INDENTURE
among
SUNRISE FUNDING CORPORATION I
("Issuer")
and
SUNRISE LEASING CORPORATION
("Servicer")
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
("Trustee")
Dated as of November 1, 1996
TABLE OF CONTENTS
PAGE
Parties 1
Preliminary Statement 1
Granting Clause 1
Article One Definitions 2
Section 1.01. Definitions 2
Article Two Note Form 14
Section 2.01. Forms 14
Article Three The Notes 14
Section 3.01. Denomination 14
Section 3.02. Execution, Authentication, Delivery and Dating 15
Section 3.03. Temporary Notes 15
Section 3.04. Registration, Registration of Transfer and Exchange 15
Section 3.05. Limitation on Transfer and Exchange 17
Section 3.06. Mutilated, Destroyed, Lost or Stolen Notes 17
Section 3.07. Payment of Principal and Interest; Principal and
Interest Rights Preserved 18
Section 3.08. Persons Deemed Owner 19
Section 3.09. Cancellation 19
Article Four Original Issuance of Notes; Substitutions of
Collateral 20
Section 4.01. Conditions to Original Issuance of Notes 20
Section 4.02. Security for Notes 21
Section 4.03 Substitution and Purchase of Lease Receivables 21
Section 4.04. Releases 23
Section 4.05. Trust Estate 23
Section 4.06. Notice of Release 24
Section 4.07. Opinions as to Trust Estate 24
Article Five Satisfaction and Discharge 24
Section 5.01. Satisfaction and Discharge of Indenture 24
Section 5.02. Application of Trust Money 24
Article Six Defaults and Remedies 25
Section 6.01. Events of Default 25
Section 6.02. Acceleration of Maturity; Rescission and Annulment 26
Section 6.03. Collection of Indebtedness and Suits for Enforcement
by Trustee 27
Section 6.04. Remedies 27
Section 6.05. Optional Preservation of Trust Estate 28
Section 6.06. Trustee May File Proofs of Claim 28
Section 6.07. Trustee May Enforce Claims Without Possession of Notes 29
Section 6.08. Application of Money Collected 29
Section 6.09. Limitation on Suits 30
Section 6.10. Unconditional Right of Noteholders to Receive
Principal and Interest 31
Section 6.11. Restoration of Rights and Remedies 31
Section 6.12. Rights and Remedies Cumulative 31
Section 6.13. Delay or Omission; Not Waiver 31
Section 6.14. Control by Noteholders 31
Section 6.15 Waiver of Past Defaults 32
Section 6.16. Undertaking for Costs 32
Section 6.17. Waiver of Stay or Extension Laws 33
Section 6.18. Sale of Trust Estate 33
Section 6.19. Action on Notes 34
Article Seven The Trustee 34
Section 7.01. Certain Duties and Responsibilities 34
Section 7.02. Notice of Default 36
Section 7.03. Certain Rights of Trustee 36
Section 7.04. Not Responsible for Recitals or Issuance of Notes 37
Section 7.05. May Hold Notes 38
Section 7.06. Money Held in Trust 38
Section 7.07. Compensation and Reimbursement 38
Section 7.08. Corporate Trustee Required; Eligibility 39
Section 7.09. Resignation and Removal; Appointment of Successor 40
Section 7.10. Acceptance of Appointment by Successor 40
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business of Trustee 41
Section 7.12. Co-Trustees and Separate Trustees 41
Section 7.13. Rights with Respect to the Servicer 42
Section 7.14. Appointment of Authenticating Agent 43
Section 7.15. Trustee to Hold Lease Contracts 44
Article Eight Optional Purchase of Receivables 44
Section 8.01. Optional Purchase of All Receivables 44
Article Nine Supplemental Indentures 45
Section 9.01. Supplemental Indentures Without Consent of Noteholders 45
Section 9.02. Supplemental Indentures with Consent of Noteholders 46
Section 9.03. Execution of Supplemental Indentures 47
Section 9.04. Effect of Supplemental Indentures 47
Section 9.05. Reference in Notes to Supplemental Indentures 47
Article Ten Redemption of the Notes 47
Section 10.01. Redemption at the Option of the Issuer; Election to
Redeem 47
Section 10.02. Notice to Trustee 48
Section 10.03. Notice of Redemption by the Issuer 48
Section 10.04. Deposit of the Redemption Price 48
Section 10.05. Notes Payable on Redemption Date 48
Article Eleven Representations, Warranties and Covenants 49
Section 11.01. Representations and Warranties 49
Section 11.02. Covenants 52
Section 11.03. Other Matters as to the Issuer 59
Article Twelve Accounts and Accountings 59
Section 12.01. Collection of Money 59
Section 12.02. Collection Account 59
Section 12.03. Pre-Funding Account 61
Section 12.04. Reports by Trustee to Noteholders 63
Article Thirteen Provisions of General Application 64
Section 13.01. Acts of Noteholders 64
Section 13.02. Notices, etc., to Trustee, Issuer and Servicer 64
Section 13.03. Notices to Noteholders; Waiver 65
Section 13.04. Effect of Headings and Table of Contents 65
Section 13.05. Successors and Assigns 65
Section 13.06. Separability 65
Section 13.07. Benefits of Indenture 65
Section 13.08. Legal Holidays 66
Section 13.09. Governing Law 66
Section 13.10. Counterparts 66
Section 13.11. Obligation 66
Section 13.12. Compliance Certificates and Opinions 66
Signatures 68
Exhibit A Form of Investment Letter
Exhibit B Form of Supplement for Grant of Interests in Substitute Lease
Contracts
Exhibit C Form of Supplement for Grant of Interests in Subsequent Lease
Contracts
Exhibit D Form of Note
Schedule A Lease Schedule
INDENTURE, dated as of November 1, 1996 (herein, as amended and
supplemented from time to time as permitted hereby, called this "Indenture"),
among SUNRISE FUNDING CORPORATION I, a Minnesota corporation (herein, together
with its permitted successors and assigns, called the "Issuer"), SUNRISE LEASING
CORPORATION, a Minnesota corporation, as servicer (herein, together with its
permitted successors and assigns, called the "Servicer"), and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Trustee").
Preliminary Statement
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the Issuer's Lease Receivables-Backed
Notes, Series 1996-1 (the "Notes"). All covenants and agreements made by the
Issuer, the Servicer and the Trustee herein are for the benefit and security of
the Holders of the Notes. The Issuer, the Servicer and the Trustee are entering
into this Indenture, and the Trustee is accepting the trusts created hereby, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer, the Servicer and the Trustee in accordance with its terms have been
done.
Granting Clause
To secure the payment of the principal of and interest on the Notes in
accordance with their terms, the payment of all of the sums payable under this
Indenture and the performance of the covenants contained in this Indenture, the
Issuer hereby Grants to the Trustee, solely in trust and as collateral security
as provided in this Indenture, for the ratable benefit of the Holders of the
Notes, all of the Issuer's rights, title and interest in and to the following
whether now owned or hereafter acquired and any and all benefits accruing to the
Issuer from: (a) the Lease Receivables, Lease Contracts and the related
Equipment, including all proceeds of the Lease Contracts, Lease Receivables and
the related Equipment and all payments received on or with respect to the Lease
Contracts, Lease Receivables and the related Equipment and due after the related
Cut-Off Date; (b) the Lease Contract Files; (c) all rights and interests of the
Issuer under each Insurance Policy related to the Lease Contracts and Insurance
Proceeds; (d) the Contribution Agreement; (e) the Purchase Agreement; (f) the
Servicing Agreement; (g) the Vendor Agreements; (h) all amounts from time to
time on deposit in the Collection Account, the Pre-Funding Account and the
Lockbox Account (including any Eligible Investments and other property in such
accounts); and (i) proceeds of the foregoing (including, but not by way of
limitation, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind, and other forms of
obligations and receivables which at any time constitute all or part or are
included in the proceeds of any of the foregoing) (all of the foregoing being
hereinafter referred to as the "Collateral" or "Trust Estate").
The Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform the duties herein
required to the best of its ability to the end that the interests of the
Noteholders may be adequately and effectively protected.
Article One
Definitions
Section 1.01. Definitions. Except as otherwise expressly provided
herein or unless the context otherwise requires, the following terms have the
respective meanings set forth below for all purposes of this Indenture, and the
definitions of such terms are equally applicable both to the singular and plural
forms of such terms.
"Act." With respect to any Noteholder, the meaning specified in Section
13.01.
"Affiliate." With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Aggregate Implicit Principal Balance." On any date, the aggregate of
the Implicit Principal Balances, plus any anounts in the Pre-Funding Account.
"Authenticating Agent." Any entity appointed by the Trustee pursuant to
Section 7.14 hereof.
"Available Cash." The amount available in the Collection Account after
payment of all amounts required by clauses (i) through (iii) of Section 12.02(d)
hereof.
"Board of Directors." Either the board of directors of the Issuer or of
the Servicer, as the context requires, or any duly authorized committee of such
Board.
"Board Resolution." A copy of a resolution delivered to the Trustee and
certified by the Secretary or an Assistant Secretary of the Issuer or of the
Servicer, as the case may be, to have been duly adopted by its respective Board
of Directors and to be in full force and effect on the date of such
certification.
"Business Day." Any day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city in which the
corporate trust office of the Trustee is located are authorized or obligated by
law or executive order to close.
"Calculated Residual." For purposes of determining the Implicit
Principal Balance of a Lease Contract, the related Equipment shall be valued at
60%, 40%, 20% and 0% of cost for Lease Contracts with original terms up to and
including 12 months, 24 months, 36 months and 48 months respectively.
"Calculation Date." The last day of a Due Period, except that with
respect to the initial Payment Date, the Calculation Date shall mean the Initial
Cut-Off Date.
"Closing Date." November 8, 1996, the date that the Transaction
Documents are originally executed and delivered by the parties thereto.
"Code." The Internal Revenue Code of 1986, as amended.
"Collateral." The meaning specified in the Granting Clause of this
Indenture.
"Collection Account." The trust account or accounts created and
maintained pursuant to Section 12.02 hereof.
"Contribution Agreement." The Contribution Agreement, dated as of
November 1, 1996, between the Issuer and the Contributor, as amended and
supplemented from time to time, together with the Lease Asset Assignment and the
Subsequent Lease Asset Assignment executed in connection therewith.
"Contributor." Sunrise Leasing Corporation, a Minnesota corporation,
and its permitted successors and assigns.
"Corporate Trust Office." The principal corporate trust office of the
Trustee located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000-0000, Attention: Corporate Trust Services--Asset-Backed Administration, or
at such other address as the Trustee may designate from time to time by notice
to the Noteholders and the Issuer, or the principal corporate trust office of
any successor Trustee.
"Customer." The lessee under each related Lease Contract, including any
guarantor of such lessee, and their respective successors and assigns.
"Cut-Off Date." With respect to Initial Lease Contracts, the Initial
Lease Receivables and the related Equipment, the Initial Cut-Off Date, and with
respect to the Subsequent Lease Contracts, the Subsequent Lease Receivables and
the related Equipment, the Subsequent Cut-Off Date.
"Default." Any occurrence or circumstance which with notice or the
lapse of time or both would become an Event of Default.
"Defaulted Lease Contract." A Lease Contract shall become a Defaulted
Lease Contract at the earlier of (i) the Calculation Date on which any Scheduled
Payment with respect to such Lease Contract has not been received and remains
unpaid for a period of 120 or more days from the date such Scheduled Payment is
due or (ii) the day the Servicer determines in accordance with its customary
practices that it shall not make a Servicer Advance because the Servicer has
determined that any such Servicer Advance would be unrecoverable.
"Delinquent Lease Contract." A Lease Contract (a) as to which a
Scheduled Payment was not received when due by the Servicer and remains unpaid
as of the Calculation Date and (b) which is not a Defaulted Lease Contract.
"Delivery Date." The date on which the Notes are originally issued in
accordance with Section 4.01 hereof.
"Determination Date." The second Business Day preceding each Payment
Date.
"Disclosure Schedule": That certain disclosure schedule of the Issuer,
Sunrise Resources, Inc., and the Servicer delivered in connection with
Transaction Documents.
"Discount Rate." With respect to the Lease Contracts, 10.0% per annum.
"Due Date." With respect to each Lease Receivable the date of the month
on which payment is due thereunder.
"Due Period." As to any Determination Date or Payment Date, as the case
may be, the period beginning on the first day and ending on the last day of the
calendar month preceding the month in which such Determination Date or Payment
Date, as the case may be, occurs.
"Eligible Account." A segregated account, which may be an account
maintained with the Trustee, which is either (a) maintained with a depository
institution or trust company whose long term unsecured debt obligations are
rated at least BBB+ by S&P and Baa1 by Moody's, provided, that if only one such
rating agency rates such institution, such single rating of BBB+ if by S&P, or
of Baa1 if by Moody's shall suffice, or (b) a segregated trust account or
similar account maintained with a federally or state chartered depository
institution subject to regulations regarding fiduciary funds on deposit
substantially similar to 12 C.F.R. ss. 9.10(b).
"Eligible Investments." Any and all of the following:
(i) direct obligations of, and obligations fully guaranteed by, the
United States of America, the Federal Home Loan Mortgage Corporation, the
Federal National Mortgage Association, the Federal Home Loan Banks or any agency
or instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by or federal funds sold by any depository
institution or trust company (including the Trustee or its agent acting in their
respective commercial capacities) incorporated under the laws of the United
States of America or any State thereof and subject to supervision and
examination by federal and/or state authorities, so long as at the time of such
investment or contractual commitment providing for such investment, such
depository institution or trust company has a short term unsecured debt rating
of A-1+ or P-1 (or its equivalent) of S&P or Moody's and provided that each such
investment has an original maturity of no more than 180 days, and (B) any other
demand or time deposit or deposit which is fully insured by the Federal Deposit
Insurance Corporation;
(iii) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
State thereof which has a long term unsecured debt rating in the highest
available rating category of S&P or Moody's at the time of such investment;
(iv) commercial paper having an original maturity of less than 180 days
and issued by an institution having a short term unsecured debt rating in the
highest available rating category of S&P or Moody's at the time of such
investment;
(v) a guaranteed investment contract issued by an insurance company or
other corporation having a long term unsecured debt rating or a claims paying
ability rated in the highest available rating category of S&P or Moody's at the
time of such investment; and
(vi) money market funds having ratings in the highest or second highest
available rating category of S&P or Moody's at the time of such investment which
invest only in other Eligible Investments; any such money market funds which
provide for demand withdrawals being conclusively deemed to satisfy any maturity
requirement for Eligible Investments set forth in this Indenture.
Any Eligible Investments may be purchased by or through the Trustee or any of
its Affiliates.
"Equipment." The equipment leased to the Customers pursuant to the
Lease Contracts.
"Event of Default." The meaning specified in Section 6.01 hereof.
"Final Due Date." With respect to each Lease Receivable, the last Due
Date specified in the related Lease Contract.
"Final Payment Date." The date on which the final principal payment on
the Notes becomes due and payable as therein or herein provided, whether at the
Stated Maturity or by acceleration or redemption.
"Funding Period." The period beginning on the Closing Date and ending
on the first to occur of (a) the Subsequent Transfer Date, (b) the date on which
an Event of Default, a Servicer Event of Default or a Trigger Event occurs and
(c) the close of business on January 31, 1997.
"Grant." To grant, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in and right of set-off against, deposit, set over and confirm. A Grant of the
Lease Contracts, the Lease Receivables or of any other instrument shall include
all rights, powers and options (but none of the obligations) of the Granting
party thereunder, including, without limitation, the immediate and continuing
right to claim, collect, receive and receipt for payments in respect of the
Lease Contracts, the Lease Receivables and the related Equipment, or any other
payment due thereunder, to give and receive notices and other communications, to
make waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise, and generally to do
and receive anything which the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
"Guaranty Amounts." Any and all amounts paid by the guarantor indicated
on the applicable Lease Contract.
"Holder" or "Noteholder." The person in whose name a Note or
Certificate is registered in the Note Register.
"Implicit Principal Balance." With respect to each Lease Receivable as
of any Determination Date, the present value of the sum of (i) the remaining
stream of Scheduled Payments due with respect to such Lease Receivable after the
applicable Calculation Date (reduced by the Servicer Fee) and (ii) the
Calculated Residual, based upon discounting such Scheduled Payments as so
reduced and upon discounting the Calculated Residual to such Calculation Date at
the Discount Rate, at the same frequency as the Payment Dates; except that on
the Calculation Date (w) on or immediately following the deposit into the
Collection Account of Insurance Proceeds equal to the outstanding Implicit
Principal Balance of the related Lease Contract, or the Purchase Price of a
repurchased Lease Contract, or on or immediately following the delivery of a
Substitute Lease Contract, (x) immediately on or after the date that a Lease
Contract has become a Defaulted Lease Contract, (y) immediately preceding the
Final Payment Date or (z) immediately on or after the date which is 90 days
after the Final Due Date with respect to a Lease Contract if the related
Equipment has not been sold, released or otherwise disposed by the Servicer, the
Implicit Principal Balance of each such related Lease Receivable shall be zero.
