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JLA FUNDING CORPORATION II,
Issuer
JLA CREDIT CORPORATION,
Servicer
and
LTCB TRUST COMPANY,
Trustee
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INDENTURE
Dated as of August 15, 1997
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$70,658,000 FLOATING RATE ASSET-BACKED NOTES, CLASS A
$4,342,000 FLOATING RATE ASSET-BACKED NOTES, CLASS B
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TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY.................................................. 1
GRANTING CLAUSE ......................................................... 1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01. Definitions .............................................. 3
SECTION 1.02. Compliance Certificates and Opinions ..................... 20
SECTION 1.03. Form of Documents Delivered to Trustee.................... 20
SECTION 1.04. Acts of Noteholders, etc. ................................ 22
SECTION 1.05. Notices .................................................. 23
SECTION 1.06. Notice to Noteholders; Waiver............................. 24
SECTION 1.07. Table of Contents, Headings, etc. ........................ 24
SECTION 1.08. Successors and Assigns.................................... 24
SECTION 1.09. Severability Clause....................................... 24
SECTION 1.10. Benefits of Indenture .................................... 25
SECTION 1.11. Governing Law ............................................ 25
SECTION 1.12. Legal Holidays ........................................... 25
SECTION 1.13. Execution in Counterparts................................. 25
SECTION 1.14. Inspection ............................................... 25
SECTION 1.15. Survival of Representations and Warranties ............... 26
SECTION 1.16. Communications with Noteholders .......................... 26
SECTION 1.17. Statements Required in Officer's Certificate ............. 26
SECTION 1.18. When Treasury Securities Disregarded ..................... 27
SECTION 1.19. Rules by Trustee ......................................... 27
SECTION 1.20. No Adverse Interpretation of other Agreements............. 27
SECTION 1.21. No Recourse Against Others .............................. 27
SECTION 1.22. Independence of Covenants ................................ 27
SECTION 1.23. Consent to Jurisdiction .................................. 28
SECTION 1.24. No Bankruptcy Petition ................................... 28
ARTICLE II
THE NOTES
SECTION 2.01. General Provisions ...................................... 29
SECTION 2.02. Issuances During the Note Issuance Period ................ 30
SECTION 2.03. Execution, Authentication, Delivery and Dating............ 31
SECTION 2.04. Registration, Transfer and Exchange ...................... 32
SECTION 2.05. Mutilated, Destroyed, Lost and Stolen Notes .............. 33
SECTION 2.06. Restrictions on Transfer and Exchange of Notes;
Compliance with Rule 144A................................. 34
SECTION 2.07. Payment of Interest and Principal; Rights
Preserved................................................. 36
SECTION 2.08. Persons Deemed Owners .................................... 36
SECTION 2.09. Cancellation ............................................. 36
SECTION 2.10. Class B Notes Subordinated to Class A Notes............... 37
SECTION 2.11. Noteholder Lists.......................................... 37
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ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS
SECTION 3.01. Accounts; Investments by Trustee.......................... 38
SECTION 3.02. Collections; Applications ............................... 41
SECTION 3.03. Additional Deposits ...................................... 42
SECTION 3.04. Daily Deposits............................................ 42
SECTION 3.05. Reserve Account .......................................... 42
SECTION 3.06. Payahead Account ......................................... 43
SECTION 3.07. Collection Account ....................................... 44
SECTION 3.08. Lease Purchase Account ................................... 46
SECTION 3.09. Reports; Notices of Certain Payments .................... 47
SECTION 3.10. Trustee May Rely on Certain Information .................. 47
ARTICLE IV
LEASES AND EQUIPMENT
SECTION 4.01. Representations and Warranties of the Company ............ 48
SECTION 4.02. Purchase upon Breach; Sale and Servicing
Agreement................................................. 48
SECTION 4.03. Release of Leases and Equipment Following
Substitution or Repurchase ............................... 49
SECTION 4.04. Release of Leases and Equipment Upon Final Rent
Payment .................................................. 50
SECTION 4.05. Execution of Documents ................................... 50
ARTICLE V
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 5.01. Servicer Events of Default ............................... 50
SECTION 5.02. Substitute Servicer ...................................... 51
SECTION 5.03. Notification to Noteholders .............................. 51
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
SECTION 6.01. Events of Default ........................................ 51
SECTION 6.02. Acceleration of Maturity; Rescission and
Annulment ................................................ 53
SECTION 6.03. Other Remedies ........................................... 54
SECTION 6.04. Trustee May File Proofs of Claim ......................... 54
SECTION 6.05. Trustee May Enforce Claims Without Possession of
Notes .................................................... 55
SECTION 6.06. Application of Money Collected ........................... 56
SECTION 6.07. Limitation on Suits ...................................... 57
SECTION 6.08. Unconditional Right of Noteholders to Receive
Payment .................................................. 58
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SECTION 6.09. Restoration of Rights and Remedies........................ 58
SECTION 6.10. Rights and Remedies Cumulative ........................... 58
SECTION 6.11. Delay or Omission Not Waiver ............................. 58
SECTION 6.12. Control by the Class A and Class B Noteholders ........... 59
SECTION 6.13. Waiver of Defaults and Events of Default ................. 59
SECTION 6.14. Waiver of Stay or Extension Laws ......................... 60
SECTION 6.15. Sale of Trust Property ................................... 60
SECTION 6.16. Undertaking for Costs .................................... 61
ARTICLE VII
THE TRUSTEE
SECTION 7.01. Certain Duties and Responsibilities ...................... 62
SECTION 7.02. Notice of Defaults or Events of Default .................. 63
SECTION 7.03. Certain Rights of Trustee................................. 63
SECTION 7.04. Trustee's Disclaimer .................................... 65
SECTION 7.05. Money Held in Trust ...................................... 65
SECTION 7.06. Compensation, Reimbursement, etc. ........................ 65
SECTION 7.07. Eligibility; Disqualification ............................ 66
SECTION 7.08. Resignation and Removal; Appointment of Successor......... 67
SECTION 7.09. Acceptance of Appointment by Successor.................... 68
SECTION 7.10. Merger, Conversion, Consolidation or Succession to
Business ................................................. 68
SECTION 7.11. Co-trustees and Separate Trustees ........................ 68
SECTION 7.12. Servicer to Hold Leases .................................. 70
SECTION 7.13. Financing Statements ..................................... 70
SECTION 7.14. Reports by Trustee to Noteholders ........................ 70
ARTICLE VIII
COVENANTS
SECTION 8.01. Payment of Principal and Interest ........................ 72
SECTION 8.02. Maintenance of Office or Agency; Chief Executive
Office ................................................... 72
SECTION 8.03. Money for Payments to Noteholders to Be Held In
Trust..................................................... 73
SECTION 8.04. Corporate Existence; etc. ................................ 73
SECTION 8.05. Protection of Trust Property; Further Assurances.......... 75
SECTION 8.06. Compliance Certificates .................................. 76
SECTION 8.07. Performance of Obligations; Sale and Servicing
Agreement ................................................ 76
SECTION 8.08. Negative Covenants ....................................... 76
SECTION 8.09. Information as to the Company ............................ 78
SECTION 8.10. Payment of Taxes and Other Claims ........................ 79
SECTION 8.11. Indemnification ......................................... 79
SECTION 8.12. Use of Proceeds .......................................... 79
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SECTION 8.13. Maximum Note Principal Balance ........................... 80
SECTION 8.14. Rate Cap Provider......................................... 80
ARTICLE IX
AMENDMENTS AND SUPPLEMENTAL INDENTURES
SECTION 9.01. Amendments and Supplemental Indentures.................... 80
SECTION 9.02. Execution of Amendments and Supplemental
Indentures ............................................... 81
SECTION 9.03. Effect of Amendments and Supplemental Indentures.......... 81
SECTION 9.04. Reference in Notes to Amendments and Supplemental
Indentures ............................................... 82
SECTION 9.05. Revocation and Effect of Consents ........................ 82
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Optional Redemption; Election to Redeem................... 82
SECTION 10.02. Notice to Trustee ........................................ 83
SECTION 10.03. Notice of Redemption by the Company ...................... 83
SECTION 10.04. Deposit of the Redemption Price .......................... 83
SECTION 10.05. Notes Payable on Redemption Date ......................... 84
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of Indenture .................. 84
SECTION 11.02. Application of Trust Money ............................... 85
SECTION 11.03. Reinstatement ............................................ 85
SCHEDULES
Schedule I - Maximum Note Principal Balance
EXHIBITS
Exhibit A - Form of Class A Note
Exhibit B - Form of Class B Note
Exhibit C - Form of Transferee Letter
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INDENTURE
This INDENTURE dated as of August 15, 1997, is between JLA
FUNDING CORPORATION II, a Delaware corporation (herein called the "company"),
JLA CREDIT CORPORATION, a Delaware corporation (herein sometimes called "JLACC"
or the "Servicer"), and LTCB TRUST COMPANY, a New York trust company, as
trustee (herein called the "Trustee")
RECITALS OF THE COMPANY
The Company has duly authorized the issuance, from time to
time during the Note Issuance Period (as defined herein), of up to $70,658,000
in aggregate principal amount of its Floating Rate Asset-Backed Notes, Class A
(the "Class A Notes") and up to $4,342,000 in aggregate principal amount of its
Floating Rate Asset-Backed Notes, Class B, which will be subordinate to the
Class A Notes (the "Class B Notes" and together with the Class A Notes, the
"Notes"), of substantially the tenor hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
All things necessary to make the Notes, when executed by the
Company and authenticated and delivered hereunder, the valid obligations of the
Company, and to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Notes by the holders thereof, it is mutually covenanted and agreed, for the
benefit of all Noteholders, as follows:
GRANTING CLAUSE
The Company hereby Grants to the Trustee, for the benefit and
security of the Noteholders and the Trustee as their interests appear herein,
all of the Company's right, title and interest in and to (a) any and all Leases
(including Substitute Leases) acquired by the Company at any time or from time
to time after August 15, 1997 (including any Purchase Option Payments), and all
Rent Payments, Retransfer Amounts and other amounts due or becoming due with
respect thereto (other than any payments due pursuant to the terms of any Lease
on or before the related Cut-Off Date for such Lease), (b) all rights of
the Company to or under any guarantees of or collateral for the Lessee's
obligations under any Lease, (c) all moneys from time to time held by the
Trustee pursuant to Section 3.01 pending deposit in one of the accounts referred
to therein, (d) the amounts representing Security Deposit Offsets applied to
unpaid Rent Payments and Purchase Option Payments due on or to become due
after the applicable Cut-Off Dates, any guaranty relating to a Lease and all
moneys from time to time on deposit in the Lock-Box Account Collection Account
and Reserve Account, including all investment and income from the investment of
such moneys, (e) the Payahead Account and the right to receive payments of funds
deposited therein under the circumstances described in this Indenture, (f) the
Lease Purchase Account and the rights to receive payment of all fund deposited
therein and all rights of the Company under the Sale an Servicing Agreement, (g)
the Lease Files and all documents therein and all rights of the Company under
any program agreement, purchase agreement, assignment agreement, or other
document pursuant to which the company acquired an interest in any Lease and the
Equipment subject thereto and any support agreements or guarantees related
thereto, and (h) each Insurance Policy, if any, covering Equipment including all
rights to any Insurance Proceeds received pursuant to such Insurance Policy
after the applicable Cut-Off Date, (i) the Rate Cap Agreement, including all
Rate Cap Proceeds, and any credit enhancement with respect to any Class or
Classes of Notes, and (j) all proceeds of any of the foregoing. The Company also
hereby Grants to the Trustee, for the benefit and security of the Noteholders
and the Trustee, a security interest in (i) all of the Company's right, title
and interest in and to the Equipment at any time subject to any Lease and (ii)
any and all proceeds of such Equipment.
