TRUST AND SECURITY
AGREEMENT
among
GF FUNDING CORP. III
(the "Transferor")
GRANITE FINANCIAL, INC.
(the "Servicer")
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
(the "Trustee")
and
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
(the "Back-up Servicer")
Dated as of March 1, 1997
TABLE OF CONTENTS
Page
ARTICLE ONE 2
DEFINITIONS 2
Section 1.01 Definitions 2
ARTICLE TWO 17
THE CERTIFICATES 17
Section 2.01 Form Generally 17
Section 2.02 Classes of Certificates; Denomination 17
Section 2.03 Formation, Execution, Authentication,
Delivery and Dating 18
Section 2.04 Temporary Certificates 18
Section 2.05 Registration, Registration of Transfer
and Exchange 19
Section 2.06 Limitation on Transfer and Exchange 19
Section 2.07 Mutilated, Destroyed, Lost or Stolen
Certificate 20
Section 2.08 Payment of Principal and Interest;
Principal and Interest Rights Preserved 21
Section 2.09 Persons Deemed Owner 22
Section 2.10 Cancellation 22
Section 2.11 Tax Treatment 23
ARTICLE THREE 24
FUNDINGS 24
Section 3.01 Fundings 24
Section 3.02 Determination of Funding Amounts;
Release from the Prefunding Account. 24
Section 3.03 Procedure for Fundings 24
Section 3.04 Verification of Funding Report 25
Section 3.05 Appointment of Certificate Funding
Administrator 27
ARTICLE FOUR 28
ISSUANCE OF CERTIFICATES; SUBSTITUTIONS OF COLLATERAL 28
Section 4.01 Conditions to Issuance of Certificates on
Closing Date 28
Section 4.02 Perfection of Transfer 29
Section 4.03 Substitution, Removal and Purchase of
Lease Assets 29
Section 4.04 Releases 31
Section 4.05 Trust Estate 32
Section 4.06 Notice of Release 32
Section 4.07 Nature of Transfer 32
Section 4.08 Issuances of Class B Certificates 32
ARTICLE FIVE 34
SATISFACTION AND DISCHARGE 34
Section 5.01 Satisfaction and Discharge
of Agreement 34
Section 5.02 Application of Trust Money 34
ARTICLE SIX 35
DEFAULTS AND REMEDIES 35
Section 6.01 Events of Default 35
Section 6.02 Acceleration of Maturity; Rescission
and Annulment 35
Section 6.03 Collection of Indebtedness and Suits for
Enforcement by Trustee 36
Section 6.04 Remedies 37
Section 6.05 Optional Preservation of Trust Estate 37
Section 6.06 Trustee May File Proofs of Claim 38
Section 6.07 Trustee May Enforce Claims Without
Possession of Certificates 38
Section 6.08 Application of Money Collected 39
Section 6.09 Limitation on Suits 40
Section 6.10 Unconditional Right of Certificateholders
to Receive Principal and Interest 40
Section 6.11 Restoration of Rights and Remedies 41
Section 6.12 Rights and Remedies Cumulative 41
Section 6.13 Delay or Omission; Not Waiver 41
Section 6.14 Control by MBIA or Certificateholders 41
Section 6.15 Waiver of Certain Events by MBIA or
Certificateholders 42
Section 6.16 Undertaking for Costs 42
Section 6.17 Waiver of Stay or Extension Laws 42
Section 6.18 Sale of Trust Estate 42
Section 6.19 Action on Certificates 43
ARTICLE SEVEN 44
THE TRUSTEE 44
Section 7.01 Certain Duties and Responsibilities 44
Section 7.02 Notice of Default and Other Events 45
Section 7.03 Certain Rights of Trustee 45
Section 7.04 Not Responsible for Recitals or Issuance
of Certificates 46
Section 7.05 May Hold Certificates 47
Section 7.06 Money Held in Trust 47
Section 7.07 Compensation and Reimbursement 47
Section 7.08 Corporate Trustee Required; Eligibility 48
Section 7.09 Resignation and Removal; Appointment of
Successor 48
Section 7.10 Acceptance of Appointment by Successor 49
Section 7.11 Merger, Conversion, Consolidation or
Succession to Business of Trustee 49
Section 7.12 Co-Trustees and Separate Trustees 49
Section 7.13 Rights with Respect to the Servicer 51
Section 7.14 Appointment of Authenticating Agent 51
Section 7.15 Trustee to Hold Lease Contracts 52
Section 7.16 Money for Certificate Payments to
Be Held in Trust 52
ARTICLE EIGHT 54
THE CERTIFICATE INSURANCE POLICY 54
Section 8.01 Payments under the Certificate Insurance
Policy 54
ARTICLE NINE 55
AMENDMENTS 55
Section 9.01 Amendments without Consent of
Certificateholders 55
Section 9.02 Amendments and Modifications to Agreement
with Consent of Certificateholders 56
Section 9.03 Execution of Amendments 57
Section 9.04 Effect of Amendments 57
Section 9.05 Reference in Certificates to Amendments 57
ARTICLE TEN 58
REDEMPTION OF CERTIFICATES 58
Section 10.01 Redemption at the Option of the Transferor;
Election to Redeem 58
Section 10.02 Notice to Trustee; Deposit of Redemption
Price 58
Section 10.03 Notice of Redemption by the Transferor 58
Section 10.04 Certificates Payable on Redemption Date 59
Section 10.05 Release of Lease Contracts 59
ARTICLE ELEVEN 60
REPRESENTATIONS, WARRANTIES AND COVENANTS 60
Section 11.01 Representations and Warranties 60
Section 11.02 Covenants 61
Section 11.03 Other Matters as to the Transferor 66
ARTICLE TWELVE 67
ACCOUNTS AND ACCOUNTINGS 67
Section 12.01 Collection of Money 67
Section 12.02 Collection Account; Redemption Account 67
Section 12.03 Cash Collateral Account 70
Section 12.04 Prefunding Account; Capitalized Interest
Account. 71
Section 12.05 Reports by Trustee to MBIA and
Certificateholders 72
ARTICLE THIRTEEN 74
PROVISIONS OF GENERAL APPLICATION 74
Section 13.01 General Provisions 74
Section 13.02 Acts of Certificateholders 74
Section 13.03 Notices, etc., to Trustee, MBIA,
Transferor and Servicer 74
Section 13.04 Notices to Certificateholders; Waiver 75
Section 13.05 Effect of Headings and Table of Contents 75
Section 13.06 Successors and Assigns 75
Section 13.07 Separability 75
Section 13.08 Benefits of Agreement 75
Section 13.09 Legal Holidays 76
Section 13.10 Governing Law 76
Section 13.11 Counterparts 76
Section 13.12 Corporate Obligation 76
Section 13.13 Compliance Certificates and Opinions 76
Section 13.14 MBIA Default or Termination 77
EXHIBITS AND SCHEDULES
Schedule I Initial Lease Schedule
Schedule II Terms Schedule
Exhibit A Form of Class A Certificate
Exhibit B Form of Class B Certificate
Exhibit C Form of Transferor Certificate
Exhibit D Form of Investment Letter
Exhibit E Form of Funding Report
Exhibit F Form of GF Certificate
Exhibit G Form of Class B Supplement
This TRUST AND SECURITY AGREEMENT (this "Agreement"), dated
as of March 1, 1997, is by and among GF Funding Corp. III
(the "Transferor"), Granite Financial, Inc., as servicer
(the "Servicer"), Norwest Bank Minnesota, National
Association, a national banking association, as back-up
servicer (the "Back-up Servicer"), and Norwest Bank
Minnesota, National Association, a national banking
association, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Transferor has duly authorized the execution
and
delivery of this Agreement to provide for the issuance of
the Certificates issuable as provided in this Agreement.
All
covenants and agreements made by the Transferor, the
Servicer, the Trustee and the Back-up Servicer herein are for
the benefit and security of the Holders of the Certificates
and MBIA. The
Transferor, the Servicer, the Trustee and the Back-up
Servicer are entering into this Agreement, and the Trustee is
accepting the trust created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged.
All things necessary to make this Agreement a
valid
agreement of the Transferor, the Servicer, the Trustee and
the Back-up Servicer in accordance with its terms have been
done.
CONVEYANCE CLAUSE
The Transferor does hereby absolutely transfer, assign,
set over, and otherwise convey to the Trustee, for the
ratable benefit of the Holders of the Certificates and MBIA,
all of the Transferor's rights, title and interest in and to
the following and any and all benefits accruing to the
Transferor from (but none of the obligations under): (a)
the Lease Receivables and Lease Contracts and all payments
received on or with respect to the Lease Contracts and Lease
Receivables and due after the CutOff Date, with respect to
those Lease Contracts listed on the Initial Lease Schedule,
or the applicable Acquisition Dates, with respect to those
Lease Contracts acquired on such Acquisition Dates; (b) the
Transferor's rights and interests in the Equipment and any
security interest in the Equipment not owned by the
Transferor; (c) any rights of the Transferor under each
Insurance Policy related to the Lease Contracts or the
Equipment and Insurance Proceeds; (d) the Lease Acquisition
Agreement, the Servicing Agreement, the Broker Assignment
Agreements and any other Transaction Documents to which the
Transferor is a party; (e) all amounts from time to time on
deposit in the Collection Account, the Cash Collateral
Account, the Lockbox Account, the Capitalized Interest
Account, the Prefunding Account,
the
Redemption Account and the ACH Account (including any
Eligible Investments and other property in such accounts); (f)
the Lease Contract Files; (g) the Certificate Insurance
Policy, except that the Holders of the Class B Certificates
and the Transferor
Certificate shall have no right, title or interest in or to
the Certificate Insurance Policy; and (h) proceeds of the
foregoing (including, but not by way of limitation, all
cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to
payment of any and every kind, and other forms of obligations
and receivables which at any time constitute all or part or
are included in the proceeds of any of the foregoing), in
each case whether now owned or hereafter acquired, except
that the Holders of the Class B Certificates and the Transferor
Certificate shall have no right, title or interest in proceeds
of the Certificate Insurance Policy (all of the foregoing
being hereinafter referred to as the "Trust Estate"). The
foregoing transfer, assignment, set over and conveyance does
not constitute and is not intended to result in a creation or
an assumption by the Trustee, any Certificateholder or MBIA of
any obligation of the Transferor, the Company, the Servicer
or any other Person in connection with the Trust Estate or
under any agreement or instrument relating thereto. The
trust created by the foregoing assignment shall be known
as the "GF Funding Equipment Lease Trust 1997-1."
The Trustee acknowledges its acceptance on behalf of
the Certificateholders and MBIA of all right, title and
interest previously held by the Transferor in and to the Trust
Estate, and declares that it shall maintain such right, title
and interest in accordance with the provisions hereof and
agrees to perform the duties herein required to the best of
its ability to the end that the interests of the
Certificateholders and MBIA may be adequately and
effectively protected.
ARTICLE ONE
DEFINITIONS
Section 1.01 Definitions.
Except as otherwise expressly provided herein, or unless
the context otherwise requires, the following terms have
the
respective meanings set forth below for all purposes of
this Agreement, and the definitions of such terms are
equally applicable both to the singular and plural forms of
such terms. Capitalized terms used herein but not otherwise
defined shall have the respective meanings assigned to
such terms in the Servicing Agreement or the Lease
Acquisition Agreement.
"Accrual Period": The period beginning on the twentieth
day of each month (or, in the case of the Accrual Period
applicable to the Initial Payment Date, beginning on the
Closing Date) and ending on the nineteenth day of the
immediately following month.
"ACH": The National Automated Clearinghouse System.
"ACH Account": The meaning specified in Section
12.02(f) hereof.
"ACH Bank": The bank, if any, specified in the
Servicing Agreement so long as such bank meets the
requirements of a Trustee as set forth in Section 7.08
hereof.
"Acquisition Date": Any Funding Date or any date
of substitution of a Substitute Lease Contract, as applicable.
"Act": With respect to any Certificateholder, the
meaning specified in Section 13.02.
"Additional Lease Contract": Each Lease Contract
acquired by the Transferor on an Acquisition Date, including
pursuant to a Funding.
"Additional Principal Amount": The meaning specified
in Section 12.02(d)(x) hereof.
"Additional Servicer Fee": The amount, if any, of the
fee payable in accordance with Section 6.02 of the
Servicing Agreement to a successor Servicer appointed pursuant
to Section 6.02 of the Servicing Agreement that is in excess
of the Servicer Fee.
"Affiliate": With respect to any specified Person,
any other Person controlling or controlled by or under common
control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified
Person, means the power to direct the management and policies
of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and
the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Aggregate IPB": The aggregate of the Implicit
Principal Balance of all Lease Contracts.
"Aggregate Initial IPB": The Aggregate IPB as of the
CutOff Date, which is $17,785,141.60, plus the sum of the
IPB of each Funded Lease Contract, as of the respective
Funding Date, of the Funded Lease Contracts.
"Agreement": This Agreement, in the form when
originally executed and, if from time to time further
supplemented or amended by one or more amendments hereto
pursuant to the applicable provisions hereof, as so
supplemented or amended. All references in this Agreement
designated "Articles," "Sections," "Subsections" and other
subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this Agreement as
originally executed, or if amended or supplemented, as so
amended and supplemented. The words "herein," "hereof,"
"hereunder" and other words of similar import when not related
to a specific subdivision of this Agreement, refer to this
Agreement as a whole and not to any particular Article,
Section, Subsection or other subdivision of this Agreement.
"Amended Lease Schedule": The list of Lease
Contracts amending the Lease Schedule pursuant to any
substitution, repurchase, modification or Funding of Lease
Contracts in accordance with the terms hereof and the
Lease Acquisition Agreement, and accompanied by a Company
Certificate or a GF Certificate, as applicable.
"Amortization Period": The period commencing on the
first day after the Funding Termination Date and ending on
the Final Payment Date.
"Annualized Gross Default Rate": For any Monthly
Period, the sum of the Implicit Principal Balance as of the
Calculation Date occurring in such Monthly Period of all Lease
Contracts that either (a) have become delinquent for a period
of 91 or more days during such Monthly Period (including any
such Lease Contracts that have been repurchased, removed or
substituted during such Monthly Period), or (b) the Servicer
has determined in accordance with its customary practices
that it shall not make a Servicer Advance with respect to
such Lease Contract, that a prior Servicer Advance with
respect to such Lease Contract is unrecoverable, or that
the remaining Scheduled Payments under the
related Lease Contract are uncollectible during such
Monthly Period (including any such Lease Contracts that
have been removed, repurchased or substituted during such
Monthly Period), divided by the Aggregate IPB on the
Calculation Date immediately preceding such Monthly Period
multiplied by twelve.
"Authenticating Agent": Initially, the Trustee,
and
thereafter any entity appointed by the Trustee pursuant
to Section 7.14 hereof.
"Back-up Servicer": Norwest Bank Minnesota,
National Association, and all successors thereto.
"Back-up Servicer Fee": The fee payable on each
Payment Date to the Back-up Servicer in consideration for
the Back-up Servicer's performance of its duties pursuant to
this Agreement and the Servicing Agreement as Back-up
Servicer, in an amount equal to the product of one-twelfth
of the Back-up Servicer Fee Rate and the Class A Certificate
Balance immediately following the preceding Payment Date,
provided, however, with respect to the Initial Payment
Date, the Back-up Servicer Fee shall equal $954.86.
"Back-up Servicer Fee Rate": The meaning given in the
Terms Schedule attached hereto.
"Benefit Plan Investor": The meaning set forth in 29
C.F.R.
2510.3-101.
"Board of Directors": Either the board of directors of
the Transferor or of the Servicer, as the context requires,
or any duly authorized committee of such board.
"Board Resolution": A copy of a resolution certified by
the Secretary or an Assistant Secretary of the Transferor or
of the Servicer to have been duly adopted by its Board of
Directors and to be in full force and effect on the date of
such certification and delivered to the Trustee.
"Broker Assignment Agreements": The assignments by
which the Company obtains an assignment of lease contracts
and the related equipment from the originating broker.
"Business Day": Any day other than a Saturday, a Sunday
or a day on which banking institutions in New York City or in
the city in which the principal place of business of the
Transferor or the Servicer or the corporate trust office of
the Trustee under this Agreement is located are authorized
or obligated by law or executive order to close. For
purposes of draws on the Certificate Insurance Policy pursuant
to Article Eight hereof, a "Business Day" means any day other
than a Saturday, a Sunday or a day on which MBIA or banking
institutions in New York City or in the city in which the
principal place of business of the Transferor or the
Servicer or the corporate trust office of the Trustee under
this Agreement is located are authorized or obligated by
law or executive order to close.
"Calculation Date": The last day of a Monthly
Period, except that (a) with respect to any calculations made
regarding any Funding, the Calculation Date shall mean the
Calculation Date that was the basis for the most recent Monthly
Servicer's Report; and (b) with respect to any calculations
that occur prior to delivery of the initial Monthly
Servicer's Report, the
Calculation Date shall mean the Cut-Off Date.
"Capitalized Interest Account": The trust account
created and maintained pursuant to Section 12.04 hereof.
"Capitalized Interest Account Deposit": $233,135.42,
which is an amount equal to one-fourth of the product of
(i) the difference between (A) the Discount Rate, and (B)
2.5% and (ii) the Prefunding Account Deposit.
"Cash Collateral Account": The trust account or
accounts created and maintained pursuant to Section 12.03
hereof.
"Cash Collateral Account Factor": One plus the quotient
of (a) the positive difference between (i) the sum of the
Class A Interest Rate, the MBIA Premium Rate, the Trustee Fee
Rate, and the Back-up Servicer Fee Rate, and (ii) 2.5% over
(b) twelve.
"Cash Collateral Account Required Balance": As of any
date of determination, an amount equal to the product of (i)
the Cash Collateral Account Factor and (ii) the Required
Collateralization Amount minus the positive difference
between: (A) the Aggregate IPB and, if applicable, the sum of
the IPB of the Lease Contracts relating to the Funding expected
to occur on the related Funding Date, and (B) the Class A
Certificate Balance (after giving effect to any payments
of principal expected to occur on a related Payment Date,
if any) less the Prefunding Account Deposit then on deposit
in the Prefunding Account (after releasing amounts
therefrom, if any, on a related Funding Date); provided,
however, if a Trigger Event has occurred, the Cash
Collateral Account Required Balance shall be an amount equal to
zero.
"Certificate" or "Certificates": Any one or
collectively, all Class A Certificates, Class B Certificates
and the Transferor Certificate or all Certificates of any
one Class, as is consistent with the context in which such
term is used.
"Certificate Balance": The Class A Certificate
Balance and/or the Class B Certificate Balance, as applicable.
"Certificate Funding Administration Agreement":
With respect to the Class A Certificates, the administration
agreement executed in connection therewith between the
Certificate Funding Administrator, the Servicer and the
Transferor.
"Certificate Funding Administrator": Rothschild Inc.,
or any successor Certificate Funding Administrator
approved in writing by MBIA.
"Certificate Insurance Policy": The certificate
guaranty insurance policy issued by MBIA insuring the Class A
Certificates in accordance with the terms thereof.
"Certificate Interest Rate": With respect to the Class
A Certificates, the Class A Interest Rate and with respect to
the Class B Certificates, the Class B Interest Rate.
"Certificate Purchase Agreement": Each Certificate
Purchase Agreement between the Transferor and one or more
purchasers of Certificates.
"Certificate Register" and "Certificate Registrar":
The respective meanings specified in Section 2.05 hereof.
"Certificateholder" or "Holder": The Person in whose name
a Certificate is registered in the Certificate Register.
"Class": The separate senior, junior and
subordinated classes of Certificates issued pursuant to
this Agreement, designated as Class A Certificates, Class B
Certificates and the
Transferor Certificate, respectively.
"Class A Certificates": Any one of the
Certificates executed by the Transferor and authenticated by
the Trustee in the form attached hereto as Exhibit A.
"Class A Certificate Initial Balance": The meaning given
in the Terms Schedule attached hereto.
"Class A Certificate Balance": The Class A
Certificate Initial Balance less all amounts allocable
to principal distributed to Class A Certificateholders.
"Class A Interest Rate": The meaning given in the
Terms Schedule attached hereto.
"Class A Percentage": The meaning given in the
Terms Schedule attached hereto.
"Class A Principal Distribution Amount": As of each
Payment Date during the Funding Period, zero, and as of each
Payment Date during the Amortization Period and prior to the
Stated Maturity, an amount equal to the Class A Targeted
Principal Distribution Amount for such Payment Date and as
of the Stated Maturity, an amount equal to the Class A
Certificate Balance as of such date. In addition, on the
first Payment Date following the end of the Funding Period,
pursuant to Section 12.04(d)(ii) hereof, the Trustee is
required to pay any portion of the Prefunding Account Deposit
remaining on deposit in the Prefunding Account to the Class
A Certificateholders.
"Class A Targeted Principal Distribution Amount":
With respect to each Payment Date after the Funding Period has
ended, if the Aggregate IPB is less than the Targeted Balance
for such Payment Date, an amount equal to the Class A
Certificate Balance (as of such Payment Date and before
giving effect to distributions on such date) minus the
Aggregate IPB, and if the Aggregate IPB equals or exceeds
the Targeted Balance for such Payment Date, an amount equal
to the Class A Certificate Balance (as of such Payment
Date and before giving effect to distributions on such
date) minus the Targeted Balance for such Payment Date.
"Class B Certificates": Any one of the
Certificates executed by the Transferor and authenticated by
the Trustee in the form attached hereto as Exhibit B
pursuant to the execution of the Class B Supplement.
"Class B Certificate Balance": The Class B
Certificate Initial Balance, less all amounts allocable
to principal distributed to the Class B Certificateholders.
"Class B Interest Rate": The meaning given in the Class
B Supplement.
"Class B Certificate Initial Balance": The meaning given
in the Class B Supplement.
"Class B Percentage": The meaning given in the Class
B Supplement.
"Class B Principal Distribution Amount": The meaning
given in the Class B Supplement.
"Class B Supplement": With respect to Class B
Certificates that may be issued hereunder, the supplement to
this Agreement in the form attached as Exhibit G hereto
for the Class B
Certificates and pursuant to which the terms of such Class
B Certificates are specified as provided in Section 2.02
hereof.
"Closing Date": March 25, 1997.
"Code": The Internal Revenue Code of 1986, as amended.
"Collection Account": The trust account or accounts
created and maintained pursuant to Section 12.02 hereof.
"Company": Granite Financial, Inc., and all
successors thereto in accordance with the Lease Acquisition
Agreement.
"Company Certificate": An Officer's Certificate
delivered by the Company substantially in the form of Exhibit
A to the Lease Acquisition Agreement.
"Concentration Limits": The meaning specified in the
Lease Acquisition Agreement.
"Controlling Holders": Holders of Class A
Certificates representing at least 51% of the Class A
Certificate Balance, and after the Class A Certificate Balance
has been reduced to zero, Holders of Class B Certificates
representing at least 51% of the Class B Certificate
Balance, and after the Class B Certificate Balance has been
reduced to zero, the Holder of the Transferor Certificate.
"Corporate Trust Office": The principal corporate
trust office of the Trustee at 0xx Xxxxxx and Marquette
Avenue, Minneapolis, Minnesota 55479-0070, or at such other
address as the Trustee may designate from time to time by
notice to MBIA, the Certificateholders and the Transferor,
or the principal corporate trust office of any successor
Trustee.
"Cumulative Gross Default Rate": For any Monthly
Period, the sum of the Implicit Principal Balance of Lease
Contracts, determined in the Monthly Period during which
such Lease
Contracts became 91 or more days delinquent, that either (a)
are currently delinquent for a period of 91 or more days
(including any such Lease Contracts that have been
repurchased, removed or substituted during such Monthly
Period), or (b) the Servicer has determined in accordance
with its customary practices that it shall not make a
Servicer Advance with respect to such Lease Contract, that
a prior Servicer Advance with respect to such Lease
Contract is unrecoverable, or that the remaining Scheduled
Payments under the related Lease Contract are
uncollectible (including any such Lease Contracts that have
been removed, repurchased or substituted during such Monthly
Period) divided by the Aggregate Initial IPB.
"Customer": The lessee under each related Lease
Contract, including any guarantor of such lessee and their
respective successors and assigns.
"Cut-Off Date": February 28, 1997.
"Default": Any occurrence or circumstance which with
notice or the lapse of time or both would become an Event of
Default.
"Defaulted Lease Contract": A Lease Contract shall become
a
Defaulted Lease Contract at the earlier of (a) the
Calculation Date on which such Lease Contract becomes
delinquent for a period of 180 or more days, or (b) the
Servicer determines in accordance with its customary
practices that it shall not make a Servicer Advance with
respect to such Lease Contract, that a prior Servicer
Advance with respect to such Lease Contract is
unrecoverable, or that the remaining Scheduled Payments under
the related Lease Contract are uncollectible.
"Delinquency Rate": For any Monthly Period, the sum of
the Implicit Principal Balance as of the Calculation Date
occurring in such Monthly Period of all Lease Contracts that
are more than 60 days and less than 91 days delinquent, as of
such Calculation Date (including any such Lease Contracts
that have been repurchased, removed or substituted during
such Monthly Period), divided by the Aggregate IPB on such
Calculation Date (including any such Lease Contracts that have
been repurchased, removed or substituted during such Monthly
Period).
"Delinquent Lease Contract": For any Monthly Period,
any Lease Contract (a) as to which a full Scheduled Payment
was not received when due by the Servicer and remains unpaid
as of the Calculation Date at the end of such Monthly Period
and (b) which is not a Defaulted Lease Contract.
"Determination Date": The fourth Business Day
preceding each Payment Date.
"Discount Rate": The rate equal to the sum of the
Trustee Fee Rate, the Back-up Servicer Fee Rate, the MBIA
Premium Rate and the Class A Interest Rate.
"Dollar(s)": Lawful money of the United States of
America.
"Due Date": With respect to each Lease Contract, each
date on which payment is due thereunder.
"Electronic Ledgers": The electronic master records of
all lease contracts of the Company or the Servicer similar
to and including the Lease Contracts.
"Eligible Investments": Any and all of the following:
(a) direct obligations of, and obligations fully
guaranteed by, the United States of America, the
Federal Home Loan Mortgage Corporation, the Federal
National Mortgage Association, the Federal Home Loan
Banks or any agency or instrumentality of the
United States of America the obligations of which are
backed by the full faith and credit of the United
States of America;
(b) (i) demand and time deposits in, certificates
of deposit of, banker's acceptances issued by or
federal funds sold by any depository institution
or trust company (including the Trustee or its
agent acting in their respective commercial
capacities) incorporated under the laws of the
United States of America or any State thereof
and subject to supervision
and
examination by federal and/or state authorities,
so long as at the time of such investment or
contractual commitment providing for such
investment, such depository institution or trust
company has a short term unsecured debt rating
in the highest available rating category of S&P
and Moody's and provided that each such
investment has an original maturity of no more
than 365 days, and (ii) any other demand or time
deposit or deposit which is fully insured by
the Federal Deposit Insurance Corporation;
(c) repurchase obligations with a term not to exceed
30 days with respect to any security described in
clause (a)
above and entered into with a depository
institution or trust company (acting as a
principal) rated in the highest available rating
category by S&P and
Moody's; provided, however, that collateral
transferred pursuant to such repurchase obligation
must be of the type described in clause (a) above
and must (i) be valued weekly at current market
price plus accrued interest, (ii) pursuant to
such valuation, equal, at all times, 105% of the
cash transferred by the
Trustee in exchange for such collateral and
(iii) be delivered to the Trustee or, if the Trustee
is supplying the collateral, an agent for the
Trustee, in such a manner as to accomplish
perfection of a security interest in the
collateral by possession of certificated
securities.
