE
OF CLAUSES (B) OR (C) ABOVE, TO COMPLIANCE BY THE NOTEHOLDER AND THE
TRANSFEREE WITH THE PROVISIONS OF THE INDENTURE, DATED AS OF MARCH 30,1998,
AMONG JLA FUNDING CORPORATION III (THE "COMPANY"), JLA CREDIT CORPORATION, AS
SERVICER, LTCB TRUST COMPANY, AS TRUSTEE (THE "TRUSTEE"), AND THE BANK OF NEW
YORK, AS BACKUP TRUSTEE (THE "BACKUP TRUSTEE"), APPLICABLE TO SUCH TRANSFER.
BY ACCEPTANCE OF THIS NOTE, THE NOTEHOLDER AGREES TO TREAT THIS NOTE AS
INDEBTEDNESS FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES. THIS NOTE OR
ANY INTEREST HEREIN SHALL NOT BE TRANSFERRED TO ANY PERSON UNLESS SUCH PERSON
SHALL HAVE PROVIDED TO THE COMPANY AND THE TRUSTEE A CERTIFICATION, IN THE
FORM APPROVED BY THE COMPANY AND THE TRUSTEE, (I) THAT IT IS NOT AND FOR SO
LONG AS IT HOLDS NOTES WILL NOT BE A BENEFIT PLAN INVESTOR (AS DEFINED IN 29
C.F.R. ss. 2510.3-101 OR ANY SUCCESSOR PROVISION), OR (II) THAT (A) IN ANY
CASE IN WHICH THE NOTES ARE ACQUIRED BY SUCH PURCHASER WITH THE ASSETS OF AN
"EMPLOYEE BENEFIT PLAN" WITHIN THE MEANING OF SECTION 3(3) OF ERISA OR A
"PLAN" WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE CODE (ANY SUCH PLAN OR
EMPLOYEE BENEFIT PLAN, A "PLAN") AND FOR ANY PERIOD FOR WHICH A NOTE IS (OR IS
DEEMED FOR ERISA PURPOSES TO BE) ASSETS OF A PLAN, THAT THE ACQUISITION OR
TRANSFER, AND SUBSEQUENT HOLDING, WILL NOT CONSTITUTE, CAUSE OR OTHERWISE GIVE
RISE TO A TRANSACTION DESCRIBED IN SECTION 406 OF ERISA OR SECTION 4975 OF THE
CODE FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE, AND (B)
NO VIOLATION OF STATE, LOCAL OR OTHER APPLICABLE LAW WILL ARISE BY VIRTUE OF
SUCH PERSON'S ACQUISITION, HOLDING AND SUBSEQUENT TRANSFER OF A NOTE.
No. Note Principal Balance $
Cusip No.
FIXED RATE ASSET-BACKED NOTE, CLASS B-FX
JLA Funding Corporation III, a Delaware corporation (the
"Company "), for value received, hereby promises to pay to ________________
_______________ or registered assigns, the principal sum of
___________________ (________________), which shall be payable in monthly
installments to the extent of available funds pursuant to the Indenture (as
defined below), each equal to the sum of (i) the Monthly Principal allocable
to this Class B-FX Note and (ii) the Overdue Monthly Principal allocable to
this Class B-FX Note, on the 16th day of each month commencing in the first
calendar month following the end of the Note Issuance Period and ending not
later than the Scheduled Final Payment Date, when all remaining principal and
interest are due and payable in their entirety (each, a "Monthly Payment
Date"),
B-1
and to pay interest (computed on the basis of a 360-day year consisting of
twelve 30-day months) accruing from the Note Issuance Date hereof. Interest on
this Note will be payable on each Monthly Payment Date on the Class A-FX Note
Principal Balance hereof commencing on the Monthly Payment Date occurring in
the calendar month immediately succeeding the month in which the Note Issuance
Date of this Note occurs, at a per annum rate of __%, for each Interest
Period. "Interest Period" means, with respect to any Note and any Monthly
Payment Date, the period from and including the previous Monthly Payment Date
(or, in the case of the first Monthly Payment Date for such Note, from and
including the Note Issuance Date for such Note), to but excluding such Monthly
Payment Date.