The Grants of the Trust Property effected by this Indenture
shall include all rights, powers, and options (but none of the obligations) of
the Company with respect thereto, including, without limitation, the immediate
and continuing right to claim for, collect, receive, and give receipts for Rent
Payments in respect of the Leases and all other moneys payable thereunder, to
give and receive notice and other communications, to make waivers, amendments or
other agreements, to exercise all rights and options, to bring judicial
proceedings in the name of the Company or otherwise, to terminate a Lease
pursuant to the terms thereof, and generally to do and receive anything that the
Company is or may be entitled to do or receive thereunder or with respect
thereto. Such Grants are made in trust to secure (i) the payment of all amounts
due on the Notes in accordance with their terms, equally and ratably without
prejudices priority, or distinction between any Note of the same class and any
other Note of the same class by reason of differences in time of issuance or
otherwise, except as otherwise may be provided in this Indenture, (ii) the
payment of all other sums payable under this Indenture and (iii) compliance with
the provisions of this Indenture with respect to the Notes.
The Trustee acknowledges such Grants, accepts the trust
hereunder in accordance with the provisions hereof, and agrees to perform the
duties herein required to the best of its ability and to the end that the
interests of the Noteholders may be adequately and effectively protected as
hereinafter provided.
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01. Definitions.
(a) General Definitions. Except as otherwise specified or as
the context may otherwise require, the following terms have the meanings set
forth below for all purposes of this Indenture, and the definitions of such
terms are applicable to the singular as well as the plural forms of such terms
and to the masculine as well as to the feminine and neuter genders of such
terms.
"Account" means each of the Collection Account, the Reserve
Account, the Payahead Account and the Lease Purchase Account.
"Act" has the meaning specified in Section 1.04.
"Administrative Fees" means, with respect to any Lease any
date, any late, prepayment, extension, insurance, property tax or administrative
fees or similar charges paid by the Lessee pursuant to the terms of such Lease.
"Affiliate" means, with respect to any specified Person, any
other Person (i) which directly or indirectly controls, or whose directors or
officers directly or indirectly control, or is controlled by, or is under common
control with, such specified Person, (ii) which beneficially owns or holds, or
whose directors or officers, beneficially own or hold, 5% or more of any class
of the voting stock (or, in the case of an entity that is not a corporation, 5%
of the equity interest) of such specified Person, or (iii) 5% or more of the
voting stock (or, in the case of an entity that is not a corporation, 5% of the
equity interest) of which is owned or held by such specified Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Assumed Longest Amortization" has the meaning specified in
Section 8.13.
"Authorized Officer" means, with respect to any matter, any
officer of or other Person representing the Company, the Seller, the Servicer,
the Trustee or a Noteholder, as the case may be, who is authorized to act for
that party and named on a list which shall be provided to the Trustee from time
to time by each respective Person.
"Available Payment Amount" has the meaning specified Section
3.07(b).
"Available Reserve Amount" shall mean, with respect to any
Monthly Payment Date, the lesser of (a) the amount on deposit in the
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Reserve Account (excluding all income from the investment of funds therein) and
(b) the Required Reserve Amount.
"Business Day" means any day that is a London Banking Day and
that is not a Saturday, a Sunday or a day on which banking institutions in New
York City or in the city in which the Corporate Trust Office is located are
authorized or required by law or executive order to be closed.
"Capital Stock" means the Company's common stock, $.10 par
value per share.
"Class" has the meaning specified in Section 2.01.
"Class A Note" means any one of the Notes authorized by and
authenticated and delivered under, this Agreement in substantially the form set
forth in Exhibit A.
"Class A Note Principal Balance" means, on any date, the
unpaid principal amount of the Class A Notes as of such date.
"Class A Noteholder" means, at any time, any Person in whose
name a Class A Note is registered in the Note Register.
"Class A Percentage" means, as of any date, the quotient
(expressed as a percentage) obtained by dividing (i) the Class A Note Principal
Balance as of such date by (ii) the Note Principal Balance of all Notes as of
such date.
"Class A Rate" means, with respect to the Class A Notes the
variable per annum rate of interest that for each Interest Period is equal to
the sum of LIBOR plus 0.30%.
"Class B Note" means any one of the Notes authorized by and
authenticated and delivered under, this Agreement in substantially the form set
forth in Exhibit B.
"Class B Note Principal Balance" means, on any date, the
unpaid principal amount of the Class B Notes as of such date.
"Class B Noteholder" means, at any time, any Person in whose
name a Class B Note is registered in the Note Register.
"Class B Percentage" means, as of any date, the quotient
(expressed as a percentage) obtained by dividing (i) the Class B Note Principal
Balance as of such date by (ii) the Note Principal Balance of all Notes as of
such date.
"Class B Rate" means, with respect to the Class B Notes, the
variable per annum rate of interest that for each Interest Period is equal to
the sum of LIBOR plus 0.65%.
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"Class Percentage" means (i) with respect to the Class A
Notes, the Class A Percentage, and (ii) with respect to the Class B Notes, the
Class B Percentage.
"Closing Date" means August 15, 1997.
"Code" means the Internal Revenue Code of 1986, as it may be
amended from time to time, or any successor statute thereto, and applicable
regulations of the U.S. Department of the Treasury promulgated thereunder.
"Collection Account" means the segregated account or accounts
by that name established and maintained by the Trustee pursuant to Section 3.01.
"Collection Period" means, as to any Monthly Payment Date the
calendar month preceding the month in which such Monthly Payment Date occurs.
"Committed Investor" means each purchaser of Notes that is
contractually committed to purchase and fund Notes during the Note Issuance
Period.
"Company" means JLA Funding Corporation II, a corporation
organized and existing under the laws of the State of Delaware, and its
successors.
"Company Order" or "Company Request" means a written order or
request delivered to the Trustee and signed in the name of the Company by an
Authorized Officer.
"Corporate Trust Office" means the principal office of the
Trustee at which its corporate trust business shall be administered which office
at the date of execution of this Agreement is locate at 000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xx. Xxxxxxx Xxxxxxxxx, Vice President, Corporate
Trust Administration, or such office at some other address or such other
person as the Trustee may designate from time to time by notice to the
Noteholders, the Company and the Servicer.
"Credit and Collection Policy" means those receivable credit
and collection policies and practices of the Servicer as in effect from time to
time and maintained in compliance with the requirement of the Sale and Servicing
Agreement.
"Current Amount" means with respect to any Lease (other than a
Defaulted Lease, a Retransferred Lease, or a Lease which, together with amounts,
if any, on deposit in the Payahead Account with respect to such Lease is prepaid
in full (a "Prepaid Lease") from and after the Collection Period in which such
Lease became Defaulted, Retransferred or Prepaid Lease) for any Collection
Period and the related Monthly Payment Date, the portion of any Payahead Amount
which is allocated by the Servicer to such Collection Period or any prior
Collection Period and, with respect to a Defaulted Lease,
5
Retransferred Lease or Prepaid Lease, means the entire Payahead Amount.
"Cut-Off Date" means, as to any Lease, the last day of the
calendar month immediately preceding the applicable Lease Purchase Date of such
Lease, as specified in the related Xxxx of Sale delivered pursuant to the Sale
and Servicing Agreement.
"Default" any occurrence that is, or with notice or the lapse
of time or both would become, an Indenture Event of Default.
"Defaulted Lease" with respect to a Monthly Payment Date,
means a Lease (other than a Retransferred Lease) (i) as to which the Servicer
has, in accordance with its customary servicing procedures, during the
Collection Period preceding such Monthly Payment Date, written off any amount to
be paid thereunder as uncollectible or placed into the pending writeoff or
workout category or (ii) as to which any payment remains unpaid for 181 days or
more from the original due date for such payment or (iii) rejected by or on
behalf of the related Lessee in a bankruptcy proceeding.
"Default Ratio" means the ratio (expressed as an annualized
percentage) computed, as of the last day of each calendar month, by dividing (i)
the aggregate outstanding Principal Balance of all Leases that were Defaulted
Leases on such day or that would have been Defaulted Leases on such day had they
not been written off the books of the Servicer or placed into the pending
writeoff or workout category during such calendar month (in each case without
(for purposes of this definition) giving effect to any withdrawal from the Trust
Property of any Defaulted Lease pursuant to Article IV of the inclusion in the
Trust Property of any Substitute Lease), net of any Recoveries received by the
Servicer with respect to such Leases during such calendar month by (ii) the
aggregate outstanding Principal Balance of all Leases on such day (without (for
purposes of this definition) giving effect to any withdrawal from the Trust
Property of any Defaulted Lease pursuant to Article IV or the inclusion in the
Trust Property of any Substitute Lease); provided, however, that for purposes of
the foregoing ratio the Principal Balance of Substitute Lease that becomes a
Defaulted Lease shall be include if such Sulpstitute Lease becomes a Defaulted
Lease during the Note Issuance Period but shall not be included if such
Substitute Lease becomes a Defaulted Lease after the Note Issuance Period.
