Exhibit 4.2
EXECUTION COPY
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TRANSFER AND SERVICING AGREEMENT
among
METLIFE CAPITAL EQUIPMENT LOAN TRUST 1997-A
Issuer
METLIFE CAPITAL FUNDING CORP. III
Transferor
and
METLIFE CAPITAL CORPORATION
Servicer
Dated as of May 1, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions................................................... 1
SECTION 1.02. Other Definitional Provisions................................. 21
SECTION 1.03. Calculations.................................................. 22
ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Initial Receivables............................. 22
SECTION 2.02. Conveyance of Subsequent Receivables.......................... 23
SECTION 2.03. Closing....................................................... 25
SECTION 2.04. Books and Records............................................. 25
SECTION 2.05. Grant of Security Interest.................................... 26
SECTION 2.06. Discounted Receivables........................................ 26
ARTICLE III
THE RECEIVABLES
SECTION 3.01. Representations and Warranties of Transferor.................. 26
SECTION 3.02. Reacquisition by Transferor or MCC Upon Breach................ 27
SECTION 3.03. Duties of Servicer............................................ 28
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer............................................ 29
SECTION 4.02. Collection of Receivable Payments............................. 29
SECTION 4.03. Realization upon Receivables.................................. 30
SECTION 4.04. Physical Damage Insurance..................................... 30
SECTION 4.05. Maintenance of Security Interests in Financed Equipment. . . 30
SECTION 4.06. Covenants of Servicer......................................... 30
SECTION 4.07. Acquisition by Servicer of Receivables upon Breach............ 31
SECTION 4.08. Servicing Fee................................................. 31
SECTION 4.09. Servicer's Certificate........................................ 31
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.......... 31
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SECTION 4.11. Annual Independent Public Accountants' Servicing Report....... 32
SECTION 4.12. Servicer Expenses............................................. 32
ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS
SECTION 5.01. Establishment of Trust Accounts............................... 33
SECTION 5.02. Collections................................................... 35
SECTION 5.03. Additional Deposits........................................... 35
SECTION 5.04. Distributions................................................. 36
SECTION 5.05. Reserve Account............................................... 38
SECTION 5.06. Statements to Noteholders..................................... 39
SECTION 5.07. Net Deposits.................................................. 40
ARTICLE VI
THE TRANSFEROR
SECTION 6.01. Representations of Transferor................................. 40
SECTION 6.02. Liability of Transferor; Indemnities.......................... 42
SECTION 6.03. Merger or Consolidation of, or Assumption of the Obligations of,
Transferor.................................................... 42
SECTION 6.04. Limitation on Liability of Transferor and Others.............. 43
SECTION 6.05. Transferor May Own Notes...................................... 43
SECTION 6.06. Tax Treatment................................................. 43
ARTICLE VII
THE SERVICER
SECTION 7.01. Representations of Servicer................................... 44
SECTION 7.02. Indemnities of Servicer....................................... 45
SECTION 7.03. Merger or Consolidation of, or Assumption of the Obligations of,
Servicer...................................................... 46
SECTION 7.04. Limitation on Liability of Servicer and Others................ 47
SECTION 7.05. MCC Not To Resign as Servicer................................. 48
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Default.............................................. 48
SECTION 8.02. Appointment of Successor...................................... 49
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SECTION 8.03. Notification to Noteholders................................... 50
SECTION 8.04. Waiver of Past Defaults....................................... 50
ARTICLE IX
EARLY AMORTIZATION EVENTS; OPTIONAL ACQUISITION
SECTION 9.01. Early Amortization Events..................................... 51
SECTION 9.02. Optional Acquisition of All Receivables....................... 52
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment..................................................... 52
SECTION 10.02. Protection of Title to Trust.................................. 53
SECTION 10.03. Notices....................................................... 55
SECTION 10.04. Assignment.................................................... 56
SECTION 10.05. Limitations on Rights of Others............................... 56
SECTION 10.06. Severability.................................................. 56
SECTION 10.07. Separate Counterparts......................................... 56
SECTION 10.08. Headings...................................................... 56
SECTION 10.09. Governing Law................................................. 56
SECTION 10.10. Assignment to Indenture Trustee............................... 56
SECTION 10.11. Nonpetition Covenants......................................... 57
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture Trustee.57
SCHEDULE A - Schedule of Receivables [Deemed Incorporated]............. A-1
SCHEDULE B - Location of Receivable Files.............................. B-1
SCHEDULE C - Servicer's Certificate.................................... C-1
SCHEDULE D - Officers' Certificate..................................... D-1
SCHEDULE E - Subsequent Transfer Assignment............................ E-1
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TRANSFER AND SERVICING AGREEMENT dated as of May 1, 1997, among METLIFE
CAPITAL EQUIPMENT LOAN TRUST 1997-A, a Delaware business trust (the
"Issuer"), METLIFE CAPITAL FUNDING CORP. III, a Delaware corporation (the
"Transferor"), and METLIFE CAPITAL CORPORATION, a Delaware corporation (the
"Servicer").
WHEREAS the Issuer desires to acquire a portfolio of receivables arising
in connection with commercial loan contracts and equipment finance lease
contracts secured by commercial and industrial equipment acquired or
originated by MetLife Capital Corporation in the ordinary course of its
business;
WHEREAS the Transferor has acquired such portfolio of receivables from
MetLife Capital Corporation and desires to transfer such portfolio of
receivables to the Issuer; and
WHEREAS MetLife Capital Corporation desires to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Acquired Receivable" means a Receivable acquired as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 or reacquired as of such time by the Transferor pursuant to
Section 3.02.
"Acquisition Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full the respective
Receivable under the terms thereof (including interest at the related APR to
the end of the month of acquisition).
"Administration Agreement" means the Administration Agreement dated as of
May 1, 1997 among the Trust, the Transferor, MCC, as Administrator, as the
same may be amended and supplemented from time to time.
"Administration Fee" means the fee payable to the Administrator pursuant
to Section 3 of the Administration Agreement.
"Administrator" means the administrator under the Administration
Agreement.
"Affiliate" has the meaning assigned thereto in Section 1.01 of the
Indenture.
"Agreement" means this Transfer and Servicing Agreement, as the same may
be amended and supplemented from time to time.
"Amortization Period" means the period commencing on the earlier to occur
of (a) the Scheduled Revolving Period Termination Date and (b) the day on
which an Early Amortization Event is deemed to occur and ending on the
earlier to occur of (i) the Final Scheduled Distribution Date and (ii) the
payment to Noteholders of all amounts required to be paid to them pursuant to
the Indenture.
"APR" or "Annual Percentage Rate" of a Receivable means the annual
percentage rate of interest of such Receivable set forth on the Schedule of
Receivables.
"Available Interest Amount" means, with respect to any Distribution Date,
the sum of the following amounts, without duplication, with respect to the
preceding Collection Period: (i) the portion of all Collections received
during such Collection Period (including any such amounts constituting
Prepayment Proceeds and the discounted portion of any Discounted Receivable)
allocable to interest, (ii) all Investment Earnings with respect to such
Distribution Date, (iii) all Liquidation Proceeds and Recoveries received
during such Collection Period and (iv) the portion of all Acquisition Amounts
received during such Collection Period allocable to interest, but excluding
in all cases (x) all payments and proceeds (including Liquidation Proceeds
and Recoveries) of any Acquired Receivables the principal portion of which
has been included in the Principal Distribution Amount in a prior Collection
Period and (y) any Excluded Amounts.
"Available Principal Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication, with respect to
the preceding Collection Period: (i) that portion of all Collections received
during such Collection Period (including any such amounts constituting
Prepayment Proceeds but excluding the discounted portion of any Discounted
Receivable) allocable to principal, (ii) the portion of all Acquisition
Amounts received during such Collection Period allocable to principal and
(iii) the portion of the Available Interest Amount deposited in the Principal
Funding Account pursuant to Section 5.04(b)(i)(E), but excluding in all cases
(x) all payments and proceeds of any Acquired Receivables the principal
portion of which has been included in the Principal Distribution Amount in a
prior Collection Period and (y) any Excluded Amounts.
"Base Rate" means, with respect to any Collection Period, the annualized
percentage equivalent of a fraction, the numerator of which is equal to the
sum of (a) the Noteholders' Class A Interest Distributable Amount and the
Noteholders' Class B Interest Distributable Amount, each for such
Distribution Date, (b) the Administration Fee with respect to such Collection
Period and (c) the Servicing Fee with respect to such Collection Period and
the denominator of which is the Pool Balance as of the close of business on
the last day of such Collection Period.
"Basic Documents" has the meaning assigned to such term in the Indenture.
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"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in New York, New York, Seattle,
Washington, or Wilmington, Delaware are authorized or obligated by law,
regulation or executive order to remain closed.
"Certificated Securities" has the meaning specified in Section
8-102(1)(a) of the UCC.
"Class" means the Class A Notes or the Class B Notes, as applicable.
"Class A Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Distribution Date with respect to the Amortization Period, the
lesser of (a) the Class A Noteholders' Percentage of the Principal
Distribution Amount and (b) the outstanding principal balance of the Class A
Notes.
"Class A Noteholders' Percentage" means (i) as long as the Pool Balance
is greater than $82,663,946 and the Cumulative Net Loss Ratio is less than
3%, the percentage equivalent of a fraction, the numerator of which is the
principal balance of the Class A Notes and the denominator of which is the
Pool Balance, in each case, as of the close of business on the last day of
the Revolving Period, and (ii) from and after the first to occur of (x) the
date on which the Pool Balance is less than or equal to $82,663,946 or (y)
the date on which the Cumulative Net Loss Ratio is equal to or greater than
3%, 100%.
"Class A Noteholders' Principal Distributable Amount" means, with respect
to any Distribution Date with respect to the Amortization Period, the Class A
Noteholders' Monthly Principal Distributable Amount for such Distribution
Date; provided, however, that the Class A Noteholders' Monthly Distributable
Amount shall not exceed the outstanding principal amount of the Class A
Notes, and on the Final Scheduled Distribution Date, the Class A Noteholders'
Principal Distributable Amount will include the amount necessary (after
giving effect to the other amounts to be deposited in the Note Distribution
Account on such Distribution Date and allocable to principal) to reduce the
outstanding principal amount of the Class A Notes to zero.
"Class A Note Interest Rate" has the meaning assigned to such term in the
Indenture.
"Class A Note Pool Factor" means 1.0000000 as of the Closing Date, and as
of the close of business on the last day of a Collection Period thereafter
means a seven-digit decimal figure equal to the outstanding principal amount
of the Class A Notes as of such date (after giving effect to payments in
reduction of the principal amount of the Class A Notes on the immediately
following Distribution Date) divided by the original outstanding principal
amount of the Class A Notes.
"Class B Noteholders' Percentage" means (i) as long as the Pool Balance
is greater than $82,663,946 and the Cumulative Net Loss Ratio is less than
3%, 100% minus the Class A Noteholders' Percentage (if any Class A Notes are
outstanding), and (ii) from and after the first to occur of (x) the date on
which the Pool Balance is less than or equal to $82,663,946 or (y) the date
on which the Cumulative Net Loss Ratio equals or exceeds 3%, 0%; provided,
that
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after the Distribution Date on which the Class A Notes are paid in full, the
Class B Noteholders' Percentage shall equal 100%.
"Class B Noteholders' Principal Distributable Amount" means, with respect
to any Distribution Date with respect to the Amortization Period, the Class B
Noteholders' Percentage of the Principal Distribution Amount.
"Class B Note Interest Rate" has the meaning assigned to such term in the
Indenture.
"Closing Date" means May 30, 1997.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01.
"Collection Period" means, with respect to the first Distribution Date,
the calendar month ending on and including May 31, 1997 and, with respect to
each subsequent Distribution Date, the immediately preceding calendar month.
Any amount stated "as of the close of business on the last day of a
Collection Period" shall give effect to the following calculations as
determined as of the end of the day on such last day: (1) all applications of
collections and (2) all distributions to be made on the following
Distribution Date.
"Collections" means all payments received by the Servicer in respect of
any Receivable, other than Excluded Amounts.
"Commission" means the Securities and Exchange Commission.
"Component Lien" means any Lien, to the extent that it secures the
payment or performance of any Component Receivable (including the ownership
or security interest of the lessor pursuant to any lease transaction that is
a Component Receivable).
"Component Receivable" has the meaning specified in the definition of
the term "Master Receivable Agreement" in this Section 1.01.
"Contract" means, with respect to any Receivable, a commercial loan
contract or an equipment finance lease contract, secured by commercial and/or
industrial equipment, and shall include any amendment or modification of such
Contract and, with respect to Included Component Receivables, shall include
only those schedules and promissory notes that constitute the Included
Component Receivable, and the Master Receivable Agreement solely to the
extent incorporated in the Included Component Receivable.
"Contribution and Sale Agreement" means the Contribution and Sale
Agreement dated as of May 1, 1997 between the Transferor and MCC, as the same
may be amended from time to time.
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"Corporate Trust Office" means the principal office of the Indenture
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of the execution of this Agreement is
located at 000 Xxxx 00 Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, except
that for purposes of Section 3.02 of the Indenture, such term shall mean the
office or agency of the Indenture Trustee in the Borough of Manhattan, the
City of New York which office at the date hereof is located at 000 Xxxx 00
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx; or at such other address as the
Indenture Trustee may designate from time to time by notice to the
Noteholders, the Owner Trustee and the Transferor, or the principal corporate
trust office of any successor Indenture Trustee (the address of which the
successor Indenture Trustee will notify the Noteholders, the Owner Trustee
and the Transferor); provided, that for purposes of Section 3.02 of the
Indenture, the address of any such office shall be in the Borough of
Manhattan in the City of New York.
"Cumulative Net Loss Ratio" means the percentage equivalent of a
fraction, the numerator of which is the excess, if any, of the cumulative
aggregate Realized Losses for each Collection Period from the Closing Date
over the sum of (a) the cumulative aggregate Liquidation Proceeds for each
Collection Period from the Closing Date and (b) the cumulative aggregate
Recoveries for each Collection Period from the Closing Date, and the
denominator of which is the Initial Pool Balance.
"Cut-off Date" means, as applicable, the Initial Cut-off Date and each
Subsequent Cut-off Date.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization,
suspension of payments, readjustment of debt, marshalling of assets or
similar debtor relief laws of the United States or any state from time to
time in effect, affecting the rights of creditors generally.
"Defaulted Receivable" means any Receivable as to which all or any
portion of any unpaid Scheduled Payment has been charged off as uncollectible
on the Receivable Management System in accordance with the Servicer's
customary and normal collection and servicing procedures or as to which the
Servicer has repossessed the related Financed Equipment; provided, however,
that the Servicer shall charge off a Receivable as uncollectible on the
Receivable Management System no later than the date on which such Receivable
becomes 180 days delinquent. A Receivable shall become a Defaulted
Receivable on the earlier to occur of (a) the date on which such Receivable
is recorded as charged off as uncollectible on the Receivable Management
System or (b) the date that the Servicer has repossessed the related Financed
Equipment.
