EXHIBIT 4.2
POOLING, COLLATERAL AGENCY AND SERVICING AGREEMENT,
dated as of April 15, 1996, among NEWCOURT RECEIVABLES
CORPORATION, a Delaware corporation, as Seller (the "Seller"),
NEWCOURT CREDIT GROUP INC., an Ontario corporation, as Servicer
(the "Servicer"), FLEET NATIONAL BANK, a national banking
association, as Collateral Agent (the "Collateral Agent"), and
CHEMICAL BANK DELAWARE, a banking corporation organized and
existing under the laws of Delaware, not in its individual
capacity but solely as Issuer Trustee (the "Issuer Trustee").
In consideration of the mutual agreements herein
contained, each party agrees as follows for the benefit of the
other parties and for the benefit of the Noteholders:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this
Agreement, the following words and phrases shall have the
following meanings:
"Accrual Period" shall mean the period from and
including the first day of each calendar month to and
including the last day of such calendar month, except that
the Accrual Period immediately preceding the initial
Distribution Date for a Class of Notes shall mean the period
from but excluding the applicable Cutoff Date for such Class
of Notes to and including the last day of the calendar month
immediately preceding such Distribution Date.
"ADCB" shall mean, on any date of determination, the
sum of the Discounted Contract Balances of each Contract
included in the group of Contracts for which an ADCB
determination is being made as of the date of such
determination. For purposes of calculating such sum on any
date other than the last day of a Collection Period, the
Discounted Contract Balance of any Contract shall be as of
the last day of the preceding Collection Period or, with
respect to any Contract transferred to the Trust after such
last day, the Discounted Contract Balance on the Cut Off
Date for such Contract.
"Addition" shall have the meaning specified in Section
6.2.
"Addition Date" shall mean, with respect to any
Additional Contracts, the date on which such Additional
Contracts are transferred to the Trust pursuant to Section
6.2.
"Additional Contracts" shall mean the Contracts
transferred to the Trust after the First Closing Date, as
specified in the related Supplement.
"Additional Cut Off Date" shall mean each date on and
after which Collections on an Additional Contract are to be
transferred to the Trust, as specified in the related
assignment.
"Additional Series Enhancement" shall have for any
applicable Series the meaning specified in the related
Supplement.
"Adjusted Scheduled Payments" shall mean, for all
Contracts in the Contract Pool as of the date for which a
Series ADCB determination is being made, all remaining
Scheduled Payments under such Contracts due and payable
after such date of determination excluding (x) each
Scheduled Payment either becoming due after such date of
determination or due and payable after the applicable Cut
Off Date that has not been received by the Servicer, under
each of the Defaulted Contracts in the Contract Pool and (y)
each Scheduled Payment, or part thereof, becoming due after
such date of determination for any Contract in the Contract
Pool for which a Prepayment has been received by the
Servicer.
"Affiliate" of any specified Person, shall mean any
other Person directly or indirectly controlling or
controlled by or under direct or indirect common control
with such specified Person. For purposes of this
definition, "control" when used with respect to any
specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Aggregate Principal Amount" shall mean, with respect
to any group of Notes, at any date of determination, the sum
of the Principal Amounts of such Notes on such date of
determination.
"Agreement" shall mean this Pooling, Collateral Agency
and Servicing Agreement and all amendments hereof and
supplements hereto, including any Supplement.
"Allocated Series Discounted Contract Balance" means,
with respect to any Contract and Series, at any time of
determination, the present value (discounted monthly at the
applicable Series Discount Rate) of the product of (1) the
applicable Series Allocation Percentage and (2) the
remaining Adjusted Scheduled Payments becoming due under
such Contract after such date of determination.
"Applicable Class Percentage" means, for any Contract
and for any outstanding Class of Notes of any Series, the
ratio that the Initial Principal Amount of such Class of
Notes of such Series bears to the sum of the Initial
Principal Amount of the outstanding Notes of all Classes of
such Series.
"Applicable Indenture" shall mean, with respect to the
Class A Notes of any Series, the indenture specified in the
related Supplement.
"Applicable Indenture Trustee" shall mean, with respect
to the Class A Notes of any Series, the Indenture Trustee
under the Applicable Indenture.
"Applicable Purchase Agreement" means, with respect to
any Contract, the Subsequent Purchase Agreement pursuant to
which such Contract was transferred to the Seller.
"Applicable Security" means, with respect to a Vendor
Note, any (i) Secondary Contracts securing such Vendor Note
and (ii) Equipment securing such Vendor Note or a related
Secondary Contract.
"Authorized Newspaper" shall mean The New York Times or
the Wall Street Journal.
"Available Amount" shall mean, as of any Distribution
Date, the sum of (i) all amounts on deposit in the
Collection Account as of the immediately preceding
Determination Date on account of Scheduled Payments due on
or before and Prepayments received on or before the last day
of the Collection Period immediately preceding such
Distribution Date (other than Excluded Amounts and any
Investment Earnings credited to the Collection Account),
(ii) any amounts received from any Hedging Counterparty
during the preceding Collection Period and (iii) Recoveries
on account of previously Defaulted Contracts.
"Business Day" shall mean each day which is neither a
Saturday, a Sunday nor any other day on which banking
institutions in Xxx Xxxx, Xxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx,
Xxxxxxx, Xxxxxxx, Xxxxxx (or, with respect to any Series,
any additional city specified in the related Supplement) are
authorized or obligated by law or required by executive
order to be closed.
"Business Trust Statute" shall mean Chapter 38 of
Title 12 of the Delaware Code, 12 Del Code 3801 et seq., as
the same may be amended from time to time.
"Canadian Filing Location" means Ontario, Canada.
"Casualty Loss" means, with respect to any item of
Equipment, the loss, theft, damage beyond repair or
governmental condemnation or seizure of such item of
Equipment.
"Charge-Off" shall mean on any date of determination,
each Contract (i) that was charged off by the Servicer as
uncollectible in accordance with its usual and customary
practices during the six preceding Collection Periods
(whether or not such Contract was a Defaulted Contract) or
(ii) under which the related Obligor was the subject of an
Insolvency Event during such six Collection Periods.
"Class" shall mean, with respect to any Series, any one
or more of the classes of Notes of such Series as specified
in the related Supplement.
"Class A Notes" shall mean the Class of Notes of any
Series the right of which to receive payments is senior to
the rights of all other Classes of Notes of such Series as
specified in the related Supplement or Supplements.
"Class A Principal Payment Amount" shall mean, with
respect to any Distribution Date and any Series of Class A
Notes, the sum of (i) the product of (A) the Applicable
Class Percentage for such Notes and (B) the excess of (1)
the Series ADCB as of the last day of the second Collection
Period preceding such Distribution Date (or, in the case of
Contracts that were first added to the Contract Pool during
the Collection Period immediately preceding such
Distribution Date, as of the Cut Off Date for such
Contracts) over (2) the Series ADCB as of the last day of
the Collection Period immediately preceding such
Distribution Date (without giving effect, in the case of
clauses (1) and (2), to Scheduled Payments expected to have
been received on or after the last day of the applicable
Collection Period referred to in such clause under each
Contract in the Contract Pool which became a Defaulted
Contract or a Prepaid Contract during such Collection
Period) and (ii) the sum of the following amounts: the
present value (discounted monthly at the applicable Series
Discount Rate) of the product of (x) each Scheduled Payment
expected to have been received on or after the last day of
the Collection Period immediately preceding such
Distribution Date under each Contract in the Contract Pool
which became a Defaulted Contract or a Prepaid Contract
during such Collection Period and (y) the Series Allocation
Percentage as of the last day of the Collection Period
immediately preceding such Distribution Date (the sum of (i)
and (ii), the "Expected Class A Payment") and (iii) the
aggregate amount of Expected Class A Payments which were not
paid on each preceding Distribution Date.
"Class B Notes" shall mean the Class or Classes of
Notes of any Series the right of which to receive payments
is junior to the rights of the Class A Notes of all Series
as specified in the related Supplement or Supplements.
"Class B Principal Payment Amount" for a Series of
Class B Notes means, for any Distribution Date, the sum of
(i) the product of (A) the Applicable Class Percentage for
such Notes and (B) the excess of (1) the Series ADCB as of
the last day of the second Collection Period preceding such
Distribution Date (or, in the case of Contracts that were
first added to the Contract Pool during the Collection
Period immediately preceding such Distribution Date, as of
the Cut Off Date for such Contracts) over (2) the Series
ADCB as of the last day of the Collection Period immediately
preceding such Distribution Date (without giving effect, in
the case of clauses (1) and (2), to Scheduled Payments
expected to have been received on or after the last day of
the applicable Collection Period referred to in such clause
under each Contract in the Contract Pool which became a
Defaulted Contract or a Prepaid Contract during such
Collection Period) and (ii) from and after the date the
Class A Notes of each Series have been paid in full, the sum
of the following amounts: the present value (discounted
monthly at the applicable Series Discount Rate) of the
product of (x) each Scheduled Payment expected to have been
received on or after the last day of the Collection Period
immediately preceding such Distribution Date under each
Contract in the Contract Pool which became a Defaulted
Contract or a Prepaid Contract during such Collection Period
and (y) the Series Allocation Percentage as of the last day
of the Collection Period immediately preceding such
Distribution Date (the sum of (i) and (ii), the "Expected
Class B Payment") and (iii) the aggregate amount of Expected
Class B Payments which were not paid on each preceding
Distribution Date.
"Class C Notes" shall mean the Class or Classes of
Notes of any Series the right of which to receive payments
is junior to the rights of the Class A Notes and the Class B
Notes of all Series as specified in the related Supplement
or Supplements.
"Class C Principal Payment Amount" for a Series of
Class C Notes means, for any Distribution Date, the sum of
(i) the product of (A) the Applicable Class Percentage for
such Notes and (B) the excess of (1) the Series ADCB as of
the last day of the second Collection Period preceding such
Distribution Date (or, in the case of Contracts that were
first added to the Contract Pool during the Collection
Period immediately preceding such Distribution Date, as of
the Cut Off Date for such Contracts) over (2) the Series
ADCB as of the last day of the Collection Period immediately
preceding such Distribution Date (without giving effect, in
the case of clauses (1) and (2), to Scheduled Payments
expected to have been received on or after the last day of
the applicable Collection Period referred to in such clause
under each Contract in the Contract Pool which became a
Defaulted Contract or a Prepaid Contract during such
Collection Period) and (ii), from and after the date the
Class A Notes and Class B Notes of each Series have been
paid in full, the sum of the following amounts: the present
value (discounted monthly at the applicable Series Discount
Rate) of the product of (x) each Scheduled Payment expected
to have been received on or after the last day of the
Collection Period immediately preceding such Distribution
Date under each Contract in the Contract Pool which became a
Defaulted Contract or a Prepaid Contract during such
Collection Period and (y) the Series Allocation Percentage
as of the last day of the Collection Period immediately
preceding such Distribution Date (the sum of (i) and (ii),
the "Expected Class C Payment") and (iii) the aggregate
amount of Expected Class C Payments which were not paid on
each preceding Distribution Date.
"Closing Date" shall mean, with respect to any Series,
the date specified as such in the related Supplement.
"Collateral Agent" shall mean the institution executing
this Agreement as Collateral Agent, or its successor in
interest, or any successor collateral agent appointed as
herein provided.
"Collection Account" shall have the meaning specified
in subsection 4.2(a).
"Collection Period" shall, unless otherwise specified
in the related Supplement, mean a period beginning on the
first day of a calendar month and ending on, but not
including the first day of the next calendar month, provided
that the first Collection Period shall be the period
beginning on the initial Cut Off Date and ending on, but not
including, the first day of the calendar month immediately
following the calendar month in which the First Closing Date
occurs.
"Collections" shall mean all payments received on or
with respect to the Contracts in the Contract Pool or the
related Equipment, including, without limitation, Scheduled
Payments, Prepayments, Recoveries and Expired Lease
Proceeds, all as related to amounts attributable to the
Contracts in the Contract Pool or the related Equipment, but
excluding any Excluded Amounts.
"Commitment Termination Date" shall mean the date which
is eighteen months from the First Closing Date.
"Contract" shall mean each End-User Contract and each
Vendor Note but, unless otherwise expressly specified herein
or in a Supplement, shall not refer to any Secondary
Contract.
"Contract Files" shall mean, with respect to each
Contract, the fully executed original counterpart (for UCC
purposes) of the Contract, the original certificate of title
or other title document with respect to the related
Equipment (if applicable), and otherwise such documents, if
any, that the Servicer keeps on file in accordance with its
customary procedures, evidencing ownership of such Equipment
(if applicable) and all other documents originally delivered
to the Seller or held by the Servicer with respect to any
Contract.
"Contract Pool" as of any date shall mean the Original
Contracts and the Additional Contracts, other than any such
Contracts which (i) have been transferred to the Seller
pursuant to Sections 2.5(e) or 2.5(f) or (ii) have been paid
(or prepaid) in full.
"Controlling Party" means Indenture Trustees
representing the Holders of Class A Notes aggregating more
than 66-2/3% of the Aggregate Principle Amount of all Class
A Notes outstanding (and if no Class A Notes remain
outstanding, the Holders of Notes aggregating more than 50%
of the Aggregate Principal Amount of all Series
outstanding).
"Corporate Trust Office" shall mean the principal
office of the Issuer Trustee at which at any particular time
its corporate trust business shall be administered, which
office at the date of the execution of this Agreement is
located at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
"Credit Enhancement" shall mean, with respect to any
Series, the letter of credit, cash collateral or reserve
account, surety bond, insurance policy, guaranteed rate
agreement, interest rate swap or any other contract,
arrangement or agreement for the benefit of the Noteholders
of such Series (or Noteholders of a Class within such
Series), or any combination of the foregoing, as designated
in the applicable Supplement, including any Series
Enhancement or additional subordination provisions that
require that distributions of principal or interest be made
with respect to the Notes of such Class or Classes before
distributions are made to one or more other Classes of such
Series.
"Credit Enhancer" shall mean, with respect to any
Series, the Person, if any, designated as such in the
related Supplement.
"Credit Guidelines" shall mean Newcourt's Credit Manual
dated as of May, 1995, as amended or supplemented from time
to time.
"CSA" shall mean each conditional sales agreement,
including, as applicable, schedules, subschedules,
supplements and amendments to a master conditional sales
agreement, pursuant to which specified assets were
conditionally sold to an Obligor at specified monthly,
quarterly or semi-annual payments.
"Custodian" shall have the meaning specified in Section
2.6(o).
"Custody Agreement" shall have the meaning specified in
Section 2.6(o).
"Cut Off Date" shall mean with respect to each Original
Contract, the date specified in the Supplement executed in
connection with the first issuance of Notes on and after
which Collections on such Original Contract are to be
transferred to the Trust, and with respect to each
Additional Contract, the related Additional Cut Off Date.
"Date of Processing" shall mean, with respect to any
transaction, the date on which such transaction is first
recorded on the related Financing Originator's or Servicer's
computer master file of Contracts (without regard to the
effective date of such recordation).
"Defaulted Contract" means a Contract in the Contract
Pool as to which (i) the Servicer has determined in its sole
discretion, in accordance with its customary and usual
practices, that such Contract is not collectible, or (ii)
all or part of a Scheduled Payment thereunder is more than
90 days delinquent.
"Determination Date" shall mean with respect to any
Distribution Date, the third day prior to such Distribution
Date or, if such third day is not a Business Day, the next
succeeding Business Day.
"Discounted Contract Balance" means with respect to any
Contract, (i) as of the related Cut Off Date, the present
value of all of the remaining Scheduled Payments becoming
due under such Contract after the applicable Cut Off Date
discounted monthly at the applicable Series Discount Rate
and (ii) as of any other date of determination, the sum of
(x) the present value for each Series of the product of (a)
the applicable Series Allocation Percentage for such Series
and (b) all of the remaining Scheduled Payments becoming due
under such Contract after such date of determination
discounted monthly at the Series Discount Rate for such
Series and (y) the aggregate amount of all Scheduled
Payments due and payable under such Contract after the
applicable Cut Off Date and prior to such date of
determination (other than Scheduled Payments related to
Defaulted Contracts and Prepaid Contracts) that have not
then been received by the Servicer.
The "Discounted Contract Balance" for each Contract shall be
calculated assuming:
(i) all payments due in any Collection Period are
due on the last day of the Collection Period;
(ii) payments are discounted on a monthly basis
using a 30 day month and a 360 day year; and
(iii) all security deposits and drawings under
letters of credit, if any, issued in support of a
Contract are applied to reduce Scheduled Payments
in inverse order of the due date thereof.
"Distribution Date" shall mean the twentieth day of
each calendar month or, if such twentieth day is not a
Business Day, the next succeeding Business Day.
"Dollar" and "$" means lawful currency of the United
States of America.
"Eligible Contract" shall mean at any date of
determination, each Contract with respect to which each of
the following is true:
(a) the information with respect to the Contract,
any Secondary Contract securing the obligations under
such Contract, and the Equipment, if any, subject to
the Contract delivered under the Applicable Purchase
Agreement is true and correct in all material respects;
(b) immediately prior to the transfer of such
Contract and any related Equipment (or security
interest therein) or Applicable Security (or security
interest therein) to the Trust, such Contract was owned
by the Seller free and clear of any adverse claim
(other than with respect to any Residual Investment
(other than a Guaranteed Residual Investment) or
related Subordinated Residual Interest);
(c) the Contract did not have a Scheduled Payment
that was a delinquent payment for more than 60 days,
and the Contract is not otherwise a Defaulted Contract;
(d) no provision of the Contract has been waived,
altered or modified in any respect, except by
instruments or documents contained in the Contract File
(other than payment delinquencies permitted under
clause (c) above);
(e) the Contract is a valid and binding payment
obligation of the Obligor and is enforceable in
accordance with its terms (except as may be limited by
applicable Insolvency Laws and the availability of
equitable remedies);
(f) the Contract is not and will not be subject to
rights of rescission, setoff, counterclaim or defense
and, to the Seller's knowledge, no such rights have
been asserted or threatened with respect to the
Contract;
(g) the Contract, at the time it was made, did not
violate the laws of the United States or any state,
except for any such violations which would not
materially and adversely affect the collectibility of
the Contracts in the Contract Pool taken as a whole;
(h) (i) the Contract and any related Equipment
have not been sold, transferred, assigned or pledged by
the Seller to any other Person (other than the sale of
the Equipment to the End-User in connection with CSAs,
Secured Notes and "non-true leases" and other than the
Residual Investment, if any (other than a Guaranteed
Residual Investment), and any related Subordinated
Residual Interest) and, with respect to a Contract
which is a "true lease," any Equipment related to such
true lease is free and clear of any Liens of any third
parties (except for any Permitted Liens) and (ii)
either (A) such Contract is secured by a fully
perfected Lien of the first priority on the related
Equipment or, in the case of any Vendor Note, related
Applicable Security or (B) in the case of a Contract
secured by vehicle(s) subject to state certificate of
title statutes, within 30 calendar days of the
origination or acquisition of such Contract by a
Financing Originator an application was filed in the
appropriate state office to note such Financing
Originator's interest on the certificate of title for
such vehicle and such interest will be so noted within
180 days of such acquisition or origination;
(i) if the Contract constitutes either "chattel
paper" or an "instrument" for purposes of the UCC,
there is not more than one "secured party's original"
counterpart of the Contract;
(j) all filings necessary to evidence the
conveyance or transfer of the Contract and interest in
the related Equipment or Applicable Security, as
applicable, to the Trust have been made in all 40
appropriate jurisdictions;
(k) the Obligor is not, to the Seller's knowledge,
subject to bankruptcy or other insolvency proceedings;
(l) the Obligor's billing address is in the United
States and the Contract is a U.S. dollar denominated
obligation;
(m) the Contract does not require the prior
written consent of an Obligor or contain any other
restriction on the transfer or assignment of the
Contract (other than a consent or waiver of such
restriction that has been obtained prior to the Closing
Date, with respect to an Original Contract, or the
Addition Date, with respect to an Additional Contract);
(n) either (x) the obligations of the related
Obligor under such Contract are irrevocable and
unconditional and non-cancelable or (y) with respect to
certain Leases with Lessees that are governmental
entities or municipalities, if such Lease is cancelled
in accordance with its terms, either (1) the Vendor
that assigned such Lease to a Financing Originator is
unconditionally obligated to repurchase such Lease from
such Financing Originator for a purchase price not less
than the Discounted Contract Balance of such Lease (as
of the date of purchase) plus interest thereon at the
weighted average of the Series Discount Rates through
the Distribution Date following such date of repurchase
or (2) pursuant to the Applicable Purchase Agreement,
the Financing Originator that sold such Lease to the
Seller has indemnified the Seller against such
cancellation in an amount at least equal to the
Discounted Contract Balance of such Lease (as of the
date of purchase) plus interest thereon at the weighted
average of the Series Discount Rates through the
Distribution Date following such cancellation less any
amounts paid by the Vendor pursuant to clause (1);
(o) the Contract has an original maturity of not
greater than the term specified in this Agreement;
(p) no adverse selection procedure was used in
selecting the Contract for the Contract Pool;
(q) the Obligor under the Contract is required to
maintain casualty insurance or to self-insure with
respect to the related Equipment in accordance with the
Servicer's normal requirements;
(r) the Contract constitutes chattel paper, an
account, an instrument or a general intangible as
defined under the UCC;
(s) the Contract is not a "consumer lease" as
defined in Section 2A 103(1)(e) of the UCC;
(t) if such Contract is a Lease, the Lessee
thereunder has represented to the related Vendor or
Financing Originator that such Lessee has accepted the
related Equipment and has had a reasonable opportunity
to inspect and test such Equipment and the Vendor or
Financing Originator has not been notified of any
defects therein;
(u) the Contract is not subject to any guarantee
by Newcourt nor has the Seller or either Financing
Originator established any specific credit reserve with
respect to the related Obligor;
(v) if such Contract is a Lease, such Lease is a
"triple net lease" under which the Obligor is
responsible for the maintenance of the related
Equipment in accordance with general industry standards
applicable to such item of Equipment;
(w) if such Contract is a Vendor Note, such Vendor
Note is secured by an Eligible Secondary Contract
having an aggregate Discounted Contract Balance for
such Eligible Secondary Contract equal to the
outstanding principal amount of such Vendor Note
(assuming the interest rate specified in such Vendor
Note is the "Series Discount Rate" for purposes of
calculating such Discounted Contract Balance);
(x) no provision of such Contract provides for a
Prepayment Amount less than the amount calculated in
accordance with the definition of Prepayment Amount
(unless otherwise indemnified by the Vendor or the
Financing Originator in an amount equal to the excess
of the "Prepayment Amount" as calculated in accordance
with the definition thereof over the amount otherwise
payable upon a prepayment under such Contract);
(y) such Contract is not an obligation of the
United States of America or agency, department, or
instrumentality of the United States of America; and
(z) such other criteria, if any, with respect to
Additional Contracts as are specified in a Supplement;
provided, that Contracts with respect to which any of the
statements in clauses (c), (o) or (x) above are not true
shall also be "Eligible Contracts" if the Seller shall have
received confirmation from each Rating Agency that such fact
will not result in a Ratings Effect.
"Eligible Deposit Account" shall mean either (a) a
segregated account with a Qualified Institution or (b) a
segregated trust account with the corporate trust department
of a depository institution organized under the laws of the
United States or any one of the states thereof, including
the District of Columbia (or any domestic branch of a
foreign bank), and acting as a trustee for funds deposited
in such account, so long as any of the securities of such
depository institution shall have a credit rating from each
Rating Agency in one of its short-term credit rating
categories which signifies investment grade.
"Eligible Investments" with respect to any Distribution
Date shall mean negotiable instruments or securities or
other investments maturing on or before such Distribution
Date (a) which, except in the case of demand or time
deposits, investments in money market funds and Eligible
Repurchase Obligations, are represented by instruments in
bearer or registered form or ownership of which is
represented by book entries by a Clearing Agency or by a
Federal Reserve Bank in favor of depository institutions
eligible to have an account with such Federal Reserve Bank
who hold such investments on behalf of their customers, (b)
which, as of any date of determination, mature by their
terms on or prior to the Distribution Date immediately
following such date of determination and (c) which evidence:
(i) direct obligations of, and obligations fully
guaranteed as to full and timely payment by, the United
States of America (or by any agency thereof to the
extent such obligations are backed by the full faith
and credit of the United States of America);
(ii) demand deposits, time deposits or
certificates of deposit of depository institutions or
trust companies incorporated under the laws of the
United States of America or any state thereof and
subject to supervision and examination by federal or
state banking or depository institution authorities;
provided, however, that at the time of the Trust's
investment or contractual commitment to invest therein,
the commercial paper, if any, and short-term unsecured
debt obligations (other than such obligation whose
rating is based on the credit of a Person other than
such institution or trust company) of such depository
institution or trust company shall have a credit rating
from each Rating Agency in the Highest Required
Investment Category granted by such Rating Agency;
(iii) commercial paper, or other short term
obligations, having, at the time of the Trust's
investment or contractual commitment to invest therein,
a rating in the Highest Required Investment Category
granted by each Rating Agency;
(iv) demand deposits, time deposits or
certificates of deposit that are fully insured by the
FDIC;
(v) notes that are payable on demand or bankers'
acceptances issued by any depository institution or
trust company referred to in (ii) above;
(vi) investments in money market funds having, at
the time of the Trust's investment or contractual
commitment to invest therein, a rating of the Highest
Required Investment Category from each Rating Agency or
whose portfolio is limited to the investments described
in clause (i) of this definition;
(vii) time deposits (having maturities of not more
than 90 days) by an entity the commercial paper of
which has, at the time of the Trust's investment or
contractual commitment to invest therein, a rating of
the Highest Required Investment Category granted by
each Rating Agency;
(viii) Eligible Repurchase Obligations; and
(ix) any negotiable instruments or securities or
other investments in which the investment by the Trust
therein has been approved in writing by the Rating
Agency.
"Eligible Repurchase Obligations" shall mean repurchase
obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit
of the United States of America, in either case entered into
with a depository institution or trust company (acting as
principal) described in clause (b)(ii) of the definition of
Eligible Investments.
"Eligible Secondary Contract" shall mean each Secondary
Contract
(i) that satisfies all the criteria set forth
in the definition of "Eligible Contract" except clauses
(b), (h) (with respect to ownership by the Financing
Originator of the Contract) and (w) thereof, and except
that the term "Obligor" shall mean "End-User" in all
such criteria;
(ii) with respect to which Secondary Contract
and the proceeds thereof the Financing Originator has a
duly perfected first priority lien; and
(iii) the transfer of the Financing Originator's
security interest with respect to which has created a
valid first priority Lien in such Secondary Contract
and the proceeds thereof in favor of the Seller which
has been duly perfected.
"End-User" shall mean any party that uses the Financed
Item pursuant to an End-User Contract.
"End-User Contract" shall mean any CSA, Secured or
Unsecured Note, Lease, IPA, or other Financing Agreement
covering Financed Items originated or purchased by either of
the Financing Originators.
"Equipment" means the tangible assets (including
information technology equipment, communications equipment,
commercial equipment, industrial equipment, transportation
equipment, construction equipment, forestry equipment or
other equipment) financed or leased by an Obligor pursuant
to a Contract and/or, unless the context otherwise requires,
a security interest in such assets.
"Event of Default" shall have, with respect to each
Series, the meaning specified in Section 9.1.
"Excess Concentration Amount" means, at any date of
determination, an amount equal to the sum of (i) the
Discounted Contract Balances of all Excess Contracts in the
Trust, together with accrued interest thereon through such
date of determination at the weighted average of the Series
Discount Rates and (ii) the outstanding principal amount of
any Servicer Advances with respect thereto.
"Excess Contract", as of any date of determination,
means each Contract selected by the Servicer at such time as
there shall be a breach of any of the representations and
warranties set forth in Section 2.5(c), the removal of which
pursuant to Section 2.5(e) shall remedy such breach.
"Excess Spread Amount" for the Class A Notes and Class
B Notes of a Series means, such portion of the Series
Available Amount available to pay the Class C Noteholders of
such Series which is specified in the Supplement related to
such Series of Notes. The Excess Spread Amount for the
Class C Notes of a Series shall be an amount equal to the
portion of the Series Available Amount, if any, remaining
after payment of the Excess Spread Amount for the Class A
Notes and Class B Notes of such Series. The Excess Spread
Amount specified for any Series of Class A Notes, Class B
Notes and Class C Notes may increase or decrease from time
to time in connection with the issuance of additional Series
depending upon the amount, if any, of the "Excess Spread
Amount" deductible from the Series Available Amount
available to pay the Class C Noteholders of such additional
Series.
"Excluded Amounts" means (i) any collections on deposit
in the Collection Account or otherwise received by the
Servicer on or with respect to the Contract Pool or related
Equipment, which collections are attributable to any taxes,
fees or other charges imposed by any Governmental Authority,
(ii) any collections representing reimbursements of
insurance premiums or payments for services that were not
financed by the Financing Originator and (iii) any proceeds
from the sale or other disposition of Equipment in excess of
the difference between (x) the Discounted Contract Balance
of the related Contract as of the applicable Cutoff Date,
over (y) the present value as of the applicable Cutoff Date
of all amounts actually received by the Trust in respect of
such Contract, discounted monthly at the applicable Series
Discount Rate.
"Existing Contracts" means the Contracts purchased by
the Seller under the Original Purchase Agreement and owned
by the Seller on the First Closing Date.
"Expired Lease" means any Lease that has terminated
other than on its scheduled expiration date.
"Expired Lease Proceeds" means any and all cash
proceeds or rents realized from the sale or re-lease of
Equipment under an Expired Lease (net of Liquidation
Expenses).
"FDIC" shall mean the Federal Deposit Insurance
Corporation, or any successor thereto.
"Filing Locations" is a collective reference to the UCC
Filing Locations and the Canadian Filing Location.
"Final Trust Termination Date" shall mean December 31,
2015.
"Financed Items" shall mean Equipment, Software,
Services and other property and services that are permitted
to be financed under Contracts in accordance with the Credit
Guidelines.
"Financing Agreement" shall mean each financing
agreement covering Financed Items other than a CSA, a
Secured or Unsecured Note, a Lease or an IPA.
"Financing Originator" shall mean any of Newcourt
Financial USA Inc., a Delaware corporation, Newcourt
Transportation USA Inc., a Delaware corporation, or any
other direct or indirect wholly owned subsidiary of Newcourt
Credit Group USA Inc., a Delaware corporation, which
subsidiary is incorporated under the laws of the United
States or of any state thereof and principally engaged in
the financing business within the United States that is
specified in a Supplement.
"First Closing Date" shall mean the Closing Date
specified in the Supplement executed in connection with the
first issuance of Notes.
"Governmental Authority" shall mean the United States
of America, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Guaranteed Residual Investment" shall mean each
Residual Investment that is made in the form of a full
recourse loan to the Vendor, repayable by the Vendor at the
expiration or termination of the related Contract, together
with interest thereon, and secured by a security interest in
the Equipment covered by the Contract.
"Hedged Contract" shall mean on any date of
determination each Contract in the Contract Pool that is the
subject of an Interest Rate Hedge on such date of
determination.
"Hedging Counterparty" shall mean any Person that
provides an Interest Rate Hedge as provided in subsection
4.4(a) or if any Replacement Interest Rate Hedge or
Qualified Substitute Arrangement is obtained pursuant to
subsection 4.4(b), any obligor with respect to such
Replacement Interest Rate Hedge or Qualified Substitute
Arrangement.
"Highest Required Investment Category" shall mean (i)
with respect to ratings assigned by Standard & Poor's, A-1+
for short-term instruments and AAA for long-term instruments
and (ii) with respect to ratings assigned by Moody's, A-2 or
P-1 for one month instruments, A-1 or P-1 for three month
instruments, AA3 or P-1 for six month instruments and AAA or
P-1 for instruments with a term in excess of six months.
"Indebtedness" shall mean, with respect to any Person
at any date, (a) all indebtedness of such Person for
borrowed money or for the deferred purchase price of
property or services (other than current liabilities
incurred in the ordinary course of business and payable in
accordance with customary trade practices) or which is
evidenced by a note, bond, debenture or similar instrument,
(b) all obligations of such Person under capital leases, (c)
all obligations of such Person in respect of acceptances
issued or created for the account of such Person and (d) all
liabilities secured by any Lien on any property owned by
such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.
"Indenture Event of Default" under any Indenture shall
have the meaning assigned thereto in such Indenture.
"Indenture Trustee" shall mean an indenture trustee
under an indenture pursuant to which the Class A Notes of
any outstanding Series have been issued.
"Indentures" is a collective reference to each
indenture under which the Class A Notes of any Series are
issued.
"Ineligible Contract" shall have the meaning specified
in subsection 2.5(e).
"Initial Principal Amount" shall mean the initial
principal payable in respect of the Notes of any Class of
any Series pursuant to Article IV as set forth in the
Supplement related to such Series.
"Insolvency Event" means, with respect to a specified
Person, (a) the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of such
Person or any substantial part of its property in an
involuntary case under any applicable Insolvency Law now or
hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its
property, or ordering the winding-up or liquidation of such
Person's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
or (b) the commencement by such Person of a voluntary case
under any applicable Insolvency Law now or hereafter in
effect, or the consent by such Person to the entry of an
order for relief in an involuntary case under any such law,
or the consent by such Person to the appointment of or
taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official for
such Person or for any substantial part of its property, or
the making by such Person of any general assignment for the
benefit of creditors, or the failure by such Person
generally to pay its debts as such debts become due, or the
taking of action by such Person in furtherance of any of the
foregoing.
"Insolvency Laws" shall mean the Bankruptcy Code of the
United States of America and all other applicable
liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization,
suspension of payments, or similar debtor relief laws from
time to time in effect affecting the rights of creditors
generally including without limitation with respect to the
Servicer, all similar laws of Canada.
"Instrument" shall mean a Contract which is evidenced
by an "instrument" (as defined in Article 9 of the UCC),
other than an instrument which constitutes part of chattel
paper
"Insurance Policy" means, with respect to any Contract,
an insurance policy covering physical damage to or loss of
the related Equipment.
"Insurance Proceeds" means, depending on the context,
any amounts payable or any payments made, to the Servicer
under any Insurance Policy.
"Interest Rate" shall mean with respect to any Series
of Notes (or, for any Series with more than one Class, for
each Class of such Series), the rate (or formula on the
basis of which such rate shall be determined) per annum
stated for such Series in the related Supplement, which rate
shall be calculated in each case on the basis set forth in
the related Supplement.
"Interest Rate Hedge" shall mean any interest rate
hedge agreement executed and delivered pursuant to Section
4.4(a), in each case as supplemented from time to time
between the Issuer Trustee and the relevant Hedging
Counterparty, or any Replacement Interest Rate Hedge or
Qualified Substitute Arrangement.
"Internal Revenue Code" shall mean the Internal Revenue
Code of 1986, as amended from time to time.
"Investment Earnings" shall mean any earnings (net of
losses and investment expenses) on funds in the Collection
Account and the Reserve Account, which earnings shall be
paid to Newcourt as provided in Sections 4.3(d) and 4.3(e).
"IPA" shall mean each installment payment agreement,
including as applicable, schedules, subschedules,
supplements and amendments to a software license agreement,
pursuant to which the Originator financed the purchase or
acquisition of specified assets by an Obligor for specified
monthly, quarterly or semiannual payments.
"Issuer Trustee" shall mean the institution executing
this Agreement as Issuer Trustee, or its successor in
interest, or any successor trustee appointed as herein
provided.
"Lease" shall mean each agreement, including, both
operating and financing agreements, and, as applicable,
schedules, subschedules, supplements and amendments to a
master lease, pursuant to which the Originator, as lessor,
leases specified assets to a Lessee at a specified monthly,
quarterly or semiannual rental.
"Lessee" means, with respect to any Lease, the Obligor
with respect to such Lease.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), equity interest, participation
interest, preference, priority or other security agreement
or preferential arrangement of any kind or nature
whatsoever, including, without limitation, any conditional
sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the
foregoing; provided, however, that any assignment pursuant
to Section 7.2 shall not be deemed to constitute a Lien.
"Liquidation Expenses" means, with respect to any
Contract, the aggregate amount of all out-of-pocket expenses
reasonably incurred by the Servicer (including amounts paid
to any subservicer) and any reasonably allocated costs of
internal counsel, in each case in accordance with the
Servicer's customary procedures in connection with the
repossession, refurbishing and disposition of any related
Equipment upon or after the expiration or earlier
termination of such Contract and other out-of-pocket costs
related to the liquidation of any such Equipment, including
the attempted collection of any amount owing pursuant to
such Contract if it is a Defaulted Contract.
"Liquidation Proceeds" means, with respect to a
Defaulted Contract, proceeds from the sale, lease or
re-lease of the Equipment, proceeds of the related Insurance
Policy and any other recoveries with respect to such
Defaulted Contract and the related Equipment, net of
Liquidation Expenses and amounts, if any, so received that
are required to be refunded to the Obligor on such Contract.
"Lockbox" shall mean the post office boxes listed on
Schedule 2 to which the Obligors are instructed to remit
payments on the Contracts included in the Contract Pool
and/or such other post office boxes as may be established
from time to time.