"Delinquency Ratio" means the ratio (expressed as percentage)
computed as of the last day of each calendar month by dividing (i) the aggregate
outstanding Principal Balance of all Leases that were Delinquent Leases on such
day by (ii) the aggregate outstanding Principal Balance of all Leases on such
day (without, for purposes of clauses (i) and (ii) of this definition, giving
effect to any withdrawal from the Trust Property of any Delinquent Lease
pursuant to Article IV or to the inclusion in the Trust Property of any
Substitute Lease); provided, however, that for purposes of the foregoing ratio
the Principal Balance of a Substitute Lease that becomes a Delinquent Lease
shall be included if such Substitute Lease
6
becomes a Delinquent Lease during the Note Issuance Period but shall not be
included if such Substitute Lease becomes a Delinquent Lease after the Note
Issuance Period.
"Delinquent Lease" with respect to any Monthly Payment Date
means any Lease that is not a Defaulted Lease and under which any payment
remains unpaid, as of the last day of the Collection Period preceding such
Monthly Payment Date, for 61 days or more from the original due date for such
payment.
"Deposit Date" means, with respect to any Monthly Payment
Date, the Business Day immediately preceding such related Month Payment Date.
"Determination Date" means, with respect to each Month Payment
Date, the second Business Day before such Monthly Payment Date.
"Early Amortization Event" means the occurrence of a Indenture
Event of Default.
"Eligibility Criteria" has the meaning specified in the Sale
and Servicing Agreement.
"Eligible Deposit Account" shall mean either (x) a segregated
trust account in the corporate trust department at a Qualified Institution with
corporate trust powers or (y) a segregated demand deposit account at a Qualified
Institution whose short-term unsecured deposits are rated A-1+ by Standard &
Poor's.
"Eligible Lease" has the meaning specified in Section 3.02 of
the Sale and Servicing Agreement.
"Eligible Rate Cap Provider" means a bank, other depository
institution or other Person (i) the long-term debt obligations of which are
rated not less than AA by Standard & Poor's, the rating of which does not have a
"t" highlighter affixed to it and (ii) have the power and authority to execute,
deliver and perform the Rate C Agreement.
"Equipment" means any new or used equipment, together with all
accessions thereto and replacement parts, accessories and repairs with respect
thereto, which is the subject of a Lease.
"Equity Base" means, with respect to the Company on any date,
the amount equal to the excess of (i) the Pool Balance of the Leases owned by
the Company on such date plus the amount on deposit in the Reserve Account
(after giving effect to all required deposit and withdrawals therefrom, if any,
on such date), over (ii) the aggregate outstanding Note Principal Balance of all
Class A Not and Class B Notes on such date.
"ERISA" means the Employee Retirement Income Security of Xxx
0000, as amended.
7
"Excess Collections" means, for any Monthly Payment Date, the
amounts remaining in the Collection Account with respect to the related
Collection Period and available for distribution to or upon the order of the
Company pursuant to Section 3.07(b)(xiii).
"Grant" means to grant, bargain, sell, convey, assign,
transfer, mortgage, pledge, create and grant a security interest in and right of
set-off against, deposit, set over and confirm.
"Indenture" or "this Indenture" means this instrument as
originally executed and as from time to time supplemented or amended pursuant to
the applicable provisions hereof.
"Indenture Event of Default" means an "Event of Default" as
defined in Section 6.01.
"Insurance Policies" means all theft and physical damage and
all other insurance policies covering the Equipment.
"Insurance Proceeds" means proceeds paid pursuant to any
Insurance Policy and amounts (exclusive of rebated premiums or amounts used to
restore or repair the Equipment) paid by any insurer under any other insurance
policy related to the Equipment.
"Interest Component" means, with respect to any Lease on a
Monthly Payment Date, the portion of the Rent Payments thereon received during
the related Collection Period which represents the interest on the purchase
price paid by JLACC for the related Equipment.
"Interest Determination Date" means, with respect to any
Interest Period, the second Business Day preceding the first day of such
Interest Period.
"Interest Period" means, with respect to any Note and any
Monthly Payment Date, the period from and including the previous Monthly Payment
Date (or, in the case of the first Monthly Payment Date for such Note, from and
including the Note Issuance Date for such Note), to but excluding such Monthly
Payment Date.
"JLACC" means JLA Credit Corporation, a Delaware corporation,
and its successors in interest.
"Lease" means, for any applicable Lease Purchase Date, each
commercial loan contract or equipment finance lease contract, secured by
commercial and/or industrial equipment, including any amendment or modification
of such contract and any schedules and promissory notes incorporated therein
(including, without limitation, all rights to receive Rental Payments) sold and
transferred to the Company on such Lease Purchase Date pursuant to the Sale and
Servicing Agreement, as identified in the related Xxxx of Sale.
"Lease Assets" means the Leases (exclusive of any Purchase
Option Payments, Administrative Fees and all amounts due or becoming
8
due under such Leases prior to the applicable Cut-Off Dates), together with
(i) a perfected security interest in the Equipment; (ii) certain rights,
remedies and interests under the Sale and Servicing Agreement; (iii) amounts
representing Security Deposit Offsets applied to unpaid Rent Payments due after
the Cut-Off Date; (iv) any guaranty relating to a Lease; (v) each Insurance
Policy, if any, covering Equipment, including all rights to any Insurance
Proceeds received on or after the applicable Cut-Off Date; (vi) the interest of
the Seller in any funds to be deposited in the Collection Account (exclusive of
any Purchase Option Payments and the proceeds thereof); (vii) all documents
contained in the Lease Files (of which JLA will retain possession only as agent
of the Company); (viii) all payments and proceeds with respect to the Leases and
the other Lease Assets (including any Recoveries on the Leases) held by the
Servicer or any subservicer; (ix) all rights under the Rate Cap Agreement; and
(x) all proceeds of the foregoing.
"Lease Files" means the documents specified in Section 3.04 of
the Sale and Servicing Agreement.
"Lease Proceeds" shall mean collectively (i) the Rent
Payments, (ii) any Retransfer Amounts paid by the Seller or the Servicer
pursuant to Section 3.03 of the Sale and Servicing Agreement and (iii) any
prepayments in full of a Lease.
"Lease Purchase Account" means the account by that name
established and maintained by the Trustee pursuant to Section 3.01.
"Lease Purchase Date" means each date during the Note Issuance
Period that is designated by the Company to the Seller upon not less than five
Business Days' prior notice to the Seller and the Trustee, and approved by the
Seller, on which additional Leases are to be purchased by the Company pursuant
to the Sale and Servicing Agreement.
"Lease Rate" of a Lease means the interest rate stated or
implied in such Lease.
"Lessee" means each lessee under a Lease and its permitted
assigns.
"LIBOR" means, with respect to any Interest Period, the per
annum rate for deposits in United States dollars for a one-month period which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Interest
Determination Date. If such rate does not appear on Telerate Page 3750 on such
day, the rate will be determined on the basis of the rates at which deposits in
U.S. dollars are offered by the Reference Banks at approximately 11:00 a.m.,
London time, on the related Interest Determination Date to prime banks in the
London interbank market for a period of one month. The Trustee will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If at least two such quotations are provided, the rate for that
Interest Determination Date will be the arithmetic mean of the quotations. If
fewer then
9
two quotations are provided as requested, the rate for that Interest
Determination Date will be the arithmetic mean of the rates rounded upwards to
the nearest 1/16 of 1.0% (one per cent) quoted by two or more major banks in
New York City, selected by the Trustee in its sole discretion, at approximately
11:00 a.m., New York City time, on that Interest Determination Date for loans in
U.S. dollars to leading banks in London interbank market for a period of one
month. "Reference Banks" shall mean Barclays Bank PLC, Citibank, N.A., The Chase
Manhattan Bank and Deutsche Bank AG.
"Lien" means a security interest, lien, charge, pledge or
encumbrance of any kind.
"Lock-Box Account" means the account designated as such,
established and maintained pursuant to the Lock Box Agreement and in accordance
with Section 5.01 of the Sale and Servicing Agreement.
"Lock-Box Agreement" means the agreement, dated as of April 3,
1990, by and among JLACC and Bank of America National Trust and Savings
Association (as successor to Continental Bank), as Lock-Box Bank (as amended by
a letter agreement to be entered into prior to the initial Note Issuance Date
and as may be further amended from time to time), pursuant to which the Lock-Box
Account is established and maintained.
"Lock-Box Bank" means, as of any date, the bank or trust
company at which the Lock-Box Account is established and maintained as of such
date.
"London Banking Day" means any Business Day on which dealings
in deposits in United States dollars are transacted in the London interbank
market.
"Monthly Interest" means, for any Monthly Payment Date, (i)
with respect to each Class A Note, the product of (a) the product of (1) the
actual number of days in each Interest Period for such Note divided by 360 times
(2) the Class A Rate for the related Interest Period for such Note and (b) the
Note Principal Balance of the Class A Note after giving effect to any payments
of the principal thereof on the preceding Monthly Payment Date, and (ii) with
respect to each Class B Note, the product of (a) the product of (1) the actual
number of days in each Interest Period for such Note divided by 360 times (2)
the Class B Rate for the related Interest Period for such Note times (b) the
Note Principal Balance of the Class B Note after giving effect to any payments
of the principal thereof on the preceding Monthly Payment Date; provided that
with respect to the first Monthly Payment Date for a Note, Monthly Interest
shall be equal to the amount of interest that would accrue on the applicable
Note Principal Balance at the applicable Rate from and including the Note
Issuance Date for such Note to but excluding the first Monthly Payment Date for
such Note.
"Monthly Payment Date" means the 16th day of each month (or if
such date is not a Business Day, the next succeeding Business
10
Day), commencing in the calendar month immediately succeeding the first Note
Issuance Date, and ending with the Scheduled Final Payment Date.