To the extent that the Final Due Date of any Lease Receivable is later than the
Stated Maturity, any Scheduled Payments due on such Lease Receivable after the
Calculation Date immediately preceding the Stated Maturity shall not be taken
into account in calculating the Implicit Principal Balance of such Lease
Receivable.
"Indenture" or "this Indenture." This instrument as originally executed
as from time to time supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
as so supplemented or amended. All references in this Indenture to designated
"Articles," "Sections," "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of this
Indenture as originally executed, or if amended or supplemented, as so amended
and supplemented. The words "herein," "hereof," "hereunder" and other words of
similar import, when not related to a specific subdivision of this Indenture,
refer to this Indenture as a whole and not to any particular Article, Section,
Subsection or other subdivision.
"Independent." When used with respect to any specified Person means
such a Person, who (1) is in fact independent of the Issuer, (2) does not have
any direct financial interest or any material indirect financial interest in the
Issuer or in any Affiliate of the Issuer and (3) is not connected with the
Issuer as an officer, employee, promoter, underwriter, Trustee, partner,
director, or person performing similar functions. Whenever it is herein provided
that any Independent Person's opinion or certificate shall be furnished to the
Trustee, such Person shall be appointed by an Issuer Order and approved by the
Trustee in the exercise of reasonable care, and such opinion or certificate
shall state that the signer has read this definition and that the signer is
Independent within the meaning hereof.
"Initial Cut-Off Date." November 1, 1996.
"Initial Lease Contract." Any Lease Contact transferred to the Issuer
and pledged to the Trustee on the Closing Date.
"Initial Lease Receivable." The Lease Receivable related to an Initial
Lease Contract.
"Initial Payment Date." December 15, 1996, the first Payment Date
following the Delivery Date.
"Insurance Policy." With respect to an item of Equipment and a Lease
Contract, any insurance policy maintained by the Customer pursuant to the
related Lease Contract that covers physical damage to the Equipment (including
policies procured by the Issuer or the Servicer on behalf of the Customer).
"Insurance Proceeds." With respect to an item of Equipment and a Lease
Contract, any amount received during the related Due Period pursuant to an
Insurance Policy issued with respect to such Equipment and the related Lease
Contract, net of any costs of collecting such amounts not otherwise reimbursed.
"Insurer." Any finance company or other insurer providing any Insurance
Policy.
"Issuer." Sunrise Funding Corporation I, a Minnesota corporation, until
a successor Person shall have become the Issuer pursuant to the applicable
provisions of this Indenture, and thereafter "Issuer" shall mean such successor
Person.
"Issuer Order" and "Issuer Request." A written order or request signed
in the name of the Issuer by its Chairman of the Board, President, or a Vice
President, and delivered to the Trustee.
"Lease Acquisition Consideration." The meaning specified in the
Contribution Agreement.
"Lease Asset Assignment." The Lease Asset Assignment and Assumption
Agreement entered into on the Closing Date in connection with the execution of
the Contribution Agreement.
"Lease Contract Files." The meaning specified in the Contribution
Agreement.
"Lease Contracts." The lease contracts (and all rights with respect
thereto, including all guaranties and other agreements or arrangements of
whatever character from time to time supporting or securing payment of any lease
contract and all rights with respect to any agreements or arrangements with the
vendors, dealers or manufacturers of the Equipment to the extent specifically
related to any lease contract) certain interests in which are acquired by the
Issuer from time to time pursuant to the Contribution Agreement and identified
on the Lease Schedule attached hereto as Schedule A, including Substitute Lease
Contracts and Subsequent Lease Contracts, and any amendments, riders and annexes
thereto; provided that, from and after the date on which a Lease Receivable
relating to a Lease Contract is purchased or substituted by the Issuer or the
Contributor in accordance with Section 4.03 hereof, such Lease Contract shall no
longer constitute a "Lease Contract" for purposes of the Transaction Documents.
"Lease Receivables." With respect to any Lease Contract, all of, and
the right to receive all of (i) the Scheduled Payments, (ii) any Guaranty
Amounts, (iii) any Insurance Proceeds, (iv) any Residual Proceeds and (v) any
Recoveries.
"Lease Schedule." The listing of Lease Contracts and Lease Receivables
on Schedule A hereto, which shall include with respect to each Lease Contract
listed on such schedule: (a) a number identifying such Lease Contract, (b) the
Implicit Principal Balance of the related Lease Receivable as of the related
Cut-Off Date, (c) the Customer, (d) the State of the Customer's billing address,
(e) the original and remaining term, (f) the Scheduled Payment and (g) the zip
code of the Customer's billing address, as such schedule may be amended upon any
purchase or substitution of Lease Contracts made in accordance with the terms of
the Transaction Documents.
"Lien." Any mortgage, deed of trust, pledge, hypothecation, assignment,
participation or equity interest, deposit arrangement, encumbrance, charge, lien
(statutory or other), preferences priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing.
"Lockbox Account." The meaning specified in the Servicing Agreement.
"Mode Change Date." The date on which the mode of the Notes changes
from a floating rate of interest to a fixed rate. Such date shall be specified
in a written notice from the Holders of a majority in principal amount of the
Notes Outstanding to the Issuer, the Servicer and the Trustee.
"Monthly Servicer's Report." The report prepared by the Servicer
pursuant to Section 4.01 of the Servicing Agreement.
"Moody's." Xxxxx'x Investors Service, Inc. and its successors in
interest.
"Note" or "Notes." The Lease Receivables-Backed Notes authenticated and
delivered under this Indenture.
"Noteholder" or "Holder." The Person in whose name a Note is registered
in the Note Register.
"Note Interest Rate." (i) Until the Mode Change Date, the sum of (a)
the Prime Rate and (b) 0.75% per annum, and (ii) after the Mode Change Date, a
fixed rate equal to the Note Interest Rate determined pursuant to clause (i) in
effect on the Mode Change Date.
"Note Register" and "Note Registrar." The respective meanings specified
in Section 3.04 hereof.
"Officer's Certificate." A certificate signed by the Chairman of the
Board, the President, a Vice President, the Treasurer, the Controller, an
Assistant Controller or the Secretary of the company on whose behalf the
certificate is delivered, and delivered to the Trustee, which certificate shall
comply with the applicable requirements of Section 13.12 hereof. Unless
otherwise specified, any reference in this Indenture to an Officer's Certificate
shall be to an Officer's Certificate of the Issuer.
"Opinion of Counsel." A written opinion of Independent counsel who may,
except as otherwise expressly provided in this Indenture, be counsel for the
Issuer and who shall be reasonably satisfactory to the Trustee and which opinion
shall comply with the applicable requirements of Section 13.12 hereof.
"Outstanding." With respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes for whose payment money in the necessary amount has
been theretofore irrevocably deposited with the Trustee or any Paying
Agent (other than the Issuer) in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or any
provision therefor, satisfactory to the Trustee, has been made); and
(iii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture,
unless proof satisfactory to the Trustee is presented that any such
Notes are held by a bona fide purchaser;
provided, however, that for purposes of determining whether the Holders of the
requisite principal amount of the Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Issuer or any other obligor upon such Notes, any Affiliate of the
Issuer or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent, or waiver, only such Notes which the Trustee knows to be so owned shall
be so disregarded.
"Overdue Payment." With respect to a Due Period and a Delinquent Lease
Contract, all payments due in a prior Due Period that the Servicer receives from
or on behalf of a Customer during such Due Period on such Delinquent Lease
Contract, including any Servicing Charges.
"Paying Agent." The Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 7.08 hereof and is
authorized by the Issuer pursuant to Section 11.15(o) hereof to pay the
principal of, or interest on, any Notes on behalf of the Issuer.
"Payment Date." The fifteenth day of each calendar month (or if such
day is not a Business Day, the next succeeding Business Day) commencing on the
Initial Payment Date.
"Person." Any individual, corporation, partnership, association,
joint-stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"Placement Agent." Xxxxxxxxx Xxxxxxx, Inc. and its successors in
interest.
"Pre-Funded Amount." $7,000,000.
"Pre-Funding Account." The trust account created and maintained
pursuant to Section 12.03 hereof.
"Prime Rate." The prime rate per annum of interest as announced by
First Bank National Association.
"Principal Distribution Amount." With respect to each Payment Date, (a)
for any Payment Date prior to the Stated Maturity, an amount equal to the
Available Cash and (b) on the Stated Maturity, an amount equal to the aggregate
principal amount of Outstanding Notes as of such date.
"Proceeding." Any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase and Substitution Limit." With respect to the Lease Contracts,
15% of the Aggregate Implicit Principal Balance.
"Purchase Price." With respect to any Lease Contract or interest
therein for which payment has been made in order to repurchase or have released
from the lien of the Trustee, pursuant to Section 3.03 of the Contribution
Agreement, Section 4.03(d) hereof or Section 3.10 of the Servicing Agreement,
the sum of (i) the Implicit Principal Balance as of the Calculation Date
immediately succeeding the date on which such Lease Contract is repurchased and
(ii) any Scheduled Payments with respect to the Lease Contract due on or prior
to such Calculation Date, but not received through such date.
"Record Date." The close of business on the last day of the month
preceding the applicable Payment Date, whether or not a Business Day, except
with respect to the Initial Payment Date for the Notes, the Record Date shall be
the Delivery Date.
"Recoveries." For any Due Period occurring during or after the date on
which any Lease Contract becomes a Defaulted Lease Contract and with respect to
such Defaulted Lease Contract, all payments that the Servicer received from or
on behalf of a Customer during such Due Period in respect of such Defaulted
Lease Contract or from liquidation or re-leasing of the related Equipment,
including but not limited to Scheduled Payments, Overdue Payments, Guaranty
Amounts, and Insurance Proceeds, as reduced by (i) any unreimbursed Servicer
Advances with respect to such Lease Contract and (ii) any reasonably incurred
out-of-pocket expenses incurred by the Servicer in enforcing such Defaulted
Lease Contract.
"Redemption Date." A date fixed pursuant to Section 10.01 hereof.
"Redemption Price." With respect to any Note, and as of any Redemption
Date, the Outstanding principal amount of such Note, together with interest
accrued thereon through the Redemption Date at the related Note Interest Rate
(exclusive of installments of interest and principal maturing on or prior to the
Redemption Date, payment of which shall have been made or duly provided for to
the Holder of such Note on the applicable Record Date or as otherwise provided
in this Indenture).
"Redemption Record Date." With respect to any redemption of any Note, a
date fixed pursuant to Section 10.01 hereof.
"Registered Holder." The Person whose name appears on the Note Register
on the applicable Record Date or Redemption Record Date.
"Reinvestment Income." Any interest or other earnings earned on all or
part of the Trust Estate.
"Residual Proceeds." With respect to a Lease Contract that is not a
Defaulted Lease Contract and the related Equipment, the net proceeds (including
Insurance Proceeds) of any sale, re-lease (including any lease renewal) or other
disposition of such Equipment.
"Responsible Officer." When used with respect to the Trustee, any
officer assigned to the Corporate Trust Department (or any successor thereto),
including any Vice President, Assistant Vice President, Trust Officer, Assistant
Secretary or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Indenture, and also, with
respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Sale." The meaning specified in Section 6.18 hereof.
"Scheduled Payment." With respect to a Payment Date and a Lease
Contract, the sum of the periodic payment (exclusive of any amounts in respect
of taxes) set forth in such Lease Contract due from the Customer in the related
Due Period, calculated without regard to any modification granted pursuant to
Section 3.01(b)(v) of the Servicing Agreement.
"Scheduled Payment Date": With respect to any Lease Contract, the date
payments are due from the lessee thereunder.
"Servicer." Initially, Sunrise Leasing Corporation, and any successor
Servicer appointed pursuant to Section 6.02 of the Servicing Agreement.
"Servicer Advance." The meaning set forth in Section 3.04 of the
Servicing Agreement.
"Servicer Fee." $10.00 per Lease Contract per Scheduled Payment, the
amount payable to the Servicer as the Servicer Fee on each Payment Date.
"Servicing Agreement." The Servicing Agreement, dated as of November 1,
1996, by and among the Issuer, the Servicer and the Trustee, as amended or
supplemented from time to time.
"Servicing Charges." The sum of (i) all late payment charges paid by
Customers on Delinquent Lease Contracts after payment in full of any Scheduled
Payments due in a prior Due Period and Scheduled Payments for the related Due
Period and (ii) any other incidental charges or fees received from a Customer,
including, but not limited to, late fees, collection fees and bounced check
charges.
"Servicing Officers." The meaning set forth in the Servicing Agreement.
"S & P." Standard & Poor's Ratings Group, a division of The XxXxxx-Xxxx
Companies, Inc., a corporation organized and existing under the laws of the
State of Delaware, and its successors in interest.
"State." Any state of the United States of America and, in addition,
the District of Columbia and Puerto Rico.
"Stated Maturity." January 1, 2000.
"Subsequent Cut-Off Date." The Cut-Off Date specified in the Subsequent
Lease Assignment Agreement.
"Subsequent Lease Assignment Agreement." The Subsequent Lease Asset
Assignment and Assumption Agreement, pursuant to which the Contributor will
transfer the Subsequent Lease Contracts and related assets to the Issuer on the
Subsequent Transfer Date.
"Subsequent Lease Contract." A Lease Contract transferred to the Issuer
on the Subsequent Transfer Date.
"Subsequent Lease Receivable." The Lease Receivable relating to a
Subsequent Lease Contract.
"Subsequent Transfer Date." The date, if any, during the Funding Period
on which the Contributor transfers additional Lease Contracts, Lease Receivables
and the related Equipment to the Issuer for pledge to the Trustee pursuant to
the Transaction Documents.
"Substitute Lease Contract." The meaning specified in the Contribution
Agreement.
"Transaction Documents." This Indenture, the Servicing Agreement, the
Contribution Agreement and the Notes.
"Trigger Event." Any of the following events as of any Determination
Date: (1) the sum of the Scheduled Payments which were not received by the
Servicer within 60 days of when due and which remain unpaid as of the related
Calculation Date divided by the sum of the Scheduled Payments due during the
related Due Period exceeds 9.0%; (2) the aggregate of the Implicit Principal
Balances of the Lease Contracts which are Defaulted Contracts as of the related
Calculation Date divided by the Aggregate Implicit Principal Balance as of the
related Calculation Date exceeds 3.0%; (3) there occurs a Servicer Event of
Default pursuant to Section 6.01(a)(vii) or (viii) of the Servicing Agreement;
(4) the net worth of the Servicer as of its latest audited or unaudited
financial statements shall be less than $10 million; or (5) the aggregate
Residual Proceeds received by the Servicer from the Closing Date through the
related Calculation Date divided by the aggregate Calculated Residual for each
item of Equipment for which the Servicer has received Residual Proceeds is less
than 110%.
"Trustee." Norwest Bank Minnesota, National Association, until a
successor Person shall have become the Trustee pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall mean such successor
Person.
"Trust Estate." The meaning specified in the Granting Clause of this
Indenture.
"Trustee Fee." The fee payable on each Payment Date to the Trustee in
consideration for the Trustee's performance of its duties pursuant to this
Indenture as Trustee, in an amount equal to the product of one-twelfth of the
Trustee Fee Rate and on any Payment Date, the aggregate principal amount of
Outstanding Notes on the preceding Payment Date after giving effect to
distributions on such date (or, in the case of the Initial Payment Date, the
initial aggregate principal amount of the Notes).
"Trustee Fee Rate." $12,000 per annum.
"UCC." The Uniform Commercial Code as it may from time to time be in
effect in the applicable State.
"Vendor Agreements." The agreements relating to the Equipment between
the manufacturer of the Equipment and the Contributor or one of its Affiliates,
together with all amendments and supplements thereto.
"Vice President." With respect to the Issuer or the Trustee, any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."
Article Two
Note Form
Section 2.01. Forms. The Notes together with the certificate of
authentication shall be in substantially the forms set forth in Exhibit D
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of such Notes.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any manner acceptable to the Trustee and the
initial purchasers of the Notes, all as determined by the officers executing
such Notes, as evidenced by their execution of such Notes.
Article Three
The Notes
Section 3.01. Denomination. The aggregate principal amount of Notes
which may be authenticated and delivered under this Indenture is limited to an
aggregate principal amount of $20,000,000 (except for Notes authenticated and
delivered upon registration of transfer or in exchange for or in lieu of, other
Notes pursuant to Sections 3.03, 3.04, 3.06 or 9.05 hereof). The Notes shall be
issuable only as registered Notes without coupons in the denominations of
$100,000 and any integral multiple of $1,000 in excess thereof; provided,
however, that, the foregoing shall not restrict or prevent the transfer in
accordance with Sections 3.04 and 3.05 hereof of any Note with a remaining
outstanding principal amount of less than $100,000.
Section 3.02. Execution, Authentication, Delivery and Dating. The Notes
shall be executed on behalf of the Issuer by its President or one of its Vice
Presidents under its corporate seal imprinted (if it has one) or otherwise
reproduced thereon. The signature of these officers on the Notes must be manual.