"Lockbox Account" shall mean the intervening account
used by a Lockbox Processor for deposit of funds received in
a Lockbox prior to their transfer to the Collection Account.
"Lockbox Processor" shall mean the depositary
institution or processing company (which may be the
Collateral Agent) which processes payments on the Contracts
sent by the Obligors thereon forwarded to a Lockbox.
"Maturity Date" shall mean, with respect to any Series,
the date, if any, specified as such in the related
Supplement.
"Minimum Deposit" shall mean, with respect to any
Series, an amount equal to the lesser of (x) 1% of the
Series ADCB for such Series and (y) the amount by which
amounts then on deposit therein are less than the Minimum
Reserve Balance.
"Minimum Reserve Balance" shall have the meaning
specified in Section 4.3(d)(iv)(D).
"Monthly Report" shall have the meaning specified in
Section 3.10.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.,
or any successor thereto.
"Net Pool Balance" shall have the meaning specified in
Section 6.2(b)(x).
"New Issuance" shall have the meaning specified in
Section 6.2.
"Newcourt Advance" shall have the meaning specified in
Section 6.2(b)(xii).
"Non-Transferrable Notes" shall have the meaning
specified in Section 6.1.
"Note" shall mean any one of the notes of any Series
executed and authenticated in accordance with the Note
Documents for such Series.
"Note Agreements" shall be a collective reference to
each Supplement under which a Series of Subordinated Notes
has been issued and is outstanding.
"Note Documents" for any Series of Notes, is a
collective reference to (i) with respect to the Class A
Notes of such Series, the Applicable Indenture for such
Class A Notes, (ii) with respect to the Class B Notes of
such Series, the Note Agreement for such Class B Notes and
(iii) with respect to the Class C Notes, if any, of such
Series, the Note Agreement for such Class C Notes.
"Noteholder" or "Holder" shall mean the Person in whose
name a Note is registered in the Note Register.
"Note Owner" shall mean, with respect to a Book-Entry
Note, the Person who is the owner of such Book-Entry Note,
as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing
Agency (directly or as an indirect participant, in
accordance with the rules of such Clearing Agency), and in
any event the Person who is the beneficial owner of a Note.
"Note Payment Account" for a Class of Notes shall mean
the account or accounts specified in any of the Note
Documents related to such Notes, into which deposits
hereunder are to be made for payment to the Owners of such
Notes.
"Note Register" shall mean (i) for any Class A Note,
the note register maintained in accordance with the
Applicable Indenture and (ii) for any Subordinated Note, the
note register maintained in accordance with the Note
Agreement pursuant to which such Subordinated Note was
issued.
"Notice of Default" shall mean a written notice from a
Holder of a Subordinated Note or the Applicable Indenture
Trustee on behalf of the Holders of Class A Notes of any
Series specifying the percentage of the Principal Amount of
Notes of such Holder or Class desiring to declare an "Event
of Default" under the Pooling Agreement.
"Obligor" shall mean, with respect to any Contract, the
Person or Persons obligated to make payments with respect to
such Contract, including any guarantor thereof.
"Officer's Certificate" shall mean a certificate signed
by any officer of Seller or the Servicer and delivered to
the Issuer Trustee or the Collateral Agent, as the case may
be.
"Opinion of Counsel" shall mean a written opinion of
counsel, who may be counsel (including internal counsel) for
Seller or the Servicer and who shall be reasonably
acceptable to the Issuer Trustee or the Collateral Agent, as
the case may be.
"Original Contract" shall mean each Contract identified
by account number and Contract Balance in a computer file or
list delivered to the Issuer Trustee by the Seller on or
prior to the First Closing Date pursuant to Section 2.1.
"Original Purchase Agreement" means the Purchase
Agreement dated as of December 28, 1995, as amended and
restated prior to the First Closing Date, between Newcourt
Financial USA Inc. and the Seller, as further amended from
time to time.
"Originator" shall mean, with respect to each Contract,
the party that is the original lessor or financing party
thereunder.
"Partnership Notes" shall mean each Class of Notes that
does not have the benefit of an opinion to the effect that
such Notes will be treated as debt for federal income tax
purposes.
"Permitted Liens" shall mean (a) with respect to
Contracts in the Contract Pool:
(i) Liens for state, municipal or other local taxes if
such taxes shall not at the time be due and payable or
if the Seller shall currently be contesting the
validity thereof in good faith by appropriate
proceedings and shall have set aside on its books
adequate reserves with respect thereto, (ii) Liens in
favor of the Seller created pursuant to a Purchase
Agreement and transferred to the Trust pursuant hereto,
(iii) Liens in favor of the Issuer Trustee created
pursuant to this Agreement and (iv) Liens in favor of
the Collateral Agent created pursuant to this
Agreement;
and (b) with respect to the related Equipment:
(i) materialmen's, warehousemen's, mechanics' and other
liens arising by operation of law in the ordinary
course of business for sums not due, (ii) Liens for
state, municipal or other local taxes if such taxes
shall not at the time be due and payable or if the
Seller shall currently be contesting the validity
thereof in good faith by appropriate proceedings and
shall have set aside on its books adequate reserves
with respect thereto, (iii) Liens in favor of the
Seller created pursuant to a Purchase Agreement and
transferred to the Issuer Trustee pursuant hereto, (iv)
Liens in favor of the Trust created pursuant to this
Agreement; (v) Liens in favor of the Collateral Agent
created pursuant to this Agreement, (vi) Subordinated
Residual Investments, (vii) with respect to Equipment
which is the subject of a Lease under which Sun Data is
the lessor, Liens in favor of SouthTrust Bank of
Alabama which are subordinated to the interest of the
Trust in such Equipment, (viii) other subordinated
liens which are subordinated to the prior payment of
the Notes on terms described herein and (ix) Liens
granted by the End-Users which are subordinated to the
interest of the Trust in such Equipment.
"Permitted Transaction" shall mean any transaction or
series of related transactions pursuant to which the Seller
finances an interest in the Trust Assets pursuant to the
transfer of a Note or otherwise and (i) as to which the
Rating Agency Condition is satisfied and (ii) which in the
reasonable judgment of the Seller as evidenced by an
Officer's Certificate delivered to the Collateral Agent,
each Indenture Trustee and each Rating Agency, could not
reasonably be expected to have a material adverse effect on
the interests of the Noteholders.
"Permitted Vendor Percentage" shall mean, with respect
to any Vendor, the percentage equivalent of a fraction, the
numerator of which is the ADCB of all Contracts in the
Contract Pool in which a security interest only has been
transferred to the Seller, which security interest only was
transferred to the Seller and the denominator of which is
the ADCB of all Contracts in the Contract Pool, which
percentage equivalent shall not cause a Ratings Effect with
respect to any Series of Class A Notes.
"Person" shall mean any legal person, including any
individual, corporation, limited liability company,
partnership, limited liability partnership, joint venture,
association, joint-stock company, trust, unincorporated
organization, governmental entity or other entity of similar
nature.
"Placement Agency Agreement" shall be a collective
reference to each placement agency agreement under which
Subordinated Notes are issued.
"Prepaid Contract" shall mean any Contract that has
terminated or been prepaid in full prior to its scheduled
expiration date (including because of a Casualty Loss),
other than a Defaulted Contract.
"Prepayment Amount" shall have the meaning specified in
Section 3.2(b).
"Prepayments" shall mean any and all partial and full
prepayments on a Contract (including, with respect to any
Contract and any Collection Period, any Scheduled Payment
(or portion thereof) which is due in a subsequent Collection
Period which the Servicer has received, and expressly
permitted the related Obligor to make, in advance of its
scheduled due date and which will be applied to such
Scheduled Payment on such due date, and any and all cash
proceeds or rents realized from the sale, lease, re-lease or
re-financing of Equipment under a Prepaid Contract, net of
Liquidation Expenses), Liquidation Proceeds, amounts
received in respect of Transfer Deposit Amounts and payments
upon an optional termination of the Trust.
"Principal Amount" shall mean, with respect to a Class
of Notes, the aggregate Initial Principal Amount thereof
reduced by (i) the aggregate amount of any distributions
applied in reduction of such principal amount and (ii) the
aggregate amount of any distributions then on deposit in the
Note Payment Account, if any, for such Class of Notes
established in accordance with the Applicable Indenture or
the related Note Documents and to be applied in reduction of
such principal amount in accordance with such Applicable
Indenture or the related Note Documents.
"Program Agreement" shall mean each vendor finance
program agreement pursuant to which End-User Contracts
originated by a Vendor are assigned or pledged to a
Financing Originator.
"Publication Date" shall have the meaning specified in
Section 9.2(a).
"Purchase Agreements" is a collective reference to the
Original Purchase Agreement and the Subsequent Purchase
Agreements.
"Qualified Institution" shall have the meaning
specified in Section 4.2(a).
"Qualified Substitute Arrangement" shall have the
meaning specified in Section 4.4(b).
"Rating Agency" shall mean, with respect to each
Series, the rating agency or agencies, if any, selected by
the Seller from Xxxxx'x or Standard & Poor's and designated
as a "Rating Agency" in the related Supplement, and, with
respect to Eligible Investments, unless the context
otherwise requires, each of Xxxxx'x and Standard & Poor's.
"Rating Agency Condition" shall mean, with respect to
any action or series of related actions or proposed
transaction or series of related proposed transactions, that
each Rating Agency shall have notified the Seller and the
Issuer Trustee in writing that such action or series of
related actions or the consummation of such proposed
transaction or series of related transactions will not
result in a reduction or withdrawal of the rating of any
outstanding Series or Class with respect to which it is a
Rating Agency.
"Ratings Effect" shall mean, with respect to any action
or series of related actions or proposed transaction or
series of related proposed transactions, a reduction or
withdrawal of the rating of any outstanding Series or Class
with respect to which a Rating Agency has previously issued
a rating as a result of such action or series of related
actions or the consummation of such proposed transaction or
series of related transactions.
"Record Date" shall mean with respect to any Series,
any date specified as such in the applicable Supplement.
"Recoveries" shall mean any and all recoveries on
account of a Defaulted Contract, including, without
limitation, any and all cash proceeds or rents realized from
the sale, lease, re-lease or re-financing of repossessed
Equipment or other property, Insurance Proceeds, amounts
representing late fees and penalties and amounts received
pursuant to a Program Agreement (including, without
limitation, amounts received from any "ultimate net loss
pool" that may have been created under such Program
Agreement), but in each case net of Liquidation Expenses.
"Released Amounts" means, with respect to any payment
or collection received with respect to any Receivable on any
Business Day (whether such payment or collection is received
by the Servicer, the Issuer Trustee or the Seller), an
amount equal to that portion of such payment or collection
constituting Excluded Amounts.
"Replacement Interest Rate Hedge" shall mean any
interest rate swap or cap having substantially the same
terms and conditions as the Interest Rate Hedge and
otherwise satisfying the conditions set forth in Section
4.4.
"Request for Instrument Release" shall have the meaning
specified in Section 2.3(h).
"Required Holders" shall have, for any Series, the
meaning specified in the related Supplement.
"Required Percentage of Holders" shall mean (i) prior
to the payment in full of the principal amount of and
accrued interest on the Class A Notes of all Series, Class A
Noteholders holding Class A Notes evidencing more than 50%
of the Aggregate Principal Amount of Class A Notes of all
Series then outstanding or Indenture Trustees on behalf of
such percentage of Class A Noteholders, (ii) from and after
the payment in full of the principal amount of and accrued
interest on the Class A Notes of all Series, Class B
Noteholders holding Class B Notes evidencing more than 50%
of the Aggregate Principal Amount of the Class B Notes of
all Series outstanding and (iii) from and after the payment
in full of the principal amount of and accrued interest on
the Class A Notes and Class B Notes of all Series, Class C
Noteholders holding Class C Notes evidencing more than 50%
of the Aggregate Principal Amount of the Class C Notes of
all Series outstanding.
"Requirements of Law" for any Person shall mean the
certificate of incorporation or articles of association and
by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation, or
order or determination of an arbitrator or Governmental
Authority, in each case applicable to or binding upon such
Person or to which such Person is subject, whether Federal,
state or local (including, without limitation, usury laws,
the Federal Truth in Lending Act and Regulation Z and
Regulation B of the Board of Governors of the Federal
Reserve System).
"Reserve Account" shall have the meaning specified in
Section 4.2(b).
"Reserve Account Allocation Amount" shall mean, with
respect to each Series in respect of which a draw on the
Reserve Account is required to be made on a Distribution
Date, an amount equal to the product of (i) all amounts on
deposit in the Reserve Account on such Distribution Date and
(ii) a fraction, the numerator of which is the Series ADCB
of such Series and the denominator of which is the sum of
the Series ADCB of each Series in respect of which a draw on
the Reserve Account is required to be made on such
Distribution Date.
"Residual Investment" shall mean, with respect to
certain Leases, any funds that a Financing Originator or
third party residual investor shall have advanced against
all or any portion of the anticipated residual value of the
leased Equipment upon the expiration of such Lease in
accordance with its terms, and in excess of the discounted
present value of the rental payments due under such Lease.
"Responsible Officer" shall mean any officer of the
Issuer Trustee with direct responsibility for the
administration of this Agreement and also, with respect to a
particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and
familiarity with the particular subject. The term
"Responsible Officer", when used herein with respect to any
Person other than the Issuer Trustee, means an officer or
employee of such Person corresponding to any officer or
employee described in the preceding sentence.
"Restricting Event" shall mean, with respect to any
Series, any of the following events and any other events
specified as such in the related Supplement:
(a) As of any Distribution Date, the weighted
average ADCB of all Contracts in respect of which,
during the three preceding Collection Periods, a
Scheduled Payment is more than 60 days past due exceeds
2.0% of the weighted average ADCB of the Contract Pool
during such three Collection Periods; or
(b) As of any Distribution Date, the product of
(i) two multiplied by (ii) the difference between (x)
the ADCB of the sum of (A) all Contracts which were
charged-off by the Servicer as uncollectible in
accordance with its usual and customary practices
during the six preceding Collection Periods (whether or
not such Contract was a Defaulted Contract) and (B) all
Contracts under which the related Obligor was the
subject of an Insolvency Event during such six
Collection Periods (Contracts which were the subject of
an event described in clause (A) or (B) being referred
to collectively as "Charge-Offs") and (y) Recoveries
received during such six Collection Periods on account
of Charge-Offs, exceeds 1% of the weighted average ADCB
of all Contracts in the Contract Pool during such six
Collection Periods; or
(c) As of any Distribution Date, after giving
effect to the allocations to be made on such date, the
sum of the following for any Series: (i) the applicable
Series Allocation Percentage of amounts on deposit in
the Reserve Account plus (ii) the difference between
the Series ADCB for such Series of the Contract Pool
and the Aggregate Principal Amount of Class A Notes of
such Series is less than, for such Series, the amount
specified in the related Supplement as the "Minimum
Amount"; or
(d) Any other Restricting Event specified in any
Supplement.
"Retransfer Date" shall have the meaning specified in
subsection 2.5(f).
"Scheduled Payment" means, with respect to any
Contract, the monthly or quarterly or semi-annual rent or
financing (whether principal or principal and interest)
payment scheduled to be made by the related Obligor under
the terms of such Contract after the related Cut Off Date;
it being understood that (i) Scheduled Payments do not
include any Excluded Amounts and (ii) the interest component
of rent or financing payments scheduled to be made under a
Contract which has been hedged pursuant to an Interest Rate
Hedge shall be the amount payable under the Interest Rate
Hedge for such Contract for the term of such Interest Rate
Hedge.
"Secondary Contract" shall mean, with respect to a
Vendor Note, each End-User Contract securing such Vendor
Note.
"Secured or Unsecured Note" shall mean each promissory
note with or without a related security interest, pursuant
to which the purchase of specified assets by a Obligor is
financed for specified monthly, quarterly or semiannual
payments.
"Secured Parties" shall mean the Collateral Agent, the
Indenture Trustees, the Noteholders of each Series and each
provider of Credit Enhancement from time to time identified
as an additional Secured Party in a Supplement.
"Seller" shall mean NRC, or any successor thereto.
"Series" shall mean any series of Notes, which may
include within any such Series a Class or Classes of Notes
subordinate to another such Class or Classes of Notes.
"Series ADCB" for a Series of Notes as of any date of
determination means the sum of (1) the present value
(discounted monthly at the applicable Series Discount Rate)
of the product of (x) the applicable Series Allocation
Percentage and (y) the Adjusted Scheduled Payments and (2)
the product of (x) the applicable Series Allocation
Percentage and (y) all Scheduled Payments due and payable
after the applicable Cut Off Date and prior to such date of
determination under such Contracts that have not been
received by the Servicer.
"Series Allocation Percentage" shall mean, with respect
to any allocation or payment and any particular Series, the
percentage equivalent of a fraction, the numerator of which
is the sum of the Series Expected Cash Flow and the Series
Arrearage and the denominator of which is the sum of (i) the
aggregate of the Series Expected Cash Flows for all Series
of Notes then outstanding and (ii) the aggregate of the
Series Arrearages for all Series of Notes then outstanding,
in each case without giving effect to any limitation based
on insufficient available funds.
"Series Arrearage" shall mean, with respect to a
particular Series, for any Distribution Date, the amount by
which on the previous Distribution Date, the principal of
and interest on the Class A Notes and Class B Notes of such
Series were not paid in accordance with the allocations set
forth herein.
"Series Available Amount" means, with respect to any
Series as of any Distribution Date, the product of (i) the
applicable Series Allocation Percentage and (ii) the
Available Amounts remaining to be allocated after payment of
amounts set forth in subsection 4.3(d)(i) through (iii).
"Series Discount Rate" shall mean, with respect to a
Series at any date of determination, the sum of (1) the
weighted average of the Class A Interest Rate and the
Subordinated Note Rate applicable to the Notes issued in
connection with such Series and (2) the Servicing Fee
Percentage.
"Series Enhancement" shall have for any Series the
meaning specified in the related Supplement.
"Series Expected Cash Flow" shall mean, for any
Distribution Date, (i) with respect to the first Series of
Notes, the aggregate amount of the Adjusted Scheduled
Payments scheduled to be made during the Collection Period
immediately preceding such Distribution Date (and any other
Scheduled Payments due and payable after the applicable Cut
Off Date and prior to the last day of such Collection Period
that have not been received by the Servicer prior to the
last day of the second Collection Period immediately
preceding such Distribution Date) under the terms of all
Original Contracts in the Contract Pool as of the last day
of the Collection Period immediately preceding such
Distribution Date and (ii) with respect to each other Series
of Notes, the aggregate amount of the Adjusted Scheduled
Payments scheduled to be made during the Collection Period
immediately preceding such Distribution Date (and any other
Scheduled Payments due and payable after the applicable Cut
Off Date and prior to the last day of such Collection Period
that have not been received by the Servicer prior to the
last day of the second Collection Period immediately
preceding such Distribution Date) under the terms of the
Additional Contracts sold to the Trust in connection with
the issuance of such Series and in the Contract Pool as of
the last day of the Collection Period immediately preceding
such Distribution Date.
"Servicer" shall mean initially Newcourt and its
permitted successors and assigns, and thereafter any Person
appointed as successor as herein provided to service the
Trust Assets.
"Servicer Advance" means an advance of Scheduled
Payments made by the Servicer pursuant to Section 3.3.
"Servicer Default" shall have the meaning specified in
Section 10.1.
"Services" shall mean, in connection with the financing
of Software by an Originator, the support and consulting
services related to such Software the procurement of which
was also financed by such Originator pursuant to a Contract.
"Servicing Fee" shall have the meaning specified in
Section 3.8.
"Servicing Fee Percentage" shall mean .60%.
"Software" shall mean the computer software programs
financed or leased by an Obligor pursuant to a Contract.
"Solvent" shall mean, as to any Person at any time,
that (a) the fair value of the Property of such Person is
greater than the amount of such Person's liabilities
(including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities
evaluated for purposes of Section 101(31) of the Bankruptcy
Code; (b) the present fair saleable value of the Property of
such Person in an orderly liquidation of such Person is not
less than the amount that will be required to pay the
probable liability of such Person on its debts as they
become absolute and matured; (c) such Person is able to
realize upon its Property and pay its debts and other
liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities
mature; and (e) such Person is not engaged in business or a
transaction, and is not about to engage in a business or a
transaction, for which such Person's property would
constitute unreasonably small capital.
"Standard & Poor's" shall mean Standard & Poor's
Ratings Services, a division of McGraw Hill, Inc., or any
successor thereto.
"Subordinated Noteholder" shall mean a Holder of a
Subordinated Note.
"Subordinated Note Rate" shall mean, for a Series, the
rate that is equivalent to the pre-tax yield of 800 basis
points over the yield of the U.S. Treasury security having a
maturity nearest to the weighted average life of the Class A
Notes of such Series. The Subordinated Note Rate for a
Series shall be specified in the related Supplement.
"Subordinated Notes" shall be the collective reference
to the Class B Notes and Class C Notes of each Series.
"Subordinated Residual Interest" shall mean, with
respect to a Residual Investment (other than a Guaranteed
Residual Investment), a security interest in the subject
Equipment to secure such Residual Investment, which security
interest is subordinated to the Lien on such item of
Equipment securing the payment of the related Contract.
"Subsequent Purchase Agreement" shall mean a Purchase
Agreement among the Seller and one or both of the Financing
Originators, as amended from time to time, pursuant to which
Contracts (including Original Contracts) other than Existing
Contracts will be acquired by the Seller.
"Successor Servicer" shall have the meaning specified
in Section 10.2.
"Supplement" shall mean, with respect to any Series, a
supplement to this Agreement complying with the terms of
Section 6.2(c), executed by the parties hereto and the
applicable Indenture Trustee in conjunction with the
issuance of any Series (or, in the case of the issuance of
Notes on the First Closing Date, the supplement executed in
connection with such issuance).
"Targetted Holders" shall mean each holder of a right
to receive interest or principal with respect to a
Partnership Note, including any holder of a right to receive
any amount in respect of the Non-Transferable Notes.
"Tax Opinion" shall mean, with respect to any action,
an Opinion of Counsel to the effect that, for federal income
tax purposes, (i) following such action the Trust will not
be deemed to be an association (or publicly traded
partnership) taxable as a corporation and (ii) such action
will not effect the tax characterization as debt of Notes of
any outstanding Series or Class issued by the Trust for
which an Opinion of Counsel has been provided that such
Notes are debt.
"Termination Account" shall have the meaning specified
in Section 13.2(c).
"Termination Notice" shall have the meaning specified
in Section 10.1.
"Transfer" shall have the meaning specified in Section
6.1.
"Transfer Date" shall mean the Business Day immediately
preceding each Distribution Date.
"Transfer Deposit Amount" shall mean, with respect to
each Ineligible Contract or Excess Contract, on any date of
determination, the sum of the Discounted Contract Balance of
such Contract (utilizing, for purposes of calculating the
Discounted Contract Balance, the Series Discount Rate of the
Series to which such Ineligible Contract or Excess Contract
relates at the time such Ineligible Contract or Excess
Contract was transferred to the Trust) and any outstanding
Servicer Advances thereon.
"Transfer Event" shall have the meaning specified in
subsection 9.1(f).
"Transferred Assets" shall mean all right, title and
interest of the transferring party in, to and under the
following:
"Transaction Agreements" shall mean a collective
reference to this Agreement and the Supplements, the
Subsequent Purchase Agreements, the Note Documents and the
Indentures.
(i) the Original Contracts and Additional
Contracts, and all monies due or to become due in payment of such
Contracts on and after the related Cut Off Date, any Prepayment
Amounts, any payments in respect of a casualty or early
termination, and any Recoveries received with respect thereto,
but excluding any Scheduled Payments due prior to the related Cut
Off Date and any Excluded Amounts;
(ii) the Equipment related to such Contracts and,
in the case of any Vendor Note, related Applicable
Security including all proceeds from any sale or other
disposition of such Equipment;
(iii) the Contract Files;
(iv) all payments made or to be made in the future
with respect to such Contracts or the Obligor
thereunder under any Program Agreements or Vendor
Agreements with the related Financing Originator and
under any guarantee or similar credit enhancement with
respect to such Contracts;
(v) all Insurance Proceeds with respect to each
such Contract;
(vi) Each Purchase Agreement, including, without
limitation, the obligation of each Financing Originator
party thereto to repurchase Contracts under certain
circumstances as specified therein;
(vii) each Assignment; and
(viii) all income and proceeds of the foregoing;
; provided, that Transferred Assets shall not include any
Residual Investment other than a Guaranteed Residual
Investment.
"Trust" shall mean the trust created by this Agreement
and known as the "Newcourt Receivables Asset Trust", a
business trust established pursuant to the Business Trust
Statute.
"Trust Assets" shall have the meaning specified in
Section 2.1.
"Trust Termination Date" shall have the meaning
specified in subsection 13.1.
"Trustee Incumbency Certificate" shall have the meaning
specified in Section 1.7.
"Trustee Representatives" shall have the meaning
specified in Section 1.7.
"UCC" shall mean the Uniform Commercial Code as the
same may, from time to time, be in effect in the State of
New York provided, however, in the event that, by reason of
mandatory provisions of law, any and all of the attachment,
perfection or priority of the Lien of the Trust in and to
the Collateral is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than the State of New York
the term "UCC" shall mean the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the
provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such
provisions.
"UCC Filing Locations" means the States of California,
Delaware and each State in which a Vendor is located (as
defined in the UCC in such State).
"Unreimbursed Servicer Advances" means, at any time,
the amount of all previous Servicer Advances (or portions
thereof) as to which the Servicer has not been reimbursed as
of such time pursuant to Sections 4.3(c), (d) or (e) and
which the Servicer has determined in its sole discretion
will not be recoverable from Collections with respect to the
related Contract.
"Vendor" shall mean, with respect to a Contract, the
equipment manufacturer, dealer or distributor, or software
licensor or distributor, or other Person that provided
financing under such Contract in connection with the
acquisition or use by an End-User of such party's Equipment,
Software, Services or other products.
"Vendor Agreements" shall mean the collective reference
to Vendor Assignments and Program Agreements.
"Vendor Assignment" shall mean each assignment
agreement pursuant to which an individual End-User Contract
originated by a Vendor is assigned or pledged to a Financing
Originator.
"Vendor Note" shall mean limited recourse promissory
notes payable by Vendors and secured by the Vendor's
interest in Secondary Contracts and by the Equipment, if
any, related thereto.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in this Agreement or in any
Supplement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto
or thereto unless otherwise defined therein.
(b) As used in this Agreement or in any Supplement and
in any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms not defined in Section 1.1,
and accounting terms partially defined in Section 1.1 to the
extent not defined, shall have the meanings given to them under
generally accepted accounting principles. To the extent that the
definitions of accounting terms herein are inconsistent with the
meaning of such terms under generally accepted accounting
principles, the definitions contained herein shall control.
(c) The agreements, representations and warranties of
Newcourt in this Agreement and in any Supplement in its capacity
as Servicer shall be deemed to be the agreements, representations
and warranties of Newcourt solely in its capacity as Servicer for
so long as it acts in such capacity under this Agreement.
(d) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement or any
Supplement shall refer to this Agreement or any Supplement as a
whole and not to any particular provision of this Agreement or
any Supplement; and Section, subsection, Schedule and Exhibit
references contained in this Agreement or any Supplement are
references to Sections, subsections, Schedules and Exhibits in or
to this Agreement or any Supplement unless otherwise specified.
SECTION 1.3 Compliance Certificates and Opinions.
Upon any application or request by an Indenture Trustee, the
Seller or the Servicer to the Collateral Agent or by an Indenture
Trustee or the Collateral Agent to the Issuer Trustee to take or
refrain from taking any action under any provision of this
Agreement, the requesting Person shall furnish to the Collateral
Agent or the Issuer Trustee, as the case may be, a certificate
stating that, in the opinion of the signer(s), all conditions
precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with except that, in the case
of any such application or request as to which the furnishing of
such document is specifically required by any provision of this
Agreement, no additional certificate need be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Agreement shall
include:
(i) a statement that each Person making such
certificate or opinion has read such covenant or condition
and the definitions in this Agreement relating thereto;
(ii) a brief statement as to the nature and scope of
the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(iii) a statement that, in the opinion of each such
Person, such Person has made such examination or
investigation as is necessary to enable him or her or it to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion
of each such Person, such condition or covenant has been
complied with.
Any certificate, statement or opinion of an officer of
a Person may be based, insofar as it relates to legal matters,
upon a certificate or opinion of or representations by counsel,
unless such Person knows that the certificate or opinion or
representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that
the same are erroneous. Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual matters or
information which is in the possession of a Person, upon the
certificate, statement or opinion of or representations by an
officer or officers of such Person, unless such counsel knows
that the certificate, statement or opinion or representations
with respect to the matters upon which his certificate, statement
or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of
a Person or of counsel thereto may be based, insofar as it
relates to accounting matters, upon a certificate or opinion of
or representations by an accountant or firm of accountants
employed by such Person or the Seller on behalf of such Person,
unless such officer or counsel, as the case may be, knows that
the certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are
erroneous.
SECTION 1.4 Form of Documents Delivered to Collateral
Agent or Issuer 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.
Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Agreement,
they may, but need not, be consolidated and form one instrument.
SECTION 1.5 Acts of Indenture Trustees. (a) Any
direction, consent, waiver or other action provided by this
Agreement to be given or taken by the Indenture Trustees, or any
of them, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such
Indenture Trustee(s) in person or by an agent or proxy duly
appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument
or instruments are delivered to the Collateral Agent and, where
it is hereby expressly required pursuant to this Agreement, to
the Issuer Trustee, the Servicer or the Seller. Such instrument
or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Indenture Trustee(s) 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 Agreement and conclusive in favor of the Collateral Agent,
the Issuer Trustee, the Servicer and the Seller, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person
of any such instrument or writing may be proved (i) by the
certificate of any notary public or other officer of any
jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instrument
acknowledged to him the execution thereof, or (ii) by an
affidavit of a witness to such execution sworn to before any such
notary or such other officer, and where such execution is by an
officer of a corporation or association or a member of a
partnership, on behalf of such corporation, association or
partnership, 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
reasonable manner which the Collateral Agent deems sufficient.
SECTION 1.6 Acts of Noteholders. (a) The Collateral
Agent recognizes and agrees that in lieu of the Indenture
Trustees, certain notices and demands hereunder may be delivered
by a specified percentage of Noteholders of a Class. Any such
notice delivered by one or more Noteholders of any Class may be
embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person
or by an agent or proxy duly appointed in writing; and, except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to
the Collateral Agent and, where it is hereby expressly required
pursuant to this Agreement, to the Issuer Trustee, the Servicer
or the Seller. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any
purpose of this Agreement and conclusive in favor of the
Collateral Agent, the Issuer Trustee, the Servicer and the
Seller, if made in the manner provided in this Section 1.6.
(b) The fact and date of the execution by any Person
of any such instrument or writing may be proved (i) by the
certificate of any notary public or other officer of any
jurisdiction authorized to take acknowledgments of deeds or
administer oaths that the Person executing such instrument
acknowledged to him the execution thereof, or (ii) by an
affidavit of a witness to such execution sworn to before any such
notary or such other officer, and where such execution is by an
officer of a corporation or association or a member of a
partnership, on behalf of such corporation, association or
partnership, 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
reasonable manner which the Collateral Agent deems sufficient.
(c) In determining whether a specified percentage of
Noteholders have given a direction, Notes owned by the Seller,
the Servicer, the Issuer Trustee, or any Affiliate of any
thereof, shall be disregarded and deemed not to be outstanding
for purposes of any such determination; provided that, for the
purposes of this Section 1.6(c), the Issuer Trustee, acting in
its individual capacity, shall not be deemed an Affiliate of the
Seller. In determining whether the Collateral Agent shall be
protected in relying upon any direction delivered by the
Noteholders of any Class, only Notes which the Collateral Agent
knows to be so owned shall be so disregarded. Notwithstanding
the foregoing, (i) if any such Person owns 100% of the Notes of
any Class, such Class of Notes shall not be so disregarded as
aforesaid, and (ii) if any amount of such Class of Notes so owned
by any such Person have been pledged in good faith, such Class of
Notes shall not be disregarded as aforesaid if the pledgee
establishes to the satisfaction of the Collateral Agent the
pledgee's right so to act with respect to such Notes and that the
pledgee is not the Seller, the Servicer, the Issuer Trustee or
any Affiliate of any thereof.
SECTION 1.7 Designated Representatives. With the
delivery of the related Supplement, the Indenture Trustee party
thereto shall furnish to the Collateral Agent and the Issuer
Trustee, and from time to time thereafter may furnish to the
Collateral Agent and the Issuer Trustee at its discretion or upon
the Collateral Agent's or the Issuer Trustee's request (which
request shall not be made more than one time in any twelve-month
period), a certificate (a "Trustee Incumbency Certificate") of
the Secretary or an Assistant Secretary of such Indenture Trustee
certifying as to the incumbency and specimen signatures of the
officers of such Indenture Trustee and the attorney-in-fact and
agents of such Indenture Trustee ("Trustee Representatives")
authorized to give written notices, demands and directions on
behalf of such Indenture Trustee hereunder. Until the Collateral
Agent and the Issuer Trustee receives a subsequent Trustee
Incumbency Certificate, it shall be entitled to rely on the last
Trustee Incumbency Certificate delivered to it hereunder.
SECTION 1.8 Controlling Party. Subject to the terms
and conditions hereof, the Controlling Party shall have full
right, power and authority to act, on its own behalf and on
behalf of the Secured Parties which are not then acting as
Controlling Party, with respect to the exercise of the remedies
granted to the Controlling Party and the Collateral Agent
hereunder, and the Controlling Party is authorized to direct the
Collateral Agent in the exercise of, or to refrain from directing
the Collateral Agent in the exercise of, the remedies granted to
the Collateral Agent hereunder. The Controlling Party shall have
the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Collateral Agent;
provided, however, that
(a) such direction shall not be in conflict with any
rule of law or with this Collateral Agreement and would not
involve the Collateral Agent in personal liability or
expense, and
(b) the Collateral Agent may take any other action
deemed proper by the Collateral Agent which is not
inconsistent with such direction.
SECTION 1.9 Business Day Certificate. On the date of
execution and delivery of this Agreement (with respect to the
remainder of calendar year 1996) and thereafter, within 15 days
prior to the end of each calendar year while this Agreement
remains in effect (with respect to the succeeding calendar
years), the Seller shall deliver to the Issuer Trustee and
Collateral Agent an Officers' Certificate specifying the days on
which banking institutions in the City of Hartford, Connecticut
and Xxxxxxx, Xxxxxxx, Xxxxxx are authorized or obligated by law
or required by executive order to be closed.
ARTICLE II
CREATION OF TRUST; TRANSFER OF TRUST ASSETS
Section 2.1 Creation of Trust; Transfer of Trust
Assets. (a) The Trust shall be created upon the execution and
delivery of this Agreement and the filing by the Issuer Trustee
of an appropriately completed Certificate of Trust under the
Business Trust Statute. The purpose of the Trust is, and the
Trust shall have the power and authority, to engage in the
following:
(i) to issue the Class A Notes pursuant to the
Indentures, and the Class B Notes and Class C Notes pursuant
to the applicable Supplement, and to sell the Notes in
public or private offerings;
(ii) with the proceeds of the sale of the Notes to
acquire the Transferred Assets from the Seller;
(iii) to pay interest and principal on the Notes;
(iv) to assign, grant, transfer, pledge, mortgage and
convey the Trust Assets to the Collateral Agent;
(v) to execute, deliver and perform its obligations
under the Transaction Agreements to which it is to be a
party; and
(vi) to engage in other transactions, including
entering into agreements, that are necessary, suitable or
convenient to accomplish the foregoing or are incidental
thereto or connected therewith.
The Trust is hereby authorized to engage in the
foregoing. The Trust shall not engaged in any activity other
than in connection with the foregoing or other than as required
or authorized by the terms of this Agreement or the other
Transaction Agreements to which it is a party.
The Seller does hereby sell, transfer, assign and set
over to the Trust all right, title and interest of the Seller in,
to and under the Transferred Assets.
Such property, together with all monies and investments
on deposit excluding earnings on such investments, from time to
time, in the Collection Account, the Reserve Account and each
Termination Account shall constitute the corpus of the Trust
(collectively, the "Trust Assets"). The foregoing transfer,
assignment, set-over and conveyance does not constitute and is
not intended to result in the creation or an assumption by the
Trust, the Issuer Trustee or any Noteholder of any obligation of
the Seller, the Servicer or any other Person in connection with
the Contracts in the Contract Pool or any agreement or instrument
relating thereto, including, without limitation, any obligation
to any Obligors or insurers, or in connection with any Purchase
Agreement. The parties hereto intend that the Trust constitute a
business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business
trust.