"Monthly Principal" means for any Monthly Payment Date, an
amount equal to the relevant Class Percentage multiplied by the sum of the
following amounts: (i) to the extent received during the related Collection
Period, the Principal Component of all Rent Payments other than any amounts
received with respect to future collection Periods, which will be deposited in
the Payahead Account and will constitute Rent Payments in the Collection Period
such payments are scheduled to be received; (ii) with respect to any Lease that
first became a Defaulted Lease during the related Collection Period, the
Principal Balance of such Defaulted Lease; (iii) to the extent received during
the related Collection Period, the Principal Component of any Retransfer
Amounts; (iv) to the extent received during the related Collection Period, the
Principal Component of any prepayments in full of a Lease; and (v) to the extent
received during the related Collection Period, any Insurance Proceeds.
"Monthly Servicer Report" means a report in the form attached
as Exhibit B to the Sale and Servicing Agreement.
"Non-Utilization Premium" means the fee payable pursuant to
the Note Purchase Agreement to each Committed Investor on each Monthly Payment
Date during (and immediately following) the Note Issuance Period in an amount
that is equal to the product of (i) the Non-Utilization Premium Rate per annum
and (ii) the daily average principal amount by which the Commitment (as defined
in the Note Purchase Agreement) of such Committed Investor exceeds the aggregate
outstanding principal amount of Notes purchased on or before such day by such
Committed Investor from the Company.
"Non-Utilization Premium Rate" means 0.10% per annum.
"Note Amortization Period" means the period from (and
including) the date that is the earlier of (i) the first day following the end
of the Note Issuance Period and (ii) the date (if any) on which any Early
Amortization Event or Indenture Event of Default shall have occurred, to (and
including) the Scheduled Final Payment Date.
"Note Issuance Date" means each Business Day (not more
frequently than one per month) on which any Notes are issued during the Note
Issuance Period.
"Note Issuance Period" means the period commencing on the
Closing Date and ending (unless sooner terminated pursuant to Section 6.02) on
the date that is the earlier of (i) May 15, 1998 and (ii) the date (if any) on
which the aggregate outstanding principal amount of the Notes equals
$75,000,000.
"Note Principal Balance" means (i) as of any date prior to the
first Monthly Payment Date, the outstanding principal balance of the applicable
Class of Notes on the initial Note Issuance Date,
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(ii) as of any other date prior to the Scheduled Final Payment Date (or other
final payment date on the Notes), the outstanding principal balance of the
applicable Class of Notes as of the preceding Monthly Payment Date, and (iii) as
of the Scheduled Final Payment Date (of other final payment date on the Notes),
the outstanding principal balance of such Class of Notes on such date; provided
that the tern "Note Principal Balance" as of any Monthly Payment Date on which a
payment in respect of principal has been made, shall mean the outstanding
principal balance of the applicable Class of Notes or such date after giving
effect to any distributions of Monthly Principal and overdue Monthly Principal
on such date.
"Note Purchase Agreement" means the Note Purchase Agreement,
dated as of the date hereof, among JLACC, the Company and each initial
Noteholder.
"Note Register" has the meaning specified in Section 2.04.
"Note Registrar" has the meaning specified in Section 2.04.
"Noteholder" means, at any time, any Person in whose name a
Note is registered in the Note Register except that, solely for the purpose of
giving any consent, request or waiver pursuant to this Indenture, the interest
evidenced by any Note registered in the name, of the Company or any other
obligor on the Notes, the Servicer, any subservicer or any Affiliate of any of
them shall not be deemed a Noteholder for the purpose of determining whether the
requisite percentage necessary to effect any such consent, request or waiver
shall have been obtained. The Trustee may request, obtain and conclusively rely
upon a certificate of the Servicer or the Company to determine whether Notes are
registered to the Company, the Servicer, any subservicer or any other Person
controlling, controlled by, or under common control with any of them.
"Notes" means the Class A Notes and the Class B Notes.
"Officer's Certificate" means a certificate signed by the
chairman of the board, the president, any vice chairman of the board, or a vice
president of the Company, the Seller or the Servicer, as appropriate, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel (who
may be in-house counsel for the Seller or Servicer), acceptable in form and
substance to the Trustee.
"Overdue Monthly Interest" means any interest on a Note which
was to have been distributed, and was not distributed, on a Monthly Payment
Date.
"Overdue Monthly Principal" means any principal on a Note
which was to have been distributed, and was not distributed, on a Monthly
Payment Date.
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"Over-Issuance Condition" has the meaning specified in Section
8.13.
"Payahead Account" means the account by that name established
and maintained pursuant to Section 3.01.
"Payahead Amount" means, with respect to any Lease, the amount
of any payment by a Lessee in excess of the Current Amount
"Payahead Draw Amount" means, with respect to any Monthly
Payment Date, the aggregate of all Current Amounts for all Lessees.
"Permitted Investments" means, at any time, any one or more of
the following obligations and securities:
(a) obligations of the United States or any agency thereof,
provided such obligations are guaranteed as to the timely payment of
principal and interest by the full faith an credit of the United
States;
(b) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia the assigned a
rating of AAA or A-1+ by Standard & Poor's or such lower rating (as
approved in writing by Standard & Poor's) as will not result in the
qualification, downgrading or withdrawal of the rating then assigned to
the Notes of either Class by Standard & Poor's;
(c) interests in any money market fund which invest
exclusively in any of the obligations described in (a) or (b) above and
which at the date of acquisition of the interests in such funds has a
rating of AAAm-G by Standard & Poor's or is otherwise approved in
writing by Standard & Poor's;
(d) commercial paper which is then rated A-1+ by Standard &
Poor's or such lower rating (as approved in writing by Standard &
Poor's) as will not result in the qualification, downgrading or
withdrawal of the rating then assigned to the Notes of either Class by
Standard & Poor's;
(e) certificates of deposit, demand or time deposits federal
funds or banker's acceptances issued by any depository institution or
trust company incorporated under the laws of the United States or of
any state thereof or incorporated under the laws of a foreign
jurisdiction with a branch or agency located in the United States and
subject to supervision and examination by federal or state banking
authorities, provided that the short-term unsecured deposit obligations
of such depository institution or trust company have a rating of A-1+
by Standard & Poor's, or such lower rating category (as approved in
writing by Standard & Poor's) as will not result in the qualification,
downgrading or withdrawal of the rating then assigned to the Notes of
either Class by Standard & Poor's.
13
(f) guaranteed reinvestment agreements issued by any bank
insurance company or other corporation (as approved in writing by
Standard & Poor's) as will not result in the qualification, downgrading
or withdrawal of the rating then assigned to the Notes of either Class
by Standard & Poor's;
(g) repurchase obligations with respect to any security
described in clauses (a) or (b) hereof or any security issued or
guaranteed by the Federal National Mortgage Association or any agency
or instrumentality of the United States which is backed by the full
faith and credit of the United States, in either case entered into with
a federal agency or a depository institution or trust company (acting
as principal) described in clause (e) above;
(h) interests in any open-end or closed-end management type
investment company or investment trust (x) registered under the
Investment Company Act of 1940, the portfolio of which is limited to
the obligations of, or guaranteed by, the United States and to
agreements to repurchase such obligations, which agreements, with
respect to principal and interest, are at least 100% collateralized by
such obligations marked to market on a daily basis and the investment
company or investment trust shall take delivery of such obligations
either directly or through an independent custodian designated in
accordance with the Investment Company Act of 1940, and (y) as will not
result in the qualification, downgrading or withdrawal of the rating
then assigned to the Notes of either Class by Standard & Poor's (as
approved in writing by Standard & Poor's); and
(i) such other investments (a) where the short-tern unsecured
debt of the obligor is rated A-1+ by Standard & Poor's or (b) which
are acceptable to Standard & Poor's (as approved in writing by
Standard & Poor's) and as will not result in the qualification,
downgrading or withdrawal of the rating assigned to the Notes of either
Class by Standard & Poor's.
Notwithstanding the foregoing, Permitted Investments shall not include (i)
"stripped securities" and investments which contractually may return less than
the purchase price therefor, and (ii) instruments with a purchase price greater
than par if such instrument may be prepaid or called at a price less than its
purchase price prior to its stated maturity.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, trust (including any beneficiary thereof), unincorporated organization,
or government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Plan" has the meaning specified in Section 2.04(f).
"Pool Balance" as of any date means the aggregate Principal
Balance of the Leases as of such date.
14
"Predecessor Notes" means, with respect to any particular
Note, every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any
Note authenticated and delivered under section 2.05 in lieu of a lost, destroyed
or stolen Note (or a mutilated Note surrendered to the Trustee) shall be deemed
to evidence the same debt as the lost, destroyed or stolen Note (or a mutilated
Note surrendered to the Trustee).
"Principal Balance" means, with respect to any Lease on any
day, (i) the unamortized portion of the purchase price paid by JLACC for the
related Equipment, and amounts paid by JLACC in respect of taxes and origination
costs and fees, as of the related Cut-Off Date, minus (ii) the sum of the
following with respect to such Lease:(a) the Principal Component of all Rent
Payments since the applicable Cut-Off Date received by the Servicer and
deposited in the Collection Account other than the Principal Component of any
payments received with respect to future Collection Periods, which will be
deposited in the Payahead Account and will constitute Rent Payments in the
Collection Period such payments are scheduled to be received; and (b) the
proceeds of any Insurance Policies; provided, however, that for any day
following the Monthly Payment Date on which the proceeds of a prepayment in full
of a Lease or a Retransferred Lease are payable to Noteholders under the
definition of Monthly Principal or a Defaulted Lease first becomes a Defaulted
Lease, the Principal Balance of any such Lease shall be zero.
"Principal Component" shall mean, with respect to Rent
Payments, that portion of such payments which represents the amortization of
the purchase price paid by JLACC for the related Equipment.
"Purchase Option Payment" shall mean, with respect to any
Lease, any payment (received on or after the applicable Cut-Off Date for such
Lease) made by a Lessee to purchase the Equipment subject to the Lease.
"Oualified Institution" means a depository institution
organized under the laws of the United States or any state thereof and whose
deposits are insured by the Federal Deposit Insurance Corporation.
"Rate" means (i) with respect to the Class A Notes, the Class
A Rate, and (ii) with respect to the Class B Notes, the Class B Rate.
"Rate Cap Agreement" means the interest rate cap agreement,
dated as of the date hereof, between the Company (as assignee of the Seller) and
the Rate Cap Provider.
"Rate Cap Proceeds" means, with respect to the Rate Cap
Agreement, any proceeds to be paid by the Rate Cap Provider thereunder.