(d) securities bearing interest or sold at a
discount issued by any corporation incorporated
under the laws of the United States of America or
any State thereof which has a long term unsecured
debt rating in the highest available rating
category of each of the Rating Agencies at the time
of such investment;
(e) commercial paper having an original maturity of
less than 365 days and issued by an institution
having a short term unsecured debt rating in
the highest available rating category of each
of the Rating Agencies at the time of such
investment;
(f) a guaranteed investment contract approved in writing
by each of the Rating Agencies and MBIA and issued
by an insurance company or other corporation having
a long term unsecured debt rating in the highest
available rating category of each of the Rating
Agencies at the time of such investment;
(g) money market funds having ratings in the
highest available rating categories of S&P and
Moody's at the time of such investment which
invest only in other Eligible Investments; any such
money market funds which provide for demand
withdrawals being conclusively deemed to satisfy
any maturity requirement for Eligible Investments set
forth in this Agreement; and
(h) any investment approved in writing by each of the
Rating Agencies and MBIA.
The Trustee may purchase from or sell to itself or
an affiliate, as principal or agent, the Eligible Investments
listed above. All Eligible Investments shall be made in the
name of the Trustee for the benefit of the Certificateholders
and MBIA.
"Eligible Lease Contract": A Lease Contract that
satisfies the selection criteria set forth in Section 3.01(a)
of the Lease Acquisition Agreement as of the Closing Date
or applicable Acquisition Date.
"Equipment": The equipment leased to the Customers
pursuant to the Lease Contracts, including motor vehicles,
together with any replacement parts, additions and repairs
thereof, and any accessories incorporated therein and/or
affixed thereto.
"ERISA": The Employee Retirement Income Security Act
of
1974, as amended or any successor statute thereto.
"Event of Default": The meaning specified in Section
6.01
hereof.
"Existing Indebtedness": The meaning specified in the
Lease Acquisition Agreement.
"Expected Maturity": The meaning specified in the Class
B Supplement.
"Final Due Date": With respect to each Lease Contract,
the final Due Date thereunder.
"Final Payment Date": With respect to any Class
A Certificate or Class B Certificate, the date on which the
final principal payment on such Certificate is made as
therein or herein provided, whether at the Stated Maturity
or Expected Maturity, as applicable, or by acceleration or
redemption.
"Funded Lease Contract": A Lease Contract acquired by
the Transferor on a Funding Date.
"Funding": The acquisition of Funded Lease Contracts by
the Transferor from the Company pursuant to the Lease
Acquisition Agreement, the conveyance by the Transferor of such
Funded Lease Contracts to the Trust and the release of
funds from the Prefunding Account in accordance with Article
Three and Section 12.04(d)(i) hereof.
"Funding Amount": As of any Funding Date, the amount,
if any, by which the Aggregate IPB and the sum of the IPB of
the Lease Contracts relating to the Funding expected to occur
on such Funding Date exceeds the sum of (A) the
Required Collateralization Amount and (B) the Class A
Certificate Balance less the Prefunding Account Deposit
then on deposit in the Prefunding Account (prior to
releasing amounts therefrom, if any, on the related Funding
Date).
"Funding Date": At the option of the Transferor, any
of March 31, 1997, May 12, 1997 and June 10, 1997.
"Funding Period": The period of time commencing on
the Closing Date and ending on the Funding Termination Date.
"Funding Report": A Funding Report in the form of Exhibit
E hereto.
"Funding Termination Date": The earliest of (a) June
10, 1997, (b) the date on which amounts on deposit in the
Prefunding Account are reduced to $30,000 or less and (c) the
date on which a Trigger Event occurs.
"GF Certificate": An Officer's Certificate delivered by
the Transferor substantially in the form of Exhibit F hereto.
"Guaranty Amounts": Any and all amounts paid by
any guarantor indicated on the applicable Lease Contract.
"Holder" or "Certificateholder": The person in whose name
a Certificate is registered in the Certificate Register.
"Implicit Principal Balance" or "IPB": As of any date
of determination, with respect to any Lease Contract, the
present value of the remaining stream of Scheduled Payments
(reduced by the applicable Servicer Fee but not reduced by
any Additional Servicer Fee) due with respect to such Lease
Contract after the applicable Calculation Date, and
calculated by discounting such Scheduled Payments (assuming
such Scheduled Payments are received on the
last day of the related Monthly Period) to such
Calculation Date at an annual rate equal to the Discount Rate,
at the same frequency as the Payment Dates; except that on
the Calculation Date, (a) on or immediately following the
deposit into the Collection Account of any Insurance Proceeds
(and the termination of the related Lease Contract) or the
Removal Price, or on or immediately following the delivery of
a Substitute Lease Contract, (b) immediately on or after the
date that a Lease Contract has
become a Defaulted Lease Contract, or
(c) immediately preceding the Final Payment Date, the
Implicit Principal Balance of each such related Lease Contract
shall be zero. To the extent that the Final Due Date of
any Lease Contract is later than the Stated Maturity,
any Scheduled Payments due on such Lease Contract after the
Calculation Date immediately preceding such Stated Maturity
shall not be taken into account in calculating the
Implicit Principal Balance of such Lease Contract.
"Independent": When used with respect to any
specified Person means such a Person, who (a) is in fact
independent of the Transferor, (b) does not have any direct
financial interest or any material indirect financial
interest in the Transferor or in any Affiliate of the
Transferor and (c) is not connected with the Transferor as
an officer, employee, promoter, underwriter, trustee,
partner, director, or person performing similar
functions. Whenever it is herein provided that any
Independent Person's opinion or certificate shall be
furnished to the Trustee, such Person shall be appointed by a
Transferor Order and approved by the Trustee in the exercise
of reasonable care, and such opinion or certificate shall
state that the signer has read this definition and that the
signer is Independent within the meaning hereof.
"Independent Accountants": Ehrhardt, Keefe, Xxxxxxx
& Xxxxxxx, or any firm of independent certified public
accountants of recognized national standing and reasonably
acceptable to MBIA, or if an MBIA Default or Termination has
occurred and is continuing, the Controlling Holders.
"Initial Payment Date": April 21, 1997.
"Initial Lease Schedule": The listing of Lease
Contracts and related Equipment attached hereto as Schedule I.
"Insurance Agreement": The Insurance Agreement dated as
of March 1, 1997 by and among MBIA, the Transferor, the
Company, the Servicer, the Back-up Servicer, the Trustee and
the Certificate Funding Administrator, as amended or
supplemented in accordance with the terms thereof.
"Insurance Policy": With respect to an item of
Equipment and a Lease Contract, any insurance policy
maintained by the Customer pursuant to the related Lease
Contract that covers physical damage to the Equipment or
general liability (including policies procured by the Company
or the Servicer on behalf of the Customer).
"Insurance Proceeds": With respect to an item of
Equipment and a Lease Contract, any amount received during
the related Monthly Period pursuant to an Insurance
Policy issued with respect to such Equipment and the related
Lease Contract, net of any costs of collecting such amounts
not otherwise reimbursed.
"Insurer": Any insurance company or other insurer
providing any Insurance Policy.
"Investment Letter": The letter required to be delivered
by each transferee of a Certificate, as provided in Section
2.06
hereof, substantially in the form of Exhibit D hereto.
"Lease Acquisition Agreement": The Lease
Acquisition Agreement dated as of March 1, 1997, by and
between the Transferor and the Company, as amended or
supplemented from time to time in accordance with the terms
thereof.
"Lease Assets": The meaning specified in the
Lease
Acquisition Agreement.
"Lease Contract File": The meaning specified in the
Lease Acquisition Agreement.
"Lease Contracts": The lease contracts including all
Loan Contracts (and all rights with respect thereto,
including all guaranties and other agreements or
arrangements of whatever character from time to time
supporting or securing payment of any Lease Contract and all
rights with respect to any agreements or arrangements with
the vendors, dealers or manufacturers of the Equipment to
the extent specifically related to any Lease Contract)
which are identified either (i) on the Initial Lease Schedule
delivered to the Trustee and MBIA on the Closing Date, or (ii)
on an Amended Lease Schedule delivered to the Trustee and MBIA
on an Acquisition Date; provided that, from and after the
date on which a Lease Contract is repurchased, removed
or substituted by the Company or the Transferor in accordance
with Section 4.03 hereof, such repurchased, removed or replaced
Lease Contract shall no longer constitute a Lease Contract for
purposes of the Transaction Documents.
"Lease Receivables": With respect to any Lease
Contract, all of, and the right to receive all of (a)
the Scheduled Payments, (b) any prepayments made with
respect of such Lease Contract, (c) any Guaranty Amounts,
(d) any Insurance Proceeds, (e) any Residual Proceeds, (f)
any Overdue Payments, and (g) any Recoveries.
"Lease Schedule": The Initial Lease Schedule, together
with and as amended by all Amended Lease Schedules, each of
which shall include with respect to each Lease Contract: (a)
a number identifying the Lease Contract, (b) the Implicit
Principal Balance, (c) the number identifying the Customer,
(d) the State of the Customer's billing address, (e) the
original and remaining term, (f) the Scheduled Payment and
the frequency thereof, (g) the Equipment type, (h) the zip
code of the Customer's billing address, (i) the broker of
the Lease Contract (j) whether such Lease Contract is a "true
lease" or a Loan Contract and (k) the amount of any PUT
Payment.
"Lien": The meaning specified in the Lease
Acquisition Agreement.
"Liquidated Lease Receivable": A Lease Receivable that
has been liquidated pursuant to Section 3.01(b) of the
Servicing Agreement.
"Loan Contract": A Lease Contract that evidences a sale
of the related Equipment to the Customer and the retention by
the lessor of a security interest in such Equipment.
"Lockbox Account": The meaning specified in the
Servicing Agreement.
"Material Affiliate": Any entity whose capital stock
the Company has majority ownership.
"MBIA": MBIA Insurance Corporation and any
successor thereto.
"MBIA Default or Termination": The occurrence
and
continuance of any of the following events:
(a) the failure by MBIA to make a payment under
the Certificate Insurance Policy in accordance
with its terms;
(b) the occurrence of an "Insurer Insolvency," as that
term is defined in the Insurance Agreement, with
respect to MBIA; or
(c) 124 days have elapsed since the Class A
Certificates have been paid in full, MBIA has been
paid all amounts owed to it under the
Insurance Agreement,
the
Certificate Insurance Policy has been surrendered
to MBIA and the Insurance Agreement has been
terminated.
"MBIA Premium": The MBIA Premium specified in the
Insurance Agreement.
"MBIA Premium Rate": The meaning specified in the
Insurance Agreement.
"Monthly Period": As to any Determination Date or
Payment Date, the period beginning on the first day and
ending on the last day of the calendar month preceding the
month in which such Determination Date or Payment Date occurs.
"Monthly Servicer's Report": The report prepared by
the Servicer pursuant to Section 4.01 of the Servicing
Agreement.
"Moody's": Xxxxx'x Investors Service, Inc. and
its
successors in interest.
"Negative Arbitrage Amount": For any Payment Date,
the product of (A) one-twelfth of the Discount Rate and
(B) the balance of the Prefunding Account at the beginning of
the related Accrual Period.
"Net Worth Requirement" has the meaning given in the
Terms Schedule attached hereto.
"Nonrecoverable Advance": The meaning specified in
the Servicing Agreement.
"Officer's Certificate": A certificate signed by
the
Chairman of the Board, the President, a Vice President,
the Treasurer, the Controller, an Assistant Controller or
the
Secretary of the company on whose behalf the certificate
is delivered, and delivered to the Trustee, which certificate
shall comply with the applicable requirements of Section 13.13
hereof. Unless otherwise specified, any reference in this
Agreement to an Officer's Certificate shall be to an Officer's
Certificate of the Transferor.
"Opinion of Counsel": A written opinion of outside
counsel who shall be reasonably satisfactory to the Trustee
and MBIA and which opinion shall comply with the applicable
requirements of Section
13.13 hereof.
"Original Issuance": The date of issuance, if any, of
the Class B Certificates.
"Outstanding": With respect to Certificates, as of any
date of determination, all Certificates theretofore
authenticated and delivered under this Agreement except:
(a) Certificates theretofore canceled by the
Certificate Registrar or delivered to the Certificate
Registrar for cancellation; and
(b) Certificates in exchange for or in lieu of which
other Certificates have been authenticated and
delivered pursuant to this Agreement, unless proof
satisfactory to the Trustee is presented that any
such Certificates are held by a bona fide purchaser;
provided, however, that for purposes of disbursing payments
from the Certificate Insurance Policy and in determining
whether the Holders of the requisite amount of Certificate
Balance have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Certificates
(other than the Transferor Certificate) owned by the
Transferor or any other obligor upon the Certificates or
any Affiliate of the Transferor or the Servicer or such
other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent, or
waiver, only Certificates which the Trustee knows to be so
owned shall be so disregarded.
"Overdue Payment": With respect to a Monthly Period and
a Lease Contract that is a Delinquent Lease Contract, all
payments due in a prior Monthly Period that the Servicer
receives from or on behalf of a Customer during the related
Monthly Period on such Delinquent Lease Contract, including any
Servicing Charges.
"Paying Agent": The Trustee or any other Person that
meets the eligibility standards for the Trustee specified in
Section 7.08 hereof and is authorized by the Transferor
pursuant to Section 7.16 hereof to pay the principal of, or
interest on, any Certificates on behalf of the Transferor.
"Payment Date": The twentieth day of each calendar
month (or if such day is not a Business Day, the next
succeeding Business Day) commencing on the Initial Payment
Date.
"Person": Any individual, corporation,
partnership, association, joint-stock company, limited
liability company, trust (including any beneficiary
thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Placement Agent": Rothschild Inc.
"Preference Claim": The meaning given in Section
8.01 hereof.
"Prefunding Account": The trust account established
and maintained pursuant to Section 12.04(b) hereof.
"Prefunding Account Deposit": The meaning given in the
Terms Schedule attached hereto.
"Private Placement Memorandum" or "Final Private
Placement Memorandum": The preliminary Private Placement
Memorandum dated March 5, 1997 or the final Private
Placement Memorandum dated March 24, 1997.
"Proceeding": Any suit in equity, action at law or
other judicial or administrative proceeding.
"PUT Payments": A provision in a Lease Contract
obligating the lessee to purchase the related Equipment upon
termination.
"Rating Agencies": Moody's and S & P.
"Record Date": The close of business on the last day of
the month preceding the applicable Payment Date, whether or
not a Business Day, except with respect to an Initial Payment
Date, the Record Date shall be the Closing Date.
"Recoveries": For any Monthly Period occurring after
the date on which any Lease Contract becomes a Defaulted
Lease Contract and with respect to such Defaulted Lease
Contract, all payments that the Servicer received from or
on behalf of a Customer during such Monthly Period in
respect of such Defaulted Lease Contract or from liquidation
or re-leasing of the related Equipment, including but not
limited to prepayments, Scheduled Payments, Overdue
Payments, Guaranty Amounts, and Insurance Proceeds.
"Redemption Account": The trust account or accounts
created and maintained pursuant to Section 12.02 hereof.
"Redemption Date": A date fixed pursuant to Section
10.01
hereof.
"Redemption Price": With respect to any Class
of
Certificates being redeemed pursuant to Article Ten hereof,
and as of the related Redemption Date, the Certificate
Balance of such Class of Certificates, together with
interest accrued and unpaid thereon to but excluding the
related Redemption Date at the applicable Certificate
Interest Rate (exclusive
of
installments of interest and principal maturing on or prior
to such date, payment of which shall have been made or duly
provided for to the Holder of such Certificate on the
applicable Record Date or as otherwise provided in this
Agreement).
"Redemption Record Date": With respect to any redemption
of Certificates, a date fixed pursuant to Section 10.01 hereof.
"Registered Holder": The Person whose name appears on
the Certificate Register on the applicable Record Date or
Redemption Record Date.
"Reinvestment Income": Any interest or other
earnings earned on all or part of the Trust Estate.
"Removal Price": With respect to any Lease
Contract repurchased by the Company pursuant to Sections 2.06
or 3.03 of the Lease Acquisition Agreement or removed by
the Transferor pursuant to Section 4.03(d) hereof, the sum of
(a) the Implicit Principal Balance (computed without giving
effect to clauses (b) and (c) of the definition of "Implicit
Principal Balance") of the related
Lease Receivable on the Calculation Date on
or
immediately preceding the date when the Lease Contract is
removed or repurchased, (b) any Scheduled Payments with
respect to the Lease Contract due on or prior to such
Calculation Date but not received through such Calculation
Date, and (c) with respect to the related Equipment, the
amount, if any, recorded in the books and records of the
Transferor as the "unguaranteed residual."
"Required Collateralization Amount": The meaning given
in the Terms Schedule attached hereto.
"Residual Proceeds": With respect to a Lease Contract
that is not a Defaulted Lease Contract and the related
Equipment, the net proceeds (including Insurance Proceeds) of
any sale, re-lease (including any lease renewal) or other
disposition of such Equipment or any periodic payment under
the Lease Contract for use of the Equipment after the initial
term thereof.
"Responsible Officer": When used with respect to
the Trustee, any officer assigned to the Corporate Trust
Department (or any successor thereto), including any Vice
President, Senior Trust Officer, Trust Officer, Assistant
Trust Officer, any Assistant Secretary, any Trust Officer or
any other Officer of the Trustee customarily performing
functions similar to those performed by any of the above
designated officers and having direct responsibility for the
administration of this 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.
"Sale": The meaning specified in Section 6.18 hereof.
"Scheduled Expenses": On any Determination Date,
the
Servicer Fee, the Back-up Servicer Fee, the MBIA Premium and
the Trustee Fee to be due on the next succeeding Payment Date.
"Scheduled Payment": With respect to a Payment Date and
a Lease Contract, the periodic payment (exclusive of any
amounts in respect of taxes and including any PUT Payment but
excluding any other balloon payments) set forth in such Lease
Contract due from the Customer in the related Monthly Period,
calculated without regard to any modification granted pursuant
to Section 3.01(b)(v) of the Servicing Agreement.
"Servicer": Initially, the Company, and thereafter
any successor Servicer appointed pursuant to Section 6.02
of the Servicing Agreement.
"Servicer Advance": The meaning set forth in Section
3.04
of the Servicing Agreement.
"Servicing Officers": The persons listed on a
certificate of the Servicer from time to time delivered by
the Servicer to the Transferor and the Trustee.
"Servicer Fee": The meaning given in the Terms
Schedule attached hereto.
"Servicing Agreement": The Servicing Agreement dated as
of March 1, 1997 by and among the Servicer, the Transferor,
the Back-up Servicer and the Trustee, as amended or
supplemented from time to time in accordance with the terms
thereof.
"Servicing Charges": The sum of (a) all late
payment charges paid by Customers on Lease Contracts that are
Delinquent Lease Contracts after payment in full of any
Scheduled Payments due in a prior Monthly Period and
Scheduled Payments for the related Monthly Period and (b)
any other incidental charges or fees received from a
Customer, including but not limited to, late fees, collection
fees and bounced check charges.
"S & P": Standard & Poor's Ratings Services, a division
of The McGraw Hill Companies, Inc., and its successors in
interest.
"State": Any state of the United States of America and,
in addition, the District of Columbia and Puerto Rico.
"Stated Maturity": With respect to the Class
A Certificates, December 20, 2002.
"Substitute Lease Contract": The meaning specified in
the Lease Acquisition Agreement.
"Tangible Net Worth": The excess of (a) the tangible
assets of the Servicer and any subsidiaries calculated in
accordance with GAAP, as reduced by adequate reserves in each
case where reserves are proper, over (b) all
indebtedness (including subordinated debt) of the
Servicer and its subsidiaries; provided, however, that (i)
in no event shall there be included in the above calculation
any intangible assets such as patents, trademarks, trade
names, copyrights, licenses, goodwill, organizational
costs, advances or loans to, or receivables from, directors,
officers, employees or subsidiaries (other than
subsidiaries that are special purpose entities owned by
the Servicer or any subsidiary thereof), prepaid assets,
amounts relating to covenants not to compete, pension assets,
deferred charges or treasury stock or any securities of the
Servicer or any other securities unless the same are readily
marketable in the United States of America or entitled to be
used as a credit against federal income tax liabilities, (ii)
securities included as such intangible assets shall be taken
into account at their current market price or cost, whichever
is lower, and (iii) any write-up in the book value of any
assets shall not be taken into account.
"Targeted Balance": For each Payment Date occurring in
the Amortization Period, the amount indicated for such Payment
Date on the Targeted Balance Schedule
"Targeted Balance Schedule": The schedule prepared by
the Certificate Funding Administrator at the close of the
Funding Period in accordance with Section 3.03(c) hereof.
"Terms Schedule": Schedule II attached hereto.
"Transaction Documents": The Agreement, the
Servicing Agreement, the Lease Acquisition Agreement, the
Certificates, the Insurance Agreement, the Certificate
Insurance Policy and the Certificate Funding Administration
Agreement.
"Transaction Documents Date": March 1, 1997.
"Transferor": GF Funding Corp. III, and all
successors thereto in accordance with the terms hereof.
"Transferor Certificate": The Certificate substantially
in the form of Exhibit C attached hereto executed by the
Transferor and authenticated by the Trustee.
"Transferor Order" and "Transferor Request": A
written order or request signed in the name of the
Transferor by its President or a Vice President, and
delivered to the Trustee.
"Transition Cost": Any documented expenses
reasonably incurred by a successor Servicer, the Trustee
or MBIA in connection with a transfer of servicing from the
Servicer to a successor Servicer as successor Servicer
pursuant to Section 6.02
of the Servicing Agreement, but not to exceed $50,000.
"Trigger Event": The meaning given in the Terms
Schedule attached hereto.
"Trust": The meaning specified in the Conveyance Clause
of
this Agreement.
"Trust Estate": The meaning specified in the
Conveyance
Clause of this Agreement.
"Trustee": Norwest Bank Minnesota, National
Association, until a successor Person shall have become the
Trustee pursuant to the applicable provisions of this
Agreement, and thereafter "Trustee" shall mean such successor
Person.
"Trustee Fee": The fee payable on each Payment Date to
the Trustee in consideration for the Trustee's performance
of its duties pursuant to this Agreement as Trustee, in an
amount equal to the product of one-twelfth of the Trustee
Fee Rate and the Class A Certificate Balance immediately
following the preceding Payment Date, provided, however, with
respect to the Initial Payment Date, the Trustee Fee shall
equal $954.86.
"Trustee Fee Rate": The meaning given in the Terms
Schedule attached hereto.
"Vice President": With respect to the Transferor or
the Trustee, any vice president, whether or not designated
by a number or a word or words added before or after the
title "vice president."
ARTICLE TWO
THE CERTIFICATES
Section 2.01 Form Generally.
The Class A Certificates and the certificates
of authentication shall be in substantially the form set
forth in Exhibit A attached hereto and the Class B
Certificates shall be in substantially the form set forth in
Exhibit B attached hereto and the Transferor Certificate shall
be in substantially the form set forth in Exhibit C attached
hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are
required or permitted by this Agreement, and may have such
letters, numbers or other marks of identification and such
legends or endorsements placed thereon, as may,
consistently herewith, be determined by the officers
executing such Certificates, as evidenced by their
execution of the Certificates.
The definitive Certificates shall be typewritten,
printed, lithographed or engraved or produced by any
combination of these methods on steel engraved borders or
may be produced in any manner acceptable to the Trustee and
the initial purchasers of the Certificates, all as
determined by the officers executing such Certificates, as
evidenced by their execution of such Certificates.
Section 2.02 Classes of Certificates; Denomination.
(a) This Agreement provides for the issuance by
the Transferor of Certificates consisting of Class A
Certificates, Class B Certificates and the Transferor
Certificate, all subject to and in accordance with the terms
of this Agreement. Each Certificate shall bear upon the
face thereof the designation selected for the Class to which
it belongs.
All Class A Certificates issued under this Agreement
shall in all respects represent a fractional undivided
interest in the Trust Estate, pari passu with all other Class A
Certificates, and
shall be entitled to the benefits hereof without
preference, priority or distinction on account of the actual
time or times of authentication and delivery, all in accordance
with the terms and provisions of this Agreement.
All Class B Certificates issued under this Agreement
shall in all respects represent a fractional undivided
interest in the Trust Estate, pari passu with all other Class B
Certificates and subordinate to all Class A Certificates and
to certain other payments as provided herein (although the
Class B Certificates are not secured by and do not have the
benefit of the Certificate Insurance Policy or any proceeds
therefrom), and shall be entitled to the benefits hereof
without preference, priority or distinction on
account of the actual time or times
of
authentication and delivery, all in accordance with the terms
and provisions of this Agreement.
The rights of the Holders of the Class B Certificates
to receive payments of interest and principal in respect of
the Class B Certificates on any Payment Date shall be
subordinated to the rights of the Holders of Class A
Certificates to receive payments of principal and interest
in respect of the Class A Certificates on such Payment Date
and other payments as set forth in Section 12.02(d).
The rights of the Holders of the Transferor Certificate
to receive payments in respect of the Transferor Certificate on
any Payment Date shall be subordinated to the rights of the
Holders of Class A Certificates and Class B Certificates
to receive payments of principal and interest in respect of
the Class A Certificates and Class B Certificates on such
Payment Date and certain other payments as set forth in
Section 12.02(d).
(b) The aggregate principal amount of Class A
Certificates
that may be authenticated and delivered under this
Agreement shall be $27,500,000, and the aggregate principal
amount of Class B Certificates that may be authenticated and
delivered under this Agreement shall be set forth in the
Class B Supplement, except for Certificates authenticated and
delivered upon registration of transfer or in exchange for
or in lieu of, other Certificates pursuant to Sections 2.04,
2.05, 2.07 or 9.05 hereof. The Class A and Class B
Certificates shall be issuable only as registered Certificates
without coupons in denominations of at least $250,000
and any amount in excess thereof; provided, however, that,
the foregoing shall not restrict or prevent the transfer in
accordance with Sections 2.05 and 2.06 hereof of any
Certificate with a remaining Certificate Balance of less than
$250,000. The
Transferor Certificate shall have no stated principal amount
and no stated interest rate.
Section 2.03 Formation, Execution,
Authentication, Delivery and Dating.
(a) By its conveyance of the Trust Estate to the Trustee
as set forth in the Conveyance Clause hereof, the Transferor
hereby establishes the Trust in exchange for the Transferor
Certificate, the proceeds of the sale of the Class A
Certificates and the proceeds, when and if sold, of the
sale of the Class B Certificates, and all other rights of
the Transferor set forth herein. On
the Closing Date, Certificates shall be issued in
accordance with the terms hereof by the Trust and, upon
written order from the Transferor, the Trustee shall
authenticate (i) the Class A Certificates in an aggregate
principal amount
of
$27,500,000 and (ii) the Transferor Certificate. The Class
B Certificates may be issued at any time after the Closing Date
at the election of the Transferor subject to Section 4.08
hereof.