(b) In connection with such sale, transfer, assignment
and set-over, the Seller agrees as follows:
(i) Within 10 days following the First Closing Date,
the Seller shall (x) record and file, at the Seller's
expense, in each Filing Location, financing statements
(including any continuation statements with respect to such
financing statements when applicable) with respect to the
Transferred Assets meeting the requirements of applicable
law in each Filing Location and in such manner as is
necessary to perfect (to the extent governed by the law of
each Filing Location) the Lien of the Trust in the
Transferred Assets and (y) cause file-stamped copies of such
financing statements or continuation statements or other
evidence of such filings (which may, for purposes of this
Section 2.1(b), consist of telephone confirmations of such
filings with the file-stamped copy to be provided to the
Issuer Trustee as soon as practicable) to be delivered to
the Issuer Trustee within 10 days following the First
Closing Date, each applicable Addition Date and each date of
filing of any continuation statements filed pursuant to this
Section 2.1(b). Except as provided in subsection (ii)
below, the Seller will not be required to deliver the
Contract Files to the Issuer Trustee, but instead the
Contract Files will be held by the Servicer in accordance
with the provisions hereof.
(ii) On or prior to the First Closing Date and each
applicable Addition Date, the Seller shall deliver to the
Issuer Trustee each Instrument included in the Transferred
Assets transferred hereunder on such date, in order to
perfect the Lien of the Trust in the Transferred Assets.
(iii) The Seller shall, at its own expense, on or prior
to (x) the First Closing Date in the case of the Original
Contracts, and (y) the applicable Addition Date, in the case
of Additional Contracts (A) indicate in its books and
records, including the appropriate computer files relating
to the Contracts, that such Contracts have been transferred
to the Trust pursuant to this Agreement and stamp the
related Contract Files or otherwise xxxx such Contracts with
a legend to the effect that such Contracts have been
transferred to the Trust pursuant hereto and (B) deliver to
the Issuer Trustee a computer file or microfiche or written
list containing a true and complete list of (x) all
Contracts then being transferred to the Trust, identified by
[contract] number and by the Discounted Contract Balance as
of the related Cut Off Date and (y) all Instruments then
being delivered to the Issuer Trustee, identified by account
number. The file or list specified in clause (B)(x) above
shall be marked as Schedule 1 to this Agreement and the file
or list specified in clause (B)(y) above shall be marked as
Schedule 4 to this Agreement and each such Schedule is
hereby incorporated into and made a part of this Agreement.
(iv) The Seller shall, at its own expense, on or prior
to (x) the First Closing Date in the case of the Original
Contracts, and (y) the applicable Addition Date, in the case
of Additional Contracts, deliver to the Servicer the related
Contract Files to be held by the Servicer, provided that, in
the case of an Instrument, any related Contract File to be
held by the Servicer shall include only copies of such
Instruments.
(v) With respect to any item of Equipment with respect
to which title thereto or a security interest therein is
required to be noted on a certificate of title or otherwise
recorded, the Seller shall not be required to note the name
of the Trust, the Collateral Agent or the Issuer Trustee on
the certificate of title, provided, that to the extent
financing or similar filings are required with respect to
any item of related Equipment, the Seller shall be required
to record such filings in the Filing Locations.
(c) To the extent that the Seller retains or is deemed
to retain any interest in the Transferred Assets or the related
Equipment or any other property included in the Transferred
Assets, the Seller hereby grants to the Trust, a first priority
perfected security interest in all of the Transferred Assets to
secure a loan in an amount equal to the unpaid principal amount
of the Notes, the interest accruing thereon at the applicable
Interest Rates and all of Seller's and the Servicer's other
obligations hereunder, and agrees that this Agreement shall
constitute a security agreement under applicable law.
Section 2.2 Acceptance by Issuer Trustee.
(a) The Issuer Trustee hereby acknowledges its
acceptance, on behalf of the Trust, of the Trust Assets, and
declares that it shall maintain such right, title and interest,
upon the trust herein set forth in accordance with the terms of
this Agreement. The Issuer Trustee further acknowledges that,
prior to or contemporaneously with the execution and delivery of
this Agreement, the Seller delivered to the Issuer Trustee the
computer file or microfiche or written list with respect to the
Original Contracts described in Section 2.1(b). On the First
Closing Date, and on each applicable Addition Date, the Issuer
Trustee shall execute and deliver to the Seller a receipt
evidencing the Issuer Trustee's receipt of the Instruments listed
on the Schedule 4 delivered hereunder on such date.
(b) In connection with the sale, transfer and
assignment of the Contracts and related Applicable Security to
the Seller pursuant to the Purchase Agreements and to the Trust
pursuant hereto, the Issuer Trustee hereby appoints the Servicer,
and the Servicer accepts such appointment, to act as the
custodian of the Contract Files.
(c) The Issuer Trustee hereby agrees not to disclose
to any Person any of the account numbers or other information
contained in the computer files or microfiche or written lists
delivered to the Issuer Trustee by the Seller pursuant to
Sections 2.1 and 2.6, except as is required in connection with
the performance of its duties hereunder or in enforcing the
rights of the Noteholders, or to a Successor Servicer appointed
pursuant to Section 10.2, any successor trustee appointed
pursuant to Section 11.8, any co-trustee or separate trustee
appointed pursuant to Section 11.10 or as mandated by any
Requirement of Law applicable to the Issuer Trustee. The Issuer
Trustee agrees to take such measures as shall be reasonably
requested by the Seller to protect and maintain the security and
confidentiality of such information, and, in connection
therewith, shall allow Seller to inspect the Issuer Trustee's
security and confidentiality arrangements from time to time
during normal business hours.
(d) The Issuer Trustee shall have no power to create,
assume or incur indebtedness or other liabilities in the name of
the Trust other than as contemplated in this Agreement.
(e) Upon giving effect to the release of Released
Amounts to the Trust pursuant to Section 2.3(k), the Trust shall
release to the Seller from the Transferred Assets an amount equal
to the Released Amounts immediately upon identification thereof,
which release shall be automatic and shall require no further act
by the Issuer Trustee, provided that the Issuer Trustee shall
execute and deliver such instruments of release and assignment,
or otherwise confirm the foregoing release of any Released
Amounts, as may be reasonably requested by the Transferor. Upon
such release of Released Amounts, such Released Amounts shall not
constitute and shall not be included in the Transferred Assets.
Section 2.3 Grant of Security Interest. (a) The
Trust hereby grants to the Collateral Agent for the benefit of
the Secured Parties a first priority perfected security interest
in all of the Trust Assets to secure a loan in an amount equal to
the unpaid principal amount of the Notes issued and to be issued
from time to time under the Indentures and the related
Supplement, the interest accruing thereon at the applicable
Interest Rates, and agrees that this Agreement shall constitute a
security agreement under applicable law.
(b) Within 10 days following the First Closing Date,
the Seller on behalf of the Trust shall record and file, at the
Seller's expense, in each Filing Location, financing statements
(including any continuation statements with respect to such
financing statements when applicable) with respect to the Trust
Assets meeting the requirements of applicable law in each Filing
Location and in such manner as is necessary to perfect (to the
extent governed by the law of each Filing Location) the Lien of
the Collateral Agent in the Trust Assets, and shall cause
file-stamped copies of such financing statements or continuation
statements or other evidence of such filings (which may, for
purposes of this Section 2.3, consist of telephone confirmations
of such filings with the file-stamped copy to be provided to the
Collateral Agent as soon as practicable) to the Collateral Agent
within 10 days following the First Closing Date, each applicable
Addition Date and each date of filing of any continuation
statements filed pursuant to this Section 2.3. Except as
provided below, the Issuer Trustee will not be required to
deliver the Contract Files to the Collateral Agent but instead
the Contract Files will be held by the Servicer as custodian for
the Collateral Agent in accordance with the provisions hereof.
In order to perfect the Lien of the Collateral Agent in the
Transferred Assets, on the First Closing Date and on each
applicable Addition Date, the Issuer Trustee, or the Seller for
the account of the Issuer Trustee, shall deliver to the
Collateral Agent each Instrument listed on the Schedule 4
delivered to the Issuer Trustee on such date.
(c) The Seller shall, at its own expense, on or prior
to (x) the First Closing Date in the case of the Original
Contracts, and (y) the applicable Addition Date, in the case of
Additional Contracts (A) indicate in its books and records,
including the appropriate computer files relating to the
Contracts, that a Lien on such Contracts has been transferred to
the Collateral Agent pursuant to this Agreement and stamp the
related Contract Files or otherwise xxxx such Contracts with a
legend to the effect that such Lien has been transferred to the
Collateral Agent pursuant hereto and (B) deliver to the
Collateral Agent a computer file or microfiche or written list
containing a true and complete list of (x) all Contracts then
being transferred to the Trust, identified by account number and
by the Discounted Contract Balance as of the related Cut Off Date
and (y) all Instruments then being delivered to the Issuer
Trustee, identified by contract number. As provided in Section
2.1, the file or list specified in clause (B)(x) above shall be
marked as Schedule 1 to this Agreement and the file or list
specified in clause (B)(y) above shall be marked as Schedule 4 to
this Agreement and each such Schedule is hereby incorporated into
and made a part of this Agreement.
(d) With respect to any item of Equipment with respect
to which title thereto or a security interest therein is required
to be noted on a certificate of title or otherwise recorded, the
Seller shall not be required to note the name of the Collateral
Agent on the certificate of title, provided, that to the extent
financing or similar filings are required with respect to any
item of related Equipment, the Seller shall be required to record
such filings in the Filing Locations.
(e) To the extent that the Seller retains or is deemed
to retain any interest in the Contracts in the Contract Pool or
the related Equipment or any other property included in the Trust
Assets, the Seller hereby grants to the Collateral Agent, a first
priority perfected security interest in all of the Trust Assets,
and the Trust hereby assigns the Lien in its favor granted
pursuant to Section 2.1(c), to secure, in each case, a loan in an
amount equal to the unpaid principal amount of the Notes, the
interest accruing thereon at the applicable Interest Rates and
all of Seller's and the Servicer's other obligations hereunder,
and agrees that this Agreement shall constitute a security
agreement under applicable law.
(f) The Collateral Agent hereby acknowledges that,
pursuant to Section 2.3 (b), on the First Closing Date and on
each applicable Addition Date and pursuant to this Agreement, the
Collateral Agent will be given possession of the Instruments
specified on the related Schedule 4 to this Agreement, a copy of
which will be delivered to the Collateral Agent simultaneously
with the delivery of the Instruments specified thereon. On and
after the First Closing Date for so long as this Agreement shall
remain in effect, the Collateral Agent shall hold the Instruments
now and from time to time hereafter delivered to it in its sole
custody or control as custodian, unless and until released from
the Lien of the Collateral Agent and otherwise in accordance with
this Agreement.
(g) Upon delivery to the Collateral Agent of the
Instruments, as specified in Section 2.3(b), the Collateral Agent
shall review the same and verify that each Instrument identified
on the related Schedule 4 has been delivered to the Collateral
Agent and shall provide to the Issuer Trustee, a receipt
indicating that all the Instruments listed on the related
Schedule 4 have been delivered.
(h) Upon the purchase of any Instrument pursuant to
Section 6.1.1, or Section 6.1.2 of the related Purchase
Agreement, or upon the payment in full of any Instrument, which
shall be evidenced by delivery from the Servicer to the
Collateral Agent of the request for release in the form annexed
hereto as Exhibit G ("Request for Instrument Release"), the
Collateral Agent shall promptly release the Instrument specified
in such request to the Servicer for the account of the Issuer
Trustee and the Seller and the security interest in such
Instrument granted by the Trust to the Collateral Agent pursuant
to Section 2.3 and the security interest in such Instrument and
the related Transferred Assets granted by the Seller to the Trust
shall terminate without any further action by the Collateral
Agent, the Issuer Trustee or the Seller. The Collateral Agent
shall not deliver any Instrument to any Person unless the
Collateral Agent shall have received a properly executed Request
for Instrument Release of the Servicer and shall have received
evidence of payment of the Instrument.
(i) The Collateral Agent shall have and perform the
other following duties with respect to the Instruments delivered
to it hereunder:
(i) Safekeeping. To segregate the Instruments
from all other instruments and similar documents in its
possession, to identify the Instruments as being held and to
hold the Instruments for and on behalf of the other Secured
Parties. The Collateral Agent will promptly report to the
Issuer Trustee any failure on its part to hold the
Instruments delivered to it hereunder as herein provided and
promptly take appropriate action to remedy any such failure.
(ii) Administration; Reports. In general, to
attend to all non-discretionary details in connection with
maintaining custody of the Instruments as may be expressly
provided herein or as may be required or customary for a
custodian of similar instruments.
(j) The Collateral Agent shall permit the Issuer
Trustee or the Servicer on its behalf and its duly authorized
agents, attorneys or auditors, upon reasonable prior notice, to
inspect the Instruments delivered to it hereunder at such
reasonable times as they may reasonably request.
(k) The Collateral Agent hereby agrees to release to
the Trust from the Transferred Assets an amount equal to the
Released Amounts immediately upon identification thereof, which
release shall be automatic and shall require no further act by
the Collateral Agent, provided that the Collateral Agent shall
execute and deliver such instruments of release and assignment,
or otherwise confirm the foregoing release of any Released
Amounts, as may be reasonably requested by the Issuer Trustee.
Section 2.4 Representations and Warranties of Seller
Relating to Seller. The Seller hereby represents and warrants as
of the First Closing Date and on each Addition Date that:
(a) Organization and Good Standing. The Seller is a
corporation duly organized and validly existing in good
standing under the laws of the State of Delaware, and has
full corporate power, authority and legal right to own its
properties and conduct its business as such properties are
presently owned and such business is presently conducted,
and to execute, deliver and perform its obligations under
this Agreement and each Purchase Agreement and to direct the
Issuer Trustee to execute and deliver the Notes.
(b) Due Qualification. The Seller is duly qualified
to do business and is in good standing as a foreign
corporation (or is exempt from such requirements), and has
obtained or will obtain all necessary licenses and
approvals, in each jurisdiction in which failure to so
qualify or to obtain such licenses and approvals would have
a material adverse effect on its ability to perform its
obligations hereunder.
(c) Due Authorization. The execution and delivery of
this Agreement and each Purchase Agreement and the
consummation of the transactions provided for herein and
therein have been duly authorized by the Seller by all
necessary corporate action on the part of the Seller.
(d) No Conflict. The execution and delivery of this
Agreement and each Purchase Agreement, the performance of
the transactions contemplated hereby and thereby and the
fulfillment of the terms hereof and thereof will not
conflict with, result in any breach of any of the material
terms and provisions of, or constitute (with or without
notice or lapse of time or both) a default under, any
indenture, contract, agreement, mortgage, deed of trust, or
other instrument to which the Seller is a party or by which
it or any of its property is bound.
(e) No Violation. The execution and delivery of this
Agreement and each Purchase Agreement, the performance of
the transactions contemplated hereby and thereby and the
fulfillment of the terms hereof and thereof will not
conflict with or violate, in any material respect, any
Requirements of Law applicable to the Seller.
(f) No Proceedings. There are no proceedings or
investigations pending or, to the best knowledge of the
Seller, threatened against the Seller, before any court,
regulatory body, administrative agency, or other tribunal or
governmental instrumentality (i) asserting the invalidity of
this Agreement, any Purchase Agreement or the Notes, (ii)
seeking to prevent the issuance of the Notes or the
consummation of any of the transactions contemplated by this
Agreement, any Purchase Agreement or the Notes, (iii)
seeking any determination or ruling that, in the reasonable
judgment of the Seller, could reasonably be expected to be
adversely determined, and if adversely determined, would
materially and adversely affect the performance by the
Seller of its obligations under this Agreement or any
Purchase Agreement or (iv) seeking to impose income taxes on
the Trust.
(g) All Consents Required. All approvals,
authorizations, consents, orders or other actions of any
Person or of any Governmental Authority required in
connection with the execution and delivery of this
Agreement, and the Notes, the performance of the
transactions contemplated by this Agreement, and the
fulfillment of or terms hereof, have been obtained.
(h) Bulk Sales. The execution, delivery and
performance of this Agreement do not require compliance with
any "bulk sales" law by Seller.
(i) Solvency. The transactions under this Agreement
do not and will not render the Seller insolvent.
(j) Selection Procedures. No selection procedures
believed by Seller to be materially adverse to the interests
of the Trust or the Noteholders were utilized by the Seller
in selecting the Contracts in the Contract Pool.
(k) Taxes. The Seller has filed or caused to be filed
all tax returns which, to its knowledge, are required to be
filed and has put all taxes shown to be due and payable on
such returns or on any assessments made against it or any of
its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental
Authority (other than any amount of tax due the validity of
which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves
in accordance with generally accepted accounting principles
have been provided on the books of the Seller); no tax lien
has been filed and, to the Seller's knowledge, no claim is
being asserted, with respect to any such tax, fee or other
charge.
The representations and warranties set forth in this Section 2.4
shall survive the transfer of the Trust Assets to the Trust, and
termination of the rights and obligations of the Servicer
pursuant to Section 10.1. Upon discovery by the Seller, the
Servicer or a Responsible Officer of the Issuer Trustee or the
Collateral Agent of a breach of any of the foregoing
representations and warranties, the party discovering such breach
shall give prompt written notice to the others and any Credit
Enhancer. For the purposes of the representations and warranties
contained in this Section 2.4 and made by Seller on the First
Closing Date, "Notes" shall mean the Notes issued on the First
Closing Date. The Seller hereby represents and warrants, with
respect to any Series, as of the Closing Date with respect to
such Series, unless otherwise stated in the related Supplement,
that the representations and warranties of Seller set forth in
this Section 2.4 will be true and correct as of such date (for
the purposes of such representations and warranties, "Notes"
shall mean the Notes issued on such Closing Date).
Section 2.5 Representations and Warranties of Seller
Relating to the Agreement and the Contracts.
(a) Binding Obligation; Valid Transfer and Security
Interest. The Seller hereby represents and warrants to the Trust
that, as of the First Closing Date and, with respect to any
Series issued after the First Closing Date, unless otherwise
stated in the related Supplement, as of the Closing Date for such
Series and as of each Addition Date:
(i) This Agreement and each Purchase Agreement
constitutes a legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with
its terms, except as such enforceability may be limited by
Insolvency Laws and except as such enforceability may be
limited by general principles of equity (whether considered
in a suit at law or in equity) or by an implied covenant of
good faith and fair dealing.
(ii) This Agreement constitutes either (A) a valid
transfer to the Trust of all right, title and interest of
Seller in, to and under the Trust Assets (other than any
Residual Investment that is not a Guaranteed Residual
Investment), and such property will be held by the Trust
free and clear of any Lien of any Person claiming through or
under the Seller or its Affiliates, except for (x) the Lien
of the Collateral Agent and (y) Permitted Liens, or (B) a
grant of a security interest in such property to the Trust.
Upon the filing of the financing statements described in
Section 2.1 and, in the case of Additional Contracts on the
applicable Addition Date, the Trust shall have a first
priority perfected security interest in such property,
subject only to the Lien of the Collateral Agent and
Permitted Liens. Neither the Seller nor any Person claiming
through or under Seller shall have any claim to or interest
in the Collection Account or the Reserve Account except in
accordance with the provisions of Article IV and, if this
Agreement constitutes the grant of a security interest in
such property, except for the interest of Seller in such
property as a debtor for purposes of the UCC as in effect in
the State of Delaware.
(b) Eligibility of Contracts. The Seller hereby
represents and warrants to the Trust as of the First Closing Date
that (i) as of the initial Cut Off Date, Schedule 1 to this
Agreement and the computer file or microfiche or written list
delivered pursuant to Section 2.1 is an accurate and complete
listing in all material respects of all the Contracts and
Secondary Contracts in the Contract Pool as of the Cut Off Date
and the information contained therein with respect to the
identity of such Contracts and Secondary Contracts and the
amounts owing thereunder is true and correct in all material
respects as of the Cut Off Date, (ii) each such Contract is an
Eligible Contract and each Secondary Contract (or interest
therein) is an Eligible Secondary Contract, (iii) each such
Contract and the Seller's interest in the related Equipment and
Applicable Security, as appropriate, has been transferred to the
Trust free and clear of any Lien of any Person (other than
Permitted Liens) and in compliance, in all material respects,
with all Requirements of Law applicable to the Seller and (iv)
with respect to each such Contract, all material consents,
licenses, approvals or authorizations of or registrations or
declarations with any Governmental Authority required to be
obtained, effected or given by Seller in connection with the
transfer of such Contract and the related Equipment and
Applicable Security to the Trust have been duly obtained,
effected or given and are in full force and effect. On each
Addition Date on which Additional Contracts are transferred by
Seller to the Trust, Seller shall be deemed to represent and
warrant to the Trust that (i) each Additional Contract
transferred on such day is an Eligible Contract, (ii) each such
Additional Contract and the Seller's interest in the related
Equipment and Applicable Security, as appropriate, has been
transferred to the Trust free and clear of any Lien of any Person
(other than Permitted Liens) and in compliance, in all material
respects, with all Requirements of Law applicable to Seller or
the Originator thereof, (iii) with respect to each such
Additional Contract, all material consents, licenses, approvals
or authorizations of or registrations or declarations with any
Governmental Authority required to be obtained, effected or given
by the Seller in connection with the transfer of such Contract
and the related Equipment and Applicable Security to the Trust
have been duly obtained, effected or given and are in full force
and effect and (iv) the representations and warranties set forth
in subsection 2.5(a) are true and correct with respect to each
Contract transferred on such day as if made on such day.
(c) Excess Concentration Amounts. The Seller hereby
represents and warrants to the Trust as of each Closing Date that
after giving effect to all transfers of Contracts to the Trust on
such Closing Date, based on the Discounted Contract Balance of
each such newly transferred Contract on the related Cut Off Date:
(i) the ADCB of all End-User Contracts with Obligors
that are governmental entities or municipalities does not
exceed 1% of the ADCB of the Contract Pool;
(ii) the ADCB of all End-User Contracts which finance,
lease or are related to Software does not exceed 20% of the
ADCB of the Contract Pool;
(iii) the aggregate principal amount of Guaranteed
Residual Investments included in the Contract Pool does not
exceed 5% of the ADCB of the Contract Pool; and
(iv) in the Seller's reasonable judgment, the
Discounted Contract Balance of End-User Contracts in the
Contract Pool that are "true leases" does not exceed 10% of
the ADCB of the Contract Pool.
(d) Notice of Breach. The representations and
warranties set forth in this Section 2.5 shall survive the
transfer of the respective Contracts and related Equipment, or
interests therein, to the Trust, and termination of the rights
and obligations of the Servicer pursuant to Section 10.1. Upon
discovery by the Seller, the Servicer or a Responsible Officer of
the Issuer Trustee or the Collateral Agent of a breach of any of
the foregoing representations and warranties, the party
discovering such breach shall give prompt written notice to the
others and any Credit Enhancer.
(e) Retransfer of Ineligible Contracts and Excess
Contracts. In the event of a breach of any representation or
warranty set forth in subsection 2.5(b) or 6.2(b)(ix) with
respect to a Contract in the Contract Pool (each such Contract,
an "Ineligible Contract"), or set forth in subsection 2.5(c)
which renders a Contract an Excess Contract, in no later than 90
days after the earlier of knowledge of such breach on the part of
the Seller and receipt by the Seller of written notice of such
breach given by the Issuer Trustee, the Collateral Agent or the
Servicer, the Seller shall accept a retransfer of each such
Contract (and any related Equipment or Applicable Security)
selected by the Servicer to which such breach relates at such
time as there is a breach of any such representation or warranty
on the terms and conditions set forth below; provided, however,
that no such retransfer shall be required to be made with respect
to such Ineligible Contract or Excess Contract, as the case may
be (and such Contract shall cease to be an Ineligible Contract or
Excess Contract, as the case may be) if, on or before the
expiration of such 90-day period, the representations and
warranties in subsections 2.5(b), 6.2(b)(ix) and 2.5(c) with
respect to such Contract shall be made true and correct in all
material respects with respect to such Contract as if such
Contract had been transferred to the Trust on such day.
Notwithstanding anything contained in this subsection 2.5(e) to
the contrary, in the event of breach of any representation and
warranty set forth in subsection 2.5(a), with respect to each
Original Contract or Additional Contract and the related
Equipment having been conveyed to the Trust free and clear of any
Lien of any Person claiming through or under the Seller and its
Affiliates (other than Permitted Liens) and in compliance in all
material respects, with all Requirements of Law applicable to the
Seller, immediately upon the earlier to occur of the discovery of
such breach by the Seller or receipt by the Seller of written
notice of such breach given by the Issuer Trustee, the Collateral
Agent or the Servicer, the Seller shall repurchase and the Trust
shall convey, without recourse, representation or warranty, all
of the Trust's right, title and interest in such Ineligible
Contract. In any of the foregoing instances, the Seller shall
accept a retransfer of each such Ineligible Contract or Excess
Contract, and there shall be deducted from the ADCB of the
Contract Pool the Discounted Contract Balance of each such
Ineligible Contract or Excess Contract. On and after the date of
such retransfer, each Ineligible Contract or Excess Contract so
retransferred shall not be included in the ADCB of the Contract
Pool or of any group of Contracts. In consideration of such
retransfer the Seller shall, on the date of retransfer of such
Ineligible Contract or Excess Contract, make a deposit in the
Collection Account (for allocation pursuant to Article IV) in
immediately available funds in an amount equal to the Transfer
Deposit Amount. Upon each retransfer to the Seller of such
Ineligible Contract or Excess Contract, the Trust and the
Collateral Agent shall automatically and without further action
be deemed to transfer, assign and set-over to the Seller, without
recourse, representation or warranty, all the right, title and
interest of the Trust or the Collateral Agent, respectively, in,
to and under such Contract and all monies due or to become due
with respect thereto, the related Equipment and all proceeds of
such Contract and Liquidation Proceeds and Insurance Proceeds
relating thereto and all rights to security for any such
Contract, and all proceeds and products of the foregoing. The
Issuer Trustee, on behalf of the Trust, and the Collateral Agent
shall execute such documents and instruments of transfer as may
be prepared by the Seller and take such other actions as shall
reasonably be requested by the Seller to effect the transfer of
such Ineligible Contract pursuant to this subsection. The
obligation of the Seller to accept retransfer of any Ineligible
Contract or Excess Contract shall constitute the sole remedy
respecting any breach of the representations and warranties set
forth in subsection 2.5(b), 6.2(b)(ix) and 2.5(c) with respect to
such Contract available to Noteholders, or the Issuer Trustee on
their behalf or the Collateral Agent on behalf of the Secured
Parties.
(f) Retransfer of Trust Portfolio. In the event of a
breach of any of the representations and warranties set forth in
subsection 2.5(a) hereof which breach could reasonably be
expected to have a material adverse affect on the rights of the
Noteholders or of the Collateral Agent hereunder or on the
ability of the Seller to perform its obligations hereunder,
either the Collateral Agent, or, so long as any Series of Class A
Notes remains outstanding, the Controlling Party, by notice then
given in writing to the Seller, the Issuer Trustee and the
Servicer (and to the Collateral Agent, if given by the
Controlling Party), may direct the Seller to accept retransfer of
all of the Contracts in the Contract Pool and the Seller shall be
obligated to accept retransfer of such Contracts on a
Distribution Date specified by the Seller (such date, the
"Retransfer Date") occurring within the period of 60 days after
such notice on the terms and conditions set forth below;
provided, however, that no such retransfer shall be required to
be made if, on or before expiration of such applicable period,
the representations and warranties contained in subsection 2.5(a)
shall be made true and correct in all material respects. The
Seller shall deposit on the Retransfer Date an amount equal to
the deposit amount provided in the next sentence for such
Contracts in the Collection Account for distribution to the
Noteholders pursuant to Section 13.3. The deposit amount for
such retransfer will be equal to the sum of (i) the Aggregate
Principal Amount of the Notes of all Series at the end of the
Business Day preceding the Distribution Date on which the
retransfer is scheduled to be made, plus (ii) an amount equal to
all interest accrued but unpaid on the Notes at the applicable
Interest Rate through such Distribution Date, plus (iii) an
amount sufficient to pay all unreimbursed amounts owing to each
Credit Enhancer (to the extent set forth in the applicable
Supplement) less (iv) the amount, if any, available in the
Collection Account and the Reserve Account on such Transfer Date.
On the Retransfer Date immediately following the Transfer Date on
which such amount has been deposited in full into the Collection
Account, the Contracts in the Contract Pool (or security
interests therein) and all monies due or to become due with
respect thereto, the related Equipment (or security interests
therein) and all proceeds thereof, all rights to security for any
such Contracts, and all proceeds and products of the foregoing,
shall be transferred to the Seller, and the Issuer Trustee, on
behalf of the Trust, and the Collateral Agent shall execute and
deliver such instruments of transfer, in each case without
recourse, representation or warranty, as shall be prepared and
reasonably requested by the Seller to vest in the Seller, or its
designee or assignee, all right, title and interest of the Trust
and the Collateral Agent in, to and under the Contracts in the
Contract Pool, all monies due or to become due with respect
thereto, the related Equipment and all proceeds thereof and
Insurance Proceeds relating thereto. If the Collateral Agent or
the Noteholders give a notice directing the Seller to accept a
retransfer as provided above, the obligation of Seller to accept
a retransfer of the Contracts in the Contract Pool pursuant to
this subsection 2.5(e) shall constitute the sole remedy
respecting a breach of the representations and warranties
contained in subsection 2.5(a) available to the Noteholders or
the Collateral Agent on behalf of the Secured Parties.
Section 2.6 Covenants of Seller. The Seller hereby
covenants that:
(a) Contracts Not to be Evidenced by Promissory Notes.
The Seller will take no action to cause any Contract which
is not, as of the related Closing Date, evidenced by an
Instrument, to be so evidenced except in connection with the
enforcement or collection of such Contract.
(b) Security Interests. Except for the transfers
hereunder and any Residual Investment that is not a
Guaranteed Residual Investment, the Seller will not sell,
pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any
Contract in the Contract Pool or related Equipment, whether
now existing or hereafter transferred to the Trust, or any
interest therein, and the Seller will not sell, pledge,
assign or suffer to exist any Lien on its interest as
beneficial owner of the Trust. The Seller will immediately
notify the Issuer Trustee and the Collateral Agent of the
existence of any Lien on any Contract in the Contract Pool
or related Equipment; and the Seller shall defend the right,
title and interest of the Trust in, to and under the
Contracts in the Contract Pool and the related Equipment,
against all claims of third parties; provided, however, that
nothing in this subsection 2.6(b) shall prevent or be deemed
to prohibit the Seller from suffering to exist Permitted
Liens upon any of the Contracts in the Contract Pool or any
related Equipment.
(c) Delivery of Collections. The Seller agrees to pay
to the Servicer promptly (but in no event later than two
Business Days after receipt) all Collections received by
Seller in respect of the Contracts in the Contract Pool.
(d) Regulatory Filings. The Seller shall make any
filings, reports, notices, applications and registrations
with, and seek any consents or authorizations from, the
Securities and Exchange Commission and any state securities
authority on behalf of the Trust as may be necessary or that
Seller deems advisable to comply with any federal or state
securities or reporting requirements laws.
(e) Compliance with Law. Seller hereby agrees to
comply in all material respects with all Requirements of Law
applicable to Seller.
(f) Activities of Seller. The Seller shall not engage
in any business or activity of any kind, or enter into any
transaction or indenture, mortgage, instrument, agreement,
contract, lease or other undertaking, which is not directly
related to the transactions contemplated and authorized by
this Agreement or the Purchase Agreements or which is
otherwise a Permitted Transaction.
(g) Indebtedness. The Seller shall not create, incur,
assume or suffer to exist any Indebtedness or other
liability whatsoever, except (i) Indebtedness owing from
time to time to Newcourt Credit Group USA Inc. and incurred
to finance a portion of the purchase price of Contracts, the
payment of which Indebtedness is subordinated to the prior
payment in full of the Notes, (ii) obligations incurred
under this Agreement, (iii) liabilities incident to the
maintenance of its corporate existence in good standing or
(iv) obligations incident to a Permitted Transaction.
(h) Guarantees. The Seller shall not become or remain
liable, directly or contingently, in connection with any
Indebtedness or other liability of any other Person, whether
by guarantee, endorsement (other than endorsements of
negotiable instruments for deposit or collection in the
ordinary course of business), agreement to purchase or
repurchase, agreement to supply or advance funds, or
otherwise except incident to a Permitted Transaction.
(i) Investments. The Seller shall not make or suffer
to exist any loans or advances to, or extend any credit to,
or make any investments (by way of transfer of property,
contributions to capital, purchase of stock or securities or
evidences of indebtedness, acquisition of the business or
assets, or otherwise) in, any Person except (i) for
purchases of Contracts pursuant to the Purchase Agreements,
(ii) for investments in Eligible Investments in accordance
with the terms of this Agreement or (iii) pursuant to a
Permitted Transaction.
(j) Merger; Sales. The Seller shall not enter into
any transaction of merger or consolidation, or liquidate or
dissolve itself (or suffer any liquidation or dissolution),
or acquire or be acquired by any Person, or convey, sell,
lease or otherwise dispose of all or substantially all of
its property or business, except as provided for in this
Agreement.
(k) Distributions. The Seller shall not declare or
pay, directly or indirectly, any dividend or make any other
distribution (whether in cash or other property) with
respect to the profits, assets or capital of the Seller or
any Person's interest therein, or purchase, redeem or
otherwise acquire for value any of its capital stock now or
hereafter outstanding, except that so long as no Event of
Default has occurred and is continuing and no Event of
Default would occur as a result thereof or after giving
effect thereto and the Seller would continue to be Solvent
as a result thereof and after giving effect thereto, the
Seller may declare and pay dividends on its capital stock.
(l) Agreements. The Seller shall not become a party
to, or permit any of its properties to be bound by, any
indenture, mortgage, instrument, contract, agreement, lease
or other undertaking, except this Agreement, the Purchase
Agreements and the Supplements and except incidental to a
Permitted Transaction or amend or modify the provisions of
its Certificate of Incorporation or issue any power of
attorney except to the Issuer Trustee, the Collateral Agent
or the Servicer.
(m) Purchase Agreements. Seller shall not give any
material consent to any Financing Originator or exercise any
of its rights under any Purchase Agreement unless the Rating
Agency Condition is satisfied with respect thereto.
(n) Separate Corporate Existence. The Seller shall:
(i) Maintain its own deposit account or accounts,
separate from those of any Affiliate, with commercial
banking institutions. The funds of the Seller will not
be diverted to any other Person or for other than
corporate uses of the Seller.
(ii) Ensure that, to the extent that it shares the
same officers or other employees as any of its
stockholders or Affiliates, the salaries of and the
expenses related to providing benefits to such officers
and other employees shall be fairly allocated among
such entities, and each such entity shall bear its fair
share of the salary and benefit costs associated with
all such common officers and employees.
(iii) Ensure that, to the extent that it jointly
contracts with any of its stockholders or Affiliates to
do business with vendors or service providers or to
share overhead expenses, the costs incurred in so doing
shall be allocated fairly among such entities, and each
such entity shall bear its fair share of such costs.
To the extent that the Seller contracts or does
business with vendors or service providers when the
goods and services provided are partially for the
benefit of any other Person, the costs incurred in so
doing shall be fairly allocated to or among such
entities for whose benefit the goods and services are
provided, and each such entity shall bear its fair
share of such costs. All material transactions between
Seller and any of its Affiliates shall be only on an
arm's length basis.
(iv) Maintain a principal executive and
administrative office through which its business is
conducted separate from those of its Affiliates. To
the extent that Seller and any of its stockholders or
Affiliates have offices in the same location, there
shall be a fair and appropriate allocation of overhead
costs among them, and each such entity shall bear its
fair share of such expenses.
(v) Conduct its affairs strictly in accordance
with its Certificate of Incorporation and observe all
necessary, appropriate and customary corporate
formalities, including, but not limited to, holding all
regular and special stockholders' and directors'
meetings appropriate to authorize all corporate action,
keeping separate and accurate minutes of its meetings,
passing all resolutions or consents necessary to
authorize actions taken or to be taken, and maintaining
accurate and separate books, records and accounts,
including, but not limited to, payroll and intercompany
transaction accounts.
(vi) Take or refrain from taking, as applicable,
each of the activities specified in the "non-
substantive consolidation" opinion of Skadden, Arps,
Slate, Xxxxxxx & Xxxx delivered on the First Closing
Date, upon which the conclusions expressed therein are
based.
(o) Location of Seller, Records; Instruments. The
Seller (x) shall not move outside the State of California,
the location of its chief executive office, without 45 days'
prior written notice to the Issuer Trustee and the
Collateral Agent and (y) shall not move or permit the
Servicer to move the location of the Contract Files from the
location(s) thereof on the First Closing Date, without 45
days' prior written notice to the Issuer Trustee and the
Collateral Agent and (z) will promptly take all actions
required (including, but not limited to, all filings and
other acts necessary or advisable under the UCC and the
Personal Property Security Act (Ontario), if applicable, of
each relevant jurisdiction in order to continue the first
priority perfected security interest of the Collateral Agent
in all Contracts in the Contract Pool. The Seller will give
the Issuer Trustee and the Collateral Agent prompt notice of
a change within the State of California of the location of
its chief executive office.