THE RIGHTS TO RECEIVE PAYMENTS WITH RESPECT TO THIS CLASS
B-FX NOTE ARE SUBORDINATE TO THE PRIOR PAYMENT IN FULL ON EACH MONTHLY PAYMENT
DATE OF ALL AMOUNTS OF PRINCIPAL AND INTEREST DUE AND PAYABLE ON THE CLASS
B-FX NOTES AS PROVIDED IN THE INDENTURE.
Payments of principal and interest on this Note shall be
made on each Monthly Payment Date in such coin or currency of the United
States of America as at such time is legal tender for payment of public and
private debts to the Person in whose name this Note (or one or more
predecessor Notes) is registered at the close of business on the Record Date
for such Monthly Payment Date, which shall be the last day of the month
preceding the month in which the Monthly Payment Date occurs (or in the case
of the initial Monthly Payment Date, the Note Issuance Date hereof), by wire
transfer of immediately available funds to the account and number specified in
the Note Register on such Record Date for such Person or, if no such account
or number is so specified, then by check mailed to such Person's address as it
appears in the Note Register on such Record Date. The holder hereof shall
surrender this Note at the principal Corporate Trust Office of the Trustee for
the final installment of principal of this Note.
This Note is one of a duly authorized issue of Class B-FX
Notes of the Company designated as its Fixed Rate Asset-Backed Notes, Class
B-FX, which are being or have been issued on any date or dates during the
Note Issuance Period (as defined in the Indenture) under an Indenture, dated
as of March 30, 1998 (as may be amended from time to time, the "Indenture"),
among the Company, the Servicer, LTCB Trust Company, as trustee (herein called
the "Trustee," which term includes any successor trustee under the Indenture),
and The Bank of New York, as backup trustee, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, and immunities
thereunder of the Company, the Trustee, and the holders of the Notes and of
the terms upon which the Notes are, and are to be, authenticated and
delivered. The Subordinated Notes are subordinated to the Senior Notes as and
to the extent set forth in the Indenture. The Trust Property secures all of
the Notes equally and ratably without preference, priority, or distinction
between any Note of the same Class and any other Note of the same Class by
reason of difference in time or times of issuance and delivery or otherwise,
and also secures the payment of certain other amounts and certain other
obligations as set forth in the Indenture.
If an Indenture Event of Default shall occur and be
continuing, the Notes may be declared due and payable in the manner and with
the effect provided in the Indenture.
As provided in the Indenture and subject to restrictions on
transfer and the other limitations set forth therein and above, the transfer
of this Note is registrable in the Note Register, upon surrender of this Note
for registration of transfer at the office or agency designated by the Company
pursuant to the Indenture, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and
for the same original
B-2
aggregate principal amount, will, in accordance with the Indenture, be issued
to the designated transferee or transferees.
The Notes may be redeemed by the Company, in whole but not
in part, at the Redemption Price on any Monthly Payment Date on which the
outstanding Aggregate Note Principal Balance of the Notes is less than 10% of
the Aggregate Note Principal Balance as of the first day of the Note
Amortization Period (after giving effect to payments of principal on such
Monthly Payment Date) in the manner provided in the Indenture.
The Notes are issuable only in registered form without
coupons in denominations as provided in the Indenture and subject to certain
limitations therein set forth. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Note is registered as the owner hereof
for all purposes, whether or not this Note be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Notes are limited recourse obligations of the Company.
The sole source of payment of the Notes will be the assets comprising the
Trust Property. The Notes do not represent an obligation of, or an interest
in, the Seller, the Servicer or any affiliate of any of them. The Notes are
limited in right of payment to certain collections and recoveries respecting
the Contracts and certain payments from the Collection Account, the Reserve
Account and the Payahead Account, all as more specifically set forth in the
Indenture. A copy of the Indenture may be examined during normal business
hours at the office of the Servicer, and at such other places, if any,
designated by the Trustee, by any Noteholder upon request.