Notes bearing the manual signatures of individuals who were at any time
the proper officers of the Issuer shall bind the Issuer, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to the
authentication or delivery of such Notes or did not hold offices at the date of
authentication or delivery of such Notes.
Each Note shall bear on its face the Delivery Date and be dated as of
the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or by any Authenticating Agent by the manual signature
of one of its authorized officers, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
Section 3.03. Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute, and upon Issuer Order, the Trustee shall
authenticate and deliver, temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 11.02(n) hereof, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Notes, the Issuer
shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more definitive Notes of any authorized denominations and of a
like initial aggregate principal amount and Stated Maturity. Until so exchanged,
the temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes.
Section 3.04. Registration, Registration of Transfer and Exchange. (a)
The Issuer shall cause to be kept initially at the Corporate Trust Office of the
Trustee a register (the "Note Register"), in which, subject to such reasonable
regulations as it may prescribe, the Issuer shall provide for the registration
of Notes and the registration of transfers of Notes. Norwest Bank Minnesota,
National Association, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx
00000-0000, is hereby appointed "Note Registrar" for the purpose of registering
Notes and transfers of Notes as herein provided. The Trustee shall have the
right to rely conclusively upon a certificate of the Note Registrar as to the
names and addresses of the holders of the Notes and the principal amounts and
numbers of such Notes as held. Upon request of any Holder, the Trustee shall, to
the extent it may lawfully do so, furnish such Holder with a list of the names
and addresses of all Holders entered on the Note Register indicating the
principal amount and serial number, if any, of each Note held by each Holder.
(b) Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 11.02(n)
hereof and subject to the conditions set forth in Section 3.05 hereof, the
Issuer shall execute, and the Trustee or its agent shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes of any authorized denominations, and of a like aggregate principal
amount and Stated Maturity.
(c) At the option of the Holder, Notes may be exchanged for other Notes
of any authorized denominations and of a like aggregate principal amount and
Stated Maturity, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, the Issuer shall
execute, and the Trustee or its agent shall authenticate and deliver, the Notes
which the Noteholder making the exchange is entitled to receive.
(d) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of such transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Issuer or the Note Registrar) be duly
endorsed or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Note Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 3.03 or 9.05 hereof not involving any registration
of transfer.
Notwithstanding anything else to the contrary contained in this
Indenture, the obligation of the Issuer to pay the principal of and interest on
the Notes is not a general obligation of the Issuer, but is limited solely to
the Collateral pledged under this Indenture.
Section 3.05. Limitation on Transfer and Exchange. The Notes will not
be registered or qualified under the Securities Act of 1933, as amended (the
"1933 Act"), or the securities laws of any State. No transfer of any Note shall
be made unless that transfer is made in a transaction which does not require
registration or qualification under the 1933 Act or under applicable State
securities laws. In the event that a transfer is to be made without registration
or qualification, such Noteholder's prospective transferee shall either (i)
deliver to the Trustee an investment letter substantially in the form set forth
on Exhibit A hereto (the "Investment Letter") or (ii) deliver to the Trustee an
opinion of counsel that the transfer is exempt from the 1933 Act and will not
result in the Issuer being required to register as an "investment company" under
the Investment Company Act of 1940, as amended. Neither the Issuer nor the
Trustee is obligated to register or qualify the Notes under the 1933 Act or any
other securities law.
No transfer or exchange of any Note shall be made if, after such
transfer, there would be more than 100 beneficial owners (within the meaning of
the Investment Company Act of 1940, as amended) of (i) the Notes, (ii) the
membership interests and (iii) all other securities of the Issuer. For purposes
of determining whether after a transfer of a Note there would be more than 100
beneficial owners of the securities of the Issuer for purposes of the Investment
Company Act of 1940, as amended, the Trustee shall rely upon the representations
of each Holder contained in the Investment Letter and upon information provided
by the Issuer to the Trustee. At the request of the Trustee, the Issuer shall
promptly provide the Trustee with the number of beneficial owners of all
securities of the Company (except, so long as the Trustee is the Note Registrar,
the Notes); provided, however, that in determining the number of such beneficial
owners, the Issuer may rely upon the representations of such beneficial owners
contained in any letter delivered to the Issuer in connection with each such
beneficial owner's acquisition of such security. The Issuer shall deliver any
such letter to the Trustee.
The Trustee shall have no liability to the Trust Estate or any
Noteholder arising from a transfer of any such Note in reliance upon a
certification described in this Section 3.05.
Section 3.06. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Note Registrar, or the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, and
(ii) there is delivered to the Trustee such security or indemnity as may be
required by the Trustee to save the Issuer and the Trustee or any agent of any
of them harmless, then, in the absence of notice to the Issuer or the Note
Registrar that such Note has been acquired by a bona fide purchaser, the Issuer
shall execute and, upon its request, the Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a new Note of the same tenor, initial principal amount and Stated
Maturity, bearing a number not contemporaneously outstanding. If after the
delivery of such new Note, a bona fide purchaser of the original Note in lieu of
which such new Note was issued presents for payment such original Note, the
Issuer and the Trustee shall be entitled to recover such new Note from the
person to whom it was delivered or any person taking therefrom, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expenses incurred
by the Issuer or the Trustee or any agent of any of them in connection
therewith. If any such mutilated, destroyed, lost or stolen Note shall have
become or shall be about to become due and payable, or shall have become subject
to redemption in full, instead of issuing a new Note, the Issuer may pay such
Note without surrender thereof, except that any mutilated Note shall be
surrendered.
Upon the issuance of any new Note under this Section 3.06, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 3.06, in lieu of any
destroyed, lost or stolen Note, shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section 3.06 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
'Section 3.07. Payment of Principal and Interest; Principal and
Interest Rights Preserved'. (a) The Notes shall bear interest on the unpaid
principal amount thereof from and including the Closing Date at the applicable
Note Interest Rate (calculated on the basis of a 360-day year and the actual
number of days elapsed when the Note Interest Rate is a floating rate, and
calculated on the basis of a 360-day year consisting of 12 months of 30 days
each when the Note Interest Rate is a fixed rate) through the day immediately
preceding the Initial Payment Date and thereafter, monthly from and including
the most recent Payment Date through and including the day immediately preceding
the next Payment Date, and (to the extent that the payment of such interest
shall be legally enforceable) on any overdue installment of interest from the
date such interest became due and payable (giving effect to any applicable grace
periods provided herein) until fully paid. Interest shall be due and payable in
arrears on each Payment Date, with each payment of interest calculated as
described above on the unpaid principal amount of the Outstanding Notes on the
immediately preceding Payment Date (after the distributions on the Notes on such
date) or, with respect to interest payable on the Initial Payment Date, on the
principal amount of the Outstanding Notes on the Delivery Date; provided,
however, that in making any interest payment, if the interest calculation with
respect to any Note shall result in a portion of such payment being less than
$.01, then such payment shall be decreased to the nearest whole cent, and no
subsequent adjustment shall be made in respect thereof.
(b) The principal of each Note shall be payable in installments ending
no later than the Stated Maturity unless such Note becomes due and payable at an
earlier date by declaration of acceleration, call for redemption or otherwise.
All reductions in the principal amount of any Note effected by payments of
installments of principal made on any Payment Date shall be binding upon all
future Holders of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, whether or not such
payment is noted on such Note. Each installment of principal payable on the
Notes shall be in an amount equal to the Principal Distribution Amount. The
principal payable on the Notes shall be paid on each Payment Date beginning on
the Initial Payment Date and ending on the Final Payment Date for the Notes on a
pro rata basis based upon the face amount of each Note; provided, however, that
if as a result of such proration a portion of such principal would be less than
$.01, then such payment shall be decreased to the nearest whole cent, and such
portion shall be applied to the next succeeding principal payment.
(c) The principal of and interest on the Notes are payable by check
mailed by first-class mail to the Person whose name appears as the Registered
Holder of such Note on the Note Register at the address of such Person as it
appears on the Note Register or, if requested by such Registered Holder who
holds Notes in an aggregate principal amount greater than $500,000, by wire
transfer in immediately available funds to the account specified in writing to
the Trustee by such Registered Holder at least five Business Days prior to the
Record Date for the Payment Date on which wire transfers will commence, in such
coin or currency of the United States of America as at the time of payment is
legal tender for the payment of public and private debts. Except as set forth in
the final sentence of this Section 3.07(c), all payments on the Notes shall be
paid without any requirement of presentment. The Issuer shall notify the Trustee
at the close of business on the Record Date next preceding the Payment Date on
which the Issuer expects that the final installment of principal of such Note
will be paid that the Issuer expects that such final installment will be paid on
such Payment Date. In addition, the Issuer shall specify the place or places
where any Note may be presented and surrendered for final payment. Notice of
final payment on any Note shall be mailed by the Trustee to the Holder of such
Note in accordance with Section 12.05(a) hereof. Funds representing any such
checks returned undeliverable shall be held in accordance with Section 11.02(o).
Each Noteholder shall surrender its Note to the Trustee prior to payment of the
final installment of principal of such Note.
Section 3.08. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Trustee and any agent of
the Issuer or the Trustee shall treat the Person in whose name any Note is
registered as the owner of such Note for the purpose of receiving payments of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Issuer, the Trustee nor any
agent of the Issuer or the Trustee shall be affected by notice to the contrary.
Section 3.09. Cancellation. All Notes surrendered to the Trustee for
payment, registration of transfer or exchange (including Notes surrendered to
any Person other than the Trustee which shall be delivered to the Trustee) shall
be promptly cancelled by the Trustee. No Notes shall be authenticated in lieu of
or in exchange for any Notes cancelled as provided in this Section 3.09, except
as expressly permitted by this Indenture. All cancelled Notes held by the
Trustee shall be disposed of by the Trustee as is customary with its standard
practice, and the Trustee shall so certify such disposal to the Issuer.
Article Four
Original Issuance of Notes; Substitutions of Collateral
Section 4.01. Conditions to Original Issuance of Notes. (a) The Trustee
shall, upon receipt of, and in accordance with, an Issuer Order and upon the
satisfaction of the conditions set forth below, authenticate and deliver the
Notes on the Delivery Date. The Outstanding Notes shall be equally and ratably
entitled, with all other Notes as provided herein, to the benefits of this
Indenture without preference, priority or distinction, all in accordance with
the terms and provisions of this Indenture.
(b) The obligation of the Trustee to authenticate, execute and deliver
the Notes is subject to the satisfaction of the following conditions:
(i) the Issuer shall have executed the Notes to be
authenticated and delivered on the Delivery Date and shall have
delivered such Notes to the Trustee on or prior to the Delivery Date;
(ii) the Issuer shall have delivered to the Trustee (A) on or
prior to the Delivery Date the original executed counterpart of each
Lease Contract constituting "chattel paper" for purposes of Sections
9-105(1)(b), 9-305 and 9-308 of the UCC identified in the Lease
Schedule on the Closing Date; and (B) the Lease Contract File relating
to such Lease Contract;
(iii) the Issuer and the Servicer shall have delivered to the
Trustee on or prior to the Delivery Date an Officer's Certificate dated
as of the Delivery Date of each of the Issuer and the Servicer,
stating, as applicable, that (A) such Person is not in Default under
this Indenture or the Servicing Agreement and that the issuance of the
Notes will not result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, such Person's certificate
of incorporation, by-laws or other organizational documents, as
applicable, or any material indenture, mortgage, deed of trust or other
agreement or instrument to which such Person is a party or by which it
is bound, or any order of any court or administrative agency entered in
any proceeding to which such Person is a party or by which it may be
bound or to which it may be subject; and (B) that all conditions
precedent provided in this Indenture relating to the authentication and
delivery of the Notes have been complied with;
(iv) each of the Issuer and the Servicer shall have delivered
to the Trustee on or prior to the Delivery Date a Board Resolution of
its board of directors authorizing, as applicable, the execution,
delivery and performance of this Indenture and the other Transaction
Documents and the transactions contemplated hereby and thereby,
certified by an officer of the Issuer or the Servicer, as applicable;
(v) each of the Issuer and the Servicer shall have delivered
to the Trustee on or prior to the Delivery Date a copy of an officially
certified document, dated not more than 30 days prior to the Delivery
Date, evidencing its due organization and good standing;
(vi) each of the Issuer and the Servicer shall have delivered
to the Trustee on or prior to the Delivery Date copies of its charter
and by-laws certified by its Secretary or an Assistant Secretary;
(vii) the Servicer shall have delivered to the Trustee on or
prior to the Delivery Date a certificate listing the Servicing Officers
of the Servicer as of the Delivery Date; and
(viii) the Issuer shall have delivered to the Trustee on or
prior to the Delivery Date an executed copy of the Servicing Agreement
and the Contribution Agreement and all amendments and supplements
thereto.
Section 4.02. Security for Notes. (a) Filing. The Issuer shall deliver
to the Trustee, within 10 days of the Delivery Date, evidence of filing with the
Secretary of State of the State of the Issuer's chief executive office of UCC-1
financing statements executed by the Issuer, as debtor, and naming the Trustee
for the benefit of the Noteholders as secured party, and the Trust Estate as
collateral. From time to time, the Servicer shall, at its own expense, take or
cause to be taken such actions and execute such documents as are necessary to
perfect and protect the Trustee's interests in the Lease Contracts, the Lease
Receivables and the Equipment against all other Persons, including, without
limitation, the filing of financing statements, amendments thereto and
continuation statements, the execution of transfer instruments and the making of
notations on or taking possession of all records or documents of title.
(b) Name Change or Relocation. If any change in the Issuer's name,
identity, structure or the location of its principal place of business or chief
executive office occurs, then the Issuer shall deliver 30 days' prior written
notice of such change or relocation to the Servicer and the Trustee and no later
than the effective date of such change or relocation, the Servicer shall file
such amendments or statements as may be required to preserve and protect the
Trustee's interests in the Trust Estate.
(c) Chief Executive Office. During the term of this Indenture, the
Issuer will maintain its chief executive office and principal place of business
in one of the States of the United States.
(d) Costs and Expense. The Servicer agrees to pay all reasonable costs
and disbursements in connection with the perfection and the maintenance of
perfection, as against all third parties, of the Trustee's right, title and
interest in and to the Trust Estate.
Section 4.03 Substitution and Purchase of Lease Receivables. (a) If at
any time the Issuer or the Trustee obtains knowledge (within the meaning of
7.01(e) hereof), discovers or is notified by the Servicer that any of the
representations and warranties of the Contributor in the Contribution Agreement
were incorrect at the time as of which such representations and warranties were
made, then the Person discovering such defect, omission, or circumstance shall
promptly notify the other parties to this Indenture.
(b) In the event any representation or warranty of the Contributor in
the Contribution Agreement is incorrect and materially and adversely affects the
value of a Lease Contract, the related Lease Receivable or the related
Equipment, or the interests of the Holders of the Notes, or in the event of any
breach of any of the representations and warranties set forth in Sections
3.01(a)(ii), 3.01(a)(v), 3.01(a)(vii) or 3.01(a)(xviii) of the Contribution
Agreement, then the Issuer shall require the Contributor pursuant to the
Contribution Agreement to eliminate or otherwise cure the circumstance or
condition which has caused such representation or warranty to be incorrect
within 30 days of discovery or notice thereof. If the Contributor fails or is
unable to cure such circumstance or condition in accordance with the
Contribution Agreement then the Issuer shall require the Contributor to
substitute or purchase pursuant to the Contribution Agreement any Lease
Receivable related to any Lease Contract as to which such representation or
warranty is incorrect within the time specified in Section 3.03 of the
Contribution Agreement. The proceeds of a purchase shall be remitted by the
Issuer to the Servicer for deposit by the Servicer in the Collection Account
pursuant to Section 3.03(a) of the Contribution Agreement.
(c) If a Responsible Officer of the Trustee receives written notice of,
or to the extent a Responsible Officer of the Trustee has actual knowledge of,
any failure of the Issuer to enforce the purchase or substitution obligation of
the Contributor under the Contribution Agreement, the Trustee shall so notify
each Noteholder. The Trustee shall be responsible for enforcing such obligation
of the Contributor if so directed by a majority in principal balance of the
Noteholders.
(d) With respect to (i) any Lease Contract to be prepaid or terminated
early pursuant to Section 3.10 of the Servicing Agreement and (ii) any Defaulted
Lease Contract or Delinquent Lease Contract, the Issuer shall be entitled to
purchase the Lease Receivable related to such Lease Contract or to deliver a
Substitute Lease Receivable meeting the same requirements as those specified in
Section 3.04 of the Contribution Agreement for substitutions and purchases by
the Contributor upon breaches of a representation or warranty by the Contributor
thereunder; provided, however, that the sum of (A) the cumulative Implicit
Principal Balance of prepaid or early terminated Lease Contracts which are
substituted by the Issuer (measured as of the date of substitution) and (B) the
cumulative Implicit Principal Balance of Defaulted Lease Contracts and
Delinquent Lease Contracts which are purchased or substituted by the Issuer
(measured as of the date of substitution) shall not exceed the Purchase and
Substitution Limit.