Section 2.7 Release of Lien on Equipment. At the same
time as (i) any Lease in the Contract Pool becomes an Expired
Lease and the Equipment related to such Lease is sold, (ii) any
Contract becomes an Prepaid Contract and in connection therewith
the Equipment related to such Prepaid Contract is sold, or (iii)
the Servicer substitutes or replaces any unit of Equipment as
contemplated in Section 3.1(c), the Issuer Trustee, on behalf of
the Trust, and the Collateral Agent, on behalf of the Secured
Parties, will to the extent requested by the Servicer release the
Trust's interest in the Equipment relating to such Expired Lease
or Prepaid Contract or such substituted or replaced Equipment, as
the case may be; provided that such release will not constitute a
release of the Trust's interest in the proceeds of such sale
(other than with respect to Equipment that is replaced pursuant
to Section 3.1(c)). In connection with any sale of such
Equipment, the Issuer Trustee, on behalf of the Trust, and the
Collateral Agent will execute and deliver to the Servicer any
assignments, bills of sale, termination statements and any other
releases and instruments as the Servicer may request in order to
effect such release and transfer; provided that neither the
Issuer Trustee nor the Collateral Agent will make any
representation or warranty, express or implied, with respect to
any such Equipment in connection with such sale or transfer and
assignment. Nothing in this Section 2.7 shall diminish the
Servicer's obligations pursuant to Section 3.1(d) with respect to
the proceeds of any such sale.
Section 2.8 Hedging of Contracts After the Related
Addition Date.
(a) Subject to the provisions of Section 2.8(b), the
Seller may on any Distribution Date transfer to the Trust an
Interest Rate Hedge with respect to one or more Contracts in the
Contract Pool that were not originally Hedged Contracts
hereunder.
(b) The Seller agrees that any such Interest Rate
Hedge shall be transferred to the Trust under Section 2.8(a) upon
and subject to the following conditions:
(i) On or before the Determination Date preceding
such Distribution Date, the Seller shall give the Issuer
Trustee, the Collateral Agent, the Servicer, each Rating
Agency and any Credit Enhancer entitled thereto pursuant to
the relevant Supplement written notice that such Interest
Rate Hedge will be transferred to the Trust and (x)
specifying (A) the applicable Distribution Date for such
transfer, (B) the specific Contracts in the Contract Pool
being hedged thereunder, (C) the sum of the Discounted
Contract Balances of such Contracts as of the last day of
the preceding Collection Period before giving effect to such
Interest Rate Hedge and after giving effect thereto
(utilizing the interest rate payable by the counterparty
thereunder as the amount to be received in respect of
interest thereunder), (D) the identity of the Hedging
Counterparty and the effective interest rate under the
related hedging transaction and (E) a recalculation of the
ADCB of the Contract Pool and of each Series as of such
Determination Date (after giving effect to all transactions
to occur on such date hereunder) and (y) certifying that all
conditions precedent in this Section 2.8 to such transfer
have been satisfied.
(ii) On such Distribution Date, after giving effect
to the transfer of such Interest Rate Hedge to the Trust and
the recalculation of the ADCB of the Contract Pool
(utilizing, for such Contracts as to which the Interest Rate
Hedge shall apply, the interest rate payable by the
counterparty thereunder as the amount to be received in
respect of interest thereunder), no Event of Default, or an
event which with notice or lapse of time or both would
constitute an Event of Default shall have occurred and no
Excess Concentration Amount has been caused for any Series.
(iii) On or before such Distribution Date, and before
giving effect to such transfer, the Rating Agency Condition
shall have been satisfied.
ARTICLE III
ADMINISTRATION AND SERVICING OF CONTRACTS
Section 3.1 Appointment and Acceptance; Duties.
(a) Appointment of Initial Servicer. Newcourt is
hereby appointed as Servicer and custodian pursuant to this
Agreement. Newcourt accepts the appointment and agrees to act as
the Servicer and custodian pursuant to this Agreement.
(b) General Duties. The Servicer will service,
administer and enforce the Contracts in the Contract Pool on
behalf of the Trust and will have full power and authority to do
any and all things in connection with such servicing and
administration which it deems necessary or desirable and as shall
not contravene the provisions of this Agreement. The Servicer
will manage, service, administer, and make collections on the
Contracts in the Contract Pool with reasonable care, using that
degree of skill and attention that the Servicer exercises with
respect to all comparable contracts that it services for itself
or others. The Servicer's duties will include collection and
posting of all payments, responding to inquiries of Obligors
regarding the Contracts in the Contract Pool, investigating
delinquencies, accounting for collections, furnishing monthly and
annual statements with respect to collections and payments in
accordance with Section 3.10, making Servicer Advances in its
discretion, and using its best efforts to maintain the perfected
first priority security interest of the Collateral Agent in the
Trust Assets. The Servicer will follow its customary standards,
policies, and procedures and will have full power and authority,
acting alone, to do any and all things in connection with such
managing, servicing, administration, and collection that it deems
necessary or desirable. If the Servicer commences a legal
proceeding to enforce a Defaulted Contract pursuant to Section
3.4 or commences or participates in a legal proceeding (including
a bankruptcy proceeding) relating to or involving a Contract in
the Contract Pool, the Trust will be deemed to have automatically
assigned such Contract to the Servicer for purposes of commencing
or participating in any such proceeding as a party or claimant,
and the Servicer is authorized and empowered by the Trust,
pursuant to this Section 3.1(b), to execute and deliver, on
behalf of itself and the Trust, any and all instruments of
satisfaction or cancellation, or partial or full release or
discharge, and all other notices, demands, claims, complaints,
responses, affidavits or other documents or instruments in
connection with any such proceedings. If in any enforcement suit
or legal proceeding it is held that the Servicer may not enforce
a Contract on the ground that it is not a real party in interest
or a holder entitled to enforce the Contract, then the Issuer
Trustee will, at the Servicer's expense and direction, take steps
on behalf of the Trust to enforce the Contract, including
bringing suit in the Trust's name.
(c) Consent to Assignment or Replacement. At the
request of an Obligor, the Servicer may in its sole discretion
consent to the assignment of the related Contract or the sublease
of a unit of the Equipment relating to a Contract, so long as
such Obligor remains liable for all of its obligations under such
Contract. Upon the request of any Obligor, the Servicer may, in
its sole discretion, provide for the substitution or replacement
of any unit of Equipment for a substantially similar unit of
equipment, so long as such Obligor remains liable for all of its
obligations under such Contract.
(d) Disposition Upon Termination of Contract. Upon
the termination of a Lease included in the Contract Pool as a
result of a default by the obligor thereunder, and upon any such
Lease becoming a Defaulted Contract, the Servicer will use
commercially reasonable efforts to dispose of any related
Equipment. Without limiting the generality of the foregoing, the
Servicer may dispose of any such Equipment by purchasing such
Equipment or by selling such Equipment to any of its Affiliates
for a purchase price equal to the fair market value thereof. The
Servicer will deposit any Prepayments and any Expired Lease
Proceeds of any such disposition in accordance with Section 4.3.
(e) Subservicers. The Servicer may enter into
servicing agreements with one or more subservicers (including any
Affiliate of the Servicer) to perform all or a portion of the
servicing functions on behalf of the Servicer; provided that the
Servicer shall remain obligated and be liable to the Trust for
servicing and administering the Contracts in the Contract Pool in
accordance with the provisions of this Agreement without
diminution of such obligation and liability by virtue of the
appointment of such subservicer, to the same extent and under the
same terms and conditions as if the Servicer alone were servicing
and administering such Contracts. The fees and expenses of the
subservicer (if any) will be as agreed between the Servicer and
its subservicer and neither the Issuer Trustee, the Trust, the
Collateral Agent nor the Holders will have any responsibility
therefor. All actions of a subservicer taken pursuant to such a
subservicer agreement will be taken as an agent of the Servicer
with the same force and effect as though performed by the
Servicer.
(f) Further Assurances. The Issuer Trustee and the
Collateral Agent will furnish the Servicer, and the Servicer will
furnish any subservicer, with any powers of attorney and other
documents necessary or appropriate to enable the Servicer or a
subservicer, as applicable, to carry out its servicing and
administrative duties under this Agreement.
(g) Notice to Obligors. Subject to the provisions of
Section 3.2(e), the Servicer will not be required to notify any
Obligor that such Obligor's Contract or related Equipment, or any
security interest in such Contract or such Equipment, has been
sold, transferred, assigned, or conveyed pursuant to the
Applicable Purchase Agreement or pursuant to this Agreement;
provided that, in the event that the Servicer resigns or is
replaced, then if the place for payment pursuant to any Contract
is changed, the Successor Servicer must give each related Obligor
prompt written notice of the appointment of the Successor
Servicer and the place to which such Obligor should make payments
pursuant to each such Contract.
(h) Custodial Duties. As custodian, the Servicer
shall take and retain custody of the Contract Files in accordance
with the terms and conditions of this Agreement, all for the
benefit of the Trust and subject to the Lien thereon in favor of
the Collateral Agent on behalf of the Secured Parties. In so
taking and retaining custody of the Contract Files, the Servicer
shall be deemed to be acting as the agent of the Collateral
Agent, provided, however, that the Servicer makes no
representations as to the existence, perfection or priority of
any Lien on the Contract Files or the instruments therein, and
provided, further, that the Servicer's duties as agent shall be
limited to those expressly contemplated herein. All Contract
Files shall be kept in fireproof vaults or cabinets at the
locations specified in Section 2.6(o)(ii), or at such other
office as shall be specified by prior written notice in
accordance with Section 2.6(o). All Contract Files shall be
placed together in a separate file cabinet with an appropriate
identifying label and maintained in such a manner so as to permit
retrieval and access. All Contract Files shall be clearly
segregated from any other documents or instruments maintained by
the Servicer. The Servicer shall clearly indicate that such
Contract Files are the sole property of the Trust, subject to the
Lien of the Collateral Agent. In performing its duties as
custodian, the Servicer shall use the same degree of care and
attention as it employs with respect to Contracts which are owned
by it or not otherwise included in the Contract Pool.
Section 3.2 Collection of Payments.
(a) Collection Efforts; Modification of Contracts.
The Servicer will make reasonable efforts to collect all payments
called for under the terms and provisions of the Contracts in the
Contract Pool as and when the same become due, and will follow
those collection procedures which it follows with respect to all
comparable contracts that it services for itself or others. The
Servicer may, subject to Sections 3.2(b) and (c), at the request
of an Obligor and at the Servicer's option, waive, modify or
otherwise vary any other provision of a Contract in accordance
with its customary and usual practices, provided, that no such
waiver, modification or variance shall, without the consent of
each Rating Agency, have the effect of accelerating (except as
provided in Sections 3.2(b) and (c)), delaying, reducing or
extending the date for payment of Scheduled Payments with respect
to such Contract. The Servicer may in its discretion waive any
late payment charge or any other fees that may be collected in
the ordinary course of servicing any Contract in the Contract
Pool.
(b) Prepaid Contract. The Servicer may, at its option
and in accordance with its customary and usual practices, agree
to permit a Contract in the Contract Pool to become a Prepaid
Contract (which shall not include a Contract that becomes an
Prepaid Contract due to a Casualty Loss); provided, that the
Servicer will not permit the early termination or full prepayment
of a Contract unless (i) such early termination or full
prepayment would not result in the Trust receiving an amount (the
"Prepayment Amount") less than the greater of (x) the sum of (A)
the Discounted Contract Balance on the date of such prepayment
plus any accrued and unpaid interest payments thereon (at the
weighted average of the Series Discount Rates in effect on the
date of such payment) and (B) any outstanding Servicer Advances
thereon and (y) the present value of remaining Scheduled Payments
under such Contract, discounted at a rate equal to 150 basis
points over the monthly-equivalent yield of the U.S. treasury
security with a maturity closest to the remaining life of the
Contract being prepaid or (ii) if such early termination or full
prepayment would result in the Trust receiving a Prepayment
Amount from the End-User less than the amount set forth in clause
(i), either the Vendor or the Financing Originator shall have
agreed to pay the Trust the difference between the Prepayment
Amount actually paid by the End-User and the amount set forth in
clause (i) (such payment by the Vendor or Financing Originator
also to be considered a "Prepayment Amount").
(c) Acceleration. The Servicer, in its sole
discretion, may accelerate (or elect not to accelerate) the
maturity of all or any Scheduled Payments under any Contract in
the Contract Pool under which a default under the terms thereof
has occurred and is continuing (after the lapse of any applicable
grace period); provided that the Servicer is required to
accelerate the Scheduled Payments due under any Contract in the
Contract Pool (and take other action in accordance with the
Originator's past practice, including repossessing or otherwise
converting the related Equipment, to realize upon the value of
such Contract and the related Equipment) to the fullest extent
permitted by the terms of such Contract, promptly after such
Contract becomes a Defaulted Contract.
(d) Taxes and Other Amounts. To the extent provided
for in any Contract in the Contract Pool, the Servicer will make
reasonable efforts to collect all payments with respect to
amounts due for taxes, assessments and insurance premiums
relating to such Contracts or the Equipment and remit such
amounts to the appropriate Governmental Authority or insurer on
or prior to the date such payments are due.
(e) Payments to Lockbox and Lockbox Account. On or
before the First Closing Date with respect to the Original
Contracts and on or before the relevant Addition Date, with
respect to Additional Contracts, the Servicer shall have
instructed all Obligors to make all payments in respect of the
Contracts in the Contract Pool to a Lockbox or directly to a
Lockbox Account. All Collections received in a Lockbox shall,
within one Business Day of receipt thereof, be deposited in the
Lockbox Account. In the event that any payments in respect of
the Contracts are made directly to the Servicer, the Servicer
shall, within two Business Days of receipt thereof, deposit such
amounts in a Lockbox Account or in the Collection Account. The
Servicer shall cause all Collections deposited in the Lockbox
Account to be deposited in the Collection Account within two
Business Days of the date such Collections are possessed by or on
behalf of the Servicer.
(f) Reserved.
(g) Remittances. The Servicer will service all
Collections in accordance with Section 4.3 hereof. As soon as
practicable but in any event not later than the Business Day
following the date of establishment by the Servicer that any of
the collected funds received in any of the Lockboxes do not
constitute Collections on account of the Contracts in the
Contract Pool, such monies which do not constitute such
Collections shall be remitted to the Seller or Financing
Originator, as appropriate.
Section 3.3 Servicer Advances. For each Collection
Period, if the Servicer determines that any Scheduled Payment (or
portion thereof) which was due and payable pursuant to a Contract
in the Contract Pool during such Collection Period was not
received prior to the end of such Collection Period, the Servicer
may make a Servicer Advance in an amount up to the amount of such
delinquent Scheduled Payment (or portion thereof), to the extent
that in its sole discretion it determines that it can recoup such
amount from subsequent collections under the related Contract.
The Servicer will deposit any Servicer Advances into the
Collection Account on or prior to 11:00 a.m. (New York City time)
on the related Transfer Date, in immediately available funds.
The Servicer will be entitled to be reimbursed for Servicer
Advances pursuant to Sections 4.3(d) and 4.3(e).
Section 3.4 Realization Upon Defaulted Contract. The
Servicer will use its best efforts consistent with its customary
and usual practices and procedures in its servicing of contracts
to repossess or otherwise comparably convert the ownership of any
Equipment relating to a Defaulted Contract and will act as sales
and processing agent for Equipment or Applicable Security which
it repossesses. The Servicer will follow such other practices
and procedures as it deems necessary or advisable and as are
customary and usual in its servicing of contracts and other
actions by the Servicer in order to realize upon such Equipment
or Applicable Security, which practices and procedures may
include reasonable efforts to enforce all obligations of Obligors
and repossessing and selling such Equipment or Applicable
Security at public or private sale in circumstances other than
those described in the preceding sentence. Without limiting the
generality of the foregoing, the Servicer may sell any such
Equipment or Applicable Security to the Servicer or its
Affiliates for a purchase price equal to the then fair market
value thereof. In any case in which any such Equipment or
Applicable Security has suffered damage, the Servicer will not
expend funds in connection with any repair or toward the
repossession of such Equipment or Applicable Security unless it
determines in its discretion that such repair and/or repossession
will increase the Liquidation Proceeds by an amount greater than
the amount of such expenses. The Servicer will remit to the
Collection Account the Liquidation Proceeds received in
connection with the sale or disposition of Equipment or
Applicable Security relating to a Defaulted Contract in
accordance with Section 4.3(a) net of any amounts payable to a
Vendor.
Section 3.5 Maintenance of Insurance Policies. The
Servicer will use its best efforts to ensure that each Obligor
maintains an Insurance Policy with respect to the related
Equipment in an amount at least equal to the sum of the
Discounted Contract Balance of the related Contract in the
Contract Pool; provided that the Servicer, in accordance with its
customary servicing procedures, may allow Obligors to
self-insure. Additionally, the Servicer will require that each
Obligor maintain property damage liability insurance during the
term of each Contract in the Contract Pool in amounts and against
risks customarily insured against by the Obligor on equipment
owned by it. If a Lessee fails to maintain property damage
insurance, the Servicer may purchase and maintain such insurance
on behalf of, and at the expense of, the Obligor. In connection
with its activities as Servicer of the Contracts, the Servicer
agrees to present, on behalf of itself, the Trust, the Collateral
Agent, the Indenture Trustees and the Holders, claims to the
insurer under each Insurance Policy and any such liability
policy, and to settle, adjust and compromise such claims, in each
case, consistent with the terms of each Contract. The Servicer's
Insurance Policies with respect to the related Equipment will
insure against liability for personal injury and property damage
relating to such Equipment, will name the Collateral Agent as an
insured thereunder and will contain a breach of warranty clause.
Section 3.6 Representations and Warranties of
Servicer. The Servicer represents and warrants to the Trust, the
Collateral Agent and the Holders that, as of the First Closing
Date and each subsequent Closing Date and on each Addition Date,
insofar as any of the following affects the Servicer's ability to
perform its obligations pursuant to this Agreement in any
material respect:
(a) Organization and Good Standing. The Servicer is a
corporation duly organized, validly existing and in good
standing under the laws of Ontario, Canada, with all
requisite corporate power and authority to own its
properties and to conduct its business as presently
conducted and to enter into and perform its obligations
pursuant to this Agreement.
(b) Due Qualification. The Servicer is qualified to
do business as a foreign corporation, is in good standing,
and has obtained all licenses and approvals as required
under the laws of, all provinces and states in which the
ownership or lease of its property and or the conduct of its
business (other than the performance of its obligations
hereunder) requires such qualification, standing, license or
approval, except to the extent that the failure to so
qualify, maintain such standing or be so licensed or
approved would not, in the aggregate, adversely effect the
enforceability of the Contracts in the Contract Pool.
Either the Servicer is qualified to do business as a foreign
corporation, is in good standing, and has obtained all
licenses and approvals as required under the laws of all
provinces and states in which the performance of its
obligations pursuant to this Agreement requires such
qualification, standing, license or approval or the Servicer
will have delegated its duties hereunder (in accordance with
Section 8.7) to subservicers which, when taken together with
the Servicer are, in the aggregate, qualified to do business
as a foreign corporation, are in good standing, and have
obtained all licenses and approvals as required under the
laws of, all provinces and states in which the performance
by the Servicer of its obligations pursuant to this
Agreement requires such qualification, standing, license or
approval, except to the extent that the failure to so
qualify, maintain such standing or be so licensed or
approved would not, in the aggregate, materially and
adversely affect the ability of the Servicer to comply with
this Agreement or to perform its obligations hereunder or
adversely effect the enforceability of the Contracts in the
Contract Pool.
(c) Power and Authority. The Servicer has the
corporate power and authority to execute and deliver this
Agreement and to carry out its terms. The Servicer has duly
authorized the execution, delivery and performance of this
Agreement by all requisite corporate action.
(d) No Violation. The consummation of the
transactions contemplated by, and the fulfillment of the
terms of, this Agreement by the Servicer (with or without
notice or lapse of time) will not (i) conflict with, result
in any breach of any of the terms or provisions of, or
constitute a default under, the articles of incorporation or
by-laws of the Servicer, or any term of any indenture,
agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound, (ii)
result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, or
(iii) violate any law, regulation, order, writ, judgment,
injunction, decree, determination or award of any
Governmental Authority applicable to the Servicer or any of
its properties.
(e) No Consent. No consent, approval, authorization,
order, registration, filing, qualification, license or
permit of or with any Governmental Authority having
jurisdiction over the Servicer or any of its properties is
required to be obtained by or with respect to the Servicer
in order for the Servicer to enter into this Agreement or
perform its obligations hereunder.
(f) Binding Obligation. This Agreement constitutes a
legal, valid and binding obligation of the Servicer,
enforceable against the Servicer in accordance with its
terms, except as such enforceability may be limited by (i)
applicable Canadian Insolvency Laws and (ii) general
principles of equity (whether considered in a suit at law or
in equity) or implied covenants of good faith and fair
dealing.
(g) No Proceedings. There are no proceedings or
investigations pending, or, to the best of the Servicer's
knowledge, threatened against the Servicer, before any
Governmental Authority (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or (iii)
seeking any determination or ruling that might (in the
reasonable judgment of the Servicer) materially and
adversely affect the performance by the Servicer of its
obligations under, or the validity or enforceability of,
this Agreement.
Section 3.7 Covenants of Servicer. The Servicer
hereby covenants that:
(a) Contract Files. The Servicer will, at its own
cost and expense, maintain all Contract Files in accordance
with the terms of the Custodian Agreement. Without limiting
the generality of the preceding sentence, the Servicer will
not dispose of any documents constituting the Contract Files
in any manner which is inconsistent with the performance of
its obligations as the Servicer pursuant to this Agreement
and will not dispose of any Contract except as contemplated
by this Agreement.
(b) Compliance with Law. The Servicer will comply, in
all material respects, with all laws and regulations of any
Governmental Authority applicable to the Servicer or the
Contracts in the Contract Pool and related Equipment and
Contract Files or any part thereof; provided that the
Servicer may contest any such law or regulation in any
reasonable manner which will not materially and adversely
affect the value of (or the rights of the Trust on behalf of
the Holders or the Collateral Agent on behalf of the Secured
Parties, with respect to) the Trust Assets.
(c) Preservation of Security Interest. The Servicer
will execute and file such financing and continuation
statements and any other documents reasonably requested by
the Issuer Trustee or the Collateral Agent to be filed or
which may be required by any law or regulation of any
Governmental Authority to preserve and protect fully the
interest of the Collateral Agent in, to and under the Trust
Assets; provided that the Servicer will not be required to
file any financing or continuation statements with respect
to the Equipment in any jurisdiction other than the Filing
Locations.
(d) Obligations with Respect to Contracts;
Modifications. The Servicer will duly fulfill and comply
with, in all material respects, all obligations on the part
of the Seller to be fulfilled or complied with under or in
connection with each Contract in the Contract Pool and will
do nothing to impair the rights of the Collateral Agent and
the Holders in, to and under the Trust Assets. The Servicer
will perform such obligations under the Contracts in the
Contract Pool and will not change or modify the Contracts,
except as otherwise provided herein and except insofar as
any such failure to perform, change or modify would not
materially and adversely affect the value of (or the rights
of the Trust, on behalf of the Holders, or the Collateral
Agent, on behalf of the Secured Parties, with respect to)
the Contracts or the related Equipment.
(e) No Bankruptcy Petition. Prior to the date that is
one year and one day after the payment in full of all
amounts owing in respect of all outstanding Notes, the
Servicer will not institute against the Seller, or the
Trust, or join any other Person in instituting against the
Seller or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or
any state of the United States. This Section 3.7(e) will
survive the termination of this Agreement.
(f) Location of Contract Files. The Contract Files
(other than Instruments as set forth in Section 2.1(b)(ii))
shall remain at all times in the possession of the Servicer.
Section 3.8 Servicing Compensation. As compensation
for its servicing activities hereunder and reimbursement for its
expenses as set forth in Section 3.9, the Servicer shall be
entitled to receive a monthly servicing fee in respect of any
Collection Period (or portion thereof) prior to the termination
of the Trust pursuant to Section 13.1 (with respect to each
Collection Period, the "Servicing Fee") equal to one-twelfth of
the product of (A) the Servicing Fee Percentage and (B) the ADCB
of the Contract Pool as of the first day of such Collection
Period.
Section 3.9 Payment of Certain Expenses by Servicer.
The Servicer will be required to pay all expenses incurred by it
in connection with its activities under this Agreement, including
fees and disbursements of independent accountants, the Issuer
Trustee, the Collateral Agent, taxes imposed on the Servicer,
expenses incurred in connection with payments and reports
pursuant to this Agreement, and all other fees and expenses not
expressly stated under this Agreement for the account of the
Trust or the Seller, but excluding Liquidation Expenses incurred
as a result of activities contemplated by Section 3.4. The
Servicer will be required to pay all reasonable fees and expenses
owing to the Issuer Trustee or the Collateral Agent in connection
with the maintenance of the Trust Accounts. The Servicer shall
be required to pay such expenses for its own account and shall
not be entitled to any payment therefor other than the Servicing
Fee.
Section 3.10 Monthly Report; Annual Report.
(a) Monthly Report. With respect to each Distribution
Date and the related Collection Period, the Servicer will provide
to the Issuer Trustee, the Collateral Agent, each Indenture
Trustee and each Rating Agency, on the related Determination
Date, a monthly statement (a "Monthly Report"), signed by a
Responsible Officer of the Servicer and substantially in the form
of Exhibit E and such other information as may be specified in a
Supplement.
(b) Annual Summary Statement. The Servicer will
provide to the Issuer Trustee, the Collateral Agent, each
Indenture Trustee, each Rating Agency and each Credit Enhancer,
on or prior to January 31 of each year, commencing January 31,
1997, a cumulative summary of the information required to be
included in the Monthly Reports for the Collection Periods ending
during the immediately preceding calendar year.
Section 3.11 Annual Statement as to Compliance. The
Servicer will provide to the Issuer Trustee, the Collateral
Agent, each Indenture Trustee, each Rating Agency and each Credit
Enhancer, on or prior to March 31 of each year, commencing March
31, 1997, an annual report signed by a Responsible Officer of the
Servicer stating that (a) a review of the activities of the
Servicer, and the Servicer's performance pursuant to this
Agreement, for the period ending on the last day of the
immediately preceding calendar year has been made under such
Person's supervision and (b) to the best of such Person's
knowledge, based on such review, the Servicer has performed or
has caused to be performed in all material respects all of its
obligations under this Agreement throughout such year and no
Servicer Default has occurred and is continuing (or, if a
Servicer Default has so occurred and is continuing, specifying
each such event, the nature and status thereof and the steps
necessary to remedy such event, and, if a Servicer Default
occurred during such year and no notice thereof has been given to
the Issuer Trustee or the Collateral Agent, specifying such
Servicer Default and the steps taken to remedy such event).
Section 3.12 Annual Independent Public Accountant's
Servicing Reports. The Servicer will cause a firm of nationally
recognized independent public accountants (who may also render
other services to the Servicer) to furnish to the Issuer Trustee,
the Collateral Agent, each Rating Agency, each Indenture Trustee
and each Credit Enhancer, on or prior to March 31 of each year,
commencing March 31, 1997, (i) a report relating to the previous
calendar year to the effect that (a) such firm has reviewed
certain documents and records relating to the servicing of the
Contracts in the Contract Pool, and (b) based on such
examination, such firm is of the opinion that the Monthly Reports
for such year were prepared in compliance with this Agreement,
except for such exceptions as it believes to be immaterial and
such other exceptions as will be set forth in such firm's report
and (ii) a report covering the preceding calendar year to the
effect that such accountants have applied certain agreed-upon
procedures to certain documents and records relating to the
servicing of Contracts under this Agreement, compared the
information contained in the Servicer's certificates delivered
during the period covered by such report with such documents and
records and that no matters came to the attention of such
accountants that caused them to believe that such servicing was
not conducted in compliance with Article III, Article IV and
Article VIII of this Agreement, except for such exceptions as
such accountants shall believe to be immaterial and such other
exceptions as shall be set forth in such statement. A copy of
such report may be obtained by any Noteholder by a request in
writing to the applicable Indenture Trustee, in the case of a
Holder of Class A Notes, or the Issuer Trustee, in the case of a
Holder of any Subordinated Note, addressed to its Corporate Trust
Office.
Section 3.13 Tax Treatment. The Seller has structured
this Agreement and the Notes to facilitate a secured,
credit-enhanced financing on favorable terms with the intention
that the Notes will constitute indebtedness of the Seller for
federal income and state and local tax purposes. The Seller, the
Servicer, each Holder and each Note Owner agree to treat and to
take no action inconsistent with the treatment of the Notes (or
any beneficial interest therein) as indebtedness for purposes of
federal, state, local and foreign income or franchise taxes and
any other tax imposed on or measured by income. Each Holder, by
accepting its Note, and each Note Owner, by acquiring a
beneficial interest in a Note, agrees to be bound by the
provisions of this Section 3.13. Each Noteholder will cause any
Note Owner acquiring an interest in a Note through it to comply
with this Agreement as to treatment as indebtedness under
applicable tax law, as described in this Section 3.13.
Furthermore, subject to Section 11.11, the Issuer Trustee shall
not file tax returns or obtain an employer identification number
on behalf of the Trust.
Section 3.14 Adjustments. If (i) the Servicer makes a
deposit into the Collection Account in respect of a Collection of
a Contract in the Contract Pool and such Collection was received
by the Servicer in the form of a check which is not honored for
any reason or (ii) the Servicer makes a mistake with respect to
the amount of any Collection and deposits an amount that is less
than or more than the actual amount of such Collection, the
Servicer shall appropriately adjust the amount subsequently
deposited into the Collection Account to reflect such dishonored
check or mistake. Any Scheduled Payment in respect of which a
dishonored check is received shall be deemed not to have been
paid.
ARTICLE IV
RIGHTS OF NOTEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
Section 4.1 Rights of Holders. The Notes shall
represent indebtedness of the Trust secured by the Trust Assets
and an obligation of the Trust to pay the Noteholders interest
and principal on the Notes out of the Trust Assets, which, with
respect to each Series, shall consist of the right to receive, to
the extent necessary to make the required principal, interest and
any other payments with respect to the Notes of such Series at
the times and in the amounts specified in the related Supplement,
the portion of Collections allocable to Noteholders of such
Series pursuant to this Agreement and such Supplement, funds on
deposit in the Collection Account allocable to Noteholders of
such Series pursuant to this Agreement and such Supplement and
funds available pursuant to any related Enhancement. By
acceptance of the Notes each Noteholder of every Series shall be
deemed to have appointed the Collateral Agent as its agent
pursuant to the terms hereof and shall be deemed to have
authorized the Collateral Agent to accept such appointment as
agent by the Noteholders of each subsequent Series and agrees
that the lien created hereunder in favor of the Collateral Agent
shall secure the Notes of each Series equally and ratably.
Section 4.2 Establishment of Accounts.
(a) The Collection Account. The Servicer shall cause
to be established and maintained in the name of the Collateral
Agent on behalf of the Secured Parties, with an office or branch
of a depository institution or trust company (which may include
the Collateral Agent) organized under the laws of the United
States of America or any one of the states thereof and located in
the state designated by the Servicer a segregated corporate trust
account (the "Collection Account") bearing a designation clearly
indicating that the funds deposited therein are held in trust for
the benefit of the Secured Parties; provided, however, that at
all times such depository institution or trust company shall be
(a) the corporate trust department of the Collateral Agent or (b)
a depository institution organized under the laws of the United
States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank),
(i)(A) which has either (1) a long-term unsecured debt rating
acceptable to the Rating Agencies or (2) a short-term unsecured
debt rating or certificate of deposit rating acceptable to the
Rating Agencies, (B) the parent corporation of which has either
(1) a long-term unsecured debt rating acceptable to the Rating
Agencies or (2) a short-term unsecured debt rating or certificate
of deposit rating acceptable to the Rating Agencies or (C) is
otherwise acceptable to the Rating Agencies and (ii) whose
deposits are insured by the Federal Deposit Insurance Corporation
(any such depository institution or trust company, a "Qualified
Institution"). The Supplement for a Series may require the
Collateral Agent to establish and maintain, for administrative
purposes only, other Series accounts for such Series bearing a
designation clearly indicating that the funds allocated thereto
are held in trust for the benefit of the Noteholders of such
Series. Pursuant to authority granted to it pursuant to
subsection 3.1(b), the Servicer shall have the revocable power to
instruct the Collateral Agent to make withdrawals and payments
from a related Collection Account for the purposes of carrying
out its duties hereunder and under any Supplement hereto.
(b) Establishment of the Reserve Account. The
Servicer, for the benefit of the Noteholders, shall cause to be
established and maintained in the name of the Collateral Agent on
behalf of the Noteholders, with a Qualified Institution
designated by the Servicer (which may include the Collateral
Agent), a segregated trust account within the corporate trust
department of such Qualified Institution (the "Reserve Account"),
bearing a designation clearly indicating that the funds deposited
therein are held in trust for the benefit of the Noteholders.
The Collateral Agent shall possess all right, title and interest
in all funds on deposit from time to time in the Reserve Account
and in all proceeds thereof excluding interest on funds in
deposit. Pursuant to the authority granted to it pursuant to
subsection 3.1(b), the Servicer shall have the revocable power to
instruct the Collateral Agent to make withdrawals and payments
from the Reserve Account for the purposes of carrying out its
duties hereunder and under any supplement hereto.
(c) Failure of Institution to Qualify. If any
institution with which any of the accounts established pursuant
to this Section 4.2 are established ceases to be a Qualified
Institution, the Servicer or the Collateral Agent (as the case
may be) shall within 10 Business Days establish a replacement
account at a Qualified Institution after notice thereof.
(d) Amounts in Reserve Account. Amounts on deposit in
the Reserve Account on any Business Day will be invested, at the
written direction of the Servicer to the Collateral Agent, in
Eligible Investments maturing or available for withdrawal on the
next Transfer Day. Earnings from such investments (net of losses
and investment expenses) shall be paid to Newcourt as provided in
Sections 4.3(d) and(e). Any investment instructions to the
Collateral Agent shall be in writing and include a certification
that the proposed investment is an Eligible Investment that
matures at or prior to the date required by this Agreement.
(e) Amounts in Collection Account. Amounts on deposit
in the Collection Account on any Business Day will be invested,
at the written direction of the Servicer to the Collateral Agent,
in Eligible Investments maturing or available for withdrawal on
the next Business Day; provided that any portion of such funds
that are allocable to a particular Collection Period may be
invested in Eligible Investments maturing on the Transfer Date
preceding the Distribution Date on which such funds will be
included in the "Available Amount". Earnings from such
investments received (net of losses and investment expenses)
shall be paid to Newcourt. Any investment instructions to the
Collateral Agent shall be in writing and include a certification
that the proposed investment is an Eligible Investment that
matures at or prior to the date required by this Agreement.
(f) Identification of Accounts. Schedule 3, which is
hereby incorporated into and made a part of this Agreement,
identifies the Collection Account by setting forth the account
number of such account, the account designation of such account
and the name of the institution with which such account has been
established. Such information with respect to the Reserve
Account shall be set forth in the Supplement (or a schedule
thereto) executed in connection with the issuance of the related
Series.
Section 4.3 Collections and Allocations.
(a) Collections. The Servicer shall, subject to
subsections 4.3(c) and 4.3(d), transfer, or cause to be
transferred, all Collections on deposit in the form of available
funds in the Lockbox Account to the Collection Account as
promptly as possible after the Date of Processing of such
Collections, but in no event later than the second Business Day
following such Date of Processing. The Servicer shall promptly
(but in no event later than two Business Days after the Date of
Processing thereof) deposit all Collections received directly by
it in the Collection Account.
The Servicer shall allocate such amounts to each Series
of Notes in accordance with this Article IV and shall instruct
the Collateral Agent to withdraw the required amounts from the
Collection Account and to pay such amounts to the Holder or to
the other Persons entitled thereto in accordance with this
Article IV. The Servicer shall make such deposits or payments on
the date indicated therein, if applicable, by wire transfer in
immediately available funds or as otherwise provided in the
Supplement for any Series with respect to such Series.
(b) Initial Deposits. On the First Closing Date and
on each Addition Date thereafter, the Servicer will deposit (in
immediately available funds) into the Collection Account all
Collections received after the applicable Cut Off Date and
through and including the First Closing Date or Addition Date, as
the case may be, in respect of Contracts being transferred to the
Trust on such date.
(c) Amounts Exempt from Deposit. Notwithstanding
Sections 4.3(a) and 4.3(b), the following collections (or
portions thereof) are not required to be deposited into the
Collection Account:
Collections on any Contracts in the Contract Pool
on which (and to the extent that) the Servicer has
previously made a Servicer Advance which has not been
reimbursed, which amounts the Servicer may retain (as a
reimbursement of such Servicer Advance).