"Delivery" when used with respect to Trust Account Property means:
(a) with respect to items of the Trust Account Property that constitute
"instruments" within the meaning of Section 9-105(a)(i) of the UCC (other
than Certificated Securities), transfer thereof to the Indenture Trustee by
physical delivery to the Indenture Trustee, endorsed to, or registered in
the name of, the Indenture Trustee or its nominee in its capacity as
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Indenture Trustee or endorsed in blank (with any intervening endorsements
necessary to provide a complete chain of endorsement); and such additional
or alternative procedures as may hereafter become appropriate to effect the
complete transfer of ownership of any such item of the Trust Account
Property to the Indenture Trustee free and clear of any adverse claims,
consistent with changes in applicable law or regulations or the
interpretation thereof, and the Issuer agrees to do or take all actions (or
omit from taking actions) in order to make all transfers contemplated
hereby valid under applicable law, including, without limitation, deliver
to the Indenture Trustee any endorsements, documents or instruments which
may be necessary or appropriate to transfer any such item of the Trust
Account Property to the Indenture Trustee;
(b) with respect to an item of the Trust Account Property that is a
Certificated Security, transfer thereof:
(i) by physical delivery of such Certificated Security to
the Indenture Trustee, provided that if the Certificated Security is in
registered form, it shall be endorsed to, or registered in the name of, the
Indenture Trustee or endorsed in blank (with any intervening endorsements
necessary to provide a complete chain of endorsement);
(ii) by physical delivery of such Certificated Security to a
"financial intermediary" (as defined in Section 8-313(4) of the UCC) of the
Indenture Trustee specially endorsed to or issued in the name of the
Indenture Trustee (with any intervening endorsements necessary to provide a
complete chain of endorsement);
(iii) by the sending by a financial intermediary, not a
"clearing corporation" (as defined in Section 8-102(3) of the UCC), of a
confirmation of the purchase by such financial intermediary of and the
making by such financial intermediary of entries on its books and records
identifying as belonging to the Indenture Trustee of (A) a specific
Certificated Security in the financial intermediary's possession, (B) a
quantity of securities that constitute or are part of a fungible bulk of
Certificated Securities in the financial intermediary's possession, or (C)
a quantity of securities that constitute or are part of a fungible bulk of
securities shown on the account of the financial intermediary on the books
of another financial intermediary; or
(iv) by the making by a clearing corporation of appropriate
entries on its books reducing the appropriate securities account of the
transferor and increasing the appropriate securities account of the
Indenture Trustee, or a financial intermediary acting on its behalf, by the
amount of such Certificated Security, provided that in each case: (A) the
clearing corporation identifies such Certificated Security on its books and
records for the sole and exclusive account of the Indenture Trustee or such
financial intermediary, (B) such Certificated Security shall be subject to
the clearing corporation's exclusive control, (C) such Certificated
Security is endorsed in blank or registered in the name of the clearing
corporation or a custodian bank or a nominee of either of them, (D) custody
of such Certificated Security shall be maintained by such clearing
corporation or any other "custodian" (as defined in Section 8-102(4) of the
UCC) or the nominee of either subject
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to the control of the clearing corporation, (E) such Certificated Security
is shown on the account of the transferor thereof on the books of the
clearing corporation prior to the making of such entries, and (F) if such
security is reflected in the account of a financial intermediary for the
Indenture Trustee, the confirmation described in paragraph (b)(iii)
hereinabove shall be provided to the Indenture Trustee;
and such additional or alternative procedures as may be or may hereafter
become appropriate to effect the complete transfer of ownership of any such
item of the Trust Account Property to the Indenture Trustee free and clear of
any adverse claims, consistent with applicable law or regulations or changes
therein or the interpretation thereof, and the Issuer agrees to do or take
all actions (or omit from taking actions) in order to make all transfers
contemplated hereby valid under applicable law, including, without
limitation, deliver to the Indenture Trustee any endorsements, documents or
instruments which may be necessary or appropriate to transfer any such item
of the Trust Account Property to the Indenture Trustee;
(c) with respect to any United States Securities Entitlement held through
the Federal Reserve System pursuant to Federal book-entry regulations,
compliance with the following procedures, all in accordance with applicable
law, including applicable federal regulations and Articles 8 and 9 of the
UCC:
(i) book-entry registration of such property to an
appropriate book-entry account maintained with a Federal Reserve Bank by a
securities intermediary which is also a "depositary" pursuant to applicable
federal regulations and issuance by such depositary of a deposit advice or
other written confirmation of such book-entry registration to the Indenture
Trustee, or to a financial intermediary for the Indenture Trustee, of the
purchase by the financial intermediary on behalf of the Indenture Trustee
(or a financial intermediary for the Indenture Trustee) of such United
States Securities Entitlement;
(ii) the making by such depositary of entries in its books
and records identifying such United States Securities Entitlement held
through the Federal Reserve System as belonging to the Indenture Trustee
and indicating that such depositary holds such United States Securities
Entitlement solely as agent for the Indenture Trustee (or a financial
intermediary for the Indenture Trustee);
(iii) the sending by such depositary to the Indenture Trustee
of the confirmation described in paragraph (b)(iii) of this definition (or
to a financial intermediary for the Indenture Trustee and the sending of
such confirmation to the Indenture Trustee by such financial intermediary);
and
(iv) such additional or alternative procedures as may be or may
hereafter become appropriate to effect complete transfer of ownership of
any such item of the Trust Account Property to the Indenture Trustee free
of any adverse claims, consistent with applicable law or regulations or
changes therein or the interpretation thereof, and the Issuer agrees to do
or take all actions (or omit from taking actions) in order to make all
transfers contemplated hereby valid under applicable law, including,
without limitation, deliver to the
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Indenture Trustee any endorsements, documents or instruments which may be
necessary or appropriate to transfer any such item of the Trust Account
Property to the Indenture Trustee;
(d) with respect to any item of the Trust Account Property that is an
"uncertificated security" (as defined in Section 8-102(1)(b) of the UCC)
and that is not governed by clause (c) above, transfer thereof:
(i) by delivery to the Indenture Trustee of a written
statement from the issuer thereof describing such security, identifying the
amount thereof transferred and the date of transfer, and confirming the
registration of the transfer thereof to the Indenture Trustee or its
nominee, on the books and records of the issuer thereof;
(ii) by the sending of a confirmation by a financial
intermediary of the purchase by such financial intermediary, and the making
by such financial intermediary of entries on its books and records
identifying as belonging to the Indenture Trustee, of (A) a quantity of
securities which constitute or are part of a fungible bulk of
uncertificated securities registered in the name of the financial
intermediary or (B) a quantity of securities which constitute or are part
of a fungible bulk of securities shown on the account of the financial
intermediary on the books of another financial intermediary; or
(iii) by the making by a clearing corporation of appropriate
entries on its books reducing the appropriate account of the transferor and
increasing the account of the Indenture Trustee (or a financial
intermediary for the Indenture Trustee) by the amount of such
uncertificated security, provided that in each case: (A) the clearing
corporation identifies on its books and records such uncertificated
security for the sole and exclusive use of the Indenture Trustee (or such
financial intermediary designated by the Indenture Trustee), (B) such
uncertificated security is registered in the name of the clearing
corporation or a custodian bank or a nominee of either, (C) such
uncertificated security is shown on the account of the transferor on the
books of the clearing corporation prior to the making of such entries, and
(D) if such security is shown on the books of such clearing corporation for
the account of a financial intermediary for the Indenture Trustee, a
confirmation described in paragraph (b)(iii) hereinabove shall be sent to
the Indenture Trustee;
and such additional or alternative procedures as may be or may hereafter
become appropriate to effect the complete transfer of ownership of any such
item of the Trust Account Property to the Indenture Trustee free and clear of
any adverse claims, consistent with applicable law or regulations or changes
therein or the interpretation thereof, and the Issuer agrees to do or take
all actions (or omit from taking actions) in order to make all transfers
contemplated hereby valid under applicable law, including, without
limitation, deliver to the Indenture Trustee any endorsements, documents or
instruments which may be necessary or appropriate to transfer any such item
of the Trust Account Property to the Indenture Trustee; and
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(e) in each case of Delivery contemplated herein, the Indenture Trustee
shall make appropriate notations on its records, and shall cause same to be
made on the records of its nominees, if any, indicating that such securities
are held in trust pursuant to and as provided in this Indenture.
"Determination Date" means, with respect to any Distribution Date, the
second Business Day prior to such Distribution Date.
"Discounted Receivable" means a Subsequent Receivable that the Transferor
discounts pursuant to Section 2.06.
"Distribution Date" means the 20th day of each calendar month or, if such
day is not a Business Day, the immediately following Business Day, commencing
on June 20, 1997.
"Early Amortization Event" has the meaning assigned thereto in Section
9.01.
"Eligible Deposit Account" means either (a) a segregated account with an
Eligible Institution or (b) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution shall have a credit
rating from each Rating Agency in one of its generic rating categories which
signifies investment grade.
"Eligible Institution" means (a) the corporate trust department of the
Indenture Trustee or the Owner Trustee, so long as it is a paying agent under
the Indenture, or such other institution acceptable to the Rating Agencies,
or (b) a depository institution (excluding the Servicer or any of its
Affiliates) organized under the laws of the United States of America or any
one of the states thereof or the District of Columbia (or any domestic branch
of a foreign bank) (i)(A) which has either (1) a long-term unsecured debt
rating of AAA or better by Standard & Poor's and Aaa or better by Moody's or
(2) a short-term unsecured debt rating or a certificate of deposit rating of
A-1+ by Standard & Poor's and P-1 or better by Moody's, or any other
long-term, short-term or certificate of deposit rating acceptable to the
Rating Agencies and (B) whose deposits are insured by the FDIC or (ii)(A) the
parent of which has a long-term or short-term unsecured debt rating
acceptable to the Rating Agencies and (B) whose deposits are insured by the
FDIC. If so qualified, the Indenture Trustee or the Owner Trustee may be
considered an Eligible Institution for the purposes of clause (b) of this
definition.
"Eligible Investments" mean book-entry securities, negotiable instruments
or securities (other than any such instrument or security issued by MCC or
any of its Affiliates) represented by instruments in bearer or registered
form or United States Securities Entitlements which evidence:
(a) direct obligations of, and obligations fully guaranteed as to timely
payment by, the United States of America;
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(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or
State banking or depository institution authorities; provided, however,
that at the time of the investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is based on
the credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from each Rating Agency in the
highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or contractual
commitment to invest therein, a rating from each Rating Agency in the
highest investment category granted thereby;
(d) bankers' acceptances issued by any depository institution or trust
company referred to in clause (b) above;
(e) repurchase obligations with respect to any security that is a direct
obligation of, or fully guaranteed by, the United States of America or any
agency or instrumentality thereof the obligations of which are backed by
the full faith and credit of the United States of America, in either case
entered into with (i) a depository institution or trust company (acting as
principal) described in clause (b) or (ii) a depository institution or trust
company the deposits of which are insured by FDIC; or
(f) investments in money market funds (including those of the Indenture
Trustee or its affiliates) rated AAA-m or AAA-mg by Standard & Poor's and
P-1 by Moody's or otherwise approved in writing by each Rating Agency;
provided, however, that investments in this clause (f) must be disposed of
(i) with respect to any money market funds of the Indenture Trustee, only
on the Business Day immediately preceeding the Distribution Date relating
to the Monthly Period in which such investment is made by the Trust, (ii)
with respect to any money market funds of a Person other than the Indenture
Trustee, only on the Business Day immediately preceding the Distribution
Date relating to the Monthly Period in which such investment is made by the
Trust; or
(g) any other investment permitted by each of the Rating Agencies.
"Excluded Amounts" means (i) any payments received from an Obligor in
connection with any insurance premiums or fees, or Taxes or other charges
imposed by any Governmental Authority, (ii) any indemnity payments made by an
Obligor pursuant to any Receivable, (iii) any Make-Whole Amount and (iv) all
Late Fees, extension fees, and other incidental charges (from whatever
source) collected with respect to any Receivable.
"Excluded Component Receivable" means any Component Receivable that is
not a Receivable.
10
"Farm Credit Entitlement" means a "Security Entitlement" as defined in 12
C.F.R. Section 615.5450.
"Farm Credit Intermediary" means a "Securities Intermediary" as defined
in 12 C.F.R. Section 615.5450 whose jurisdiction for purposes of 12 C.F.R.
Section 615.5453 with respect to the related Farm Credit Entitlement is the
State of New York.
"FHL Bank Entitlement" means a "Security Entitlement" as defined in 12
C.F.R. Section 912.1.
"FHL Bank Intermediary" means a "Securities Intermediary" as defined in
12 C.F.R. Section 912.1 whose jurisdiction for purposes of 12 C.F.R. Section
912.3 with respect to the related FHL Bank Entitlement is the State of New
York.
"Final Scheduled Distribution Date" means the May 2008 Distribution Date.
"Financed Equipment" means all goods, equipment or other property which
secure the payment or performance of a Receivable which were directly or
indirectly acquired with the proceeds of such Receivable, or in the case of a
lease transaction, are leased by the Obligor in connection with such
Receivable.
"Funding Corporation Entitlement" means a "Security Entitlement" as
defined in 12 C.F.R. Section 1511.1.
"Funding Corporation Intermediary" means a "Securities Intermediary" as
defined in 12 C.F.R. Section 1511.1 whose jurisdiction for purposes of 12
C.F.R. Section 1511.3 with respect to the related Funding Corporation
Entitlement is the State of New York.
"Governmental Authority" means the United States of America, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Holder" or "Noteholder" has the meaning assigned to such term in Section
1.01 of the Indenture.
"HUD Entitlement" means a "Security Entitlement" as defined in 24 C.F.R.
Section 81.2.
"HUD Intermediary" means a "Securities Intermediary" as defined in 24
C.F.R. Section 81.2 whose jurisdiction for purposes of 12 C.F.R. Section
81.92 with respect to the related HUD Entitlement is the State of New York.
"Included Component Receivable" means any Component Receivable that is a
Receivable.
"Indenture" means the Indenture dated as of May 1, 1997 between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
11
"Indenture Trustee" means The Chase Manhattan Bank, in its capacity as
trustee under the Indenture, its successors in interest and any successor
trustee under the Indenture.
"Initial Cut-off Date" means, with respect to the Initial Receivables,
May 1, 1997.
"Initial Pool Balance" means the Pool Balance as of the Initial Cut-off
Date, which is $330,665,783.
"Initial Receivable" means each loan or lease Contract, including any
Included Component Receivable, which is identified in the initial Schedule of
Receivables delivered to the Owner Trustee and the Indenture Trustee on or
prior to the Closing Date pursuant to Section 2.01.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable Federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by such Person to the entry of
an order for relief in an involuntary case under any such law, or the consent
by such Person to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
for such Person or for any substantial part of its property, or the making by
such Person of any general assignment for the benefit of creditors, or the
failure by such Person generally to pay its debts as such debts become due,
or the taking of action by such Person in furtherance of any of the foregoing.
"Insurance Policy" means any insurance policy maintained by an Obligor
(or on an Obligor's behalf by the Servicer) covering physical damage to the
Financed Equipment relating to any Receivable or the related Obligor's
ability to make Scheduled Payments pursuant to such Receivable.
"Insurance Proceeds" means all payments made to the Servicer under an
Insurance Policy in respect of or in lieu of any amount that has or may
become due pursuant to any Receivable, including any such amount received in
respect of any Scheduled Payment.
"Interest Payment Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Investment Earnings" means, with respect to any Distribution Date, the
investment earnings (net of losses and investment expenses) on amounts on
deposit in the Trust Accounts to be deposited into the Collection Account on
such Distribution Date pursuant to Section 5.01(b).
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"Issuer" means MetLife Capital Equipment Loan Trust 1997-A.
"Late Fees" means any interest or other amounts assessed by MCC and paid
by an Obligor in excess of the Scheduled Payment due to the delinquency of
such Scheduled Payment.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind with respect to any Receivable other than mechanics'
liens and any liens which attach to such Receivable by operation of law as a
result of any act or omission by the related Obligor.
"Liquidation Proceeds" means, with respect to any Defaulted Receivable,
the moneys collected in respect thereof, from whatever source (including any
Insurance Proceeds) during the Collection Period in which such Receivable
became a Defaulted Receivable, net of the sum of any amounts expended by the
Servicer in connection with such liquidation and any amounts required by law
to be remitted to the Obligor on such Defaulted Receivable.
"Make-Whole Amount" means, with respect to any prepayment, the amount, if
any, by which the amount required (by the Contract evidencing such
Receivable, as in effect on the applicable Cut-off Date) to be paid by the
Obligor in connection with a prepayment exceeds the sum of (i) the Scheduled
Principal Payments that are the subject of such prepayment and (ii) any
accrued and unpaid interest on such Receivable.
"Master Receivable Agreement" means any agreement or series of agreements
(including an agreement as to which an Obligor has entered into multiple
schedules or promissory notes) pursuant to which MCC has entered or has the
right to enter into more than one loan and/or lease transaction (as lender or
lessor) with a single Obligor (each of which transactions is referred to as a
"Component Receivable"), at any time when
(a) at least one Component Receivable is a Receivable which is part of the
Trust Estate,
(b) at least one Component Receivable is not a Receivable that is part of
the Trust Estate, and
(c) (i) such Obligor's obligations pursuant to at least one Component
Receivable that is described in clause (a) above are secured by assets
directly or indirectly acquired with the proceeds of, or leased by such
Obligor as the lessee pursuant to, at least one Component Receivable that
is described in clause (b) above, or
(ii) such Obligor's obligations pursuant to at least one Component
Receivable that is described in clause (b) above are secured by assets
directly or indirectly acquired with the proceeds of, or leased by such
Obligor as the lessee pursuant to, at least one Component Receivable that
is described in clause (a) above.