(e) The Issuer shall provide to the Trustee, or with respect to item
(ii) below the Trustee, on the date of delivery of any Substitute Lease Contract
the items listed in (i) and (ii) below and, at the end of each calendar quarter,
the items listed in (iii) below with respect to any Substitute Lease Contracts
substituted during such period:
(i) a supplement to the Contribution Agreement substantially
in the form of Annex A to the Contribution Agreement and Exhibit B
hereto, subjecting such Substitute Lease Contract to the provisions
thereof and hereof and providing with respect to such Substitute Lease
Contract the information set forth in the Lease Schedule;
(ii) the original executed counterpart of the Lease Contract
and the Lease Contract File relating to such Substitute Lease Contract;
and
(iii) evidence that UCC financing statements have been filed
with respect to such Substitute Lease Contract in accordance with
Section 4.02 hereof.
Section 4.04. Releases. (a) The Issuer shall be entitled to obtain a
release from the lien of this Indenture for any Lease Contract, the related
Lease Receivable and the related Equipment at any time (i) after a payment by
the Contributor or the Issuer of the Purchase Price of the Lease Receivable,
(ii) after a Substitute Lease Contract is substituted for such Lease Contract,
or (iii) upon the termination of a Lease Contract following the sale or other
disposition (but not a re-lease) of the related Equipment in accordance with
Section 3.01(b)(vii) of the Servicing Agreement, if the Issuer delivers to the
Trustee an Officer's Certificate (A) identifying the Lease Receivable and the
related Lease Contract and Equipment to be released, (B) requesting the release
thereof, (C) setting forth the amount deposited in the Collection Account with
respect thereto, in the event a Lease Contract, the related Lease Receivable and
the related Equipment are being released from the lien of this Indenture
pursuant to (i) or (iii) above, and (D) certifying that the amount deposited in
the Collection Account equals (x) the Purchase Price of the Lease Receivable
related to such Lease Contract, in the event a Lease Contract, the related Lease
Receivable and the related Equipment are being released from the lien of this
Indenture pursuant to (i) above or (y) in the event of a release from the lien
of this Indenture pursuant to (iii) above, the entire amount of Recoveries or
Residual Proceeds received with respect to such Lease Contract, the related
Lease Receivable and related Equipment; provided, however, that upon the
termination of a Lease Contract, any residual proceeds from the related
Equipment shall be placed in the Collection Account prior to the Trustee or the
Issuer releasing the Equipment from the security interest granted to the Trustee
by the Issuer pursuant to this Indenture or to the Issuer by the Contributor
pursuant to the Contribution Agreement.
(b) Upon satisfaction of the conditions specified in subsection (a)
above or upon satisfaction of the Issuer's obligations under Section 4.03 hereof
with respect to a Lease Contract, the Trustee shall release from the lien of
this Indenture the Lease Contract, the related Lease Receivable and the related
Equipment described in the Issuer's request for release and shall deliver, to or
upon the order of the Issuer, such Lease Contract and the related Lease Contract
File.
Section 4.05. Trust Estate. The Trustee may, and when required by the
provisions of Articles Four, Six and Twelve hereof shall, execute instruments to
release property from the lien of this Indenture, or convey the Trustee's
interest in the same, in a manner and under circumstances which are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Trustee as provided in this Article Four shall be
bound to ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any monies.
Section 4.06. Notice of Release. The Trustee shall be entitled to
receive at least 10 days' notice of any action to be taken pursuant to Section
4.04(a) hereof, accompanied by copies of any instruments involved.
Section 4.07. Opinions as to Trust Estate. On the Closing Date, the
Issuer shall furnish to the Trustee an Opinion of Counsel either stating that,
in the opinion of such counsel, such action has been taken with respect to the
recording and filing of this Indenture, any indentures supplemental hereto, and
any other requisite documents, and with respect to the execution and filing of
any UCC financing statements and continuation statements, as are necessary to
perfect and make effective the first priority lien and security interest in
favor of the Trustee, for the benefit of the Noteholders, created by this
Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
Article Five
Satisfaction and Discharge
Section 5.01. Satisfaction and Discharge of Indenture. (a) Following
payment in full of (i) the Notes, (ii) the fees and charges of the Trustee and
(iii) all other obligations of the Issuer under this Indenture, and the release
by the Trustee of the Trust Estate in accordance with Section 5.01(b) hereof,
this Indenture shall be discharged.
(b) In connection with the discharge of this Indenture and the release
of the Trust Estate, the Trustee shall release from the lien of this Indenture
and shall deliver, to or upon the order of the Issuer all property remaining in
the Trust Estate and shall execute and file, at the expense of the Issuer, UCC
financing statements evidencing such discharge and release.
Section 5.02. Application of Trust Money. Subject to the last paragraph
of Section 11.02(o) hereof, all monies deposited with the Trustee pursuant to
Section 5.01 hereof shall be held in trust and applied by the Trustee, in
accordance with the provisions of the Notes and this Indenture, to the payment,
either directly or through any Paying Agent as the Trustee may determine, to the
Persons entitled thereto, of the principal and interest for whose payment such
money has been deposited with the Trustee; but such money need not be segregated
from other funds except to the extent required herein or to the extent required
by law.
Article Six
Defaults and Remedies
Section 6.01. Events of Default. "Event of Default" wherever used
herein means any one of the following events:
(1) default in the payment of any interest upon any Note that
continues for two Business Days after the same becomes due and payable;
or
(2) default in the payment of any principal of any Note that continues
for two Business Days after the same becomes due and payable; or
(3) default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture or the Servicing
Agreement (other than a covenant or warranty default, the observance or
performance of which is elsewhere in this Section 6.01 specifically
dealt with), or any representation or warranty of the Issuer made in
this Indenture, the Servicing Agreement or in any certificate or other
writing delivered pursuant hereto or thereto or in connection herewith
or therewith proving to have been incorrect in any material respect as
of the time when the same shall have been made and such default shall
continue or not be cured, or the circumstance or condition in respect
of which such representation or warranty was incorrect shall not have
been eliminated or otherwise cured, for a period of 30 days after
(except for defaults relating to Sections 4.03 and 11.02(a), (b), (l),
(q) and (s) hereof, which shall have no additional grace period) there
shall have been given, by registered or certified mail, to the Issuer
by the Trustee or to the Issuer and the Trustee by the Holders of at
least 25% of the aggregate principal amount of the Outstanding Notes, a
written notice specifying such default or incorrect representation or
warranty and requiring it to be remedied; or
(4) the Issuer becomes subject to registration as an
"investment company" under the Investment Company Act of 1940, as
amended; or
(5) the filing of a petition or the entry of a decree or order
for relief by a court having jurisdiction in the premises in respect of
the Issuer under the federal Bankruptcy Code or any other applicable
federal or State bankruptcy, insolvency, reorganization, liquidation or
other similar law now or hereafter in effect or any arrangement with
creditors or appointing a receiver, liquidator, assignee, trustee, or
sequestrator (or other similar official) for the Issuer or for any
substantial part of its property in an involuntary case, or ordering
the winding up or liquidation of the Issuer's affairs, and the
continuance of any such petition undismissed or of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
(6) the institution by the Issuer of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by the Issuer to
the institution of bankruptcy or insolvency proceedings against the
Issuer, or the filing by the Issuer of a petition or answer or consent
seeking reorganization or relief under the federal Bankruptcy Code or
any other applicable federal or State bankruptcy, insolvency,
reorganization, liquidation or other similar law now or hereafter in
effect, or the consent by the Issuer to the filing of any such petition
or to the appointment of or possession by a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or other similar
official) of the Issuer or of any substantial part of the Issuer's
property, or the making by the Issuer of any assignment for the benefit
of creditors, or the admission by it in writing of its inability, or
the failure by it generally, to pay its debts as they become due, or
the taking of corporate action by the Issuer in furtherance of any such
action; or
(7) the impairment of the validity of any security interest of
the Trustee in the Trust Estate, except as expressly permitted, or
creation of any encumbrance not otherwise permitted which is not
released within 60 days of its creation.
Section 6.02. Acceleration of Maturity; Rescission and Annulment'. If
an Event of Default with respect to the Notes at the time Outstanding occurs and
is continuing, then the Trustee may, and in every such case, at the direction of
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Notes, the Trustee shall, declare the principal of all the Notes to
be immediately due and payable, by notice given in writing to the Issuer (and to
the Trustee if given by Noteholders), and upon any such declaration, such
principal shall become immediately due and payable without any presentment,
demand, protest or other notice of any kind (except such notices as shall be
expressly required by the provisions of this Indenture), all of which are hereby
expressly waived.
At any time after such a declaration of acceleration has been made, but
before any Sale of the Trust Estate has been made or a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of not less than 66-2/3% in aggregate principal
amount of the Outstanding Notes, by written notice to the Issuer and the
Trustee, may rescind and annul such declaration and its consequences (except
that in the case of a payment default on the Notes, the consent of all the
Noteholders shall be required to rescind and annul such a declaration and its
consequences) if:
(1) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all
Notes,
(B) the principal of any Notes which has become due
otherwise than by such declaration of acceleration and
interest thereon at the rate borne by such Notes from the time
such principal first became due until the date when paid, and
(C) all sums paid or advanced, together with interest
thereon, by the Trustee or any Noteholder hereunder and the
reasonable compensation, expenses, disbursements and advances
of the Trustee and the Noteholders, their agents and counsel
incurred in connection with the enforcement of this Indenture
to the date of such payment or deposit; and
(2) all Events of Default, other than the nonpayment of the
principal of the Notes which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 6.15
hereof.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 6.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Issuer covenants that if an Event of Default shall occur and be
continuing and the Notes have been declared due and payable and such declaration
has not been rescinded and annulled, the Issuer will, upon demand of the
Trustee, pay to the Trustee, for the benefit of the Holders of the Notes, the
whole amount then due and payable on the Notes for principal and interest, with
interest upon the overdue principal at the rate borne by the Notes and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Issuer fails to pay such amount forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust may, institute
Proceedings for the collection of the sums so due and unpaid, and prosecute such
Proceeding to judgment or final decree, and enforce the same against the Issuer
and collect the monies adjudged or decreed to be payable in the manner provided
by law out of the property of the Issuer, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate Proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
Section 6.04. Remedies. If an Event of Default shall have occurred and
be continuing, the Trustee may do one or more of the following:
(a) institute Proceedings for the collection of all amounts
then due and payable on the Notes or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer the monies adjudged due;
(b) take possession of and sell the Trust Estate securing the
Notes or any portion thereof or rights or interest therein, at one or
more Sales called and conducted in any manner permitted by law;
(c) institute any Proceedings from time to time for the
complete or partial foreclosure of the lien created by this Indenture
with respect to the Trust Estate securing the Notes;
(d) during the continuance of a default under a Lease
Contract, exercise any of the rights of the lessor under such Lease
Contract; and
(e) exercise any remedies of a secured party under the UCC or
any applicable law and take any other appropriate action to protect and
enforce the rights and remedies of the Trustee or the Holders of the
Notes hereunder;
provided, however, that without the consent of all the Holders of Outstanding
Notes, the Trustee may not sell or otherwise liquidate any portion of the Trust
Estate unless the proceeds of such Sale or liquidation distributable to the
Noteholders are sufficient to discharge in full the amounts then due and unpaid
upon the Notes for principal and interest.
Section 6.05. Optional Preservation of Trust Estate. If (i) an Event of
Default shall have occurred and be continuing with respect to the Notes and (ii)
no Notes have been declared due and payable, or such declaration and its
consequences have been annulled and rescinded, the Trustee may in its sole
discretion, if it determines it to be in the best interests of the Holders of
the Notes or upon request from the Holders of a majority in principal amount of
the Outstanding Notes, elect, by giving written notice of such election to the
Issuer, to take possession of and retain the Trust Estate securing the Notes
intact, collect or cause the collection of the proceeds thereof and make and
apply all payments and deposits and maintain all accounts in respect of such
Notes in accordance with the provisions of Article Twelve of this Indenture. If
the Trustee is unable to or is stayed from giving such notice to the Issuer for
any reason whatsoever, such election shall be effective as of the time of such
determination or request, as the case may be, notwithstanding any failure to
give such notice, and the Trustee shall give such notice upon the removal or
cure of such inability or stay (but shall have no obligation to effect such
removal or cure). Any such election may be rescinded with respect to any portion
of the Trust Estate securing the Notes remaining at the time of such rescission
by written notice to the Trustee and the Issuer from the Holders of a majority
in principal amount of the Outstanding Notes.
Section 6.06. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial Proceeding relating to
the Issuer or any other obligor upon any of the Notes or the property of the
Issuer or of such other obligor or their creditors, the Trustee (irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Issuer for the payment of overdue principal or
interest) shall be entitled and empowered to intervene in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of
the Notes issued hereunder and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 7.07 hereof) and of the
Noteholders allowed in such judicial Proceeding, and
(ii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such judicial Proceeding is hereby authorized by each
Noteholder to make such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Noteholder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Noteholder in any such Proceeding.
Section 6.07. Trustee May Enforce Claims Without Possession of Notes.
(a) In all Proceedings brought by the Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party), the Trustee shall be held to represent all of the
Noteholders, and it shall not be necessary to make any Noteholder a party to any
such Proceedings.
(b) All rights of actions and claims under this Indenture or the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Notes or the production thereof in any Proceeding relating thereto, and any
such Proceedings instituted by the Trustee shall be brought in its own name as
Trustee of an express trust, and any recovery whether by judgment, settlement or
otherwise shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the benefit of the Holders of the Notes and shall be distributed as set
forth in Section 6.08 hereof.
Section 6.08. Application of Money Collected. If the Notes have been
declared due and payable following an Event of Default and such declaration has
not been rescinded or annulled, any money collected by the Trustee with respect
to the Notes pursuant to this Article Six or otherwise and any other money that
may be held thereafter by the Trustee as security for the Notes shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal or interest, upon
presentation of the Notes and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
First: To the payment to the Trustee of the Trustee Fee then
due and to the Trustee its costs incurred in connection with enforcing
the remedies provided for in this Article Six;
Second: To the payment of (i) if Sunrise Leasing Corporation
or an Affiliate thereof is not the Servicer, all amounts due the
Servicer pursuant to Section 3.09 of the Servicing Agreement and
Section 12.02(d)(ii) hereof and (ii) the amount necessary to reimburse
the Servicer for any unrecovered Servicer Advances;
Third: To the payment of the amounts then due and unpaid upon
the Notes for interest, with interest (to the extent such interest has
been collected by the Trustee or a sum sufficient therefor has been so
collected and payment thereof is legally enforceable at the respective
rate or rates prescribed therefor in the Notes) on overdue principal,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for interest;
Fourth: To the payment of the remaining outstanding principal
balance of the Notes ratably without preference or priority of any
kind;
Fifth: To the payment to the Trustee of any other amounts due
to the Trustee as expressly provided herein and in the Servicing
Agreement;
Sixth: To reimburse the Noteholders for any costs or expenses
incurred in connection with any enforcement action with respect to this
Indenture or the Notes;
Seventh: To the payment of (i) if Sunrise Leasing Corporation
or an Affiliate thereof is the Servicer, all amounts due the Servicer
pursuant to Section 3.09 of the Servicing Agreement and Section
12.02(d)(ii) hereof and (ii) any other amounts due the Servicer as
expressly provided herein and in the Servicing Agreement;
Eighth: To the payment of any surplus to or at the written
direction of the Issuer or any other person legally entitled thereto.
Section 6.09. Limitation on Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 66-2/3% in principal amount
of the Outstanding Notes shall have made written request to the Trustee
to institute Proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of security or indemnity has failed to institute any
such Proceedings; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of
66-2/3% or more in principal amount of the Outstanding Notes; it being
understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights
of any other Holders of Notes, or to obtain or to seek to obtain
priority or preference over any other Holders of Notes or to enforce
any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all the Holders of Notes.
Section 6.10. Unconditional Right of Noteholders to Receive Principal
and Interest. Notwithstanding any other provision in this Indenture, the
Noteholders shall have the right, which is absolute and unconditional, to
receive payment of the principal and interest on such Note as such principal and
interest becomes due and payable, and to institute any Proceeding for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Noteholder.
Section 6.11. Restoration of Rights and Remedies. If the Trustee or any
Noteholder has instituted any Proceeding to enforce any right or remedy under
this Indenture and such Proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Noteholder,
then, and in every case, the Issuer, the Trustee and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
Section 6.12. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes in the last paragraph of Section 3.06 hereof, no right or
remedy herein conferred upon or reserved to the Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.13. Delay or Omission; Not Waiver. No delay or omission of
the Trustee or of any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or any acquiescence therein.
Every right and remedy given by this Article Six or by law to the Trustee or to
the Noteholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Noteholders, as the case may be.