The Indenture permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights of the
Noteholders under the Indenture at any time by the Seller, the Servicer and
the Trustee with the consent of the Noteholders of Notes evidencing not less
than 51% of the Aggregate Note Principal Balance and, in certain
circumstances, each affected Noteholder. Any such consent by the Noteholder of
this Note shall be conclusive and binding on such Noteholder and on all future
Noteholders of this Note and of any Note issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Note. The Indenture also permits the amendment thereof, in
certain limited circumstances, without prior notice to or the consent of the
Noteholders of any of the Notes.
Each Noteholder, by its acceptance of a Note, covenants and
agrees that such Noteholder will not, at any time prior to the day that is one
year and one day following the payment in full of all amounts owing pursuant
to the Notes and the Indenture, institute against the Seller or the Company,
or join in any institution against the Seller or the Company of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States Federal or state bankruptcy or similar law in
connection with any obligations under or relating to the Notes or the
Indenture.
By accepting this Note, the holder hereof irrevocably
appoints the Trustee under the Indenture as the special attorney-in-fact for
the holder vested with full power on behalf of the holder to effect and
enforce the rights of such holder and the provisions of the Indenture for the
benefit of the holder. The preceding provision in no way shall limit the right
of the holder hereof to demand payment hereunder or bring an action to enforce
payment hereof.
B-3
Capitalized terms used and not defined in this Note which
are defined in the Indenture have the meanings specified in the Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State
of New York, without regard to the conflict of laws principles thereof.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Note shall not be entitled
to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, JLA Funding Corporation III has caused
this instrument to be duly executed.
JLA FUNDING CORPORATION III
By:_________________________
Title:
CERTIFICATE OF AUTHENTICATION
Dated:_______________________
This is one of the Notes
referred to in the within
mentioned Indenture.
LTCB TRUST COMPANY,
not in its individual
capacity but solely in
its capacity as Trustee
By:________________________________
Authorized Signatory
B-4
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have
your signature guaranteed:
I or we assign and transfer this Note to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
___________________
___________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
(Print or type assignee's name,
address and zip code)
and irrevocably appoint_______________________________________________________
______________________________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
______________________________________
Date:_________________________________________________________________________
Your signature:_______________________________________________________________
(Sign exactly as your name appears on the other side
of this Note)
Signature(s) Guaranteed by:___________________________________________________
(All signatures must be guaranteed by a
member of a Signature Guarantee Medallion
Program.)
B-5
EXHIBIT C
FORM OF TRANSFEREE LETTER
[letterhead of Transferee]
Date:
JLA Funding Corporation III
00000 Xxxxxxx Xxxxxxxxx - Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
LTCB Trust Company, as Trustee
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: JLA Funding Corporation III
---------------------------
Dear Sirs:
We are the transferee in a private sale or other transfer from
__________ (the "Transferor") of $__________ in aggregate original principal
amount of Floating Rate Asset-Backed Notes, Class A (the "Senior Notes"), and
$__________ in aggregate original principal amount of Floating Rate
Asset-Backed Notes, Class B (the "Subordinated Notes" and, collectively with
the Senior Notes, the "Notes") issued by JLA Funding Corporation III (the
"Company"), pursuant to the Indenture, dated as of March 30, 1998 (as may be
amended from time to time, the "Indenture"), among the Company, JLA Credit
Corporation and LTCB Trust Company, as Trustee (the "Trustee"). Capitalized
terms used and not otherwise defined herein have the meanings specified in the
Indenture.