The terms of the Class B Certificates shall be set forth in
the Class B Supplement.
(b) The Certificates shall be executed on behalf of
the
Transferor by the President or one of the Vice-Presidents of
the Transferor under its corporate seal imprinted or
otherwise reproduced thereon. The signature of these
officers on the Certificates must be manual.
(c) Certificates bearing the manual signatures
of
individuals who were at any time the proper officers of
the Transferor shall bind the Transferor, notwithstanding that
such individuals or any of them have ceased to hold such
offices prior to the authentication or delivery of such
Certificates or did not hold offices at the date of
authentication or delivery of such Certificates.
(d) Each Certificate shall bear on its face the
Closing
Date (or the date of its issuance with respect to any Class
B Certificates which may be issued hereunder) and be dated as
of the date of its authentication.
(e) No Certificate shall be entitled to any benefit
under
this Agreement or be valid or obligatory for any purpose,
unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein
executed by the Trustee or by any Authenticating Agent by the
manual signature of one of its authorized officers, and such
certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has
been duly authenticated and delivered hereunder.
Section 2.04 Temporary Certificates.
Pending the preparation of definitive Certificates,
the Transferor may execute, and upon Transferor Order, the
Trustee shall authenticate and deliver, temporary Certificates
which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any denomination, containing the
same terms and representing the same rights as the
definitive Certificates in lieu of which they are issued.
If temporary Certificates are issued, the Transferor
will cause definitive Certificates to be prepared without
unreasonable delay. After the preparation of definitive
Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of
the temporary Certificates at the office or agency of the
Transferor to be maintained as provided in Section 11.02(m)
hereof, without charge to the Holder. Upon surrender
for cancellation of any one or more temporary
Certificates, the Transferor shall execute and the Trustee
shall authenticate and deliver in exchange therefor one
or more definitive Certificates of any authorized
denominations and of a like initial aggregate principal
amount and Stated Maturity or Expected Maturity, as
applicable. Until so exchanged, the temporary Certificates
shall in all respects be entitled to the same benefits under
this Agreement as definitive Certificates.
Section 2.05 Registration, Registration of Transfer
and Exchange.
(a) The Transferor shall cause to be kept at an office
or
agency to be maintained by the Transferor in accordance
with Section
11.02(m) hereof a register (the "Certificate Register"),
in which, subject to such reasonable regulations as it
may prescribe, the Transferor shall provide for the
registration of
Certificates and the registration of transfers of
Certificates. Norwest Bank Minnesota, National Association,
0xx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000-0000, is hereby appointed "Certificate Registrar" for
the purpose of registering Certificates and transfers of
Certificates as herein provided. The Trustee shall have
the right to examine the Certificate Register at all
reasonable times and to rely conclusively upon a Certificate
of the Certificate Registrar as to the names and addresses
of the Holders of the Certificates and the principal amounts
and numbers of such Certificates as held.
(b) Upon surrender for registration of transfer of
any
Certificate at the office or agency of the Transferor to
be maintained as provided in Section 11.02(m) hereof and
subject to the conditions set forth in Section 2.06 hereof,
the Transferor shall execute, and the Trustee or its agent
shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new
Certificates of any authorized denominations, and of a like
aggregate principal amount, Class and Stated Maturity or
Expected Maturity, as applicable.
(c) At the option of the Holder, Certificates may
be
exchanged for other Certificates of any authorized
denominations and of a like aggregate principal amount,
Class and Stated Maturity or Expected Maturity, as
applicable, upon surrender of the Certificates to be
exchanged at such office or agency. Whenever any
Certificates are so surrendered for exchange, the Transferor
shall execute, and the Trustee or its agent shall
authenticate and deliver, the Certificates which
the
Certificateholder making the exchange is entitled to receive.
(d) All Certificates issued upon any registration
of
transfer or exchange of Certificates shall be entitled to
the same benefits under this Agreement, as the
Certificates surrendered upon such registration of such
transfer or exchange.
Every Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by
the Transferor or the Certificate Registrar) be duly endorsed
or be accompanied by a written instrument of transfer in form
satisfactory to the Transferor and the Certificate Registrar
duly executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made to a Holder for
any registration of transfer or exchange of Certificates,
but the Transferor may require payment of a sum sufficient to
cover any tax or other governmental charge that may be
imposed in
connection with any registration of transfer or exchange
of Certificates, other than exchanges pursuant to Section
2.04 or 9.05 hereof not involving any registration of
transfer.
Section 2.06 Limitation on Transfer and Exchange.
(a) The Certificates have not been registered or
qualified
under the Securities Act of 1933, as amended (the "1933 Act")
or the securities laws of any state. No transfer of any
Certificate shall be made unless that transfer is made in a
transaction which does not require registration or
qualification under the 1933 Act or under applicable state
securities or "Blue Sky" laws. In the event that a transfer
is to be made without registration or qualification, such
Certificateholder's prospective transferee shall either (i)
deliver to the Trustee an Investment Letter or (ii) deliver
to the Trustee an opinion of counsel that the transfer is
exempt from such registration or qualification (which opinion
shall not be at the expense of the Transferor, the
Trustee, the Servicer or the Trust Estate). Neither
the
Transferor nor the Trustee is obligated to register or
qualify the Certificates under the 1933 Act or any other
securities law. Any such Holder desiring to effect such
transfer shall, and does hereby agree to, indemnify the
Trustee, MBIA and the Transferor against any liability,
cost or expense (including attorneys' fees) that may result
if the transfer is not so exempt or is not made in accordance
with such federal and state laws. The Trustee shall promptly,
after receipt of such information as is provided by the
Servicer, furnish to any Holder, or any Prospective Owner
designated by a Holder, the information required to be
delivered to Holders and Prospective Owners of Certificates
in connection with resales of the Certificates to permit
compliance with Rule 144A of the 1933 Act in connection
with such resales. Such
information shall be provided to the Trustee by the Servicer.
(b) No acquisition or transfer of a Certificate or
any interest therein may be made to any "Benefit Plan
Investor" (as defined in 29 C.F.R. 2510.3-101) or to any
person who is directly or indirectly purchasing such
Certificates or an interest therein on behalf of, as named
fiduciary of, as trustee of, or with assets of, such a
Benefit Plan Investor unless the Trustee is provided with
evidence that establishes to the satisfaction of the
Trustee that (i) either no "prohibited transaction" under
ERISA or the Code will occur in connection with such
prospective acquiror's or transferee's acquisition and holding
of the Certificates or that the acquisition and holding of the
Certificates by such prospective acquiror or transferee is
subject to a statutory or administrative exemption, and (ii)
that the prospective acquiror's or transferee's
acquisition and
holding will not subject the Transferor, the Servicer,
the Trustee or
the Certificate Funding Administrator to
any
obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in
addition to those explicitly undertaken in the Transaction
Documents.
(c) No transfer of the Transferor Certificate by
the Transferor may be made except in accordance with Section
11.02(o) hereof.
(d) The Trustee shall have no liability to the Trust
Estate or any Certificateholder arising from a transfer of
any such Certificate in reliance upon a certification
described in this Section 2.06.
Section 2.07 Mutilated, Destroyed, Lost or
Stolen Certificate.
If (i) any mutilated Certificate is surrendered to
the Certificate Registrar, or the Trustee receives evidence
to its satisfaction of the destruction, loss or theft
of any
Certificate, and (ii) there is delivered to the Trustee and
MBIA such security or indemnity as may be required by the
Trustee to save the Transferor, the Trustee and MBIA or any
agent of any of them harmless, then, in the absence of notice
to the Transferor or the Certificate Registrar that such
Certificate has been acquired by a bona fide purchaser, the
Transferor shall execute and, upon its request, the
Trustee shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of the same tenor, initial
principal amount and Stated Maturity or Expected Maturity,
as applicable, bearing a number
not
contemporaneously outstanding. If after the delivery of such
new Certificate, a bona fide purchaser of the original
Certificate in lieu of which such new Certificate was
issued presents for payment such original Certificate, MBIA,
the Transferor and the Trustee shall be entitled to recover
such new Certificate from
the person to whom it was delivered or any person
taking therefrom, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expenses
incurred by MBIA, the Transferor or the Trustee or any
agent of any of them in connection therewith. If any such
mutilated, destroyed, lost or stolen Certificate shall have
become or shall be about to become due and payable, or shall
have become subject to redemption in full, instead of
issuing a new Certificate, the Transferor may pay such
Certificate without surrender thereof, except that any
mutilated Certificate shall be surrendered.
No service charge shall be made to a Holder for
any registration of transfer or exchange of Certificates,
but the Transferor may require payment of a sum sufficient to
cover any tax or other governmental charge that may be
imposed in
connection with any registration of transfer or exchange
of Certificates, other than exchanges pursuant to Section
2.04 or 9.05 hereof not involving any registration of
transfer. Upon the issuance of any new Certificate under
this Section, the
Transferor may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Certificate issued pursuant to this Section
2.07, in lieu of any destroyed, lost or stolen
Certificate, shall constitute an original additional
contractual obligation of the Transferor, whether or not
the destroyed, lost or stolen Certificate shall be at any
time enforceable by anyone, and shall be entitled to all the
benefits of this Agreement equally and proportionately with
any and all other Certificates duly issued hereunder.
The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Certificates.
Section 2.08 Payment of Principal and Interest;
Principal and Interest Rights Preserved.
(a) For each applicable Accrual Period, the Class
A Certificates and the Class B Certificates shall bear interest
on their respective Class A or Class B Certificate Balance at
their applicable Certificate Interest Rate, until the
last day
preceding the Final Payment Date and (to the extent that
the payment of such interest shall be legally enforceable)
on any overdue installment of interest from the date such
interest became due and until fully paid. Interest for
each Accrual Period shall be calculated on the basis of
a 360-day year consisting of 12 months of 30 days each.
Interest shall be due and payable in arrears on each Payment
Date, with each payment of interest calculated as described
above on the Certificate Balance immediately following the
preceding Payment Date or on the Closing Date, if there
has not been any preceding Payment Date; provided that the
payment of interest on the Class B Certificates is subordinate
to the payment of principal and interest on the Class A
Certificates and other fees and expenses as specified in
Section 12.02(d). In making any such interest payment, if
the interest calculation with respect to a Certificate shall
result in a portion of such payment being less than $0.01,
then such payment shall be decreased to the nearest whole
cent, and no subsequent adjustment shall be made in respect
thereof.
(b) The principal of each Class A and Class B
Certificate
shall be payable in installments ending no later than the
Stated Maturity or Expected
Maturity thereof unless such Certificate
becomes due and payable at an earlier date by declaration
of
acceleration, call for redemption or otherwise. All
reductions in the principal amount of a Certificate effected
by payments of installments of
principal made on any Payment Date shall be
binding upon all future Holders of such Certificate and of
any Certificate issued upon the registration of transfer
thereof or
in exchange therefor or in lieu thereof, whether or not
such
payment is noted on such Certificate. Each installment
of
principal payable on the Class A Certificates shall be in
an
amount equal to the Class A Principal Distribution Amount and
the Additional Principal Amount, if any, available to be
paid in
accordance with the priorities of Section 12.02(d) hereof.
Each
installment of principal payable on the Class B
Certificates shall be in an amount equal to the Class B
Principal Distribution Amount; provided that the payment of
the Class B Principal Distribution Amount
shall be subordinate to the payments of
principal and interest on the Class A Certificates and to
certain other payments in accordance with Section 12.02(d)
hereof. The
principal payable on the Class A Certificates shall be paid
on
each Payment Date beginning on the first Payment Date in
the Amortization Period
and ending on the Final Payment Date, and
unless otherwise stated in the Class B Supplement, the
principal payable on the Class B Certificates shall be paid on
each Payment Date beginning on the first Payment Date after
the later of the Funding Termination Date and issuance thereof
and ending on the applicable Final Payment Date. All
payments of principal with respect to all of the Certificates
of any Class, shall be made on a pro rata basis
based upon the ratio that the certificate
balance of a Certificate bears to the Certificate Balance of
all Certificates of such
Class; provided, however, that if as a
result of such proration a portion of such principal would
be
less than $.01, then such payment shall be increased to
the nearest whole cent, and such portion shall be deducted
from the next succeeding principal payment.
(c) The principal, interest and any other amounts paid
on
the Certificates are payable by check mailed by first-class
mail to the Person whose name appears as the Registered Holder
of such Certificate on the Certificate Register at the address
of such Person as it appears on the Certificate Register
or by wire transfer in immediately available funds to the
account specified in writing to the Trustee by such Registered
Holder at least five Business Days prior to the Record Date
for the Payment Date on
which wire transfers will commence, in such coin or currency
of
the United States of America as at the time of payment is
legal tender for the payment of public and private debts.
Except as
set forth in the final sentence of this Section 2.08(c),
all payments on the Certificates shall be paid without
any
requirement of presentment. The Transferor shall notify
the Person in whose name a Certificate is registered at the
close of
business on the Record Date next preceding the Payment Date
on
which the Transferor expects that the final installment
of
principal of such Certificate will be paid that the
Transferor expects that such final installment will be paid on
such Payment Date. Such notice
shall be mailed no later than the tenth day
prior to such Payment Date and shall specify the place where
such Certificate may be surrendered. Funds representing
any such checks returned undeliverable shall be held in
accordance with Section 7.16 hereof. Each Certificateholder
shall surrender its Certificate to the Trustee prior to
payment of the final installment of principal of such
Certificate.
(d) Notwithstanding any of the foregoing provisions
with respect to payments of principal of and interest
on the
Certificates, if the Certificates have become or been
declared due and payable following an Event of Default
and such
acceleration of maturity and its consequences have not
been rescinded and annulled, then payments of principal
of and interest on such Certificates shall be made in
accordance with Section 6.08 hereof.
(e) Payments on the Transferor Certificate shall be made
on each Payment Date to the extent funds are available
therefore pursuant to Section 12.02(d)(xvi).
(f) Each Holder of a Certificate, by acceptance of
its Certificate, agrees that during the term of this
Agreement and for one year and one day after the
termination hereof, such Holder or any Affiliate thereof
will not file any involuntary petition or otherwise
institute any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceeding
under any federal or state bankruptcy or similar law against
the Transferor.
(g) The Certificates are payable only out of the
Trust Estate and do not represent recourse obligations
of the
Transferor, the Servicer or any affiliate thereof or
any
successor thereto.
Section 2.09 Persons Deemed Owner.
Prior to due presentment for registration of transfer of
any Certificate, the Transferor, MBIA, the Trustee and any
agent of the Transferor, MBIA or the Trustee shall treat the
Person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving
payments of principal of and interest on such Certificate
and for all other purposes whatsoever, whether or not
such Certificate be overdue, and neither the Transferor,
MBIA, the Trustee nor any agent of the Transferor, MBIA or
the Trustee shall be affected by notice to the contrary.
Section 2.10 Cancellation.
All Certificates surrendered to the Trustee for
payment, registration of transfer or exchange (including
Certificates surrendered to any Person other than the Trustee
which shall be delivered to the Trustee) shall be promptly
canceled by the Trustee. No Certificates shall be
authenticated in lieu of or in exchange for any Certificates
canceled as provided in this Section 2.10, except
as expressly permitted by this Agreement.
All canceled Certificates held by the Trustee shall be
disposed of by the Trustee as is customary with its standard
practice.
Section 2.11 Tax Treatment.
The Transferor has structured this Agreement and
the Certificates with the intention that the Class A
Certificates qualify under applicable tax laws as indebtedness
secured by the Trust Estate. The Transferor further intends
that the Trust formed hereby be disregarded as an entity
separate from the Transferor if and until the date when
there is more than one Certificateholder (not
including holders of Class A
Certificates), and thereafter be treated as a partnership,
with the assets of the partnership including all of the
assets comprising the Trust Estate, the partners of the
partnership being the Class B Certificateholders and the
holder of the Transferor Certificate, and the Class A
Certificates being nonrecourse debt of such partnership.
The Transferor, the Trustee, the Servicer, MBIA and each
Certificateholder, by
acceptance of its Certificate (and any Person that is
a beneficial owner of any interest in a Certificate, by virtue
of such Person's acquisition of a beneficial interest therein)
agree to report the transactions contemplated hereby in
accordance with the above stated intentions unless and until
determined to the contrary by an applicable taxing
authority. In connection therewith, at any time after the
date when there is more than one Certificateholder (not
including holders of Class
A
Certificates), the Holder of the Transferor Certificate shall
(i) maintain capital accounts and make partnership
allocations in accordance with section 704 of the Code, (ii)
file Form 8832 with the Internal Revenue Service and make the
election provided for to have the Trust be classified as a
partnership for federal income tax purposes and (iii) be
designated as the "tax matters partner" of the Trust.
ARTICLE THREE
FUNDINGS
Section 3.01 Fundings.
Subject to satisfaction of the conditions precedent
set forth in Section 3.03 hereof and Eligible Lease Contracts
being available to be acquired pursuant to the Lease
Acquisition Agreement, during the Funding Period the Transferor
shall acquire Funded Lease Contracts pursuant to the
Lease Acquisition Agreement with amounts on deposit in the
Prefunding Account.
Section 3.02 Determination of Funding Amounts;
Release from the Prefunding Account.
(a) The Funding Amount for the Funded Lease
Contracts acquired on a Funding Date shall be determined by the
Servicer on behalf of the Transferor, and confirmed by
the Certificate Funding Administrator and the Trustee and
shall be reflected in the Funding Report with respect to Lease
Contracts identified on the related Amended Lease Schedule
attached to the GF Certificate and the Company Certificate for
such Funding. Each Funded Lease Contract shall automatically
become subject to this Agreement, and the related Lease
Contract Files shall be held by the Trustee as provided herein.
(b) On each Funding Date, provided that the provisions
of Section 3.03 hereof are satisfied, the Trustee shall release
from the Prefunding Account the amounts specified in
Section
12.04(d)(i) and remit such funds in accordance with such
Section. Thereafter, the Trustee shall release from the Cash
Collateral Account the amount specified in Section
12.03(d)(iv) hereof and remit such funds in accordance with
such Section. At the end of the Funding Period, the
Trustee shall release all remaining amounts in the
Prefunding Account in accordance with Section 12.04(d)(ii)
hereof.
Section 3.03 Procedure for Fundings.
(a) Conditions Precedent. Each Funding is subject to
the satisfaction of the following conditions precedent on
the
relevant date specified below:
(i) the Servicer shall have provided three
Business Days advance notification to the Trustee,
MBIA and the Certificate Funding Administrator (by
telephone or in
writing) of a request for a Funding to occur;
(ii) no later than 11:00 a.m. (New York time)
the
second Business Day immediately prior to the
requested Funding Date, the Transferor shall have
delivered to the Certificate Funding Administrator and
the Trustee, by a diskette or electronic transfer, a
list of the proposed Lease Contracts to be funded, and
providing for each such Lease Contract all information
required to be provided in the Amended Lease Schedule
as provided in the definition thereof;
(iii) the delivery by the Transferor to the
Trustee on or before the second Business Day immediately
prior to the requested Funding Date of the
original executed counterpart of the Lease Contracts
relating to such Funding and the other items comprising
the related Lease Contract Files, including, in the
case of titled Equipment, a certificate of title
naming the Trustee as first lienholder of such titled
Equipment and, in the case of Lease Contracts which are
not Loan Contracts, a certificate of title naming the
Transferor as owner and naming the Trustee as first
lienholder of such titled Equipment;
(iv) the Transferor's delivery to the Trustee on
or before the Business Day immediately prior to the
requested Funding Date of the GF Certificate and
the Company Certificate, each accompanied by an Amended
Lease Schedule, executed by the Company or the
Transferor, as appropriate;
(v) the Trustee shall have no actual knowledge that
a Default, Event of Default or Trigger Event shall exist
or shall result from the Funding;
(vi) the Certificate Insurance Policy shall be in
full force and effect and the Trustee shall have no
actual knowledge that an MBIA Default or Termination
shall have occurred;
(vii) the Transferor shall have certified
pursuant
to the GF Certificate that (A) the Lease Contracts
proposed to be funded with such Funding shall be
Eligible Lease Contracts and (B) after giving effect to
such Funding, the Concentration Limits shall not have
been exceeded;
(viii) as of the second Business Day
immediately
prior to the requested Funding Date, a Certificate
Funding Administrator is in place in accordance with
Section 3.05 hereof;
(ix) such Funding shall occur on a Funding Date; and
(x) the Funding Report shall have been delivered
to the Trustee and MBIA pursuant to clause (b) below.
The Trustee may assume that MBIA has received all of
the documentation required to be delivered to MBIA pursuant to
this Article III if MBIA has not notified the Trustee, in
writing, no later than 11:00 a.m. (Minneapolis time) on any
Funding Date that MBIA has not received any such documentation.
(b) Preparation of Funding Report. The Servicer,
together with the Certificate Funding Administrator, shall
review such diskette or electronic transfer specified in
clause (a)(ii) above and prepare a Funding Report from the
information provided in such diskette or electronic
transfer, the existing information regarding all other Lease
Contracts and the existing information used to generate the
Monthly Servicer's Report. No later than 10:00 a.m. (New
York time) on each Business Day immediately
preceding a proposed Funding Date, the Certificate
Funding
Administrator shall fax the Funding Report, and the amount to
be released from the Cash Collateral Account and the
Prefunding Account, to the Transferor and the Transferor
shall thereupon execute such report and fax it to MBIA and
the Trustee no later than 11:00 a.m. (New York time) on such
date of receipt. The
Servicer shall forward to MBIA by overnight mail or
electronic transfer, for
receipt by MBIA on the related Funding Date, a
diskette or other electronic file, containing, in a
standardized format, the same information that was delivered by
the Transferor pursuant to clause (a)(ii) above.
(c) Preparation of Targeted Balance Schedule.
Immediately
after the Funding Termination Date, the Certificate
Funding Administrator shall prepare and deliver to the Trustee,
MBIA, the Transferor, the Servicer and the Certificateholders
the Targeted Balance Schedule. Such schedule shall be based
on all Lease Contracts then
assigned to the Trustee and shall reflect the
targeted decline of the Class A Certificate Balance
assuming (i) no delinquencies, defaults or prepayments on
the Lease Contracts, (ii) the Class A Certificateholders are
paid on each Payment Date the Class A Percentage of the
Scheduled Payments to be paid during the related Monthly
Period and (iii) such adjustments as may be necessary
pursuant to clause (b) or (c) of the definition of Required
Collateralization Amount are taken into account when such
clauses would be applicable for any
Payment Date.
Section 3.04 Verification of Funding Report.
(a) Upon the Trustee's receipt of a Funding Report
pursuant to Section 3.03(b) hereof, the Trustee shall recompute
all of the calculations in such Funding Report (including
without limitation a recalculation of the Implicit Principal
Balance of the related Lease Contracts) based on the
information contained in the list of Lease
Contracts forwarded to it by diskette or electronic
transfer, the existing information regarding all other
Lease
Contracts and the existing information used to generate
the
Monthly Servicer's Report. If the Trustee does not discover
and
is not notified of any errors in the calculations in such
Funding Report that have not been corrected by 3:00 p.m. (New
York time) on the Business Day immediately preceding the
proposed Funding Date and all of the conditions
precedent set forth in
Section 3.03 hereof have been satisfied (provided, however,
that
with respect to 3.03(a)(vii)(A), the Trustee may
conclusively rely on the Company Certificate), the Trustee
shall release the
amounts specified in Section 3.02(b) from the Cash
Collateral Account and the Prefunding Account in accordance
with Section 3.02 hereof. If the Trustee discovers or is
notified of any
error in the Funding Report that is not corrected by 3:00
p.m.
(New York time) on the Business Day immediately preceding
the
proposed Funding Date or if any of the conditions precedent
set
forth in Section 3.03(a) hereof have not been satisfied,
the
Trustee shall notify the Transferor that the applicable
Funding is postponed until the next Business Day following
resolution of any such error, and the Trustee shall thereupon
notify MBIA and
the Certificate Funding Administrator of such error. If
MBIA discovers any
error in the Funding Report after a Funding based
on such report, MBIA shall notify the Trustee, the Servicer,
the Company, the
Certificate Funding Administrator and the
Transferor.
(b) If a Funding occurs based upon a Funding Report
with
respect to which an error has been discovered and the
Certificate Funding Administrator or the Transferor is not
able to correct such error to the satisfaction of MBIA by
the next succeeding
date upon which a Funding is permitted to occur (or, in the
case of the final Funding preceding or on the applicable
Funding Termination Date, by the Payment Date immediately
following such Funding Termination Date), the Transferor shall
cause the Company to either (i) repurchase the affected Lease
Contracts at a price equal to the Removal Price of such Lease
Contracts, (ii) replace the affected Lease Contracts with
Substitute Lease Contracts, in each case on the earlier of
(x) the second succeeding date upon which the next Funding
is permitted to occur, (y) the following Determination Date
and (z) the Funding Termination Date or (iii) deposit
funds in the Prefunding Account (or, in the case of the
final Funding preceding or on the applicable Funding
Termination Date, the Collection Account) in the amount, if
any, by which the Funding Amount as recalculated based on the
correct information is less than the erroneous Funding Amount.
(c) On the Funding Termination Date, the Transferor
will forward to the Independent Accountants by mailing
computer diskettes or by electronic transfer, the Funding
Reports prepared during the Funding Period together with the
information necessary to
calculate the Implicit Principal Balance of the Lease
Contracts. Within sixty (60) days following the
Funding
Termination Date, the Transferor shall cause the
Independent Accountants to (i) recalculate the Implicit
Principal Balance of the Lease Contracts included in such
Funding Reports and the related Funding Amounts, in each
case based solely on the information contained in such
reports or on such computer diskettes, and to send the
results of such recalculation to the Transferor, the
Trustee, the Servicer, the Certificate Funding Administrator
and MBIA and (ii) reunderwrite 10% of all Lease Contracts
acquired by the Transferor during the Funding Period and 100%
of all Lease Contracts acquired by the Transferor during the
Funding Period having titled Equipment underlying such Lease
Contracts. If any errors have been discovered by the
Independent Accountants in the course of any such review, and
the Certificate Funding Administrator or the Transferor is not
able to correct such error to the satisfaction of MBIA by
the next Payment Date following receipt by the Transferor
from the Independent Accountants of the results, the
Transferor shall cause the Company to either (i) repurchase
the affected Lease Contracts at a price equal to the
Removal Price of such Lease Contracts, (ii) replace the
affected Lease Contracts with Substitute Lease Contracts or
(iii) deposit funds in the Collection Account in the amount, if
any, by which the Funding Amount as recalculated based on the
correct information is less than the erroneous Funding
Amount.
Section 3.05 Appointment of Certificate
Funding
Administrator.