(d) Allocations and Payments Prior to an Event of
Default or a Restricting Event. On each Determination Date prior
to an Event of Default or a Restricting Event, the Servicer,
pursuant to monthly payment instructions and notification, shall
instruct the Collateral Agent to withdraw, and on the succeeding
Distribution Date the Collateral Agent acting in accordance with
such instructions shall withdraw, the amounts required to be
withdrawn from the Collection Account pursuant to this Section in
order to make the following payments or allocations from the
Available Amount for the related Distribution Date (in each case,
such payment or transfer to be made only to the extent funds
remain available therefor after all prior payments and transfers
for such Distribution Date have been made), in the following
order of priority:
(i) pay to the Servicer, the amount of any
Unreimbursed Servicer Advance;
(ii) pay to the Servicer the monthly Servicing Fee for
the preceding monthly period together with any amounts in
respect of the Servicing Fee that were due in respect of
prior monthly periods that remain unpaid;
(iii) pay to each Hedging Counterparty the amount owing
to such Hedging Counterparty under the related Interest Rate
Hedge for the Accrual Period immediately preceding such
Distribution Date, together with any such amounts that were
due in respect of prior Accrual Periods that remain unpaid
(excluding, in each case, any amounts owing in respect of
termination payments, liquidated damages and gross-ups);
provided that if the Available Amount remaining to be
allocated pursuant to this Section 4.3(d)(iii) is less than
the full amount required to be so allocated, such remaining
Available Amount shall be allocated to each Hedging
Counterparty pro rata based on the amount owing to it;
(iv) allocate to each Series of Notes the applicable
Series Available Amount for application as follows:
(A) pay to the Applicable Indenture Trustee on
behalf of the Class A Noteholders of such Series an
amount equal to interest accrued in respect of the
related Class A Notes for the Accrual Period
immediately preceding such Distribution Date, together
with any such amounts that accrued in respect of prior
Accrual Periods for which no allocation was previously
made; provided that if the Series Available Amount
remaining to be allocated pursuant to this clause is
less than the full amount required to be so allocated,
such remaining Series Available Amount shall be
allocated to the Holder of each Class A Note of such
Series pro rata based upon the outstanding Principal
Amount thereof;
(B) pay to the Holders of the Class B Notes of
such Series an amount equal to the interest accrued
thereon for the Accrual Period immediately preceding
such Distribution Date, together with any amounts that
accrued in respect of prior Accrual Periods for which
no allocation was previously made; provided, that if
the Series Available Amount remaining to be allocated
pursuant to this clause is less than the full amount
required to be so paid, such remaining Series Available
Amount shall be paid to the Holder of each Class B Note
of such Series pro rata based on the outstanding
Principal Amount thereof;
(C) pay to the Applicable Indenture Trustee on
behalf of the Holders of Class A Notes of each Series
the lesser of (A) the Class A Principal Payment Amount
for such Series for such Distribution Date and (B) the
remaining outstanding Principal Amount of the Class A
Notes of such Series; provided, that if the Series
Available Amount remaining to be allocated pursuant to
this clause is less than the full amount required to be
so paid, such remaining Series Available Amount shall
be paid to the Holder of each Class A Note of such
Series pro rata based on the outstanding Principal
Amount thereof;
(D) to the extent that the amount then maintained
in the Reserve Account is less than 1% of the sum of
the Series ADCB for all outstanding Series (such
amount, the "Minimum Reserve Balance"), deposit to the
Reserve Account an amount equal to the Series
Allocation Percentage of such insufficiency, provided,
that to the extent the amount on deposit in the Reserve
Account exceeds the Minimum Reserve Balance, such
excess shall be paid to Newcourt to the extent and as
required by the last paragraph of this Section 4.3(d);
(E) pay to the Holders of the Class C Notes of
such Series an amount equal to interest accrued in
respect of such Series of Class C Notes for the Accrual
Period immediately preceding such Distribution Date,
together with any such amounts that accrued in respect
of prior Accrual Periods for which no allocation was
previously made; provided, that if the Series Available
Amount remaining to be allocated pursuant to this
clause is less than the full amount required to be so
paid, such remaining Series Available Amount shall be
allocated to the Holder of each Class C Note of such
Series pro rata based on the outstanding principal
amount thereof;
(F) pay to the Holders of the Class B Notes of
such Series the lesser of (i) the Class B Principal
Payment Amount for such Series of Class B Notes for
such Distribution Date and (ii) the remaining
outstanding Principal Amount of the Class B Notes of
such Series; provided, that if the Series Available
Amount remaining to be allocated pursuant to this
clause is less than the full amount required to be so
paid, such remaining Series Available Amount shall be
allocated to the Holder of each Class B Note of such
Series pro rata based on the outstanding Principal
Amount thereof;
(G) pay to the Holders of the Class C Notes of
such Series the lesser of (i) the Class C Principal
Payment Amount for such Series of Class C Notes for
such Distribution Date and (ii) the remaining
outstanding Principal Amount of the Class C Notes of
such Series; provided, that if the Series Available
Amount remaining to be allocated pursuant to this
clause is less than the full amount required to be so
paid, such remaining Series Available Amount shall be
allocated to the Holder of each Class C Note of such
Series pro rata based on the outstanding Principal
Amount thereof;
(H) pay to the Applicable Indenture Trustee on
behalf of the Holders of the Class A Notes of such
Series, as an additional payment of principal of such
Class A Notes an amount equal to the product of (i) the
Applicable Class Percentage for such Class A Notes and
(ii) the applicable Excess Spread Amount;
(I) pay to the Class B Noteholders of such
Series, as an additional payment of principal of such
Class B Notes an amount equal to the product of (i) the
Applicable Class Percentage for such Class B Notes and
(ii) the applicable Excess Spread Amount; and
(J) pay to each Hedging Counterparty an amount
equal to the product of (1) the amounts owing to it in
respect of termination payments, liquidated damages and
gross-ups and (2) the applicable Series Allocation
Percentage; provided, that if the Series Available
Amount remaining to be allocated pursuant to this
clause is less than the full amount required to be so
allocated, such remaining Series Available Amount shall
be allocated to each Hedging Counterparty pro rata
based on the amount owing to it;
(K) pay the remaining Series Available Amount to
the Holders of the Class C Notes;
provided, that no Series Available Amount shall be allocated
pursuant to any of clauses (iv)(E), (F), (G), (H), (I), (J) or
(K) above to the extent that any allocation having priority over
such clause has not been made in full for any other Series of
Notes; any such remaining Series Available Amount shall be deemed
to constitute Series Available Amounts for such other Series,
allocated among such other Series, if more than one, in
proportion to the respective Series Allocation Percentages of
such other Series.
Prior to the occurrence of an Event of Default or a
Restricting Event, to the extent specified by the Servicer, if
the Available Amounts or Series Available Amounts, as applicable,
are less than the amount required to make in full the payments
and allocations set forth in Sections 4.3(d)(i) through
(d)(iv)(C) above, amounts held in the Reserve Account shall be
withdrawn in order for any of such payments or allocations to be
made and such amounts will be considered as Available Amounts or
Series Available Amounts, as appropriate, for such purpose only;
provided, to the extent amounts on deposit in the Reserve Account
are insufficient to make such payments in full for each Series in
respect of which a draw on the Reserve Account is required, such
amounts shall be allocated to each such Series pro rata based
upon the Reserve Account Allocation Amount. On each Distribution
Date, after giving effect to all payments and allocations to be
made on such date, amounts on deposit in the Reserve Account in
excess of the Minimum Reserve Balance shall be paid first, to
Newcourt in reimbursement of the outstanding Newcourt Advance and
second, to the holders of the Class C Notes.
(e) Allocations and Payments after an Event of Default
or a Restricting Event. On each Determination Date after the
occurrence of an Event of Default or on each Determination Date
after the occurrence, but only during the continuance, of a
Restricting Event, the Servicer, pursuant to monthly payment
instructions and notification, shall instruct the Collateral
Agent to withdraw, and on the succeeding Distribution Date the
Collateral Agent acting in accordance with such instructions
shall withdraw, the amounts required to be withdrawn from the
Collection Account pursuant to this Section in order to make the
following payments or allocations from the Available Amount for
the related Distribution Date (in each case, such payment or
transfer to be made only to the extent funds remain available
therefor after all prior payments and transfers for such
Distribution Date have been made), in the following order of
priority:
(i) pay to the Collateral Agent the amount of any
unpaid fees and expenses to which the Collateral Agent is
entitled under Section 12.4;
(ii) pay to the Servicer, the amount of any
Unreimbursed Servicer Advance;
(iii) pay to the Servicer the monthly Servicing Fee for
the preceding monthly period together with any amounts in
respect of the Servicing Fee that were due in respect of
prior monthly periods that remain unpaid;
(iv) pay to each Hedging Counterparty the amount owing
to such Hedging Counterparty under the applicable Interest
Rate Hedge for the Accrual Period immediately preceding such
Distribution Date, together with any such amounts that were
due in respect of prior Accrual Periods that remain unpaid
(excluding, in each case, any amounts owing in respect of
termination payments, liquidated damages and gross-ups);
provided that if the Available Amount remaining to be
allocated pursuant to this Section 4.3(e)(iii) is less than
the full amount required to be so allocated, such remaining
Available Amount shall be allocated to each Hedging
Counterparty pro rata based on the amount owing to it;
(v) pay to each Applicable Indenture Trustee on behalf
of the Holders of the Class A Notes represented thereby an
amount equal to interest accrued in respect of such Class A
Notes for the Accrual Period immediately preceding such
Distribution Date, together with any such amounts that
accrued in respect of prior Accrual Periods for which no
allocation was previously made; provided, that if the
Available Amount remaining to be allocated pursuant to this
clause is less than the full amount required to be so
allocated, such remaining Available Amount shall be
allocated to each Series of Class A Notes pro rata based on
the Outstanding Principal Amount thereof;
(vi) pay to the Holders of the Class B Notes of each
Series an amount equal to interest accrued in respect of
such Class B Notes for the Accrual Period immediately
preceding such Distribution Date, together with any such
amounts that accrued in respect of prior Accrual Periods for
which no allocation was previously made; provided, that if
the Available Amount remaining to be allocated pursuant to
this clause is less than the full amount required to be so
allocated, such remaining Available Amount shall be
allocated to each Series of Class B Notes pro rata based on
the outstanding Principal Amount thereof;
(vii) pay to each Applicable Indenture Trustee on behalf
of the Holders of the Class A Notes represented thereby the
remaining outstanding Principal Amount of such Class A
Notes; provided, that if the Available Amount remaining to
be allocated pursuant to this subsection is less than the
full amount required to be so allocated, such remaining
Available Amount shall be allocated to each Series of Class
A Notes pro rata based on the outstanding Principal Amount
thereof;
(viii) pay to Newcourt the outstanding amount of the
Newcourt Advance;
(ix) pay to the Holders of Class C Notes of each Series
an amount equal to interest accrued in respect of such Class
C Notes for the Accrual Period immediately preceding such
Distribution Date, together with any such amounts that
accrued in respect of prior Accrual Periods for which no
allocation was previously made; provided, that if the
Available Amount remaining to be allocated pursuant to this
clause is less than the full amount required to be so
allocated, such remaining Available Amount shall be
allocated to each Series of Class C Notes pro rata based on
the outstanding Principal Amount thereof;
(x) pay to the Class B Noteholders the remaining
outstanding Principal Amount of the Class B Notes; provided,
that if the Available Amount remaining to be allocated
pursuant to this clause is less than the full amount
required to be so allocated, such remaining Available Amount
shall be allocated to each Series of Class B Notes pro rata
based on the outstanding Principal Amount thereof;
(xi) pay to the Holders of Class C Notes of each
Series the remaining outstanding principal amount of such
Class C Notes; provided, that if the Available Amount
remaining to be allocated pursuant to this clause is less
than the full amount required to be so allocated, such
remaining Available Amount shall be allocated to each Series
of Class C Notes pro rata based on the outstanding Principal
Amount thereof;
(xii) pay to each Hedging Counterparty an amount equal
to the amounts owing to it in respect of termination
payments, liquidated damages and gross-ups; provided, that
if the Available Amount remaining to be allocated pursuant
to this subsection is less than the full amount required to
be so allocated, such remaining Available Amount shall be
allocated to each Hedging Counterparty pro rata based on the
amount owing to it; and
(xiii) pay any remaining Series Available Amounts to the
Holders of the Class C Notes of each Series; provided, that
no Series Available Amount shall be allocated pursuant to
this subsection to the extent that allocations set forth in
Sections 4.3(e)(i) through (ix) above have not been made in
full for any other Series of Notes but any remaining Series
Available Amount to such extent shall be deemed to
constitute Series Available Amounts for such other Series,
allocated among such other Series, if more than one, in
proportion to the respective Series Allocation Percentages
of such other Series.
Following the occurrence of an Event of Default, and
notwithstanding the occurrence or continuance of a Restricting
Event, amounts on deposit in the Reserve Account shall be treated
as Available Funds and allocated as provided above in this
Section 4.3(e); provided, that (i), before giving effect to any
allocations or payments on such Distribution Date, Investment
Earnings in the Reserve Account shall be paid to Newcourt and
(ii), after giving effect to the withdrawal of Investment
Earnings, amounts on deposit in the Reserve Account on the first
Distribution Date following such Event of Default (and prior to
any allocations or payments of Available Amounts on such date) in
excess of the Minimum Reserve Balance shall be paid first, to
Newcourt in reimbursement of the outstanding Newcourt Advance and
second, to the Holders of the Class C Notes.
Following the occurrence, but only during the
continuance, of a Restricting Event, and prior to the occurrence
of an Event of Default, amounts on deposit in the Reserve Account
shall be treated as Available Funds and allocated as provided
above in this Section 4.3(e); provided, that (i), before giving
effect to any allocations or payments on such Distribution Date,
Investment Earnings in the Reserve Account shall be paid to
Newcourt and (ii), after giving effect to the withdrawal of
Investment Earnings, amounts on deposit in the Reserve Account,
before giving effect to any allocations or payments on such
Distribution Date, in excess, in the aggregate, of the Minimum
Reserve Balance shall be paid first, to Newcourt in reimbursement
of the outstanding Newcourt Advance and second, to the Holders of
the Class C Notes.
(f) The Collateral Agent or other appropriate party
(the "Withholding Party") is expressly empowered to make any
necessary adjustment to the amounts paid pursuant to this
Agreement and this Section 4.3 in order to satisfy applicable
income tax provisions requiring withholding of tax, if any, with
respect to payments. Any amount so withheld from a payment
pursuant to this provision shall be remitted by the Withholding
Party to the appropriate taxing authority in accordance with law
on behalf of the party from whom withheld.
Section 4.4 Interest Rate Xxxxxx. (a) The Servicer
may from time to time designate Persons to become additional
Hedging Counterparties hereunder, provided that (i) when
designating such additional Hedging Counterparty, the Servicer
shall deliver to the Issuer Trustee, each Rating Agency and the
Collateral Agent an Opinion of Counsel as to the due
authorization, execution and delivery and validity and
enforceability of the Interest Rate Hedge with such additional
Hedging Counterparty and (ii) at the time of such designation,
the long term unsecured debt or long term certificate of deposit
rating assigned to such additional Hedging Counterparty, shall be
AAA by Standard & Poor's and Aaa by Moody's.
(b) In the event that the long term unsecured debt or
long term certificate of deposit rating of a Hedging Counterparty
is withdrawn or reduced below AAA by Standard & Poor's or is
withdrawn or reduced below Aaa by Moody's, then within 30 days
after receiving notice of such decline in the creditworthiness,
either (x) such Hedging Counterparty, at its own expense, will
obtain a Replacement Interest Rate Hedge or (y) the Collateral
Agent, at the written direction of the Servicer, shall either (i)
with the prior written confirmation of the Rating Agency that
such action will not result in a reduction or withdrawal of the
rating of any Class of Notes, use its reasonable efforts to (A)
cause such Hedging Counterparty to pledge securities which
qualify as Eligible Investments in the manner provided by
applicable law or (B) otherwise cause to be pledged securities,
which shall be held by the Collateral Agent, its custodian, or
its agent free and clear of the Lien of any third party, in a
manner conferring on the Collateral Agent a perfected first Lien
in such securities securing the Hedging Counterparty's
performance of its obligations under the Interest Rate Hedge, or
(ii) provided that a Replacement Interest Rate Hedge or Qualified
Substitute Arrangement meeting the requirements of Section 4.4(c)
has been obtained, (A) provide written notice to the Hedging
Counterparty of its intention to terminate the Interest Rate
Hedge within such 30-day period and (B) terminate the Interest
Rate Hedge within such 30-day period, request the payment to it
of all amounts due to the Trust under the Interest Rate Hedge
through the termination date and deposit any such amounts so
received, on the day of receipt, to the Collection Account, or
(iii) use reasonable efforts to establish any other arrangement
satisfactory to the Rating Agency including collateral,
guarantees or letters of credit, which arrangement will result in
the Rating Agency not reducing or withdrawing the then rating of
any Class of Notes (a "Qualified Substitute Arrangement");
provided, however, that in the event at any time any alternative
arrangement established pursuant to clause (x) or (y)(i) or
(y)(iii) above shall cease to be satisfactory to the Rating
Agency, then the provisions of this Section 4.4(b) shall again be
applied and in connection therewith the 30-day period referred to
above shall commence on the date the Servicer receives notice of
such cessation or termination, as the case may be.
(c) Unless an alternative arrangement pursuant to
clause (x) or (y)(i) of Section 4.4(b) is being established, the
Collateral Agent, at the direction of the Servicer shall use its
best efforts to obtain a Replacement Interest Rate Hedge or
Qualified Substitute Arrangement meeting the requirements of this
Section 4.4(c) during the 30-day period referred to in Section
4.4(b). The Collateral Agent shall not at any time terminate the
Interest Rate Hedge unless, prior to such termination, the
Servicer has obtained (i) a Replacement Interest Rate Hedge or
Qualified Substitute Arrangement, (ii) to the extent applicable,
an Opinion of Counsel as to the due authorization, execution,
delivery, validity and enforceability of such Replacement
Interest Rate Hedge or Qualified Substitute Arrangement, as the
case may be, and (iii) a letter from the Rating Agency confirming
that the termination of the Interest Rate Hedge and its
replacement with such Replacement Interest Rate Hedge or
Qualified Substitute Arrangement will not adversely affect its
rating of any Class of Notes.
(d) The Servicer shall notify the Issuer Trustee, the
Collateral Agent and the Rating Agency within five Business Days
after obtaining knowledge that the long term unsecured debt or
the long term certificate of deposit rating of a Hedging
Counterparty has been withdrawn or reduced by Standard & Poor's
or Moody's.
(e) Notwithstanding the foregoing, the Servicer may at
any time obtain a Replacement Interest Rate Hedge, provided that
the Servicer delivers to the Collateral Agent (i) an Opinion of
Counsel as to the due authorization, execution and delivery and
validity and enforceability of such Replacement Interest Rate
Hedge and (ii) a letter from the Rating Agency confirming that
the termination of the then current Interest Rate Hedge and its
replacement with such Replacement Interest Rate Hedge will not
adversely affect its rating of any Class of Notes.
(f) The Issuer Trustee and the Collateral Agent hereby
appoint each Hedging Counterparty to perform the duties of the
calculation agent under the related Interest Rate Hedge.
Section 4.5 Reliance by Collateral Agent Upon
Information Provided. In connection with the payments required
to be made by the Collateral Agent pursuant to Section 4.3 or
otherwise provided in this Agreement, the Collateral Agent shall
be fully protected in relying, on any Distribution Date, on the
Monthly Statement provided by the Servicer pursuant to Section
3.10, for such Distribution Date. The Collateral Agent shall
have no obligation to verify, calculate or re-calculate any
amount forth in any Monthly Statement. In the absence of a
Monthly Statement specifying the amounts to be paid by the
Collateral Agent, the Collateral Agent shall be fully protected
in relying upon written notice provided by any of the following
Persons with respect to any of the following information and
shall have no obligation to verify, calculate or re-calculate any
amount set forth in any such written notice:
(a) with respect to the amount of Unreimbursed Servicer
Advances and unpaid Servicing Fee for any period, the
Servicer;
(b) with respect to amounts owing to a Hedging Counterparty,
either the Servicer or such Hedging Counterparty;
(c) with respect to accrued interest for any specified
period and the unpaid principal amount of Class A Notes of
any Series, either the Servicer or the Applicable Indenture
Trustee for such Class A Notes;
(d) with respect to accrued interest for any specified
period and the unpaid principal amount of Class B Notes of
any Series, the Servicer;
(e) with respect to accrued interest for any specified
period and the unpaid principal amount of Class C Notes of
any Series, the Servicer; and
(f) with respect to payment to Newcourt or any other matters
required to be determined in connection with any of the
foregoing payments, the Servicer.
All payments to be made by the Collateral Agent on account of the
Notes of any Series shall be made to such account or accounts as
(i) in the case of the Class A Notes of any Series, shall be
notified to the Collateral Agent by the Applicable Indenture
Trustee for such Note Owners, (ii) in the case of the Class B
Notes of any Series, shall be specified in the Note Agreement for
such Class B Notes and (iii) in the case of the Class C Notes of
any Series, shall be specified in the Note Agreement for such
Class C Notes.
[THE REMAINDER OF ARTICLE IV IS RESERVED AND
SHALL BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES]
ARTICLE VI
THE PARTNERSHIP NOTES; NEW ISSUANCES
Section 6.1 Note Transfer Restrictions.
(a) Unless otherwise provided in the related
Supplement, no sale, assignment, participation, transfer or other
disposition (a "Transfer") (i) of any Class B Note (or any
interest therein) shall be made unless the Seller shall have
granted its prior written consent to such Transfer, provided,
that the Seller shall not withhold its consent to any such
Transfer unless such transfer would, in the reasonable opinion of
the Seller or the Servicer, result in the Trust being deemed to
be an association or a publicly traded partnership taxable as a
corporation or (ii) of any Class C Note by the original Holder
thereof (other than the Seller) shall be made unless the Seller,
in its unfettered discretion, shall have granted its prior
written consent to such Transfer. In no event shall a Transfer
of a Partnership Note be permitted to a partnership, subchapter S
corporation or grantor trust unless less than 50 percent of the
aggregate value of the assets of such entity are attributable to
interests in the Trust. Moreover, no Transfer of a Partnership
Note shall be permitted except to a Person who is either (A)(i) a
citizen or resident of the United States, (ii) a corporation,
partnership or other entity organized in or under the laws of the
United States or any political subdivision thereof or (iii) a
Person not described in (i) or (ii) whose ownership of the
Partnership Note is effectively connected with such Person's
conduct of a trade or business within the United States (within
the meaning of the Code) and its ownership of any interest in a
Partnership Note will not result in any withholding obligation
with respect to any payments with respect the Partnership Notes
by any Person (other than withholding, if any, under Section 1446
under the Code) or (B) an estate or trust the income of which is
includable in gross income for United States Federal income tax
purposes. Persons other than those described in clause A(iii)
above shall provide a certification of non-foreign status signed
under penalties of perjury to the Seller, the Servicer and the
Issuer Trustee. If any Transfer is made to a Person described in
clause (A)(iii) above, such Person shall furnish to the Seller,
the Servicer and the Issuer Trustee, a properly executed U.S.
Internal Revenue Service Form 4224 and a new Form 4224 upon the
expiration or obsolescence of any previously delivered form (and
such other certifications, representations or Opinions of Counsel
as may be requested by the Seller, the Servicer or the Issuer
Trustee). Finally, no subsequent Transfer of a Partnership Note
is permitted unless (i) such Transfer is of a Partnership Note
with a denomination of at least $500,000 and (ii) the Seller and
the Servicer each consent in writing to the proposed Transfer,
which consent shall be granted unless either the Seller or the
Servicer, acting pursuant to an Opinion of Counsel, determines
that such Transfer would create a material risk that the Trust
would be classified for Federal or any applicable state tax
purposes as an association or publicly traded partnership taxable
as a corporation; provided, that any attempted Transfer that
would cause the number of Targeted Holders to exceed ninety-nine
shall be void; and provided, further, that there shall not at any
time be more than 99 Targeted Holders of Partnership Notes or
such other number as may be consented to by the Seller which
consent may be withheld in its sole and absolute discretion. The
Seller and Servicer shall not approve a Transfer of a Partnership
Note and consent will be deemed to be reasonably withheld if,
acting pursuant to an Opinion of Counsel such Persons determine
such Transfer creates a material risk that the Trust would be
taxable as a corporation for federal income tax purposes. Any
Holder of a Partnership Note which wishes to effect a Transfer
must deliver to the Seller and the Servicer the following
representation prior to the Transfer:
The Purchaser has neither acquired nor will it sell, trade,
assign or otherwise dispose of the Note(s) (or any interest
therein) or cause the Note(s) (or any interest therein) to
be marketed on or through (i) an "established securities
market" within the meaning of section 7704(b)(1) of the
Internal Revenue Code of 1986, as amended (the "Code"),
including, without limitation, an over-the-counter market or
an interdealer quotation system that regularly disseminates
firm buy or sell quotations or (ii) a "secondary market"
within the meaning of section 7704(b)(2) of the Code,
including a market wherein the Notes (or any interests
therein) are regularly quoted by any person making a market
in such interests and a market wherein any person regularly
makes available bid or offer quotes with respect to the
Notes (or any interest therein) and stands ready to effect
buy or sell transactions at the quoted prices for itself or
on behalf of others.
If the Seller and Servicer do not object to the Transfer within
five Business Days of the receipt of the above representation,
such Transfer may be recorded by the transfer agent and registrar
under the Applicable Indenture.
(b) The Seller (i) shall at all times own (x) Class B
Notes in an amount not less than 1% of the Aggregate Principal
Amount of all Class B Notes and (y) Class C Notes in an amount
not less than 33.3% of the Aggregate Principal Amount of the
Class C Notes (the Subordinated Notes referred to in clauses (x)
and (y), the "Non-Transferrable Notes").
In addition, by accepting the terms and benefits hereof
each Holder from time to time of Class B Notes and Class C Notes
(other than the Seller) agrees that (i) Class C Notes held by any
such Person may not be sold without the consent of the Seller (in
its unfettered discretion) and (ii) Class B Notes held by any
such Person may not be sold without the consent of the Seller,
provided, that the Seller shall not withhold its consent to any
such transfer of Class B Notes described in this clause (ii)
unless determined to be appropriate under other provisions of
this Agreement or such transfer would, in the reasonable opinion
of the Seller, result in the Trust being deemed to be an
association or a publicly traded partnership taxable as a
corporation.
Any sale, assignment, pledge or transfer in violation
of the foregoing restrictions shall be void, but any permitted
assignment shall be recognized by the Issuer Trustee and
Collateral Agent upon written notice thereof.
Section 6.2 New Issuances; Addition of Contracts. (a)
The Seller may from time to time prior to the Commitment
Termination Date, at its sole discretion, subject to the
conditions specified in subsection 6.2(b) below, direct the
Issuer Trustee in writing to issue additional Series of Notes
subject to the conditions specified in this Section 6.2 (each
such issuance, a "New Issuance"). Any such Series of Notes shall
be substantially in the form specified in the related Supplement
and shall bear, upon its face, the designation for the Series to
which it belongs, as selected by the Seller. Except as specified
in the related Supplement, all Notes in the same Class of any
Series shall rank pari passu and be equally and ratably entitled
as provided herein to the benefits hereof (except that the
Additional Credit Enhancement provided for any Notes of any
Series, if any, shall not be available for any other Series)
without preference, priority or distinction on delivery, all in
accordance with terms and provisions of this Agreement and the
related Supplement. In connection with each New Issuance, the
Seller shall, subject to the conditions specified in subsection
6.2(b) below, transfer additional Eligible Contracts and
Applicable Security to the Trust (each such transfer, an
"Addition") as Additional Contracts as of the applicable
Additional Cut Off Date.
(b) The obligation of the Issuer Trustee and the
Collateral Agent to execute and deliver the Supplement related to
any New Issuance (as required by clause (ii) below) is subject to
the satisfaction of the following conditions:
(i) on or before the tenth Business Day immediately
preceding the date upon which the New Issuance is to occur
(unless the parties to be notified agree to a shorter notice
period), the Seller shall have given the Issuer Trustee, the
Collateral Agent, the Servicer, each Indenture Trustee, the
Rating Agency and those providers of Credit Enhancement, if
any, requesting such notice, written notice of the New
Issuance and the related Addition, specifying (A) the
designation of the Series to be issued and, with respect to
such Series: (1) its Initial Principal Amount (or the
method of calculating such Initial Principal Amount), (2)
its Interest Rate (or the method of allocating interest
payments or other cash flows to such Series), if any, (3)
the Enhancement Provider(s), if any, with respect to such
Series and (4) the date upon which the New Issuance is to
occur and (B) with respect to the related Additional
Contracts, (1) the applicable Addition Date, (2) the
Additional Cut Off Date (which shall be the last day of a
Collection Period), (3) the approximate number of Additional
Contracts expected to be added, (4) the approximate
Discounted Contract Balances expected to be outstanding with
respect to the Additional Contracts to be added as of the
Additional Cut Off Date with respect thereto and (5) if such
Additional Contracts are to be Hedged Contracts, the
identity of the Hedging Counterparty and the effective
interest rate under the related hedging transaction, and if
such Additional Contracts are not Hedged Contracts, the
effective interest rate as calculated in accordance with the
definition of "Discounted Contract Balance";
(ii) the Seller shall have delivered to the Issuer
Trustee and the Collateral Agent (x) a Supplement,
satisfying the criteria specified in subsection 6.2(c) and
otherwise in form satisfactory to the Issuer Trustee and the
Collateral Agent, executed by each party to this Agreement,
(y) a Subsequent Purchase Agreement referencing the
Additional Contracts and (z) the Note Documents for such New
Issuance, each satisfying the requirements of Section
11.1(h) hereof and otherwise in form satisfactory to the
Issuer Trustee and the Collateral Agent and executed by each
party thereto;
(iii) if such Series has the benefit of an Additional
Credit Enhancement, the Seller shall have delivered to the
Collateral Agent any applicable Credit Enhancement agreement
executed by each of the parties to such agreement;
(iv) the Issuer Trustee shall have received
confirmation from the Rating Agency that neither the New
Issuance nor the related Addition will result in a Ratings
Effect with respect to any other Series or Class of Notes
issued by the Trust;
(v) the Seller shall have delivered to the Issuer
Trustee, each Indenture Trustee and those providers of
Credit Enhancement, if any, which shall have requested
copies thereof, an Officer's Certificate, dated the date
upon which the New Issuance is to occur, (x) as to the
matters referred to in clauses (vi), (vii), (ix), (x), (xi),
(y) to the effect that the Seller reasonably believes that
the New Issuance and related Addition will not, based on the
facts known to the officer executing the same at the time of
the certification, cause an Event of Default or a
Restricting Event to occur with respect to any Series and
(z) as to the satisfaction of all of the conditions set
forth in this Section 6.2(b);
(vi) Within the time period specified in the applicable
Supplement, if any (otherwise as specified in subsection
2.1(b)(i)), the Seller shall have taken such actions as are
necessary to perfect Trust's and the Collateral Agent's
respective interests in such Additional Contracts and any
related Equipment or Applicable Security to the extent
specified in subsection 2.1(b) and shall deliver to the
Issuer Trustee and the Collateral Agent Opinions of Counsel
specified in the Supplement;
(vii) the Seller shall have deposited in the Collection
Account, Collections with respect to the related Additional
Contracts since the related Additional Cut Off Date;
(viii) the Seller shall have delivered to the Issuer
Trustee, the Collateral Agent, each Indenture Trustee, the
Rating Agency and certain providers of Credit Enhancement,
if any, an Opinion of Counsel acceptable to the Issuer
Trustee that for Federal income tax purposes (x) following
the New Issuance the Trust will not be deemed to be an
association (or publicly traded partnership) taxable as a
corporation, (y) the New Issuance will not affect the tax
characterization as debt of Notes of any outstanding Series
or Class issued by the Trust for which an Opinion of Counsel
has been provided that such Notes are debt for Federal
income tax purposes and (z) the Class A Notes of such new
Series will, as of their issuance date, be characterized as
debt for Federal income tax purposes;
(ix) the Seller shall be deemed to represent and
warrant that (v) as of the Addition Date, Schedule 2 to the
Supplement and the computer file or microfiche or written
list delivered pursuant to Section 2.1 is an accurate and
complete listing in all material respects of all the
Additional Contracts as of the Additional Cut Off Date and
the information contained therein with respect to the
identity of such Additional Contracts is true and correct in
all material respects as of the Additional Cut Off Date, (w)
as of the Addition Date, the representations and warranties
set forth in Section 2.5 are true and correct with respect
to the Additional Contracts and the related transfer, (x)
each Additional Contract is, as of the Additional Cut Off
Date, an Eligible Contracts, (y) no selection procedures
reasonably believed by the Seller to be materially adverse
to the interests of the Noteholders were utilized in
selecting the Additional Contracts from the available
Eligible Contracts and (z) as of the Addition Date, the
Seller is not insolvent and will not be rendered insolvent
by transferring any such Additional Contract or security
interest therein to the Trust;
(x) the sum of (i) the excess of (x) the ADCB over (y)
the Excess Concentration Amount for the Addition (such
excess, the "Net Pool Balance") and (ii) the aggregate
amounts (other than Investment Earnings) on deposit in the
Reserve Account shall not be less, after giving effect to
such New Issuance and related Addition, than the Aggregate
Principal Amount;
(xi) immediately prior to the New Issuance and after
giving effect thereto, no Restricting Event or Event of
Default shall have occurred or be continuing; and
(xii) Newcourt shall have deposited into the Reserve
Account the applicable Minimum Deposit (the aggregate
outstanding amount deposited by Newcourt into the Reserve
Account (after giving effect to reimbursements pursuant to
Sections 4.3(d) and (e)) at any time, the "Newcourt
Advance").
Upon satisfaction of such conditions, and any additional
conditions specified in the Supplement or Note Documents to be
executed in connection with such New Issuance, the Issuer Trustee
shall execute such Series of Notes dated the related Closing Date
pursuant to the Applicable Indenture and Note Agreements for such
Series. There is no limit to the number of New Issuances that
may be issued under this Agreement.
(c) In conjunction with a New Issuance, the parties
hereto shall execute a Supplement, which shall specify the
relevant terms with respect to any newly issued Series of Notes,
which may include without limitation: (i) its name or
designation, (ii) an Initial Principal Amount or the method of
calculating the Initial Principal Amount, (iii) the Interest Rate
(or formula for the determination thereof), (iv) the Closing
Date, (v) the Rating Agency rating such Series, (vi) the name of
the Clearing Agency, if any, (vii) the interest payment date or
dates and the date or dates from which interest shall accrue,
(viii) the method of allocating amounts to such Series (which
shall be consistent with Article IV) and, if applicable, the
method by which the principal amount of Notes of such Series
shall amortize or accrue, (ix) the names of any accounts to be
used by such Series and the terms governing the operation of any
such accounts, (x) the terms of any Additional Credit Enhancement
with respect to such Series, (xi) the Additional Credit
Enhancement provider(s), if applicable, (xii) the terms on which
the Notes of such Series may be repurchased or remarketed to
other investors, (xiii) any deposit into any account provided for
such Series, (xiv) the number of Classes of such Series, and if
more than one Class, the rights and priorities of each such Class
and (xvii) any other relevant terms of such Series. The terms of
such Supplement may modify or amend the terms of this Agreement
solely as applied to such new Series.
ARTICLE VII
OTHER MATTERS RELATING TO SELLER
Section 7.1 Liability of Seller. The Seller shall be
liable in accordance herewith to the extent, and only to the
extent, of the obligations specifically undertaken by the Seller
hereunder.
Section 7.2 Merger or Consolidation of, or Assumption
of the Obligations of, Seller, etc.
(a) Seller shall not consolidate with or merge into
any other Person or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(i) the Person formed by such consolidation or into
which Seller is merged or the Person which acquires by
conveyance or transfer the properties and assets of Seller
substantially as an entirety shall be, if Seller is not the
surviving entity, organized and existing under the laws of
the United States of America or any State or the District of
Columbia and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Issuer
Trustee and the Collateral Agent, in form satisfactory to
each of the Issuer Trustee and the Collateral Agent, the
performance of every covenant and obligation of Seller, as
applicable hereunder, and shall benefit from all the rights
granted to Seller, as applicable hereunder;
(ii) the Seller shall have delivered to the Issuer
Trustee, the Collateral Agent, each Indenture Trustee and
each Credit Enhancer (x) an Officer's Certificate of the
Seller and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance or transfer and such
supplemental agreement comply with this Section 7.2 and that
all conditions precedent herein provided for relating to
such transaction have been complied with and, in the case of
the Opinion of Counsel, that such supplemental agreement is
legal, valid and binding with respect to Seller and (y) a
Tax Opinion; and
(iii) the Seller shall have delivered notice of such
consolidation, merger, conveyance or transfer to each Rating
Agency and, with respect to each Series that is rated by a
Rating Agency, the Rating Agency Condition shall have been
satisfied and, with respect to each other Series, the
consent thereto of the Required Holders has been obtained.
(b) The obligations of the Seller hereunder shall not
be assignable nor shall any Person succeed to the obligations of
Seller hereunder except for mergers, consolidations, assumptions
or transfers in accordance with the provisions of the foregoing
paragraph.
Section 7.3 Limitation on Liability of Seller. Except
as expressly provided herein, neither the Seller nor any of the
directors, officers, employees and agents of the Seller shall be
under any liability to the Trust, the Issuer Trustee, the
Collateral Agent, the Noteholders or any other Person for any
action taken or for refraining from the taking of any action
pursuant to this Agreement whether arising from express or
implied duties under this Agreement, it being expressly
understood that all such liability is expressly waived and
released as a condition of, and as consideration for, the
execution of this Agreement and any Supplement and the issuance
of the Notes; provided, however, that this provision shall not
protect Seller or any such Person against any liability which
would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by
reason of willful misconduct hereunder. The Seller and any
director, officer, employee and agent of the Seller may rely in
good faith on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters
arising hereunder.