In connection with our acquisition of the Notes, we hereby represent,
warrant, certify and agree as follows:
(A) We confirm that [check as applicable]:
___________We are an institutional investor that is an
"accredited investor" as defined under paragraph (1), (2),
(3) or (7) of Rule 501(a) under the Securities Act of 1933,
as amended (the "Securities Act") (an "Institutional
Accredited Investor") or, if the Notes are to be purchased by
us for one or more institutional accounts ("investor
accounts") for which we are acting as a fiduciary or agent,
each such investor account is an Institutional Accredited
Investor.
___________We are a "qualified institutional buyer" as that
term is defined in Rule 144A under the Securities Act (a
"Qualified Institutional Buyer") or, if the Notes are to be
purchased by us for one or more investor accounts
C-1
for which we are acting as a fiduciary or agent, each such investor
account is a Qualified Institutional Buyer.
(B) We are purchasing the Notes solely for our own account or
accounts for which we exercise sole investment discretion and not as nominee
or agent for any other person.
(C) We have such knowledge and experience in financial and business
matters and with respect to investments in securities that we are capable of
evaluating the merits and risks of an investment in the Notes, and we are (and
each account, if any, for which we are purchasing is) able to bear the
economic risk of such investment for an indefinite period. We have had such
opportunity to ask questions of and receive answers from the Transferor and
the Company concerning our purchase of the Notes and all matters relating
thereto and we have been afforded such access to information (including
financial information) about the Company and JLACC as have enabled us to
evaluate our investment in the Notes and we have received all such information
as we have deemed necessary to make an informed decision with respect to our
purchase of the Notes.
(D) We understand that the Notes are not being registered under the
Securities Act or any state securities laws and that the Company is relying
upon an exemption from registration as an "investment company" under the
Investment Company Act of 1940, as amended (the "Investment Company Act"). We
understand that the Notes are being transferred to us in a transaction that is
exempt from the registration requirements of the Securities Act and such laws.
We understand that there is no market for, nor is there any assurance that a
market will develop, for the Notes, and we will not reoffer or resell the
Notes by any form of general solicitation or general advertising.
(E) We understand that, if in the future we decide to sell or
otherwise transfer any Note, such Note may be sold or transferred only (A) to
a person that we reasonably believe is a Qualified Institutional Buyer in a
transaction meeting the requirements of Rule 144A under the Securities Act,
or (B) to an Institutional Accredited Investor pursuant to another available
exemption from the registration requirements of the Securities Act subject, in
the case of clauses (A) and (B) above, to compliance by the transferee and us
with the provisions of the Indenture including, without limitation, the
delivery by the proposed transferee of a Transferee Letter substantially in
the form of this letter and, in the case of clause (B), the delivery of an
opinion of counsel of counsel to the transferee, in form and substance
acceptable to the Trustee and the Company, if requested by the Trustee or the
Company.
(F) We understand that the Notes will bear legends substantially to
the following effect:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") OR ANY STATE SECURITIES LAWS. THE NOTEHOLDER
OF THIS NOTE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH NOTE ONLY (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE ACT, (B) TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE ACT IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A OR (C) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT SUBJECT, IN
THE CASE OF CLAUSES (B) OR (C) ABOVE, TO COMPLIANCE BY THE NOTEHOLDER
AND THE TRANSFEREE WITH THE PROVISIONS OF THE INDENTURE, DATED AS OF
MARCH 30,1998, AMONG
C-2
JLA FUNDING CORPORATION III (THE "COMPANY"), JLA CREDIT CORPORATION,
AS SERVICER, AND LTCB TRUST COMPANY, AS TRUSTEE (THE "TRUSTEE"),
APPLICABLE TO SUCH TRANSFER.
BY ACCEPTANCE OF THIS NOTE, THE NOTEHOLDER AGREES TO TREAT THIS NOTE
AS INDEBTEDNESS FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES.