(a) As a condition to the issuance of the Class
A Certificates, the Transferor shall appoint Rothschild Inc. to
act as the Certificate Funding Administrator to perform the
functions described in this Article Three. If at any time
MBIA, or upon an MBIA Default or Termination, the
Controlling Holders, shall notify the Trustee and Rothschild
Inc. in writing that Rothschild Inc. has failed to perform
its duties in accordance with this Article Three or if at any
time, Rothschild Inc. shall become the subject of a proceeding
under the United States Bankruptcy Code or if
Rothschild Inc. resigns as Certificate
Funding
Administrator, the Servicer shall direct the Transferor
to appoint a successor Certificate Funding Administrator of
the Servicer's choosing which shall be acceptable to MBIA and
notify the
Trustee of such appointment. Upon notice of such
appointment, the Trustee shall mail written notice thereof
by first-class mail, postage prepaid, to all
Certificateholders.
Upon the Certificate Funding Administrator's resignation
or termination pursuant to this Section 3.05, (i) the
Certificate Funding Administrator shall comply with the
provisions hereof and the Insurance Agreement until the
acceptance of the appointment of a successor Certificate
Funding Administrator and (ii) until the Trustee receives
MBIA's written consent to a successor Certificate Funding
Administrator, no Funding shall occur.
Any
successor Certificate Funding Administrator upon acceptance
of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as the
Certificate Funding Administrator.
(b) The Transferor agrees to pay the Certificate
Funding
Administrator compensation for its services under this
Article Three in accordance
with the Certificate Administration
Agreement, which fee, if any, shall in no event be an
obligation of the Trust Estate.
ARTICLE FOUR
ISSUANCE OF CERTIFICATES; SUBSTITUTIONS OF COLLATERAL
Section 4.01 Conditions to Issuance of Certificates
on Closing Date.
All Certificates to be issued on the Closing Date shall
be executed by the Transferor and delivered to the Trustee
for authentication, and thereupon, the same shall be
authenticated and delivered by the Trustee upon Transferor
Order and upon receipt by the Trustee of the following:
(a) the Initial Lease Schedule;
(b) the original executed counterpart of each
Lease
Contract listed on the Initial Lease Schedule and all other
items included in the related Lease Contract File, subject
to such exceptions as shall be noted in an exception report
delivered by the Trustee to MBIA, the Servicer and the
Certificateholders within 10 days of the Closing Date;
(c) a Board Resolution of each of the Transferor,
the
Servicer and the Company authorizing, as applicable,
the
execution, delivery and performance of the Transaction
Documents and the transactions contemplated hereby and by
the other Transaction Documents, certified by the Secretary or
an Assistant Secretary of the Transferor, the Servicer or
the Company, as applicable;
(d) a copy of an officially certified document, dated
not
more than 30 days prior to the Closing Date, evidencing the
due organization and good standing of each of the
Transferor, the Servicer and the Company in their
respective states
of
incorporation;
(e) copies of the Certificate of Incorporation and By-
Laws
of each of the Transferor, the Servicer and the
Company, certified by the Secretary or an Assistant
Secretary of the Transferor, the Servicer and the Company, as
applicable;
(f) (i) evidence of filing with the Secretary of State
of
the State (and with the relevant county, if required by
the applicable state law) of the Company's chief executive
office of UCC-1 financing statements executed by the Company,
as debtor, and naming the Transferor as secured party, the
Trustee for the benefit of the Certificateholders and MBIA as
assignee and the
Lease Assets as collateral; and (ii) evidence of filing with
the Secretary of State of the State (and with the relevant
county, if required by the applicable state law) of the
Transferor's chief executive office of UCC-1 financing
statements executed by the Transferor, as debtor, and naming
the Trustee for the benefit of the Certificateholders and
MBIA as secured party, and the Trust Estate as collateral;
(g) a certificate listing the Servicing Officers of
the
Servicer as of the Closing Date;
(h) an executed copy of the Servicing Agreement and
the
Lease Acquisition Agreement;
(i) the Certificate Insurance Policy for the Class
A
Certificates;
(j) evidence of the deposit of the Prefunding
Account
Deposit and the Capitalized Interest Account Deposit;
(k) evidence of the deposit by the Transferor into
the
Collection Account of any amounts due and paid on the
Lease Contracts since the Cut-Off Date; and
(l) such other documents as the Trustee, MBIA or
the
Certificateholders may reasonably require, including
such documents and opinions described in the Certificate
Purchase Agreements or the Insurance Agreement.
MBIA shall have agreed, by delivering the
Certificate Insurance Policy, that the conditions precedent in
this Section 4.01 have been satisfied to MBIA's satisfaction
or waived by MBIA.
Section 4.02 Perfection of Transfer.
(a) The Transferor and the Company shall file UCC-
1
financing statements described in Section 4.01(f) hereof
in accordance with such Section. Within thirty days of the
Closing Date, the Transferor and the Company shall file an
application for certificate of title for each item of
titled Equipment, naming the Trustee as first lienholder and
with respect to Lease Contracts which
are not Loan Contracts, also naming the
Transferor as owner of such titled Equipment. On or prior to
the Funding Termination Date, the Transferor and the Company
shall deliver such original certificate of title to the
Trustee. From time to time, the Servicer shall take or cause
to be taken such actions and execute such documents as are
necessary to perfect and protect the Trustee's and MBIA's
respective interests in the Lease Contracts against all other
Persons, including, without limitation, the filing of
financing statements,
amendments
thereto and continuation statements, the execution of
transfer instruments and the making of notations on or taking
possession of all records or documents of title.
(b) If any change in either the Company's or
the
Transferor's name, identity, structure or the location of
its principal place of business or chief executive office
occurs, then the Transferor shall, or the Transferor shall
cause the Company to deliver 30 days prior written notice of
such change or relocation to the Servicer, MBIA and the
Trustee and no later than the effective date of such
change or relocation, the Servicer shall file such
amendments or statements as may be required to preserve
and protect the Trustee's and MBIA's respective interests
in the Trust Estate.
(c) During the term of this Agreement, the Transferor
will maintain its chief executive office and principal
place of business in one of the States of the United States.
(d) The Servicer agrees to pay all reasonable costs
and disbursements in connection with the perfection and
the
maintenance of perfection, as against all third parties, of
the Trustee's and MBIA's respective right, title and interest
in and to the Trust Estate.
(e) The Trustee shall hold the original
executed
counterparts of each Lease Contract at its office in the State
of Minnesota, and at any such new address in the State of
Minnesota as the Trustee shall inform the Servicer, the
Transferor, and MBIA in writing from time to time. The
Trustee shall hold each Lease Contract for the benefit of
Certificateholders and MBIA, and maintain accurate records
pertaining to each Lease Contract to maintain a current
inventory thereof. The Trustee may, if requested by the
Servicer in writing for purposes of servicing a Lease
Contract, temporarily release to the Servicer such Lease
Contract. Any Lease Contract temporarily released from
the custody of the Trustee to the Servicer or its agents shall
have stamped on it prior to delivery a legend to the effect
that the Lease Contract is the property of Norwest Bank
Minnesota, National Association, as Trustee. The Servicer
shall promptly return the Lease Contract to the Trustee when
the need therefor no longer exists.
Section 4.03 Substitution, Removal and Purchase of
Lease
Assets.
(a) If at any time the Transferor, MBIA or the
Trustee obtains knowledge (within the meaning of 7.01(e)
hereof), discovers or is notified by the Servicer that
any of the representations and warranties of the Company
in the Lease Acquisition Agreement were incorrect at the time
as of which such representations and warranties were made,
then the Person discovering such defect, omission, or
circumstance shall promptly notify MBIA and the other parties
to this Agreement.
(b) In the event that any representation or warranty of
the Company in the Lease Acquisition Agreement is
incorrect and materially and adversely affects the interests
of MBIA or the Holders of the Certificates, or if there is
any breach of any of the representations and warranties
set forth inSections
3.01(a)(ii), 3.01(a)(v), 3.01(a)(vii), 3.01(a)(xix)
or
3.01(c)(iii) of the Lease Acquisition Agreement, the
Transferor shall require the Company pursuant to the Lease
Acquisition Agreement to eliminate or otherwise cure the
circumstance or condition which has caused such representation
or warranty to be incorrect within 30 days of discovery or
notice thereof. If the Company fails or the Company or the
Back-up Servicer is unable to cure such circumstance or
condition in accordance with the Lease Acquisition Agreement,
then the Transferor shall require the Company to
substitute or purchase pursuant to the Lease Acquisition
Agreement for any Lease Asset as to which such
representation or warranty is incorrect within the time
specified in Section 3.03 of the Lease Acquisition Agreement.
The proceeds of a purchase shall be remitted by the Transferor
to the Servicer for deposit by the Servicer in the Collection
Account pursuant to Section 3.03(c) of the Servicing Agreement.
(c) If the Transferor fails to enforce the purchase
or substitution
obligation of the Company under the Lease
Acquisition Agreement at the direction of MBIA, or upon
the occurrence of an MBIA Default or Termination, the
Controlling
Holders (provided, in each case, that the requirements of
Section 7.03(e) have been satisfied) the Trustee shall
enforce such purchase or substitution obligation for the
benefit of the Certificateholders and MBIA, and the Trustee
is hereby appointed attorney-in-fact to act on behalf of and
in the name of the Transferor to require such purchase or
substitution.
(d) With respect to (i) any Lease Contract to be prepaid
or terminated early pursuant to Section 3.09 of the
Servicing Agreement and (ii) any Lease Contract that becomes
a Defaulted Lease Contract or any Lease Contract that becomes
a Delinquent Lease Contract, the Transferor shall be entitled
to, upon five Business Days notice to the Trustee, remove
such Lease Contract from the Trust Estate and deliver a
Substitute Lease Contract meeting the same requirements as
those specified in Section 3.04
of the Lease Acquisition Agreement for substitutions
and
purchases by the Company upon breaches of a representation
or warranty by the Company thereunder; provided, however, that
the aggregate Implicit Principal Balance of such prepaid and
early terminated Lease Contracts, Defaulted Lease
Contracts and
Delinquent Lease Contracts that are substituted or removed by
the Transferor shall be subject to an overall limit of 10%
of the Aggregate Initial IPB; and, provided, further
that no
substitution or repurchase shall be made if (i) such
substitution or repurchase is made with any intent to
hinder, delay, or defraud any entity to which the Company
is or will become indebted; (ii) there shall be any reason
to believe that the Company is insolvent or that such
substitution or repurchase will render the Company insolvent
on the date thereof or as a result of such substitution or
repurchase; (iii) at the time of such substitution or
repurchase, the Company is engaged in business, or about to
engage in business, for which the assets remaining with it
after the substitution or repurchase will be an
unreasonably small amount of capital; or (iv) the Company
intends or believes that it will incur debts beyond its ability
to pay as such debts mature.
(e) The Transferor shall comply with the
requirements
relating to Substitute Lease Contracts and Funded Lease
Contracts as set forth in the Lease Acquisition Agreement
(including compliance with the Eligibility Criteria and the
Concentration Limits) within the time periods set forth
therein. In addition, in the case of any Funded Lease
Contracts, the Transferor shall provide to the Trustee and
MBIA, as applicable, the items listed in Section 3.03(a)
hereof which are required to be delivered to the Trustee
and/or MBIA pursuant to such Section. On or prior to the
Business Day preceding the Closing Date or within two
Business Days of the related Funding Date the Trustee will
review the related Lease Contract Files. The Trustee shall
confirm, by execution and delivery of a certificate of the
Trustee to the Transferor, the Certificateholders and
MBIA, that: (1) the Trustee has received the Lease
Contract Files; and (2) that the Trustee has received the
originals of each Lease Contract. In
the case of any Substitute Lease Contracts acquired by
the Transferor, the Transferor shall provide to the Trustee
on the applicable date of delivery the items listed in (i)
and (ii) below, and to MBIA the item listed in (i) below. In
the case of any Funded Lease Contracts or Substitute Lease
Contracts acquired by the Transferor pursuant to either a
Funding or a substitution of a Lease Contract, the Transferor
shall provide to the Trustee and MBIA at the end of each
calendar quarter the items listed in (iii) below with
respect to any Substitute Lease Contracts substituted or
Funded Lease Contracts acquired during such period:
(i) a Company Certificate and a GF Certificate,
each
such certificate having attached thereto an Amended
Lease Schedule and subjecting such Substitute Lease
Contract to the provisions thereof and hereof and
providing with respect to the Substitute Lease Contract
the information required to supplement the Lease
Schedule, and with respect to titled Equipment, an
application to retitle or originate title in such
Equipment, as applicable, in the name of the Transferor
and naming the Trustee as secured party;
(ii) the original executed counterpart of the
Lease Contract relating to such Substitute Lease Contract
and all other items included in the Lease Contract File;
and
(iii) evidence that financing statements have
been filed with
respect to such Substitute Lease Contract or
Funded Lease Contract in accordance with Sections
4.01(f) and 4.02
hereof.
(f) If, upon examination of the Lease Contract Files
in
accordance with Section 4.03(e) hereof, the Trustee
determines
that any such Lease Contract File does not satisfy
the
requirements set forth in Section 4.03(e) hereof, or is unable
to confirm that the requirements have been met, the Trustee
shall promptly notify the Transferor, the Servicer and
MBIA by
telephone or telecopy. If the Transferor or the Servicer
does not satisfy the Trustee that the requirements of Section
4.03(e) hereof have been met prior to the related Funding
Date, the Trustee shall return the applicable Lease Contract
and related files to the Transferor.
(g) Within thirty days after the Funding Termination
Date,
the Trustee shall review the exception report delivered
pursuant to Section 4.01(b) and shall verify that it has
possession of the original executed counterpart of each Lease
Contract listed on such report and a certificate of title
naming the Transferor as owner (if the
underlying Lease Contract is not a Loan Contract)
and naming the Trustee as the first lienholder of all
titled Equipment underlying any Lease Contract. The Trustee
shall send such verification and notice of any defects to
the Transferor, the Company and MBIA within thirty days
after the Funding Termination Date and take any appropriate
action under the Lease Acquisition Agreement.
Section 4.04 Releases.
(a) The Transferor shall be entitled to obtain a
release
from the lien of this Agreement for any Lease Contract
and, except in the case of a re-lease under (iii) below, the
related Equipment at any time (i) after a payment by the
Company or the Transferor of the
Removal Price of the Lease Receivable,
(ii) after a Substitute Lease Contract is substituted for
such Lease Contract, or (iii) upon the termination of a Lease
Contract following the sale, lease or other disposition of
the related Equipment in accordance with Section
3.01(b)(vii) of the Servicing Agreement, if the Transferor
delivers to the Trustee and MBIA an Officer's Certificate
(A) identifying the Lease Receivable and the
related Lease Contract and Equipment to be
released, (B) requesting the release thereof, (C) setting
forth the amount deposited in the Collection Account with
respect thereto, in the event a Lease Contract and the related
Equipment are being released
from the lien of this Agreement pursuant to
(i) or (iii) above, and (D) certifying that the amount
deposited in the Collection Account (x) equals the Removal
Price of the Lease Contract, in the event a Lease Contract
and the related Equipment are being released from the lien
of this Agreement pursuant to (i) above or (y) equals
the entire amount of
Insurance Proceeds, Recoveries or Residual Proceeds received
or expected to be received with respect to such Lease Contract
and related Equipment in the event of a release from the lien
of this Agreement pursuant to (iii) above.
(b) Upon satisfaction of the conditions specified
in subsection (a), the Trustee shall release from the lien of
this Agreement and deliver to or upon the order of the
Transferor (or to or upon the order of the Company if it
has satisfied its obligations under Section 4.03 hereof and
Section 3.04 of the Lease Acquisition Agreement with respect
to a Lease Contract) the Lease Contract, the Lease Receivable
and the Equipment described in the Transferor's request for
release.
Section 4.05 Trust Estate.
The Trustee may, and when required by the provisions
of Articles Four, Five, Six and Twelve hereof shall,
execute instruments to release property from the lien of this
Agreement, or convey the Trustee's interest in the same, in a
manner and under circumstances which are not
inconsistent with
the
provisions of this Agreement. No party relying upon
an
instrument executed by the Trustee as provided in this
Article Four shall be bound to ascertain the Trustee's
authority, inquire into the satisfaction of any conditions
precedent or see to the application of any monies.
Section 4.06 Notice of Release.
The Trustee shall be entitled to receive at least 10
days' notice of any action to be taken pursuant to Section
4.04(a) hereof, accompanied by copies of any instruments
involved.
Section 4.07 Nature of Transfer.
To the extent that the transfer of the Trust Estate from
the Transferor to the Trustee is deemed to be a secured
financing, the Transferor shall be deemed hereunder to have
granted to the Trustee, and the Transferor does hereby grant
to the Trustee, a security interest in all of the
Transferor's right, title and interest in, to and under the
Trust Estate, whether now owned or hereafter acquired. For
purposes of such grant, this Agreement shall constitute a
security agreement under applicable law.
Section 4.08 Issuances of Class B Certificates.
(a) Class B Certificates may be issued by the Transferor
in accordance with the terms of this Agreement. On or before
the issuance date of such Class B Certificates, the parties
hereto will execute and deliver the Class B Supplement that
will specify the terms applicable to the Class B Certificates.
The terms set forth in the Class B Supplement may modify or
amend, subject to Article Nine hereof, the terms of this
Agreement solely as applied to such Class B Certificates.
The Class B Certificates may be executed by the Transferor
and delivered to the Trustee for authentication, and
thereupon, the same shall
be
authenticated and delivered by the Trustee upon Transferor
Order and upon receipt:
(i) by the Trustee, of an executed copy of a Class
B Supplement;
(ii) by the Trustee and MBIA, of an Officers' Certificate
of the Transferor to the effect that (A) such issuance
will not result in the occurrence of a Trigger Event or
a Default under this Agreement and the Transferor is
not in Default under this Agreement, (B) the issuance
of the Class B
Certificates applied for will not result in a breach of
any of the terms, conditions or provisions of, or
constitute a default under, any agreement or instrument
to which the Transferor is a party or by which it is
bound, or any order of any court or administrative
agency entered in any proceeding to which the
Transferor is a party or by which it may be bound or
to which it may be subject, (C) all conditions
precedent provided in this Agreement relating to the
authentication and delivery of the Class B Certificates
applied for have been complied with, and (D) specifying
the Expected Maturity, the principal amount and the
Class B Interest Rate of the Class B Certificates; and
(iii) by the Trustee and MBIA, an Opinion of Counsel
to the effect that the issuance of such Class B
Certificates will not adversely affect the
characterization of the Class A Certificates as debt
for tax purposes, and as to such
additional legal matters as MBIA may reasonably
request.
The Transferor shall notify the Trustee in writing no
later than 10:00a.m. (Minneapolis time) on the proposed
date of issuance of such Class B Certificates that MBIA has
been provided (A) the Officer's Certificate required by (ii)
above and (B) an opinion covering all matters required
pursuant to clause (iii) above.
Upon satisfaction of the above conditions, the Trustee
shall execute the Class B Supplement and issue and deliver to
or upon the order of the Transferor the Class B Certificates,
and provide notice to MBIA, the Rating Agencies and
all existing Certificateholders of the issuance of such Class
B Certificates.
ARTICLE FIVE
SATISFACTION AND DISCHARGE
Section 5.01 Satisfaction and Discharge of Agreement.
(a) Following payment in full of (i) all of
the
Certificates, (ii) the fees and charges of the Trustee, (iii)
all other obligations of the Transferor under the
Transaction Documents and (iv) all amounts owing to MBIA under
the Insurance Agreement, and the release by the Trustee of the
Trust Estate in accordance with Section 5.01(b) hereof, this
Agreement shall be discharged and the Trustee shall notify
the Rating Agencies thereof.
(b) Upon payment in full of the amounts referred to
in clauses (i) through (iv) of Section 5.01(a) hereof,
the
Transferor may submit to the Trustee an Officer's
Certificate requesting the release to the Transferor or its
designee of a stated amount of the funds on deposit in the
Cash Collateral Account and some or all of the other Trust
Estate (collectively, the "Withdrawn Collateral"), accompanied
by an Opinion of Counsel reasonably acceptable to MBIA or,
if an MBIA Default
or
Termination has occurred and is continuing, acceptable to
the Controlling Holders, to the effect that, after the release
of the Withdrawn Collateral, there will remain an amount in
the Cash Collateral Account or otherwise subject to this
Agreement at least equal to the payments of interest due on
the Outstanding Certificates and the Class A Principal
Distribution Amounts and Class B Principal Distribution
Amounts that are subject to recapture as preferential
transfers pursuant to Section 547 of the Bankruptcy Code or,
alternatively, to the effect that no such
payments are subject to recapture. In rendering such Opinion
of Counsel, such counsel may rely as to factual matters,
including, without limitation, the date on which funds were
received and the source of funds, upon an Officer's
Certificate. Promptly after receipt of such Officer's
Certificate, Opinion of Counsel and authorization to release
from MBIA, the Trustee shall release the Withdrawn Collateral
from the lien of this Agreement, and deliver the Withdrawn
Collateral to the Transferor or its designee. The Transferor
shall be entitled to deliver more than one such Officer's
Certificate and Opinion of Counsel until the entire Trust
Estate is released and delivered to the Transferor or its
designee. Notwithstanding the foregoing, MBIA or, if an
MBIA Default or Termination has occurred and is
continuing, the Controlling Holders, may waive the
requirement that the
Transferor deliver such Officer's Certificate and/or Opinion
of Counsel and authorize the Trustee by written direction to
release all or a portion of the Cash Collateral Account or
other items of the Trust Estate from the lien of this Agreement
upon payment in full of the amounts referred to in clauses
(i) through (iv) of Section 5.01(a)
hereof. Notwithstanding termination of this
Agreement, the Trustee shall remain obligated to make
claims under the Certificate Insurance Policy with respect
to any Preference Claim.
(c) In connection with the discharge of this Agreement
and the release of the Trust Estate, the Trustee shall release
from the lien of this Agreement and deliver to or upon the
order of the Transferor all property remaining in the Trust
Estate and shall execute and file, at the expense of the
Transferor, UCC financing statements evidencing such discharge
and release.
Section 5.02 Application of Trust Money.
Subject to the last paragraph of Section 7.16 hereof,
all
monies deposited with the Trustee pursuant to Section 5.01
hereof shall be held in trust and if invested, shall be
invested in Eligible Investments of the type described in
clause (a) of the definition thereof, and applied by the
Trustee, in accordance with the provisions of the
Certificates and this Agreement, to the payment, either
directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal
and interest for whose payment such money has been
deposited with the Trustee; but such money need not be
segregated from other funds except to the extent required in
this Agreement or to the extent required by law.
ARTICLE SIX
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
"Event of Default" wherever used herein means any one of
the following events:
(a) default in the payment of any interest or
any other amounts due and owing to
the Class A
Certificateholders when the same becomes due and
payable, and if there are no Class A Certificates
Outstanding, default in the payment of any interest upon
any Class B Certificates when the same becomes due and
payable; or
(b) default in the payment of any principal of
any Class A Certificate when the same becomes due and
payable, and if there are no Class A Certificates
Outstanding, default in the payment of any principal
upon any Class B
Certificates when the same becomes due and payable; or
(c) default in the performance of any covenant of
the Transferor, or breach of any representation or
warranty of the Transferor which has a material adverse
effect on the Certificateholders or MBIA, in this
Agreement, the Lease Acquisition Agreement, the
Insurance Agreement, the
Certificate Purchase Agreements or the Servicing
Agreement (other than a
covenant or warranty default in the
performance of which or breach of which is elsewhere in
this Section specifically dealt with), and continuance
of such default or breach for a period of 30 days
after the Transferor has actual knowledge thereof;
(d) the entry of a decree or order for relief by
a court having jurisdiction in the premises in respect of
the Transferor under the United States Bankruptcy Code
or any other applicable Federal or state bankruptcy,
insolvency, reorganization, liquidation or other similar
law now or hereafter in effect or any arrangement with
creditors or appointing a receiver, liquidator,
assignee, trustee, or sequestrator (or other similar
official) for the Transferor or for any substantial part
of its property, or ordering the winding up or
liquidation of the Transferor's affairs, and the
continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; or
(e) the institution by the Transferor of
proceedings to be adjudicated a bankrupt or insolvent, or
the consent by the Transferor to the institution of
bankruptcy or
insolvency proceedings against the Transferor, or the
filing by the Transferor of a petition or answer or
consent seeking reorganization or relief under the United
States Bankruptcy Code or any other applicable Federal
or state bankruptcy insolvency, reorganization,
liquidation or other similar law now or hereafter in
effect, or the consent by the Transferor to the filing of
any such petition or to the appointment of or taking
possession by a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or other
similar
official) of the Transferor or of any substantial part
of the Transferor's property, or the making by the
Transferor of any assignment for the benefit of
creditors, or the admission by it in writing of its
inability, or the failure by it generally, to pay its
debts as they become due, or the taking of corporate
action by the Transferor in furtherance of any such
action.
Section 6.02 Acceleration of Maturity; Rescission
and Annulment.
If an Event of Default with respect to any of
the
Certificates at the time Outstanding occurs and is
continuing, then, and in every such case, the Trustee shall, at
the direction of MBIA, or if there is an MBIA Default or
Termination, the Trustee shall, at the direction of the
Controlling Holders, declare the Certificate Balance of all
the Certificates to be immediately due and payable, by
notice given in writing to the Transferor (and to the
Trustee if given by Certificateholders); provided that, MBIA
shall not declare the Certificate Balance of all of the
Certificates immediately due and payable unless it shall
have endorsed the Certificate Insurance Policy to provide
coverage for any shortfall in the payment of
accelerated principal and any interest due on the Class A
Certificates on the date established for redemption
thereof pursuant to such acceleration, and upon any such
declaration, such principal shall become immediately due and
payable without any presentment,
demand, protest or other notice of any kind (except such
notices as shall be expressly required by the provisions
of this Agreement), all of which are hereby expressly waived.
At any time after such a declaration of acceleration
has been made, but before any Sale of the Trust Estate has
been made or a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter in this
Article provided, MBIA, or if an MBIA Default or Termination
has occurred, the Controlling Holders, by written notice to
the Transferor and the Trustee, may rescind and annul
such declaration and
its
consequences (except that in the case of a payment default on
the Class A Certificates, or if no Class A Certificates
are
Outstanding, the Class B Certificates, the consent of all
the Holders of such Class shall be required to rescind and
annul such a declaration and its consequences) if:
(1) the Transferor has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue installments of interest on all
Class A Certificates, or if no Class A Certificates are
Outstanding, the Class B Certificates;
(B) the principal of any Class A Certificates, or
if no Class A Certificates are Outstanding, the Class B
Certificates which have become due otherwise than by
such declaration of acceleration and interest thereon
at the rate borne by such Certificates from the
time such principal first became due until the
date when paid; and
(C) all sums paid or advanced, together
with interest thereon, by the Trustee, MBIA
or any
Certificateholder hereunder or by MBIA under
the
Insurance Agreement or the Certificate
Insurance Policy, and the reasonable
compensation, expenses, disbursements and advances
of the Trustee, MBIA and the Certificateholders,
their agents and counsel incurred in connection
with the enforcement of this Agreement to the date of
such payment or deposit; and
(2) all Events of Default, other than the
nonpayment of the principal on the Class A
Certificates, or if no Class A Certificates are
Outstanding, the Class B Certificates which have
become due solely by such declaration of
acceleration, have been cured or waived as provided
in Section 6.15 hereof.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
Section 6.03 Collection of Indebtedness and Suits
for
Enforcement by Trustee.