15
"Rate Cap Provider" means, initially, SRCM Derivative Products
Limited (including its successors) and, thereafter, any such other Person as
becomes the Rate Cap Provider pursuant to Section 8.14.
"Rating Agency" means Standard & Poor's and any successor
thereto.
"Ratings Effect" means a reduction or withdrawal of a rating
on a Class of Notes by the Rating Agency.
"Record Date" means, with respect to any Monthly Payment Date,
the last day of the month preceding the month in which such Monthly Payment Date
occurs (or in the case of the initial Monthly Payment Date, the initial Note
Issuance Date).
"Recoveries" means, with respect to any Defaulted Lease, all
payments and proceeds received by the Servicer or the Company in the process of
recovery, repossession and liquidation of the related Equipment, other than the
amounts reimbursed to the Servicer for all reasonable expenses related to such
process.
"Redemption Date" means, with respect to any redemption of the
Notes, a Monthly Payment Date fixed as the date on which the Notes are to be
redeemed at the option of the Company pursuant to Section 10.01.
"Redemption Price" means, with respect to any Note, and as of
any Redemption Date fixed by the Company, the outstanding Note Principal Balance
of such Note, together with interest accrued thereon to but not including such
Redemption Date at the applicable Rate.
"Redemption Record Date" means, with respect to any redemption
of the Notes, a date fixed pursuant to Section 10.01.
"Rent Payment" shall mean, with respect to each Lease, the
scheduled monthly rental payment for the Equipment leased to the Lessee under
such Lease, consisting of an Interest Component and a Principal Component.
"Required Deposit Rating" shall be a short-term unsecured
deposit rating of A-1+ by Standard & Poor's.
"Required Reserve Amount" means, with respect to any Monthly
Payment Date, an amount equal to the product of (i) the Required Reserve
Percentage and (ii) the aggregate Note Principal Balance of all Notes (after
giving effect to all payments of principal on such Monthly Payment Date).
"Required Reserve Percentage" means one percent (1%) provided
that if during the Note Amortization Period the Weighted Average Yield of the
Leases in the Trust Property for any Collection Period is less than 9.75% per
annum, then on the related Monthly Payment Date and on each Monthly Payment Date
thereafter until the
16
Weighted Average Yield of the Leases in the Trust Property for related
Collection Period is equal to or greater than 9.75% per annum, "Required Reserve
Percentage" shall instead mean the sum of (i) one and one-half percent (1.5%)
plus (ii) ten percent (10%) minus the Weighted Average Yield of the Leases in
the Trust Property for the related Collection Period.
"Required Support Percentage" means, on any date, the greater
of (i) 10.5% and (ii) the amount (expressed as a percentage) that is the
quotient obtained by dividing (x) the aggregate Principal Balance of all Leases
having Lessees that are the ten largest Lessees (by aggregate Lease Balance)
represented by the Pool Balance, by (y) the Pool Balance, all computed as of
such date.
"Reserve Account" means the segregated account by that name
established and maintained by the Trustee pursuant to Section 3.01.
"Reserve Account Surplus" means, as of any Monthly Payment
Date, the amount, if any, by which the amount on deposit in the Reserve Account,
including all net income from the investment of funds therein and after taking
into account any deposits and any payments pursuant to Sections 3.05 and 3.07
hereof on such Monthly Payment Date, exceeds the Required Reserve Amount for the
next Monthly Payment Date.
"Reserve Draw Amount" has the meaning specified in Section
3.05(b).
"Residual Amount" means, with respect to any Lease, the amount
(if any) received in respect of such Lease and the related Equipment (through
Lessee payments, Recoveries, Purchase Option Payments or otherwise) that is in
excess of the amount required fox the payment of all amounts owing under such
Lease.
"Responsible Officer" means, when used with respect to the
Trustee, any Vice President, any Assistant Vice President; any Senior Trust
Officer, any Trust Officer or any other officer of the Trustee in its
Corporate Trust Office customarily performing functions similar to those
performed by any of the above designated officers and also, with respect to a
particular matter, any other officer in its Corporate Trust Office to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
"Retransfer Amount" means, with respect to any Lease, the
price equal to the Principal Balance of such Lease (prior to any amendment,
modification or exchange) on the first day of the month following the date on
which the reacquisition obligation with respect to such Lease arose, plus
accrued interest on the Principal Balance of such Lease, at a rate equal to 1/12
of the sum of (i) the Class B Rate and (ii) the Servicing Fee Rate, to the date
that is the date of payment of such Retransfer Amount, less the amount, if any,
on deposit in the Payahead Account with respect to such Lease.
17
"Retransferred Lease" means, for any Collection Period a Lease
which has been retransferred to the Seller or Servicer as of the last day of
such Collection Period pursuant to Section 4.0 hereof or Section 3.03 or 4.06 of
the Sale and Servicing Agreement.
"Retransferred Lease Receivables" means, for any Collection
Period, the Lease receivables under Leases which have been retransferred to the
Seller or Servicer as of the last day of such Collection Period pursuant to
Section 3.03 or 4.06 of the Sale an Servicing Agreement.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement, dated as of the date hereof, between the Company and JLACC pursuant
to which the Company will purchase Leases and certain related Trust Property
from JLACC on one or more Lease Purchase Dates, an JLACC agrees to act as
Servicer for all purchased Leases, as the same may be amended or modified from
time to time in accordance with the provisions hereof and thereof.
"Scheduled Final Payment Date" means, with respect to the
Notes, the Monthly Payment Date occurring in the sixty-sixth (66th) calendar
month following the expiration (or earlier termination) of the Note Issuance
Period (subject to earlier final payment of the Notes pursuant to the terms of
this Indenture).
"Schedule of Leases" means, as of any date, the schedule of
Leases included in the Trust Property on such date. As of each Note Issuance
Date, a Schedule of Leases in respect of the Leases purchased on such date shall
set forth, as to each such Lease as of the related Cut-Off Date, among other
things, (a) its identifying number and the name of the related Lessee; (b) its
date of origination; (c) the original number of months to stated maturity, (d)
the original stated maturity; (e) the original Principal Balance at inception of
the Lease; (f) the Principal Balance as of the applicable Cut-Off Date; (g) the
location where the related Lease File is kept, if other than 00000 Xxxxxxx
Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx or 000 Xxxx 000xx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000; (h) the Lease Rate; and (i) the scheduled monthly Rent
Payment.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Deposit Offset" shall mean the application by JLACC
to one or more Rent Payments under a Defaulted Lease of the amount required to
be deposited with JLACC by the Lessee as security for payment of amounts due
under such Lease.
"Seller" means JLACC in its capacity as Seller of Leases under
the Sale and Servicing Agreement, and each successor to JLACC (in the same
capacity) pursuant to Section 6.02 thereof.
"Servicer" means JLACC, as the servicer of the Leases under
the Sale and Servicing Agreement, and each successor to JLACC (in the same
capacity) pursuant to the Sale and Servicing Agreement.
18
"Servicer Event of Default" means "Event of Default" as
defined in Section 8.01 of the Sale and Servicing Agreement.
"Servicer Notice" means a written request, instruction or
other notice delivered to the Trustee and signed in the name of the Servicer by
a Servicing Officer.
"Servicing Fee" with regard to a Collection Period means the
fee payable to the Servicer for services rendered during such Collection Period,
determined pursuant to Section 4.07 of the Sale and Servicing Agreement.
"Servicing Officer" means any officer of the Servicer or any
subservicer involved in, or responsible for, the administration and servicing of
the Leases whose name appears on a list of servicing officers annexed to an
Officer's Certificate furnished to the Trustee on the date of execution of this
Agreement by the Servicer, or as such list may from time to time be amended.
"Standard & Poor's" means Standard & Poor's, a division of
XxXxxx-Xxxx, and its successors in interest.
"Substitute Lease" has the meaning specified in Section 3.08
of the Sale and Servicing Agreement.
"Successor Servicer" means the Trustee or any successor to the
Servicer pursuant to the Sale and Servicing Agreement.
"Three-Month Average Default Ratio" as of the last day of any
calendar month means the arithmetic average of the Default Ratios as of the last
day of such calendar month and the two immediately preceding calendar months.
"Three-Month Average Delinquency Ratio" as of the last day of
any calendar month means the arithmetic average of the Delinquency Ratios as of
the last day of such calendar month and the two immediately preceding calendar
months.
"Trust Property" means all Leases, Equipment, Accounts, money,
instruments, accounts, general intangibles, contract rights and other assets and
property that is described in the Granting Clause of this Indenture and subject
to or intended to be subject to the lien of this Indenture, including all
proceeds thereof.
"Trustee" means the Person named as the "Trustee" in the
first paragraph of this Indenture 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; provided, that the provisions of
Section 7.06 and Section 8.11, as applicable to any Person at any time serving
as Trustee hereunder, shall survive (with respect to any period prior to the
date of such termination) the termination of such Person's status as Trustee
hereunder and the succession of any other Person to such status.
19
"Trustee Fee" means the fee payable to the Trustee hereunder
in an amount that, for each Monthly Payment Date (and for the date on which the
final payment of principal is made), is equal to the sum of (A) the wire
transfer fees and reimburseable out-of-pocket expenses referred to in the
Trustee Fee Letter plus (B) the amount that is the product of (i) the rate per
annum specified in the Trustee Fee Letter and (ii) the Note Principal Balance of
all Notes as of the previous Monthly Payment Date (after giving effect to all
payments of principal on such date) (or, in the case of the first Monthly
Payment Date, as of the Initial Note Issuance Date).
"Trustee Fee Letter" means the letter dated June 19, 1997 from
LTCB Trust Company to JLA Credit Corporation setting forth the rate at which the
Trustee Fee is to accrue under this Indenture.
"Trustee's Certificate" means a statement completed and
executed by a Responsible Officer pursuant to Section 7.14.
"Uniform Commercial Code" or "UCC" means, with respect to a
particular jurisdiction, the Uniform Commercial Code, as in effect from time to
time in such jurisdiction, or any successor statute thereto.
"Weighted Average Yield" means, with respect to the Leases
included in the Trust Property and any Collection Period, the weighted average
yield of such Leases during such period (expressed as an annualized percentage).
SECTION 1.02. Compliance Certificates and Opinions.