Section 7.4 Liabilities. Notwithstanding Section 3803
of the Business Trust Statute, a creditor of the Trust may seek
personal satisfaction from the Seller to the extent that the
Trust Assets are insufficient to satisfy the creditor's claims as
though this Agreement created a partnership under the Delaware
Revised Uniform Limited Partnership Act in which the Seller is
the general partner. Moreover, the Seller agrees to be liable to
and to indemnify and hold harmless the Trust, the Issuer Trustee
and the Collateral Agent from and against any loss, liability,
reasonable expense, damage or injury suffered or sustained by
reason of any acts or omissions or alleged acts or omissions
arising out of or based upon the arrangement created by this
Agreement as though this Agreement created a partnership under
the Delaware Revised Uniform Limited Partnership Act in which the
Seller is a general partner and pursuant to which it agreed to
provide the foregoing indemnity; provided, however, that the
Seller shall not be liable to or indemnify or hold harmless the
Issuer Trustee or any of its officers, directors, employees or
agents as to any loss, liability, expense, damage or injury
suffered or sustained by reason of fraud, negligence or willful
misconduct on the part of the Issuer Trustee or any of its
officers, directors, employees or agents or be liable to or
indemnify or hold harmless the Collateral Agent or any of its
officers, directors, employees or agents as to any loss,
liability, expense, damage or injury suffered or sustained by
reason of fraud, negligence or willful misconduct on the part of
the Collateral Agent or any of its officers, directors, employees
or agents; and provided further, however, that, in no event will
the Seller be liable, directly or indirectly, for or in respect
of any indebtedness evidenced or created by any Note, recourse as
to which shall be limited solely to the assets of the Trust
allocated for the payment thereof as provided in this Agreement
and any applicable Supplement. The indemnification contained in
this Section 7.4 shall survive the resignation or removal of the
Issuer Trustee or the Collateral Agent, as the case may be, and
the termination of the Trust.
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER
Section 8.1 Liability of the Servicer. The Servicer
shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer in such
capacity herein.
Section 8.2 Merger or Consolidation of, or Assumption
of the Obligations of, the Servicer. The Servicer shall not
consolidate with or merge into any other Person or convey or
transfer its properties and assets substantially as an entirety
to any Person, unless:
(i) the Person formed by such consolidation or into
which the Servicer is merged or the Person which acquires by
conveyance or transfer the properties and assets of the
Servicer substantially as an entirety shall be if the
Servicer is not the surviving entity, organized and existing
under the laws of the United States of America or any State
or the District of Columbia or of Canada or any Province or
Territory thereof and shall expressly assume, by an
agreement supplemental hereto, executed and delivered to the
Issuer Trustee and the Collateral Agent in form satisfactory
to each of the Issuer Trustee and the Collateral Agent, the
performance of every covenant and obligation of the Servicer
hereunder, and shall benefit from all the rights granted to
the Servicer, as applicable hereunder;
(ii) the Servicer has delivered to the Issuer
Trustee, the Collateral Agent and each Credit Enhancer an
Officer's Certificate and an Opinion of Counsel each stating
that such consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section 8.2 and
that all conditions precedent herein provided for relating
to such transaction have been complied with and, in the case
of the Opinion of Counsel, that such supplemental agreement
is legal, valid and binding with respect to the Servicer;
(iii) the Servicer shall have delivered notice of such
consolidation, merger, conveyance or transfer to each of the
Rating Agencies; and
(iv) after giving effect thereto, no Event of Default
or an event which with notice or lapse of time or both would
constitute an Event of Default shall have occurred.
Section 8.3 Limitation on Liability of the Servicer
and Others. Except as provided herein, neither the Servicer nor
any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust, the Issuer
Trustee, the Collateral Agent, the Noteholders or any other
Person for any action taken or for refraining from the taking of
any action pursuant to this Agreement whether arising from
express or implied duties under this Agreement; provided,
however, that this provision shall not protect the Servicer or
any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of its
willful misconduct hereunder. The Servicer and any director or
officer or employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising
hereunder.
Section 8.4 Indemnification of the Seller, the Trust,
the Issuer Trustee, the Collateral Agent and each Indenture
Trustee. The Servicer shall indemnify and hold harmless the
Seller, the Trust, the Issuer Trustee, each Indenture Trustee and
the Collateral Agent from and against any loss, liability,
expense, damage or injury suffered or sustained by reason of any
acts, omissions or alleged acts or omissions of the Servicer with
respect to activities of the Trust, the Issuer Trustee or the
Collateral Agent for which the Servicer is responsible pursuant
to this Agreement, including those arising from acts or omissions
of the Servicer pursuant to this Agreement, including, but not
limited to any judgment, award, settlement, reasonable attorneys'
fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim.
In addition, the Servicer shall indemnify and hold harmless the
Issuer Trustee from and against any loss, liability, expense,
damage or injury suffered or sustained by reason of any acts or
omissions or alleged acts or omissions of the Issuer Trustee
pursuant to this Agreement or arising out of the Trust created
hereby. Notwithstanding the foregoing, (i) the Servicer shall
not indemnify the Seller, the Trust, the Issuer Trustee or the
Collateral Agent if such acts, omissions or alleged acts
constitute fraud, negligence or breach of fiduciary duty by such
Person; (ii) the Servicer shall not indemnify the Seller, the
Trust, the Collateral Agent (or, directly or indirectly, any
Noteholders or any Note Owners) for any liabilities, costs or
expenses of the Seller or the Trust with respect to any action
taken by the Collateral Agent at the request of any Noteholders;
(iii) the Servicer shall not indemnify the Seller or the Trust
(or, directly or indirectly, any Noteholders or any Note Owners)
as to any losses, claims or damages incurred by any of them in
their capacities as investors, including without limitation
losses incurred as a result of Defaulted Contracts which are
written off as uncollectible; and (iv) the Servicer shall not
indemnify the Trust, the Collateral Agent (or, directly or
indirectly, any Noteholders or the Note Owners) for any
liabilities, costs or expenses of the Trust, the Issuer Trustee,
the Collateral Agent (or, directly or indirectly, any Noteholders
or the Note Owners) arising under any tax law, including without
limitation any federal, state or local income or franchise taxes
or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a
failure to comply therewith) required to be paid by the Trust,
such Noteholders or such Note Owners in connection herewith to
any taxing authority. The provisions of this indemnity shall run
directly to and be enforceable by an injured party subject to the
limitations hereof.
Any indemnification pursuant to this Section shall not
be payable from the Trust Assets.
The obligations of the Servicer under this Section 8.4
shall survive the termination of the Trust and the resignation or
removal of the Issuer Trustee.
Section 8.5 The Servicer Not to Resign. The Servicer
shall not resign from the obligations and duties hereby imposed
on it except upon determination that (i) the performance of its
duties hereunder is or becomes impermissible under applicable law
and (ii) there is no reasonable action which the Servicer could
take to make the performance of its duties hereunder permissible
under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced as to clause (i)
above by an Opinion of Counsel to such effect delivered to the
Issuer Trustee and the Collateral Agent. No such resignation
shall become effective until the Collateral Agent or a Successor
Servicer shall have assumed the responsibilities and obligations
of the Servicer in accordance with Section 10.2. If the
Collateral Agent is unable within 120 days of the date of such
determination to appoint a Successor Servicer, the Collateral
Agent shall serve as Successor Servicer hereunder subject to the
provisions of Section 10.2 hereof.
Section 8.6 Access to Certain Documentation and
Information Regarding the Contracts. The Servicer shall provide
to the Collateral Agent access to the documentation regarding the
Contracts in the Contract Pool and the related Equipment in such
cases where the Collateral Agent is required in connection with
the enforcement of the rights of the Noteholders, or by
applicable statutes or regulations to review such documentation,
such access being afforded without charge but only (i) upon
reasonable request, (ii) during normal business hours, (iii)
subject to the Servicer's normal security and confidentiality
procedures and (iv) at offices designated by the Servicer.
Section 8.7 Delegation of Duties. Any delegation of
duties permitted under Article VIII shall not relieve the
Servicer of its liability and responsibility with respect to such
duties, and shall not constitute a resignation within the meaning
of Section 8.5.
Section 8.8 Examination of Records. The Servicer
shall clearly and unambiguously identify each Contract in the
Contract Pool and the related Equipment in its computer or other
records to reflect that such Contracts and Equipment have been
transferred by the Seller to the Trust pursuant to this
Agreement.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.1 Events of Default. If any one of the
following events (or any other events specified in any
Supplement) shall occur with respect to any Series:
(a) failure to pay the then outstanding principal
amount of any Note, if any, on its related Maturity Date; or
(b) (i) failure on the part of Seller to make any
payment or deposit required by the terms of this Agreement
or any Supplement within three Business Days after the date
such payment or deposit is required to be made or (ii)
failure on the part of the Seller, the Trust or the Issuer
Trustee to observe or perform any other covenants or
agreements of such Person set forth in this Agreement, any
Supplement, any Indenture or any Note Document which failure
has a material adverse effect on the Noteholders and which
continues unremedied for a period of 60 days after written
notice; provided, that no such 60-day cure period shall
apply in the case of a failure by the Seller to accept
reassignment of Ineligible Contracts which were the subject
of a breach of representation or warranty as provided in
Section 2.4(b) or (d) and further provided, that only a five
day cure period shall apply in the case of a failure by the
Seller, the Trust or the Issuer Trustee to observe its
covenant not to grant a security interest or otherwise
intentionally create a Lien on the Contracts; or
(c) any representation or warranty made by the Seller,
the Trust or the Issuer Trustee in this Agreement, any
Supplement, any Indenture or any Note Document or any
information required to be given by the Seller to the
Collateral Agent to identify the Contracts pursuant to
Section 2.1 or 2.6, shall prove to have been incorrect in
any material respect when made or when delivered, which
continues to be incorrect in any material respect for a
period of 60 days after written notice and as a result of
which the interests of the Noteholders are materially and
adversely affected and continue to be materially and
adversely affected for such period; provided, however, that
an Event of Default pursuant to this Section 9.1(c) shall
not be deemed to have occurred hereunder if the Seller has
repurchased the related Contract, or all of such Contracts,
if applicable, during such period in accordance with the
provisions hereof; or
(d) the occurrence of an Insolvency Event relating to
Newcourt, the Seller, the Trust or the Servicer; or
(e) the Trust shall become an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended; or
(f) the Seller or any other Person Transfers any
portion of the Non-Transferrable Notes or any economic
interest in the Non-Transferrable Notes in violation of the
restrictions on transfer in this Agreement (a "Transfer
Event"); or
(g) an additional Event of Default as specified in any
Supplement;
then, and in any such event described in subparagraph (a), (b),
(c), (f) or, unless otherwise specified in the related
Supplement, (g), after the applicable grace period set forth in
such subparagraphs, either the Collateral Agent or the Required
Percentage of Holders, by written notice to the Seller, the
Servicer and the Issuer Trustee (and the Collateral Agent, if
such notice is given by the Required Percentage of Holders) may
declare that an event of default (an "Event of Default") has
occurred as of the date of such notice and in the case of any
event described in subparagraph (d) or (e) an Event of Default
shall be deemed to have occurred without any notice or other
action on the part of the Collateral Agent or the Noteholders
immediately upon the occurrence of such event. Upon the
occurrence of an Event of Default, the principal amount of and
unpaid interest on the Notes of all Classes and all Series shall
be immediately due and payable, whereupon such amount shall be
immediately due and payable, without presentment, demand, protest
or other notice, all of which are hereby waived. Notice of any
Event of Default shall be given by the Servicer to the Rating
Agencies.
In determining whether the Required Percentage of
Holders desires to declare the occurrence of an Event of Default,
the Collateral Agent may conclusively rely, without independent
investigation, upon the information supplied to the Collateral
Agent in each Notice of Default delivered pursuant to a Note
Document. The Collateral Agent shall promptly notify the Issuer
Trustee and each Indenture Trustee of any such acceleration or
any rescission thereof.
Upon the occurrence of an Event of Default, Available
Amounts shall be allocated and paid as provided in Section 4.4.
Subject to the provisions of Sections 9.2 and 10.1 (if,
applicable), the Collateral Agent shall not be required to take
any further action upon the occurrence and during the continuance
of an Event of Default.
Section 9.2 Additional Rights Upon the Occurrence of
Certain Events. (a) If an Insolvency Event occurs with respect
to the Seller or a Transfer Event occurs, on the day of the
Insolvency Event or Transfer Event, the Seller shall promptly
give notice to the Collateral Agent thereof. Within 15 days
after a Responsible Officer of the Collateral Agent receives
notice of the Insolvency Event or Transfer Event, the Collateral
Agent shall (i) publish a notice in an Authorized Newspaper that
the Insolvency Event or Transfer Event, as the case may be, has
occurred and that the Collateral Agent intends to sell, dispose
of or otherwise liquidate the Trust Assets in a commercially
reasonable manner and on commercially reasonable terms and (ii)
send written notice to the Noteholders describing the provisions
of this Section 9.2 and requesting instructions from such
Holders. If after 30 days from the day notice pursuant to clause
(i) above is first published (the "Publication Date"), the
Collateral Agent shall not have received written instructions
from the Controlling Party to the effect that the Collateral
Agent shall not sell, dispose of, or otherwise liquidate the
Trust Assets, the Collateral Agent, subject to the following
proviso, shall, or shall instruct the Servicer to, proceed to
take such preparatory actions as the Collateral Agent may deem
appropriate in order to sell, dispose of, or otherwise liquidate
the Trust Assets in a commercially reasonable manner and on
commercially reasonable terms, which shall include the
solicitation of competitive bids. The Collateral Agent may
obtain a prior determination from any bankruptcy trustee,
conservator or receiver that the terms and manner of any proposed
sale, disposition or liquidation are commercially reasonable.
The provisions of Sections 9.1 and 9.2 shall not be deemed to be
mutually exclusive.
(b) The proceeds from the sale, disposition or
liquidation of the Trust Assets pursuant to subsection (a) above
shall be treated as Collections on the Contracts in the Contract
Pool and shall be allocated and deposited in accordance with the
provisions of Article IV. On the day following the Distribution
Date on which such proceeds are scheduled to be distributed to
the Noteholders, the Trust shall terminate.
Section 9.3 Limitation on Suits. No Holder shall have
any right by virtue of any provisions of this Agreement to
institute any suit, action or proceeding in equity or at law upon
or under or with respect to this Agreement, unless such Holder
previously shall have made, and unless the Holders of Notes
aggregating more than 66-2/3% of the Principal Amount of any
Series affected shall have made, written request upon the
Collateral Agent to institute such action, suit or proceeding in
its own name as Collateral Agent hereunder and shall have offered
to the Collateral Agent such reasonable indemnity as it may
require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Collateral Agent, for 60
days after its receipt of such notice, request and offer of
indemnity, shall have neglected or refused to institute any such
action, suit or proceeding; it being understood and intended, and
being expressly covenanted by each Holder with every other Holder
and the Collateral Agent, that no one or more Holders shall have
the right in any manner whatever by virtue or by availing itself
or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of
the Notes, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and
for the equal, ratable and common benefit of all Holders. For
the protection and enforcement of the provisions of this Section
9.3, each and every Holder and the Collateral Agent shall be
entitled to such relief as can be given either at law or in
equity.
ARTICLE X
SERVICER DEFAULTS
Section 10.1 Servicer Defaults. If any one of the
following events (a "Servicer Default") shall occur and be
continuing:
(a) any failure by the Servicer to make any payment,
transfer or deposit or to give instructions or notice to the
Issuer Trustee or the Collateral Agent pursuant to Article
IV or to make any required drawing, withdrawal, or payment
under any Credit Enhancement, or to deliver any required
Monthly Report hereunder on or before the date occurring two
Business Days after the date such payment, transfer,
deposit, withdrawal or drawing, or such instruction or
notice or report is required to be made or given, as the
case may be, under the terms of this Agreement; or
(b) failure on the part of the Servicer duly to
observe or perform in any material respect any other
covenants or agreements of the Servicer set forth in this
Agreement or any Supplement which has a material adverse
effect on the Noteholders, which continues unremedied for a
period of 30 days after the first to occur of (i) the date
on which written notice of such failure requiring the same
to be remedied shall have been given to the Servicer by the
Collateral Agent, or to the Servicer and the Collateral
Agent by the Noteholders or the Applicable Indenture Trustee
on behalf of such Holders of Notes aggregating not less than
25% of the Principal Amount of any Series adversely affected
thereby and (ii) the date on which a Responsible Officer of
the Servicer becomes aware thereof and such failure
continues to materially adversely affect such Noteholders
for such period; or
(c) any representation, warranty or certification made
by the Servicer in this Agreement or any Supplement or in
any certificate delivered pursuant to this Agreement or any
Supplement shall prove to have been incorrect when made,
which has a material adverse effect on the Noteholders and
which continues to be incorrect in any material respect for
a period of 30 days after the first to occur of (i) the date
on which written notice of such incorrectness requiring the
same to be remedied shall have been given to the Servicer
and the Issuer Trustee by the Collateral Agent, or to the
Servicer, the Issuer Trustee and the Collateral Agent by the
Noteholders or by the Applicable Indenture Trustee on behalf
of Holders of Notes aggregating not less than 25% of the
Principal Amount of any Series adversely affected thereby
and (ii) the date on which a Responsible Officer of the
Servicer becomes aware thereof, and such incorrectness
continues to materially adversely affect such Holders for
such period; or
(d) an Insolvency Event shall occur with respect to
the Servicer; or
(e) the Servicer delegates any of its duties hereunder
except to the extent such delegation is permitted hereunder
and such delegation continues unremedied for 15 days;
then, so long as such Servicer Default shall not have been
remedied, either the Collateral Agent, or the Controlling Party,
by written notice to the Servicer and the Issuer Trustee (and to
the Collateral Agent and Credit Enhancers if given by the
Noteholders) (a "Termination Notice"), may terminate all of the
rights and obligations of the Servicer as Servicer under this
Agreement. After receipt by the Servicer of such Termination
Notice, and on the date that a Successor Servicer shall have been
appointed by the Collateral Agent pursuant to Section 10.2, all
authority and power of the Servicer under this Agreement shall
pass to and be vested in a Successor Servicer; and, without
limitation, the Collateral Agent is hereby authorized and
empowered (upon the failure of the Servicer to cooperate) to
execute and deliver, on behalf of the Servicer, as attorney-in-
fact or otherwise, all documents and other instruments upon the
failure of the Servicer to execute or deliver such documents or
instruments, and to do and accomplish all other acts or things
necessary or appropriate to effect the purposes of such transfer
of servicing rights. Subject to Section 12.2(c), the Servicer
agrees to cooperate with the Collateral Agent and such Successor
Servicer in effecting the termination of the responsibilities and
rights of the Servicer to conduct servicing hereunder, including
without limitation, the transfer to such Successor Servicer of
all authority of the Servicer to service the Trust Assets
provided for under this Agreement, including, without limitation,
all authority over all Collections which shall on the date of
transfer be held by the Servicer for deposit, or which have been
deposited by the Servicer, in any Collection Account, Reserve
Account or Termination Account, or which shall thereafter be
received with respect to the Trust Assets, and in assisting the
Successor Servicer and in enforcing all rights to Insurance
Proceeds. The Servicer shall promptly transfer the Contract
Files and its electronic records relating to the Contracts in the
Contract Pool to the Successor Servicer in such electronic form
as the Successor Servicer may reasonably request and shall
promptly transfer to the Successor Servicer all other records,
correspondence and documents necessary for the continued
servicing of the Contracts in the Contract Pool in the manner and
at such times as the Collateral Agent or the Successor Servicer
shall reasonably request. To the extent that compliance with
this Section 10.1 shall require the Servicer to disclose to the
Successor Servicer information of any kind which the Servicer
reasonably deems to be confidential, the Successor Servicer shall
be required to enter into such customary licensing and
confidentiality agreements as the Servicer shall deem necessary
to protect its interest. The Servicer shall, on the date of any
servicing transfer, transfer all of its rights and obligations,
if any, in respect of any Enhancement to the Successor Servicer.
In connection with any servicing transfer, all reasonable costs
and expenses (including reasonable attorneys' fees) incurred in
connection with transferring the Contracts in the Contract Pool
and the other Trust Assets to the Successor Servicer and amending
this Agreement to reflect such succession as Successor Servicer
pursuant to this Section 10.1 and Section 10.2 shall be paid by
the Servicer (unless the Collateral Agent is acting as the
Servicer, in which case the original Servicer) upon presentation
of reasonable documentation of such costs and expenses.
Notwithstanding the foregoing, a delay in or failure of
performance referred to in subsection 10.1(a) for a period of
five Business Days, or under subsection 10.1(b), (c) or (e) for a
period of 60 days, in each case in addition to any grace period
specified in such subsections, shall not constitute a Servicer
Default if such delay or failure could not have been prevented by
the exercise of reasonable diligence by the Servicer and such
delay or failure was caused by an act of God or public enemy,
acts of declared or undeclared war, public disorder, rebellion,
riot or sabotage, epidemics, landslides, lightning, fire,
hurricanes, tornadoes, earthquakes, nuclear disasters or
meltdowns, floods, power outages, bank closings, communications
malfunction, computer malfunction or other electronic system
malfunction or similar causes. The preceding sentence shall not
relieve the Servicer from using its best efforts to perform its
obligations in a timely manner in accordance with the terms of
this Agreement and the Servicer shall provide the Issuer Trustee,
the Collateral Agent, the Seller and certain providers of Credit
Enhancement with an Officer's Certificate giving prompt notice of
such failure or delay by it, together with a description of the
cause of such failure or delay and its efforts so to perform its
obligations. The Servicer shall immediately notify the
Collateral Agent in writing of any Servicer Default.
Section 10.2 Collateral Agent to Act; Appointment of
Successor. (a) On and after the receipt by the Servicer of a
Termination Notice pursuant to Section 10.1, the Servicer shall
continue to perform all servicing functions under this Agreement
until the date specified in the Termination Notice or otherwise
specified by the Collateral Agent in writing or, if no such date
is specified in such Termination Notice or otherwise specified by
the Collateral Agent, until a date mutually agreed upon by the
Servicer and the Collateral Agent. The Collateral Agent shall as
promptly as possible after the giving of a Termination Notice
appoint a successor servicer (the "Successor Servicer"), and such
Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Collateral Agent and the
Issuer Trustee. If the Collateral Agent within 60 days of
receipt of a Termination Notice is unable to obtain any bids from
eligible Servicers and the Servicer delivers an Officer's
Certificate to the effect that it cannot in good faith cure the
Servicer Default which gave rise to a transfer of servicing, then
the Collateral Agent shall offer the Seller the right to accept
retransfer of all the Trust Assets and the Seller may accept
retransfer of all the Trust Assets, provided, however, that if
the long-term unsecured debt obligations of the Seller are not
rated at the time of such purchase at least investment grade by
each rating agency providing a rating in respect of such long-
term unsecured debt obligations, no such retransfer shall occur
unless the Seller shall deliver an Opinion of Counsel reasonably
acceptable to the Collateral Agent that such retransfer would not
constitute a fraudulent conveyance of the Seller. The retransfer
deposit amount for such a retransfer shall be equal to the sum of
the Aggregate Principal Amount of all Series on the applicable
Distribution Date plus accrued and unpaid interest thereon at the
applicable Interest Rate (together with, if applicable, interest
on interest amounts that were due and not paid on a prior date),
through the date of such retransfer. In the event that a
Successor Servicer has not been appointed and has not accepted
its appointment at the time when the Servicer ceases to act as
Servicer, the Collateral Agent without further action shall
automatically be appointed the Successor Servicer.
Notwithstanding the above, the Collateral Agent shall, if it is
legally unable so to act, petition a court of competent
jurisdiction to appoint any established financial institution
having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of Contracts as the Successor
Servicer hereunder.
(b) Upon its appointment, the Successor Servicer shall
be the successor in all respects to the Servicer with respect to
servicing functions under this Agreement and shall be subject to
all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof, and
all references in this Agreement to the Servicer shall be deemed
to refer to the Successor Servicer. Any Successor Servicer, by
its acceptance of its appointment, will automatically agree to be
bound by the terms and provisions of any Credit Enhancement to
the extent that such terms apply to the Servicer.
(c) In connection with such appointment and
assumption, the Collateral Agent shall be entitled to such
compensation, or may make such arrangements for the compensation
of the Successor Servicer out of Collections, as it and such
Successor Servicer shall agree; provided, however, that no such
compensation shall be in excess of the Servicing Fee.
(d) All authority and power granted to the Servicer
under this Agreement shall automatically cease and terminate upon
termination of the Trust pursuant to Section 13.1 and shall pass
to and be vested in the Seller and, without limitation, the
Seller is hereby authorized and empowered to execute and deliver,
on behalf of the Servicer, as attorney-in-fact or otherwise, all
documents and other instruments, and to do and accomplish all
other acts or things necessary or appropriate to effect the
purposes of such transfer of servicing rights. The Servicer
agrees to cooperate with the Seller in effecting the termination
of the responsibilities and rights of the Servicer to conduct
servicing on the Contracts in the Contract Pool.
Section 10.3 Notification. Upon the Servicer becoming
aware of the occurrence of any Servicer Default, the Servicer
shall give prompt written notice thereof to the Collateral Agent
and the Collateral Agent shall give notice to the Indenture
Trustees and the Issuer Trustee. Upon any termination or
appointment of a Successor Servicer pursuant to this Article X,
the Collateral Agent shall give prompt written notice thereof to
the Indenture Trustees and the Issuer Trustee. A copy of any
notice given pursuant to this Section 10.3 shall be delivered to
each Rating Agency.
Section 10.4 Waiver of Past Defaults. The Controlling
Party may, on behalf of all Noteholders, waive any default by the
Servicer or the Seller in the performance of its obligations
hereunder and its consequences, except a default in the failure
to make any required deposits or payments in accordance with
Article IV, provided, however, that no such waiver shall affect
any rights of, or obligations to, any Credit Enhancer hereunder.
Upon any such waiver of a past default, such default shall cease
to exist, and any default arising therefrom shall be deemed to
have been remedied for every purpose of this Agreement. No such
waiver shall extend to any subsequent or other default or impair
any right consequent thereon except to the extent expressly so
waived.
ARTICLE XI
THE ISSUER TRUSTEE
Section 11.1 Duties of Issuer Trustee.
(a) The Issuer Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Agreement, and no implied duties or covenants shall be read into
this Agreement against the Issuer Trustee.
(b) The Issuer Trustee, upon receipt of all
resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to the Issuer
Trustee which are specifically required to be furnished pursuant
to any provision of this Agreement, shall examine them to
determine whether they conform to the requirements of this
Agreement. The Issuer Trustee shall give prompt written notice
to each Indenture Trustee and, for so long as the Issuer Trustee
shall be the registrar for the Subordinated Notes, each Holder of
a Class B Note or Class C Note, of any material lack of
conformity of any such instrument to the applicable requirements
of this Agreement discovered by the Issuer Trustee which would
entitle a specified percentage of the Holders to take any action
pursuant to this Agreement. Notwithstanding the foregoing, the
Issuer Trustee shall have no obligation to independently
calculate, recompute, verify or confirm any information received
from the Servicer or the Collateral Agent.
(c) No provision of this Agreement shall be construed
to relieve the Issuer Trustee from liability for its own grossly
negligent action, its own grossly negligent failure to act or its
own misconduct; provided, however, that the Issuer Trustee shall
not be personally liable for an error of judgment made in good
faith by a Responsible Officer or Responsible Officers of the
Issuer Trustee, unless it shall be proved that the Issuer Trustee
was negligent in ascertaining the pertinent facts.
(d) The Issuer Trustee shall not be required to expend
or risk its own funds or otherwise incur financial liability in
the performance of any of its duties hereunder, or in exercise of
any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it,
and none of the provisions contained in this Agreement shall in
any event require the Issuer Trustee to perform, or be
responsible for the manner of performance of, any of the
obligations of the Seller, the Servicer or the Collateral Agent
under this Agreement.
(e) Except for actions expressly authorized by this
Agreement, the Issuer Trustee shall take no action reasonably
likely to impair the interests of the Trust in the Trust Assets
now existing or hereafter arising or to impair the value of any
Contract in the Contract Pool.
(f) Except as expressly provided in this Agreement,
the Issuer Trustee shall have no power to vary the corpus of the
Trust, including, without limitation, the power to (i) accept any
substitute obligation for a Contract initially assigned to the
Trust under Section 2.1 or 6.2, (ii) add any other investment,
obligation or security to the Trust or (iii) withdraw from the
Trust any Contracts, except for a withdrawal permitted under
subsection 2.4(d) or 2.4(e), Article IV, or Section 9.2 or 13.1.
(g) If the Seller has agreed to transfer any of its
Contracts to another Person, upon the written request of the
Seller, the Issuer Trustee, on behalf of the Trust, will enter
into such intercreditor agreements with the transferee of such
Contracts as the Seller shall request; provided, that the Seller
shall have delivered to the Issuer Trustee (i) an Officer's
Certificate to the effect that such intercreditor agreements (x)
are customary and necessary to identify the rights of the Trust
and such other Person, as the case may be, in the Seller's
Contracts and (y) could not reasonably be expected to adversely
affect the interests of the Noteholders and (ii) an Opinion of
Counsel on any matters relating to such intercreditor agreement,
reasonably requested by the Issuer Trustee and in form and
substance satisfactory to the Issuer Trustee.
(h) The Issuer Trustee is authorized and directed to
execute and deliver on behalf of the Trust each Note Document and
each Supplement to which the Trust is to be a party and each
certificate or other document attached as an exhibit to or
contemplated by any Note Document or any Supplement to which the
Trust is to be a party, or an amendment thereto or other
agreement, in each case, in such form as the Seller shall approve
as evidenced conclusively by the delivery of such certificates
and documents to the Issuer Trustee for the Issuer Trustee's
execution thereof. In addition to the foregoing, the Issuer
Trustee is authorized, but shall not be obligated, to take all
actions required of the Trust pursuant to this Agreement, any
Note Document or any Supplement. The Issuer Trustee is further
authorized from time to time to take such action as the Seller
directs in writing with respect to this Agreement, any Note
Document or any Supplement and shall, upon the written direction
of the Seller, execute and deliver any amendment to this
Agreement (subject to Section 14.1) or any Note Document or
Supplement as may be presented by the Seller for execution and
delivery by the Issuer Trustee; provided that the Issuer Trustee
may, but shall not be obligated to, enter into any such amendment
which affects the Issuer Trustee's own rights, duties or
immunities under this Agreement or otherwise.
Section 11.2 Certain Matters Affecting the Issuer
Trustee. Except as otherwise provided in Section 11.1:
(a) the Issuer Trustee may rely on and shall be
protected in acting on, or in refraining from acting in
accordance with, any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed
by it to be genuine and to have been signed or presented to
it pursuant to this Agreement by the proper party or
parties;
(b) the Issuer Trustee may consult with counsel and
any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(c) the Issuer Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
Agreement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or
direction of any of the Noteholders or any Credit Enhancer,
pursuant to the provisions of this Agreement, unless such
Holders or such Credit Enhancer shall have offered to the
Issuer Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred
therein or thereby;
(d) the Issuer Trustee shall not be liable for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(e) the Issuer Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys or a
custodian, and the Issuer Trustee shall not be responsible
for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed with due care by it
hereunder;
(f) the Issuer Trustee shall not be required to make
any initial or periodic examination of any documents or
records related to the Contracts in the Contract Pool or the
related Equipment for the purpose of establishing the
presence or absence of defects, the compliance by the Seller
with its representations and warranties or for any other
purpose;
(g) the right of the Issuer Trustee to perform any
discretionary act enumerated in this Agreement or any
Supplement shall not be construed as a duty, and the Issuer
Trustee shall not be answerable for other than its
negligence or willful misconduct in the performance of any
such act;
(h) the Issuer Trustee shall not be required to take
any action hereunder or under Indenture or Supplement if the
Issuer Trustee shall have reasonably determined, or shall
have been advised by counsel, that such action is likely to
result in liability on the part of the Issuer Trustee or is
contrary to the terms hereof or of any Indenture or
Supplement or is otherwise contrary to law;
(i) the Issuer Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in
accordance with the instructions of the Seller, the
Servicer, the Collateral Agent or the Noteholders;
(j) under no circumstances shall the Issuer Trustee be
liable for indebtedness evidenced by or arising under this
Agreement, or any of the Note Documents or Supplements,
including the principal of and interest on the Notes; and
(k) the Issuer Trustee shall not be liable for the
default or misconduct of the Seller, the Servicer, the
Indenture Trustees or the Collateral Agent under any of this
Agreement, the Indentures, the Note Agreements or the
Supplements or otherwise and the Issuer Trustee shall have
no obligation or liability to perform the obligations of the
Trust under this Agreement or otherwise that are required to
be performed by the Seller, the Servicer, the Collateral
Agent or the Indenture Trustee under this Agreement, the
Indentures, the Note Agreements or the Supplements.
Section 11.3 Issuer Trustee Not Liable for Recitals in
Notes. The Issuer Trustee assumes no responsibility for the
correctness of the recitals contained herein and in the Notes.
Except as expressly set forth in this Agreement or any Note
Document, the Issuer Trustee makes no representations as to the
validity or sufficiency of this Agreement, any Note Document or
any Supplement or of the Notes or of any Contract or related
document. The Issuer Trustee shall not be accountable for the
use or application by the Seller of any of the Notes or of the
proceeds thereof, or for the use or application of any funds paid
to the Seller in respect of the Contracts in the Contract Pool or
deposited in the Collection Account or the Reserve Account or
Termination Account, or withdrawn from the Collection Account or
the Reserve Account or Termination Account, by the Servicer. The
Issuer Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Contract by the Seller pursuant to this
Agreement, any Note Document or any Supplement or the eligibility
of any Contract for purposes of this Agreement, any Note Document
or any Supplement. The Issuer Trustee shall have no
responsibility for filing any financing or continuation statement
in any public office at any time or to otherwise perfect or
maintain the perfection of any security interest or lien granted
to it or the Trust hereunder or to prepare or file any Securities
and Exchange Commission filing for the Trust or to record this
Agreement or any Supplement.
Section 11.4 Issuer Trustee May Own Notes. The Issuer
Trustee in its individual or any other capacity may become the
owner or pledgee of Notes, and may deal with the Seller, the
Servicer, the Collateral Agent, any Indenture Trustee or any
Credit Enhancer, with the same rights as it would have if it were
not the Issuer Trustee.
Section 11.5 Servicer to Pay Issuer Trustee's Fees and
Expenses. The Servicer covenants and agrees to pay to the Issuer
Trustee from time to time, and the Issuer Trustee shall be
entitled to receive, reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of
a trustee of an express trust) for all services rendered by it in
the execution of the trust hereby created and in the exercise and
performance of any of the powers and duties hereunder of the
Issuer Trustee, and, subject to Section 8.4, the Servicer will
promptly pay or reimburse the Issuer Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or
made by the Issuer Trustee in accordance with any of the
provisions of this Agreement (including the reasonable fees and
expenses of its agents and counsel) except any such expense,
disbursement or advance as may arise from its gross negligence or
bad faith.
The obligations of the Servicer under this Section 11.5
shall survive the termination of the Trust and the resignation or
removal of the Issuer Trustee.
In the case of a sale, disposition or liquidation of
the Trust Assets pursuant to subsection 9.2(a), the Issuer
Trustee shall be entitled to retain from any amounts
distributable to the Seller pursuant to any Supplement with
respect to any Series from the proceeds of such sale, disposition
or liquidation an amount equal to the Issuer Trustee's expenses
in connection with such sale, disposition or liquidation and the
performance by the Issuer Trustee of the procedures set forth in
subsection 9.2(a).
Section 11.6 Eligibility Requirements for Issuer
Trustee. The Issuer Trustee hereunder shall at all times be a
corporation organized and doing business under the laws of the
United States of America or any state thereof authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or state authority. 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 11.6, 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 addition, no institution shall qualify as a
Successor Issuer Trustee hereunder unless its long-term debt
obligations are rated at least investment grade by each Rating
Agency. In case at any time the Issuer Trustee shall cease to be
eligible in accordance with the provisions of this Section 11.6,
the Issuer Trustee shall resign immediately in the manner and
with the effect specified in Section 11.7.
Section 11.7 Resignation or Removal of Issuer Trustee.
(a) The Issuer Trustee may at any time resign and be discharged
from the trust hereby created by giving written notice thereof to
the Seller and the Servicer. Upon receiving such notice of
resignation, the Seller shall (i) promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Issuer Trustee and
one copy to the successor trustee and (ii) provide written notice
to each Rating Agency of such resignation. If no successor
trustee shall have been so appointed and have accepted within 30
days after the giving of such notice of resignation, the
resigning Issuer Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Issuer Trustee shall cease to
be eligible in accordance with the provisions of Section 11.6 and
shall fail to resign after written request therefor by the
Seller, or if at any time the Issuer Trustee shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Issuer Trustee or of its property shall be
appointed, or any public officer shall take charge or control of
the Issuer Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then the Seller
may, but shall not be required to, remove the Issuer Trustee and
promptly appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the
Issuer Trustee so removed and one copy to the successor trustee.