Section 6.14. Control by Noteholders. The Holders of 66-2/3% in
principal amount of the Outstanding Notes, shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee; provided
that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture including, without limitation, any provision
hereof which expressly provides for greater percentage of principal of
Outstanding Notes;
(2) any direction to the Trustee by the Noteholders to
undertake a private Sale of the Trust Estate shall be by the Holders of
all Outstanding Notes, unless the condition set forth in Section
6.18(b)(ii) hereof is met;
(3) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; provided,
however, that, subject to Section 7.01 hereof, the Trustee need not
take any action which a Responsible Officer or Officers of the Trustee
in good faith determines might involve it in personal liability or be
unjustly prejudicial to the Noteholders not consenting; and
(4) the Trustee has been furnished reasonable indemnity
against costs, expenses and liabilities which it might incur in
connection therewith as provided in Section 7.01(f) hereof.
Section 6.15 Waiver of Past Defaults. The Holders of 66-2/3% in
principal amount of the Outstanding Notes may on behalf of the Holders of all
the Notes waive any past Default hereunder and its consequences, except a
Default:
(1) in the payment of the principal of, or premium, if any, or
interest on any Note, or a Default described in Sections 6.01(5) and
(6) hereof, or
(2) in respect of a covenant or provision hereof which under
Article Nine hereof cannot be modified or amended without the consent
of the Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 6.16. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 6.16 shall not apply to
any suit instituted by the Trustee, or to any suit instituted by any Noteholder
or group of Noteholders, holding in the aggregate more than 50% in principal
amount of the Outstanding Notes, or to any suit instituted by any Noteholder for
the enforcement of the payment of the principal of or interest on any Note on or
after the Stated Maturity.
Section 6.17. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not, at any time, insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
Section 6.18. Sale of Trust Estate. (a) The power to effect any sale (a
"Sale") of any portion of the Trust Estate pursuant to Section 6.04 hereof shall
not be exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
securing the Notes shall have been sold or all amounts payable on the Notes and
under this Indenture with respect thereto shall have been paid. The Trustee may
from time to time postpone any Sale by public announcement made at the time and
place of such Sale.
(b) To the extent permitted by applicable law, the Trustee shall not,
in any private Sale, sell to a third party the Trust Estate, or any portion
thereof unless:
(i) the Holders of all Outstanding Notes, consent to or direct
the Trustee to make such Sale; or
(ii) the proceeds of such Sale would not be less than the sum
of all amounts due to the Trustee hereunder and the entire unpaid
principal amount of the Notes and interest due or to become due thereon
on the Payment Date next succeeding such Sale.
(c) The Trustee or the Noteholders may bid for and acquire any portion
of the Trust Estate in connection with a public Sale thereof, and in lieu of
paying cash therefor, any Noteholder may make settlement for the purchase price
by crediting against amounts owing on the Notes of such Holder or other amounts
owing to such Holder secured by this Indenture, that portion of the net proceeds
of such Sale to which such Holder would be entitled, after deducting the
reasonable costs, charges and expenses incurred by the Trustee or the
Noteholders in connection with such Sale. The Notes need not be produced in
order to complete any such Sale, or in order for the net proceeds of such Sale
to be credited against the Notes. The Trustee or the Noteholders may hold,
lease, operate, manage or otherwise deal with any property so acquired in any
manner permitted by law.
(d) The Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Trust Estate in
connection with a Sale thereof. In addition, the Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Issuer to transfer and convey
its interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale. No purchaser or
transferee at such a sale shall be bound to ascertain the Trustee's authority,
inquire into the satisfaction of any conditions precedent or see to the
application of any monies.
(e) The method, manner, time, place and terms of any Sale of all or any
portion of the Trust Estate shall be commercially reasonable.
Section 6.19. Action on Notes. The Trustee's right to seek and recover
judgment on the Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect to
this Indenture. Neither the lien of this Indenture nor any rights or remedies of
the Trustee or the Noteholders shall be impaired by the recovery of any judgment
by the Trustee against the Issuer or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of the
Issuer.
Article Seven
The Trustee
Section 7.01. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default known to the Trustee as provided in
subsection (e) below:
(i) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith or negligence on its part,
the Trustee may conclusively rely as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions,
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
and to determine whether or not they conform to the requirements of
this Indenture.
(b) In case an Event of Default known to the Trustee as provided in
subsection (e) below has occurred and is continuing, the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and shall use the
same degree of care and skill in its exercise, as a reasonable person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct or bad faith, except that:
(i) this subsection (c) shall not be construed to limit the
effect of subsection (a) of this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction the Holders of a majority (or other such percentage
as may be required by the terms hereof) in principal amount of the
Outstanding Notes in accordance with Section 6.14 hereof relating to
the time, method and place of conducting any Proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture, the Contribution Agreement or
the Servicing Agreement; and
(iv) no provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it, provided that nothing herein contained shall excuse the Trustee for
failure to perform its duties as Trustee in accordance with subsections
(a) and (b) of this Section 7.01.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 7.01.
(e) For all purposes under this Indenture, the Trustee shall not be
deemed to have notice of any Event of Default described in Section 6.01(4),
6.01(5) or 6.01(6) hereof or any Default described in Section 6.01(3) hereof
unless a Responsible Officer assigned to and working in the Trustee's corporate
trust department has actual knowledge thereof or unless written notice of any
event which is in fact such an Event of Default or Default is received by the
Trustee by a Responsible Officer at the Corporate Trust Office, and such notice
references the Notes, the Issuer, the Trust Estate or this Indenture.
(f) The Trustee shall be under no obligation to institute any suit, or
to take any remedial proceeding under this Indenture, or to enter any appearance
or in any way defend in any suit in which it may be made defendant, or to take
any steps in the execution of the trusts hereby created or in the enforcement of
any rights and powers hereunder until it shall be indemnified to its
satisfaction against any and all costs and expenses, outlays and counsel fees
and other reasonable disbursements and against all liability, except liability
resulting from the Trustee's negligence or willful misconduct as adjudicated, in
connection with any action so taken.
(g) Notwithstanding any extinguishment of all right, title and interest
of the Issuer in and to the Trust Estate following an Event of Default and a
consequent declaration of acceleration of the maturity of the Notes, whether
such extinguishment occurs through a Sale of the Trust Estate to another person,
the acquisition of the Trust Estate (or the proceeds thereof) by the Trustee or
the Noteholders, the rights of the Trustee and the Noteholders shall continue to
be governed by the terms of this Indenture.
(h) Notwithstanding anything to the contrary contained herein, the
provisions of subsections (e) through (g), inclusive, of this Section 7.01 shall
be subject to the provisions of subsections (a) through (c), inclusive, of this
Section 7.01.
(i) The Trustee shall provide the reports and accountings as required
pursuant to Section 12.04 hereof.
Section 7.02. Notice of Default. Promptly after the occurrence of any
Default known to the Trustee (within the meaning of Section 7.01(e) hereof)
which is continuing and has not been promptly cured or waived, the Trustee shall
transmit by mail to all Holders of Notes, as their names and addresses appear on
the Note Register, notice of such Default.
Section 7.03. Certain Rights of Trustee. Except to the extent of the
obligation of the Trustee in Section 7.01(a)(ii) to examine documents to ensure
their compliance with this Indenture, and subject to the standards of care set
forth in Section 7.01(c),
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, note or other
obligation, paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request or Issuer Order and any resolution
of the Board of Directors may, and at the Trustee's request, shall be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel selected by the Trustee with due care or any Opinion of Counsel shall be
full and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Noteholders pursuant to this Indenture, unless such Noteholders shall
have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Issuer, upon
reasonable notice and at reasonable times personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney, appointed with due care by it
hereunder.
Section 7.04. Not Responsible for Recitals or Issuance of Notes. (a)
The recitals contained herein and in the Notes, except the certificates of
authentication on the Notes, shall be taken as the statements of the Issuer, and
the Trustee assumes no responsibility for their correctness. The Trustee makes
no representations as to the validity or condition of the Trust Estate or any
part thereof, or as to the title of the Issuer thereto or as to the security
afforded thereby or hereby, or as to the validity or genuineness of any
securities at any time pledged and deposited with the Trustee hereunder or as to
the validity or sufficiency of this Indenture or of the Notes. The Trustee shall
not be accountable for the use or application by
the Issuer of Notes or the proceeds thereof or of any money paid to the Issuer
or upon Issuer Order under any provisions hereof.
(b) Except as otherwise expressly provided herein and without limiting
the generality of the foregoing, the Trustee shall have no responsibility or
liability for or with respect to the existence or validity of any Equipment or
Lease Contract, the perfection of any security interest (whether as of the date
hereof or at any future time), the maintenance of or the taking of any action to
maintain such perfection, the validity of the assignment of any portion of the
Trust Estate to the Trustee or of any intervening assignment, the review of any
Lease Contract (it being understood that the Trustee has not reviewed and does
not intend to review the substance or form of any such Lease Contract), the
performance or enforcement of any Lease Contract, the compliance by the Issuer,
the Contributor or the Servicer with any covenant or the breach by the Issuer,
the Contributor or the Servicer of any warranty or representation made hereunder
or in any related document or the accuracy of any such warranty or
representation, any investment of monies in the Collection Account or any loss
resulting therefrom, the acts or omissions of the Issuer, the Contributor, the
Servicer or any Customer, any action of the Servicer taken in the name of the
Trustee, or the validity of the Servicing Agreement or the Contribution
Agreement.
(c) The Trustee shall not have any obligation or liability under any
Lease Contract or with respect to any other Lease Assets by reason of or arising
out of this Indenture or the granting of a security interest in such Lease
Contract or any other Lease Assets hereunder or the receipt by the Trustee of
any payment relating to any Lease Contract or any other Lease Assets pursuant
hereto, nor shall the Trustee be required or obligated in any manner to perform
or fulfill any of the obligations of the Contributor under or pursuant to any
Lease Contract or any other Lease Assets, or to make any payment, or to make any
inquiry as to the nature or the sufficiency of any payment received by it, or
the sufficiency of any performance by any party, under any Lease Contract, or
with respect to any other Lease Assets.
Section 7.05. May Hold Notes. The Trustee, the Servicer, any Paying
Agent, the Note Registrar, any Authenticating Agent or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of Notes, and if operative, may otherwise deal with the Issuer with the same
rights it would have if it were not Trustee, Servicer, Paying Agent, Note
Registrar, Authenticating Agent or such other agent.
Section 7.06. Money Held in Trust. Money and investments held in trust
by the Trustee or any Paying Agent hereunder shall be held in one or more trust
accounts hereunder but need not be segregated from other funds except to the
extent required herein or required by law. The Trustee or any Paying Agent shall
be under no liability for interest on any money received by it hereunder except
as otherwise agreed with the Issuer or otherwise specifically provided herein.
Section 7.07. Compensation and Reimbursement. The Issuer agrees:
(i) to pay the Trustee monthly its fee for all services
rendered by it hereunder as Trustee, in the amount of the Trustee Fee
(which compensation shall not otherwise be limited by any provision of
law in regard to the compensation of a trustee of an express trust);
(ii) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable out-of-pocket
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture or Servicing Agreement
(including the reasonable compensation and the expenses and
disbursements of the Trustee's agents and counsel), except any such
expense, disbursement or advance as may be attributable to its
negligence, bad faith or willful misconduct; and
(iii) to indemnify and hold harmless the Trust Estate and the
Trustee from and against any loss, liability, expense, damage or injury
sustained or suffered pursuant to this Indenture by reason of any acts,
omissions or alleged acts or omissions arising out of activities of the
Trust Estate or the Trustee (including without limitation any violation
of any applicable laws by the Issuer as a result of the transactions
contemplated by this Indenture), including, but not limited to, any
judgment, award, settlement, reasonable attorneys' fees and other
expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim; provided that the Issuer shall
not indemnify the Trustee if such loss, liability, expense, damage or
injury is due to the Trustee's gross negligence or willful misconduct,
willful misfeasance or bad faith in the performance of duties. Any
indemnification pursuant to this Section 7.07 shall only be payable
from the assets of the Issuer and shall not be payable from the assets
of the Trust Estate. The provisions of this indemnity shall run
directly to and be enforceable by an injured person subject to the
limitations hereof and this indemnification agreement shall survive the
termination of this Indenture.
Upon the occurrence of an Event of Default resulting in an acceleration
of maturity of the Notes that has not been rescinded and annulled, the Trustee
shall have, as security for the performance of the Issuer under this Section
7.07, a lien ranking senior to the lien of the Notes with respect to which any
claim of the Trustee under this Section 7.07 arose upon all property and funds
held or collected as part of the Trust Estate by the Trustee in its capacity as
such. The Trustee shall not institute any Proceeding seeking the enforcement of
such lien against any Trust Estate unless (i) such Proceeding is in connection
with a proceeding in accordance with Article Six hereof for enforcement of the
lien of this Indenture for the benefit of the Holders of the Notes secured by
such Trust Estate after the occurrence of an Event of Default (other than an
Event of Default due solely to a breach of this Section 7.07) and a resulting
declaration of acceleration of maturity of such Notes that has not been
rescinded and annulled, or (ii) such Proceeding does not result in or cause a
Sale or other disposition of such Trust Estate. All monies so collected by the
Trustee shall be applied in accordance with Section 6.08 hereof and the Trustee
shall receive amounts pursuant to Section 6.08 hereof only to the extent that
payment thereof will not result in a subsequent Event of Default caused by such
payments to the Trustee.
Section 7.08. Corporate Trustee Required; Eligibility. There shall at
all times be a trustee hereunder which shall be a corporation or association
organized and doing business under the laws of the United States of America or
of any state, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $100,000,000, or be a member
of a consolidated bank holding company with a combined capital and surplus of at
least $100,000,000, subject to supervision or examination by Federal or state
authority and having an office within the United States of America, and, except
with respect to the initial Trustee hereunder, which shall have a commercial
paper or other short-term rating of the highest short term rating categories by
S&P or Moody's, or otherwise acceptable to the Holders of 66-2/3% in principal
amount of the Outstanding Notes. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 7.08, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.08, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article Seven.
Section 7.09. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article Seven shall become effective until the acceptance of
appointment by the successor Trustee under Section 7.10 hereof.
(b) The Trustee may resign at any time by giving 30 days' written
notice thereof to the Issuer and to each Noteholder. If an instrument of
acceptance by a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor Trustee.
(c) The Trustee may be removed by the Act of the Holders of 66-2/3% in
principal amount of the Outstanding Notes by notice to the Trustee, at any time
if one of the following events have occurred:
(i) the Trustee shall cease to be eligible under Section 7.08
hereof and shall fail to resign after written request therefor by the
Issuer or by any Noteholder, or
(ii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or
(iii) the Trustee has failed to perform its duties hereunder
in any material respect, or has breached any representation of warranty
made hereunder in any material respect.
(d) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause
with respect to the Notes, the Issuer by a Board Resolution, shall promptly
appoint a successor Trustee. If the Issuer shall fail to appoint a successor
Trustee within 90 days of notice of removal or resignation, then the Holders of
66-2/3% in principal amount of the Outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Notes.
(e) The Issuer shall give notice in the manner provided in Section
13.04 hereof of each resignation and each removal of the Trustee and each
appointment of a successor Trustee with respect to the Notes. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
Section 7.10. Acceptance of Appointment by Successor. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer
and the retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee but, on request of the Issuer or the successor Trustee, such retiring
Trustee shall, upon payment of its reasonable out-of-pocket costs and expenses,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its lien, if any,
provided for in Section 7.07 hereof. Upon request of any such successor Trustee,
the Issuer shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be eligible under this Article
Seven.
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any Person into which the Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such Person shall be otherwise qualified and eligible under this
Article Seven, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Notes have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes.
Section 7.12. Co-Trustees and Separate Trustees. At any time or times,
for the purpose of meeting the legal requirements of any jurisdiction in which
any of the Trust Estate may at the time be located, the Issuer, and the Trustee
shall have power to appoint, and, upon the written request of the Trustee, or of
the Holders of Notes representing at least 25% of the aggregate principal amount
of the Outstanding Notes, the Issuer shall for such purpose join with the
Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to appoint, one or more Persons approved by the
Trustee, either to act as co-Trustee, jointly with the Trustee of all or any
part of such Trust Estate, or to act as separate Trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 7.12. If the Issuer does not join in such
appointment within 15 days after the receipt by it of a request so to do, or in
case an Event of Default has occurred and is continuing, the Trustee alone shall
have power to make such appointment.
Should any written instrument from the Issuer be reasonably required by
any co-Trustee or separate Trustee so appointed for more fully confirming to
such co-Trustee or separate Trustee such property, title, right or power, any
and all such instruments shall, on request, be executed, acknowledged and
delivered by the Issuer.