Subject to the terms hereof, upon any application or request
by the Company to the Trustee to take any action under any provision of this
Indenture, other than any request expressly provided herein that (i) the Trustee
authenticate the Notes specified in such request, (ii) the Trustee invest moneys
in the Collection Account, the Reserve Account, the Payahead Account or the
Lease Purchase Account pursuant to the written directions specified in such
request, or (iii) the Trustee pay moneys due and payable to the Company
hereunder to the Company's assignee specified in such request, the Trustee may
require the Company to furnish to the Trustee an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such requested action as to
which other evidence of satisfaction of the conditions precedent thereto is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
SECTION 1.03. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered
20
by the opinion of, only one such Person, or that they be so certified or covered
by only one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in one or
several documents.
Any Officer's Certificate delivered to the Trustee may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such Officer's Certificate or opinion and any Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Authorized Officer or Authorized Officers
of the Company as to such factual matters unless such Authorized Officer or
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous. Any Opinion of Counsel may be based on the written opinion of other
counsel, in which event such Opinion of Counsel shall be accompanied by a copy
of such other counsel's Opinion and shall include a statement to the effect
that such counsel believes that such counsel and the Trustee may reasonably rely
upon the opinion of such other counsel.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Wherever in this Indenture, in connection with any application
or certificate or report to the Trustee, it is provided that the Company shall
deliver any document as a condition of the granting of such application, or as
evidence of compliance with any term hereof, it is intended that the truth and
accuracy, at the time of the granting of such application or at the effective
date of such certificate or report (as the case may be), of the facts and
opinions stated in such document shall in such case be conditions precedent to
the right of the Company to have such application granted or to the sufficiency
of such certificate or report. The foregoing shall not, however, be construed to
affect the Trustee's right to rely upon the truth and accuracy of any
statement or opinion contained in any such document as provided in Section
7.01(a)(ii).
Whenever in this Indenture it is provided that the absence of
the occurrence and continuation of a Default or an Indenture Event of Default or
a Servicer Event of Default or an Early Amortization Event is a condition
precedent to the taking of any action by the Trustee at the request or direction
of the Company, then, notwithstanding that the satisfaction of such condition is
a condition precedent to the Company's right to make such request or direction,
the Trustee shall be protected in acting in accordance with such request or
direction if it has not been notified in writing, prior
21
to the date of such request or direction, of the occurrence and continuation of
such Default or Indenture Event of Default or Servicer Event of Default or Early
Amortization Event. For all purposes of this Indenture, the Trustee shall not be
deemed to have knowledge of any Default or Indenture Event of Default (other
than an Indenture Event of Default of the kind described in clause (i) of
Section 6. 01) or Servicer Event of Default or Early Amortization Event unless a
Responsible Officer of the Trustee shall have been notified in writing thereof
by the Company, the Servicer or any Noteholder.
SECTION 1.04. Acts of Noteholders, etc.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing (pursuant to appointments previously delivered to the
Trustee in form and substance reasonably satisfactory to the Trustee); and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee, with
a copy (or if expressly required an original) to the Company and the Servicer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Section 7.01) conclusive in favor
of the Trustee and the Company, if made in the manner provided in this Section
1.04.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the holder of any Note shall bind every future
holder of the same Note and the holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Note.
(d) By accepting the Notes issued pursuant to this Indenture,
each Noteholder irrevocably appoints the Trustee hereunder
22
as the special attorney-in-fact for such Noteholder vested with full power on
behalf of such Noteholder to effect and enforce the rights of such Noteholder
pursuant hereto and the provisions hereof for the benefit of such Noteholder.
(e) Each holder of a Note, by acceptance of its Note, agrees
to treat the Note as indebtedness of the Company for federal income tax
purposes.
SECTION 1.05. Notices.
Any request, demand, authorization, direction, notice,
consent, waiver, Act of Noteholders, or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with, the
Trustee, the Company or the Servicer shall be sufficient for every purpose
hereunder if in writing and telexed, telecopied (with a copy of the telexed or
telecopied material sent to the recipient by overnight courier on the day of the
telex or telecopy), mailed, first-class postage prepaid, or hand delivered.
Unless otherwise specifically provided herein, no such request, demand,
authorization, direction, notice, consent, waiver, Act of Noteholders or other
document shall be effective until received and any provision hereof requiring
the making, giving, furnishing, or filing of the same on any date shall be
interpreted as requiring the same to be sent or delivered in such fashion that
it will be received on such date. Any such request, demand, authorization,
direction, notice, consent, waiver, Act of Noteholders, or other document shall
be sent or delivered to the following addresses:
(i) if to the Trustee, at the Corporate Trust Office,
Attention: Xx. Xxxxxxx Xxxxxxxxx, Vice President, Corporate Trust
Administration (Number for telecopy: (000) 000-0000).
(ii) if to the Company, at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxx Xxxxx, Xxxxxxxxxx 00000 (Number for telecopy: (000) 000-0000), or
at any other address previously furnished in writing to the Trustee and
the Servicer by the Company;
(iii) if to the Seller, at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxx Xxxxx, Xxxxxxxxxx 00000 (Number for telecopy: (000) 000-0000), or
at any other address previously furnished in writing to the Trustee,
the Company and the Servicer by the Seller;
(iv) if to the Servicer, at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx
000, Xxx Xxxxx, Xxxxxxxxxx 00000 (Number for telecopy: (000) 000-0000),
or at any other address previously furnished in writing to the Trustee,
the Company and the Seller by the Servicer; and
(v) if to Standard & Poor's, at 00 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000-0000, Attention: Surveillance Group (Number for telecopy:
(000) 000-0000), or at any such other
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address previously furnished in writing to the Trustee, the Company and the
Seller by the Servicer.
SECTION 1.06. Notice to Noteholders; Waiver.
(a) Where this Indenture provides for notice to Noteholders of
any event, or the mailing of any report to Noteholders, such notice or report
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first class postage prepaid, or sent by private courier or
confirmed telecopy (with a copy of the telecopied material sent to the recipient
by overnight courier on the day of the telecopy) to each Noteholder affected
by such event or to whom such report is required to be mailed, at its address as
it appears in the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Noteholders is mailed,
neither the failure to mail such notice or report, nor any defect in any notice
or report so mailed, to any particular Noteholder shall affect the sufficiency
of such notice or report with respect to other Noteholders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Noteholders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
(b) In case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to mail or
send notice to Noteholders, in accordance with Section 1.06(a), of any event
or any report to Noteholders when such notice or report is required to be
delivered pursuant to any provision of this Indenture, then such notification or
delivery as shall be made with the approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder.
SECTION 1.07. Table of Contents, Headings, etc.
The Table of Contents and the Article and Section headings are
for convenience only and shall in no way modify or restrict any of the terms or
provisions hereof.
SECTION 1.08. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
or the Trustee shall bind its respective successors and permitted assigns,
whether so expressed or not.
SECTION 1.09. Severability Clause.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality
24
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 1.10. Benefits of Indenture.
Nothing in this Indenture or in the Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any separate trustee or co-trustee appointed under Section 7.11 and
the Noteholders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
SECTION 1.11. Governing Law.
This Indenture and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to the conflict of laws principles thereof.
SECTION 1.12. Legal Holidays.
In any case where any Monthly Payment Date or the Scheduled
Final Payment Date or any other date on which principal of or interest on any
Note is proposed to be paid shall not be a Business Day, then (notwithstanding
any other provision of this Indenture or of the Notes) such payment shall be
made on the next succeeding Business Day and no interest shall accrue for the
intervening period.
SECTION 1.13. Execution in Counterparts.
This Indenture may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 1.14. Inspection.
The Company agrees that, on reasonable prior notice, it will
permit the representatives of the Trustee or any Noteholder, during the
Company's normal business hours, to examine all of the books of account,
records, reports and other papers of the Company, to make copies thereof and
extracts therefrom, to cause such books to be audited by independent accountants
selected by the Company and reasonably acceptable to the Trustee or such
Noteholder, as the case may be, and to discuss its affairs, finances and
accounts with its officers, employees and independent accountants with an
Authorized officer of the Company present (and by this provision the Company
hereby authorizes its accountants to discuss with such representatives such
affairs, finances and accounts), all at such reasonable times and as often as
may be reasonably requested for the purpose of reviewing or evaluating the
financial condition or affairs of the Company or the performance of and
compliance with the covenants and undertakings of the Company in this Indenture,
the Sale and Servicing Agreement, the Rate Cap Agreement, the Note Purchase
Agreement or any of the other documents referred to herein or therein. Subject
entirely to the priorities of payment specified in Section 3.07(b)
25
and 6.06 hereof and to the availability of funds to the Company in accordance
therewith, any expense incident to the exercise by the Trustee or any Noteholder
of any right set forth in this Section 1.14 during the continuance of any
Default or Indenture Event of Default (including, without limitation, any
Servicer Event of Default) shall be borne by the Company, but any expense due to
the exercise of a right by any such Person prior to the occurrence of a Default
or Indenture Event of Default (including, without limitation, any Servicer Event
of Default) shall be borne (subject to the other provisions of this Indenture)
by such Person; provided, however, that any insufficiency of funds available to
the Company for the payment of any amount otherwise owing by the Company under
this Section will not represent a claim against the Company.
SECTION 1.15. Survival of Representations and Warranties.
The representations, warranties and certifications of the
Company made in this Indenture or in any certificate or other writing delivered
by the Company pursuant hereto shall survive the Closing Date and the
authentication and delivery of the Notes issued on each Note Issuance Date
hereunder, but unless explicitly provided to the contrary, such representations,
warranties and certifications are made only as of the Closing Date and each such
Note Issuance Date.
SECTION 1.16. Communications with Noteholders.
Within 15 days' receipt of written request from the Servicer,
the Trustee, acting as Note Registrar, will provide to the Servicer a list of
the names and addresses of all Noteholders of record as of the most recent
Record Date. The Trustee, upon written request by one or more Noteholders
aggregating not less than 25% of the Note Principal Balance, will obtain from
the Note Registrar (if other than the Trustee) and afford such Noteholders
access during business hours to the current list of Noteholders for purposes of
communicating with other Noteholders with respect to their rights under the
Indenture (provided such Noteholders (i) state that they wish to communicate
with other Noteholders with respect to their rights under the Indenture or under
the Notes and (ii) provide the Trustee and Servicer with a copy of the proposed
communication).