"Master Receivable Collateral" means any asset that secures the payment
or performance of one or more Component Receivables or any asset leased to
the Obligor pursuant to any lease transaction that is a Component Receivable.
13
"MCC" means MetLife Capital Corporation, a Delaware corporation.
"Monthly Class A Note Interest" means, with respect to any Distribution
Date, an amount equal to one-twelfth of the product of (a) the Class A Note
Interest Rate and (b) the outstanding principal balance of the Class A Notes
as of the close of business on the preceding Distribution Date after giving
effect to all payments of principal made to the Class A Noteholders on such
preceding Distribution Date; provided, however, that with respect to the
first Distribution Date, interest on the outstanding principal balance of the
Class A Notes will accrue from and including the Closing Date to but
excluding the June 1997 Distribution Date and will be calculated on the basis
of a 360-day year of twelve 30-day months.
"Monthly Class B Note Interest" means, with respect to any Distribution
Date, an amount equal to one-twelfth of the product of (a) the Class B Note
Interest Rate and (b) the outstanding principal balance of the Class B Notes
as of the close of business on the preceding Distribution Date after giving
effect to all payments of principal made to the Class B Noteholder on such
preceding Distribution Date; provided, however, that with respect to the
first Distribution Date, interest on the outstanding principal balance of the
Class B Notes will accrue from and including the Closing Date to but
excluding the June 1997 Distribution Date and will be calculated on the basis
of a 360-day year of twelve 30-day months.
"Moody's" means Xxxxx'x Investors Service, Inc., or its successor.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Note Register" and "Note Registrar" have the meanings specified in
Section 2.04 of the Indenture.
"Noteholders' Class A Interest Carryover Shortfall" means, with respect
to any Distribution Date, the sum of (a) the excess of (i) the sum of (A) the
Monthly Class A Note Interest for the preceding Distribution Date and (B) any
outstanding Noteholders' Class A Interest Carryover Shortfall on such
preceding Distribution Date, over (ii) the amount in respect of interest that
is actually deposited in the Note Distribution Account on such preceding
Distribution Date and allocated to the Class A Notes for such Distribution
Date, plus (b) interest on the amount of interest due but not paid to the
Class A Noteholders on the preceding Distribution Date, to the extent
permitted by law, at the Class A Note Interest Rate from and including such
preceding Distribution Date to but excluding the current Distribution Date.
"Noteholders' Class A Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Monthly Class A Note Interest
for such Distribution Date and (b) the Noteholders' Class A Interest
Carryover Shortfall for such Distribution Date.
"Noteholders' Class B Interest Carryover Shortfall" means, with respect
to any Distribution Date, the sum of (a) the excess of (i) the sum of (A) the
Monthly Class B Note Interest for the preceding Distribution Date and (B) any
outstanding Noteholders' Class B Interest Carryover
14
Shortfall on such preceding Distribution Date, over (ii) the amount in
respect of interest that is actually deposited in the Note Distribution
Account on such preceding Distribution Date and allocated to the Class B
Notes for such Distribution Date, plus (b) interest on the amount of interest
due but not paid to the Class B Noteholder on the preceding Distribution
Date, to the extent permitted by law, at the Class B Note Interest Rate from
and including such preceding Distribution Date to but excluding the current
Distribution Date.
"Noteholders' Class B Interest Distributable Amount" means, with respect
to any Distribution Date, the sum of (a) the Monthly Class B Note Interest
for such Distribution Date and (b) the Noteholders' Class B Interest
Carryover Shortfall for such Distribution Date.
"Notes" means the Class A Notes and the Class B Notes, collectively.
"Notes of a Class" or "Class of Notes" means all Notes included in Class
A Notes or all Notes included in Class B Notes, whichever is appropriate.
"Obligor" with respect to any Receivable means any Person which is an
obligor, lessee or guarantor thereof; provided, that in no event shall MCC or
the Transferor be construed to be the Obligor with respect to any Receivable
due to the application of Section 3.02 or Section 4.07, as applicable.
"Obligor Over-concentration Amount" means, with respect to any Obligor as
of any date of determination, an amount equal to the product of (a) the
positive difference, if any, by which (i) the percentage equivalent of a
fraction, the numerator of which is the aggregate of the Principal Balance of
each Receivable relating to such Obligor as of such date of determination and
the denominator of which is the Pool Balance as of such date of determination
exceeds (ii) 1.5% and (b) the Pool Balance as of such date of determination.
"Officers' Certificate" of any Person means a certificate on behalf of
such Person that is signed by any Vice President or more senior officer of
such Person and states that the certifications set forth in such certificate
are based upon the results of a due inquiry into the matters in question
conducted by or under the supervision of the signing officer and that the
facts stated in such certifications are true and correct to the best of the
signing officer's knowledge.
"Opinion of Counsel" means one or more written opinions of counsel who
may be an employee of or counsel to the Transferor or the Servicer, which
counsel shall be acceptable to the Indenture Trustee, the Owner Trustee
and/or the Rating Agencies, as applicable.
"Outstanding" has the meaning assigned to such term in Section 1.01 of
the Indenture.
"Outstanding Amount" means the aggregate principal amount of all Notes,
or a Class of Notes, as applicable, Outstanding at the date of determination.
"Owner" means GSS Holdings, Inc., as holder of the certificate of
beneficial ownership issued by the Trust.
15
"Owner Trust Estate" has the meaning assigned to such term in the Trust
Agreement.
"Owner Trustee" means Wilmington Trust Company in its capacity as Owner
Trustee under the Trust Agreement, its successors in interest and any
successor owner trustee under the Trust Agreement.
"Permitted Lien" means (i) any Component Lien, to the extent it secures
an Excluded Component Receivable, and (ii) any Lien for municipal or other
local Taxes and other governmental charges, so long as either (x) such Taxes
or governmental charges are not at the time due and payable or (y) the
Transferor or MCC is then contesting the validity of any such Taxes or
charges in good faith by appropriate proceedings and there has been set aside
on the appropriate entity's books any reserve that is required under
generally accepted accounting principles with respect to such Taxes or
charges.
"Pool Balance" means, at any time, the sum of (a) the aggregate of the
Principal Balances of the Receivables at the end of the preceding Collection
Period, after giving effect to (i) all payments received from or for the
credit of Obligors and Acquisition Amounts remitted by the Transferor or the
Servicer, as the case may be, for such Collection Period, and (ii) all
Realized Losses on Defaulted Receivables during such Collection Period and
(b) with respect to any date of determination during the Revolving Period,
the sum of the Principal Funding Account Balance at such time and, if such
date of determination is prior to the Distribution Date in the current
Collection Period, the Available Principal Amount with respect to such
preceding Collection Period on deposit in the Collection Account.
"Prepayment Proceeds" means all Collections that constitute part of any
prepayment.
"Principal Balance" of a Receivable, as of the close of business on the
last day of a Collection Period or as of the applicable Cut-off Date, as
applicable, means the aggregate amount of all Scheduled Principal Payments
that have not been received by the Servicer (including all Scheduled
Principal Payments that are then due and payable), calculated as of the
related Cut-off Date or as of the end of the preceding Collection Period, as
applicable; provided, however, that the Principal Balance of Discounted
Receivables will be the discounted Principal Balance specified on the
Schedule of Receivables; and provided further, however, that the Principal
Balance of each Defaulted Receivable is zero.
"Principal Distribution Amount" means, with respect to any Distribution
Date, the sum of the following amounts, without duplication: (i) that portion
of all Collections on the Receivables allocable to principal with respect to
the preceding Collection Period; (ii) the amount of Realized Losses with
respect to the preceding Collection Period (except to the extent included in
clause (iii) below), (iii) the Principal Balance of each Receivable that the
Servicer became obligated to acquire or that the Transferor became obligated
to reacquire with respect to the preceding Collection Period (except to the
extent included in clause (i) above) and (iv) the aggregate amount of all
Principal Distribution Amounts with respect to prior Distribution Dates that
have not previously been deposited into the Principal Funding Account on
previous Distribution Dates.
16
"Principal Funding Account" means the account designated as such,
established and maintained pursuant to Section 5.01.
"Principal Funding Account Balance" means, as of any date of
determination, the principal amount on deposit in the Principal Funding
Account.
"Quality Code" means, with respect to each Receivable, the numeric code
assigned to such Receivable by the Servicer in accordance with the Servicer's
customary and usual procedures for measuring credit quality of loan and lease
contracts substantially similar to the Receivables.
"Rating Agencies" means Moody's and Standard & Poor's. If no such
organization or successor is in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization or other comparable
Person designated by the Transferor, notice of which designation shall be
given to the Indenture Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have notified the Transferor, the Servicer, the Owner
Trustee and the Indenture Trustee in writing that such action will not result
in a reduction or withdrawal of the then current rating of the Class A Notes.
"Realized Loss" means, with respect to any Collection Period, for any
Receivable which became a Defaulted Receivable during such Collection Period,
the Principal Balance of such Defaulted Receivable.
"Receivable" means each Initial Receivable and each Subsequent
Receivable; provided, that from and after the date on which a Receivable
becomes an Acquired Receivable, such Acquired Receivable will no longer be a
Receivable.
"Receivable Files" means the written agreements (including, as
applicable, schedules, subschedules, supplements, amendments, modifications
and renewals thereof or thereto), note(s), security agreement(s) and other
instruments and documents relating to the Receivables.
"Receivable Management System" means the computerized electronic
Receivable Management System maintained by MCC for all Receivables and other
assets similar to the Receivables.
"Recoveries" means, with respect to any Defaulted Receivable (a) monies
collected in respect thereof, from whatever source, (including Insurance
Proceeds) during any Collection Period following the Collection Period in
which such Receivable became a Defaulted Receivable, net of (b) the sum of
any out-of-pocket costs and expenses of collection (including attorneys fees
and expenses deducted therefrom) expended by the Servicer in connection with
such Defaulted Receivable and any amounts required by law to be remitted to
the Obligor.
"Related Property" means all right, title and interest of the Transferor
in, to and under (a) the Financed Equipment, (b) any proceeds with respect to
the Receivables from claims on any
17
physical damage, credit life or disability insurance policies covering
Financed Equipment or Obligors with respect to Financed Equipment, as the
case may be, (c) the Contribution and Sale Agreement and (d) the proceeds of
any of the foregoing.
"Remaining Available Principal Amounts" has the meaning assigned thereto
in Section 5.04(b)(iii).
"Remaining Residual Amount" means, with respect to any non-tax oriented
operating lease as of any date of determination, that portion of the
aggregate amount initially financed with respect to such lease the repayment
of which is not guaranteed by the terms of the contract, as such amount is
reduced from time to time in accordance with the terms of the related
Contract.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a).
"Reserve Account Initial Deposit" means the initial deposit by the
Transferor on the Closing Date of $5,088,828.
"Revolving Period" means the period commencing on the Initial Cut-off
Date and ending on the day immediately preceding the commencement of the
Amortization Period.
"Xxxxxx Mae Entitlement" means a "Security Entitlement" as defined in 24
C.F.R. Section 354.1.
"Xxxxxx Xxx Intermediary" means a "Securities Intermediary" as defined in
24 C.F.R. Section 81.2 whose jurisdiction for purposes of 12 C.F.R. Section
81.92 with respect to the related Xxxxxx Mae Entitlement is the State of New
York.
"Schedule of Receivables" means each schedule of Receivables delivered to
the Owner Trustee and the Indenture Trustee (as supplemented from time to
time to reflect Subsequent Receivables and Acquired Receivables) marked as
Schedule A to this Agreement and incorporated into and made a part of this
Agreement.
"Scheduled Interest Payment" means, with respect to any Receivable, that
portion of the regularly scheduled payment required to be paid in accordance
with the terms and conditions of such Receivable as in effect on the
applicable Cut-off Date that is allocable to interest.
"Scheduled Payment" on a Receivable means the Scheduled Principal Payment
or Scheduled Interest Payment for such Receivable.
"Scheduled Principal Payment" means, with respect to any Receivable, that
portion of the regularly scheduled payment required to be paid in accordance
with the terms and conditions of such Receivable as in effect on the
applicable Cut-off Date (other than by reason of acceleration of such
Scheduled Principal Payment in connection with a default under such
Receivable or any other event that causes a payment to become due prior to
its scheduled payment date pursuant to the terms of such Receivable as in
effect on the applicable Cut-off Date) that is allocable to
18
principal; provided, however, that the Scheduled Principal Payments of
Discounted Receivables shall be reduced by the amount specified by the
Transferor on the Schedule of Receivables delivered to the Owner Trustee and
the Indenture Trustee on the related Transfer Date.
"Scheduled Revolving Period Termination Date" means September 1, 2000.
"Servicer" means MCC, as the servicer of the Receivables, and each
successor to MCC (in the same capacity) pursuant to Section 7.03 or 8.02.
"Servicer Default" means an event specified as such in Section 8.01.
"Servicer's Certificate" means an Officers' Certificate of the Servicer
delivered pursuant to Section 4.09, substantially in the form of Schedule C
or in such other form that is acceptable to the Indenture Trustee, the Owner
Trustee and the Servicer.
"Servicer Termination Event" means an event specified as such in Section
8.01.
"Servicer's Yield" means, with respect to any Receivable, (i) any
indemnity payments made by an Obligor pursuant to a Receivable (ii) any
Make-Whole Amount and (iii) all Late Fees, extension fees and other
incidental charges (from whatever source) collected with respect to any
Receivable.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during the respective Collection Period, determined pursuant to
Section 4.08.
"Servicing Fee Rate" means 0.5% per annum.
"Specified Reserve Account Balance" with respect to any Distribution Date
means the sum of (a) 1% of the Initial Pool Balance and (b) the sum, without
duplication, of (i) the aggregate of all Remaining Residual Amounts as of the
close of business on the last day of the preceding Collection Period and (ii)
the aggregate of all Obligor Over-concentration Amounts as of the close of
business on the last day of the preceding Collection Period; provided,
however, that the Specified Reserve Account Balance shall not exceed the
Outstanding Amount of the Class A Notes.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The XxXxxx-Xxxx Companies, Inc., or its successor.
"Subsequent Cut-off Date" means, with respect to any Transfer Date for
any Subsequent Receivables, the last day of the immediately preceding
Collection Period.
"Subsequent Receivable" means each loan or lease Contract, including any
Included Component Receivable, which is identified in a Schedule of
Receivables to the related Subsequent Transfer Assignment delivered to the
Owner Trustee and the Indenture Trustee pursuant to Section 2.02.
19
"Subsequent Transfer Assignment" has the meaning assigned thereto in
Section 2.02.
"Tax" with respect to any Person means each tax, assessment or other
governmental charge or levy imposed upon such Person, its income, any
transaction in which it engages, or any of its properties, franchises or
assets.
"Transfer Date" has the meaning assigned thereto in Section 2.02.
"Transferor" means MetLife Capital Funding Corp. III, a Delaware
corporation, and its successors in interest to the extent permitted hereunder.
"Treasury Entitlement" means a "Security Entitlement" as defined in 31
C.F.R. Section 357.2.
"Treasury Intermediary" means a "Securities Intermediary" as defined in
31 C.F.R. Section 357.2 whose jurisdiction for purposes of 31 C.F.R. Section
357.11 with respect to the related Treasury Entitlement is the State of New
York.
"Trust" means the Issuer.
"Trust Accounts" has the meaning assigned thereto in Section 5.01(b).
"Trust Account Property" means the Trust Accounts, all monies,
instruments, securities, documents and other property held in or credited to
any Trust Account from time to time (whether in the form of deposit accounts,
Physical Property, book-entry securities, uncertificated securities, United
States Securities Entitlements or otherwise), including the Reserve Account
Initial Deposit, and all proceeds of the foregoing.
"Trust Agreement" means the Trust Agreement dated as of May 1, 1997,
between the Transferor and the Owner Trustee, as the same may be amended and
supplemented from time to time.
"Trust Estate" means all money, instruments, documents, securities,
general intangibles and other property that are subject or intended to be
subject to the lien and security interest of the Indenture for the benefit of
the Noteholders (including, without limitation, all property and interests
Granted (as defined in the Indenture) to the Indenture Trustee), including
all proceeds thereof.