(c) Any resignation or removal of the Issuer Trustee
and appointment of a successor trustee pursuant to any of the
provisions of this Section 11.7 shall not become effective until
acceptance of appointment by the successor trustee as provided in
Section 11.8 and any liability of the Issuer Trustee arising
hereunder shall survive such appointment of a successor trustee.
Section 11.8 Successor Issuer Trustee. (a) Any
successor trustee appointed as provided in Section 11.7 shall
execute, acknowledge and deliver to the Seller and to its
predecessor Issuer Trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal
of the predecessor Issuer Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with like effect as if
originally named as Issuer Trustee herein. The predecessor Issuer
Trustee shall, upon payment of all amounts due it pursuant to
Section 11.5, deliver to the successor trustee all documents and
statements held by it hereunder; and Seller and the predecessor
Issuer Trustee shall execute and deliver such instruments and do
such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as
provided in this Section 11.8 unless at the time of such
acceptance such successor trustee shall be eligible under the
provisions of Section 11.6.
(c) Upon acceptance of appointment by a successor
trustee as provided in this Section 11.8, such successor trustee
shall mail notice of such succession hereunder to each Indenture
Trustee and to each Subordinated Noteholder, and also to each
Rating Agency.
Section 11.9 Merger or Consolidation of Issuer
Trustee. Any Person into which the Issuer 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 Issuer Trustee shall be a party, or any Person succeeding to
all or substantially all of the corporate trust business of the
Issuer Trustee, shall be the successor of the Issuer Trustee
hereunder, provided such corporation shall be eligible under the
provisions of Section 11.6, without the execution or filing of
any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding.
Section 11.10 Appointment of Co-Issuer Trustee or
Separate Issuer Trustee. (a) Notwithstanding any other
provisions of this Agreement, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any
part of the Trust may at the time be located, the Issuer Trustee
shall have the power and may execute and deliver all instruments
to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in
such capacity and for the benefit of the Noteholders, such title
to the Trust Assets, or any part thereof, and, subject to the
other provisions of this Section 11.10, such powers, duties,
obligations, rights and trusts as the Issuer Trustee may consider
necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 11.6 and no notice to Noteholders
of the appointment of any co-trustee or separate trustee shall be
required under Section 11.8.
(b) Every separate trustee and co-trustee shall, to
the extent permitted by law, be appointed and act subject to the
following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Issuer Trustee shall be
conferred or imposed upon and exercised or performed by the
Issuer Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the
Issuer Trustee joining in such act), except to the extent
that under any laws of any jurisdiction in which any
particular act or acts are to be performed (whether as
Issuer Trustee hereunder or as successor to the Servicer
hereunder), the Issuer Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the
holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly
by such separate trustee or co-trustee, but solely at the
direction of the Issuer Trustee;
(ii) no trustee hereunder shall be liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Issuer Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Issuer Trustee shall be deemed to have been given to each of the
then separate trustees and co-trustees, as effectively as if
given to each of them. Every instrument appointing any separate
trustee or co-trustee shall refer to this Agreement and the
conditions of this Article XI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument
of appointment, either jointly with the Issuer Trustee or
separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting
the liability of, or affording protection to, the Issuer Trustee.
Every such instrument shall be filed with the Issuer Trustee and
a copy thereof given to the Servicer.
(d) Any separate trustee or co-trustee may at any time
constitute the Issuer Trustee its agent or attorney-in-fact with
full power and authority, to the extent not prohibited by law, to
do any lawful act under or in respect to this Agreement on its
behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Issuer Trustee, to the extent
permitted by law, without the appointment of a new or successor
trustee.
Section 11.11 Tax Returns. As set forth in Section
3.13, the Issuer Trustee shall not file any federal tax returns
on behalf of the Trust; provided, however, that if the Trust
shall be required to file tax returns or is otherwise determined
necessary by the Issuer Trustee that the Trust should file tax
returns, the Servicer, as soon as practicable after it is made
aware of such requirement or determination, shall prepare or
cause to be prepared, and the Issuer Trustee is authorized
hereunder to sign, any tax returns required or determined
necessary to be filed by the Trust and, to the extent possible,
the Servicer shall deliver such returns to the Issuer Trustee at
least five days before such returns are due to be filed. In
executing any tax return on behalf of the Trust, the Issuer
Trustee shall be entitled to assume that any such return
presented to it for execution is true and accurate and shall not
be required to recalculate or otherwise take any action to verify
the truth or accuracy thereof. The Servicer shall prepare or
shall cause to be prepared all tax information required by law to
be distributed to Noteholders and shall deliver such information
to the Issuer Trustee at least five days prior to the date it is
required by law to be so distributed to Holders. The Issuer
Trustee and the Collateral Agent, upon written request, will
furnish the Servicer with all such information known to the
Issuer Trustee or the Collateral Agent, as the case may be, as
may be reasonably required in connection with the preparation of
all tax returns of the Trust. In no event shall the Issuer
Trustee, the Collateral Agent or the Servicer be liable for any
liabilities, costs or expenses of the Trust, the Noteholders or
the Note Owners arising under any tax law, including without
limitation federal, state or local income or excise taxes or any
other tax imposed on or measured by income (or any interest or
penalty with respect thereto or arising from a failure to comply
therewith). Nothing in this Section 11.11 shall be construed as
inconsistent with the characterization of the Notes as
indebtedness of Seller for purposes of federal, state and local
income or franchise taxes and any other tax imposed upon or
measured by income, as expressed in Section 3.13.
Section 11.12 Representations and Warranties of Issuer
Trustee. The Issuer Trustee represents and warrants that:
(i) The Issuer Trustee is a banking corporation
organized, existing and in good standing under the laws of
the State of Delaware;
(ii) The Issuer Trustee is an entity that satisfies the
eligibility requirements of Section 11.6;
(iii) The Issuer Trustee has full power, authority and
right to execute, deliver and perform this Agreement, and
has taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement;
(iv) This Agreement has been duly executed and
delivered by the Issuer Trustee; and
(v) This Agreement constitutes a legal, valid and
binding obligation of the Issuer Trustee, enforceable
against the Issuer Trustee in accordance with its terms,
except as such enforceability may be limited by Insolvency
Laws and except as such enforceability may be limited by
general principles of equity (whether considered in a suit
at law or in equity) or by an implied covenant of good faith
and fair dealing.
Section 11.13 Maintenance of Office or Agency. The
Issuer Trustee will maintain at its expense in the City of
Wilmington, Delaware, an office or offices or agency or agencies
where notices and demands to or upon the Issuer Trustee in
respect of the Notes and this Agreement may be served. The
Issuer Trustee initially appoints its Corporate Trust Office as
its office for such purposes. The Issuer Trustee will give
prompt written notice to the Servicer, each Indenture Trustee and
each Subordinated Noteholder of any change in the location of
such office or agency.
Section 11.14 Requests for Agreement. A copy of this
Agreement may be obtained by any Holder by a request in writing
to the Issuer Trustee addressed to the Corporate Trust Office and
will be provided at the expense of Seller.
Section 11.15 Not Acting in Individual Capacity.
Except as provided in this Article XI, in accepting the trusts
hereby created Chemical Bank Delaware acts solely as Issuer
Trustee hereunder and not in its individual capacity and all
Persons having any claim against the Issuer Trustee by reason of
the transactions contemplated by this Agreement or otherwise
shall look only to the Trust Assets for payment or satisfaction
thereof.
ARTICLE XII
THE COLLATERAL AGENT
Section 12.1 Duties of Collateral Agent.
(a) Prior to the occurrence of a Servicer Default of
which a Responsible Officer of the Collateral Agent has
knowledge, and following the cure of such Servicer Default, the
Collateral Agent undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement and the
Applicable Indentures, and no implied duties or covenants shall
be read into this Agreement or such Applicable Indentures against
the Collateral Agent. If a Responsible Officer of the Collateral
Agent has received notice that a Servicer Default has occurred
(which has not been cured or waived), the Collateral Agent shall
exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in the
exercise of such rights and powers, as a prudent person would
exercise or use under the circumstances in the conduct of such
person's own affairs, provided, however, that if the Collateral
Agent shall assume the duties of the Servicer pursuant hereto,
the Collateral Agent in performing such duties shall use the
degree of skill and attention customarily exercised by a servicer
with respect to comparable Contracts that it services for itself
or others.
(b) In the event that the Collateral Agent shall have
knowledge of an Event of Default under this Agreement or any
Indenture, as promptly as practicable after, and in any event
within 90 days after, the occurrence of such Event of Default,
the Collateral Agent shall provide written notice to the Issuer
Trustee, the Seller, the Servicer, each Rating Agency, the Credit
Enhancers and each Applicable Indenture Trustee of such Event of
Default known to the Collateral Agent, unless such Event of
Default shall have been cured or waived. Subject to the terms of
this Agreement and any Supplement, the Collateral Agent shall
take such action, or refrain from taking such action, with
respect to any such Event of Default (including with respect to
the exercise of any rights or remedies under the Applicable
Indenture) as the Collateral Agent shall be instructed in writing
by the Controlling Party. Subject to the provisions of this
Section 12.1 and Section 12.2 hereof, if the Collateral Agent
shall not have received instructions as above provided within 20
calendar days after notice of such Event of Default to the
Applicable Indenture Trustee, the Collateral Agent may, subject
to instructions thereafter received pursuant to the preceding
provisions of this Section 12.1, take such action, or refrain
from taking such action, but shall be under no duty to take or
refrain from taking any action, with respect to any such Event of
Default as it shall determine advisable in the best interests of
the Secured Parties and shall use the same degree of care and
skill in connection therewith as a prudent man would use under
the circumstances in the conduct of his own affairs. In the
event the Collateral Agent shall at any time foreclose the Lien
of this Agreement or otherwise enforce this Agreement, the
Collateral Agent shall forthwith notify the Indenture Trustees,
the Issuer Trustee, each Rating Agency and the Credit Enhancers.
For all purposes of this Agreement, in the absence of actual
knowledge on the part of a Responsible Officer of the Collateral
Agent, the Collateral Agent shall not be deemed to have knowledge
of any Event of Default under this Agreement or any Indenture
(other than the failure to pay any amount on a Class A Note when
due) unless notified in writing by any Indenture Trustee, the
Issuer Trustee, any Credit Enhancer or one or more Noteholders.
(c) The Collateral Agent, upon receipt of all
resolutions, certificates, statements, opinions, reports,
documents, orders or other instruments furnished to the
Collateral Agent which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them
to determine whether they conform to the requirements of this
Agreement. The Collateral Agent shall give prompt written notice
to the Issuer Trustee and each Indenture Trustee of any material
lack of conformity of any such instrument to the applicable
requirements of this Agreement discovered by the Collateral Agent
which would entitle a specified percentage of the Holders to take
any action pursuant to this Agreement. Notwithstanding the
foregoing, the Collateral Agent shall have no obligation to
independently calculate, recompute, verify or confirm any
information received from the Servicer.
(d) No provision of this Agreement shall be construed
to relieve the Collateral Agent from liability for its own
grossly negligent action, its own grossly negligent failure to
act or its own misconduct; provided, however, that:
(i) the Collateral Agent shall not be personally
liable for an error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the
Collateral Agent, unless it shall be proved that the
Collateral Agent was negligent in ascertaining the pertinent
facts;
(ii) the Collateral Agent shall not be personally
liable with respect to any action taken, suffered or omitted
to be taken by it in good faith in accordance with the
direction of the Controlling Party relating to the time,
method and place of conducting any proceeding for any remedy
available to the Collateral Agent, or exercising any trust
or power conferred upon the Collateral Agent, under this
Agreement; and
(iii) the Collateral Agent shall not be charged with
knowledge of any failure by the Servicer to comply with the
obligations of the Servicer referred to in Section 10.1 or
any Event of Default unless a Responsible Officer of the
Collateral Agent obtains actual knowledge of such failure or
Event of Default or the Collateral Agent receives written
notice of such failure from the Servicer, the Issuer
Trustee, any Indenture Trustee or any Holders of (or
Indenture Trustee on behalf of Holders of) Notes aggregating
not less than 10% of the Principal Amount of any Series.
(e) The Collateral Agent shall not be required to
expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder, or
in exercise of any of its rights or powers, if there is
reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in
this Agreement shall in any event require the Collateral Agent to
perform, or be responsible for the manner of performance of, any
of the obligations of the Servicer under this Agreement.
(f) Except for actions expressly authorized by this
Agreement, the Collateral Agent shall take no action reasonably
likely to impair the interests of the Trust in the Trust Assets
now existing or hereafter arising or to impair the value of any
Contract in the Contract Pool.
(g) If the Seller has agreed to transfer any of its
Contracts to another Person, upon the written request of Seller,
the Collateral Agent will enter into such intercreditor
agreements with the transferee of such Contracts as requested by
the Seller; provided, that the Seller shall have delivered to the
Collateral Agent (i) an Officer's Certificate to the effect that
such intercreditor agreements (x) are customary and necessary to
identify the rights of the Trust and such other Person, as the
case may be, in the Seller's Contracts and (y) could not
reasonably be expected to adversely affect the interests of the
Noteholders and (ii) an Opinion of Counsel on any matters
relating to such intercreditor agreement, reasonably requested by
the Collateral Agent, in form and substance satisfactory to the
Collateral Agent.
(h) Except in accordance with written instructions
furnished pursuant to Section 12.1(b), 12.2(e) and 12.12, the
Collateral Agent shall have no duty (i) to see to any recording
or filing of, or necessary to perfect a security interest in, the
Trust Assets or any other document, or to see to the maintenance
of any such recording or filing, (ii) to see to any insurance,
whether or not the Servicer or the Seller shall be in default
with respect thereto, (iii) to see to the payment or discharge of
any Lien of any kind against any part of the Trust Assets or (iv)
to confirm, verify or inquire into the failure to receive any
financial statements required to be delivered under the Pooling
Agreement.
Section 12.2 Certain Matters Affecting the Collateral
Agent. Except as otherwise provided in Section 12.1:
(a) the Collateral Agent may rely on and shall be
protected in acting on, or in refraining from acting in
accordance with, any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent,
order, appraisal, bond or other paper or document believed
by it to be genuine and to have been signed or presented to
it pursuant to this Agreement by the proper party or
parties;
(b) the Collateral Agent may consult with counsel and
any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken
or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(c) the Collateral Agent shall be under no obligation
to exercise any of the rights or powers vested in it by this
Agreement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or
direction of any of the Noteholders, Indenture Trustees or
any Credit Enhancer, pursuant to the provisions of this
Agreement, unless such Holders, such Indenture Trustees or
such Credit Enhancer shall have offered to the Collateral
Agent reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or
thereby; provided, however, that nothing contained herein
shall relieve the Collateral Agent of the obligations, upon
the occurrence of any Servicer Default (which has not been
cured) of which a Responsible Officer of the Collateral
Agent has knowledge, to exercise such of the rights and
powers vested in it by this Agreement or any Enhancement,
and to use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs;
provided, further, that the Collateral Agent shall have no
such obligations in the event that the Servicer fails to
cooperate with the Collateral Agent, pursuant to Section
10.1, in effecting the termination of the responsibilities
and rights of the Servicer to conduct servicing following
the occurrence of a Servicer Default;
(d) the Collateral Agent shall not be liable for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(e) the Collateral Agent shall not be bound to make
any investigation into the facts of matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing so to
do by the Controlling Party, provided, however, that if the
payment within a reasonable time to the Collateral Agent of
the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation shall be, in the
opinion of the Collateral Agent, not reasonably assured to
the Collateral Agent by the security afforded to it by the
terms of this Agreement, the Collateral Agent may require
reasonable indemnity against such cost, expense or liability
as a condition to so proceeding;
(f) the Collateral Agent may execute any of the trusts
or powers hereunder or perform any duties hereunder either
directly or by or through agents, including co-collateral
agents, or attorneys or a custodian, and the Collateral
Agent shall not be responsible for any misconduct or
negligence on the part of any such agent, attorney or
custodian appointed with due care by it hereunder;
(g) except as may be required pursuant to subsection
12.1(a), the Collateral Agent shall not be required to make
any initial or periodic examination of any documents or
records related to the Contracts in the Contract Pool or the
related Equipment for the purpose of establishing the
presence or absence of defects, the compliance by the Seller
with its representations and warranties or for any other
purpose;
(h) the right of the Collateral Agent to perform any
discretionary act enumerated in this Agreement or any
Supplement shall not be construed as a duty, and the
Collateral Agent shall not be answerable for other than its
gross negligence or willful misconduct (subject to Section
12.1(d)) in the performance of any such act;
(i) the Collateral Agent shall not be liable with
respect to any action taken or omitted to be taken by it in
accordance with the instructions of the Controlling Party;
(j) under no circumstances shall the Collateral Agent
be liable for indebtedness evidenced by or arising under
this Agreement, or any of the Note Documents or Supplements,
including the principal of and interest on the Notes; and
(k) the Collateral Agent shall not be liable for the
default or misconduct of the Seller, the Servicer, the
Indenture Trustees or the Issuer Trustee under any of this
Agreement, the Indentures, the Note Agreements or the
Supplements or otherwise.
Section 12.3 Collateral Agent May Own Notes. The
Collateral Agent in its individual or any other capacity may
become the owner or pledgee of Notes, and may deal with the
Seller, the Servicer, the Issuer Trustee or any Credit Enhancer,
with the same rights as it would have if it were not the
Collateral Agent.
Section 12.4 Servicer to Pay Collateral Agent's Fees
and Expenses. The Servicer covenants and agrees to pay to the
Collateral Agent from time to time, and the Collateral Agent
shall be entitled to receive, reasonable compensation for all
services rendered by it in the execution of the collateral agency
hereby created and in the exercise and performance of any of the
powers and duties hereunder of the Collateral Agent, and, subject
to Section 8.4, the Servicer will promptly pay or reimburse the
Collateral Agent upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Collateral
Agent in connection with the closing of the transactions
contemplated by the applicable Note Documents and in accordance
with any of the provisions of this Agreement including any
expenses, disbursements and advances incurred in connection with
the appointment of a Successor Servicer (including the reasonable
fees and expenses of its agents and counsel) except any such
expense, disbursement or advance as may arise from its gross
negligence or bad faith and except as provided in the following
sentence. If the Collateral Agent is appointed Successor
Servicer pursuant to Section 10.2, the provisions of this Section
12.4 shall not apply to the expenses, disbursements and advances
made or incurred by the Collateral Agent in its capacity as
Successor Servicer.
The obligations of the Servicer under this Section 12.5
shall survive the termination of the Trust and the resignation or
removal of the Collateral Agent.
In the case of a sale, disposition or liquidation of
the Trust Assets pursuant to subsection 9.2(a), the Collateral
Agent shall be entitled to retain from any amounts distributable
to the Seller pursuant to any Supplement with respect to any
Series from the proceeds of such sale, disposition or liquidation
an amount equal to the Collateral Agent's expenses in connection
with such sale, disposition or liquidation and the performance by
the Collateral Agent of the procedures set forth in subsection
9.2(a).
Section 12.5 Eligibility Requirements for Collateral
Agent. The Collateral Agent hereunder shall at all times be a
corporation organized and doing business under the laws of the
United States of America or any state thereof authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $100,000,000 and subject to
supervision or examination by Federal or state authority. 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 12.5, 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 addition, no institution shall qualify as a
successor Collateral Agent hereunder unless its long-term debt
obligations are rated at least investment grade by each Rating
Agency. In case at any time the Collateral Agent shall cease to
be eligible in accordance with the provisions of this Section
12.5, the Collateral Agent shall resign immediately in the manner
and with the effect specified in Section 12.6.
Section 12.6 Resignation or Removal of Collateral
Agent. (a) The Collateral Agent may at any time resign and be
discharged from the trust hereby created by giving written notice
thereof to the Seller, the Issuer Trustee and the Servicer. Upon
receiving such notice of resignation, the Seller shall (i)
promptly appoint a successor collateral agent by written
instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Collateral Agent and one copy to the
successor collateral agent and (ii) provide written notice to
each Rating Agency of such resignation. If no successor
collateral agent shall have been so appointed and have accepted
within 30 days after the giving of such notice of resignation,
the resigning Collateral Agent may petition any court of
competent jurisdiction for the appointment of a successor
collateral agent.
(b) If at any time the Collateral Agent shall cease to
be eligible in accordance with the provisions of Section 12.5 and
shall fail to resign after written request therefor by the
Seller, or if at any time the Collateral Agent shall be legally
unable to act, or shall be adjudged a bankrupt or insolvent, or a
receiver of the Collateral Agent or of its property shall be
appointed, or any public officer shall take charge or control of
the Collateral Agent or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the
Seller may, but shall not be required to, remove the Collateral
Agent and promptly appoint a successor collateral agent by
written instrument, in duplicate, one copy of which instrument
shall be delivered to the Collateral Agent so removed and one
copy to the successor collateral agent.
(c) Any resignation or removal of the Collateral Agent
and appointment of a successor collateral agent pursuant to any
of the provisions of this Section 12.6 shall not become effective
until acceptance of appointment by the successor collateral agent
as provided in Section 12.7 and any liability of the Collateral
Agent arising hereunder shall survive such appointment of a
successor collateral agent.
Section 12.7 Successor Collateral Agent. (a) Any
successor collateral agent appointed as provided in Section 12.6
shall execute, acknowledge and deliver to the Seller and to its
predecessor Collateral Agent an instrument accepting such
appointment hereunder, and thereupon the resignation or removal
of the predecessor Collateral Agent shall become effective and
such successor collateral agent, without any further act, deed or
conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with
like effect as if originally named as Collateral Agent herein.
The predecessor Collateral Agent shall, upon payment of all
amounts due it pursuant to Section 12.4, deliver to the successor
collateral agent all documents and statements held by it
hereunder; and Seller and the predecessor Collateral Agent shall
execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and
confirming in the successor collateral agent all such rights,
powers, duties and obligations.
(b) No successor collateral agent shall accept
appointment as provided in this Section 12.7 unless at the time
of such acceptance such successor collateral agent shall be
eligible under the provisions of Section 12.5.
(c) Upon acceptance of appointment by a successor
collateral agent as provided in this Section 12.7, such successor
collateral agent shall mail notice of such succession hereunder
to each Indenture Trustee and to each Rating Agency, and also to
the Issuer Trustee who shall mail notice of such succession
hereunder to each Subordinated Noteholder.
Section 12.8 Merger or Consolidation of Collateral
Agent. Any Person into which the Collateral Agent 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 Collateral Agent shall be a party, or any Person succeeding
to all or substantially all of the corporate trust business of
the Collateral Agent, shall be the successor of the Collateral
Agent hereunder, provided such corporation shall be eligible
under the provisions of Section 12.5, without the execution or
filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section 12.9 Appointment of Co-Collateral Agent or
Separate Collateral Agent. (a) Notwithstanding any other
provisions of this Agreement, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any
part of the Trust may at the time be located, the Collateral
Agent shall have the power and may execute and deliver all
instruments to appoint one or more Persons to act as a
co-collateral agent or co-collateral agents, or separate
collateral agent or separate collateral agents, with respect to
all or any part of the Trust Assets, and to vest in such Person
or Persons, in such capacity and for the benefit of the
Noteholders, such security interest in the Trust Assets, or any
part thereof, and, subject to the other provisions of this
Section 12.9, such powers, duties, obligations, rights and trusts
as the Collateral Agent may consider necessary or desirable. No
co-collateral agent or separate collateral agent hereunder shall
be required to meet the terms of eligibility as a successor
collateral agent under Section 12.5 and no notice to Noteholders
of the appointment of any co-collateral agent or separate
collateral agent shall be required under Section 12.7.
(b) Every separate collateral agent and co-collateral
agent shall, to the extent permitted by law, be appointed and act
subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Collateral Agent shall be
conferred or imposed upon and exercised or performed by the
Collateral Agent and such separate collateral agent or
co-collateral agency jointly (it being understood that such
separate collateral agent or co-collateral agent is not
authorized to act separately without the Collateral Agent
joining in such act), except to the extent that under any
laws of any jurisdiction in which any particular act or acts
are to be performed, the Collateral Agent shall be
incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations
shall be exercised and performed singly by such separate
collateral agent or co-collateral agent, but solely at the
direction of the Collateral Agent;
(ii) no collateral agent hereunder shall be liable by
reason of any act or omission of any other collateral agent
hereunder; and
(iii) the Collateral Agent may at any time accept the
resignation of or remove any separate collateral agent or
co-collateral agent.
(c) Any notice, request or other writing given to the
Collateral Agent shall be deemed to have been given to each of
the then separate collateral agents and co-collateral agents, as
effectively as if given to each of them. Every instrument
appointing any separate collateral agent or co-collateral agent
shall refer to this Agreement and the conditions of this Article
XII. Each separate collateral agent and co-collateral agent,
upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of
appointment, either jointly with the Collateral Agent or
separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting
the liability of, or affording protection to, the Collateral
Agent. Every such instrument shall be filed with the Issuer
Trustee and a copy thereof given to the Servicer.
(d) Any separate collateral agent or co-collateral
agent may at any time constitute the Collateral Agent its agent
or attorney-in-fact with full power and authority, to the extent
not prohibited by law, to do any lawful act under or in respect
to this Agreement on its behalf and in its name. If any separate
collateral agent or co-collateral agent shall die, become
incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be
exercised by the Collateral Agent, to the extent permitted by
law, without the appointment of a new or successor collateral
agent.
Section 12.10 Collateral Agent May Enforce Claims
Without Possession of Notes. All rights of action and claims
under this Agreement or the Notes may be prosecuted and enforced
by the Collateral Agent without the possession of any of the
Notes, or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Collateral
Agent shall be brought in its own name as collateral agent. Any
recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances
of the Collateral Agent, its agents and counsel, be for the
ratable benefit of the Noteholders in respect of which such
judgment has been obtained.
Section 12.11 Suits for Enforcement. If a Servicer
Default of which a Responsible Officer of the Collateral Agent
has knowledge shall occur and be continuing, the Collateral
Agent, in its discretion, may, subject to the provisions of
Section 10.1, proceed to protect and enforce its rights and the
rights of the Noteholders under this Agreement or any Supplement
by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement
contained in this Agreement or any Supplement or in aid of the
execution of any power granted in this Agreement or any
Supplement or for the enforcement of any other legal, equitable
or other remedy as the Collateral Agent, being advised by
counsel, shall deem most effectual to protect and enforce any of
the rights of the Collateral Agent or such Holders.
Section 12.12 Rights of Controlling Party to Direct
Collateral Agent. The Controlling Party shall have the right to
direct the time, method, and place of conducting any proceeding
for any remedy available to the Collateral Agent, or exercising
any trust or power conferred on the Collateral Agent; provided,
however, that, subject to Section 12.1, the Collateral Agent
shall have the right to decline to follow any such direction if
the Collateral Agent being advised by counsel determines that the
action so directed may not lawfully be taken, or if the
Collateral Agent in good faith shall, by a Responsible Officer or
Responsible Officers of the Collateral Agent, determine that the
proceedings so directed would be illegal or involve it in
personal liability or be unduly prejudicial to the rights of
Noteholders not parties to such direction; and provided further
that nothing in this Agreement shall impair the right of the
Collateral Agent to take any action deemed proper by the
Collateral Agent and which is not inconsistent with such
direction.
Section 12.13 Representations and Warranties of
Collateral Agent. The Collateral Agent represents and warrants
that:
(i) The Collateral Agent is a national banking
association organized, existing and in good standing under
the laws of the United States of America;
(ii) The Collateral Agent is an entity that satisfies
the eligibility requirements of Section 12.5;
(iii) The Collateral Agent has full power, authority and
right to execute, deliver and perform this Agreement, and
has taken all necessary action to authorize the execution,
delivery and performance by it of this Agreement;
(iv) This Agreement has been duly executed and
delivered by the Collateral Agent; and
(v) This Agreement constitutes a legal, valid and
binding obligation of the Collateral Agent, enforceable
against the Collateral Agent in accordance with its terms,
except as such enforceability may be limited by Insolvency
Laws and except as such enforceability may be limited by
general principles of equity (whether considered in a suit
at law or in equity) or by an implied covenant of good faith
and fair dealing.
Section 12.14 Collateral Agent Not Liable for Recitals
in Notes. The Collateral Agent assumes no responsibility for the
correctness of the recitals contained herein and in the Notes.
Except as set forth in Section 12.13, the Collateral Agent makes
no representations as to the validity or sufficiency of this
Agreement or of the Notes or of any Contract or related document.
The Collateral Agent shall not be accountable for the use or
application by the Seller of any of the Notes or of the proceeds
thereof, or for the use or application of any funds paid to the
Seller in respect of the Contracts in the Contract Pool or
deposited in the Collection Account or the Reserve Account or
Termination Account, or withdrawn from the Collection Account or
the Reserve Account or Termination Account, by the Servicer. The
Collateral Agent shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the
repurchase of any Contract by the Seller pursuant to this
Agreement or any Supplement or the eligibility of any Contract
for purposes of this Agreement or any Supplement. The Collateral
Agent shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security
interest or lien granted to it hereunder (unless the Collateral
Agent shall have become the Successor Servicer) or to prepare or
file any Securities and Exchange Commission filing for the Trust
or to record this Agreement or any Supplement.
ARTICLE XIII
TERMINATION
Section 13.1 Termination of Trust. (a) The
respective obligations and responsibilities of the Seller, the
Servicer, the Collateral Agent and the Issuer Trustee created
hereby (other than the obligation of the Collateral Agent to make
payments to the Indenture Trustees on behalf of the Noteholders
as hereafter set forth) shall terminate, except with respect to
the duties described in Sections 7.4, 8.4 and 11.5 and
subsections 2.4(c) and 13.3(b), upon the earlier of (i) the day,
if any, designated by the Seller after the Distribution Date
following the date on which funds shall have been deposited in
the Note Payment Accounts sufficient to pay the Aggregate
Principal Amount of all Series plus any interest accrued on the
Notes through such Distribution Date in full and (ii) the day on
which final payment is made under the Notes (any such day under
either the preceding clause (i) or this clause (ii) is referred
to as a "Trust Termination Date"); but in no event later than the
Final Trust Termination Date.
(b) Notwithstanding Section 13.1(a), in accordance
with Section 3803(b) of the Business Trust Statute, this
Agreement (other than Sections 7.4, 8.4 and 11.5 and subsections
2.5(e) and (f)) and the Trust shall dissolve and terminate upon
the occurrence of an Insolvency Event with respect to the Seller
or upon the withdrawal of the Seller, unless within 90 days
thereof, the Issuer Trustee shall have received written
instructions from owners of Partnership Notes (which for this
purpose shall exclude the Seller) owning not less than 51% of the
aggregate principal amount of the Partnership Notes not owned
(beneficially or of record) by the Seller, not to dissolve and
terminate the Trust. The occurrence of an Insolvency Event or
the withdrawal, dissolution, termination, death or incapacity of
any owner of a Partnership Note, other than the Seller, or any
other Holder shall not (x) operate to terminate this Agreement or
the Trust, nor entitle the legal representatives or heirs of such
Holder or the owners of such Notes to claim an accounting or to
take any action or proceeding in any court for a partition or
winding up of all or any part of the Trust nor (z) otherwise
affect, the rights, obligations and liabilities of the parties
hereto.
(c) Except as provided in Section 13.1(b), neither the
Seller nor any other owner of a Partnership Note shall be
entitled to revoke or terminate the Trust. Upon a termination of
the trust, the Issuer Trustee shall cause the Certificate of
Trust to be cancelled by filing a certificate of cancellation
thereof, promptly following such termination, in accordance with
the provisions of the Business Trust Statute.
(d) Promptly after the occurrence of any Insolvency
Event with respect to the Seller, (i) the Seller shall give the
Collateral Agent, the Issuer Trustee, each Indenture Trustee, the
Rating Agencies and each Credit Enhancer notice of such
Insolvency Event, (ii) the Issuer Trustee shall, upon the receipt
of such written notice from the Seller, give prompt written
notice to the owners of the Class B Notes and the Class C Notes
of the occurrence of such event and (iii) each Indenture Trustee
shall, upon receipt of written notice of such Insolvency Event
from the Issuer Trustee or the Seller, give prompt written notice
to the Noteholders of the occurrence of such event; provided that
any failure to give notice required by this sentence shall not
prevent or delay, in any manner, a termination of the Trust
pursuant to Section 13.1(b). Upon a termination pursuant to
Section 13.1(b), the Issuer Trustee shall direct the Collateral
Agent promptly to sell the assets of the Trust (other than the
Collection Account, the Reserve Account, the Termination Accounts
and the Note Payment Account) in a commercially reasonable manner
and on commercially reasonable terms (which shall include the
solicitation of competitive bids from Persons who are not
Affiliates of the Seller). The proceeds received upon the sale,
disposition or other liquidation of such assets shall be
deposited into the Collection Account and shall be distributed in
accordance with Section 4.3(e). In the event that the proceeds
received upon such sale, disposition or other liquidation are
less than the sum of (i) the Principal Amount with respect to any
Series on the date on which final payment to the Noteholders is
to be made and (ii) unpaid interest thereon at the Interest Rate
for such Series as of such date, the Servicer will make a
withdrawal or drawing or take other action permitted by any
applicable Enhancement, and shall pay all amounts thereby
obtained to the Applicable Indenture Trustee for deposit in the
Note Payment Account on such date, and the amount so withdrawn
shall be distributed to the Holders of Notes of each Series in
final payment thereof pursuant to the terms of the Applicable
Indenture; provided, that if the Servicer fails to make such
withdrawal or drawing or take such other action, then the
Collateral Agent may make such withdrawal or drawing.
Section 13.2 Optional Purchase of Notes and Final
Trust Termination Date. (a) On any Distribution Date occurring
on or after the date on which the Principal Amount of the Class A
Notes and Class B Notes of all Series is 10% or less of the
aggregate principal amount of the Class A Notes and Class B Notes
of all Series as of their respective Closing Dates, the Seller at
its sole option may, upon not less than 30 and not more than 60
days notice to the Issuer Trustee, the Servicer, the Collateral
Agent, each Indenture Trustee and the Noteholders, purchase
without penalty or premium all, but not less than all, of the
Class A Notes and Class B Notes of all Series. The redemption
price will be equal to the sum of the outstanding principal
amount of the Class A Notes and Class B Notes of all Series,
together with accrued interest thereon through the day preceding
the date of redemption, and shall be payable to the respective
holders of the Class A Notes and Class B Notes on such
Distribution Date. Following any redemption, neither the Class A
Noteholders nor the Class B Noteholders will have any further
rights with respect to the Trust Assets. The Class C Notes may
not be optionally redeemed prior to the payment in full of the
Class A Notes and Class B Notes of each Series.
(b) The Principal Amount of each Series shall be due
and payable no later than the Maturity Date with respect to such
Series. If on the Determination Date in the third month
immediately preceding the month in which such Maturity Date
occurs (after giving effect to all transfers, withdrawals,
deposits and drawings to occur on the next Distribution Date and
the payment of principal on the Notes of such Series to be made
on such Distribution Date pursuant to Article IV), the Principal
Amount of the Notes of such Series would be greater than zero,
the Servicer shall sell, dispose of, or otherwise liquidate, in a
commercially reasonable manner and on commercially reasonable
terms (which shall include the solicitation of competitive bids
from Persons who are not Affiliates of Seller), within 60 days of
such Determination Date, an amount of Contracts in the Contract
Pool and related Equipment (or interests therein) equal to the
product of (i) the Series Allocation Percentage for such Series
and the ADCB on such Determination Date provided, that the
Servicer shall give the Seller at least 15 days' advance written
notice of such sale, disposition or other liquidation. The
proceeds of such sale, disposition or liquidation shall be
applied on the first Distribution Date following receipt to the
repayment of the outstanding Principal Amount of the Class A
Notes of such Series (determined after giving effect to any
payments on such Distribution Date under Article IV hereof) plus
unpaid interest thereon to the date of payment at the Interest
Rate for such Series of Class A Notes. Any remaining proceeds
shall be held in the Termination Account for such Series and
applied on each Distribution Date first, to the Class B Notes of
such Series to the extent that after giving effect to such
application the sum of (i) the ADCB and (ii) aggregate amounts
(other than Investment Earnings) on deposit in the Reserve
Account and (iii) aggregate amounts on deposit in the Termination
Accounts shall not be less than the sum of the Principal Amounts
of all Series of Class A Notes and second, to the Class C Notes
of such Series to the extent that after giving effect to such
application the sum of (i) the ADCB and (ii) aggregate amounts
(other than Investment Earnings) on deposit in the Reserve
Account and (iii) aggregate amounts on deposit in the Termination
Accounts shall not be less than the sum of the Principal Amounts
of all Series of Class B Notes. Amounts on deposit in each
Termination Account shall be applied solely as provided in this
Section 13.2. The Contracts to be sold hereunder shall be chosen
at random by the Servicer. The Seller shall have the option,
exercisable at any time after the Servicer has obtained an offer
from any Person that is not an Affiliate of the Seller and prior
to the consummation of such sale, disposition or liquidation by
giving notice of the exercise thereof to the Servicer, to
purchase such Contracts for cash (payable in immediately payable
funds on the Maturity Date) for the lesser of (i) 100% of the
Discounted Contract Balance of such Contracts, or (ii) the
highest price offered therefor pursuant to such proposed sale,
disposition or other liquidation. The proceeds received upon the
sale, disposition or other liquidation of such Contracts shall be
distributed to the Holders of the Notes of each Series in final
payment thereof. Proceeds received in excess of the amount to be
applied to a Series of Notes as aforesaid shall be treated as
Collections on the Contracts in the Contract Pool and shall be
allocated and deposited in accordance with the provisions of
Article IV. In the event that the proceeds received upon the
sale, disposition or other liquidation of such Contracts is less
than the sum of (i) the Principal Amount with respect to a Class
of Notes of a Series and (ii) unpaid interest thereon at the
Interest Rate for such Notes, the Servicer will make a withdrawal
or drawing or take other action permitted by any applicable
Enhancement, and shall pay all amounts thereby obtained to the
Applicable Indenture Trustee for deposit in the Note Payment
Account on such Maturity Date, and the amount so withdrawn shall
be distributed to the Holders of Notes of such Series in final
payment thereof; provided, that if the Servicer fails to make
such withdrawal or drawing or take such other action, then the
Collateral Agent may make such withdrawal or drawing.