Every co-Trustee or separate Trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(i) the Notes shall be authenticated and delivered by, and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder, shall
be exercised solely by the Trustee;
(ii) the rights, powers, duties and obligations hereby
conferred or imposed upon the Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Trustee or by the Trustee and such
co-Trustee or separate Trustee jointly, as shall be provided in the
instrument appointing such co-Trustee or separate Trustee, except to
the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
co-Trustee or separate Trustee;
(iii) the Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by a Board
Resolution, may accept the resignation of or remove any co-Trustee or
separate Trustee, appointed under this Section 7.12, and, in case an
Event of Default has occurred and is continuing, the Trustee shall have
power to accept the resignation of, or remove, any such co-Trustee or
separate Trustee without the concurrence of the Issuer. Upon the
written request of the Trustee, the Issuer shall join with the Trustee
in the execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or
removal. A successor to any co-Trustee or separate Trustee that has so
resigned or been removed may be appointed in the manner provided in
this Section 7.12;
(iv) no co-Trustee or separate Trustee hereunder shall be
personally liable by reason of any act or omission of the Trustee or
any other such Trustee hereunder nor shall the Trustee be liable by
reason of any act or omission of any co-Trustee or separate Trustee
selected by the Trustee with due care or appointed in accordance with
directions to the Trustee pursuant to Section 6.14 hereof; and
(v) any Act of Noteholders delivered to the Trustee shall be
deemed to have been delivered to each such co-Trustee and separate
Trustee.
Section 7.13. Rights with Respect to the Servicer. The Trustee's rights
and obligations with respect to the Servicer shall be governed by the Servicing
Agreement.
Section 7.14. Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent or Agents with respect to the Notes which shall
be authorized to act on behalf of the Trustee to authenticate Notes issued upon
original issue or upon exchange, registration of transfer or pursuant to Section
3.06 hereof, and Notes so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Notes by the Trustee or the
Trustee's certificate of authentication or the delivery of Notes to the Trustee
for authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent
and delivery of the Notes to the Authenticating Agent on behalf of the Trustee.
Each Authenticating Agent shall be acceptable to the Issuer and the Noteholders
and shall at all times be a corporation having a combined capital and surplus of
not less than the equivalent of $50,000,000 and subject to supervision or
examination by federal or state authority or the equivalent foreign authority,
in the case of an Authenticating Agent who is not organized and doing business
under the laws of the United States of America, any state thereof or the
District of Columbia. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section 7.14,
the combined capital and surplus of such Authenticating Agent shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section 7.14, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 7.14.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of such Authenticating Agent, shall continue to be an
Authenticating Agent without the execution or filing of any paper or any further
act on the part of the Trustee or such Authenticating Agent; provided, such
corporation shall be otherwise eligible under this Section 7.14.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Issuer. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 7.14, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Issuer and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Notes, if any, with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Note Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder, with
like effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section 7.14.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 7.14, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 7.07 hereof.
If an appointment is made pursuant to this Section 7.14, the Notes may
have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Notes described in the within-mentioned Indenture.
Norwest Bank Minnesota, National
Association, as Trustee
By
As Authenticating Agent
By
Authorized Officer
Section 7.15. Trustee to Hold Lease Contracts. The Trustee shall hold
each Lease Contract, together with any documents relating thereto that may from
time to time be delivered to the Trustee in accordance with this Indenture,
until such time as such Lease Contract is released from the lien of this
Indenture pursuant to the terms hereof.
The Trustee upon receipt of the Lease Contracts shall review them and
verify that with respect to the following, the information on each Lease
Contract is consistent with the information set forth on the schedule provided
to the Trustee: name of lessee, state of lessee, amount of monthly payment,
original term of lease contract, exisence of xxxx of sale. Within 3 Business
Days of receipt of such Lease Contracts, the Trustee will provide an exception
report to the Issuer, the Servicer and the Noteholders. The Issuer an the
Noteholders shall resolve any such exceptions to the Noteholders' satisfaction,
and no Lease Contract for which exceptions remain shall be funded. The Trustee
shall be under no duty or obligation to inspect, review or examine the Lease
Contracts and other documents to determine that the same are genuine,
enforceable or appropriate for the represented purpose or that they have
actually been recorded or that they are other than what they purport to be on
their face.
Article Eight
Optional Purchase of Receivables
Section 8.01. Optional Purchase of All Receivables; Liquidation of
Trust Estate. (a) At any time after the aggregate principal amount of the then
Outstanding Notes is less than 10% of the original aggregate principal amount of
the Notes the initial Servicer shall have the option to purchase all of the
Collateral; provided, however, that the amount to be paid for such purchase (as
set forth in the following sentence) shall be sufficient to pay the full amount
of principal and interest then due and payable on the Notes plus any unpaid fees
and expenses due under the Transaction Documents. The initial Servicer shall
deposit such amount into the Collection Account, and the Trustee shall
distribute the amounts so deposited in accordance with Section 12.02.
Article Nine
Supplemental Indentures
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
The Issuer, the Servicer and the Trustee, without the consent of the Holders of
any Notes, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes, provided that any such amendment, as evidenced by an
Opinion of Counsel if required by the Trustee, will not have a material adverse
effect on Noteholders:
(1) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject to the lien
of this Indenture additional property; or
(2) to evidence the succession of another Person to the
Issuer, and the assumption by such successor of the covenants of the
Issuer herein and in the Notes contained, in accordance with Section
11.02(q) hereof; or
(3) to add to the covenants of the Issuer, for the benefit of
the Holders of all Notes, or to surrender any right or power herein
conferred upon the Issuer; or
(4) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee; or
(5) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provisions with respect to matters or questions arising under this
Indenture, which shall not be inconsistent with the provisions of this
Indenture, provided that such action shall not adversely affect the
interests of the Holders of the Notes; or
(6) to evidence the succession of the Trustee pursuant to
Article Seven hereof; or
(7) to add to any Events of Default.
The Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
Promptly after the execution by the Issuer, the Servicer and the
Trustee of any supplemental indenture pursuant to this Section 9.01, the Issuer
shall mail to each Noteholder a copy of such supplemental indenture.
Section 9.02. Supplemental Indentures with Consent of Noteholders. With
the consent of the Holders of not less than 66-2/3% in principal amount of the
Outstanding Notes affected by such supplemental indenture, by Act of said
Holders delivered to the Issuer and the Trustee, the Issuer, the Servicer and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of the Notes under this Indenture; provided, however, that no
such supplemental indenture shall, without the consent of the Holders of each
Outstanding Note affected thereby:
(1) change the Stated Maturity of any Note or the due date of
any installment of principal of, or any installment of interest on, any
Note, or reduce the principal amount thereof or the applicable Note
Interest Rate or change any place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such
payment; or
(2) reduce the percentage in principal amount of the
Outstanding Notes, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with certain provisions of
this Indenture or Events of Default or their consequences; or
(3) impair or adversely affect the Trust Estate except as
otherwise permitted herein; or
(4) modify or alter the provisions of the proviso to the
definition of the term "Outstanding"; or
(5) modify or alter the provisions of the proviso to Section
6.04 hereof; or
(6) modify any of the provisions of this Section 9.02, except
to increase the percentage of Holders of the Outstanding Notes required
for any modification or waiver or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby; or
(7) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or terminate the lien of this Indenture on any property at
any time subject hereto or deprive the Holder of any Note of the
security afforded by the lien of this Indenture; or
(8) modify any of Sections 6.01(l) or (2), 6.02, 6.03, 6.18,
or 12.02(d) hereof.
It shall not be necessary for any Act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer, the Servicer and the
Trustee of any supplemental indenture pursuant to this Section 9.02, the Issuer
shall mail to the Holders of the Notes a copy of such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures. In executing any
supplemental indenture permitted by this Article Nine or the modifications
thereby of the trusts created by this Indenture, the Trustee shall be entitled
to receive upon request, and (subject to Section 7.01 hereof) shall be fully
protected in relying in good faith upon, an Opinion of Counsel reasonably
acceptable to the Trustee stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own duties or immunities under this Indenture or
otherwise.
Section 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article Nine, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Notes theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby.
Section 9.05. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article Nine may, and if required by the Trustee shall, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Trustee and the Issuer, to any such
supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Trustee in exchange for Outstanding Notes.
Article Ten
Redemption of the Notes
Section 10.01. Redemption at the Option of the Issuer; Election to
Redeem. The Issuer shall have the option to redeem the Notes, in whole but not
in part, as to the then Outstanding Notes, at any time after the aggregate
principal amount of the then Outstanding Notes is less than 10% of the original
aggregate principal amount of the Notes, at the applicable Redemption Price plus
any fees due hereunder.
The Issuer shall set the Redemption Date and the Redemption Record Date
and give notice thereof to the Trustee pursuant to Section 10.02 hereof.
Installments of interest and principal due on or prior to a Redemption
Date shall continue to be payable to the Holders of Notes called for redemption
as of the relevant Record Dates according to their terms and the provisions of
Section 3.07 hereof. The election of the Issuer to redeem any Notes pursuant to
this Section 10.01 shall be evidenced by a Board Resolution directing the
Trustee to make the payment of the applicable Redemption Price on all of the
Notes to be redeemed from monies deposited with the Trustee pursuant to Section
10.04 hereof.
Section 10.02. Notice to Trustee. In the case of any redemption
pursuant to Section 10.01 hereof, the Issuer shall, at least 15 days prior to
the Redemption Date, notify the Trustee of such Redemption Date and shall
deposit into the Collection Account on the related Calculation Date an amount
equal to the applicable Redemption Price of all Notes to be redeemed.
Section 10.03. Notice of Redemption by the Issuer. Upon receipt of such
notice and such deposit set forth in Section 10.02 above, the Trustee shall
provide notice of redemption pursuant to Section 10.01 hereof by first-class
mail, postage prepaid, mailed no later than the Business Day following the
Calculation Date on which such deposit was made, to each Holder of Notes at his
address in the Note Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price; and
(3) that on the Redemption Date, the Redemption Price will
become due and payable upon each such Note, and that interest thereon
shall cease to accrue on such date.
Notice of redemption of Notes shall be given by the Trustee in the name
and at the expense of the Issuer. Failure to give notice of redemption, or any
defect therein, to any Holder of any Note selected for redemption shall not
impair or affect the validity of the redemption of any other Note.
Section 10.04. Deposit of the Redemption Price. On or before the
related Calculation Date next preceding any Redemption Date, the Issuer shall
deposit with the Trustee or with the Paying Agent an amount of monies sufficient
to pay the Redemption Price of all Notes plus any fees due hereunder.
Section 10.05. Notes Payable on Redemption Date. Notice of redemption
having been given as provided in Section 10.03 hereof, the Notes to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
and on such Redemption Date (unless the Issuer shall default in the payment of
the Redemption Price) such Notes shall cease to bear interest. The Holders of
the Notes shall be paid the Redemption Price by the Paying Agent on behalf of
the Issuer; provided, however, that installments of principal and interest which
are due on or prior to the Redemption Date shall be payable to the Holders of
the Notes registered as such on the relevant Record Dates according to their
terms and the provisions of Section 3.07 hereof.
If the Holder of any Note called for redemption shall not be so paid,
the principal and premium, if any, shall, until paid, bear interest from the
Redemption Date at the applicable Note Interest Rate.
Article Eleven
Representations, Warranties and Covenants
Section 11.01. Representations and Warranties. The Issuer hereby makes
the following representations and warranties for the benefit of the Trustee and
the Noteholders on which the Trustee relies in accepting the Trust Estate in
trust and in authenticating the Notes. Such representations and warranties are
made as of the Delivery Date, but shall survive the transfer, grant and
assignment of the Trust Estate to the Trustee.
(a) Organization and Good Standing. The Issuer is a corporation duly
organized, validly existing and in good standing under the law of the State of
Minnesota and each other State where the nature of its business requires it to
qualify, except to the extent that the failure to so qualify would not in the
aggregate materially adversely affect the ability of the Issuer to perform its
obligations under this Indenture, the Servicing Agreement or the Contribution
Agreement.
(b) Authorization. The Issuer has the power, authority and legal right
to execute, deliver and perform this Indenture, the Servicing Agreement and the
Contribution Agreement and the execution, delivery and performance of this
Indenture, the Servicing Agreement and the Contribution Agreement have been duly
authorized by the Issuer by all necessary corporate action.
(c) Binding Obligation. This Indenture, the Servicing Agreement and the
Contribution Agreement have been duly executed and delivered by the Issuer, and
this Indenture, assuming due authorization, execution and delivery by the
Trustee and the Servicer, the Servicing Agreement, assuming due authorization,
execution and delivery by the Trustee and the Servicer, and the Contribution
Agreement, assuming due authorization, execution and delivery by the
Contributor, each constitutes a legal, valid and binding obligation of the
Issuer, enforceable against the Issuer in accordance with its terms except that
(A) such enforcement may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws (whether statutory, regulatory or decisional)
now or hereafter in effect relating to creditors' rights generally and (B) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to certain equitable defenses and to the discretion of the
court before which any proceeding therefor may be brought, whether a proceeding
at law or in equity.
(d) No Violation. The consummation of the transactions contemplated by
the fulfillment of the terms of this Indenture, the Servicing Agreement and the
Contribution Agreement will not conflict with, result in any breach of any of
the terms and provisions of or constitute (with or without notice, lapse of time
or both) a default under the organizational documents or bylaws of the Issuer,
or any material indenture, agreement, mortgage, deed of trust or other
instrument to which the Issuer is a party or by which it is bound, or in the
creation or imposition of any Lien upon any of its properties pursuant to the
terms of such indenture, agreement, mortgage, deed of trust or other such
instrument, other than any Lien created or imposed pursuant to the terms of this
Indenture, the Servicing Agreement or the Contribution Agreement, or violate any
law or, to the best of the Issuer's knowledge, any material order, rule or
regulation applicable to the Issuer of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Issuer or any of its properties.
(e) No Proceedings. Except as set forth in the Disclosure Schedule t,
here are no Proceedings or investigations to which the Issuer, or any of the
Issuer's Affiliates, is a party pending, or, to the knowledge of Issuer,
threatened, before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality (A) asserting the invalidity of this
Indenture, the Servicing Agreement, the Contribution Agreement or the Notes, (B)
seeking to prevent the issuance of the Notes or the consummation of any of the
transactions contemplated by the Contribution Agreement, the Servicing
Agreement, this Indenture or the Notes or (C) seeking any determination or
ruling that would materially and adversely affect the performance by the Issuer
of its obligations under, or the validity or enforceability of, this Indenture,
the Servicing Agreement, the Contribution Agreement or the Notes.
(f) Approvals. All approvals, authorizations, consents, orders or other
actions of any Person, or of any court, governmental agency or body or official,
required in connection with the execution and delivery of this Indenture, the
Servicing Agreement or the Contribution Agreement and with the valid and proper
authorization, issuance and sale of the Notes pursuant to this Indenture (except
approvals of State securities officials under the Blue Sky laws), have been or
will be taken or obtained on or prior to the Delivery Date.
(g) Name and Place of Business. The Issuer's legal name is as set forth
in this Indenture. Except as set forth in the Disclosure Schedule, the Issuer
has not used or done business under any other name in the previous five-year
period. The Issuer's principal place of business and chief executive office is
located at 0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxxxx, Xxxxxxxxx 00000, or
at such other location where all action required by Section 11.02(f) hereof
shall have been taken place with respect to the Trust Estate. Except as set
forth in the Disclosure Schedule, the Issuer has not used any other address in
the previous five-year period.
(h) Transfer and Assignment. Upon the delivery to the Trustee of the
Lease Contracts and the filing of the UCC financing statements described in
Section 4.02(a) hereof, the Trustee for the benefit of the Noteholders shall
have a first priority perfected security interest in the Lease Receivables, the
Lease Contracts and, except with respect to Lease Contracts the original balance
of which was less than $15,000, the Equipment, and in the proceeds thereof,
except for Liens permitted under Section 11.02(a) and, with respect to any such
proceeds, as limited to the extent set forth in Section 9-306 of the UCC as in
effect in the applicable jurisdiction. All filings (including, without
limitation, UCC filings) as are necessary in any jurisdiction to perfect the
interest of the Trustee in the Trust Estate, including the transfer of the Lease
Contracts and the payments to become due thereunder, have been made.
(i) Stockholders of the Issuer. Sunrise Leasing Corporation is the sole
stockholder of the Issuer, and it is the registered owner of all of the Common
Stock of the Issuer; except as set forth in the Disclosure Schedule all of such
shares of Common Stock have been fully paid and are owned of record, free and
clear of all mortgages, assignments, pledges, security interests, warrants,
options and rights to purchase. Sunrise Leasing Corporation will not transfer
shares of Common Stock of the Issuer without the consent of the Holders of a
majority in principal amount of Notes Outstanding.
(j) Contribution Agreement. As of the Delivery Date (and, with respect
to the Subsequent Lease Contracts, the Subsequent Transfer Date), the Issuer has
entered into the Contribution Agreement and the Lease Assignment Agreement or
the Subsequent Lease Assignment Agreement, as applicable, with the Contributor
relating to its acquisition of the Lease Contracts, the Lease Receivables and
the related Equipment, and the representations, warranties and covenants made by
the Contributor relating to such Lease Contracts, Lease Receivables and the
related Equipment have been (and, with respect to Subsequent Lease Contracts,
Lease Receivables and the related Equipment, will be) validly assigned to and
are for the benefit of the Issuer, the Trustee and the Noteholders, and such
representations and warranties are (and, with respect to Subsequent Lease
Contracts, Subsequent Lease Receivables and the related Equipment, will be) true
and correct in all material respects.