"Trust Officer" means, (a) in the case of the Indenture Trustee, any
Officer within the Corporate Trust Office of the Indenture Trustee assigned
to administer the Indenture Trustee's duties under the Basic Documents, and
(b) with respect to the Owner Trustee, any officer in the Corporate Trustee
Administration Department of the Owner Trustee with direct responsibility for
the administration of the Trust Agreement and the Basic Documents on behalf
of the Owner Trustee.
20
"Trust Yield" means, with respect to any Collection Period, the
annualized percentage equivalent of a fraction, the numerator of which is
equal to the Available Interest Amount for the related Distribution Date and
the denominator of which is equal to the Pool Balance as of the close of
business on the last day of such Collection Period.
"UCC" has the meaning assigned thereto in Section 1.01 of the Indenture.
"United States Securities Entitlement" means a Treasury Entitlement, a
HUD Entitlement, a FHL Bank Entitlement, a Funding Corporation Entitlement, a
Farm Credit Entitlement, or a Xxxxxx Xxx Entitlement.
SECTION 1.02. Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined herein have the meanings assigned to them in
the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document
shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement; Section, Schedule and Exhibit
references contained in this Agreement are references to Sections, Schedules
and Exhibits in or to this Agreement unless otherwise specified; and the
term "including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
SECTION 1.03. Calculations. For all purposes of this Agreement,
interest shall be computed on the basis of a 360-day year consisting of twelve
30-day months.
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ARTICLE II
CONVEYANCE OF RECEIVABLES
SECTION 2.01. Conveyance of Initial Receivables. In consideration of the
Issuer's delivery to or upon the order of the Transferor of (i) $304,203,000 and
(ii) Class B Notes in the principal amount of $26,452,783, the Transferor does
hereby transfer, assign, set over and otherwise convey to the Issuer, without
recourse (subject to the obligations herein) all right, title and interest of
the Transferor in and to the following, whether now owned or hereafter acquired:
(a) all right, title and interest of the Transferor, in and to the
Initial Receivables, and all moneys (including accrued interest) due or to
become due, or received thereunder on or after the Initial Cut-off Date;
(b) the interest of the Transferor in the Trust Accounts and all
monies, instruments, documents, securities and other property held in or
credited thereto;
(c) the interest of the Transferor in the Financed Equipment granted
by Obligors pursuant to the Initial Receivables;
(d) the interest of the Transferor in any proceeds with respect to
the Initial Receivables from claims on any physical damage, credit life or
disability insurance policies covering Financed Equipment or Obligors with
respect to Financed Equipment;
(e) all right, title and interest of the Transferor in and to the
Contribution and Sale Agreement, including the right of the Transferor to
cause MCC to reacquire Receivables from the Transferor under certain
circumstances, the rights of the Transferor to enforce the Contribution and
Sale Agreement and to give or withhold any and all consents, requests,
notices, directions, approvals, extensions or waivers under or with respect
to the Contribution and Sale Agreement to the same extent as the Transferor
could but for the assignment and security interest granted to the Indenture
Trustee for the benefit of the Noteholders; and
(f) the proceeds of any and all of the foregoing.
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SECTION 2.02. Conveyance of Subsequent Receivables.
(a) On or prior to the Distribution Date (x) in each month (beginning with
the June 1997 Distribution Date) during the Revolving Period and (y) if no
Early Amortization Event has occurred, in the first month with respect to
the Amortization Period, on one or more days selected by the Servicer
(each, a "Transfer Date"), the Servicer shall direct the Indenture Trustee
to reinvest Available Principal Amounts remaining on deposit in the
Principal Funding Account (after making the required deposit, if any, into
the Reserve Account) in additional loan or lease Contracts originated and
selected by MCC from its portfolio of loan and lease Contracts. Subject to
the conditions set forth in paragraph (b) below on each Transfer Date, upon
transfer of the applicable Subsequent Receivables from MCC to the
Transferor pursuant to the Contribution and Sale Agreement and payment to
the Transferor from amounts on deposit in the Principal Funding Account in
an amount equal to the Principal Balance of the Subsequent Receivables
being transferred on such date as of the related Subsequent Cut-off Date,
the Transferor hereby transfers, assigns, sets over and otherwise conveys
to the Issuer, without recourse (subject to the obligations herein) all
right, title and interest of the Transferor in and to the following,
whether then owned or thereafter acquired:
(i) all right, title and interest of the Transferor, in and to
the Subsequent Receivables listed on the related Schedule of
Receivables and all moneys (including accrued interest) due or to
become due, or received thereunder on or after the related Subsequent
Cut-off Date;
(ii) the interest of the Transferor in the Financed Equipment
granted by Obligors pursuant to such Subsequent Receivables;
(iii) the interest of the Transferor in any proceeds with respect
to such Subsequent Receivables from claims on any physical damage,
credit life or disability insurance policies covering Financed
Equipment or Obligors with respect to Financed Equipment; and
(iv) the proceeds of any and all of the foregoing.
(b) The Transferor shall transfer to the Issuer the Subsequent Receivables
and the other property and rights related thereto described in paragraph
(a) above only upon the satisfaction of each of the following conditions
precedent on or prior to the related Transfer Date:
(i) the Transferor shall have delivered to the Owner Trustee and the
Indenture Trustee a duly executed written assignment in substantially the
form of Exhibit E (the "Subsequent Transfer Assignment"), which shall
include supplements to the Schedule of Receivables listing the Subsequent
Receivables;
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(ii) the Transferor shall, to the extent required by Section
5.02, have deposited in the Collection Account all Collections in respect
of the Subsequent Receivables;
(iii) as of such Transfer Date, (A) the Transferor was not
insolvent and will not become insolvent as a result of the transfer of
Subsequent Receivables on such Transfer Date, (B) there has been no filing
of a decree or order for relief by a court having jurisdiction in the
premises in respect of the Transferor or any substantial part of its
property in an insolvency or other similar law now in effect or appointing
a receiver, liquidator, assignee, custodian, trustee, sequestrator or
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 which remains unstayed and in effect, (C) the Transferor did not
intend to incur or believe that it would incur debts that would be beyond
the Transferor's ability to pay as such debts matured, (D) such transfer
was not made with actual intent to hinder, delay or defraud any Person and
(E) the assets of the Transferor did not constitute unreasonably small
capital to carry out its business as conducted;
(iv) the Receivables then in the Trust, including the Subsequent
Receivables to be conveyed to the Trust on such Transfer Date, shall meet
the criteria (based on the characteristics of the Initial Receivables on
the Initial Cut-off Date and the Subsequent Receivables on the respective
Subsequent Cut-off Dates) specified in Section 3.01.
(v) each of the representations and warranties made by the
Transferor pursuant to Section 3.01 with respect to the Subsequent
Receivables shall be true and correct as of such Transfer Date, and the
Transferor shall have performed all obligations to be performed by it
hereunder on or prior to such Transfer Date;
(vi) the Transferor shall, at its own expense, on or prior to such
Transfer Date, indicate in its computer files that the Subsequent
Receivables identified in the Subsequent Transfer Assignment have been
transferred to the Issuer pursuant to this Agreement and the Subsequent
Transfer Assignments;
(vii) the Transferor shall have taken any action (other than
delivery of the original Contracts) required to maintain the first
perfected ownership or security interest of the Issuer in the Trust Estate;
(viii) no selection procedures believed by the Transferor to be
adverse or beneficial to the interests of the Class A Noteholders shall
have been utilized in selecting the Subsequent Receivables; and
(ix) the Transferor shall have delivered to the Indenture Trustee
and the Owner Trustee an Officer's Certificate confirming the satisfaction
of each condition specified in this paragraph (b).
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(c) The Transferor agrees to add all loan or lease Contracts originated by
MCC to a Schedule of Receivables on or prior to each Transfer Date provided,
however, that the Transferor's obligation hereunder shall be limited to loan
or lease Contracts having an outstanding principal balance (after giving
effect to the discounting of any Discounted Receivable) of not more than the
funds available pursuant to Section 5.04(b)(ii)(A) to effect such purchase on
such Transfer Date. Nothing herein shall be deemed to require MCC to
originate any one or more loan or lease Contracts at any time.
SECTION 2.03. Closing. The conveyance of the Initial Receivables
shall take place at the offices of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, 0000 X
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, on the Closing Date, simultaneously
with the closing of the transactions contemplated by the Contribution and
Sale Agreement, the underwriting agreement related to the Class A Notes and
the other Basic Documents. Upon the acceptance by the Transferor of the
Class B Note and the proceeds of the sale of the Class A Notes on the Closing
Date, and upon the release of funds from the Principal Funding Account to the
Transferor on each Transfer Date in an amount equal to the aggregate
Principal Balance of the Subsequent Receivables being transferred on such
Transfer Date, the ownership of each Receivable transferred on such date and
the contents of the related Receivable File is vested in the Issuer, subject
only to the lien of the Indenture. Notwithstanding the foregoing, the
assignment, transfer and conveyance set forth in Section 2.01 or Section 2.02
shall not constitute and is not intended to result in the creation, or an
assumption by the Issuer of any obligation of the Transferor or any other
Person in connection with the Receivables or any Contract or under any
agreement or instrument relating thereto, including any obligation to any
Obligors or any Affiliate of or other Person to whom the Transferor may
delegate servicing duties or to insurers.
SECTION 2.04. Books and Records.
(a) In connection with the transfer, assignment, set-over and conveyance
set forth in Section 2.01 or Section 2.02, the Transferor agrees to record
and file, at its own expense, any financing statements (and continuation
statements with respect to such financing statements when applicable)
required to be filed with respect to the Receivables sold or to be sold by
the Transferor hereunder, meeting the requirements of applicable state law
in such manner and in such jurisdictions as are necessary under the
applicable UCC to perfect the transfer and assignment of the Receivables to
the Issuer, and to deliver a file-stamped copy of such financing statements
or other evidence of such filings to the Issuer on or prior to the Initial
Closing Date (excluding such continuation and similar statements, which
shall be delivered promptly after filing).
(b) In connection with the sales and conveyances hereunder, the Transferor
further agrees, at its own expense, on or prior to the Closing Date with
respect to the Initial Receivables and on or prior to the relevant Transfer
Date with respect to the Subsequent Receivables to indicate on its books
and records (including any computer files) that all of the Receivables have
been sold to the Issuer pursuant to this Agreement. The Transferor further
agrees not to alter the computer file designation referenced in this
paragraph with respect to any Receivable during the term of this Agreement
unless and until such Receivable becomes an
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Acquired Receivable. The transfer of each Receivable shall be reflected on
the Transferor's balance sheets and other financial statements prepared in
accordance with generally accepted accounting principles as a transfer of
assets by the Transferor to the Issuer. The Transferor shall be responsible
for maintaining, and shall maintain, a complete and accurate set of books
and records and computer files for each Receivable which shall be clearly
marked to reflect the ownership of each Receivable by the Issuer.
SECTION 2.05. Grant of Security Interest. In the event that the
Receivables are held to continue to be property of the Transferor, then (i)
this Agreement also shall be deemed to be and hereby is a security agreement
within the meaning of the UCC, and (ii) the conveyance by the Transferor
provided for in the Agreement shall be deemed to be and hereby is a grant by
the Transferor to the Issuer of a security interest in and to all of the
Transferor's right, title and interest in, to and under all accounts,
contract rights, general intangibles, chattel paper, instruments, documents,
money, deposit accounts, certificates of deposit, goods, letters of credit,
advices of credit, certificated securities and uncertificated securities
consisting of, arising from, or relating to the Receivables and the Related
Property, to secure the rights of the Issuer under this Agreement and the
obligations of the Transferor hereunder. The Transferor and the Issuer
shall, to the extent consistent with this Agreement, take such actions (other
than delivery of the original contracts) as may be necessary to ensure that,
if the conveyance of the Receivables and the Related Property by the
Transferor to the Issuer pursuant to this Agreement is not deemed to be a
sale, the security interest in the Receivables and the Related Property
created hereunder will be a perfected security interest of first priority
under applicable law and will be maintained as such throughout the term of
this Agreement.
SECTION 2.06. Discounted Receivables. The Transferor shall have
the option, on any Transfer Date, to discount any Subsequent Receivables
being transferred to the Trust on such Transfer Date (any such Subsequent
Receivable, a "Discounted Receivable") by indicating on the Schedule of
Receivables the discounted Principal Balance and the discounted Scheduled
Principal Payments of such Discounted Receivables and the APR of such
Discounted Receivables after giving effect to such discount.
ARTICLE III
THE RECEIVABLES
SECTION 3.01. Representations and Warranties of Transferor. The
Transferor makes the following representations and warranties as to the
Receivables on which the Issuer is deemed to have relied in acquiring the
Receivables. Such representations and warranties speak as of the execution
and delivery of this agreement and as of each Transfer Date, but shall
survive the transfer and assignment of the Receivables to the Issuer and the
pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Title. It is the intention of the Transferor that the transfer and
assignment herein contemplated constitute either (i) a sale of the
Receivables or (ii) a grant of a perfected security interest therein from
the Transferor to the Issuer and that the beneficial interest
26
in and title to such Receivables not be part of the debtor's estate in the
event of the filing of a bankruptcy petition by or against the Transferor
under any bankruptcy law. No Receivable has been sold, transferred,
assigned or pledged by the Transferor to any Person other than the Issuer.
Immediately prior to the transfer and assignment herein contemplated, the
Transferor had good and marketable title to each Receivable, free and clear
of all Liens and rights of others and, immediately upon the transfer
thereof, the Issuer shall have good and marketable title to each such
Receivable, free and clear of all Liens and rights of others or a first
priority perfected security interest therein; and the transfer has been
perfected, by the filing of appropriate financing statements pursuant to the
UCC, under the UCC.
(b) All Actions Taken. All actions (other than delivering the original
Contract) necessary under the applicable UCC in any jurisdiction to be
taken (i) to give the Issuer a first priority perfected security interest
or ownership interest in the Receivables, and (ii) to give the Indenture
Trustee a first priority perfected security interest therein (including,
without limitation, UCC filings with the Delaware and Washington
Secretaries of State) have been taken.
(c) Location of Receivable Files. The Receivable Files are kept at the
location specified in Schedule B hereto.
(d) No Consents Required. All approvals, authorizations, consents, orders
or other actions of any Person or of any Governmental Authority required in
connection with the execution and delivery by the Transferor of this
Agreement or any other Basic Document, the performance by the Transferor of
the transactions contemplated by this Agreement or any other Basic Document
and the fulfillment by the Transferor of the terms hereof or thereof, have
been obtained or have been completed and are in full force and effect
(other than approvals, authorizations, consents, orders or other actions
which if not obtained or completed or in full force and effect would not
have a material adverse effect on the Transferor or the Issuer or upon the
collectibility of any Receivable or upon the ability of the Transferor to
perform its obligations under this Agreement).
SECTION 3.02. Reacquisition by Transferor or MCC Upon Breach.
(a) The Transferor, the Servicer, MCC or the Owner Trustee, as the case
may be, shall inform the other parties to the Agreement, MCC and the
Indenture Trustee promptly, in writing, upon the discovery of any breach of
the Transferor's representations and warranties made pursuant to Section
3.01 or any breach of MCC's representations and warranties made pursuant to
Section 3.02(b) of the Contribution and Sale Agreement. Unless any such
breach shall have been cured by the last day of the second month following
the month of the discovery thereof by the Transferor or receipt by the
Transferor of written notice from the Owner Trustee or the Servicer of such
breach, the Transferor shall be obligated, and, if necessary, the
Transferor or the Owner Trustee shall enforce, the obligation of MCC, if
any, under Section 6.02(a) of the Contribution and Sale Agreement to
reacquire any Receivable materially and adversely
27
affected by any such breach as of such last day (or, at the Transferor's
option, as of the last day of the first month following the month of the
discovery).
(b) In consideration of the reacquisition of the Receivable, the
Transferor shall remit the Acquisition Amount in the manner specified in
Section 5.03; provided, however, that the obligation of the Transferor to
reacquire any Receivable arising solely as a result of a breach of MCC's
representations and warranties pursuant to Section 3.02(b) of the
Contribution and Sale Agreement is subject to the receipt by the Transferor
of the Acquisition Amount from MCC. Subject to the provisions of Section
6.02, the sole remedy of each of the Issuer, the Owner Trustee, the
Indenture Trustee and the Noteholders with respect to a breach of
representations and warranties pursuant to Section 3.01 and the agreement
contained in this Section shall be to require the Transferor to reacquire
Receivables pursuant to this Section, subject to the conditions contained
herein, or to enforce MCC's obligation, if any, to the Transferor to
reacquire such Receivables pursuant to the Contribution and Sale Agreement.