THIS NOTE OR ANY INTEREST HEREIN SHALL NOT BE TRANSFERRED TO ANY
PERSON UNLESS SUCH PERSON SHALL HAVE PROVIDED TO THE COMPANY AND THE
TRUSTEE A CERTIFICATION, IN THE FORM APPROVED BY THE COMPANY AND THE
TRUSTEE, (I) THAT IT IS NOT AND FOR SO LONG AS IT HOLDS NOTES WILL
NOT BE A BENEFIT PLAN INVESTOR (AS DEFINED IN 29 C.F.R.
ss. 2510.3-101 OR ANY SUCCESSOR PROVISION), OR (II) THAT (A) IN ANY
CASE IN WHICH THE NOTES ARE ACQUIRED BY SUCH PURCHASER WITH THE
ASSETS OF AN "EMPLOYEE BENEFIT PLAN" WITHIN THE MEANING OF SECTION
3(3) OF ERISA OR A "PLAN" WITHIN THE MEANING OF SECTION 4975(E)(1) OF
THE CODE (ANY SUCH PLAN OR EMPLOYEE BENEFIT PLAN, A "PLAN") AND FOR
ANY PERIOD FOR WHICH A NOTE IS (OR IS DEEMED FOR ERISA PURPOSES TO
BE) ASSETS OF A PLAN, THAT THE ACQUISITION OR TRANSFER, AND
SUBSEQUENT HOLDING, WILL NOT CONSTITUTE, CAUSE OR OTHERWISE GIVE RISE
TO A TRANSACTION DESCRIBED IN SECTION 406 OF ERISA OR SECTION 4975 OF
THE CODE FOR WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS
UNAVAILABLE, AND (B) NO VIOLATION OF STATE, LOCAL OR OTHER APPLICABLE
LAW WILL ARISE BY VIRTUE OF SUCH PERSON'S ACQUISITION, HOLDING AND
SUBSEQUENT TRANSFER OF A NOTE.
(G) We hereby represent and warrant, further, that either
(i) we are not and for so long as we hold Notes will not be a
"benefit plan investor" (as defined in 29 C.F.R. ss. 2510.3-101 or
any successor provision) or (ii) in any case in which Notes are being
acquired by us with the assets of an "employee benefit plan" within
the meaning of Section 3(3) of ERISA or a "plan" within the meaning
of Section 4975(e)(1) of the Code (any such plan or employee benefit
plan, a "Plan") and for any period for which a Note is (or is deemed
for ERISA purposes to be) assets of a Plan, that the acquisition or
transfer, and subsequent holding, of any such Notes will not
constitute, cause or otherwise give rise to a transaction described
in Section 406 of ERISA or Section 4975 of the Code for which a
statutory or administrative exemption is unavailable.
We agree that we will obtain from any purchaser of our Notes a letter
executed by such purchaser in the form of this letter.
We hereby indemnify each of you, your respective affiliates and each
other Noteholder for any losses, claims, damages or liabilities (including
fees and expenses of counsel) incurred by you or them as a result, directly or
indirectly, of (i) any statements made by us in this letter, or in any
document delivered by us relating hereto, (ii) our making any transfer or
other disposition of any Note in a manner that violates the provisions of this
letter, such Note or the Indenture, or (iii) any failure of a direct purchaser
from us to have furnished to each of you a letter in the form hereof.
C-3
Our Notes should be registered as follows:
Name:
Address:
Tax Identification Number:
Physical Location of the Notes:
Contact:
Very truly yours,
[NAME OF PURCHASER)
By:____________________
Title:
C-4
EXHIBIT D
[FORM OF ISSUER ORDER)
[DATE OF ISSUER ORDER)
[TRUSTEE]
[ADDRESS]
[Attention: Corporate Trust Administration]
Ladies and Gentlemen:
Reference is made to the Indenture dated as of March 30, 1998, by and
among JLA Funding Corporation III, a Delaware corporation (herein called the
"Company"), JLA Credit Corporation, a Delaware corporation, LTCB Trust
Company, a New York trust company, as trustee and The Bank of New York, a
__________, as backup trustee.
In connection with the Note Issuance Date to occur on _________ 199_,
pursuant to Section 2.03(d) of the Indenture, you are requested to
authenticate definitive certificates for the Notes in the respective
denominations and in the respective names below, and to deliver such Notes in
accordance with the delivery instructions set forth below:
Name of Registered Holder: [NAME]
Denomination(s): [$______________ of [Floating/___% Fixed] Rate Asset-Backed
Notes, Class [ ]
Delivery Instruction: [DELIVERY INFORMATION]]
Name of Registered Holder: [NAME]
Denomination(s): [$______________ of [Floating/___% Fixed] Rate Asset-Backed
Notes, Class [ ]
Delivery Instruction: [DELIVERY INFORMATION]]
Name of Registered Holder: [NAME]
Denomination(s): [$______________ of [Floating/___% Fixed] Rate Asset-Backed
Notes, Class [ ]
Delivery Instruction: [DELIVERY INFORMATION]]
Upon the issuance of the Specified Notes, the Aggregate Note
Principal Balance of each class of Notes issued under the Indenture shall be:
[$_______________ of Floating Rate Asset-Backed Notes, Class A-FL]
[$_______________ of Fixed Rate Asset-Backed Notes, Class A-FX]
[$_______________ of Floating Rate Asset-Backed Notes, Class B-FL]
[$_______________ of Fixed Rate Asset-Backed Notes, Class B-FX]
The Company hereby certifies that the following conditions have been
met for the issuance of the Specified Notes:
D-1
(i) (a) no Default, Indenture Event of Default, Servicer Event
of Default or Early Amortization Event has occurred or is continuing, (b) the
Equity Base is not less than 5% of the Pool Balance and the sum of the Equity
Base and the Subordinated Note Principal Balance is not less than the Required
Support Percentage of the Pool Balance (in each case both before and after
giving effect to any purchase of Contracts to occur on the Note Issuance
Date), and (c) the aggregate Note Principal Balance is not greater than 95% of
the Company's total assets and the aggregate Senior Note Principal Balance is
not greater than 89.5% of the Company's total assets;
(ii) the net proceeds of the issuance of the Specified Notes
shall be applied by the Company on the Note Issuance Date to the purchase of
additional Eligible Contracts pursuant to the Sale and Servicing Agreement at
an aggregate purchase price that is not greater than the aggregate Principal
Balance (excluding any Residual Amounts) of all Contracts purchased, and all
conditions precedent to the purchase of Contracts and the related Contract
Assets pursuant to Article II of the Sale and Servicing Agreement have been
satisfied and complied with as of the applicable Contract Purchase Date
(provided that no failure of compliance thereunder shall affect the validity
of any Specified Notes);
(iii) such additional Contracts (and all related Contract Assets)
are included in the Trust Property and subject to a perfected security
interest in favor of the Trustee;
(iv) the Company is in compliance with its obligations under the
applicable Note Purchase Agreement and under each applicable Hedge Agreement;
(v) the Company has delivered or caused to be delivered to the
Trustee a written collateral assignment of the Contracts and related Contract
Assets to be included in the Trust Property on the Note Issuance Date, duly
executed and completed, together with an attached duly prepared Schedule of
Contracts identifying all such Contracts;
(vi) to the extent necessary under applicable law, the Company
has recorded and filed or has caused to be recorded and filed a UCC financing
statement in the office of the Secretary of State of California and in each
other jurisdiction, if any, executed by and naming the Company as debtor and
the Trustee as secured party and identifying the Contracts and the related
Contract Assets as collateral. The Company shall deliver a file-stamped copy,
or other evidence of filing, of each such financing statement to the Trustee;
and
(vii) the Company has taken or caused to be taken such actions as
are necessary so that computer files maintained for the Contracts and related
Contract Assets included in the Trust Property are appropriately adjusted to
indicate that such Contracts and related Contract Assets have been assigned
and pledged to the Trustee pursuant to the Indenture.
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Very truly yours,
JLA Funding Corporation III
By:________________________________
Authorized Signatory
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