(c) On or prior to the sale of Contracts in connection
with the payment of a Series of Notes pursuant to Subsection
13.2(b), the Servicer shall cause to be established and
maintained in the name of the Collateral Agent on behalf of the
Secured Parties, with a Qualified Institution designated by the
Servicer (which may include the Collateral Agent), a segregated
trust account within the corporate trust department of such
Qualified Institution (with respect to such Series, the
"Termination Account"), bearing a designation clearly indicating
that the funds deposited therein are held in trust for the
benefit of the Secured Parties. The Collateral Agent shall
possess all right, title and interest in all funds on deposit
from time to time in each Termination Account and in all proceeds
thereof. Pursuant to the authority granted to it pursuant to
subsection 3.1(b), the Servicer shall have the revocable power to
instruct the Collateral Agent to make withdrawals and payments
from the Termination Accounts for the purposes of carrying out
its duties hereunder and under any supplement hereto.
Section 13.3 Termination Transfer. Upon the
termination of the Trust pursuant to Section 13.1, the Issuer
Trustee, on behalf of the Trust, and the Collateral Agent, as
appropriate, shall return to the Seller or any permitted assignee
(without recourse, representation or warranty) all right, title
and interest of the Trust in, to and under the Trust Assets.
Each of the Collateral Agent and the Issuer Trustee shall execute
and deliver such instruments of transfer, in each case prepared
by the Seller and without recourse, representation or warranty,
as shall be reasonably requested by the Seller or its assignee,
to vest in such Person all right, title and interest that the
Trust had in such assets. In connection with any such request,
the Seller shall deliver to the Collateral Agent and the Issuer
Trustee an Officers' Certificate, upon which each of the
Collateral Agent and the Issuer Trustee may conclusively rely,
certifying that such transfer is authorized or permitted by this
Agreement, and that all conditions precedent to such transfer
have been satisfied.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 14.1 Amendment. (a) This Agreement
(including any Supplement) may be amended from time to time by
the Servicer, the Seller, the Issuer Trustee and the Collateral
Agent, without the consent of any of the Noteholders, (i) to cure
any ambiguity, to revise any exhibits or Schedules, to correct or
supplement any provisions herein or thereon or (ii) to add any
other provisions with respect to matters or questions raised
under this Agreement which shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the
Issuer Trustee, the Collateral Agent and the Indenture Trustee,
adversely affect in any material respect the interests of any of
the Noteholders.
(b) This Agreement and any Supplement may also be
amended from time to time by the Servicer, the Seller, the Issuer
Trustee, the Collateral Agent, with the consent of each Indenture
Trustee, Class B Noteholders representing more than 66-2/3% of
the Principal Amount of each and every Series of Class B Notes
and Class C Noteholders representing more than 66-2/3% of the
Principal Amount of each and every Series of Class C Notes, for
the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders of any
Series then issued and outstanding; provided, however, that no
such amendment under this subsection shall
(i) reduce in any manner the amount of, or delay the timing
of, distributions which are required to be made on any Note
of a Series without, in addition to each Indenture Trustee,
the consent of each Noteholder, as applicable, affected
thereby;
(ii) change the definition of (or that of any definition
included within the definition of) or the manner of
calculating the "Applicable Class Percentage", the
"Controlling Party", the "Class A Principal Payment Amount",
the "Class B Principal Payment Amount", the "Class C
Principal Payment Amount", the "Discounted Contract
Balance", the "Principal Amount", the "Series Available
Amount" or the "Series Allocation Percentage" without, in
addition to each Indenture Trustee, the consent of each
Noteholder; or
(iii) modify any of the provisions of this Section 14.1
without, in addition to each Indenture Trustee, the consent
of each Noteholder; or
(iv) modify, amend or supplement the provisions of Article
IV or Section 6.1 hereof without the consent of each
Indenture Trustee and each Noteholder; or
(v) make any Note payable in money other than Dollars
without the consent of each Indenture Trustee and each
Noteholder;
provided, however, that no such consent shall be required of (x)
any Indenture Trustee to the extent that all Class A Notes under
such Indenture and all other amounts owing to the Class A
Noteholders thereunder have been irrevocably paid in full or (y)
any Subordinated Noteholder in respect of any Subordinated Note
held by such Subordinated Noteholder to the extent that such
Subordinated Note and all other amounts owing to such
Subordinated Noteholder under the applicable Note Agreement have
been irrevocably paid in full.
(c) It shall not be necessary to obtain the consent of
Noteholders under this Section 14.1 to approve the particular
form of any proposed amendment, but it shall be sufficient if
such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization of
the execution thereof by Noteholders shall be subject to such
reasonable requirements as the Issuer Trustee may prescribe.
(d) Any Supplement executed and delivered pursuant to
Section 6.2 and any amendments regarding the addition to or
removal of Contracts from the Trust as provided in Sections 2.5
or 6.2, executed in accordance with the provisions hereof, shall
not be considered amendments to this Agreement for the purpose of
Section 14.1.
(e) In connection with any amendment, the Issuer
Trustee may request, in addition to the Opinion of Counsel
required by subsection 14.2(d), an Opinion of Counsel from Seller
or the Servicer to the effect that the amendment is authorized or
permitted by, and complies with all requirements of, this
Agreement. For the purposes of this Section 14.2(e), such
Opinion of Counsel may not be provided by internal counsel. The
Issuer Trustee may, but shall not be obligated to, enter into any
amendment which affects the Issuer Trustee's rights, duties or
immunities under this Agreement or otherwise.
(f) In connection with any amendment, the Indenture
Trustee may request an Officers' Certificate (and, to the extent
required in the Applicable Indenture, an Opinion of Counsel,) to
the effect that such amendment shall not materially adversely
affect the interests of the Class A Noteholders and does not
require the consent of each Class A Noteholder pursuant to the
Applicable Indenture.
(g) If, in the opinion of the institution acting as
Issuer Trustee or the institution acting as the Collateral Agent,
any document required to be executed pursuant to the terms of
Section 14.1 affects any right, duty, immunity or indemnity with
respect to it under this Agreement, the Collateral Agent and the
Issuer Trustee, as the case may be, may in their discretion
decline to execute such document.
(h) Every supplemental agreement executed pursuant to
this Article shall conform to the requirements of the Trust
Indenture Act as then in effect.
(i) Upon the execution of any agreement supplemental
hereto pursuant to the provisions hereof, this Agreement shall be
and be deemed to be modified and amended in accordance therewith
and the respective rights, limitations of rights, obligations,
duties and immunities under this Agreement of the parties hereto
and beneficiaries hereof shall therefore be determined, exercised
and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of
any such supplemental agreement shall be and be deemed to be part
of the terms and conditions of this Agreement for any and all
purposes.
Section 14.2 Protection of Right, Title and Interest
to Trust. (a) The Servicer shall cause this Agreement, all
amendments hereto and/or all financing statements and
continuation statements and any other necessary documents
covering the Holders' and the Collateral Agent's right, title and
interest to the Trust Assets to be promptly recorded, registered
and filed, and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be required
by law fully to preserve and protect the right, title and
interest of the Collateral Agent hereunder to all property
comprising the Trust Assets. The Servicer shall deliver to the
Collateral Agent file-stamped copies of, or filing receipts for,
any document recorded, registered or filed as provided above, as
soon as available following such recording, registration or
filing. The Seller shall cooperate fully with the Servicer in
connection with the obligations set forth above and will execute
any and all documents reasonably required to fulfill the intent
of this subsection 14.2(a).
(b) Within 30 days after the Seller makes any change
in its name, identity or corporate structure which would make any
financing statement or continuation statement filed in accordance
with paragraph (a) above seriously misleading within the meaning
of Section 9-402 of the UCC as in effect in the state where such
financing statement or continuation statement was filed, the
Seller shall give the Issuer Trustee, the Collateral Agent and
the Rating Agencies notice of any such change and shall file such
financing statements or amendments as may be necessary to
continue the perfection of the Collateral Agent's security
interest in the Trust Assets and the proceeds thereof.
(c) The Servicer will give the Issuer Trustee and the
Collateral Agent prompt written notice of any relocation of any
office from which it services Contracts in the Contract Pool or
keeps the Contract Files or of its principal executive office and
whether, as a result of such relocation, the applicable
provisions of the UCC or any other applicable law governing the
perfection of interests in property would require the filing of
any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall file such
financing statements or amendments as may be necessary to
continue the perfection of the Collateral Agent's security
interest in the Contracts in the Contract Pool and the proceeds
thereof. The Servicer will at all times maintain each office
from which it services Contracts in the Contract Pool within the
United States of America.
(d) The Servicer will deliver to the Issuer Trustee:
(i) upon the execution and delivery of each amendment of Articles
I, II, III or IV other than amendments pursuant to subsection
14.1(a) an Opinion of Counsel in the form and substance
reasonably satisfactory to the Issuer Trustee; and (ii) on or
before April 15 of each year, beginning with April 15, 1996 an
Opinion of Counsel, dated as of a date during the preceding
90-day period, in the form and substance reasonably satisfactory
to the Issuer Trustee;
Section 14.3 Limitation on Control of Trust by
Holders. No Holder shall have any right to vote (except with
respect to the Noteholders as provided in Section 14.1) or in any
manner otherwise control the operation and management of the
Trust, or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the
Notes, be construed so as to constitute the Noteholders from time
to time as partners or members of an association; nor shall any
such Holder be under any liability to any third person by reason
of any action taken by the parties to this Agreement pursuant to
any provision hereof.
SECTION 14.4 GOVERNING LAW. THIS AGREEMENT SHALL IN
ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE
PROVISIONS THEREOF GOVERNING CONFLICTS OF LAW, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 14.5 Notices. All demands, notices and
communications hereunder shall be in writing (including by
facsimile) and shall be deemed to have been duly given if
personally delivered (including by overnight courier) at or
mailed by registered mail, return receipt requested, (a) in the
case of the Servicer, to Newcourt Credit Group Inc., BCE Place,
000 Xxx Xxxxxx, Xxxxx 0000, X.X. Xxx 000, Xxxxxxx, Xxxxxxx,
Xxxxxx M5J 2T3, Attn: Xxxxxx X. Xxxxxxxx, Treasurer, with a copy
to the Seller (b) in the case of Seller, to Newcourt Receivables
Corporation, 00 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxx,
Xxxxxxxxxx 00000, Attn: X. Xxxxxxxx Martitsch, with a copy to the
Servicer, (c) in the case of the Collateral Agent, to Fleet
National Bank, 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx
00000, Attn: Corporate Trust Administration, (d) in the case of
the Issuer Trustee, to Chemical Bank Delaware, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, 00000, Attn: Corporate Trustee
Administration Department, (e) in the case of the Credit Enhancer
for a particular Series the address, if any, specified in the
Supplement relating to such Series, (f) in the case of Moody's,
to Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attn: ABS Monitoring Department, 4th Floor, and
(g) in the case of Standard & Poor's, to Standard & Poor's
Ratings Group, 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Structured Finance Surveillance; or, as to each party, at such
other address as shall be designated by such party in a written
notice to each other party. Any notice required or permitted to
be mailed to a Holder shall be given by first class mail, postage
prepaid, (i) in the case of a Class A Noteholder, to the
Applicable Indenture Trustee for mailing to such Holder pursuant
to the terms of the Applicable Indenture and (ii) in the case of
a Subordinated Noteholder, at the address and in the manner
specified in the Note Agreement pursuant to which such Holder
purchased its Note. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Holder receives such
notice.
Section 14.6 Severability of Provisions. If any one
or more of the covenants, agreements, provisions or terms of this
Agreement shall for any reason whatsoever be held invalid, then
such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of
the Notes or rights of the Holders thereof or any Credit
Enhancer.
Section 14.7 Rule 144A Information. For so long as
any of the Notes of any Series or any Class are restricted
securities within the meaning of Rule 144(a)(3) under the
Securities Act of 1933, as amended, each of the Seller, the
Servicer, the Issuer Trustee, the Collateral Agent and any Credit
Enhancer agree to cooperate with each other to provide to any
Noteholders of such Series or Class and to any prospective
purchaser of Notes designated by such a Noteholder upon the
request of such Noteholder or prospective purchaser, any
information required to be provided to such holder or prospective
purchaser to satisfy the condition set forth in Rule 144A(d)(4)
under the Act.
Section 14.8 Notes Nonassessable and Fully Paid. It is
the intention of the parties to this Agreement that the Notes
shall not be liable for obligations of the Trust, that the
interests in the Trust Assets represented by the Notes shall be
nonassessable for any losses or expenses of the Trust or for any
reason whatsoever, and that Notes upon authentication thereof by
the Issuer Trustee pursuant to Sections 2.1 and 6.2 are and shall
be deemed fully paid.
Section 14.9 Further Assurances. Seller and the
Servicer agree to do and perform, from time to time, any and all
acts and to execute any and all further instruments required or
reasonably requested by the Issuer Trustee or the Collateral
Agent more fully to effect the purposes of this Agreement,
including, without limitation, the execution of any financing
statements or continuation statements relating to the Trust
Assets for filing under the provisions of the UCC of any
applicable jurisdiction.
Section 14.10 No Waiver; Cumulative Remedies. No
failure to exercise and no delay in exercising, on the part of
the Issuer Trustee, the Collateral Agent or the Noteholders, any
right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of
any rights, remedies, powers and privileges provided by law.
Section 14.11 Counterparts. This Agreement may be
executed in two or more counterparts (and by different parties on
separate counterparts), each of which shall be an original, but
all of which together shall constitute one and the same
instrument.
Section 14.12 Third-Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the
parties hereto, the Holders and, to the extent provided in any
Supplement, the Credit Enhancer named therein, and their
respective successors and permitted assigns. Except as otherwise
provided in this Agreement or any Supplement, no other Person
will have any right or obligation hereunder.
Section 14.13 Actions by Holders. (a) Wherever in
this Agreement a provision is made that an action may be taken or
a notice, demand or instruction given by Noteholders, such
action, notice or instruction may be taken or given by any
Noteholder, unless such provision requires a specific percentage
of Noteholders.
(b) Any request, demand, authorization, direction,
notice, consent, waiver or other act by a Holder shall bind such
Holder and every subsequent Holder of such Note, as the case may
be, issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done
or omitted to be done by the Issuer Trustee, the Collateral
Agent, the Seller or the Servicer in reliance thereon, whether or
not notation of such action is made upon such Note, as the case
may be.
(c) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this
Agreement or any Supplement to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and except as herein
otherwise expressly provided, such action shall become effective
when such instrument or instruments are delivered to the Issuer
Trustee and, when required, to the Collateral Agent, the Seller
or the Servicer. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any
purpose of this Agreement or any Supplement and conclusive in
favor of the Issuer Trustee, the Collateral Agent, the Seller and
the Servicer, if made in the manner provided in this Section.
(d) The fact and date of the execution by any Holder
of any such instrument or writing may be proved in any reasonable
manner which the Issuer Trustee deems sufficient.
Section 14.14 Merger and Integration. Except as
specifically stated otherwise herein, this Agreement sets forth
the entire understanding of the parties relating to the subject
matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided
herein.
Section 14.15 No Bankruptcy Petition. The Collateral
Agent, the Servicer, each Holder and the Issuer Trustee,
severally and not jointly, hereby covenants and agrees that,
prior to the date which is one (1) year and one (1) day after the
payment in full of all Notes, it will not institute against, or
join any other Person in instituting against, the Seller or the
Trust any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the
laws of the United States or any state of the United States.
Nothing in this Section 14.15 shall preclude, or be deemed to
estop, the Collateral Agent, the Servicer, any Holder or the
Issuer Trustee from taking (to the extent such action is
otherwise permitted to be taken by such Person hereunder) or
omitting to take any action prior to such date in (i) any case or
proceeding voluntarily filed or commenced by or on behalf of the
Seller or the Trust under or pursuant to any such law or (ii) any
involuntary case or proceeding pertaining to the Seller or the
Trust under or pursuant to any such law.
Section 14.16 Jurisdiction. The Servicer hereby
irrevocably and unconditionally:
(i) submits for itself and its property in any legal action
arising out of this Agreement or any related document to
which it is a party, or the conduct of any party with
respect thereto, or for recognition and enforcement of any
judgment in respect thereof, to the nonexclusive general
jurisdiction of the courts of the state of New York, the
courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives to the fullest extent
permitted by law any objection it may now or hereafter have
to the venue of any such action or proceeding in any such
court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the
same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by
registered, certified or any substantially similar form of
mail, postage prepaid, to the Servicer at its address set
forth herein or at such other address of which the parties
shall have been notified pursuant hereto; and
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by
law or shall limit the right to xxx in any jurisdiction.
Section 14.17 Headings. The headings herein are for
purposes of reference only and shall not otherwise affect the
meaning or interpretation of any provision hereof.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed by their respective officers as of
the day and year first above written.
NEWCOURT RECEIVABLES CORPORATION
By:/s/ Xxxxxx X. Xxxxxxxx
---------------------------
Title:
NEWCOURT CREDIT GROUP INC.
By:/s/ Xxxxxx X. Xxxxxxxx
---------------------------
Title:
FLEET NATIONAL BANK, as Collateral
Agent
By:/s/ Xxxxx X. Xxxxxx
---------------------------
Title: Vice President
CHEMICAL BANK DELAWARE,
as Issuer Trustee
By:/s/ Xxxx X. Xxxxxx
---------------------------
Title: Senior Trust Officer
EXHIBIT A
[RESERVED]
EXHIBIT B
Form of Assignment of Additional Contracts
[RESERVED]
EXHIBIT C
Form of Opinion of Counsel
[RESERVED]
EXHIBIT D
[RESERVED]
EXHIBIT E
FORM OF MONTHLY NOTEHOLDER'S REPORT
Newcourt Receivables Asset Trust Master
Monthly Servicer Certificate Collect- Reserve Trust
- Accounts ion Account Distrib- Series Series
Account ution 1995-1 1996-1
Account
Beginning Account Balances
Collection Account
Collections from the Lockbox
Account
Add: Servicer Advances
Add: Liquidation Proceeds
from Servicer
Add: Earnings from Eligible
Investments
Less: Collections to
reimburse Servicer Advances
Reserve Account
Add: Investment Earnings on
Reserve Account
Available Amount
Payments on Payment Date
(A) Unreimbursed Servicer
Advances
(B) Servicing Fee
(C) Amount owed to Hedging
Counterparty
(D) Series Available Amount
to each Series of Notes
(1) Class A Interest
(2) Class B Interest
(3) Class A Principal
(4) Reserve Account
(5) Pay to Hedging
Counterparty
(6) Class B Principal
(7) Class C Interest
(8) Class C Principal
(9) Class A
Accelerated
Principal Payment
(10) Class B
Accelerated
Principal Payment
(11) Class C
Accelerated
Principal Payment
(12) Class C Additional
Interest Payment
Subtotal
Distributions to Noteholders
Ending Balance
Newcourt Receivables Asset Trust
Monthly Servicer Certificate
Minimum Subordination Amount
Aggregate Discounted
Contract Balance
Add: Available Amount
Add: Reserve Account
Less: Class A Principal
Balance
Subordination Amount
Minimum Required
Subordination Amount
Restricting Event
Calculations
(1) Event of Default
under the
Servicing
Agreement (Yes/No)
(a) Average
Discounted
Lease Balance
greater than
30 days
delinquent
Average
Aggregate
Discounted
Contract
Balance
Delinquency Ratio
Maximum
Delinquency Ratio
(b) Aggregate
ADCB
Defaulted
Contracts
Multiplier
Average Aggregate
Discounted Lease
Balance
Default Ratio
Maximum Default
Ratio
(c) Reserve plus
APB
Subordination
(d) Restricting
Event under
any Indenture
Newcourt
Receivables Asset
Trust
Monthly Servicer
Certificate
Portfolio
Performance Tests
1 2 3 4 5 6
months months months months months months
prior prior prior prior prior prior
Current (yes/no) (yes/no) (yes/no) (yes/no) (yes/no) (yes/no)
Event of
Default:
Monthly
Delinquencies Delinquency
Delinquencies ADCB
2 months prior
1 month prior
Current
Delinquency Ratio:
Maximum Delinquency
Ratio:
Monthly
Defaults Defaults ADCB Defaults
5 months
prior
4 months
prior
3 months
prior
2 months
prior
1 month
prior
Current
Default Ratio:
Maximum Default
Ratio:
Enhancement Floor
Amounts on deposit in the
Reserve Account
Aggregate Principal Amount of
Class B Notes
Newcourt Receivables
Asset Trust
Monthly Servicer
Certificate -
Certificate Schedules
CERTIFICATE FACTORS
Series 1995-1
Class A
Current A Balance
Initial A Balance
Certificate Factor:
Class B
Current B Balance
Initial B Balance
Certificate Factor:
Class C
Current C Balance
Initial C Balance
Certificate Factor:
DELINQUENCIES Monthly
Delinquencies ADCB Delinquencies
Current
30 Days Past Due
60 Days Past Due
90 Days Past Due
120 Days Past Due
150 Days Past Due
Delinquent (180
+ Days Past Due)
(Contract Pool Performance
Test (Per Prospectus P&S
Agreement)
Newcourt Receivables Asset Trust
Monthly Servicer Certificate -
Schedules
Series Series
1995-1 1996-1
Class A Interest Schedule
Opening Class A Principal % %
Balance % %
Class A Interest Rate
30/360*Class A Interest
Rate
Current Class A Interest
Distribution
Prior Class A Interest
Arrearage
Class A Interest Due
Series Series
1995-1 1996-1
Class A Principal Schedule
Opening Class A Principal
Balance
Prior Months Series ADCB ______ _________
Current Months Series _____ _
ADCB
Difference % %
Class A
Share
Scheduled
Principal
Due
Prepayments
Defaults
Class A
Total Due
Prior Class A Arrearage
Class A Principal Due
Class A Principal
Distribution
Current Class A Arrearage
Interim Class A Principal
Balance after Current
Distribution
Accelerated Class A
Distribution Amount
Ending Class A Principal
Balance after Current
Distribution
Series Series
1995-1 1996-1
Class B Interest Schedule
Opening Class B Principal % %
Balance % %
Class B Interest Rate
30/360*Class B Interest
Rate
Current Class B Interest
Distribution
Prior Class B Interest
Arrearage
Class B Interest Due
Class B Principal Schedule
Opening Class B Principal
Balance ______ _________
Prior Months Series ADCB ____ ___
Current Months Series
ADCB
Difference % %
Class B
Share
Scheduled
Principal
Due
Prepayments
Defaults
Class B
Total Due
Prior Class B Arrearage
Class B Principal Due
Class B Principal
Distribution
Current Class B Arrearage
Interim Class B Principal
Balance after Current
Distribution
Accelerated Class B
Distribution Amount
Ending Class B Principal
Balance after Current
Distribution
Class C Interest Schedule
Opening Class C Principal % %
Balance % %
Class C Interest Rate
30/360*Class C Interest
Rate
Current Class C Interest
Distribution
Prior Class C Interest
Arrearage
Class C Interest Due
Class C Principal Schedule
Opening Class C Principal
Balance
Prior Months Series ADCB ______ _________
Current Months Series ______ ______
ADCB
Difference
Class C % %
Share
Schedule
Principal
Due
Prior Class C Arrearage
Class C Principal Due
Class C Principal
Distribution
Current Class C Arrearage
Interim Class C Principal
Balance after Current
Distribution
Accelerated Class C
Distribution Amount
Ending Class C Principal
Balance after Current
Distribution
Servicing Fee Schedule
Contract Pool ADCB
Servicing Rate
Monthly Servicing Rate
Prior Servicing Fee
Arrearage
Current Servicer Fee
Servicer Fee Due
Current Servicing Fee
Arrearage
Reserve Account Schedule
Series 1995-1 Series 1996-1
Required Balance
Lessor of Series 1995-1 Series 1996-1
(i) $2,000,000 times % %
Series
Allocation Percentage
or
(ii) Greater of
(x) $500,000 % %
times
Series
Allocation
Percentage % %
(y) 2% of Class
A Notes times
Series
Allocation Percentage
EXHIBIT F
[RESERVED]
EXHIBIT G
REQUEST FOR INSTRUMENT RELEASE
[DATE]
To: Collateral Agent
Re: Pooling, Collateral Agency and Servicing
Agreement, dated as of April 15, 1996, by and
among Newcourt Receivables Corporation, as Seller,
Newcourt Credit Group Inc,, as Servicer, Fleet
National Bank, as Collateral Agent and Chemical
Bank Delaware, as Issuer Trustee.
In connection with the administration of the
Instruments held by you as Collateral Agent under the above-
referenced Agreement, [___________], on behalf of [_______
_______], requests the releasee, and acknowledges receipt, of the
Instrument described below, for the reason indicated:
A. Contract Number:
B. Reason for Requesting Release (check one)
1. Contract Paid in Full.
2. Contract Repurchased Pursuant o the related
Purchase Agreement and/or the Pooling Agreement.
Written evidence to the Collateral Agent of
receipt of payment from is required prior
to release.
NEWCOURT CREDIT GROUP INC.,
as Servicer
By_________________________
Name:
Title:
Date:
NEWCOURT RECEIVABLES CORPORATION,
as Seller,
NEWCOURT CREDIT GROUP INC.,
as Servicer,
FLEET NATIONAL BANK,
as Collateral Agent,
and
CHEMICAL BANK DELAWARE,
as Issuer Trustee
on behalf of the Holders
of the NEWCOURT RECEIVABLES ASSET TRUST
POOLING, COLLATERAL AGENCY AND SERVICING AGREEMENT
Dated as of April 15, 1996
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS . . . . . . . . . . . . 1
Section 1.1 Definitions . . . . . . . . . . . . . . . . 1
Section 1.2 Other Definitional Provisions . . . . . . 34
SECTION 1.3 Compliance Certificates and Opinions . . 35
SECTION 1.4 Form of Documents Delivered to
Collateral Agent or Issuer Trustee . . 36
SECTION 1.5 Acts of Indenture Trustees . . . . . . . 37
SECTION 1.6 Acts of Noteholders . . . . . . . . . . . 37
SECTION 1.7 Designated Representatives . . . . . . . 38
SECTION 1.8 Controlling Party . . . . . . . . . . . . 39
SECTION 1.9 Business Day Certificate . . . . . . . . 39
ARTICLE II
CREATION OF TRUST; TRANSFER OF TRUST ASSETS . . . 39
Section 2.1 Creation of Trust; Transfer of Trust
Assets . . . . . . . . . . . . . . . . 39
Section 2.2 Acceptance by Issuer Trustee . . . . . . 42
Section 2.3 Grant of Security Interest . . . . . . . 43
Section 2.4 Representations and Warranties of Seller
Relating to Seller . . . . . . . . . . 46
Section 2.5 Representations and Warranties of Seller
Relating to the Agreement and the
Contracts . . . . . . . . . . . . . . . 48
Section 2.6 Covenants of Seller . . . . . . . . . . . 53
Section 2.7 Release of Lien on Equipment . . . . . . 57
Section 2.8 Hedging of Contracts After the Related
Addition Date . . . . . . . . . . . . . 57
ARTICLE III
ADMINISTRATION AND SERVICING OF CONTRACTS . . . . 58
Section 3.1 Appointment and Acceptance; Duties . . . 58
Section 3.2 Collection of Payments . . . . . . . . . 61
Section 3.3 Servicer Advances . . . . . . . . . . . . 63
Section 3.4 Realization Upon Defaulted Contract . . . 63
Section 3.5 Maintenance of Insurance Policies . . . . 63
Section 3.6 Representations and Warranties of
Servicer . . . . . . . . . . . . . . . 64
Section 3.7 Covenants of Servicer . . . . . . . . . . 66
Section 3.8 Servicing Compensation . . . . . . . . . 67
Section 3.9 Payment of Certain Expenses by Servicer . 67
Section 3.10 Monthly Report; Annual Report . . . . . . 68
Section 3.11 Annual Statement as to Compliance . . . . 68
Section 3.12 Annual Independent Public Accountant's
Servicing Reports . . . . . . . . . . . 68
Section 3.13 Tax Treatment . . . . . . . . . . . . . . 69
Section 3.14 Adjustments . . . . . . . . . . . . . . . 69
ARTICLE IV
RIGHTS OF NOTEHOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS . . . . . . 70
Section 4.1 Rights of Holders . . . . . . . . . . . . 70
Section 4.2 Establishment of Accounts . . . . . . . . 70
Section 4.3 Collections and Allocations . . . . . . . 72
Section 4.4 Interest Rate Xxxxxx . . . . . . . . . . 79
Section 4.5 Reliance by Collateral Agent Upon
Information Provided . . . . . . . . . 81
[THE REMAINDER OF ARTICLE IV IS RESERVED AND
SHALL BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES] . . . . . . . 82
ARTICLE V
[ARTICLE V IS RESERVED AND SHALL
BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO ANY SERIES] . . . . . . . 82
ARTICLE VI
THE PARTNERSHIP NOTES; NEW ISSUANCES . . . . . 82
Section 6.1 Note Transfer Restrictions . . . . . . . 82
Section 6.2 New Issuances; Addition of Contracts . . 84
ARTICLE VII
OTHER MATTERS RELATING TO SELLER . . . . . . 88
Section 7.1 Liability of Seller . . . . . . . . . . . 88
Section 7.2 Merger or Consolidation of, or
Assumption of the Obligations of,
Seller, etc. . . . . . . . . . . . . . 88
Section 7.3 Limitation on Liability of Seller . . . . 89
Section 7.4 Liabilities . . . . . . . . . . . . . . . 90
ARTICLE VIII
OTHER MATTERS RELATING TO THE SERVICER . . . . 90
Section 8.1 Liability of the Servicer . . . . . . . . 90
Section 8.2 Merger or Consolidation of, or
Assumption of the Obligations of, the
Servicer . . . . . . . . . . . . . . . 90
Section 8.3 Limitation on Liability of the Servicer
and Others . . . . . . . . . . . . . . 91
Section 8.4 Indemnification of the Seller, the
Trust, the Issuer Trustee, the
Collateral Agent and each Indenture
Trustee . . . . . . . . . . . . . . . . 92
Section 8.5 The Servicer Not to Resign . . . . . . . 93
Section 8.6 Access to Certain Documentation and
Information Regarding the Contracts . . 93
Section 8.7 Delegation of Duties . . . . . . . . . . 93
Section 8.8 Examination of Records . . . . . . . . . 93
ARTICLE IX
EVENTS OF DEFAULT . . . . . . . . . . 93
Section 9.1 Events of Default . . . . . . . . . . . . 93
Section 9.2 Additional Rights Upon the Occurrence of
Certain Events . . . . . . . . . . . . 95
Section 9.3 Limitation on Suits . . . . . . . . . . . 96
ARTICLE X
SERVICER DEFAULTS . . . . . . . . . . 97
Section 10.1 Servicer Defaults . . . . . . . . . . . . 97
Section 10.2 Collateral Agent to Act; Appointment of
Successor . . . . . . . . . . . . . . . 99
Section 10.3 Notification . . . . . . . . . . . . . . 101
Section 10.4 Waiver of Past Defaults . . . . . . . . . 101
ARTICLE XI
THE ISSUER TRUSTEE . . . . . . . . . 101
Section 11.1 Duties of Issuer Trustee . . . . . . . . 101
Section 11.2 Certain Matters Affecting the Issuer
Trustee . . . . . . . . . . . . . . . . 103
Section 11.3 Issuer Trustee Not Liable for Recitals
in Notes . . . . . . . . . . . . . . . 105
Section 11.4 Issuer Trustee May Own Notes . . . . . . 105
Section 11.5 Servicer to Pay Issuer Trustee's Fees
and Expenses . . . . . . . . . . . . . 105
Section 11.6 Eligibility Requirements for Issuer
Trustee . . . . . . . . . . . . . . . . 106
Section 11.7 Resignation or Removal of Issuer
Trustee . . . . . . . . . . . . . . . . 106
Section 11.8 Successor Issuer Trustee . . . . . . . . 107
Section 11.9 Merger or Consolidation of Issuer
Trustee . . . . . . . . . . . . . . . . 107
Section 11.10 Appointment of Co-Issuer Trustee or
Separate Issuer Trustee . . . . . . . . 108
Section 11.11 Tax Returns . . . . . . . . . . . . . . . 109
Section 11.12 Representations and Warranties of Issuer
Trustee . . . . . . . . . . . . . . . . 110
Section 11.13 Maintenance of Office or Agency . . . . . 110
Section 11.14 Requests for Agreement . . . . . . . . . 110
Section 11.15 Not Acting in Individual Capacity . . . . 110
ARTICLE XII
THE COLLATERAL AGENT . . . . . . . . . 111
Section 12.1 Duties of Collateral Agent . . . . . . . 111
Section 12.2 Certain Matters Affecting the Collateral
Agent . . . . . . . . . . . . . . . . . 114
Section 12.3 Collateral Agent May Own Notes . . . . . 116
Section 12.4 Servicer to Pay Collateral Agent's Fees
and Expenses . . . . . . . . . . . . . 116
Section 12.5 Eligibility Requirements for Collateral
Agent . . . . . . . . . . . . . . . . . 116
Section 12.6 Resignation or Removal of Collateral
Agent . . . . . . . . . . . . . . . . . 117
Section 12.7 Successor Collateral Agent . . . . . . . 117
Section 12.8 Merger or Consolidation of Collateral
Agent . . . . . . . . . . . . . . . . . 118
Section 12.9 Appointment of Co-Collateral Agent or
Separate Collateral Agent . . . . . . . 118
Section 12.10 Collateral Agent May Enforce Claims
Without Possession of Notes . . . . . . 120
Section 12.11 Suits for Enforcement . . . . . . . . . . 120
Section 12.12 Rights of Controlling Party to Direct
Collateral Agent . . . . . . . . . . . 120
Section 12.13 Representations and Warranties of
Collateral Agent . . . . . . . . . . . 121
Section 12.14 Collateral Agent Not Liable for Recitals
in Notes . . . . . . . . . . . . . . . 121
ARTICLE XIII
TERMINATION . . . . . . . . . . . 122
Section 13.1 Termination of Trust . . . . . . . . . . 122
Section 13.2 Optional Purchase of Notes and Final
Trust Termination Date . . . . . . . . 123
Section 13.3 Termination Transfer . . . . . . . . . . 125
ARTICLE XIV
MISCELLANEOUS PROVISIONS . . . . . . . . 126
Section 14.1 Amendment . . . . . . . . . . . . . . . . 126
Section 14.2 Protection of Right, Title and Interest
to Trust . . . . . . . . . . . . . . . 128
Section 14.3 Limitation on Control of Trust by
Holders . . . . . . . . . . . . . . . . 129
SECTION 14.4 GOVERNING LAW . . . . . . . . . . . . . . 129
Section 14.5 Notices . . . . . . . . . . . . . . . . . 130
Section 14.6 Severability of Provisions . . . . . . . 130
Section 14.7 Rule 144A Information . . . . . . . . . . 130
Section 14.8 Notes Nonassessable and Fully Paid . . . 131
Section 14.9 Further Assurances . . . . . . . . . . . 131
Section 14.10 No Waiver; Cumulative Remedies . . . . . 131
Section 14.11 Counterparts . . . . . . . . . . . . . . 131
Section 14.12 Third-Party Beneficiaries . . . . . . . . 131
Section 14.13 Actions by Holders . . . . . . . . . . . 131
Section 14.14 Merger and Integration . . . . . . . . . 132
Section 14.15 No Bankruptcy Petition . . . . . . . . . 132
Section 14.16 Jurisdiction . . . . . . . . . . . . . . 133
Section 14.17 Headings . . . . . . . . . . . . . . . . 133
EXHIBITS
Exhibit A: RESERVED
Exhibit B: Form of Assignment of Additional Contracts
Exhibit C: Form of Opinion of Counsel with Respect to
Additional Contracts
Exhibit D: Reserved
Exhibit E: Form of Monthly Servicer's Certificate
Exhibit F: Documents and Records
Exhibit G: Form of Request for Instrument Release
SCHEDULES
Schedule 1 List of Contracts
Schedule 2 List of Lockboxes
Schedule 3 Identification of Accounts
Schedule 4 List of Instruments