The Owner Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the
reacquisition of any Receivable pursuant to this Section.
(c) The Issuer shall execute such documents and instruments of transfer or
assignment and take other actions as shall reasonably be requested by the
Servicer to evidence the conveyance of such Receivable pursuant to this
Section 3.02.
SECTION 3.03. Duties of Servicer.
(a) Receivable Files. The Servicer shall maintain such accurate and
complete accounts, records and computer systems pertaining to each
Receivable File as shall enable itself and the Issuer to comply with this
Agreement. In performing its duties, the Servicer shall act with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to the receivable files relating to all comparable
receivables that the Servicer services for itself or others. The Servicer
shall conduct, or cause to be conducted, periodic audits of the related
accounts, records and computer systems, in such a manner as shall enable
the Issuer or the Indenture Trustee to verify the accuracy of the
Servicer's record keeping. The Servicer shall promptly report to the
Issuer and the Indenture Trustee any failure on its part to maintain its
accounts, records and computer systems as herein provided and promptly take
appropriate action to remedy any such failure. Nothing herein shall be
deemed to require an initial review or any periodic review by the Issuer,
the Owner Trustee or the Indenture Trustee.
(b) Access to Records. The Servicer shall notify the Owner Trustee and
the Indenture Trustee of any change in the location of its principal place
of business in writing not later than 90 days after any such change. The
Servicer shall make available to the Owner Trustee and the Indenture
Trustee, or their respective duly authorized representatives, attorneys or
auditors, a list of locations of the related accounts, records and computer
systems maintained by the Servicer at such times as the Owner Trustee or
the Indenture Trustee shall instruct. The Indenture Trustee shall have
access to such
28
accounts, records and computer systems, after reasonable notice and during
normal business hours.
(c) Safekeeping. The Servicer shall hold on behalf of the Issuer (i) all
file stamped copies of UCC financing statements evidencing the security
interest of MCC in Financed Equipment, and (ii) any and all documents, that
MCC or the Transferor shall keep on file, in accordance with its customary
procedures, relating to a Receivable, an Obligor or Financed Equipment, and
shall maintain such accurate and complete records pertaining to each
Receivable as shall enable the Issuer to comply with this Agreement. Upon
instruction from the Indenture Trustee, the Servicer shall release any such
UCC filing or other document to the Indenture Trustee, the Indenture
Trustee's agent, or the Indenture Trustee's designee, as the case may be,
at such place or places as the Indenture Trustee may designate, as soon as
practicable.
ARTICLE IV
ADMINISTRATION AND SERVICING OF RECEIVABLES
SECTION 4.01. Duties of Servicer. The Servicer, as agent for the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Acquired Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable receivables that it services for
itself or others. The Servicer's duties shall include calculating, billing,
collection and posting of all payments, responding to inquiries of Obligors
on such Receivables, investigating delinquencies, reporting tax information
to Obligors (to the extent required under the related Contracts), accounting
for collections, and furnishing monthly and annual statements to the Owner
Trustee and the Indenture Trustee with respect to distributions. Subject to
the provisions of Section 4.02, the Servicer shall follow its customary
standards, policies and procedures in performing its duties as Servicer.
Without limiting the generality of the foregoing, the Servicer is authorized
and empowered to execute and deliver, on behalf of itself, the Issuer, the
Owner Trustee, the Indenture Trustee and the Noteholders or any of them, any
and all instruments of satisfaction or cancellation, or partial or full
release or discharge, and all other comparable instruments, with respect to
such Receivables or to the Financed Equipment securing such Receivables. If
the Servicer shall commence a legal proceeding to enforce a Receivable, the
Issuer (in the case of a Receivable other than an Acquired Receivable) shall
thereupon be deemed to have automatically assigned, solely for the purpose of
collection, such Receivable to the Servicer. If in any enforcement suit or
legal proceeding it shall be held that the Servicer may not enforce a
Receivable on the ground that it shall not be a real party in interest or a
holder entitled to enforce such Receivable, the Issuer shall, at the
Servicer's expense and direction, take steps to enforce such Receivable,
including bringing suit in its name or the name of the Owner Trustee, the
Indenture Trustee or the Noteholders. The Issuer shall upon the written
request of the Servicer furnish the Servicer with any powers of attorney and
other documents reasonably necessary or appropriate to enable the Servicer to
carry out its servicing and administrative duties hereunder.
29
SECTION 4.02. Collection of Receivable Payments. The Servicer
shall make reasonable efforts to collect all payments called for under the
terms and provisions of the Receivables as and when the same shall become due
and shall follow such collection procedures as it follows with respect to all
comparable receivables that it services for itself or others. In connection
therewith, the Servicer may grant extensions, rebates or adjustments on a
Receivable; provided, however, that if the Servicer extends the date for
final payment by the Obligor of any Receivable beyond the date one month
prior to the Final Scheduled Distribution Date, it shall promptly acquire the
Receivable from the Issuer in accordance with the terms of Section 4.07. The
Servicer may in its discretion waive any other amounts of Servicer's Yield
that may be collected in the ordinary course of servicing a Receivable. The
Servicer shall not agree to any reduction of the underlying interest rate on
any Receivable or, subject to the foregoing, of the amount of any Scheduled
Payment on a Receivable. Notwithstanding anything in this Agreement to the
contrary, any Recoveries shall be paid to the Transferor, and any Defaulted
Receivables shall be assigned by the Trust to the Transferor, to the extent
the Principal Balance thereof has been distributed as part of the Principal
Distribution Amount.
SECTION 4.03. Realization upon Receivables. On behalf of the
Issuer, the Servicer shall use its customary servicing procedures, to
repossess or otherwise realize upon the Financed Equipment securing any
Receivable as to which the Servicer shall have determined eventual payment in
full is unlikely. The Servicer shall follow such customary and usual
practices and procedures as it shall deem necessary or advisable in its
servicing of comparable receivables, which may include selling the Financed
Equipment at public or private sale. The foregoing shall be subject to the
provision that, in any case in which any item of Financed Equipment shall
have suffered damage, the Servicer shall not expend funds in connection with
the repair or the repossession of such Financed Equipment unless it shall
determine in its discretion that such repair and/or repossession will
increase the Liquidation Proceeds by an amount greater than the amount of
such expenses.
SECTION 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Equipment
as of the execution of the Receivable.
SECTION 4.05. Maintenance of Security Interests in Financed
Equipment. The Servicer shall, in accordance with its customary servicing
procedures, take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed
Equipment. The Servicer is hereby authorized to take such steps as are
necessary to re-perfect such security interest or to maintain such perfected
security interest on behalf of the Issuer and the Indenture Trustee in the
event of the relocation of Financed Equipment, or for any other reason.
SECTION 4.06. Covenants of Servicer. The Servicer shall not: (i)
release the Financed Equipment securing any Receivable from the security
interest granted by such Receivable in whole or in part except (A) in
accordance with Section 4.03 above or (B) in the event of payment in full by
the Obligor thereunder; (ii) impair the rights of the Issuer, the Indenture
Trustee or the Noteholders in any Receivable; or (iii) increase the number of
30
Scheduled Payments due under a Receivable except in accordance with the terms
thereof or the terms of Section 4.02.
SECTION 4.07. Acquisition by Servicer of Receivables upon Breach.
(a) The Servicer or the Owner Trustee shall inform the other party and the
Indenture Trustee, the Transferor and MCC promptly, in writing, upon the
discovery of any breach pursuant to Section 4.02, 4.05 or 4.06. Unless the
breach shall have been cured by the last day of the second month following
such discovery (or, at the Transferor's election, the last day of the first
following month), the Servicer shall acquire any Receivable materially and
adversely affected by such breach. If the Servicer takes any action pursuant
to Section 4.02 that impairs the rights of the Issuer, the Indenture Trustee
or the Noteholders in any Receivable or as otherwise provided in Section
4.02, the Servicer shall acquire such Receivable. In consideration of the
acquisition of any such Receivable pursuant to either of the two preceding
sentences, the Servicer shall remit the Acquisition Amount in the manner
specified in Section 5.03. Subject to Section 7.02, the sole remedy of any
of the Issuer, the Owner Trustee, the Indenture Trustee and the Noteholders
with respect to a breach pursuant to Section 4.02, 4.05 or 4.06 shall be to
require the Servicer to acquire Receivables pursuant to this Section. The
Owner Trustee shall have no duty to conduct any affirmative investigation as
to the occurrence of any condition requiring the acquisition of any
Receivable pursuant to this Section. The parties hereto intend that the
Servicer will not intentionally breach or cause a breach pursuant to Section
4.02, 4.05 or 4.06 in order to provide direct or indirect assurance to the
Transferor, the Indenture Trustee, the Owner Trustee or the Noteholders, as
applicable, against loss by reason of the bankruptcy or insolvency (or other
credit condition) of, or default by, the Obligor on, or the uncollectibility
of, any Receivable.
(b) The Issuer shall execute such documents and instruments of transfer or
assignment and take other actions as shall reasonably be requested by the
Servicer to evidence the conveyance of such Receivable pursuant to this
Section 4.07.
SECTION 4.08. Servicing Fee. On each Determination Date, the
Servicer shall be entitled to receive the Servicing Fee in respect of the
immediately preceding Collection Period equal to the product of (a)
one-twelfth of the Servicing Fee Rate and (b) the Pool Balance as of the
first day of such preceding Collection Period. The Servicer shall also be
entitled to any Servicer's Yield with respect to Receivables, collected (from
whatever source) on the Receivables, which Servicer's Yield shall be paid to
the Servicer pursuant to Section 5.07.
SECTION 4.09. Servicer's Certificate. On each Determination Date,
the Servicer shall deliver to the Owner Trustee, the Indenture Trustee and
the Transferor, with a copy to the Rating Agencies, a Servicer's Certificate
containing all information necessary to make the distributions pursuant to
Sections 5.04 and 5.05 for the Collection Period immediately preceding the
date of such Servicer's Certificate. Neither the Owner Trustee nor the
Indenture Trustee shall be required to determine, confirm or recalculate the
information contained in the Servicer's Certificate. Receivables to be
acquired by the Servicer or to be reacquired by the Transferor
31
shall be identified by the Servicer by account number with respect to such
Receivable as specified in Schedule A.
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Owner Trustee and the Indenture Trustee
and the Rating Agencies, on or before April 30 of each year beginning April
30, 1998, an Officers' Certificate stating that (i) a review of the
activities of the Servicer during the preceding 12-month period ending on
December 31 (or, in the case of April 30, 1998, the period from the Closing
Date to December 31, 1997) and of its performance under this Agreement has
been made under such officers' supervision and (ii) to the best of such
officers' knowledge, based on such review, the Servicer has fulfilled in all
material respects all its obligations under this Agreement throughout such
period or, if there has been a default in the fulfillment of any such
obligation in any material respect, specifying each such default known to
such officers and the nature and status thereof. The Indenture Trustee shall
send a copy of such certificate and the report referred to in Section 4.11 to
the Rating Agencies. A copy of such certificate and the report referred to
in Section 4.11 may be obtained by any Noteholder by a request in writing to
the Indenture Trustee at its address in Section 10.03.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee
and the Rating Agencies, promptly after having obtained knowledge thereof,
but in no event later than five (5) Business Days thereafter, written notice
in an Officers' Certificate of any event which with the giving of notice or
lapse of time, or both, would become a Servicer Default under Section 8.01(a)
or (b).
SECTION 4.11. Annual Independent Public Accountants' Servicing
Report. The Servicer will cause a firm of nationally recognized independent
public accountants (who may also render other services to the Servicer) to
furnish to the Transferor, each Rating Agency and each Holder, on or prior to
April 30 of each year, commencing April 30, 1998, a report relating to the
previous calendar year to the effect that management's assertion that it has
maintained an effective internal control system for the servicing of the
Receivables is fairly stated, in all material respects, based upon criteria
established by the Committee of Sponsoring Organizations of the Xxxxxxxx
Commission as described in Internal Control--Integrated Framework, and meets
the standards applicable to accountants' reports intended for general
distribution.
SECTION 4.12. Servicer Expenses. The Servicer shall be required to
pay all expenses incurred by it in connection with its activities under this
Article, including fees and disbursements of independent accountants, taxes
imposed on the Servicer and expenses incurred in connection with
distributions and reports to the Owner Trustee, the Indenture Trustee and the
Noteholders; provided, that nothing in this Section 4.12 shall preclude the
Servicer from retaining certain amounts with respect to reimbursement for
certain other expenses as expressly provided for by the terms of this
Agreement.
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ARTICLE V
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS
SECTION 5.01. Establishment of Trust Accounts.
(a)(i) The Servicer, for the benefit of the Noteholders, shall establish and
maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Collection Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Noteholders.
(ii) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Interest Payment Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Noteholders.
(iii) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Principal Funding Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Noteholders.
(iv) The Servicer, for the benefit of the Noteholders, shall establish
and maintain in the name of the Indenture Trustee an Eligible Deposit Account
(the "Note Distribution Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the Noteholders.
(v) The Servicer, for the benefit of the Class A Noteholders, shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Reserve Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Class A Noteholders.
(b) Funds on deposit in the Collection Account, the Interest Payment
Account, the Principal Funding Account, the Note Distribution Account and the
Reserve Account (collectively the "Trust Accounts") shall be invested by the
Indenture Trustee in Eligible Investments selected by the Servicer; provided,
however, it is understood and agreed that the Indenture Trustee shall not be
liable for any loss arising from such investment in Eligible Investments.
All such Eligible Investments shall be held by the Indenture Trustee for the
benefit of the Noteholders; provided, however, that on each Distribution Date
all investment earnings (net of losses and investment expenses) on funds on
deposit therein shall be deposited into the Collection Account and shall be
deemed to constitute a portion of the Available Interest Amount. Other than
as permitted by the Rating Agencies, funds on deposit in the Trust Accounts
shall be invested in Eligible Investments that will mature so that such funds
will be available at the close of business on the Business Day preceding the
immediately following Distribution Date; provided, however, that funds on
deposit in
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Trust Accounts may be invested in Eligible Investments of the Indenture
Trustee which may mature so that such funds will be available on the
Distribution Date. Funds deposited in a Trust Account on a Business Day
which immediately precedes a Distribution Date upon the maturity of any
Eligible Investments are not required to be invested overnight, but if so
invested, such investments must meet the conditions of the immediately
preceding sentence.
(c) (i) The Indenture Trustee shall possess all right, title and interest in
all monies, securities, instruments and other property on deposit from time
to time in or credited to the Trust Accounts and in all proceeds thereof
(including all income thereon) and all such monies, securities, instruments
and other property (together with all earnings, dividends, distributions,
income, issues, and profits relating thereto) shall be part of the Trust
Estate. The Trust Accounts shall be under the sole dominion and control of
the Indenture Trustee for the benefit of the Noteholders. If, at any time,
any of the Trust Accounts ceases to be an Eligible Deposit Account, the
Indenture Trustee (or the Servicer on its behalf) shall within 10 Business
Days (or such longer period, not to exceed 30 calendar days, as to which each
Rating Agency may consent) establish a new Trust Account as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such
new Trust Account. So long as the Indenture Trustee is an Eligible
Institution, any Trust Account may be maintained with it in an Eligible
Deposit Account.
(ii) With respect to the Trust Account Property, the Indenture Trustee
agrees, by its acceptance hereof, that:
(A) any Trust Account Property held in deposit accounts shall be
held solely in the Eligible Deposit Accounts; and each such Eligible Deposit
Account shall be subject to the exclusive custody and control of the
Indenture Trustee, and the Indenture Trustee shall have sole signature
authority with respect thereto;
(B) any Trust Account Property that constitutes an instrument or
Certificated Security delivered to the Indenture Trustee in accordance with
the definition of "Delivery" and shall be held, pending maturity or
disposition, solely by the Indenture Trustee or a financial intermediary (as
such term is defined in Section 8-313(4) of the UCC) acting solely for the
Indenture Trustee;
(C) any Trust Account Property that is a United States Securities
Entitlement held through the Federal Reserve System pursuant to Federal
book-entry regulations delivered in accordance with paragraph (c) of the
definition of "Delivery" and shall be maintained by the Indenture Trustee,
pending maturity or disposition, through continued book-entry registration of
such Trust Account Property as described in such paragraph; and
(D) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause (C)
above delivered to the Indenture Trustee in accordance with paragraph (d) of
the definition of "Delivery" and shall
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be maintained by the Indenture Trustee, pending maturity or disposition,
through continued registration of the Indenture Trustee's (or its nominee's)
ownership of such security.