The Transferor covenants that if an Event of Default
shall occur and be continuing and any of the Certificates
have been declared due and payable and such declaration
has not been rescinded and annulled, the Transferor will,
upon demand of the Trustee and at the direction of MBIA, or
if an MBIA Default or Termination has occurred at the
direction of the Controlling Holders, pay to the Trustee,
for the benefit of the Holders of the Certificates and MBIA,
the whole amount then due and payable on the Certificates for
principal and interest, with interest upon the overdue
principal at the rate borne by the Certificates and, in
addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee and MBIA, their
respective agents and counsel.
If the Transferor fails to pay such amount forthwith
upon such demand, the Trustee, in its own name and as Trustee
of an express trust shall, at the direction of MBIA, and if
an MBIA Default or Termination has occurred the Trustee may,
and shall, at the direction of the Controlling
Holders, institute
Proceedings for the collection of the sums so due and unpaid,
and prosecute such Proceeding to judgment or final
decree, and enforce the same against the Transferor and
collect the monies adjudged or decreed to be payable in the
manner provided by law out of the property of the Transferor,
wherever situated.
If an Event of Default occurs and is continuing, the
Trustee shall, at the direction of MBIA, and if an MBIA
Default or Termination has occurred the Trustee may in
its discretion proceed, and shall at the direction of the
Controlling Holders proceed, to protect and enforce its rights
and the rights of MBIA by such appropriate Proceedings as the
Trustee, at the direction of MBIA, or if an MBIA Default or
Termination has occurred, at its discretion shall deem most
effectual to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement in
this Agreement or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
Section 6.04 Remedies.
If an Event of Default shall have occurred and
be
continuing, the Trustee shall, at the direction of MBIA, and
if an MBIA Default or Termination has occurred, the Trustee
shall, at the direction of the Controlling Holders, do one or
more of the following:
(a) institute Proceedings for the collection of
all
amounts then due and payable on the Certificates or
under this Agreement, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the
Transferor the monies adjudged due;
(b) take possession of and sell the Trust
Estate
securing the Certificates or any portion thereof or
rights or interest therein, at one or more Sales
called and conducted in any manner permitted by law;
(c) institute any Proceedings from time to time
for
the complete or partial foreclosure of the lien created
by this Agreement with respect to the Trust Estate;
(d) during the continuance of a default under a
Lease
Contract, exercise any of the rights of the lessor
under such Lease Contract;
(e) exercise any remedies of a secured party under
the Uniform Commercial Code or any applicable law and
take any other appropriate action to protect and enforce
the rights and remedies of the Trustee, MBIA and the
Holders of the Certificates hereunder; and
(f) institute proceedings against MBIA for
the
collection of any amounts then due and payable under
the Certificate Insurance Policy, whether by
declaration or otherwise, enforce any judgment obtained,
and collect from
MBIA the monies adjudged due;
provided, however, that without the consent of MBIA, or if
an MBIA Default or Termination has occurred, all the
Controlling Holders, the Trustee may not sell or otherwise
liquidate any portion of the Trust Estate unless the proceeds
of such Sale or liquidation distributable to the
Certificateholders are
sufficient to discharge in full the amounts then due and
unpaid upon the Certificates of such Controlling Holders for
principal and interest together with any amounts owed to MBIA
under the Insurance Agreement.
Section 6.05 Optional Preservation of Trust Estate.
If (i) an Event of Default shall have occurred and
be continuing with respect to the Certificates and
(ii) no
Certificates have been declared due and payable, or
such declaration and its consequences have been
annulled and
rescinded, the Trustee shall, at the direction of MBIA, or if
an MBIA Default or Termination has occurred, the Trustee may in
its sole discretion if it determines it to be in the best
interests of the Controlling Holders and shall, upon
request from the Controlling Holders elect, by giving
written notice of such election to the Transferor, to take
possession of and retain the Trust Estate securing the
Certificates intact, collect or cause the collection of the
proceeds thereof and make and apply all payments and
deposits and maintain all accounts in respect of such
Certificates in accordance with the provisions of Article
Twelve of this Agreement. If the Trustee is unable to or
is stayed from giving such notice to the Transferor for any
reason whatsoever, such election shall be effective as of the
time of such determination or request, as the case
may be,
notwithstanding any failure to give such notice, and the
Trustee shall give such notice upon the removal or cure of such
inability or stay (but shall have no obligation to effect such
removal or cure). Any such election may be rescinded with
respect to any portion of the Trust Estate securing the
Certificates remaining at the time of such rescission by
written notice to the Trustee and the Transferor from MBIA
or, if an MBIA Default
or
Termination has occurred, from the Controlling Holders.
Section 6.06 Trustee May File Proofs of Claim.
In case of the pendency of any receivership,
insolvency, conservatorship, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other
judicial Proceeding relating to the Transferor or any other
obligor upon any of the Certificates or the property of the
Transferor or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of any of the
Certificates shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the
Transferor for the payment of overdue principal or interest)
shall be entitled and empowered, to intervene in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount
of principal and interest owing and unpaid in respect of
the Certificates issued hereunder and to file such other
papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses,
disbursements and
advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 7.07
hereof) and of MBIA and the Certificateholders allowed in
such judicial Proceeding, and
(b) to collect and receive any monies or
other property payable or deliverable on any such claims
and to distribute the same,
and any receiver, assignee, trustee, liquidator, or
sequestrator (or other similar official) in any such judicial
Proceeding is hereby authorized by MBIA and each
Certificateholder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of
such payments directly to MBIA or the Certificateholders, to
pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof.
Nothing contained in this Agreement shall be deemed
to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of MBIA or any Certificateholder
any plan of reorganization, arrangement, adjustment or
composition affecting MBIA or any of the Certificates or
the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of MBIA or any
Certificateholder in any such Proceeding.
Section 6.07 Trustee May Enforce Claims Without
Possession of Certificates.
(a) In all Proceedings brought by the Trustee (and also
any Proceedings involving the interpretation of any provision
of this Agreement to which the Trustee shall be a party),
the Trustee shall be held to represent all of the
Certificateholders, and it shall not be necessary to make any
Certificateholder a party to any such Proceedings.
(b) All rights of actions and claims under this
Agreement
or any of the Certificates may be prosecuted and enforced by
the Trustee without the possession of any of the Certificates
or the production thereof in any Proceeding relating thereto,
and any such Proceedings instituted by the Trustee shall be
brought in its own name as Trustee of an express trust, and
any recovery whether by judgment, settlement or otherwise
shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel, be for MBIA and the
ratable benefit of the Holders of the Certificates.
Section 6.08 Application of Money Collected.
If the Certificates have been declared due and
payable following an Event of Default and such declaration has
not been rescinded or annulled, any money collected by the
Trustee with respect to the Certificates pursuant to this
Article Six or otherwise and any other money that may be held
thereafter by the Trustee as security for the Certificates
shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such
money on account of principal or interest, upon presentation
of the Certificates and the notation thereon of the
payment if only partially paid and upon surrender thereof if
fully paid; provided that proceeds of a claim under the
Certificate Insurance Policy will be used only to pay interest
and principal on the Class A Certificates in the manner set
forth in clauses Fifth and Sixth below:
FIRST: To the payment to the Trustee of the
Trustee Fee then due, and any costs and expenses incurred
by it in connection with enforcing the remedies provided
for in this Article Six;
SECOND: To the payment of all the Servicer Fee and
other
amounts due the Servicer pursuant to Section 12.02(d)(i)
hereof and to pay the Servicer the amount necessary to
reimburse the Servicer for any other unrecovered Servicer
Advances;
THIRD: To the payment to the Back-up Servicer of
the
Back-up Servicer Fee then due;
FOURTH: To the payment to MBIA of the MBIA Premium
then
due;
FIFTH: To the payment of the amounts then due and
unpaid
upon the Class A Certificates for interest, with interest (to
the extent payment thereof is legally enforceable at the
respective rate or rates prescribed therefor in the Class A
Certificates) on overdue principal, without preference or
priority of any kind among Class A Certificateholders,
according to the amounts due and payable on the Class A
Certificates for interest;
SIXTH: To the payment of the remaining Class
A
Certificate Balance, without preference or priority of any
kind among Class A Certificateholders;
SEVENTH: To the payment to MBIA of any amounts
previously
paid by MBIA under the Certificate Insurance Policy and
not theretofore repaid, together with interest thereon and any
other amounts due under the Insurance Agreement;
EIGHTH: To reimburse MBIA, and in the event an
MBIA
Default or Termination has occurred, to reimburse
the
Certificateholders, for any costs or expenses incurred
in connection with any enforcement action with respect to
this Agreement or the Certificates;
TENTH: To the payment to the Servicer of any
other
amounts due the Servicer as expressly provided herein and in
the Servicing Agreement;
ELEVENTH: To the payment to the Trustee and the Back-
up Servicer, any other amounts due to the Trustee or the
Back-up Servicer as expressly provided herein and in the
Servicing Agreement;
TWELFTH: To the payment of the amounts then due and
unpaid upon the Class B Certificates for interest, with
interest (to the extent such interest has been collected by
the Trustee or a sum sufficient therefor has been so collected
and payment thereof is legally enforceable at the respective
rate or rates prescribed therefor in the Class B
Certificates) on overdue principal, without preference or
priority of any kind among Class B Certificateholders,
according to the amounts due and payable on the Class B
Certificates for interest;
THIRTEENTH: To the payment of the remaining Class
B
Certificate Balance, without preference or priority of any
kind among Class B Certificateholders;
FOURTEENTH: To the payment of any surplus to or at
the
written direction of the Holder of the Transferor Certificate
or any other person legally entitled thereto.
Section 6.09 Limitation on Suits.
No Holder of any Certificate shall have any right
to institute any Proceeding, judicial or otherwise, with
respect to
this Agreement, or for the appointment of a receiver or
trustee, or for any other remedy hereunder for so long as an
MBIA Default or Termination has not occurred, and if an
MBIA Default or Termination has occurred, unless
(a) such Holder has previously given written
notice to the Trustee of a continuing Event of Default;
(b) the Controlling Holders shall have made
written request to the Trustee to institute Proceedings
in respect of such Event of Default in its own name
as Trustee hereunder;
(c) such Holder or Holders have offered to
the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 30 days after its receipt
of such notice, request and offer of security or
indemnity has failed to institute any such
Proceedings; and
(e) no direction inconsistent with such
written request has been given to the Trustee
during such 30-day period by the Controlling
Holders; it being understood and intended that no
one or more Holders of Certificates shall have
any right in any manner whatever by virtue of,
or by availing of, any provision of this Agreement
to affect, disturb or prejudice the rights of any
other Holders of Certificates, or to obtain or to
seek to obtain priority or preference over any other
Holders or to enforce any right under this
Agreement, except in the manner herein provided and
for the equal and ratable benefit of all the
Holders of Certificates.
Section 6.10 Unconditional Right of Certificateholders
to Receive Principal and Interest.
Notwithstanding any other provision in this Agreement,
the Holder of any Class A Certificate shall have the right,
which is absolute and unconditional, to receive payment of
the principal and interest on such Class A Certificate as
such principal and interest becomes due and payable and to
institute any Proceeding for the enforcement of any such
payment, and such right shall not be impaired without the
consent of such Holder.
Section 6.11 Restoration of Rights and Remedies.
If the Trustee, MBIA or any Certificateholder has
instituted any Proceeding to enforce any right or remedy
under this Agreement and such Proceeding has been
discontinued or abandoned for any reason, or has been
determined adversely to the Trustee, MBIA or to such
Certificateholder, then, and in every case, the Transferor,
the Trustee, MBIA and the Certificateholders shall, subject
to any determination in such Proceeding, be restored
severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the
Trustee, MBIA and the Certificateholders shall continue
as though no such Proceeding had been instituted.
Section 6.12 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or
stolen Certificates in the last paragraph of Section 2.07
hereof, no right or remedy
herein conferred upon or reserved to the Trustee, MBIA or to
the Certificateholders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.13 Delay or Omission; Not Waiver.
No delay or omission of the Trustee, MBIA or of any
Holder of any Certificate to exercise any right or remedy
accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such
Event of Default or any acquiescence therein. Every
right and remedy given by this Article Six or by law
to the Trustee, MBIA or to the
Certificateholders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee, MBIA or
by the Certificateholders, as the case may be, subject in
each case, however, to the right of MBIA to control any
such right and remedy except as provided in Section 13.14
hereof.
Section 6.14 Control by MBIA or Certificateholders.
MBIA or, if an MBIA Default or Termination has occurred,
the Controlling Holders shall have the right to direct the
time, method and place of conducting any Proceeding for any
remedy available to the Trustee or exercising any trust
or power conferred on the Trustee; provided that:
(a) such direction shall not be in conflict with
any rule of law or with this Agreement including,
without limitation, any provision hereof which
expressly provides for approval by a greater percentage
of the Certificate Balance of Certificates;
(b) any direction to the Trustee by
the
Certificateholders of a Class to undertake a
private sale of the Trust Estate shall be by the
Holders of all Outstanding Certificates of such
Class, unless the condition set forth in Section
6.18(b)(ii) hereof is met;
(c) the Trustee may take any other action
deemed proper by the Trustee which is not
inconsistent with such direction; provided,
however, that, subject to Section 7.01 hereof,
the Trustee need not take any action if a
Responsible Officer or Officers of the Trustee in
good faith determines that it might involve the
Trustee or such officer in personal liability or be
prejudicial to the Certificateholders holding the
same Class of Certificates as the Controlling
Holders and not consenting; and
(d) the Trustee has been furnished
reasonable indemnity against costs, expenses and
liabilities which it might incur in connection
therewith as provided in Section 7.01(f)
hereof.
Section 6.15 Waiver of Certain Events by MBIA
or
Certificateholders.
MBIA, or if an MBIA Default or Termination has occurred
the Controlling Holders, may on behalf of the Holders of
all the
Certificates waive any past Default or Trigger Event
hereunder and its consequences, except:
(a) a Default in the payment of the principal of
or interest on any Certificate, or a Default described
in Sections 6.01(d) and (e) hereof, or
(b) in respect of a covenant or provision hereof
which under Article Nine hereof cannot be modified or
amended without the consent of the Holder of each
Outstanding Certificate affected.
Upon any such waiver, such Default or Trigger Event shall
cease to exist, and any Event of Default or other consequence
arising therefrom shall be deemed to have been cured for every
purpose of this Agreement; but no such waiver shall extend to
any subsequent or other Default or Trigger Event or impair any
right consequent thereon.
Section 6.16 Undertaking for Costs.
All parties to this Agreement agree, and each Holder of
any Certificate by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this
Agreement, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the
costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims
or defenses made by such party litigant; but the provisions
of this Section 6.16 shall not apply to any suit
instituted by the Trustee or MBIA, or to any suit instituted
by the Controlling Holders, or to any suit instituted by
any Certificateholder for the enforcement of the payment
of the principal of or interest on any Certificate on or
after the Stated Maturity or Expected Maturity
expressed in such Certificate.
Section 6.17 Waiver of Stay or Extension Laws.
The Transferor covenants (to the extent that it may
lawfully do so) that it will not, at any time, insist upon, or
plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the
covenants or the performance of this Agreement; and the
Transferor (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though
no such law had been enacted.
Section 6.18 Sale of Trust Estate.
(a) The power to effect any sale (a "Sale") of any
portion of the Trust Estate pursuant to Section 6.04 hereof
shall not be exhausted by any one or more Sales as to any
portion of the Trust Estate remaining unsold, but shall
continue unimpaired until the entire Trust Estate securing
the Certificates shall have been sold or all amounts
payable on the Certificates and under this Agreement with
respect thereto shall have been paid. The Trustee may from
time to time postpone any Sale by public announcement made at
the time and place of such Sale.
(b) To the extent permitted by applicable law, the
Trustee
shall not, in any private Sale, sell to a third party the
Trust Estate, or any portion thereof unless:
(i) MBIA, or if an MBIA Default or Termination
has occurred the Controlling Holders, consent in
writing to or directs the Trustee to make such Sale; or
(ii) if an MBIA Default or Termination has
occurred, the proceeds of such Sale would not be less
than the sum of all amounts due to the Trustee
hereunder and the Certificate Balance of the Class of
Certificates held by the Controlling Holders and
interest due or to become due thereon on the Payment
Date next succeeding such Sale, together with any
amount owing to MBIA under the Insurance Agreement.
(c) The Trustee, MBIA or the Certificateholders may bid
for and acquire any portion of the Trust Estate in connection
with a public Sale thereof, and in lieu of paying cash
therefor, any Certificateholder may make settlement for the
purchase price by crediting against amounts owing on the
Certificates of such Holder or other amounts owing to such
Holder secured by this Agreement, that portion of the net
proceeds of such Sale to which such Holder would be entitled,
after deducting the reasonable costs, charges and expenses
incurred by the Trustee, MBIA or the Certificateholders in
connection with such Sale. The Certificates need not be
produced in order to complete any such Sale, or in order for
the net proceeds of such Sale to be credited against the
Certificates. The Trustee, MBIA or the Certificateholders
may hold, lease, operate, manage or otherwise deal with
any property so acquired in any manner permitted by law.
(d) The Trustee shall execute and deliver an
appropriate
instrument of conveyance transferring its interest in any
portion of the Trust Estate in connection with a Sale
thereof. In addition, the Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Transferor to
transfer and convey its interest in any portion of the Trust
Estate in connection with a Sale thereof, and to take all
action necessary to effect such Sale. No purchaser or
transferee at such a sale shall be bound to ascertain the
Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any
monies.
(e) The method, manner, time, place and terms of any
Sale
of all or any portion of the Trust Estate shall be
commercially reasonable.
Section 6.19 Action on Certificates.
The Trustee's right to seek and recover judgment on
the Certificates or under this Agreement shall not be affected
by the seeking, obtaining or application of any other relief
under or with respect to this Agreement. Neither the
lien of this Agreement nor any rights or remedies of the
Trustee or the Certificateholders shall be impaired by the
recovery of any judgment by the Trustee against the
Transferor or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of
the assets of the Transferor.
ARTICLE SEVEN
THE TRUSTEE
Section 7.01 Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of
Default known to the Trustee as provided in subsection (e)
below:
(i) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in
this Agreement, and no implied covenants or obligations
shall be read into this Agreement against the Trustee;
and
(ii) in the absence of bad faith or negligence on
its part, the Trustee may conclusively rely as to the
truth of the statements and the correctness of the
opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Agreement; but in the case of any
such certificates or opinions, which by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine
the same and to determine whether or not they conform
to the requirements of this Agreement.
(b) In case an Event of Default known to the Trustee
as provided in subsection (e) below has occurred and is
continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Agreement, and shall use the
same degree of care and skill in its exercise, as a
reasonable person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(c) No provision of this Agreement shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct or bad faith, except that:
(i) this subsection (c) shall not be construed to
limit the effect of subsection (a) of this Section;
(ii) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer
of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Trustee shall not be liable
with respect to any action taken or omitted to be
taken by it in good faith in accordance with the
direction of MBIA or the Controlling Holders
(or other such percentage as may be required by
the terms hereof) in accordance with Section 6.14
hereof relating to the time, method and place of
conducting any Proceeding for any remedy available
to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement,
the Lease Acquisition Agreement or the Servicing
Agreement; and
(iv) no provision of this Agreement shall
require the Trustee to expend or risk its own
funds or otherwise incur any financial
liability in
the
performance of any of its duties hereunder, or in
the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity
against such risk or liability is not reasonably
assured to it, provided that nothing contained in
this Agreement shall excuse
the Trustee for failure to perform its duties as
Trustee under this Agreement.
(d) Whether or not therein expressly so provided,
every
provision of this Agreement relating to the conduct or
affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section
7.01.
(e) For all purposes under this Agreement, the
Trustee
shall not be deemed to have notice of any Event of
Default described in Section 6.01(d) or 6.01(e) hereof or
any Default described in Section 6.01(c) hereof or of any
Trigger Event unless a Responsible Officer assigned to and
working in the Trustee's corporate trust department has
actual knowledge thereof or unless written notice of any event
which is in fact such an Event of Default, Default or
Trigger Event is received by the Trustee at the Corporate
Trust Office, and such notice references any of the
Certificates generally, the Transferor, the Trust Estate or
this Agreement.
(f) The Trustee shall be under no obligation to
institute
any suit, or to take any remedial proceeding under
this Agreement, or to enter any appearance or in any way defend
in any suit in which it may be made defendant, or to take any
steps in the execution of the trusts hereby created or in the
enforcement of any rights and powers hereunder until it shall
be indemnified to its satisfaction against any and all
costs and expenses, outlays and counsel fees and other
reasonable disbursements and against all liability, except
liability that is adjudicated, in connection with any action
so taken.
(g) Notwithstanding any extinguishment of all right,
title
and interest of the Transferor in and to the Trust
Estate following an Event of Default and a consequent
declaration of acceleration of the maturity of any of the
Certificates, whether such extinguishment occurs through a
Sale of the Trust Estate to another person or the
acquisition of the Trust Estate by the Trustee, the rights
of the Certificateholders shall continue to be governed by the
terms of this Agreement.
(h) Notwithstanding anything to the contrary
contained
herein, the provisions of subsections (e) through (g),
inclusive, of this Section 7.01 shall be subject to the
provisions of subsections (a) through (c), inclusive, of this
Section 7.01.
(j) The Trustee shall provide the reports and
accountings
as required pursuant to Section 12.04 hereof.
Section 7.02 Notice of Default and Other Events.
Promptly after the occurrence of any Default, Trigger
Event or MBIA Default or Termination known to the Trustee
(within the meaning of Section 7.01(e) hereof) which is
continuing, within one Business Day of obtaining such
knowledge, the Trustee shall transmit by telephonic or
telegraphic communication confirmed by mail to MBIA and to
all Holders of Certificates, as their names and addresses
appear on the Certificate Register, notice of such Default,
Trigger Event or MBIA Default or Termination known to the
Trustee, unless in the case of notice of Default or notice of
any Trigger Event to Certificateholders, such Default shall
have been promptly cured or waived or such Trigger Event
shall have been waived by MBIA in accordance with this
Agreement.
Section 7.03 Certain Rights of Trustee.
Except as otherwise provided in Section 7.01,
(a) the Trustee may rely and shall be protected
in
acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order,
bond, note or other obligation, paper or document
believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the
Transferor
mentioned herein shall be sufficiently evidenced by
a Transferor Request or Transferor Order and any
resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this
Agreement
the Trustee shall deem it desirable that a matter be
proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an
Officer's Certificate;
(d) the Trustee may consult with counsel and
the
written advice of such counsel selected by the Trustee
with due care or any Opinion of Counsel shall be
full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation
to
exercise any of the rights or powers vested in it by
this Agreement at the request or direction of any
of the Certificateholders pursuant to this Agreement,
unless such Certificateholders shall have offered to
the Trustee
reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) unless so directed by the Controlling Holders
or
MBIA and if, in either case, the requirements of clause
(e) above have been satisfied, the Trustee shall not be
bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, note or other paper or document,
but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or
investigation, it shall be entitled to examine the
books, records and premises of the Transferor, upon
reasonable notice and at reasonable times personally or
by agent or attorney; and
(g) the Trustee may execute any of the trusts
or
powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys.
Section 7.04 Not Responsible for Recitals or Issuance
of Certificates.
(a) The recitals contained in this Agreement and in
the Certificates, except the certificates of authentication
on the Certificates, shall be taken as the statements of the
Transferor, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as
to the validity or condition of the Trust Estate or any part
thereof, or as to the
title of the Transferor thereto or as to the security
afforded thereby or hereby, or as to the validity or
genuineness of any securities at any time pledged and
deposited with the Trustee hereunder or as to the validity
or sufficiency of this Agreement or any of the Certificates.
The Trustee shall not be accountable for the use or
application by the Transferor of any of the Certificates or
the proceeds thereof or of any money paid to the Transferor or
upon Transferor Order under any provisions hereof.
(b) Except as otherwise expressly provided herein and
in Section 7.15 and without limiting the generality of
the
foregoing, the Trustee shall have no responsibility or
liability for or with respect to the validity of any
Equipment or Lease Contract, the perfection of any security
interest (whether as of the date hereof or at any future
time), the maintenance of or the taking of any action to
maintain such perfection, the validity of the assignment of
any portion of the Trust Estate to the Trustee or of any
intervening assignment, the review of any Lease Contract
(it being understood that the Trustee has not reviewed and
does not intend to review the substance or form of any such
Lease Contract), the performance or enforcement of any
Lease Contract, the
validity and sufficiency of the Certificate
Insurance Policy, the compliance by the Transferor or
the Servicer with any covenant or the breach by the Transferor
or the Servicer of any warranty or representation made
hereunder or in any related document or the accuracy of any
such warranty or representation, any investment of monies
in the Collection Account or any loss resulting therefrom,
the acts or omissions of the Transferor, the Servicer, MBIA or
any Customer, any action of the Servicer taken in the name of
the Trustee, or the validity of the Servicing Agreement or the
Lease Acquisition Agreement.
(c) Except as otherwise expressly provided herein,
the Trustee shall not have any obligation or liability
under any Lease Contract by reason of or arising out of this
Agreement or the assignment of such Lease Contract hereunder
or the receipt by the Trustee of any payment relating to
any Lease Contract pursuant hereto, nor shall the Trustee be
required or obligated in any manner to perform or fulfill any
of the obligations of the Transferor under or pursuant to any
Lease Contract, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment
received by it, or the sufficiency of any performance by any
party, under any Lease Contract.
Section 7.05 May Hold Certificates.
The Trustee, the Servicer, any Paying Agent, the
Certificate Registrar, any Authenticating Agent or any other
agent of the Transferor, in its individual or any other
capacity, may become the owner or pledgee of Certificates,
and if operative, may otherwise deal with the Transferor
with the same rights it would have if it were not Trustee,
Servicer, Paying Agent, Certificate Registrar, Authenticating
Agent or such other agent.
Section 7.06 Money Held in Trust.
Money and investments held in trust by the Trustee or
any Paying Agent hereunder shall be held in one or more
trust accounts hereunder but need not be segregated from
other funds except to the extent required in this Agreement
or required by law. The Trustee or any Paying Agent shall be
under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Transferor or
otherwise specifically provided in this Agreement.
Section 7.07 Compensation and Reimbursement.