SECTION 1.17. Statements Required in Officer's Certificate.
Each Officer's Certificate with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that the Person making such certificate has
read such covenant or condition;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in
such certificate are based;
(iii) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary
26
to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of
such Person, such covenant or condition has been complied with.
SECTION 1.18. When Treasury Securities Disregarded.
In determining whether the Noteholders of the required Note
Principal Balance of Notes have concurred in any request, waiver or consent
pursuant to this Indenture, Notes registered in the name of the Company or any
other obligor on the Notes or registered in the name of the Servicer or any
subservicer or in the name of any Affiliate of the Company, such obligor or
such Servicer or subservicer shall be disregarded, except that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded. Notes so owned
which have been pledged in good faith shall not be disregarded if the pledgee
establishes to the satisfaction of the Trustee the pledgee is right so to act
with respect to such Notes and that the pledgee's not the Company or any other
obligor upon the Notes or the Servicer or any subservicer or any Affiliate of
the Company, such obligor, such Servicer or such subservicer.
SECTION 1.19. Rules by Trustee.
The Trustee may make reasonable rules for action by or at a
meeting of Noteholders.
SECTION 1.20. No Adverse Interpretation of other Agreements.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or an Affiliate of the Company.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 1.21. No Recourse Against Others.
All liability described in the Notes of any director,
officer, employee or shareholder, as such, of the Company is waived and
released.
SECTION 1.22. Independence of Covenants.
All covenants and agreements in this Indenture shall be given
independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant shall
not avoid the occurrence of a Default or an Indenture Event of Default or an
Early Amortization Event if such action is taken or condition exists.
27
SECTION 1.23. Consent to Jurisdiction.
Each of the Company, the Servicer and the Trustee irrevocably
submits to the non-exclusive Jurisdiction of any New York State or Federal
court sitting in the Borough of Manhattan in the City of New York over any
suit, action or proceeding arising out of or relating to this Indenture or any
Note. Each of the Company, the Servicer and the Trustee irrevocably waives, to
the fullest extent permitted by applicable law, any objection which it may have
to the laying of the venue of any such suit, action or proceeding brought in
such a court and any claim that any such suit, action or proceeding brought in
such a court has been brought in any inconvenient forum. Each of the Company,
the Servicer and the Trustee agrees that final judgment in any such suit,
action or proceeding brought in such a court shall be conclusive and binding
upon the Company, the Servicer or the Trustee, as the case may be, and may be
enforced in the courts of New York (or any other courts to the jurisdiction of
which the Company, the Servicer or the Trustee, as the case may be, is subject)
by a suit upon such judgment, provided that service of process is effected upon
the Company as permitted by law; provided, however, that each of the Company,
the Servicer and the Trustee does not waive, and the foregoing provisions of
this sentence shall not constitute or be deemed to constitute a waiver of, (i)
any right to appeal any such judgment, to seek any stay or otherwise to seek
reconsideration or review of any such judgment or (ii) any stay of execution or
levy pending an appeal from, or a suit, action or proceeding for
reconsideration or review of, any such judgment.
SECTION 1.24. No Bankruptcy Petition.
Notwithstanding any provision contained herein, each of the
Noteholders and the Trustee covenants and agrees that, prior to the date which
is one year and one day after the payment in full of all Notes issued by the
Company and payment of all other amounts due under this Indenture, it will not
institute against, or join any other Person in instituting against, the Company
any bankruptcy, reorganization, receivership, arrangement, insolvency or
liquidation proceedings, or other similar proceedings under any federal or
state bankruptcy or similar law. The Company represents, warrants, and
covenants that it has obtained, and will in the future obtain, a no-petition
agreement from each and every Person that enters into any agreement of any kind
with the Company. Nothing in this Section shall constitute a waiver by the
Trustee or any Noteholder of any right to receive amounts owing to it under
this Indenture or (in the case of the Noteholders) the Notes. This Section 1.24
shall survive the termination of this Indenture.
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ARTICLE II
THE NOTES
SECTION 2.01. General Provisions.
(a) The Notes issuable hereunder shall be issued as
registered Notes without coupons in two classes (each, a "Class") on such date
or dates during the Note Issuance Period as from time to time shall be
authorized by the Company. The Notes of both Classes shall be known and entitled
generally as the "JLA Funding Corporation II Floating Rate Asset-Backed Notes."
The Notes of each Class shall have further particular designation as
specified below, and each Note issued hereunder shall bear upon the face thereof
the designation so specified for the Class to which it belongs. Subject to the
provisions of Section 2.02, the Trustee is hereby authorized and directed, upon
the written order of the Company, accompanied by an officer's Certificate
certifying that the conditions precedent set forth in Section 2.02 have been
satisfied, to authenticate and deliver Notes to be issued hereunder on each Note
Issuance Date in two classes entitled "Floating Rate Asset-Backed Notes, Class
A" and "Floating Rate Asset-Backed Notes, Class B," respectively. The forms
of the Class A Notes and the Class B Notes, and of the Trustee's certificate of
authentication, shall be in substantially the forms set forth in Exhibits A and
B hereto, respectively, with such appropriate insertions, omissions,
substitutions, and other variations as are required or permitted by this
Indenture. The aggregate principal amount of Notes which may be authenticated
and delivered under this Indenture is limited to $75,000,000 (of which the
aggregate principal amount of the Class A Notes shall be not greater than
$70,658,000 and the aggregate principal amount of the Class B Notes shall not
be greater than $4,342,000), except for Notes authenticated and delivered upon
registration of, transfer of, or in exchange for, or in lieu of, other Notes
pursuant to Section 2.04, 2.05, or 9.04. The Class A Notes shall be issuable
only in registered form and only in denominations of at least $1,000,000 and
integral multiples of $1,000 in excess thereof, provided that the foregoing
shall not restrict or prevent the transfer or issuance in accordance with
Section 2.04 or 2.05 of any Class A Note having a remaining outstanding
principal amount of less than $1,000,000. The Class B Notes shall be issuable
only in registered form and only in denominations of at least $1,000,000, and
integral multiples of $1,000 in excess thereof; provided that the foregoing
shall not restrict or prevent the transfer or issuance in accordance with
Section 2.04 or 2.05 of any Class B Note having a remaining outstanding
principal amount of less than $1,000,000.
(b) During the Note Issuance Period no principal will be due
and payable on the Class A Notes or the Class B Notes. During the Note
Amortization Period, the aggregate amount of principal due and payable on each
Class of Notes on each Monthly Payment Date shall be equal to the Monthly
Principal for such Class. Except (i) for optional redemption pursuant to Section
10.01, (ii) for Retransfer Amounts, or (iii) as otherwise provided in Section
6.02, no part of
29
the principal of any Note shall be paid prior to the Monthly Payment Date on
which such principal is due in accordance with the preceding provisions of this
Section 2.01(b). Unless earlier paid, the entire unpaid Class A Note
Principal Balance and the entire unpaid Class B Note Principal Balance will be
due and payable on the Scheduled Final Payment Date.
(c) Interest on each Note shall accrue from the Note
Issuance Date of such Note. Interest on the outstanding Note Principal Balance
of each Note shall be payable on each Monthly Payment Date, commencing on the
Monthly Payment Date occurring in the calendar month immediately succeeding the
month in which the applicable Note Issuance Date occurs, to Noteholders of
record as of the applicable the Record Date. Interest on the Notes of each
Class is required to be paid to Noteholders in an amount equal to the Monthly
Interest for such Class of Notes. Interest on the Notes of each Class shall be
computed on the basis of a 360-day year and the actual number of days elapsed
during the relevant Interest Period.
(d) All payments made with respect to any Note shall be made
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts and shall be
applied in the manner specified in Article III.
(e) All Notes of the same Class issued under this Indenture
shall be in all respects equally and ratably entitled to the benefits hereof
and thereof without preference, priority or distinction on account of the
actual time or times of authentication and delivery, all in accordance with
the terms and provisions of this Indenture. Payments of principal and interest
on Notes of the same Class shall be made pro rata among all outstanding Notes
of such Class, without preference or priority of any kind. The Notes are
limited recourse obligations of the Company. The sole source of payment of the
Notes will be the assets comprising the Trust Property.
SECTION 2.02. Issuances During the Note Issuance Period.
The Company may issue Notes on any one or more Business Days
during the Note Issuance Period (not more frequently than once per month), in
each case subject to the provisions of this Indenture, including the following
conditions precedent:
(i) at the time of such issuance (and after giving
effect thereto) (a) no Default, Indenture Event of Default, Servicer
Event of Default or Early Amortization Event shall have occurred or be
continuing, (b) the aggregate Note Principal Balance does not exceed
the amount specified for such date in Schedule I to this Indenture,
(c) the Equity Base is not less than 5% of the Pool Balance and the
sum of the Equity Base and the Class B Note Principal Balance is not
less than the Required Support Percentage of the Pool Balance (in each
case both before and after giving effect to any purchase of Leases to
occur on such date), and (d) the aggregate Note Principal Balance is
not greater than 95% of the Company's total assets and the aggregate
30
Class A Note Principal Balance is not greater than 89.5%; of the
Company's total assets;
(ii) the net proceeds of such issuance of Notes are
applied by the Company on such Note Issuance Date to the purchase of
additional Eligible Leases pursuant to the Sale and Servicing
Agreement at an aggregate purchase price that is not greater than the
aggregate Principal Balance (excluding any Residual Amounts) of all
Leases purchased, and all conditions precedent to the purchase of
Leases and the related the Lease Assets pursuant to Article II of the
Sale and Servicing Agreement have been satisfied and complied with as
of the applicable Lease Purchase Date (provided that no failure of
compliance thereunder shall affect the validity of any Note issued
hereunder);
(iii) such additional Leases (and all related Lease
Assets) are included in the Trust Property and subject to a perfected
security interest in favor of the Trustee;
(iv) the Company is in compliance with its obligations
under the Note Purchase Agreement and under the Rate Cap Agreement;
(v) the Company shall deliver or cause to be delivered
to the Trustee a written collateral assignment of the Leases and
related Lease Assets to be included in the Trust Property on such
date, duly executed and completed, together with an attached duly
prepared Schedule of Leases identifying all such Leases;
(vi) the Company shall record and file a UCC financing
statement in the office of the Secretary of State of California and in
each other jurisdiction, if any, that is required under applicable
law, executed by and naming the Company as debtor and the Trustee as
secured party and identifying the Leases and related Lease Assets as
collateral. The Company shall deliver a file-stamped copy, or other
evidence of filing, of each such financing statement to the Trustee;
and (vii) the Company will take or cause to be taken such actions as
are necessary so that computer files maintained for the Leases and
related Lease Assets included in the Trust Property are appropriately
adjusted to indicate that such Leases and related Lease Assets have
been assigned and pledged to the Trustee pursuant to the Indenture.