(iii) The Servicer shall have the power, revocable by the Indenture
Trustee or by the Owner Trustee with the consent of the Indenture
Trustee, to instruct the Indenture Trustee to make withdrawals and
payments from the Trust Accounts for the purpose of permitting the
Servicer or the Owner Trustee to carry out its respective duties
hereunder or permitting the Indenture Trustee to carry out its duties
under the Indenture.
(iv) The Indenture Trustee is hereby authorized to execute purchase
and sales directed by the Servicer through the facilities of its own
trading or capital markets operations. The Indenture Trustee shall
send statements to the Servicer monthly reflecting activity for each
amount created hereunder for the preceding month. Although the
Servicer recognizes that it may obtain a broker confirmation at no
additional cost, the Servicer hereby agrees that confirmations of
investments are not required to be issued by the Indenture Trustee for
each month in which a monthly statement is rendered. No statement
need be rendered pursuant to the provision hereof if no activity
occurred in the account for such month.
SECTION 5.02. Collections. Subject to Section 5.03, the Servicer
shall remit to the Collection Account (i) all payments by or on behalf of the
Obligors with respect to the Receivables (including Insurance Proceeds, if
any) and (ii) all Liquidation Proceeds (except to the extent of Recoveries
applied in accordance with Section 4.02), in each case as collected during
each Collection Period within two Business Days of receipt and identification
thereof. Notwithstanding the foregoing, if (i) MCC is the Servicer, (ii) a
Servicer Default shall not have occurred and be continuing and (iii) MCC (or
any entity that guarantees the servicing obligations of MCC) maintains a
short-term rating of at least A-1 by Standard & Poor's and P-1 by Moody's,
the Servicer may remit such collections with respect to each Collection
Period to the Collection Account on or before the second Business Day prior
to the following Distribution Date. For purposes of this Article V, the
phrase "payments by or on behalf of Obligors" shall mean payments made with
respect to the Receivables by Persons other than the Servicer or the
Transferor.
SECTION 5.03. Additional Deposits. The Servicer and the Transferor
shall deposit or cause to be deposited in the Collection Account the
Acquisition Amounts with respect to Acquired Receivables as set forth in the
immediately following sentence, and the Servicer shall deposit in the
Collection Account all amounts to be paid under Section 9.02 as set forth
therein. The Servicer and the Transferor will deposit the Acquisition Amount
with respect to each Acquired Receivable when such obligations are due,
unless, with respect to Acquisition Amounts to be remitted by the Servicer,
the Servicer shall be permitted to make deposits monthly prior to each
Distribution Date pursuant to Section 5.02, in which case such deposits shall
be made in accordance with such Section. The Servicer shall account for
Acquisition Amounts paid by itself and the Transferor separately.
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SECTION 5.04. Distributions.
(a) On or prior to each Determination Date, the Servicer shall calculate
all amounts required to determine the amounts to be deposited in the
Interest Payment Account, the Principal Funding Account and the Note
Distribution Account.
(b) The rights of the Class B Noteholder to receive distributions of
Available Interest Amounts and Available Principal Amounts shall be and
hereby are subordinated to the rights of the Class A Noteholders to the
extent provided in this Section 5.04(b). On the second Business Day prior
to each Distribution Date, the Servicer shall instruct the Indenture
Trustee, which instruction shall be in the form of Exhibit B to Schedule D
(or such other form that is acceptable to the Indenture Trustee and the
Servicer), to (i) withdraw from the Reserve Account the amount, if any,
described in Section 5.05(c) for application as described in Section
5.05(c) and (ii) withdraw from the Collection Account the Available
Interest Amount and the Available Principal Amount for deposit in the
Interest Payment Account and the Principal Funding Account, respectively,
and to make the following deposits and distributions for receipt by the
Servicer or the Administrator or for deposit in the Note Distribution
Account by 12:00 Noon (New York time) on such following Distribution Date
to the extent of the Available Interest Amount and the Available Principal
Amount:
(i) from the Available Interest Amount on deposit in the Interest
Payment Account, in the following order of priority:
(A) to the Servicer, the Servicing Fee and all unpaid Servicing
Fees from prior Collection Periods;
(B) to the Administrator under the Administration Agreement, the
Administration Fee and all unpaid Administration Fees from prior Collection
Periods;
(C) to the Note Distribution Account, the Noteholders' Class A
Interest Distributable Amount;
(D) to the Reserve Account, the positive difference, if any, by
which (i) the Specified Reserve Account Balance for such Distribution Date
exceeds (ii) the amount on deposit in the Reserve Account on such
Distribution Date (not taking into account the amount deposited into the
Reserve Account on such Distribution Date pursuant to this clause (D)).
(E) to the Principal Funding Account, the positive difference,
if any, by which the Principal Distribution Amount exceeds the Available
Principal Amount (not taking into account the amount of the Available
Principal Amount derived from clause (iii) of the definition thereof);
(F) to the Note Distribution Account, the Noteholders' Class B
Interest Distributable Amount; and
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(G) to the Transferor, the amount remaining on deposit in the
Interest Payment Account after giving effect to the distributions to be
made pursuant to Sections 5.04(b)(i)(A), 5.04(b)(i)(B), 5.04(b)(i)(C),
5.04(b)(i)(D), 5.04(b)(i)(E) and 5.04(b)(i)(F);
(ii) from the Available Principal Amount on deposit in the Principal
Funding Account, in the following order of priority:
(A) on each Distribution Date with respect to the Revolving
Period (1) first, to the Reserve Account, the positive difference, if any,
by which (x) the Specified Reserve Account Balance for such Distribution
Date exceeds (y) the principal amount on deposit in the Reserve Account on
such Distribution Date (after taking into account the amount deposited into
the Reserve Account on such Distribution Date pursuant to Section
5.04(b)(i)(D) but not taking into account the amount deposited into the
Reserve Account on such Distribution Date pursuant to this clause (A)) and
(2) second, the Available Principal Amount remaining after the application
of clause (1) above will be retained in the Principal Funding Account and
will be paid to the Transferor in connection with transfers of Subsequent
Receivables to the Issuer pursuant to Section 2.02; and
(B) on Distribution Dates with respect to the Amortization
Period, (1) first, to the Note Distribution Account, the Class A
Noteholders' Principal Distributable Amount, (2) second, to the Reserve
Account, the positive difference, if any, by which (x) the Specified
Reserve Account Balance for such Distribution Date exceeds (y) the
principal amount on the deposit in the Reserve Account on such Distribution
Date (after taking into account the amount deposited into the Reserve
Account on such Distribution Date pursuant to Section 5.04(b)(i)(D) but not
taking into account the amount deposited into the Reserve Account on such
Distribution Date pursuant to this clause (B)) and (3) third, to the Note
Distribution Account, the Class B Noteholders' Principal Distributable
Amount;
(iii) on the first Distribution Date with respect to the Amortization
Period, from Available Principal Amounts deposited in the Principal
Funding Account on prior Distribution Dates that were not used to
acquire Subsequent Receivables from the Transferor on or prior to such
Distribution Date ("Remaining Available Principal Amounts"), in the
following order of priority:
(A) to the Note Distribution Account, the Class A Noteholders'
Percentage of the Remaining Available Principal Amounts; and
(B) to the Note Distribution Account, the Class B Noteholders'
Percentage of the Remaining Available Principal Amounts.
(c) Notwithstanding anything in this Section 5.04 to the contrary, if an
Event of Default under the Indenture occurs and the maturities of the Notes
are accelerated pursuant to Section 5.02 of the Indenture, amounts standing
to the credit of the Collection Account, the Interest Payment Account and
the Principal Funding Account shall be applied by the Indenture Trustee in
accordance with Section 5.04(b) of the Indenture.
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SECTION 5.05. Reserve Account.
(a) On the Closing Date, the Transferor shall deposit the Reserve Account
Initial Deposit into the Reserve Account. The Servicer shall determine the
Specified Reserve Account Balance for each Distribution Date.
(b) If the amount on deposit in the Reserve Account on any Distribution
Date (after giving effect to all deposits or withdrawals therefrom on such
Distribution Date) is greater than the Specified Reserve Account Balance
for such Distribution Date, the Servicer shall instruct the Indenture
Trustee to distribute the amount of such excess to the Transferor;
provided, however, that if, after giving effect to all payments made on the
Notes on such Distribution Date, the Pool Balance as of the end of the
preceding Collection Period is less than the sum of the outstanding
principal balance the Notes, such excess amount shall not be distributed to
the Transferor and shall be retained in the Reserve Account available for
application in accordance with Sections 5.05(c) and (d). Amounts properly
distributed to the Transferor pursuant to this Section 5.05(b) shall be
deemed released from the Trust and the security interest therein granted to
the Indenture Trustee, and the Transferor shall in no event thereafter be
required to refund any such distributed amounts.
(c) In the event that the sum of the distributions and deposits to be made
pursuant to Section 5.04(b)(i)(A), Section 5.04(b)(i)(B), Section
5.04(b)(i)(C) and, on any Distribution Date with respect to the Revolving
Period, Section 5.04(b)(i)(E) with respect to any Distribution Date exceeds
the Available Interest Amount distributed in respect thereof on such
Distribution Date, the Indenture Trustee shall withdraw from the Reserve
Account on such Distribution Date, upon receipt of the instruction from the
Servicer pursuant to Section 5.04(b), to the extent of funds available
therein, an amount equal to such excess, and the Indenture Trustee shall
pay the applicable portion of such amount to the Servicer and the
Administrator, as applicable, deposit the applicable portion of such amount
into the Note Distribution Account and deposit the applicable portion of
such amount into the Principal Funding Account.
(d) In the event that the Class A Noteholders' Principal Distributable
Amount for a Distribution Date exceeds the amount deposited in the Note
Distribution Account pursuant to Section 5.04(b)(ii)(A) on such
Distribution Date, the Indenture Trustee shall withdraw on such
Distribution Date from the Reserve Account, upon receipt of the instruction
of the Servicer pursuant to Section 5.04(b), to the extent of funds
available therein after giving effect to paragraph (c) above, an amount
equal to such excess, and the Indenture Trustee shall deposit such amount
into the Note Distribution Account pursuant to the terms of the Indenture.
(e) Notwithstanding anything in this Section 5.05 to the contrary, if an
Event of Default under the Indenture occurs and the maturities of the Notes
are accelerated pursuant to Section 5.02 of the Indenture, amounts on
deposit in the Reserve Account shall be applied by the Indenture Trustee in
accordance with Section 5.04(a) of the Indenture.
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SECTION 5.06. Statements to Noteholders. On the second Business Day
prior to each Distribution Date, the Servicer shall provide to the Indenture
Trustee (with a copy to the Rating Agencies) for the Indenture Trustee to
forward to each Class A Noteholder of record, and to the Owner Trustee a
statement substantially in the form of Exhibit A to Schedule D (or such other
form that is acceptable to the Indenture Trustee, the Owner Trustee and the
Servicer) setting forth at least the following information as to the Notes
(separately stating such information as to the Class A Notes and the Class B
Notes), to the extent applicable:
(i) the amount of the distribution to be made on such Distribution
Date allocable to principal of each Class of Notes;
(ii) the amount of the distribution to be made on such Distribution
Date allocable to interest on or with respect to each Class of Notes;
(iii) the Pool Balance as of the close of business on the last day
of the preceding Collection Period, the aggregate Principal Balance of the
Receivables and the amount on deposit in the Principal Funding Account;
(iv) the aggregate outstanding principal balance of the Class A Notes
and the Class A Note Pool Factor, in each case as of the close of business
on the last day of the preceding Collection Period, after giving effect to
payments allocated to principal reported under (i) above;
(v) the amount of the Servicing Fee paid to the Servicer with respect
to the related Collection Period;
(vi) the amount of the Administration Fee paid to the Administrator
with respect to the related Collection Period;
(vii) the aggregate Acquisition Amounts for Acquired Receivables
with respect to the related Collection Period paid by each of the
Transferor and the Servicer (accounted for separately);
(viii) the amount of Realized Losses, if any, for such Collection
Period;
(ix) the balance of the Reserve Account on such Distribution Date,
after giving effect to withdrawals therefrom and deposits thereto on such
Distribution Date;
(x) the Specified Reserve Account Balance for such Distribution Date;
and
(xi) the Noteholders' Class A Interest Distributable Amount, the
Noteholders' Class B Interest Distributable Amount, the Class A
Noteholders' Principal Distributable Amount and the Class B Noteholders'
Principal Distributable Amount, the components of each thereof, and the
amount, if any, to be withdrawn from the Reserve Account and deposited into
the Note Distribution Account pursuant to Section 5.05(c) or (d);
39
Each amount set forth pursuant to paragraph (i) and (ii) above shall be
expressed as a dollar amount per $1,000 of original principal balance of a
Note.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of the Indenture, the Indenture
Trustee shall mail to each Person who at any time during such calendar year
shall have been a Class A Noteholder and received any payment thereon, a
statement containing the amounts described in (i) and (ii) above and any
other information required by applicable tax laws, for the purposes of such
Noteholder's preparation of Federal income tax returns.
The Indenture Trustee shall only be required to provide to the Class A
Noteholders the information furnished to it by the Servicer. The Indenture
Trustee shall not be required to determine, confirm or recompute any such
information.
SECTION 5.07. Net Deposits. As an administrative convenience, so long
as MCC is the Servicer and the Administrator, the Servicer will be permitted
to make the deposit of Collections on the Receivables and Acquisition Amounts
for or with respect to any Collection Period net of distributions to be made
to the Servicer and the Administrator with respect to such Collection Period
(and the Servicer shall pay amounts owing to the Administrator directly).
The Servicer, however, will account to the Owner Trustee and the Indenture
Trustee and the Noteholders as if the Servicing Fee and Administration Fee
was paid pursuant to the mechanics provided for pursuant to Section 5.04.
ARTICLE VI
THE TRANSFEROR
SECTION 6.01. Representations of Transferor. The Transferor makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of each Transfer Date and shall survive the
transfer of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Transferor is duly
organized and validly existing as a corporation in good standing under the
laws of the State of Delaware with the power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted, and had at all relevant
times, and has, the power, authority and legal right to acquire and own the
Receivables.
(b) Due Qualification. The Transferor is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the failure
to so qualify or to obtain any such
40
license or approval would render any Receivable unenforceable that would
otherwise be enforceable by the Transferor or the Owner Trustee.
(c) Power and Authority. The Transferor has the power and authority
to execute and deliver this Agreement and to carry out its terms; the
Transferor has full power and authority to transfer and assign the
Receivables and other property to be transferred and assigned to and
deposited with the Issuer and the Transferor has duly authorized such
transfer and assignment to the Issuer by all necessary corporate action;
and each of the execution, delivery and performance of this Agreement has
been duly authorized by the Transferor by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid and
binding obligation of the Transferor enforceable in accordance with its
terms, except to the extent that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, and the
remedy of specific performance and injunctive relief may be subject to
certain equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not (i)
conflict with, result in any breach of any of the terms and provisions of,
or constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or by-laws of the Transferor, or any
indenture, agreement or other instrument to which the Transferor is a party
or by which it is bound; (ii) result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the Basic
Documents); or (iii) violate any law or, to the best of the Transferor's
knowledge, any 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 its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or to the Transferor's best knowledge, threatened, before any
court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Transferor or its properties:
(i) asserting the invalidity of this Agreement, the Indenture, the Notes or
any of the other Basic Documents, (ii) seeking to prevent the issuance of
the Notes or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents; (iii)
seeking any determination or ruling that might materially and adversely
affect the performance by the Transferor of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, the Notes or
any other of the Basic Documents or (iv) which might adversely affect the
Federal or state income tax attributes of the Notes.
41
SECTION 6.02. Liability of Transferor; Indemnities. The Transferor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Transferor under this Agreement.