(k) Bulk Transfer Laws. The transfer, assignment and conveyance of the
Lease Contracts, the Lease Receivables and the related Equipment by the
Contributor to the Issuer pursuant to the Contribution Agreement, and the grant
of a security interest in the Lease Contracts, the Lease Receivables and the
related Equipment by the Issuer to the Trustee pursuant to this Indenture, are
not subject to the bulk transfer or any similar statutory provisions in effect
in any applicable jurisdiction.
(l) Solvency. Neither on the date of the transactions contemplated by
the Transaction Documents or immediately before or after such transactions, nor
as a result of the transactions, will the Issuer:
(A) be insolvent such that the sum of its debts is greater
than all of its respective property, at a fair valuation;
(B) be engaged in, or about to engage in, business or a
transaction for which any property remaining with the Issuer will be an
unreasonably small capital or the remaining assets of the Issuer will
be unreasonably small in relation to its respective business or the
transaction; and
(C) have intended to incur, or believed it would incur, debts
that would be beyond its respective ability to pay as such debts mature
or become due. The Issuer's assets and cash flow enable it to meet its
present obligations in the ordinary course of business as they become
due.
(m) Tax Returns. All tax returns or extensions required to be filed by
the Issuer in any jurisdiction have in fact been filed, and all taxes,
assessments, fees and other governmental charges upon the Issuer, or upon any of
the respective properties, income or franchises shown to be due and payable on
such returns have been, or will be, paid. To the best of the Issuer's knowledge,
all such tax returns are true and correct, and the Issuer has no knowledge of
any proposed additional tax assessment against it in any material amount nor of
any basis therefor. The provisions for taxes on the books of the Issuer are in
accordance with generally accepted accounting principles.
(n) Tax Reporting. The Issuer will treat the acquisition of the Lease
Contracts, the Lease Receivables and the related Equipment as a contribution to
the Issuer for federal, state and local income tax reporting and accounting
purposes.
(o) Subsidiaries. The Issuer has no subsidiaries.
(p) Pension Plans. Each pension plan or profit sharing plan to which
the Issuer is a party has been fully funded in accordance with the obligations
of the Issuer set forth in such plan.
(q) Constituent Documents. The Issuer will not amend its Articles of
Incorporation or its Bylaws without the consent of the Trustee and the Holders
of a majority in principal amount of the Notes Outstanding.
Section 11.02. Covenants. The Issuer hereby makes the following
covenants on which the Trustee relies in accepting the Trust Estate in trust and
in authenticating the Notes. Such covenants are made as of the Delivery Date,
but shall survive the transfer, grant and assignment of the Trust Estate to the
Trustee.
(a) No Liens. Except for the conveyances and grant of security
interests hereunder, the Issuer will not sell, pledge, assign or transfer to any
other Person, or grant, create, incur, assume or suffer to exist any Lien on any
Trust Estate now existing or hereafter created, or any interest therein prior to
the termination of this Indenture pursuant to Section 5.01 hereof; the Issuer
will notify the Trustee of the existence of any Lien on any Trust Estate
immediately upon discovery thereof; and the Issuer shall defend the right, title
and interest of the Trustee in, to and under the Trust Estate now existing or
hereafter created, against all claims of third parties claiming through or under
the Issuer; provided, however, that nothing in this Section 11.02(a) shall
prevent or be deemed to prohibit the Issuer from suffering to exist upon any of
the Trust Estate any Liens for municipal or other local taxes and other
governmental charges if such taxes or governmental charges shall not at the time
be due and payable or if the Issuer shall currently be contesting the validity
thereof in good faith by appropriate proceedings and shall have set aside on its
books adequate reserves with respect thereto.
(b) Delivery of Collections. The Issuer agrees to hold in trust and
promptly pay to the Servicer all amounts received by the Issuer in respect of
the Trust Estate (other than amounts distributed to or for the benefit of the
Issuer pursuant to Article Twelve hereof).
(c) Obligations with Respect to Lease Contracts. The Issuer will duly
fulfill all obligations on its part to be fulfilled under or in connection with
each Lease Contract and will do nothing to impair the rights of the Trustee (for
the benefit of the Noteholders) in the Lease Receivables, the Lease Contracts,
the Equipment or any other part of the Trust Estate. As long as there is no
event of default under the applicable Lease Contract, the Issuer will not
disturb the Customer's quiet and peaceful possession of the related Equipment
and the Customer's unrestricted use thereof for its intended purpose.
(d) Compliance with Law. The Issuer will comply, in all material
respects, with all acts, rules, regulations, orders, decrees and directions of
any governmental authority applicable to the Lease Contracts or any part
thereof, provided, however, that the Issuer may contest any act, regulation,
order, decree or direction in any reasonable manner which shall not materially
and adversely affect the rights of the Trustee (for the benefit of the
Noteholders) in the Lease Contracts, the Lease Receivables and the related
Equipment. The Issuer will comply, in all material respects, with all
requirements of law applicable to the Issuer.
(e) Preservation of Note Interest. The Issuer shall execute and file
such continuation statements and any other documents which may be required by
law to fully preserve and protect the interest of the Trustee (for the benefit
of the Noteholders) in the Trust Estate.
(f) Maintenance of Office, etc. The Issuer will not, without providing
30 days' prior written notice to the Trustee and without filing such amendments
to any previously filed financing statements as the Holders of a majority in
principal amount of the Notes may require or as may be required in order to
maintain the Trustee's perfected security interest in the Trust Estate, (a)
change the location of its chief executive office, or (b) change its name,
identity or corporate structure in any manner which would make any financing
statement or continuation statement filed by the Issuer in accordance with the
Servicing Agreement or this Indenture seriously misleading within the meaning of
Article 9-402(7) of any applicable enactment of the UCC.
(g) Further Assurances. Except as set forth in Section 11.02(e), the
Issuer will make, execute or endorse, acknowledge, and file or deliver to the
Trustee from time to time such schedules, confirmatory assignments, conveyances,
transfer endorsements, powers of attorney, certificates, reports and other
assurances or instruments and take such other steps relating to the Trust
Estate, as the Trustee may request and reasonably require.
(h) Notice of Liens. The Issuer shall notify the Trustee promptly after
becoming aware of any Lien on any Trust Estate, except for any Liens for
municipal or other local taxes if such taxes shall not at the time be due or
payable without penalty or if the Issuer shall currently be contesting the
validity thereof in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto.
(i) Activities of the Issuer. The Issuer (a) shall engage in only (1)
the acquisition, ownership, leasing, selling and pledging of the property
acquired by the Issuer pursuant to the Contribution Agreement, and causing the
issuance of, receiving and selling the Notes issued pursuant to this Indenture
and (2) the exercise of any powers permitted to corporations under the Business
Corporation Act of the State of Minnesota which are incidental to the foregoing
or necessary to accomplish the foregoing, and the Issuer shall incur no debt
other than trade payables and expense accruals in connection with its operations
in the normal course of business and debt incurred or assumed as contemplated by
the Contribution Agreement; (b) will (1) maintain its books and records separate
from the books and records of any other entity, (2) maintain separate bank
accounts, and no funds of the Issuer shall be commingled with funds of any other
entity, (3) keep in full effect its existence, rights and franchises as a
corporation under the laws of the State of Minnesota, and will obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Indenture, (4) conduct its business from an
office or office space separate from the office of the Contributor and will
maintain a telephone number separate from that of the Contributor, and (5)
operate its business generally so as not to be substantively consolidated with
any of its Affiliates; and (c) will not (1) dissolve or liquidate in whole or in
part, (2) own any subsidiary or lend or advance any moneys to, or make an
investment in, any Person, (3) make any capital expenditures, (4)(A) commence
any case, proceeding or other action under any existing or future bankruptcy,
insolvency or similar law seeking to have an order for relief entered with
respect to it, or seeking reorganization, arrangement, adjustment, wind-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, (B) seek appointment of a receiver, trustee, custodian or other similar
official for it or any part of its assets, (C) make a general assignment for the
benefit of creditors, or (D) take any action in furtherance of, or consenting or
acquiescing in, any of the foregoing, (5) guarantee (directly or indirectly),
endorse or otherwise become contingently liable (directly or indirectly) for the
obligations of, or own or purchase any stock, obligations or securities of or
any other interest in, or make any capital contribution to, any other Person,
(6) merge or consolidate with any other Person, except as permitted pursuant to
Section 11.02(q) hereof, (7) engage in any other action that bears on whether
the separate legal identity of the Issuer will be respected, including without
limitation (A) holding itself out as being liable for the debts of any other
party or (B) acting other than in its corporate name and through its duly
authorized officers or agents, or (8) create, incur, assume, or in any manner
become liable in respect of any indebtedness other than trade payables and
expense accruals incurred in the ordinary course of business and which are
incidental to its business purpose; provided, however, that the Issuer may take
any action prohibited by this clause (8) if the Issuer shall cause, prior to the
taking of such action, an Opinion of Counsel experienced in federal bankruptcy
matters, in substance satisfactory to the Trustee and the Holders of 66-2/3% in
aggregate principal amount of the Outstanding Notes, to be delivered to the
Trustee and the Noteholders stating to the effect that the taking of such action
will not adversely affect the substantive nonconsolidation of the Issuer with
the Contributor in the event of a bankruptcy proceeding involving the
Contributor. The Issuer shall not amend any article in its Articles of
Incorporation or its Bylaws that deals with any matter discussed above without
the prior written consent of the Holders of 66-2/3% in aggregate principal
amount of the Outstanding Notes.
(j) Directors. The Issuer agrees that at all times, at least one
director and one executive officer that will not be a director, officer or
employee of any direct or ultimate parent, or Affiliate of such parent or of the
Issuer (other than Issuer); provided, however, that (a) such independent
director may also be the independent officer and (b) such independent director
and such independent officer may serve in similar capacities for other "special
purpose corporations" formed by the Issuer and its Affiliates. The Issuer's
Articles of Incorporation shall at all times provide that such independent
director shall have a fiduciary duty to the Holders of the Notes.
(k) Consolidated Return. The Issuer is a member of an affiliated group
with the Contributor within the meaning of section 1504 of the Code and will
file a consolidated return with the Contributor for federal income tax purposes.
(1) Ownership of the Equipment. The Issuer warrants that it owns the
Equipment and that it will defend such interest in the Equipment against all
Persons, claims and demands whatsoever. The Issuer shall not assign, sell,
pledge, or exchange, or in any way encumber or otherwise dispose of the
Equipment, except as permitted under this Indenture. Within 90 days following
the delivery to the Trustee of any Lease Contract which is pledged by the Issuer
under this Indenture as part of the Trust Estate, the Issuer shall file such UCC
financing statements as are necessary to evidence the Issuer's assignment of the
related Equipment to the Trustee for the benefit of the Noteholders. The Issuer
warrants that the Trustee will have a valid first priority perfected security
interest in the Equipment upon the filing of such UCC financing statements.
(m) Taxable Income from the Lease Receivables. The Issuer shall treat
the Lease Contracts, the Lease Receivables and the related Equipment as owned by
it for federal, State and local income tax purposes, and any affiliated group of
which the Issuer is a member within the meaning of section 1504 of the Code
shall treat the Lease Contracts, the Lease Receivables and the related Equipment
as owned by the Issuer for federal, State and local income tax purposes, shall
report and include in the computation of the Issuer's gross income for such tax
purposes in its consolidated or combined return the rental and other income from
the Lease Contracts, Lease Receivables and the related Equipment and shall
deduct the interest paid or accrued with respect to the Notes in accordance with
its applicable method of accounting for such purposes.
(n) Maintenance of Office or Agency. The Issuer will maintain an office
or agency within the United States of America where Notes may be presented or
surrendered for payment, where Notes may be surrendered for registration of
transfer or exchange and where notices and demand to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Trustee at the Corporate Trust Office for each of said
purposes. The Issuer will give 30 days' prior written notice to the Trustee and
the Noteholders of any change in the location, of any such office or agency. If
at any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Trustee, and the
Issuer hereby appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands.
(o) Money for Note Payments to Be Held in Trust. The Trustee shall
execute and deliver, and if there is any Paying Agent other than the Trustee,
the Issuer will cause each Paying Agent other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee that, subject to the provisions of this Section 11.02, such Paying
Agent will:
(i) hold all sums held by it for the payment of principal of
or interest on Notes in trust for the benefit of the Noteholders
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(ii) give the Trustee notice of any Default by the Issuer (or
any other obligor upon the Notes) in the making of any payment of
principal or interest; and
(iii) at any time during the continuance of any such Default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent in trust for
the payment of the principal of or interest on any Note and remaining unclaimed
for three years after such principal or interest has become due and payable
shall be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, and subject to any applicable
statute of limitations, look only to the Issuer for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money
or the related Note, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Issuer cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in the city in which the Corporate Trust Office is located,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Trustee may also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Noteholders whose right to or interest
in monies due and payable but not claimed is determinable from the records of
any Paying Agent, at the last address as shown on the Note Register for each
such Noteholder).
(p) Enforcement of Servicing Agreement and Contribution Agreement. The
Issuer will take all actions necessary, and diligently pursue all remedies
available to it, to the extent commercially reasonable, to enforce the
obligations of the Servicer under the Servicing Agreement and the Contributor
under the Contribution Agreement and to secure its rights thereunder.
(q) Issuer May Consolidate, etc., Only on Certain Terms. The Issuer
shall not consolidate or merge with or into any other Person or convey or
transfer its properties and assets substantially as an entirety to any Person,
unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger or which acquires by conveyance
or transfer the properties and assets of the Issuer substantially as an
entirety shall be a Person organized and existing as a limited purpose
entity under the laws of the United States of America or any State
thereof and shall have expressly assumed, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the obligation to make due and punctual
payments of the principal of and interest on all of the Notes and to
perform every covenant of this Indenture on the part of the Issuer to
be performed or observed; and
(ii) immediately after giving effect to such transaction, no
Event of Default or Default shall have occurred and be continuing; and
(iii) the Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance or transfer and such supplemental
indenture comply with this Article Eleven and that all conditions
precedent herein provided for relating to such transaction have been
complied with; and
(iv) such consolidation, merger, conveyance or transfer shall
be on such terms as shall fully preserve the lien and security hereof,
the perfection and priority thereof and the rights and powers of the
Trustee and the Holders of the Notes hereunder; and
(v) the surviving entity shall be a "special purpose entity";
i.e., shall have an organizational charter substantially similar to the
Articles of Incorporation and the Bylaws of the Issuer including
specific limitations on the business purposes, and provisions for
independent directors; and
(vi) the Issuer shall have obtained the prior written consent
of the Holders of a majority in principal amount of the Notes.
(r) Successor Substituted. Upon any consolidation or merger, or any
conveyance or transfer of the properties and assets of the Issuer substantially
as an entirety in accordance with Section 11.02(q) hereof, the Person formed by
or surviving such consolidation or merger (if other than the Issuer) or the
Person to which such conveyance or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein. In the event of any such conveyance or transfer, the Person named
as the "Issuer" in the first paragraph of this instrument or any successor which
shall theretofore have become such in the manner prescribed in this Article
Eleven shall be released from its liabilities as obligor and maker on all the
Notes and from its obligations under this Indenture and may be dissolved,
wound-up and liquidated at any time thereafter.
(s) Use of Proceeds. The proceeds from the sale of the Notes will be
used by the Issuer (i) to pay the Lease Acquisition Consideration, (ii) to pay
the expenses associated with the issuance of Notes pursuant to this Indenture
and the transactions contemplated hereby and by the Contribution Agreement and
the Servicing Agreement and (iii) for the Issuer's general business purposes.
None of the transactions contemplated in this Indenture, the Contribution
Agreement or the Servicing Agreement (including the use of the proceeds from the
sale of the Notes) will result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulations issued pursuant thereto,
including Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R., Chapter II. The Issuer does not own or intend to
carry or purchase any "margin security" within the meaning of said Regulation G,
including margin securities originally issued by it or any "margin stock" within
the meaning of said Regulation U.
(t) Investment Company Act of 1940. The Issuer will at all times
conduct its operations in a manner which will not subject it to registration as
an "investment company" under the Investment Company Act of 1940, as amended.
The Issuer will not issue or register the transfer of any of its membership
interests if immediately after such issuance or transfer there would be more
than 100 beneficial owners (within the meaning of the Investment Company Act of
1940, as amended) of (i) the Notes, (ii) the membership interests of the Issuer
and (iii) all other securities of the Issuer.
(u) Transactions with Affiliates. The Issuer will not enter into or
cause, suffer or permit to exist any arrangement or contract with any of its
Affiliates unless such arrangement or contract is fair and equitable to the
Issuer, is commercially reasonable and is an arrangement or contract no less
favorable to the Issuer than generally available on an arms-length basis in
equitable transactions with third parties.
(v) Preparation of Private Placement Memorandum. The Issuer shall
prepare and deliver to the initial Holder of the Notes a Private Placement
Memorandum satisfactory to the Placement Agent within a reasonable time upon
such Holder's request.