The Transferor agrees:
(a) to pay the Trustee monthly its fee for
all services rendered by it hereunder as Trustee,
in the amount of the Trustee Fee (which
compensation shall not otherwise be limited by any
provision of law in regard to the compensation of
a trustee of an express trust), and to pay to the
Back-up Servicer its fee for all services rendered
hereunder and under the Servicing Agreement as Back-
up Servicer, in the amount of the Back-up Servicer
Fee;
(b) except as otherwise expressly
provided
herein, to reimburse the Trustee or the Back-
up Servicer upon its request for all
reasonable
out-of-pocket expenses, disbursements and
advances incurred or made by the Trustee or the Back-
up Servicer in accordance with any provision of this
Agreement or Servicing
Agreement (including the
reasonable
compensation and the expenses and disbursements of
the Trustee's and Back-up Servicer's agents and
counsel), except any such expense, disbursement or
advance as may be attributable to its negligence or
bad faith; and
(c) to indemnify and hold harmless the
Trust Estate and the Trustee from and against
any loss, liability, expense, damage or injury
(other than those attributable to a
Certificateholder in its capacity as an investor
in any of the Certificates) sustained or suffered
pursuant to this Agreement by reason of any acts,
omissions or alleged acts or omissions arising out
of activities of the Trust Estate or the Trustee
(including without limitation any violation of
any applicable laws by the Transferor as a result
of the transactions contemplated by this
Agreement), including, but not limited to, any
judgment, award, settlement, reasonable attorneys'
fees and other expenses incurred in connection
with the defense of any actual or threatened
action, proceeding or claim; provided that the
Transferor shall not indemnify the Trustee if such
loss, liability, expense, damage or injury is due
to the Trustee's gross negligence or willful
misconduct, willful misfeasance or bad faith in the
performance of duties. Any indemnification pursuant
to this Section shall only be payable from the
assets of the Transferor and shall not be payable
from the assets of the Trust Estate. The
provisions of this indemnity shall run directly to
and be enforceable by an injured person subject to
the limitations hereof and this indemnification
agreement shall survive the
termination of this Agreement.
Section 7.08 Corporate Trustee Required;
Eligibility.
There shall at all times be a trustee hereunder which
shall be a corporation or association organized and doing
business under the laws of the United States of America or of
any state, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at
least $50,000,000 (or a lesser amount with the approval of
MBIA, the Rating Agencies and the Controlling Holders),
subject to supervision or examination by Federal or state
authority and having an office within the United States of
America, and which shall have a commercial paper or other
short-term rating of the highest short term rating
categories by each of the Rating Agencies, or
otherwise acceptable to each of the Rating Agencies. 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 purposes of
this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 7.09 Resignation and Removal; Appointment
of
Successor.
(a) No resignation or removal of the Trustee and
no
appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment
by the successor Trustee under Section 7.10 hereof.
(b) The Trustee may resign at any time by giving 30
days'
written notice thereof to the Transferor, MBIA and to
each Certificateholder. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a
successor Trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and may prescribe,
appoint a successor Trustee.
(c) The Trustee may be removed by MBIA or, if an
MBIA
Default or Termination shall have occurred and is continuing,
the Controlling Holders, at any time if one of the following
events have occurred:
(i) the Trustee shall cease to be eligible under
Section 7.08 hereof and shall fail to resign after
written request therefor by the Transferor, MBIA or by
any Certificateholder, or
(ii) the Trustee shall become incapable of acting
or shall be adjudged a bankrupt or insolvent or a
receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs
for the purpose of rehabilitation, conservation or
liquidation, or
(iii) the Trustee has failed to perform its
duties in this Agreement or has breached any
representation of warranty made in this Agreement.
(d) If the Trustee shall resign, be removed or
become
incapable of acting, or if a vacancy shall occur in the office
of the Trustee for any cause with respect to any of
the
Certificates, the Transferor by a Board Resolution,
shall promptly appoint a successor Trustee satisfactory to
MBIA, or, if an MBIA Default or Termination has occurred, to
the Controlling Holders. If no successor Trustee shall have
been so appointed by the Transferor within 30 days of notice of
removal or resignation and shall have accepted appointment
in the manner hereinafter provided, then MBIA may appoint a
successor Trustee. If
MBIA
shall fail to appoint a successor Trustee within 90 days or
in the event of an MBIA Default or Termination, then the
Controlling Holders may petition any court of competent
jurisdiction for the appointment of a successor Trustee
with respectto the
Certificates.
(e) The Transferor shall give notice in the manner
provided in Section 13.04 hereof of each resignation and each
removal of
the Trustee and each appointment of a successor Trustee
with respect to the Certificates to the Certificateholders
and the Rating Agencies. Each notice shall include the
name of the successor Trustee and the address of its
Corporate Trust Office.
Section 7.10 Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Transferor and
the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties
of the retiring Trustee but, on request of the Transferor or
the successor Trustee, such retiring Trustee shall, upon
payment of its reasonable out-of-pocket costs and expenses,
execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of
the retiring Trustee, and shall duly assign, transfer and
deliver to
such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its
lien, if
any, provided for in Section 7.07 hereof. Upon request of
any such successor Trustee, the Transferor shall execute any
and all instruments for more fully and certainly vesting
in and
confirming to such successor Trustee all such rights, powers
and trusts.
No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee
shall be
eligible under this Article.
Section 7.11 Merger, Conversion, Consolidation
or
Succession to Business of Trustee.
Any Person into which the Trustee may be merged or
converted or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation
to which the Trustee shall be a party, or any corporation
succeeding to all or
substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be otherwise qualified and
eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of
the parties hereto, and notice thereof shall be provided
by the Trustee to
the
Certificateholders and the Rating Agencies. In case
any
Certificates have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger,
conversion or
consolidation to such authenticating Trustee may adopt
such authentication and deliver the Certificates so
authenticated with the same effect as if such successor
Trustee had itself authenticated such Certificates.
Section 7.12 Co-Trustees and Separate Trustees.
At any time or times, for the purpose of meeting the
legal requirements of any jurisdiction in which any of the
Trust Estate may at the time be located, the Transferor, MBIA
and the Trustee shall have power to appoint, and, upon the
written request of the Trustee, MBIA or, if an MBIA Default or
Termination has occurred and is continuing, of the Holders
representing at least 25% of
the Certificate Balance of all Certificates, the Transferor
shall for such purpose join with the Trustee in the execution,
delivery
and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the
Trustee and meeting the requirements of Section 7.08 hereof,
either to act as co-Trustee, jointly with the Trustee of all
or any part of such Trust Estate, or to act as separate
Trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment,
and to vest in such Person or persons in the capacity
aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions
of this Section. If the Transferor does not join in such
appointment within 15 days after the receipt by it of a
request so to do, or in case an Event of Default has occurred
and is continuing, the Trustee alone shall have power to make
such appointment.
Should any written instrument from the Transferor
be
reasonably required by any co-Trustee or separate Trustee
so appointed for more fully confirming to such co-
Trustee or separate Trustee such property, title, right or
power, any and all such instruments shall, on request, be
executed, acknowledged and delivered by the Transferor.
Every co-Trustee or separate Trustee shall, to the
extent permitted by law, but to such extent only, be appointed
subject to the following terms:
(a) the Certificates shall be authenticated and
delivered by, and all rights, powers, duties and
obligations under this Agreement in respect of the
custody of securities, cash and other personal property
held by, or required to be deposited or pledged with,
the Trustee under this Agreement, shall be exercised
solely by the Trustee;
(b) the rights, powers, duties and obligations
conferred or imposed upon the Trustee by this Agreement
in respect of any property covered by such
appointment shall be conferred or imposed upon and
exercised or performed by the Trustee or by the
Trustee and such co-Trustee or separate Trustee
jointly, as shall be provided in the instrument
appointing such co-Trustee or separate Trustee,
except to the extent that under any law of any
jurisdiction in which any particular act is to be
performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event
such rights, powers, duties and obligations
shall be
exercised and performed by such co-Trustee or
separate Trustee;
(c) the Trustee at any time, by an instrument
in writing executed by it, with the concurrence of
the Transferor evidenced by a Board Resolution, may
accept the resignation of or remove any co-Trustee or
separate Trustee, appointed under this Section, and,
in case an Event of Default has occurred and is
continuing, the Trustee shall have power to accept
the resignation of, or remove, any such co-
Trustee or separate Trustee without the
concurrence of the Transferor. Upon the written
request of the Trustee, the Transferor shall join
with the Trustee in the execution, delivery and
performance of all instruments and agreements
necessary or proper to effectuate such resignation or
removal. A successor to any co-Trustee or separate
Trustee that has so resigned or been removed may be
appointed in the manner provided in this Section;
(d) no co-Trustee or separate Trustee
hereunder
shall be personally liable by reason of any act
or omission of the Trustee or any other such
Trustee hereunder nor shall the Trustee be liable by
reason of any act or omission of any co-Trustee
or separate Trustee selected by the Trustee with
due care or appointed in accordance with directions
to the Trustee pursuant to Section 6.14; and
(e) any Act of Certificateholders delivered
to
the Trustee shall be deemed to have been delivered
to each such co-Trustee and separate Trustee.
Section 7.13 Rights with Respect to the Servicer.
The Trustee's rights and obligations with respect to
the Servicer and the Back-up Servicer shall be governed
by the Servicing Agreement.
Section 7.14 Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or
Agents with respect to the Certificates which shall be
authorized to act on behalf of the Trustee to authenticate
Certificates issued upon original issue or upon exchange,
registration of transfer or pursuant to
Section 2.05 hereof, and Certificates so
authenticated shall be entitled to the benefits of this
Agreement and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Agreement to the
authentication and delivery of Certificates by the Trustee
or the Trustee's certificate of authentication or the
delivery of Certificates to the Trustee for authentication,
such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by
an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent
and delivery of the Certificates to the Authenticating Agent
on behalf of the Trustee. Each Authenticating Agent shall be
acceptable to the Transferor, MBIA and if an MBIA Default
or Termination has occurred and is continuing, the
Certificateholders and shall at all times be a corporation
having a combined capital and surplus of not less than the
equivalent of $50,000,000 and subject to supervision or
examination by Federal or state authority or the equivalent
foreign authority, in the case of an Authenticating Agent
who is not organized and doing business under the laws of the
United States of America, any state thereof or the District of
Columbia. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to
the
requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and
surplus of such Authenticating Agent shall be deemed to be
its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, such Authenticating
Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may
be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion
or
consolidation to which such Authenticating Agent shall be
a party, or any corporation succeeding to the corporate agency
or corporate trust business of such Authenticating Agent,
shall continue to be an Authenticating Agent without the
execution or filing of any paper or any further act on the
part of the Trustee or such Authenticating Agent; provided,
such corporation shall be
otherwise eligible under this Section.
An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee, MBIA and
to the
Transferor. The Trustee may at any time terminate the agency
of an Authenticating Agent by giving written notice thereof to
such Authenticating Agent, MBIA and to the Transferor. Upon
receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating
Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a
successor Authenticating Agent which shall be acceptable to
the Transferor and MBIA and shall mail written notice of such
appointment by first-class mail, postage prepaid, to all
Holders of Certificates, if any, with respect to which such
Authenticating Agent will serve, as their names
and
addresses appear in the Certificate Register. Any
successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like
effect as if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless
eligible under the provisions of this Section.
The Trustee may pay to each Authenticating Agent from
time to time reasonable compensation for its services
under this Section and the Trustee shall be entitled to be
reimbursed for such payments, subject to the provisions of
Section 7.07 hereof.
If an appointment is made pursuant to this Section,
the Certificates may have endorsed thereon, in addition
to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
This is one of the Certificates described in
the
within-mentioned Agreement.
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
As Trustee
By:_________________________
__ __
As
Authenticating Agent
By:_________________________
__ __
Authorized Officer
Section 7.15 Trustee to Hold Lease Contracts.
The Trustee hereby acknowledges receipt (subject to
any exceptions as may be noted by the Trustee to the Servicer,
MBIA and the Certificateholders within 10 days of the Closing
Date) of each Lease Contract listed on the Initial Lease
Schedule and shall hold each Lease Contract together with
any documents relating thereto that may from time to time be
delivered to the Trustee, until such time as such Lease
Contract is released from the Trust Estate pursuant to the
terms of this Agreement.
Upon receipt of the Lease Contracts, the Trustee
shall determine that they are listed on the Lease Schedule.
Within thirty days of the Funding Termination Date, the
Trustee shall conduct the review provided for in Section
4.03(g). The Trustee
shall be under no duty or obligation to inspect, review
or examine the Lease Contracts and other documents to determine
that
the same are genuine, enforceable or appropriate for
the
represented purpose or that they have actually been recorded
or
that they are other than what they purport to be on their face.
Section 7.16 Money for Certificate Payments to Be Held
in
Trust.
The Trustee agrees, and if there is any Paying Agent
other than the Trustee, the Transferor will cause each
Paying Agent other than the Trustee to execute and deliver to
the Trustee and MBIA an instrument in which such Paying
Agent shall agree with the Trustee that, subject to the
provisions of this Section, such Paying Agent will:
(a) hold all sums held by it for the payment
of
principal or interest on Certificates in trust for
the benefit of the Certificateholders entitled thereto and
MBIA until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee, MBIA and the
Certificateholders notice of any Default by the
Transferor (or any other obligor upon the
Certificates) in the making of any payment of principal or
interest; and
(c) at any time during the continuance of any
such Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by
such Paying Agent.
The Transferor may at any time, for the purpose of
obtaining the satisfaction and discharge of this Agreement or
for any other purpose, pay, or by Transferor Order direct any
Paying Agent
to
pay, to the Trustee all sums held in trust by such Paying
Agent, such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by such Paying Agent;
and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent
in
trust for the payment of the principal or interest on any
Certificate and remaining unclaimed for three years after
such principal or interest has become due and payable shall be
paid to the Transferor on Transferor Request or to MBIA if
such payment had been made by MBIA; and the Holder of such
Certificate shall thereafter, as an unsecured general
creditor, and subject to any applicable statute of
limitations, look only to the Transferor for payment
thereof, and all liability of the Trustee, such Paying
Agent or MBIA with respect to such trust money or the
related Certificate, shall thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being
required to
make any such repayment, may at the expense of the
Transferor cause to be published once, in a newspaper
published in the English language, customarily published on
each Business Day and of general circulation in the city in
which the Corporate Trust Office is located, notice that such
money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Transferor; and
provided, further, that any amounts held that are proceeds of
a claim made under the Certificate Insurance Policy shall be
returned to MBIA, and the Certificateholders shall look only
to MBIA for such payments. The Trustee may also adopt and
employ, at the expense of the Transferor, any other
reasonable means of notification of such repayment
(including, but not limited
to, mailing notice of such repayment
to
Certificateholders whose right to or interest in monies due
and payable but not claimed is determinable from the records
of any Paying Agent, at the last address as shown on the
Certificate Register for each such Certificateholder).
ARTICLE EIGHT
THE CERTIFICATE INSURANCE POLICY
Section 8.01 Payments under the Certificate Insurance
Policy.
If on the close of business on the third Business Day
prior to any Payment Date, the funds on deposit in the
Collection Account and available to be distributed on such
Payment Date pursuant to Section 12.02(d) hereof, after any
transfer from the Cash Collateral Account in accordance with
Section 12.03 hereof and the Capitalized Interest Account in
accordance with Section 12.04(c) hereof, are not sufficient to
make the payment of any interest due on the Outstanding
Class A Certificates on such Payment Date in accordance with
Section 12.02(d)(v) hereof, the Trustee shall, no later than
10:00 a.m. New York time, on the second Business Day
immediately preceding such Payment Date make a claim under the
Certificate Insurance Policy in an amount equal to such
insufficiency. In addition, if on the close of business on
the third Business Day immediately prior to the Stated
Maturity the funds on deposit in the Collection Account after
any transfer from the Cash Collateral Account in accordance
with Section 12.03 hereof are not sufficient to pay the entire
Class A Certificate Balance, the Trustee shall, no later than
10:00 a.m. New York time, on the second Business Day
immediately preceding the Stated Maturity, make a claim under
the Certificate Insurance Policy in an amount equal to such
insufficiency. Proceeds of claims on the Certificate
Insurance Policy shall be deposited in the Collection
Account and used solely to pay amounts due in respect of
interest on the Class A Certificates on each Payment Date and
the Class A Certificate Balance at the Stated Maturity.
In addition, on any day that the Trustee has
actual knowledge or receives notice that any amount previously
paid to a Holder of Class A Certificates has been
subsequently recovered from such Certificateholder pursuant
to a final order of a court of competent jurisdiction that
such payment constitutes an avoidable preference within
the meaning of any applicable bankruptcy law to such
Certificateholder (a "Preference Claim"), the Trustee shall
make a claim within one Business Day upon the Certificate
Insurance Policy for the full amount of
such
Preference Claim in accordance with the terms of the
Certificate Insurance Policy. Any proceeds of any such
Preference Claim received by the Trustee shall be paid to
the related Class A Certificateholders.
ARTICLE NINE
AMENDMENTS
Section 9.01 Amendments without Consent
of
Certificateholders.
The Transferor, the Servicer, the Back-up Servicer and
the Trustee, with the prior written consent of MBIA but
without the consent of the Holders of any Certificates, at any
time and from
time to time, may enter into one or more amendments hereto,
in form satisfactory to the Trustee, for any of the
following purposes, provided that any such amendment, as
evidenced by an Opinion of Counsel if requested by the
Trustee, will not have a material adverse affect on the
Controlling Holders:
(a) to correct or amplify the description of any
property at any time included in the Trust Estate, or
better to assure, convey and confirm unto the Trustee
any property included or required to be included in the
Trust Estate, or to include in the Trust Estate any
additional property; or
(b) to evidence the succession of another Person
to the Transferor, and the assumption by such successor
of the covenants of the Transferor herein and in
the Certificates contained, in accordance with
Section 11.02(o) hereof; or
(c) to add to the covenants of the
Transferor,
for the benefit of MBIA or the Holders of
all Certificates or to surrender any right or power
herein conferred upon the Transferor; or
(d) to convey, transfer, assign, mortgage
or
pledge any property to or with the Trustee; or
(e) to cure any ambiguity, to correct
or
supplement any provision herein which may be
defective or inconsistent with any other provisions
with respect to matters or questions arising under
this Agreement, which shall not be inconsistent with
the provisions of this Agreement;
(f) to evidence the succession of the
Trustee
pursuant to Article Seven hereof; provided that
any such amendment does not modify this Agreement
in a manner described in paragraphs (i) through
(viii) of Section 9.02(a) hereof; or
(g) as may be necessary to effectuate
the
issuance of any Class B Certificates in accordance
with the terms of this Agreement and the Class B
Supplement; provided that any such amendment does
not modify this Agreement in a manner described
in paragraphs (i) through (viii) of Section 9.02(a)
or (b) hereof.
The Trustee is hereby authorized to join in the execution
of any such amendment and to make any further appropriate
agreements and stipulations that may be therein contained, but
the Trustee shall not be obligated to enter into any such
amendment that affects the
Trustee's own rights, duties, liabilities or
immunities under this Agreement or otherwise.
Promptly after the execution by the Transferor,
the
Servicer, the Back-up Servicer and the Trustee of any
amendment pursuant to this Section, the Transferor shall mail
to the Rating Agencies and each Certificateholder a copy of
such amendment.
Section 9.02 Amendments and Modifications to
Agreement with Consent of Certificateholders.
(a) With the prior written consent of MBIA and
the Controlling Holders, by Act of said Holders delivered
to the Transferor and the Trustee, the Transferor, the
Servicer, the Back-up Servicer and the Trustee may enter into
an amendment or
modification of this Agreement for the purpose of adding
any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of the Certificates under
this Agreement (other than as described in Section 9.01);
provided, however, that no such amendment shall, without the
consent of the Holders of each Outstanding Certificate affected
thereby:
(i) change the Stated Maturity or Expected
Maturity of any Certificate or the due date of any
installment of principal of, or any installment of
interest on, any Certificate, or change the principal
amount thereof or the Certificate Interest Rate or
change any place of payment where, or the coin or
currency in which, any Certificate or the interest
thereon is payable, or impair the right to institute
suit for the enforcement of any such payment; or
(ii) reduce the percentage of Certificate Balance
of Certificates, the consent of the Holders of which is
required for any such amendment, or the consent of the
Holders of which is required for any waiver of
compliance with certain provisions of this Agreement or
Events of Default or their consequences; or
(iii) impair or adversely affect the Trust
Estate; or
(iv) modify or alter the definition of the term
"Outstanding" or "Class A Certificate Balance" or
"Class B Certificate Balance" or "Controlling Holders"
or "Required Collateralization Amount"; or
(v) modify or alter the provisions of the proviso
to Section 6.04 hereof; or
(vi) modify any of the provisions of this Section
9.02, except to increase the percentage of Holders
required for any modification or waiver or to provide
that certain other provisions of this Agreement cannot
be modified or waived without the consent of
each Holder of each Outstanding Certificate
affected
thereby; or
(vii) permit the creation of any lien
ranking prior to, on a parity with, or subordinate to
the lien of this Agreement with respect to any part
of the Trust Estate or terminate or release the
lien of this Agreement on any property at any time
subject hereto or deprive the Holder of any
Certificate of the security afforded by the lien of
this Agreement; or
(viii) modify any of Sections 6.01, 6.02,
6.03,
6.18, or Section 12.02(d) hereof.
(b) With the prior written consent of MBIA and the
Holders of Certificates representing not less than 66-2/3% of
the Class A Certificate Balance, by Act of said Holders
delivered to the Transferor and the Trustee, the
Transferor, the Servicer, the Back-up Servicer and the
Trustee may enter into amendments hereto for the purpose of
adding any provisions to or changing in any manner or
eliminating any of the provisions of Article Three hereof
or the definitions therein, provided that any such
amendment does not modify the Agreement in a manner described
in clauses (i) through (viii) of paragraph (a) of this Section
9.02.
(c) With the prior written consent of MBIA and the
Holders
of Certificates representing not less than 66-2/3% of the Class
B Certificate Balance, by Act of said Holders delivered to
the Transferor and the Trustee, the Transferor, the
Servicer, the Back-up Servicer and the Trustee may enter into
amendments hereto for the purpose of adding any provisions to
or changing in any manner or
eliminating any of the provisions, including
definitions, contained herein relating to the Class
B Certificates, provided that any such amendment does not
modify this Agreement in a manner described in clauses (i)
through (viii) of paragraph (a) of this Section 9.02.
(d) The Trustee is hereby authorized to join in
the
execution of any amendments to this Agreement pursuant to
clause (a), (b) or (c) above and to make any further
appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to
enter into any such amendment that affects the
Trustee's own rights, duties,
liabilities or immunities under this Agreement. It shall not
be necessary for any Act of Certificateholders under this
Section to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Act
shall approve the substance thereof. Promptly after the
execution by the Transferor, the Servicer, the Back-up
Servicer and the Trustee of any amendment pursuant to this
Section, the Transferor shall mail to the Holders of the
Certificates, MBIA and the Rating Agencies a copy of such
amendment, together with any consents obtained from MBIA in
connection therewith.
Section 9.03 Execution of Amendments.
In executing any amendment permitted by this Article or
the modifications thereby of the trusts created by this
Agreement, the Trustee shall be entitled to receive upon
request, and (subject to Section 7.01 hereof) shall be
fully protected in relying in good faith upon, an Opinion
of Counsel reasonably acceptable to the Trustee stating
that the execution of such amendment is authorized or
permitted by this Agreement. The Trustee may, but shall
not be obligated to, enter into any such amendment which
affects the Trustee's own duties or immunities under this
Agreement or otherwise.
Section 9.04 Effect of Amendments.
Upon the execution of any amendment under this Article,
this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for
all purposes; and every Holder of Certificates
theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 9.05 Reference in Certificates to Amendments.
Certificates authenticated and delivered after the
execution of any amendment pursuant to this Article may, and if
required by the Trustee shall, bear a notation in form
approved by the Trustee as to any matter provided for in such
amendment. If the Transferor shall so determine, new
Certificates so modified as to conform, in the opinion of the
Trustee and the Transferor, to any such amendment may be
prepared and executed by the Transferor and authenticated and
delivered by the Trustee in exchange for Outstanding
Certificates.
ARTICLE TEN
REDEMPTION OF CERTIFICATES
Section 10.01 Redemption at the Option of the
Transferor; Election to Redeem.
The Transferor shall have the option to redeem (a) all
of the Outstanding Class B Certificates at any time after the
Class A Certificates have been redeemed or the Class A
Certificate Balance has been reduced to zero and (b) all of
the Outstanding Class A Certificates at any time after the
Class A Certificate Balance is less than 10% of the Class A
Certificate Balance as of the Closing Date, in each case at the
applicable Redemption Price plus any fees due hereunder and all
amounts due to MBIA under the Insurance Agreement. With
respect to any redemption permitted by clause (b) above, MBIA
shall have the same option to redeem the Class A
Certificates in the absence of the exercise thereof by the
Transferor.
The Transferor shall set the Redemption Date and
the Redemption Record Date for the Certificates and give
notice thereof to the Trustee pursuant to Section 10.02 hereof.
Installments of principal and interest that are
due
regarding a Class of Certificates on or prior to the
related Redemption Date shall continue to be payable to the
Holders of such Certificates called for redemption as of the
relevant Record Dates according to the terms and the
provisions of Section
2.08
hereof. The election of the Transferor or MBIA to redeem
any
Certificates pursuant to this Section shall be evidenced by
a Board Resolution or written notice from MBIA,
respectively, directing the Trustee to make the payment of the
Redemption Price on all of the Certificates to be redeemed
from monies deposited with the Trustee pursuant to Section
10.04 hereof.
Section 10.02 Notice to Trustee; Deposit of
Redemption Price.
In the case of any redemption pursuant to Section
10.01
hereof, the Transferor or MBIA, as applicable, shall, at least
15 days prior to the related Redemption Date, notify the
Trustee and the applicable Certificateholders of such
Redemption Date and shall deposit into the Redemption
Account on such notification date an amount equal to the
Redemption Price of all Certificates to be redeemed on such
Redemption Date plus any fees due hereunder and all
amounts due to MBIA under the Insurance Agreement.
Section 10.03 Notice of Redemption by the Transferor.
Upon receipt of such notice and such deposit set forth
in Section 10.02 above, the Trustee shall provide notice
of redemption pursuant to Section 10.01 hereof by first-class
mail, postage prepaid, mailed no later than the Business Day
following the date on which such deposit was made, to each
Holder of Certificates whose Certificates are to be
redeemed, at such Holder's address in the Certificate
Register.
All notices of redemption shall state: (a) the applicable
Redemption Date;
(b) the applicable Redemption Price; and
(c) that on such Redemption Date, the Redemption Price
will become due and payable upon each such Certificate,
and that interest thereon shall cease to accrue on such date.
Notice of redemption of Certificates shall be given by
the Trustee in the name and at the expense of the Holder
of the Transferor Certificate or MBIA, as applicable. Failure
to give notice of redemption, or any defect therein, to any
Holder of any Certificate selected for redemption shall not
impair or affect the validity of the redemption of any other
Certificate.
Section 10.04 Certificates Payable on Redemption Date.
Notice of redemption having been given as provided
in Section 10.03 hereof, the Certificates to be redeemed
shall, on the applicable Redemption Date, become due and
payable at the Redemption Price and on such Redemption Date
such Certificates shall cease to bear interest. The Holders
of such Certificates shall be paid the Redemption Price by
the Paying Agent on behalf of the Transferor; provided,
however, that installments of principal and interest that
are due regarding such Certificates on or prior to such
Redemption Date shall be payable to the Holders of such
Certificates registered as such on the relevant Record Dates
according to the terms and the provisions of Section 2.08
hereof.