(a) The Transferor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee and their officers,
directors and agents from and against any taxes that may at any time be
asserted against the Issuer, the Owner Trustee or the Indenture Trustee or
their respective officers, directors, and agents with respect to the
transfer of the Receivables to the Issuer or the issuance and original sale
of the Notes, including any sales, gross receipts, general corporation,
tangible personal property, privilege or license taxes and costs and
expenses in defending against the same.
(b) The Transferor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee and their officers,
directors, and agents from and against any loss, liability or expense
incurred by reason of (i) the Transferor's willful misfeasance, bad faith
or negligence in the performance of its duties under this Agreement, or by
reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Transferor's or the Issuer's violation or alleged
violation of Federal or state securities laws in connection with the
offering and sale of the Notes, except that the Transferor shall not
indemnify the Owner Trustee for any such loss, liability or expense as
shall result from the willful misconduct of the Owner Trustee.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination
of this Agreement and shall include reasonable fees and expenses of counsel
and expenses of litigation. If the Transferor shall have made any indemnity
payments pursuant to this Section 6.02 and the Person to or on behalf of
whom such payments are made thereafter shall collect any of such amounts
from others, such Person shall promptly repay such amounts collected from
others to the Transferor, without interest.
SECTION 6.03. Merger or Consolidation of, or Assumption of the
Obligations of, Transferor. Any Person (a) into which the Transferor may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Transferor shall be a party or (c) which may succeed to the
properties and assets of the Transferor substantially as a whole, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Transferor under this Agreement, shall be the
successor to the Transferor hereunder without the execution or filing of any
document or any further act by any of the parties to this Agreement;
provided, however, that (i) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.01
shall have been breached and no Servicer Default, and no event that, after
notice or lapse of time, or both, would become a Servicer Default shall have
occurred and be continuing, (ii) the Transferor shall have delivered to the
Owner Trustee and the Indenture Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (iii) the
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Rating Agency Condition shall have been satisfied with respect to such
transaction and (iv) the Transferor shall have delivered to the Owner Trustee
and the Indenture Trustee an Opinion of Counsel either (A) stating that, in
the opinion of such counsel, all actions (other than the delivery of the
original Contract) necessary to perfect the interests of the Owner Trustee
and the Indenture Trustee have been taken, including that all financing
statements and continuation statements and amendments thereto have been
executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve
and protect such interests. Notwithstanding anything herein to the contrary,
the execution of the foregoing agreement of assumption and compliance with
clauses (i), (ii), (iii) and (iv) above shall be conditions to the
consummation of the transactions referred to in clause (a), (b) or (c) above.
Following the effectiveness of the succession provided for in this Section
6.03, the predecessor Transferor shall be released from any obligations and
liabilities provided for under the Basic Documents other than any obligations
or liabilities incurred by such predecessor Transferor prior to the
effectiveness of such succession.
SECTION 6.04. Limitation on Liability of Transferor and Others. 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 document of any
kind, prima facie properly executed and submitted by any Person respecting
any matters arising hereunder. The Transferor shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its obligations under this Agreement, and that in its
opinion may involve it in any expense or liability.
SECTION 6.05. Transferor May Own Notes. The Transferor and any
Affiliate (other than MCC) thereof may in its individual or any other
capacity become the owner or pledgee of Class A Notes with the same rights as
it would have if it were not the Transferor or an Affiliate thereof, except
as expressly provided herein (including, without limitation, the definition
of "Outstanding" contained in the Indenture) or in any Basic Document. The
Transferor agrees that it shall not transfer any interest in Notes (including
the Class B Notes) or any rights hereunder without delivering to the Owner
Trustee an Opinion of Counsel that such transfer will not cause the Trust to
be taxable as a corporation for federal income tax purposes.
SECTION 6.06. Tax Treatment. The Transferor has structured this
Agreement, the Indenture and any related agreement with the intention that
the Class A Notes qualify under applicable federal, state, and local income
and franchise tax law as indebtedness of the Transferor secured by the
Receivables and the Issuer shall be disregarded as a separate entity for such
purposes. The Transferor, the Servicer, and the Issuer agree to treat and to
take no action inconsistent with the treatment of the Class A Notes (or any
beneficial interest therein) as such indebtedness for purposes of federal,
state, and local income and franchise tax law and for purposes of any other
tax imposed on or measured by income.
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ARTICLE VII
THE SERVICER
SECTION 7.01. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of the Agreement and as of each Transfer Date (or as of the date a
Person (other than the Indenture Trustee) becomes Servicer pursuant to
Sections 7.03 and 8.02, in the case of a successor to the Servicer) and shall
survive the transfer of the Receivables to the Issuer and the pledge thereof
to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Servicer is a corporation
duly organized, validly existing and in good standing under the laws of
the jurisdiction of its incorporation, and has the corporate power and
authority to own its properties and to conduct the business in which
it is currently engaged, and had at all relevant times, and has, the
power, authority and legal right to acquire, own, transfer and
service the Receivables.
(b) Power and Authority. The Servicer has the power and authority
to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery and performance of this Agreement have been
duly authorized by the Servicer by all necessary corporate action.
(c) Binding Obligation. This Agreement constitutes a legal, valid
and binding obligation of the Servicer enforceable in accordance with
its terms, except that such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally, and the
remedy of specific performance and injunctive relief may be subject to
certain equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(d) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof shall not
conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time) a default
under, the certificate of incorporation or by-laws of the Servicer, or
any material indenture, agreement or other instrument to which the
Servicer is a party or by which it is bound; nor result in the creation
or imposition of any material Lien upon any of its properties pursuant
to the terms of any such indenture, agreement or other instrument
(other than this Agreement); nor violate any material law or, to the
best of the Servicer's knowledge, any material order, rule or
regulation applicable to the Servicer of any court or of any Federal
or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its
properties.
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(e) No Proceedings. To the Servicer's best knowledge, there are no
proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its
properties: (i) asserting the invalidity of this Agreement, the
Indenture, the Notes or any of the other Basic Documents; (ii) seeking
to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by this Agreement, the Indenture or any of
the other Basic Documents; (iii) seeking any determination or ruling
that might materially and adversely affect the performance by the
Servicer of its obligations under, or the validity or enforceability
of, this Agreement, the Indenture, the Notes or any of the other Basic
Documents; or (iv) relating to the Servicer and which might adversely
affect the Federal or state income tax attributes of the Notes.
(f) No Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery by
the Servicer of this Agreement or any other Basic Document, the
performance by the Servicer of the transactions contemplated by
this Agreement or any other Basic Document and the fulfillment by
the Servicer of the terms hereof or thereof, have been obtained or
have been completed and are in full force and effect (other than
approvals, authorizations, consents, orders or other actions which
if not obtained or completed or in full force and effect would not
have a material adverse effect on the Servicer or the Issuer or
upon the collectibility of any Receivable or upon the ability of
the Servicer to perform its obligations under this Agreement).
SECTION 7.02. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement.
(a) The Servicer shall defend, indemnify and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders
and the Transferor and any of the officers, directors and agents of
the Issuer, the Owner Trustee, the Indenture Trustee, and the
Transferor from and against any and all costs, expenses, losses,
damages, claims and liabilities, arising out of or resulting from
the use, ownership or operation by the Servicer or any Affiliate
(other than the Transferor) thereof of any Financed Equipment.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee and the Transferor
and their respective officers, directors and agents from and
against (i) any taxes that may at any time be asserted against any
such Person with respect to the transactions contemplated herein,
including any sales, gross receipts, general corporation, tangible
personal property, privilege or license taxes (but, in the case of
the Issuer or the Transferor, not including any taxes asserted with
respect to, and as of the date of, the transfer of the Receivables
to the Issuer or the issuance and original sale of the Notes, or
Federal or other income taxes arising out of distributions on the
Notes) and (ii) costs and expenses in defending against the same.
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(c) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Transferor
and the Noteholders and any of the officers, directors and agents
of the Issuer, the Owner Trustee, the Indenture Trustee and the
Transferor from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent that any such cost,
expense, loss, claim, damage or liability arose out of, or was
imposed upon any such Person through, the negligence, willful
misfeasance or bad faith of the Servicer in the performance of its
duties under this Agreement, or by reason of reckless disregard of
its obligations and duties under this Agreement or on account of
the failure of the Servicer to be qualified to do business as a
foreign corporation or to have obtained a license or approval in
any jurisdiction.
(d) The Servicer shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers,
directors and agents from and against all costs, expenses, losses,
claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and
duties herein, and in the case of the Owner Trustee, in the Trust
Agreement, and in the case of the Indenture Trustee, the Indenture,
except to the extent that any such cost, expense, loss, claim,
damage or liability: (i) shall be due to the willful misfeasance,
bad faith or negligence of the Owner Trustee or the willful
misfeasance, bad faith or negligence of the Indenture Trustee, as
applicable; or (ii) shall arise from the breach by the Owner
Trustee of any of its representations or warranties set forth in
Section 6.03 of the Trust Agreement.
(e) The Servicer shall pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate, other than any taxes
asserted with respect to, and as of the date of, the transfer of
the Receivables to the Issuer or the Transferor or the issuance and
original sale of the Notes, or Federal or other income taxes
arising out of distributions on the Notes.
For purposes of this Section, in the event of the termination of the
rights and obligations of MCC (or any successor thereto pursuant to Section
7.03) as Servicer pursuant to Section 8.01, or a resignation by such Servicer
pursuant to this Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than the Indenture
Trustee) pursuant to Section 8.02.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee or the termination of
this Agreement. Indemnification under this Section shall include reasonable
fees and expenses of counsel and expenses of litigation if the indemnitee
prevails in any action for which indemnification is sought. If the Servicer
shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter collects any
of such amounts from others, such Person shall promptly repay such amounts to
the Servicer, without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) (i) into which the Servicer may be
merged or consolidated, (ii) which
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may result from any merger or consolidation to which the Servicer shall be a
party, (iii) which may succeed to the properties and assets of the Servicer
substantially as a whole, or (iv) which is a corporation 50% or more of the
voting stock of which is owned, directly or indirectly, by Metropolitan Life
Insurance Company, and (b) in the case of any of (i), (ii), (iii) or (iv),
which has executed an agreement of assumption to perform every obligation of
the Servicer hereunder, shall be the successor to the Servicer under this
Agreement without further act on the part of any of the parties to this
Agreement; provided, however, that (w) immediately after giving effect to
such transaction, no Servicer Default, and no event which, after notice or
lapse of time, or both, would become a Servicer Default shall have occurred
and be continuing, (x) the Servicer shall have delivered to the Owner Trustee
and the Indenture Trustee an Officers' Certificate and an Opinion of Counsel
each stating that such consolidation, merger or succession and such agreement
of assumption comply with this Section and that all conditions precedent
provided for in this Agreement relating to such transaction have been
complied with, (y) the Rating Agency Condition shall have been satisfied with
respect to such transaction and (z) the Servicer shall have delivered to the
Owner Trustee and the Indenture Trustee an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed
that are necessary fully to preserve and protect the interest of the Owner
Trustee and the Indenture Trustee, respectively, in the Receivables and
reciting the details of such filings or (B) stating that, in the opinion of
such counsel, no such action shall be necessary to preserve and protect such
interests. Notwithstanding anything herein to the contrary, the execution of
the foregoing agreement of assumption and compliance with clauses (w), (x),
(y) and (z) above shall be conditions to the consummation of the transactions
referred to in clause (a)(i), (a)(ii), (a)(iii), or (a)(iv) above. Following
the effectiveness of the succession provided for in this Section 7.03, the
predecessor Servicer shall be released from any obligations and liabilities
provided for under the Basic Documents other than any obligations or
liabilities incurred by such predecessor Servicer prior to the effectiveness
of such succession.
SECTION 7.04. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors or officers or employees or agents of
the Servicer shall be under any liability to the Issuer or the Noteholders,
except as provided under this Agreement, for any action taken or for
refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; provided, however, that this provision shall not protect
the Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement. The Servicer and any director or officer or
employee or agent of the Servicer as the case may be, may rely in good faith
on any document of any kind prima facie properly executed and submitted by
any person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with
this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement
and the other
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Basic Documents and the rights and duties of the parties to this Agreement
and the other Basic Documents and the interests of the Noteholders under the
Indenture.
SECTION 7.05. MCC Not To Resign as Servicer. Subject to the provisions
of Section 7.03, MCC shall not resign from the obligations and duties hereby
imposed on it as Servicer under this Agreement except upon determination that
the performance of its duties under this Agreement shall no longer be
permissible under applicable law (if it is also determined that such
determination may not be reversed). Notice of any such determination
permitting the resignation of MCC shall be communicated to the Owner Trustee
and the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by
an Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall have assumed the responsibilities and obligations of MCC in
accordance with Section 8.02.
ARTICLE VIII
DEFAULT
SECTION 8.01. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer (i) to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts any required payment or
(ii) to direct the Indenture Trustee to make any required distribution
therefrom in either case that shall continue unremedied for a period of
three Business Days after written notice of such failure is received by
the Servicer from the Owner Trustee or the Indenture Trustee or after
discovery of such failure by an officer of the Servicer; or
(b) failure on the part of the Servicer duly to observe or to
perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement or any other Basic Document, which
failure shall (i) materially and adversely affect the rights of Class A
Noteholders and (ii) continues unremedied for a period of 60 days after
the date on which written notice of such failure, requiring the same to
be remedied, shall have been given (A) to the Servicer by the Owner
Trustee or the Indenture Trustee or (B) to the Servicer, and to the
Owner Trustee and the Indenture Trustee by the Holders of Class A Notes
evidencing not less than 25% of the Outstanding Amount of the Class A
Notes; or
(c) an Insolvency Event occurs with respect to the Servicer;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture Trustee, or the Holders of Class A
Notes evidencing not less than 25% of
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the Outstanding Amount of the Class A Notes, by notice then given in writing
to the Servicer (and to the Indenture Trustee and the Owner Trustee if given
by the Class A Noteholders) may terminate all the rights and obligations
(other than the obligations set forth in Section 7.02 hereof) of the Servicer
under this Agreement (a "Servicer Termination Event"). On or after the
receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Notes or the
Receivables or otherwise, shall, without further action, pass to and be
vested in the Indenture Trustee or such successor Servicer as may be
appointed under Section 8.02; and, without limitation, the Indenture Trustee
and the Owner Trustee are hereby authorized and empowered to execute and
deliver, on behalf of the predecessor Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the successor Servicer, the
Indenture Trustee and the Owner Trustee in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the successor Servicer for administration by it of
all cash amounts that shall at the time be held by the predecessor Servicer
for deposit, or shall thereafter be received by it with respect to a
Receivable. All reasonable costs and expenses (including reasonable
attorneys' fees) incurred in connection (x) with transferring the computer or
other records to the successor Servicer in the form requested and (y)
amending this Agreement to reflect such succession as Servicer pursuant to
this Section shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs and expenses. Upon receipt of notice
of the occurrence of a Servicer Default, the Owner Trustee shall give notice
thereof to the Rating Agencies.
SECTION 8.02. Appointment of Successor.
(a) Upon the Servicer's receipt of notice of termination, pursuant
to Section 8.01 or the Servicer's resignation in accordance with the
terms of this Agreement, the predecessor Servicer shall continue to
perform its functions as Servicer under this Agreement, in the case of
termination, only until the date specified in such termination notice
or, if no such date is specified in a notice of termination, until
receipt of such notice and, in the case of resignation, until the
earlier of (x) the date 45 days from the delivery to the Owner Trustee
and the Indenture Trustee of written notice of such resignation (or
written confirmation of such notice) in accordance with the terms of
this Agreement and (y) the date upon which the predecessor Servicer
shall become unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the event of the
Servicer's termination hereunder, the Indenture Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its
appointment by a written assumption in form acceptable to the Owner
Trustee (such acceptance not to be unreasonably withheld) and the
Indenture Trustee (such acceptance not to be unreasonably withheld). In
the event that a successor Servicer has not been appointed at the time
when the predecessor Servicer has ceased to act as Servicer in
accordance with this Section, pending the appointment of and acceptance
by a successor Servicer, the Indenture Trustee without further action
shall automatically be appointed and serve
49
as the successor Servicer and the Indenture Trustee shall be entitled to
the Servicing Fee and the Servicer's Yield. Notwithstanding the above,
the Indenture Trustee shall, if it shall be legally unable so to act,
appoint or petition a court of competent jurisdiction to appoint, any
established institution who has demonstrated its capability to service
the Receivables to the satisfaction of the Indenture Trustee, as the
successor to the Servicer under this Agreement, having a net worth of not
less than $50,000,000 and whose regular business shall include the
servicing of receivables comparable with the Receivables, as the
successor to the Servicer under this Agreement.