Section 11.03. Other Matters as to the Issuer. (a) Limitation on
Liability of Directors, Officers, or Employees of the Issuer. The directors,
officers, or employees of the Issuer shall not be under any liability to the
Trustee, the Noteholders, the Issuer, the Servicer or any other Person hereunder
or pursuant to any document delivered hereunder, it being expressly understood
that all such liability is expressly waived and released as a condition of, and
as consideration for, the execution of this Indenture and the issuance of the
Notes.
(b) Parties Will Not Institute Insolvency Proceedings. So long as this
Indenture is in effect, and for one year following its termination, none of the
parties hereto or any Affiliate thereof will file any involuntary petition or
otherwise institute any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceeding under any federal or state bankruptcy
or similar law against or by the Issuer.
Article Twelve
Accounts and Accountings
Section 12.01. Collection of Money. Except as otherwise expressly
provided herein, the Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Trustee pursuant to this Indenture. The Trustee shall, upon
request from the Servicer, provide the Servicer with sufficient information
regarding the amount of collections with respect to the Lease Contracts received
by the Trustee in the accounts held in the name of the Trustee to permit the
Servicer to perform its duties under the Servicing Agreement. The Trustee shall
hold all such money and property so received by it as part of the Trust Estate
and shall apply it as provided in this Indenture. If any Lease Contract becomes
a Defaulted Lease Contract, the Trustee, upon Issuer or Servicer request may,
and upon the request or the Holders of a majority in principal amount of the
Outstanding Notes shall, take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and to proceed thereafter as
provided in Article Six hereof.
Section 12.02. Collection Account. (a) On or prior to the Closing Date,
the Trustee shall open and maintain a trust account (the "Collection Account"),
which at all times shall be an Eligible Account, in the name of the Trustee for
the benefit of the Noteholders, for the receipt of (i) payments remitted to the
Trustee by the Servicer, (ii) amounts transferred from the Pre-Funding Account
in accordance with Section 12.03(d)(ii) and (iii) and (iii) any Reinvestment
Income. Funds in the Collection Account shall not be commingled with any other
monies. All payments to be made from time to time by the Issuer to the
Noteholders out of funds in the Collection Account pursuant to this Indenture
shall be made by the Trustee or the Paying Agent of the Issuer. All monies
deposited from time to time in the Collection Account pursuant to this Indenture
shall be held by the Trustee as part of the Trust Estate as herein provided.
(b) Upon Issuer Order, the Trustee shall invest the funds in the
Collection Account in Eligible Investments. The Issuer Order shall specify the
Eligible Investments in which the Trustee shall invest, shall state that the
same are Eligible Investments and shall further specify the percentage of funds
to be invested in each Eligible Investment. No such Eligible Investment shall
mature later than the second Business Day preceding the next following Payment
Date and shall not be sold or disposed of prior to its maturity; provided that,
Eligible Investments of the type described in clause (i) of the definition of
Eligible Investments may mature on such Payment Date. In the absence of a Issuer
Order, the Trustee shall invest funds in the Collection Account in Eligible
Investments described in clause (vii) of the definition thereof. Eligible
Investments shall be made in the name of the Trustee for the benefit of the
Noteholders. The Trustee shall provide to the Servicer monthly written
confirmation of such investments, describing the Eligible Investments in which
such amounts have been invested. Any funds not so invested must be insured by
the Federal Deposit Insurance Corporation.
(c) Any income or other gain from investments in Eligible Investments
as outlined in (b) above shall be credited to the Collection Account, and any
loss resulting from such investments shall be charged to such account; provided,
however, that the Issuer shall make or cause to be made no later than the
applicable Payment Date a deposit to the Collection Account to the extent of any
losses therein caused as a result of the Issuer's investment instructions
provided for herein. The Trustee shall not be liable for any loss incurred on
any funds invested in Eligible Investments pursuant to the provisions of this
Section 12.02.
(d) On each Payment Date, if either no Default or Event of Default
shall have occurred and be continuing, or a Default or Event of Default shall
have occurred and be continuing but the entire unpaid principal amount of the
Notes shall not have been declared due and payable pursuant to Section 6.02
hereof, then on such Payment Date, after making all transfers and deposits to
the Collection Account pursuant to Section 12.02(a) hereof, the Trustee shall
withdraw from the Collection Account (other than amounts representing payments
of Lease Receivables due after the related Calculation Date immediately
preceding such Payment Date) including the Reinvestment Income therein, and
shall make the following disbursements in the following order in accordance with
the provisions of and instructions on the Monthly Servicer's Report; provided
that the Trustee shall withdraw from the Collection Account and make interest
payments based on the outstanding principal balance of the Notes even if it
shall not have received the Monthly Servicer's Report.
(i) to pay to the Trustee the Trustee Fee then due;
(ii) to pay to the Servicer: (A) the Servicer Fee; (B) the
amounts necessary to reimburse the Servicer and any successor Servicer
as provided in Section 3.09(a) of the Servicing Agreement for
reasonable costs and expenses incurred by the Servicer (including
reasonable attorney's fees and out-of-pocket expenses) in connection
with the realization, attempted realization or enforcement of rights
and remedies upon Defaulted Lease Contracts, from amounts received as
Recoveries from any Defaulted Lease Contracts; (C) all amounts received
in respect of Lease Receivables as to which the Servicer has made an
unrecovered Servicer Advance, to the extent of such Servicer Advance;
(D) all amounts received in respect of Servicing Charges; (E) the
amount necessary to reimburse the Servicer for any Servicer Advance
deemed by the Servicer to be unrecoverable; (F) any Servicer Advances
that have not been otherwise reimbursed; and (G) all amounts received
in respect of taxes to be paid by any Customers;
(iii) to pay the aggregate interest due on the Outstanding
Notes on that Payment Date and any overdue interest, to be applied as
provided in Section 3.07 hereof;
(iv) to pay the Principal Distribution Amount for all
Outstanding Notes on that Payment Date, to be applied to the payment of
Note principal until the Notes are paid in full;
(v) to pay to the Trustee any other amounts due to the Trustee
as expressly provided herein and in the Servicing Agreement;
(vi) to pay to the Servicer, any other amounts due the
Servicer as expressly provided herein and in the Servicing Agreement;
and
(vii) to remit any excess funds to or at the direction of the
Issuer in accordance with the instructions on the Monthly Servicer's
Report.
The foregoing provisions of paragraph 12.02(d) notwithstanding, any
monies deposited in the Collection Account for purposes of redeeming Notes
pursuant to Article Ten hereof shall, subject to Section 11.02(o) hereof, remain
in the Collection Account until used to redeem the Notes.
(e) Upon the Issuer's or the Trustee's obtaining actual knowledge of
the occurrence of any Trigger Event, the Issuer or the Trustee, as the case may
be, shall within two Business Days of obtaining such actual knowledge notify the
Noteholders of such occurrence.
Section 12.03. Pre-Funding Account. (a) Prior to the Closing Date, the
Issuer shall cause the Trustee to open and maintain a trust account (the
"Pre-Funding Account"), which at all times will be an Eligible Account, for the
benefit of the Noteholders. On the Closing Date, the Issuer shall deposit into
the Pre-Funding Account the Pre-Funded Amount. Monies on deposit in the
Pre-Funding Account will be invested at the written direction of the Issuer in
Eligible Investments during the term of this Indenture, and any income or other
gain realized from such investment, shall be held by the Trustee in the
Pre-Funding Account as part of the Trust Estate as security for the Notes
subject to disbursement and withdrawal as herein provided. Monies shall be
subject to withdrawal in accordance with Section 12.03(d) hereof.
(b) Upon Issuer Order all or a portion of the Pre-Funding Account shall
be invested and reinvested at the Issuer's written direction in one or more
Eligible Investments. In the absence of an Issuer Order, the Trustee shall
invest funds in the Pre-Funding Account in Eligible Investments described in
clause (vi) of the definition thereof. All income or other gain from such
investments shall be credited to such Pre-Funding Account and any loss resulting
from such investments shall be charged to such Pre-Funding Account; provided,
however, that the Issuer shall make or cause to be made on any Determination
Date a deposit to the Pre-Funding Account to the extent of any losses therein
caused as a result of the Issuer's investment instructions. No Eligible
Investment shall mature later than the Business Day preceding the Subsequent
Transfer Date or, if later the end of the Funding Period and shall not be sold
or disposed of prior to its maturity. Eligible Investments shall be made in the
name of the Trustee for the benefit of the Noteholders. The Trustee shall
provide to the Servicer monthly written confirmation of such investments,
describing the Eligible Investments in which such amounts have been invested.
Any funds not so invested must be insured by the Federal Deposit Insurance
Corporation.
(c) If any amounts invested as provided in Section 12.03(b) hereof
shall be needed for disbursement from the Pre-Funding Account as set forth in
Section 12.03(d) hereof, the Trustee shall cause such investments of such
Pre-Funding Account to be sold or otherwise converted to cash to the credit of
such Pre-Funding Account. The Trustee shall not be liable for any investment
loss resulting from investment of money in the Pre-Funding Account in any
Eligible Investment in accordance with the terms hereof (other than in its
capacity as obligor under any Eligible Investment).
(d) Disbursements from the Pre-Funding Account shall be made, to the
extent funds therefor are available, only as follows:
(i) on the Subsequent Transfer Date, the Servicer shall
instruct the Trustee in writing (x) to withdraw from the Pre-Funding
Account an amount equal to the sum of (A) the Implicit Principal
Balances of the Subsequent Lease Contracts transferred to the Issuer on
the Subsequent Transfer Date as of the Subsequent Cut-Off Date and (B)
any Scheduled Payments with respect to the Subsequent Lease Contracts
due on or prior to the Subsequent Cut-Off Date but not received through
the Subsequent Cut-Off Date and (y) subject to the receipt of the items
described in subparagraph (e) of this Section 12.03, to distribute such
amount to or at the direction of the Issuer in accordance with the
instructions provided to the Trustee;
(ii) if (x) the Pre-Funded Amount has not been reduced to zero
prior to the Payment Date on or immediately following the end of the
Funding Period or (y) prior to any Payment Date during the Funding
Period, an Event of Default, Servicer Event of Default or Trigger Event
occurs, then the Trustee shall withdraw from the Pre-Funding Account on
such Payment Date all amounts remaining on deposit in the Pre-Funding
Account (excluding any Reinvestment Income in such account) and deposit
such amounts in the Collection Account for distribution to the
Noteholders in accordance with Section 12.02(d)(iv) hereof; and
(iii) on the Determination Date immediately preceding each
Payment Date, the Trustee shall withdraw funds representing
Reinvestment Income from the Pre-Funding Account, pursuant to
instructions in the Monthly Servicer's Report, and deposit such funds
in the Collection Account, on or prior to 4:00 p.m., Minneapolis time,
on such Determination Date, for disbursement in accordance with the
provisions of Section 12.02(d) hereof.
(e) The Issuer shall provide to the Trustee on the Subsequent Transfer
Date the following items with respect to any Subsequent Lease Contracts
transferred on such date:
(i) a supplement to the Contribution Agreement substantially
in the form of Schedule I to the related Subsequent Lease Assignment
Agreement and Exhibit C hereto, subjecting such Subsequent Lease
Contracts and the related Subsequent Lease Receivables to the
provisions thereof and hereof and providing with respect to such
Subsequent Lease Contracts the information set forth in the Lease
Schedule;
(ii) the original executed counterpart of the Lease Contracts
relating to such Subsequent Lease Contracts and the related Lease
Contract File;
(iii) evidence that UCC financing statements have been filed
with respect to such Subsequent Lease Contracts in accordance with
Section 4.02 hereof; and
(iv) an Opinion of Counsel in accordance with Section 4.07
hereof.
Section 12.04. Reports by Trustee to Noteholders. (a) On each Payment
Date the Trustee shall account to each Holder of Notes on which payments of
principal and interest are then being made the amount which represents principal
and the amount which represents interest, and shall contemporaneously advise the
Issuer of all such payments. The Trustee shall be deemed to have satisfied its
obligations under this Section 12.04 by delivering the Monthly Servicer's Report
to each such Holder of the Notes and by causing the Servicer to deliver the
Monthly Servicer's Report to the Issuer. The Servicer hereby agrees to deliver
the Mnthly Servicer's Report to the Issuer. On or before the 10th day prior to
the Final Payment Date for the Notes the Trustee shall provide notice to the
Holders of the Notes of the Final Payment Date for the Notes. Such notice shall
include (1) a statement that interest shall cease to accrue as of the last day
preceding the date on which such Final Payment Date occurs, and (2) shall
specify the place or places at which presentation and surrender may be made.
(b) The Trustee shall, on a monthly basis beginning on the first
Calculation Date, confirm the credit rating or, if more than one credit rating
has been assigned, each such credit rating of each institution in which funds
are invested pursuant to clause (vi) of the definition of Eligible Investments
and shall promptly notify the Noteholders if any such credit rating has been
lowered, and the Trustee is not able to move affected funds into another
Eligible Investment; if the Trustee moves funds in accordance with this
sentence, it will promptly provide notice of such movement to the Issuer.
(c) At least annually, the Trustee shall distribute to Noteholders any
Form 1099 or similar information returns required by applicable tax law to be
distributed to the Noteholders and received in accordance with the next
sentence. The Servicer, at its own expense, shall prepare or cause to be
prepared all such information for distribution by the Trustee to the
Noteholders.
Article Thirteen
Provisions of General Application
Section 13.01. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Trustee, and, where it is
hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
7.01 hereof) conclusive in favor of the Trustee and the Issuer, if made in the
manner provided in this Section 13.01.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Note shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
Section 13.02. Notices, etc., to Trustee, Issuer and Servicer. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with any party hereto shall be sufficient
for every purpose hereunder if in writing and telecopied or mailed, first-class
postage prepaid and addressed to the appropriate address below:
(a) to the Trustee at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000-0000 (facsimile number (000) 000-0000), Attention: Corporate
Trust Services--Asset-Backed Administration, or at any other address previously
furnished in writing to the Issuer, the Noteholders and the Servicer; or
(b) to the Issuer at Sunrise Funding Corporation I, 0000 Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxxxx, Xxxxxxxxx 00000 (telephone number (612)
000-0000), Attention: President, or at any other address previously furnished in
writing to the Trustee, the Noteholders and the Servicer by the Issuer; or
(c) to the Servicer at Sunrise Leasing Corporation, 000 Xxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxxx Xxxxxx, Xxxxxxxxx 00000 (facsimile number (612)
513-3299), Attention: President, or at any other address previously furnished in
writing to the Trustee, the Noteholders and the Issuer.
Section 13.03. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid, to each Noteholder affected by such
event, at such Noteholder's address as it appears on the Note Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case in which notice to Noteholders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Noteholder shall affect the sufficiency of
such notice with respect to other Noteholders, and any notice which is mailed in
the manner herein provided shall conclusively be presumed to have been duly
given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 13.04. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 13.05. Successors and Assigns. All covenants and agreements in
this Indenture by the Issuer shall bind its successors and assigns, whether so
expressed or not.
Section 13.06. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or unpaired thereby.
Section 13.07. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto, the Noteholders, and any Paying Agent which may be appointed pursuant to
the provisions hereof, and any of their successors hereunder, any benefit or any
legal or equitable right, remedy or claim under this Indenture or under the
Notes.
Section 13.08. Legal Holidays. In any case in which the date of any
Payment Date or the Stated Maturity of any Note shall not be a Business Day,
then (notwithstanding any other provision of the Notes or this Indenture)
payment of principal, interest, or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the nominal date of any such Stated Maturity or Payment
Date and, assuming such payment is actually made on such subsequent Business
Day, no additional interest shall accrue on the amount so paid for the period
from and after any such nominal date.
Section 13.09. Governing Law. This Indenture and each Note shall be
construed in accordance with and governed by the internal laws of the State of
Minnesota applicable to agreements made and to be performed therein, without
regard to the conflict of laws provisions of any State.
Section 13.10. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 13.11. Obligation. No recourse may be taken, directly or
indirectly, against any incorporator, subscriber to the capital stock,
stockholder, member, partner, employee, officer or director of the Issuer or of
any predecessor or successor of the Issuer with respect to the Issuer's
obligations on the Notes or under this Indenture or any certificate or other
writing delivered in connection herewith.
Section 13.12. Compliance Certificates and Opinions. Upon any
application, order or request by the Issuer or the Servicer to the Trustee to
take any action under any provision of this Indenture for which a specific
request is required under this Indenture, the Issuer or the Servicer, as
applicable, shall furnish to the Trustee an Officer's Certificate of the Issuer
or the Servicer, as applicable, stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with, except that in the case of any such application or request as to
which the furnishing of a different certificate is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, such
individual has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
In Witness Whereof, the Issuer, the Servicer and the Trustee have
caused this Indenture to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
Sunrise Funding Corporation I, Issuer
By: /s/ R. Xxxxxxx Xxxx
Name: R. Xxxxxxx Xxxx
Title: President
SUNRISE LEASING CORPORATION,
Servicer
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, Trustee
By: /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Corporate Trust Officer