If the Holders of any Certificate called for
redemption shall not be so paid, the principal on such
Certificates shall, until paid, bear interest from the
applicable Redemption Date at the related Certificate Interest
Rate.
Section 10.05 Release of Lease Contracts.
In connection with any redemption permitted under
this Article Ten, the Transferor or MBIA, as the case may be,
shall be permitted to obtain a release of the Lease
Contracts to the extent that (a) after giving effect to such
release, (x) the sum of (i) the amount of funds then held
in the Cash Collateral Account and (ii) the Aggregate IPB is
equal to or exceeds (y) (i) the Certificate Balance of any
Outstanding Certificates (after giving effect to such
redemption) divided by (ii) a ratio equal to (A) the sum of
the Class A Certificate Balance and the Class B Certificate
Balance over (B) the sum of the Aggregate IPB and any amounts
on deposit in the Cash Collateral Account (with all
amounts in such ratio calculated as of the Determination
Date relating to the first Payment Date preceding the
Redemption Date), provided that in connection with a redemption
of the Class B Certificates, the Transferor shall be entitled
to a release of all of the Lease Contracts and (b) the
applicable Redemption Price shall have been deposited into
the Redemption Account as required by Section 10.02.
ARTICLE ELEVEN
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 11.01 Representations and Warranties.
The Transferor hereby makes the following
representations and warranties for the benefit of the
Trustee, MBIA and the Certificateholders on which the
Trustee relies in accepting the Trust Estate in trust and in
authenticating the Certificates and on which MBIA relies in
issuing the Certificate Insurance Policy. Such representations
and warranties are made as of the Closing Date and each
Funding Date and shall survive the transfer, conveyance and
assignment of the Trust Estate to the Trustee.
(a) Organization and Good Standing. The Transferor is
a corporation duly organized, validly existing and in good
standing under the law of the State of Delaware and each other
State where
the nature of its business requires it to qualify, except to
the extent that the failure to so qualify would not in the
aggregate materially
adversely affect the ability of the Transferor to
perform its obligations under the Transaction Documents;
(b) Authorization. The Transferor has the power,
authority and legal right to execute, deliver and perform
under the terms of the Transaction Documents and the
execution, delivery and performance
of the Transaction Documents have been
duly
authorized by the Transferor by all necessary corporate action;
(c) Binding Obligation. Each of (i) this
Agreement,
assuming due authorization, execution and delivery by
the
Trustee, the Back-up Servicer and the Servicer, (ii)
the
Insurance Agreement, assuming due authorization, execution
and delivery by MBIA, the Trustee, the Back-up Servicer, the
Company, the Certificate Funding Administrator and the
Servicer, (iii) the Servicing Agreement, assuming due
authorization, execution and delivery by the Transferor,
the Servicer, the Trustee and the Servicer and (iv) the
applicable Certificate Purchase Agreement, assuming due
authorization, execution and delivery by the
purchaser named therein and (v) the Lease Acquisition
Agreement, assuming due authorization, execution and
delivery by the
Company, constitutes a legal, valid and binding obligation of
the Transferor, enforceable against the Transferor in
accordance with its terms
except that (A) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or
other similar laws (whether statutory, regulatory or
decisional) now or hereafter in effect relating to creditors'
rights generally and (B) the remedy of specific performance
and injunctive and other forms of equitable relief may be
subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefor
may be brought, whether a proceeding at law or in equity;
(d) No Violation. The consummation of the
transactions
contemplated by the fulfillment of the terms of the
Transaction Documents will not conflict with, result in any
breach of any of the terms
and provisions of or constitute (with or without
notice, lapse of time or both) a default under the
organizational documents or bylaws of the Transferor, or any
material indenture, agreement, mortgage, deed of trust or other
instrument to which the Transferor is a party or by which
it is bound, or in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of such
indenture, agreement, mortgage, deed of trust or other such
instrument, other than any Lien created or imposed
pursuant to the terms of the Transaction Documents,
or violate any law, or any material order, rule or
regulation applicable to the Transferor of any court or of
any federal or state regulatory body, administrative agency or
other governmental
instrumentality having jurisdiction over the
Transferor or any of its properties.
(e) No Proceedings. There are no Proceedings
or
investigations to which the Transferor, or any of
the
Transferor's Affiliates, is a party pending, or, to the
knowledge of Transferor, threatened, before any court,
regulatory body, administrative
agency or other tribunal or governmental
instrumentality (A) asserting the invalidity of the
Transaction Documents,
(B) seeking to prevent the issuance of any of the
Certificates or the consummation of any of the
transactions contemplated by the Transaction Documents or
(C) seeking any determination or ruling that would
materially and adversely affect the performance by the
Transferor of its obligations under, or
the validity or enforceability of, the Transaction
Documents.
(f) Approvals. All approvals, authorizations,
consents,
orders or other actions of any Person, or of any
court, governmental agency or body or official, required in
connection with the execution and delivery of the Transaction
Documents and with the valid and proper authorization,
issuance and sale of the Certificates pursuant to this
Agreement (except approvals of State securities officials
under the Blue Sky Laws), have been or will be taken or
obtained on or prior to the Closing Date.
(g) Place of Business. The Transferor's principal place
of business and chief executive office is located at 0000 X.
00xx Xxxxxx, Xxxxx X, Xxxxxxxxxxx, XX 00000, and the
Transferor has done business only under the name GF Funding
Corp. III.
(h) Transfer and Assignment of Lease Assets. Upon
the
delivery to the Trustee of the Lease Contracts and the filing
of the financing statements described in Sections 4.01(f)
hereof, the Trustee for the benefit of the Certificateholders
shall have a first priority perfected security interest
in the Lease Receivables and the Lease Contracts and in the
proceeds thereof, except for Liens permitted under Section
11.02(a) and limited to the extent set forth in Section 9-306
of the UCC as in effect in the applicable jurisdiction. All
filings (including, without limitation, UCC filings) as are
necessary in any jurisdiction to perfect the ownership or
other interest of the Trustee in the Trust Estate (other
than filings with respect to Equipment underlying Lease
Contracts), including the transfer of the Lease Contracts and
the payments to become due thereunder, have been made.
(i) Parent of the Transferor. The Company is
the
registered owner of all of the issued and outstanding
common stock of the Transferor, all of which common stock
has been validly issued, is fully paid and nonassessable.
(j) Lease Acquisition Agreement The Transferor has
entered into the Lease Acquisition Agreement with the Company
relating to its acquisition of the Lease Contracts, the Lease
Receivables and the Equipment, and the representations and
warranties made by the Company relating to the Lease
Contracts, Lease Receivables and the Equipment have been
validly assigned to and are for the benefit of the
Transferor, the Trustee, MBIA and
the
Certificateholders and such representations and warranties
are true and correct in all material respects.
(k) Bulk Transfer Laws. The transfer, assignment
and
conveyance of the Lease Contracts, the Equipment and the
Lease Receivables by the Company to the Transferor pursuant
to the Lease Acquisition Agreement or by the Transferor
pursuant to this Agreement is not subject to the bulk
transfer or any similar statutory provisions in effect in
any applicable jurisdiction.
(l) The Lease Contracts. The Transferor hereby
restates
and makes each of the representations and warranties with
respect to the Lease Contracts, the Lease Receivables and the
Equipment that are made by the Company in Section 3.01 of
the Lease Acquisition Agreement as of the date on
which such representations and warranties were made.
(m) Investment Company Act. The Transferor is not
an
"investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
Section 11.02 Covenants.
The Transferor hereby makes the following covenants for
the benefit of the Trustee, MBIA and the Certificateholders, on
which the Trustee relies in accepting the Trust Estate in trust
and in authenticating the Certificates. Such covenants
shall survive the transfer, conveyance and assignment of the
Trust Estate to the Trustee.
(a) No Liens. Except for the conveyances and
assignment hereunder, the Transferor will not sell,
pledge, assign or transfer to any other Person, or grant,
create, incur, assume or suffer to exist any Lien on any
Trust Estate now existing or hereafter created, or any
interest therein prior to
the
termination of this Agreement pursuant to Section 5.01
hereof; the Transferor will notify the Trustee of the
existence of any Lien on any Trust Estate immediately upon
discovery thereof; and the Transferor shall defend the right,
title and interest of the Trustee in, to and under the
Trust Estate now existing or hereafter created, against
all claims of third parties claiming through or under the
Transferor; provided, however, that nothing in this Section
11.02(a) shall prevent or be deemed to prohibit the Transferor
from suffering to exist upon any of the Equipment any Liens
for municipal or other local taxes and other
governmental charges owed by the Transferor or a Customer
if such taxes or governmental charges shall not at the time be
due and payable or if the Transferor or related Customer
shall currently be contesting the validity thereof in good
faith by appropriate proceedings and the Transferor shall have
set aside on its books adequate reserves with respect thereto.
(b) Delivery of Collections. The Transferor agrees to
hold in trust and promptly pay to the Servicer all amounts
received by the Transferor in respect of the Trust Estate
(other than amounts distributed to or for the benefit of the
Transferor pursuant to Article Twelve hereof).
(c) Obligations with Respect to Lease Contracts.
The
Transferor will duly fulfill all obligations on its part to
be fulfilled under or in connection with each Lease Contract
and will do nothing to impair the rights of the Trustee
(for the benefit of the Certificateholders and MBIA) in the
Lease Receiv xxxxx, the Lease Contracts and any other Trust
Estate. As long as there is no event of default under
the applicable Lease Contract, the Transferor will not
disturb the Customer's quiet and peaceful possession of
the related Equipment and the Customer's unrestricted use
thereof for its intended purpose.
(d) Compliance with Law. The Transferor will comply,
in all material respects, with all acts, rules, regulations,
orders, decrees and directions of any governmental authority
applicable to the Lease Contracts or any part thereof. The
Transferor will comply, in all material respects, with all
requirements of
law
applicable to the Transferor.
(e) Preservation of Security Interest. The
Transferor shall execute and file such continuation statements
and any other documents which may be required by law to
fully preserve and protect the interest of the Trustee
(for the benefit of the Certificateholders and MBIA) in the
Trust Estate.
(f) Maintenance of Office, etc. The Transferor will
not, without providing 30 days notice to the Trustee and
MBIA and without filing such amendments to any previously
filed financing statements as the Trustee or MBIA may
require or as may be required in order to maintain the
Trustee's perfected security interest in the Trust Estate,
(a) change the location of its principal executive office,
or (b) change its name, identity or
corporate structure in any manner which would make any
financing statement or continuation statement filed by the
Transferor in accordance with the Servicing Agreement or
this Agreement seriously misleading within the meaning of
Article 9-402(7) of any applicable enactment of the UCC.
(g) Further Assurances. The Transferor will make,
execute
or endorse, acknowledge, and file or deliver to the Trustee
from time to time such schedules, confirmatory
assignments, conveyances, transfer endorsements, powers
of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the
Trust Estate, as the Trustee may request and reasonably
require.
(h) Notice of Liens. The Transferor shall notify
the
Trustee and MBIA promptly after becoming aware of any Lien on
any Trust Estate, except for any Liens on Equipment for
municipal or other local taxes if such taxes shall not at the
time be due or payable without penalty or if the Transferor
or the related Customer shall currently be contesting the
validity thereof in good faith by appropriate proceedings
and the Transferor shall have set aside on its books
adequate reserves with respect thereto.
(i) Activities of the Transferor. The Transferor (a)
shall engage in only (1) the acquisition, ownership, leasing,
selling and pledging of the property acquired by the
Transferor pursuant to the Lease Acquisition Agreement, and
causing the issuance of, receiving and selling the
Certificates issued pursuant to this Agreement and (2) the
exercise of any powers permitted to corporations under the
corporate law of the State of Delaware which are incidental
to the foregoing or necessary to accomplish the foregoing and
the Transferor shall incur no debt other than trade payables
and expense accruals in connection with its operations in
the normal course of business, and other than as contemplated
by the Transaction Documents; (b) will (1) maintain its books,
records and cash management accounts separate from the books
and records of any other entity and in accordance with
generally accepted accounting principles, (2) maintain
separate bank accounts and no funds of the Transferor shall be
commingled with funds of any other entity except for a
limited period of time between receipt by (I) the Company
in its capacity as Servicer, (II) the Lockbox Bank or (III)
the ACH Bank of certain payments on the Lease Contracts and
the underlying proceeds as specified in the Servicing
Agreement, (3) keep in full effect its existence, rights and
franchises as a corporation under the laws of its State of
incorporation, and will obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement,
(4) observe all corporate procedures required by its
Certificate of Incorporation, its bylaws and the laws of
the state of Delaware, (5) maintain its good standing under
the laws of the state of Delaware, (6) keep correct and
complete books and records of account and minutes of
meeting and other proceedings of its Board of Directors and
shareholder meetings, (7) obtain proper authorization from
its directors or shareholders, as appropriate and act solely
in its corporate name and through its duly authorized
officers and agents in the conduct of its business, (8)
disclose in its financial statements that the Lease Assets have
been sold and assigned to the Transferor and from the
Transferor to the Trust and that the assets of the Transferor
are not available to pay the creditors of the Company, (9)
maintain a separate telephone number and stationery reflecting
a separate address and identity from that of the Company; and
(c) will not (1) dissolve or liquidate in whole or in
part, (2) own any
subsidiary or lend or advance any moneys to, or make
an
investment in, any Person, (3) make any capital
expenditures,
(4)(A) commence any case, proceeding or other action under
any existing or future bankruptcy, insolvency or similar law
seeking to have an order for relief entered with respect
to it, or seeking reorganization,
arrangement, adjustment, wind-up,
liquidation, dissolution, composition or other relief
with respect to it or its debts, (B) seek appointment of a
receiver, trustee, custodian or other similar official for it
or any part of its assets, (C) make a general assignment for
the benefit of creditors, or
(D) take any action in furtherance of, or
consenting or acquiescing in, any of the foregoing, (5)
guarantee (directly or
indirectly), endorse or otherwise become
contingently liable (directly or indirectly) for the
obligations of, or own or purchase any stock, obligations or
securities of or any other interest in, or make any capital
contribution to, any other Person, (6) merge or consolidate
with any other Person, (7) engage in any other action that
bears on whether the separate legal identity of the
Transferor will be respected, including without limitation (A)
holding itself out as being liable for the debts of any
other party or (B) acting other than in its corporate
name and through its duly authorized officers or agents,
or (8) create, incur, assume, or in any manner become liable
in respect of any indebtedness other than as contemplated by
the Transaction Documents and other than trade payables and
expense accruals incurred in the ordinary course of business
and which are incidental to its business purpose; provided,
however, that the Transferor may take any action prohibited
by this
clause (8) if (x) the Transferor shall cause, prior to
the
taking of such action, an Opinion of Counsel experienced
in
federal bankruptcy matters, in substance satisfactory to
the Trustee, the Certificateholders, MBIA and the Rating
Agencies confirming the
non-consolidation of the Transferor and the
Company, to be delivered to the Trustee, the
Certificateholders, MBIA and the Rating Agencies, (y) the
Rating Agencies shall indicate in writing that the taking
of such action will not affect the then current rating of
any Certificates, and (z) MBIA, and if an MBIA Default or
Termination has occurred, the Controlling Holders, shall
have given their prior
written
consent. The Transferor shall not amend any article in
its
Certificate of Incorporation that deals with any matter
discussed above without the prior written consent of MBIA. On
or before April 15 of each year, so long as any of the
Certificates are Outstanding, the Transferor
shall furnish to each
Certificateholder, the Trustee and MBIA, an Officer's
Certificate confirming that
the Transferor has complied with its obligations
under this Section 11.02(i).
(j) Directors. The Transferor agrees that at all times,
at least two of the directors and one of the executive
officers of the Transferor (or two persons, one of whom is
serving as both a director and an executive officer) will
not be a director, officer or employee of any direct
or ultimate parent, or Affiliate of the parent or of the
Transferor; provided, however, that such independent directors
and officers may serve in similar capacities for other "special
purpose corporations" formed by the Company and its
Affiliates. The Transferor's Certificate of Incorporation
shall at all times provide that such independent directors
shall have a fiduciary duty to the Holders of the
Certificates and will always require unanimous consent of
the board of directors to file any bankruptcy petition.
(k) Preservation of the Equipment. The Transferor
warrants that it is the lawful owner and possessor of the
Equipment or has a valid security interest therein and that
it will warrant and defend such Equipment against all Persons,
claims and demands
whatsoever. The Transferor shall not assign, sell, pledge,
or exchange, or in any way encumber or otherwise dispose of
the Equipment, except as permitted under this Agreement.
(l) Tax Treatment. The Transferor shall comply
with Section 2.11 of this Agreement at all times and its
financial and tax records shall reflect such intended tax
treatment.
(m) Maintenance of Office or Agency. The Transferor
will maintain an office or agency within the United States of
America where Certificates may be presented or surrendered for
payment, where Certificates may be surrendered for
registration of transfer or exchange and where notices and
demand to or upon the Transferor in respect of the
Certificates and this Agreement may be served. The Transferor
hereby initially appoints the Trustee as the Paying Agent and
its Corporate Trust Office as the office for each of said
purposes. The Transferor will give 30 days prior written notice
to the Trustee, MBIA and the Certificateholders of any change
in the identity of the Paying Agent or the location, of any
such office or agency. If at any time the Transferor shall fail
to maintain any such office or agency or shall fail to
furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or
served at the Trustee, and the Transferor hereby appoints the
Trustee its agent to receive all such presentations,
surrenders, notices and demands.
(n) Enforcement of Servicing Agreement and
Lease Acquisition Agreement. The Transferor will take all
actions necessary, and diligently pursue all remedies available
to it, to the extent commercially reasonable, to enforce the
obligations of the Servicer under the Servicing Agreement and
the Company under the Lease Acquisition Agreement and to
secure its rights thereunder.
(o) Transferor May Consolidate, etc., Only on
Certain Terms. The Transferor shall not consolidate or merge
with or into any other Person or convey or transfer its
properties and assets substantially as an entirety to any
Person, unless:
(i) the Person (if other than the Transferor)
formed by or surviving such consolidation or merger or
which acquires by conveyance or transfer the properties
and assets of the Transferor substantially as an
entirety shall be a Person organized and existing as a
limited purpose corporation under the laws of the
United States of America or any State thereof and
shall have expressly assumed, by an amendment hereto,
executed and delivered to the Trustee and MBIA, in form
and substance reasonably satisfactory to the Trustee
and MBIA, the obligation to make due and punctual
payments of the principal of and interest on all of the
Certificates and to perform every covenant of this
Agreement on the part of the Transferor to be performed
or observed; and
(ii) the Transferor shall have caused the
Trustee to have received a letter from the Rating
Agencies to the effect that the rating issued with
respect to the Certificates is confirmed,
notwithstanding
the
consummation of such merger, consolidation, transfer
or conveyance together with the consent of MBIA to
such merger, consolidation transfer or conveyance;
and
(iii) immediately after giving effect to
such transaction, no Event of Default or Default
shall have
occurred and be continuing; and
(iv) the Transferor shall have delivered to
the Trustee and MBIA an Officer's Certificate
and an Opinion of Counsel each stating
that such
consolidation, merger, conveyance or transfer
comply with this Article Eleven and that all
conditions precedent herein provided for
relating to such transaction have been complied
with; and
(v) such consolidation, merger, conveyance
or transfer shall be on such terms as shall fully
preserve the lien and security of this Agreement, the
perfection and priority thereof and the rights and
powers of the Trustee, MBIA and the Holders of
the Certificates under this Agreement; and
(vi) the surviving corporation shall be a
"special purpose corporation"; i.e., shall
have an
organizational charter substantially similar to
the Certificate of Incorporation of the
Transferor
including specific limitations on the
business purposes, and provisions for independent
directors; and
(vii) MBIA shall have given its prior
written consent, which consent shall not be
unreasonably withheld or delayed.
(p) Successor Substituted. Upon any consolidation
or
merger, or any conveyance or transfer of the properties
and assets of the Transferor
substantially as an entirety in
accordance with Section 11.02(o) hereof, the Person formed by
or surviving such consolidation or merger (if other than
the Transferor) or the Person to which such conveyance or
transfer is made shall succeed to, and be substituted for, and
may exercise every right and power of, the Transferor under
this Agreement with the same effect as if such Person had
been named as the Transferor herein upon
the execution of an assignment and
assumption agreement by such Person. In the event of any
such
conveyance or transfer, the Person named as the "Transferor"
in
the first paragraph of this Agreement or any successor
which
shall theretofore have become such in the manner prescribed
in this Article shall be released from its liabilities as
obligor and maker on all the Certificates and from its
obligations under this Agreement and may be dissolved, wound-
up and liquidated at any time thereafter.
(q) Use of Proceeds. The proceeds from the sale of
the
Certificates will be used by the Transferor (i) to pay
the Existing Indebtedness,
(ii) to deposit to the Capitalized
Interest Account the Capitalized Interest Account Deposit and
to deposit to the Prefunding Account the Prefunding Account
Deposit, (iii) to pay the expenses associated with this
transaction and (iv) for general
corporate purposes, including the cost of
funding Funded Lease Contracts. None of the
transactions
contemplated in the Transaction Documents (including the use
of the proceeds from the sale of the Certificates) will result
in a violation of Section 7 of the Securities and Exchange
Act of 1934, as amended, or any regulations issued pursuant
thereto, including Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II. The
Transferor does not own or intend to carry or purchase
any
"margin security" within the meaning of said Regulation
G, including margin securities originally issued by it or
any "margin stock" within the meaning of said Regulation U.
(r) Notice of Trigger Events. Upon the
Transferor's
obtaining knowledge of the occurrence of any Trigger Event,
the Transferor shall within one Business Day of obtaining
such knowledge notify MBIA, the Trustee, the Rating Agencies
and the Certificateholders of such occurrence.
Section 11.03 Other Matters as to the Transferor.
(a) Limitation on Liability of Directors, Officers,
or
Employees of the Transferor Except as provided in subsection
(b) of this Section and elsewhere in this Agreement, the
directors, officers, or employees of the Transferor shall not
be under any personal liability
to the Trust, the Trustee, the
Certificateholders, the Servicer, or any other Person
hereunder or pursuant to any documents delivered
hereunder, 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 the issuance of the Certificates, except with respect to
liability resulting from such person's fraudulent or
willful misconduct. The Transferor and any
director or officer or employee or agent of the Transferor
may rely in good faith on the advice of counsel or on any
documents of any kind, prima facie properly executed and
submitted by any Person respecting any matters arising
hereunder.
(b) Parties Will Not Institute Insolvency
Proceedings.
During the term of this Agreement and for one year and one
day after the termination hereof, none of the parties hereto
or any Affiliate thereof will file any involuntary petition or
otherwise institute any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding or other
proceeding under any federal
or state bankruptcy or similar law
against the Transferor. ARTICLE TWELVE
ACCOUNTS AND ACCOUNTINGS
Section 12.01 Collection of Money.
Except as otherwise expressly provided herein, the
Trustee may demand payment or delivery of, and shall receive
and collect, all money and other property payable to or
receivable by the Trustee pursuant to this Agreement. The
Trustee shall, upon request from the Servicer, provide the
Servicer with sufficient information regarding the amount of
collections with respect to the Lease Contracts received
by the Trustee in the Lockbox Account (if such account is
held by the Trustee) and the other accounts held in the name
of the Trustee to permit the Servicer to perform its duties
under the Servicing Agreement. The Trustee shall hold all such
money and property so received by it as part of the Trust
Estate and shall apply it as provided in this Agreement.
If any Lease Contract becomes a Defaulted Lease Contract,
the Trustee, upon Transferor or Servicer request may, and upon
the request of MBIA or if an MBIA Default or Termination has
occurred and is continuing, the Controlling Holders shall
take such action as may be appropriate to enforce such payment
or performance, including the institution and
prosecution of
appropriate Proceedings. Any such action shall be
without
prejudice to any right to claim a Default or Event of
Default under this Agreement and to proceed thereafter as
provided in Article Six hereof. If the Transferor
receives any amounts payable to or receivable by the
Trustee pursuant to this Agreement, the Transferor shall
immediately, but not later than two Business Days after
receipt, remit such amounts to the Trustee for deposit in
the Collection Account.
Section 12.02 Collection Account; Redemption Account.
(a) Prior to the Closing Date, the Trustee shall open
and
maintain a trust account at its Corporate Trust Office
(the
"Collection Account") in the name of the Trustee for the
benefit of the
Certificateholders and MBIA, for the receipt of
(i) payments remitted to the Trustee by the Servicer and ACH
Bank pursuant to Sections 3.03 and 3.04 of the Servicing
Agreement, amounts transferred from the Lockbox Account in
accordance with Section 3.03 of the Servicing Agreement and
any amounts received by the Trustee pursuant to Section 12.01
hereof, (ii) amounts transferred
from the Cash Collateral Account in accordance with
Section 12.03(d)(i), (ii) and (iii) hereof, (iii)
amounts transferred
from the Capitalized Interest Account in accordance
with Section 12.04(c)(i), (iv) with respect to the Class
A Certificates, proceeds of claims made under the
Certificate Insurance Policy, in accordance with Article Eight
hereof, upon receipt, (v) amounts transferred from the
Prefunding Account in accordance with Section 12.04(d)(ii)
and (vi) any Reinvestment Income. Funds in the Collection
Account shall not be commingled with any other monies. All
payments to be made from time to time by the Transferor to the
Certificateholders out of funds in the Collection Account
pursuant to the Agreement shall be made by the Trustee or
the Paying Agent of the Transferor. All monies
deposited from time to time in the Collection Account pursuant
to this Agreement shall be held by the Trustee as part of the
Trust Estate as herein provided.
(b) Upon Transferor Order, the Trustee shall invest
the
funds in the Collection Account in Eligible
Investments;
provided, however, that all monies on deposit in the
Collection Account pursuant to Section 12.02(a)(iii) hereof
shall remain uninvested.
The Transferor Order shall specify the Eligible
Investments in which the Trustee shall invest, shall state
that the same are Eligible Investments and shall further
specify the percentage of funds to be invested in each
Eligible Investment. No such Eligible Investment shall
mature later than the second Business Day preceding the next
following Payment Date and shall not be sold or disposed of
prior to its maturity; provided that, Eligible Investments of
the type described in clause (a) of the definition of
Eligible Investments may mature on such Payment Date. In
the absence of a Transferor Order, the Trustee shall invest
funds in the Collection Account in Eligible Investments
described in clause (g) of the definition thereof.
Eligible Investments
shall be made in the name of the Trustee for the
benefit of the Certificateholders and MBIA. The Trustee
shall
provide to the Servicer and MBIA monthly written confirmation
of such investments, describing the Eligible Investments in
which such amounts have been invested. Any funds not so
invested must be insured by the Federal Deposit Insurance
Corporation.
(c) Any income or other gain from investments in
Eligible
Investments as outlined in (b) above shall be credited to
the
Collection Account and any loss resulting from such
investments shall be charged to such account; provided,
however, that the Transferor shall make or cause to be made
no later than the applicable Payment Date a deposit to the
Collection Account to the
extent of any losses therein. Except as otherwise
specifically set forth herein, the Trustee shall not be
liable for any loss incurred on any funds invested in
Eligible
Investments pursuant to the provisions of this Section
12.02
(other than in its capacity as obligor under any
Eligible Investment).