The Indenture Trustee, acting in its capacity as successor Servicer, and
any successor Servicer appointed by it, shall have no responsibility or
obligation (i) for any breach by any predecessor Servicer of any of its
representations and warranties, or (ii) any acts or omissions of MCC or any
other Servicer prior to its termination or resignation.
(b) Upon appointment, the successor Servicer (including the
Indenture Trustee acting as successor servicer) shall be the successor
in all respects to the predecessor Servicer and shall be subject to all
the responsibilities, duties and liabilities arising thereafter
relating thereto placed on the predecessor Servicer and shall be
entitled to the Servicing Fee and the Servicer's Yield accruing or
collected, as the case may be, after the successor Servicer becomes the
Servicer, as set forth above, and all the rights granted to the
predecessor Servicer by the terms and provisions of this Agreement.
(c) Subject to the Indenture Trustee's right to appoint a successor
Servicer pursuant to Section 8.02(a) after the Indenture Trustee has become
the Servicer pending the appointment of and acceptance by a successor
Servicer, the Servicer may not resign unless it is prohibited from serving as
such by law.
(d) Notwithstanding any other provision of this Agreement, neither the
Indenture Trustee nor any successor Servicer shall be deemed in default,
breach or violation of this Agreement as a result of the failure of MCC or
any Servicer (i) to cooperate with the Indenture Trustee or any successor
Servicer pursuant to Section 8.01, (ii) to deliver funds required to be
deposited to any Trust Account, or (iii) to deliver files or records relative
to the Receivables as may be requested by the Indenture Trustee or successor
Servicer.
SECTION 8.03. Notification to Noteholders. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VIII,
the Owner Trustee shall give prompt written notice thereof to the Rating
Agencies and the Indenture Trustee and the Indenture Trustee shall give
prompt written notice thereof to the Noteholders in the manner provided for
in the Indenture.
SECTION 8.04. Waiver of Past Defaults. The Holders of Class A Notes
evidencing not less than a majority of the Outstanding Amount of the Class A
Notes may, on behalf of all Noteholders, waive in writing any default by the
Servicer in the performance of its obligations hereunder and its
consequences, except a default in making any required deposits to or payments
from any of the Trust Accounts in accordance with this Agreement. Upon any
such waiver of
50
a past default, such default shall cease to exist, and any Servicer Default
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereto.
ARTICLE IX
EARLY AMORTIZATION EVENTS; OPTIONAL ACQUISITION
SECTION 9.01. Early Amortization Events. If any of the following events
shall occur during the Revolving Period:
(a) failure on the part of the Transferor or the Servicer to make any
payment or deposit under this Agreement or the Contribution and Sale Agreement
on or before the date occurring three Business Days after such payment or
deposit is required to be made;
(b) failure on the part of the Transferor or the Servicer to duly
observe or perform in any material respect any other covenants or agreements
of the Transferor or the Servicer set forth in this Agreement or the
Contribution and Sale Agreement, which failure materially and adversely
affects the rights of the Class A Noteholders and which continues unremedied
for a period of 60 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given (A) to the
Transferor or the Servicer (as the case may be) by the Owner Trustee or the
Indenture Trustee or (B) to the Servicer or the Transferor (as the case may
be) and the Owner Trustee and the Indenture Trustee by the Holders of Class A
Notes evidencing not less than 25% of the Outstanding Amount of the Class A
Notes;
(c) any representation or warranty made by MCC in the Contribution and
Sale Agreement or by the Transferor or the Servicer in this Agreement or any
information in the Schedule of Receivables (x) shall prove to be incorrect in
any material respect when made or when delivered, (y) which continues to be
incorrect in any material respect for a period of 60 days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to (A) MCC, the Transferor or the Servicer (as the case
may be) by the Owner Trustee or the Indenture Trustee or (B) MCC, the
Transferor or the Servicer (as the case may be) and the Owner Trustee and the
Indenture Trustee by Holders of Class A Notes evidencing not less than 25% of
the Outstanding Amount of the Class A Notes and (z) as a result of which the
interest of the Class A Noteholders are materially and adversely affected;
provided, however, that an Early Amortization Event shall not be deemed to
occur pursuant to this subparagraph (c) if MCC, the Transferor or the
Servicer (as the case may be) shall have acquired the relevant Receivable
pursuant to Section 6.02(a)(i) of the Contribution and Sale Agreement or
Section 3.02 or 4.07 (as applicable) by depositing the related Acquisition
Amount in the Collection Account pursuant to Section 5.03;
(d) an Insolvency Event shall occur with respect to MCC or the
Transferor;
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(e) the Transferor or the Trust shall become subject to registration as
an "investment company" under the Investment Company Act of 1940, as amended;
(f) the Pool Balance shall be less than the outstanding principal
balance of the Notes for any three consecutive Distribution Dates;
(g) a Servicer Termination Event shall occur;
(h) the amount on deposit in the Reserve Account shall be less than the
Specified Reserve Account Balance for any three consecutive Distribution
Dates;
(i) an Event of Default shall have occurred and be continuing and the
Notes shall be declared immediately due and payable;
(j) the average of the Trust Yields for any three consecutive Collection
Periods is less than the average of the Base Rates for such period; or
(k) the Cumulative Net Loss Ratio shall exceed 3%.
then (but in the case of any event described in subparagraph (a), (b) or (c)
after any applicable grace period) an early amortization event (an "Early
Amortization Event") shall have occurred.
SECTION 9.02. Optional Acquisition of All Receivables. If on the last
day of any Collection Period the Pool Balance is less than 10% of the Initial
Pool Balance, the Transferor shall have the option to acquire the Owner Trust
Estate, other than the Trust Accounts, which acquisition shall be effective
as of such last day; provided, that the Transferor may not effect any such
acquisition so long as the rating on Transferor's long-term debt obligations
is either non-existent or is less than Baa3 by Moody's, unless the Owner
Trustee and the Indenture Trustee shall have received an Opinion of Counsel
to the effect that such acquisition would not constitute a fraudulent
conveyance or transfer. To exercise such option, (x) the Transferor shall
deliver notice of such intention to the Indenture Trustee at least 15 days
prior to the next succeeding Distribution Date and (y) the Transferor shall
deposit in the Collection Account on or prior to the second Business Day
prior to such next succeeding Distribution Date an amount equal to the
aggregate Acquisition Amount for the Receivables (including Defaulted
Receivables) pursuant to Section 5.03, and shall succeed to all interests in
and to the Trust.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. Amendment. The Agreement may be amended by the
Transferor, the Servicer and the Trust, with the consent of the Indenture
Trustee, but without the consent of any of the Noteholders, to cure any
ambiguity, to correct or supplement any provisions in this Agreement or for
the purpose of adding any provisions to or changing in any manner or
52
eliminating any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Owner
Trustee and the Indenture Trustee, adversely affect in any material respect
the interests of any Noteholder.
This Agreement may also be amended from time to time by the Transferor,
the Servicer and the Trust, with the consent of the Indenture Trustee, the
consent of the Holders of Class A Notes evidencing not less than a majority
of the Outstanding Amount of the Class A Notes, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the
Noteholders; provided, however, that no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be
required to be made for the benefit of the Noteholders or (b) reduce the
aforesaid portion of the Outstanding Amount of the Class A Notes, the Holders
of which are required to consent to any such amendment, without the consent
of the Holders of all the outstanding Class A Notes.
Prior to the execution of any such amendment or consent, the Servicer
shall furnish written notification of the substance of such amendment or
consent to each of the Rating Agencies. Promptly after the execution of any
such amendment or consent, the Servicer shall furnish written notification of
the substance of such amendment or consent to the Indenture Trustee.
It shall not be necessary for the consent of Noteholders pursuant to this
Section to approve the particular form of any proposed amendment or consent,
but it shall be sufficient if such consent shall approve the substance
thereof.
Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred
to in Section 10.02(i)(1). The Owner Trustee and the Indenture Trustee may,
but shall not be obligated to, enter into any such amendment which affects
the Owner Trustee's or the Indenture Trustee's, as applicable, own rights,
duties or immunities under this Agreement or otherwise.
SECTION 10.02. Protection of Title to Trust.
(a) The Transferor shall take all actions necessary (other than delivery
of the original Contracts), and the Issuer shall cooperate with the
Transferor, if applicable, to perfect, and maintain perfection of, the
interests of the Issuer and the Indenture Trustee in the Receivables. In the
event it is determined that the Indenture Trustee's or the Issuer's interests
are no longer perfected, such actions shall include but shall not be limited
to enforcement of the terms of Section 6.02 of the Contribution and Sale
Agreement. In addition, without limiting the rights of the Indenture Trustee
or the Issuer specified in the immediately preceding sentence, the Transferor
shall execute and file and cause to be executed and filed such financing
statements
53
and continuation statements, all in such manner and in such places as may be
required by law fully to perfect, maintain, and protect the interest of the
Issuer and the interest of the Indenture Trustee in the Receivables and in
the proceeds thereof. The Transferor shall deliver (or cause to be
delivered) to the Owner Trustee and the Indenture Trustee file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.
(b) The Transferor shall not change its name, identity or corporate
structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a)
above or otherwise seriously misleading within the meaning of Section
9-402(7) of the UCC (regardless of whether such a filing was ever made),
unless it shall have given the Owner Trustee and the Indenture Trustee at
least five days' prior written notice thereof and, if applicable, shall have
timely filed appropriate amendments to any and all previously filed financing
statements or continuation statements (so that the interest of the Issuer or
the Indenture Trustee is not adversely affected).
(c) Each of the Transferor and the Servicer shall have an obligation to
give the Owner Trustee and the Indenture Trustee at least 60 days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement (regardless of whether such a
filing was ever made) and shall promptly, if applicable, file any such
amendment. The Servicer shall at all times maintain each office from which
it shall service Receivables, and its principal executive office, within the
United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and Recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or Recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.
(e) The Servicer shall maintain its Receivable Management System so that,
from and after the time of transfer under this Agreement of the Receivables,
the Servicer's Receivable Management System (including any backup archives)
that refer to a Receivable shall indicate clearly the interest of the Issuer
(which interest has been acquired from the Transferor) and the Indenture
Trustee in such Receivable and that such Receivable is owned by or has been
pledged to the Issuer and has been pledged to the Indenture Trustee.
Indication of the Issuer's interest (which interest has been acquired from
the Transferor) and the Indenture Trustee's interest in a Receivable shall be
deleted from or modified on the Servicer's Receivable Management System when,
and only when, the related Receivable shall have been paid in full or
reacquired.
(f) If at any time the Transferor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in
receivables comparable with the Receivables, to any prospective purchaser,
lender or other transferee, the Servicer shall give to such prospective
purchaser, lender or other transferee computer tapes, records or printouts
(including
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any restored from backup archives) that, if they shall refer in
any manner whatsoever to any Receivable, shall indicate clearly that such
Receivable has been transferred and is owned by or has been pledged to the
Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents at any
time following reasonable notice and during normal business hours to inspect,
audit and make copies of and abstracts from the Servicer's records regarding
any Receivable.
(h) Upon reasonable request, the Servicer shall furnish to the Owner
Trustee or to the Indenture Trustee, within five Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement and
of each amendment thereto, an Opinion of Counsel either (A) stating
that, in the opinion of such counsel, all actions (other than delivering
the original Contracts) have been taken that are necessary fully to
perfect the interests of the Owner Trustee and the Indenture Trustee in
the Receivables, and reciting the details of such action or referring to
prior Opinions of Counsel in which such details are given, or (B)
stating that, in the opinion of such counsel, no such action shall be
necessary to perfect such interest; and
(2) within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Initial Cut-off Date, an Opinion of Counsel, dated as of a
date during such 90-day period, either (A) stating that, in the opinion
of such counsel, all actions (other than the delivery of the original
Contracts) have been taken, and, if applicable, all financing statements
and continuation statements have been executed and filed, that are
necessary fully to perfect the interests of the Owner Trustee and the
Indenture Trustee in the Receivables and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details
are given, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to perfect such interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in
the following year to perfect such interest.
(j) The Transferor shall, to the extent required by applicable law, cause
the Class A Notes to be registered with the Commission pursuant to Section
12(b) or Section 12(g) of the Exchange Act within the time periods specified
in such sections.
SECTION 10.03. Notices. All demands, notices and communications upon or
to the Transferor, the Servicer, the Issuer, the Owner Trustee, the Indenture
Trustee or the Rating
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Agencies under this Agreement shall be in writing,
personally delivered or mailed by certified mail, return receipt requested,
and shall be deemed to have been duly given upon receipt (a) in the case of
the Transferor, to MetLife Capital Funding Corp. III, 00000 XX 0xx Xxxxxx,
Xxxxx 000, Xxxxxxxx, XX 00000, (b) in the case of the Servicer, to MetLife
Capital Corporation, 00000 XX 0xx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000, (c)
the case of the Issuer or the Owner Trustee, at the "Corporate Trust Office"
(as defined in the Trust Agreement), (d) in the case of the Indenture
Trustee, at the Corporate Trust Office, (e) in the case of Moody's, to
Xxxxx'x Investors Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 and (f) in the case of Standard & Poor's, to
Standard & Poor's Ratings Services, 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx
Xxxx 00000, Attention of Asset Backed Surveillance Department, or, as to each
of the foregoing, at such other address as shall be designated by written
notice to the other parties.
SECTION 10.04. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 6.04 and 7.03 and as
provided in the provisions of this Agreement concerning the resignation of
the Servicer, this Agreement may not be assigned by the Transferor or the
Servicer.
SECTION 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Transferor, the Servicer, the
Issuer, the Owner Trustee, the Indenture Trustee and the Noteholders, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 10.06. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 10.07. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.08. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 10.09. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS, REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
56
SECTION 10.10. Assignment to Indenture Trustee. The Transferor hereby
acknowledges and consents to any mortgage, pledge, assignment and grant of a
security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest
of the Issuer in, to and under the Receivables and the other property
constituting the Owner Trust Estate and/or the assignment of any or all of
the Issuer's rights and obligations hereunder to the Indenture Trustee.
SECTION 10.11. Nonpetition Covenants.
(a) Notwithstanding any prior termination of this Agreement, the
Servicer, the Transferor, the Owner Trustee and the Indenture Trustee (in its
capacity as Indenture Trustee or Servicer) shall not at any time with respect
to the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to
invoke the process of any court or government authority for the purpose of
commencing or sustaining a case against the Issuer under any Federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the
Servicer, the Issuer, the Owner Trustee and the Indenture Trustee shall not
at any time with respect to the Transferor, acquiesce, petition or otherwise
invoke or cause the Transferor to invoke the process of any court or
government authority for the purpose of commencing or sustaining a case
against the Transferor under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Transferor or any
substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Transferor.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee.
(a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the
Issuer, and in no event shall Wilmington Trust Company in its individual
capacity have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer. For all
purposes of this Agreement, in the performance of its duties or obligations
hereunder or in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Articles V, VI and VII of the Trust
Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been acknowledged and accepted by The Chase Manhattan Bank not
in its individual capacity but solely as Indenture Trustee, and in no event
shall The Chase Manhattan Bank have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer
57
hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the
assets of the Issuer.
[Signature page to follow]
58
IN WITNESS WHEREOF, the parties hereto have caused this Transfer and
Servicing Agreement to be duly executed by their respective officers as of the
day and year first above written.
METLIFE CAPITAL EQUIPMENT LOAN TRUST
1997-A
By: WILMINGTON TRUST COMPANY
not in its individual capacity but
solely as Owner Trustee on behalf of the
Trust,
By: _______________________________
Name:
Title:
METLIFE CAPITAL FUNDING CORP. III,
Transferor,
By: _______________________________
Name:
Title:
METLIFE CAPITAL CORPORATION,
Servicer,
By: _______________________________
Name:
Title:
Acknowledged and Accepted:
THE CHASE MANHATTAN BANK,
not in its individual capacity
but solely as Indenture Trustee
By:_______________________________
Name:
Title:
[Signature Page to Transfer and Servicing Agreement]