(d) On each Payment Date if either no Default or Event
of
Default shall have occurred and be continuing or a Default
or
Event of Default shall have occurred and be continuing but
the entire Certificate Balance of the Class A and
Class B Certificates shall not have been declared due
and payable pursuant to Section 6.02 hereof, then on such
Payment Date, after making all transfers and deposits to
the Collection Account referred to in Section 12.02(a)
hereof, the Trustee shall withdraw from the Collection
Account (other than amounts representing payments of
Lease Receivables due after the
Calculation Date immediately preceding such Payment Date
unless such amounts are used toward Servicer Advances
pursuant to Section 3.04 of
the Servicing Agreement) including
the
Reinvestment Income therein, and shall make the
following disbursements in the following order in
accordance with the provisions of and instructions on the
Monthly Servicer's Report; provided, however, that (x) the
proceeds of claims under the Certificate Insurance Policy
shall be used solely to pay interest and principal due under
paragraphs (v) and (vi) of this Section 12.02(d) in
accordance with the terms of the Certificate Insurance
Policy; and (y) the Trustee shall withdraw from the
Collection Account and make interest payments based on the
Class A Certificate Balance even if it shall not have
received the Monthly Servicer's Report:
(i) to pay to the Servicer: (A) the Servicer Fee
then due for all Certificates; (B) the amounts
necessary to reimburse the Servicer and any successor
Servicer and subservicer as provided in Section 3.08(a)
of the Servicing Agreement for reasonable costs
and expenses incurred by the Servicer (including
reasonable attorney's fees and out-of-pocket
expenses) in connection with the realization,
attempted realization or enforcement of rights
and remedies upon Lease Contracts that have
become Defaulted Lease Contracts, from amounts
received as Recoveries from such Defaulted Lease
Contracts; (C) any amounts received from
Customers to pay the taxes described in Section 3.07
of
the Servicing Agreement, to the extent deposited in
the Collection Account; (D) the amount
necessary to reimburse the Servicer for any
Nonrecoverable Advance; and (E) all amounts
received in respect of Lease Receivables as to
which the Servicer has made an unrecovered
Servicer Advance, to the extent of such Servicer
Advance;
(ii) to pay to the Trustee the Trustee Fee
then due for all Certificates;
(iii) to pay to the Back-up Servicer
the
Back-up Servicer Fee then due for all Certificates;
(iv) to pay to MBIA the MBIA Premium then due
for all of the Class A Certificates;
(v) to pay the interest due on that Payment
Date
on all Outstanding Class A Certificates and any
overdue interest, to be applied as provided in
Section 2.08 hereof;
(vi) to pay the Class A Principal
Distribution Amount to all Outstanding Class A
Certificates, to be applied as provided in Section
2.08 hereof;
(vii) unless a Trigger Event has occurred,
to
deposit into the Cash Collateral Account an
amount necessary to bring the balance therein to
an amount
equal to the Cash Collateral Account Required
Balance;
(viii) to pay to MBIA, any amounts
previously paid by MBIA under the Certificate
Insurance Policy and not heretofore repaid, together
with interest thereon in accordance with the
Insurance Agreement;
(ix) to pay to a successor Servicer after
a successor Servicer has been appointed pursuant
to Section 6.02 of the Servicing Agreement, the
Additional Servicer Fee, if any, and to pay any
successor
Servicer, MBIA or the Trustee, any Transition
Costs incurred by any successor Servicer, MBIA
(solely
pursuant to Section 6.02(d) of the Servicing
Agreement) or the Trustee and not previously
reimbursed;
(x) on and after each Payment Date following
the
initial occurrence of a Trigger Event, apply
any remaining funds (the "Additional Principal
Amount") to the payment of principal on the Class A
Certificates;
(xi) to pay to the Trustee and the Back-
up Servicer, any other amounts due to the Trustee or
the Back-up Servicer as expressly provided herein
and in the Servicing Agreement;
(xii) to pay to MBIA, any other amounts
due under the Insurance Agreement;
(xiii) to pay to the Servicer any
other amounts due the Servicer as expressly provided
herein and in the Servicing Agreement;
(xiv) to pay the interest due on that
Payment Date on all Outstanding Class B
Certificates and any overdue interest and interest
thereon, to be applied as provided in Section 2.08
hereof;
(xv) to pay the Class B Principal
Distribution Amount due on that Payment Date on
all Outstanding Class B Certificates, to be applied
to the payment of Certificate principal as
provided in Section 2.08
hereof; and
(xvi) to remit any excess funds to or at
the direction of the Holder of the Transferor
Certificate.
(e) Prior to the Closing Date, the Transferor shall
cause the Trustee to open and maintain a trust account at the
Corporate Trust Office (the "Redemption Account") in the
name of the Trustee for the benefit of Certificateholders
and MBIA, for the receipt of the Redemption Price of any
Certificates to be redeemed in accordance with Article
Ten hereof. On any
Redemption Date, the Trustee shall withdraw the
applicable Redemption Price from the Redemption Account and the
Paying Agent shall remit the Redemption Price to
the applicable Certificateholders in accordance with
Section 10.04 hereof.
Moneys in the Redemption Account shall be invested in
Eligible Investments that mature no later than two Business
Days prior to the relevant Redemption Date. Eligible
Investments shall be made inthe name of the Trustee for
the benefit of the
Certificateholders and MBIA. Any monies deposited in
the Redemption Account for purposes of redeeming
Certificates
pursuant to Article Ten hereof shall, subject to Section
7.16 hereof, remain in the Redemption Account until used to
redeem such Certificates.
(f) If payments on the Lease Contracts are made by means
of electronic transfers from a Customer bank account, the
Servicer shall either remit such payments to the Collection
Account in accordance with Section 3.03(a) of the Servicing
Agreement, or the Transferor shall open and maintain an
account at the ACH Bank (the "ACH Account") in the name of the
Trustee and in the name of any other Permitted Parties.
Section 12.03 Cash Collateral Account.
(a) Prior to the Closing Date, the Transferor shall
cause
the Trustee to open and maintain a trust account at the
Corporate Trust Office (the "Cash Collateral Account") in the
name of the Trustee for the benefit of the Certificateholders
and MBIA, for the receipt of deposits pursuant to
Section 12.02(d)(vii). Monies received in the Cash Collateral
Account will be invested at the
written direction of the Transferor in
Eligible
Investments during the term of this Agreement, and any income
or other gain realized from such investment, shall be held by
the Trustee in the Cash Collateral Account as part of the
Trust Estate subject to disbursement and withdrawal as herein
provided. Eligible Investments shall be made in the name of the
Trustee for the benefit of the Certificateholders and
MBIA. No such Eligible Investment shall mature later than
the second Business Day preceding the next following Payment
Date and shall not be sold or disposed of prior to its
maturity; provided that, Eligible Investments of the type
described in clause (a) of the definition of Eligible
Investments may mature on such Payment Date. In the
absence of a Transferor Order, the Trustee shall invest funds
in the Collection Account in Eligible Investments described
in clause (g) of the definition thereof Monies shall be
subject to withdrawal in accordance with Section 12.03(d)
hereof.
(b) The Trustee shall provide to the Servicer and
MBIA
monthly written confirmation of investments of funds held in
the Cash Collateral Account, describing the Eligible
Investments in which such amounts have been invested. Any
funds not so invested must be insured by the Federal Deposit
Insurance Corporation.
(c) If any amounts invested as provided in Section
12.03(a) hereof shall be needed for disbursement from the Cash
Collateral Account as set forth in Section 12.03(d) hereof,
the Trustee shall cause such investments of such Cash
Collateral Account to be sold or otherwise converted to cash
to the credit of such Cash Collateral Account. The Trustee
shall not be liable for any investment loss resulting from
investment of money in the Cash Collateral Account in any
Eligible Investment in accordance with the terms hereof (other
than in its capacity as obligor under any Eligible Investment).
(d) Disbursements from the Cash Collateral Account shall
be made, to the extent funds therefore are available,
only as follows:
(i) in the event that the amount in the
Collection Account at 10:00 a.m. Minneapolis time on
the Determination Date immediately preceding any
Payment Date (other than amounts representing payments
of Lease Receivables due after the Calculation
Date immediately preceding such Payment Date
unless such amounts are used toward Servicer
Advances pursuant to Section 3.04 of the Servicing
Agreement and taking into account funds transferred
from the Capitalized Interest Account pursuant to
Section 12.04(c)(i)) is less than
the amounts required to be paid from the
Collection Account on such Payment Date pursuant to
clauses (i) through (vi) of Section 12.02(d)
hereof, the Trustee shall withdraw funds from the
Cash Collateral Account on or prior to 4:00
p.m. New York time on such Determination Date to
the extent necessary to make such payments on such
Payment Date and deposit such funds into the
Collection Account;
(ii) subject to subparagraph (iii) of this
Section 12.03(d), in the event that on any Payment
Date the balance in the Cash Collateral Account
equals an amount greater than the Cash Collateral
Account Required Balance (after giving effect to
the distributions listed in clause (i) of this
Section 12.03(d) and clauses (i) through (vi) of
Section 12.02(d) on such Payment Date), the Trustee
shall withdraw funds in the Cash Collateral Account
in such amount so that the remaining amount in
the Cash Collateral Account after such withdrawal
will equal the Cash Collateral Account Required
Balance, and deposit such amounts in the
Collection Account for distribution on such
Payment Date in accordance with the priorities set
forth in Section 12.02(d);
(iii) in the event that on any Payment Date
a Trigger Event has occurred, the Trustee shall
withdraw all funds from the Cash Collateral Account
and deposit such funds into the Collection Account
for disbursement in accordance with the provisions
of Section 12.02(d) hereof; and
(iv) subject to subparagraph (iii) of this
Section 12.03(d), in the event that on any Funding
Date the balance in the Cash Collateral Account,
after giving effect to any Funding occurring on
such Funding Date, equals an amount greater than
the Cash Collateral Account Required Balance, the
Trustee shall withdraw funds in the Cash Collateral
Account in such amount so that the remaining
amount in the Cash Collateral Account after
such withdrawal will equal the Cash Collateral
Account Required Balance, and disburse such amounts
to or at the direction of the Transferor.
Section 12.04 Prefunding Account; Capitalized Interest
Account.
(a) Prior to the Closing Date, the Trustee shall open
and maintain a segregated trust account in the name of the
Trustee at the Corporate Trust Office (the "Capitalized
Interest Account") for the benefit of the
Certificateholders and MBIA, for the receipt of funds
transferred from the Transferor on the Closing Date. The
Transferor hereby instructs the Trustee on the Closing Date to
deposit into the Capitalized Interest Account from the
proceeds of the sale of the Certificates an amount equal to
the Capitalized Interest Account Deposit. Monies held in
the
Capitalized Interest Account shall be subject to withdrawal
in accordance with Section 12.04(c) hereof. Funds on deposit
in the Capitalized Interest Account shall not be commingled
with any other monies.
(b) Prior to the Closing Date, the Trustee shall open
and maintain a segregated trust account in the name of the
Trustee at the Corporate Trust Office (the "Prefunding
Account") for the benefit of the Certificateholders and
MBIA, for the receipt of funds transferred from the
Transferor on the Closing Date. The
Transferor hereby instructs the Trustee on the Closing Date
to
deposit into the Prefunding Account from the proceeds of the
sale of the Certificates an amount equal to the Prefunding
Account Deposit. Monies held in the Prefunding Account shall
be subject to withdrawal in accordance with Section 12.04(d)
hereof. Funds on deposit in the Prefunding Account shall not
be commingled with any other monies.
(c) Disbursements from the Capitalized Interest
Account shall be made as follows provided that funds
therefor are available:
(i) On each Determination Date through the
first
Determination Date following the end of the Funding
Period, the Trustee will withdraw from the Capitalized
Interest Account and deposit into the Collection Account
an amount equal to the Negative Arbitrage Amount.
(ii) On the first Determination Date after the end
of the Funding Period, after the payment in full of the
amounts specified in clause (i), the Trustee will
withdraw any remaining amounts in the Capitalized
Interest Account and disburse such amounts to or at
the direction of the Transferor; provided that no
Trigger Event or Event of Default shall have occurred
and be continuing and if such event shall have
occurred and be continuing, the Trustee shall deposit
such funds to the Collection Account.
(d) Disbursements from the Prefunding Account shall be
made as follows provided that funds therefor are available:
(i) Prior to the end of the Funding Period on
any
Funding Date, provided that the conditions precedent
set forth in Section 3.03(a) have been satisfied, the
Trustee shall withdraw from the Prefunding Account an
amount equal to the Funding Amount for the Lease
Contracts being acquired on such Funding Date and shall
disburse such amounts to or at the direction of the
Transferor.
(ii) On the first Payment Date in the
Amortization Period, the Trustee shall deposit to the
Collection Account and pay to the Class A
Certificateholders as a payment of principal any of the
Prefunding Account Deposit remaining in the Prefunding
Account.
(iii) On each Determination Date through the
first Determination Date following the end of the Funding
Period, the Trustee shall withdraw from the Prefunding
Account all income or gains from investments in Eligible
Investments and deposit such amounts to the Capitalized
Interest Account.
(e) Upon Transferor Order, the Trustee shall invest
the funds in the Capitalized Interest Account and the
Prefunding Account in Eligible Investments. The Transferor
Order shall specify the Eligible Investments in which the
Trustee shall invest, shall state that the same are Eligible
Investments and shall further specify the percentage of funds
to be invested in each Eligible Investment. No such
Eligible Investment shall mature later than the next
Determination Date and shall not be sold or disposed of
prior to its maturity. In the absence of a Transferor Order,
the Trustee shall invest funds in the
Capitalized Interest Account and Prefunding Account in
Eligible Investments described in clause (g) of the
definition thereof. Eligible Investments shall be made in the
name of the Trustee for the benefit of the
Certificateholders and MBIA. The Trustee shall provide
to the Servicer and MBIA monthly
written
confirmation of such investments, describing the
Eligible
Investments in which such amounts have been invested. Any
funds not so invested must be insured by the Federal Deposit
Insurance Corporation.
(f) Any income or other gain from investments in
Eligible
Investments as outlined in (e) above shall be credited to
the Capitalized Interest Account or the Prefunding
Account, as applicable, and any loss resulting from such
investments shall be charged to such applicable account;
provided, however, that the Transferor shall make or cause
to be made no later than the applicable Determination
Date a deposit to the Capitalized Interest Account or the
Prefunding Account to the extent of any losses in such
applicable account. Except as otherwise specifically set
forth herein, the Trustee shall not be liable for any loss
incurred on any funds invested in Eligible Investments
pursuant to the provisions of this Section 12.04
(other than in its capacity as obligor under any
Eligible Investment).
Section 12.05 Reports by Trustee to MBIA
and
Certificateholders.
(a) On each Payment Date the Trustee shall account to
each
Holder of Certificates on which payments of principal
and interest are then being made the amount which
represents
principal and the amount which represents interest, and
shall contemporaneously advise the Transferor and MBIA of
all such payments. The Trustee may satisfy its obligations
under this Section 12.04 by delivering the Monthly Servicer's
Report to each such Holder of the Certificates, MBIA, the
Transferor, the Rating Agencies and the Placement Agent. On or
before the 15th day prior to any Final Payment Date the
Trustee shall provide notice to MBIA, the Rating Agencies
and the Holders of the applicable Certificates of the
Final Payment Date for such Certificates. Such notice shall
include (1) a statement that interest shall cease to accrue
as of the last day preceding the date on which the Final
Payment Date occurs, and (2) shall specify the place or places
at which presentation and surrender may be made.
(b) The Trustee shall notify MBIA and
the
Certificateholders of the credit rating or, if more than
one credit rating has been assigned, each such credit rating of
each institution in which funds are invested pursuant to clause
(g) of the definition of Eligible Investments and shall
promptly notify MBIA and the Certificateholders if any such
credit rating has been lowered.
(c) At least annually, or as otherwise required by law,
the Trustee shall distribute to Certificateholders any
information returns or other tax information or statements as
are required by applicable tax law to be
distributed to the
Certificateholders. The Servicer shall prepare or cause to
be prepared all such information for distribution by the
Trustee to the Certificateholders.
ARTICLE THIRTEEN
PROVISIONS OF GENERAL APPLICATION
Section 13.01 General Provisions.
All of the provisions of this Article shall apply to this
Agreement.
Section 13.02 Acts of Certificateholders.
(a) Any request, demand, authorization, direction,
notice,
consent, waiver or other action provided by this Agreement to
be given or taken by Certificateholders may be embodied in
and evidenced by one or more instruments of substantially
similar tenor signed by such Certificateholders in person or
by an 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 Trustee, and, where it is hereby expressly
required, to the Transferor. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the
Certificateholders 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 (subject to Section 7.01 hereof)
conclusive in favor of the Trustee and the Transferor, if
made in the manner provided in this Section 13.02.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved in any manner
which the Trustee deems sufficient.
(c) The ownership of Certificates shall be proved by
the
Certificate Register.
(d) Any request, demand, authorization, direction,
notice,
consent, waiver or other action by the Holder of any
Certificate shall bind the Holder of every Certificate
issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof, in respect of anything
done, omitted or suffered to be done by the Trustee or the
Transferor in reliance thereon, whether or not notation of
such action is made upon such Certificate.
Section 13.03 Notices, etc., to Trustee, MBIA,
Transferor and Servicer.
Any request, demand, authorization, direction,
notice,
consent, waiver or Act of Certificateholders or other
document provided or permitted by this Agreement to be made
upon, given or furnished to, or filed with any party hereto
shall be sufficient for every purpose hereunder if in
writing and telecopied or mailed, first-class postage
prepaid and addressed to the
appropriate address below:
(a) to the Trustee at Xxxxx Xxxxxx xxx
Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, or
at any other address previously furnished in writing to
the Transferor, MBIA, the Certificateholders and the
Servicer; or
(b) to MBIA at MBIA Insurance Corporation, 000
Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention:
Structured Finance - Insured Portfolio Management (SF-
IPM), or at any other address previously furnished in
writing by MBIA to the Trustee, the Certificateholders,
the Servicer and the
Transferor; or
(c) to the Transferor at 0000 X. 00xx Xxxxxx, Xxxxx
X, Xxxxxxxxxxx, XX 00000, Attention: President, or at
any other address previously furnished in writing
to the
Trustee, MBIA, the Certificateholders and the Servicer
by the Transferor; or
(d) to the Servicer at 0000 X. 00xx
Xxxxxx,
Xxxxxxxxxxx, XX 00000, Attention: President, or at
any
other address previously furnished in writing to
the
Trustee, MBIA, the Certificateholders and the Transferor.
(e) to each of (i) S & P at 00 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Asset Backed
Surveillance Group, and (ii) Moody's at 00 Xxxxxx Xxxxxx,
Xxx Xxxx, XX 00000.
Section 13.04 Notices to Certificateholders; Waiver.
Where this Agreement provides for notice
to
Certificateholders of any event, such notice shall
be
sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage
prepaid, to each Certificateholder affected by such event, at
his address as it appears on the Certificate Register, not
later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any
case in which notice
to
Certificateholders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed,
to any particular Certificateholder shall affect the
sufficiency of such notice with respect to other
Certificateholders, and any notice which is mailed in the
manner herein provided shall conclusively be presumed to have
been duly given.
Where this Agreement provides for notice in any manner,
such notice may be waived in writing by any Person entitled to
receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers
of notice by Certificateholders shall be filed with the
Trustee, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such
waiver.
In case, by reason of the suspension of regular mail
service as a result of a strike, work stoppage or similar
activity, it shall be impractical to mail notice of
any event to
Certificateholders when such notice is required to be
given pursuant to any provision of this Agreement, then any
manner of giving such notice as shall be satisfactory to the
Trustee shall be deemed to be a sufficient giving of such
notice.
Section 13.05 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect
the construction hereof.
Section 13.06 Successors and Assigns.
All covenants and agreements in this Agreement by
the Transferor shall bind its successors and assigns,
whether so expressed or not. Notwithstanding the foregoing,
no party shall assign any of its rights under this Agreement,
or delegate any of its duties, except in accordance with the
provisions of Sections 2.06, 7.11 and 11.02(o) hereof.
Section 13.07 Separability.
In case any provision in this Agreement or in
the
Certificates shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby.
Section 13.08 Benefits of Agreement.
Nothing in this Agreement or in the Certificates, express
or implied, shall give to any Person, other than the parties
hereto,
the Certificateholders, and any Paying Agent which may
be appointed pursuant to the provisions hereof, and any of
their successors hereunder, any benefit or any legal or
equitable right, remedy or claim under this Agreement or
under the Certificates, except that MBIA is an express
third party beneficiary to this Agreement.
Section 13.09 Legal Holidays.
In any case in which the date of any Payment Date or
the Stated Maturity or Expected Maturity of any Certificate
shall not be a Business Day, then (notwithstanding any other
provision of a Certificate or this Agreement) payment of
principal or interest need not be made on such date, but
may be made on the next succeeding Business Day with the
same force and effect as if made on the nominal date of
any such Stated Maturity, Expected Maturity or Payment Date
and, assuming such payment is actually made on such
subsequent Business Day, no additional interest shall accrue
on the amount so paid for the period from and after any such
nominal date.
Section 13.10 Governing Law.
THE AGREEMENT AND EACH CERTIFICATE SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED THEREIN, WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS OF ANY STATE.
Section 13.11 Counterparts.
The Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 13.12 Corporate Obligation.
No recourse may be taken, directly or indirectly,
against any incorporator, subscriber to the capital stock,
stockholder, employee, officer or director of the
Transferor or of any predecessor or successor of the
Transferor with respect to the Transferor's obligations on
the Certificates or under this Agreement or any
certificate or other writing delivered in connection
herewith.
Section 13.13 Compliance Certificates and Opinions.
Upon any application, order or request by the Transferor
or the Servicer to the Trustee to take any action under
any provision of this Agreement for which a specific
request is required under this Agreement, the Transferor or
the Servicer, as applicable, shall furnish to the Trustee an
Officer's Certificate of the Transferor or the Servicer, as
applicable, stating that 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 a
different certificate is specifically required by any
provision of this Agreement relating to such particular
application or request, 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:
(a) a statement that each individual signing
such certificate or opinion has read or has caused to
be read such covenant or condition and the
definitions herein relating thereto;
(b) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(c) a statement that, in the opinion of each
such individual, such individual has made such
examination or investigation as is necessary to enable
such individual to express an informed opinion as to
whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of
each such individual, such condition or covenant
has been complied with.
Section 13.14 MBIA Default or Termination.
If an MBIA Default or Termination occurs and is
continuing, MBIA's right to consent hereunder and under any
other Transaction Document and to direct the Trustee shall be
void and, in such event, in all provisions of this Agreement
wherein MBIA's consent or direction is required or permitted,
the consent or direction of the Controlling Holders shall be
required or permitted unless a larger number of Holders is
required under the relevant provision of this Agreement.
IN WITNESS WHEREOF, the Transferor, the Servicer,
the Trustee and the Back-up Servicer have caused this Agreement
to be duly executed by their respective officers
thereunto duly authorized as of the date and year first above
written.
GF FUNDING CORP. III, Transferor
By:
Name:
Title:
GRANITE FINANCIAL, INC., Servicer
By:
Name:
Title:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee and Back-
up Servicer
By:
Name:
Title:
Schedule I
Attach Initial Lease Schedule
Schedule II
Terms Schedule
"Back-up Servicer Fee Rate": .05% per annum.
"Class A Certificate Initial Balance": $27,500,000, which
is the sum of (a) the product of (i) the Aggregate IPB as of
the Cut-Off Date and (ii) the Class A Percentage, and (b) the
Prefunding Account Deposit.
"Class A Interest Rate": 6.82%.
"Class A Percentage": 82.5%.
"Net Worth Requirement": The Servicer's consolidated
Tangible Net Worth shall not be less than the sum of
(i) $11,347,025 plus (ii) 75% of the cumulative after tax
consolidated net income since December 31, 1996, such amount
being calculated without any offset and reduction for net
losses incurred during the fiscal year for which such
calculation is being made. This requirement may be adjusted by
MBIA without the consent of the Certificateholders after
receipt of audited financial statements of the Company and the
Transferor for the year ending June 30, 1997.
"Prefunding Account Deposit": $12,827,258.18.
"Required Collateralization Amount": As of the Closing
Date, $3,112,399.78, and as of any date of determination
thereafter, the greatest of:
(a) (i) one minus the Class A Percentage multiplied
by (ii) the Aggregate IPB (including any Lease
Contracts to be purchased or funded and excluding any
Lease Contracts to be released pursuant to Section 10.05
hereof on such date of determination),
(b) the aggregate Implicit Principal Balance of the Lease
Contracts (including any Lease Contracts to be purchased
or funded on such date of determination and excluding any
Lease Contracts to be released pursuant to Section 10.05
hereof on such date of determination) relating to the
three Customers whose Lease Contracts have the greatest
remaining Implicit Principal Balance, and
(c) 5% multiplied by the Aggregate Initial IPB
(including any Lease Contracts to be purchased or funded
on such date of determination).
"Servicer Fee": $6 per Lease Contract per Scheduled
Payment on such Lease Contract, the amount payable to the
Servicer as the Servicer Fee on each Payment Date. The
Servicer Fee shall not include the Additional Servicer Fee.
"Trigger Event": The occurrence of any one of the
following events, and the declaration by MBIA, or if an MBIA
Default or Termination has occurred and is continuing, by the
Controlling Holders, that such occurrence shall constitute a
Trigger Event:
(a) commencing with the fourth Determination Date after
the Closing Date, the average of the Annualized Gross
Default Rates for the three consecutive prior Monthly
Periods was equal to or greater than 5.5%;
(b) the Cumulative Gross Default Rate exceeds 8.25%;
(c) commencing with the fourth Determination Date after
the Closing Date, the average of the Delinquency
Rates for the three consecutive prior Monthly Periods
was equal to or greater than 2%;
(d) the Net Worth Requirement is not met;
(e) the Transferor or the Trust Estate becomes an
"investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(f) the occurrence of a Servicer Event of Default;
(g) either Xxxxxxx X. Xxxxxx or both of the following
employees, Xxxx Xxxxxx and Xxxxxxx Xxxx, terminate or
shall have terminated their employment with the
Servicer or any of its Affiliates or die;
(h) an Event of Default occurs or the Company or any
Material Affiliate shall be in default under, or in
violation of any covenant or obligation under any
loan agreement, such that the lender under such loan
agreement would be authorized, pursuant to the terms
of such agreement and upon the expiration of any cure
period or grace period with respect to such violation
or default, to demand immediate payment by the
Company or such Material Affiliate, as applicable, of
10% or more of the aggregate total recourse debt of
the Company and all affiliates of the Company, and
such default or violation shall not have been cured,
remedied or waived in writing by such lender after 90
days, counting from the initial date of the violation
or default and not from the expiration of any
applicable cure or grace period; or
(i) any payment by MBIA under the Certificate Insurance
Policy.
"Trustee Fee Rate": .05% per annum.