SECTION 2.03. Execution, Authentication, Delivery and
Dating.
(a) The Notes shall be manually executed on behalf of the
Company by its President or one of its Vice Presidents.
31
(b) Any Note bearing the signature of an individual who was
at the time of execution thereof a proper officer of the Company shall bind the
Company, notwithstanding that such individual ceases to hold such office prior
to the authentication and delivery of such Note or did not hold such office at
the date of such Note.
(c) No Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Note a certificate of authentication substantially in the form provided for
herein, executed by the Trustee by manual signature, and such certificate upon
any Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder. Each Note shall be dated the
date of its authentication.
(d) The Notes may from time to time be executed by the
Company and delivered to the Trustee for authentication together with a Company
Request to the Trustee directing the authentication and delivery of such Notes
and thereupon the same shall be authenticated and delivered by the Trustee in
accordance with such Company Request.
SECTION 2.04. Registration, Transfer and Exchange.
(a) The Company shall cause to be kept at the Corporate
Trust office a register (the "Note Register") in which, subject to, such
reasonable regulations as the Trustee may prescribe, the Company shall provide
for the registration of Notes and of transfers of Notes. The Trustee is hereby
appointed initial "Note Registrar", and the Trustee hereby accepts such
appointment, for the purpose of registering Notes and transfers of Notes as
herein provided. In the event that, subsequent to the initial Note Issuance
Date, the Trustee is unable to act as Note Registrar, the Trustee shall appoint
a bank or trust company acceptable to the Trustee, agreeing to act in
accordance with the provisions of this Indenture applicable to it, to act as
successor Note Registrar under this Indenture pursuant to a note registrar
agreement acceptable to the Trustee and Noteholders holding not less than 51%
in Note Principal Balance of the Notes. In performing such duties any such Note
Registrar shall have the same benefit of the provisions of this Indenture as
the Trustee itself would have if it were performing such duties.
(b) Subject to compliance with the provisions of Section
2.06, upon surrender for registration of transfer of any Note at the office of
the Company designated pursuant to Section 8.02 for such purpose, the Company
shall execute and the Trustee upon a Company Request shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes of the same class, of any authorized denominations and of a like
aggregate original principal amount. The Trustee shall make a notation on any
such new Note of the amount of principal, if any, that has been paid on such
Note and shall make the appropriate entries in the Note Register.
(c) All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Company,
32
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Notes surrendered upon such registration of transfer or
exchange.
(d) Every Note presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed, by the holder
thereof or his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of
transfer or exchange of Notes but the Company or the Trustee may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, but this provision shall not apply to any exchange pursuant to Section
9.04 not involving any transfer.
(f) Each prospective initial Noteholder acquiring a Note,
each prospective transferee acquiring a Note and each prospective owner of a
beneficial interest in Notes acquiring such beneficial interest (the
prospective initial Noteholder, the prospective transferee and the prospective
beneficial owner, each, a "Prospective owner"), shall, in the event of such an
acquisition, be deemed to have represented, in any case in which the Notes are
acquired with the assets of an "employee benefit plan". within the meaning of
Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1)
of the Code (any such plan or employee benefit plan, a "Plan") and for any
period for which a Note is (or is deemed for ERISA purposes to be) assets of a
Plan, that the acquisition or transfer, and subsequent holding, will not
constitute, cause or otherwise give rise to a transaction described in Section
406 of ERISA or Section 4975 of the Code for which a statutory or
administrative exemption is unavailable.
SECTION 2.05. Mutilated, Destroyed, Lost and Stolen Notes.
(a) If any mutilated Note is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a replacement Note of the same class, of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the
Trustee (i) evidence to their satisfaction of the destruction, loss or theft of
any Note (provided that any Noteholder's affidavit shall be sufficient
evidence for such purpose) and (ii) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless
(provided that any institutional Noteholder's own unsecured agreement of
indemnity shall be sufficient for these purposes so long as such Noteholder is
a "qualified institutional buyer" as referred to in Section 2.06), then, in the
absence of actual notice to the Company or the Trustee that such Note
33
has been acquired by a bona fide purchaser, the Company shall execute and upon
a Company Request the Trustee shall authenticate and deliver, in lieu of any
such destroyed, lost or stolen Note, a replacement Note of the same class, of
like tenor and principal amount and bearing a number not contemporaneously
outstanding. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, the Company and the Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred
by the Company or the Trustee in connection therewith.
(c) In case the final installment of principal on any such
mutilated, destroyed, lost or stolen Note has become or will at the next
Monthly Payment Date become due and payable, the Company in its discretion may,
instead of issuing a replacement Note, pay such Note.
(d) Upon the issuance of any replacement Note under this
Section, the Company or the Trustee may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed as a result
of the issuance of such replacement Note plus reasonable costs and expenses of
the Trustee in connection therewith.
(e) Every replacement Note issued pursuant to this Section
in lieu of any destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Note shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Notes of the same class, duly issued hereunder.
(f) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Restrictions on Transfer and Exchange of Notes;
Compliance with Rule 144A.
(a) The Notes have not been registered under the Securities
Act or any state securities law. Each Noteholder agrees to offer, sell or
otherwise convey a Note or any interest therein only (A) to (i) a Person it
reasonably believes is a "qualified institutional buyer" as defined in Rule 144A
under the Securities Act in a transaction' meeting the requirements of Rule 144A
or (ii) an institutional investor that is an "accredited investor" as defined
under paragraph (1), (2), (3) or (7) of Rule 501(a) under the Securities Act (an
"Institutional Accredited Investor") pursuant to another available exemption
from the registration requirements of
34
the Securities Act and any applicable state securities laws and (B) if the
Trustee and the Company receive a Transferee Letter substantially in the form of
Exhibit C hereto from the transferee, in form satisfactory to the Trustee and
the Company, with respect to any transfer made pursuant to Rule 144A or such
other exemption. The Notes shall bear legends to the effect set forth in the
forms of Class A Note and Class B Note attached as Exhibit A and Exhibit B,
respectively. In the event that the Transferee Letter provided pursuant to this
Section 2.06 does not, in the reasonable judgment of the Company or the Trustee,
on its face establish the availability of an exemption under the Securities Act
and of continued exemption of the Company under the Investment Company Act, the
Company or the Trustee may require an Opinion of Counsel (which may be internal
counsel) reasonably satisfactory to the Seller or the Trustee, as the case may
be, that such transfer may be made pursuant to an exemption from the Securities
Act; provided, however, that no Opinion of Counsel shall be required in
connection with a direct transfer by an initial Noteholder of a Class A Note or
a Class B Note to an Affiliate or a wholly-owned subsidiary or affiliated
asset-backed commercial paper conduit so long as such Affiliate, wholly-owned
subsidiary or affiliated asset-backed commercial paper conduit is a qualified
institutional buyer or an Institutional Accredited Investor and (in each case)
delivers a Transferee Letter to the Trustee and the Company. Any such Opinion of
Counsel shall be obtained at the expense of the prospective transferor or
transferee, and not at the expense of the Company, the Seller, the Servicer or
the Trustee, and shall be delivered to the Company and the Trustee prior to any
such transfer. Neither the Company nor the Trustee is obligated to register the
Notes under the Securities Act or to take any other action not otherwise
required under this Agreement to permit the transfer of Notes without
registration. In addition, no transfer of any Note or any interest therein may
be made if the Company or the Trustee reasonably believes that as a result of
such transfer, the Notes would be "beneficially owned," as such term is
defined in the Investment Company Act of 1940, as amended, by more than one
hundred Persons.
(b) For so long as the Notes are "restricted securities"
within the meaning of Rule 144A of the Securities Act, the Seller, the Trustee
and the Servicer agree to cooperate with each other to provide to any Noteholder
and to any prospective purchaser of Notes designated by such a Noteholder, upon
the request of such Noteholder or prospective purchaser, any information that is
required to be provided to such Holder or prospective purchaser to satisfy Rule
144A(d)(4) (or any successor provision) under the Securities Act. Any recipient
of information provided pursuant to this Section 2.06(b) shall agree that such
information shall not be disclosed or used for any purpose other than the
evaluation of the Notes by the prospective purchaser. The Servicer will be
responsible for the physical delivery of the information requested pursuant to
this Section 2.06(b).
35
SECTION 2.07. Payment of Interest and Principal; Rights
Preserved.
(a) Any installment of interest or principal payable on any
Note that is paid or duly provided for by the Company on the applicable Monthly
Payment Date shall be paid to the Person in whose name such Note was registered
at the close of business on the Record Date for such Monthly Payment Date by
wire transfer of immediately available funds to the account and number
specified in the Note Register on such Record Date for such Person or, if no
such account or number is so specified, then by check mailed to such Person's
address as it appears in the Note Register on such Record Date.
(b) All reductions in the principal amount of a Note
effected by payments of installments of principal made on any Monthly Payment
Date shall be binding upon all holders of such Note and of any Note issued upon
the registration of transfer thereof or in exchange therefor or in lieu
thereof, whether or not such payment is noted on such Note. All payments on the
Notes shall be paid without any requirement of presentment but each holder of
any Note shall be deemed to agree, by its acceptance of the same, to surrender
such Note at the Corporate Trust Office for the payment of the final
installment of principal of and interest on such Note.
SECTION 2.08. Persons Deemed Owners.
Prior to due presentment of a Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Noteholder as the owner of such Note for the purpose of receiving
payment of principal of and interest on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
SECTION 2.09. Cancellation.
All Notes surrendered for registration of transfer or
exchange or final payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The
Company may at any time deliver to the Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
cancelled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes held by the Trustee
may be disposed of in the normal course of its business or as directed by a
Company Order.
36
SECTION 2.10. Class B Notes Subordinated to Class A Notes.
(a) Notwithstanding the provisions of this Indenture and any
Class B Note, each Holder of a Class B Note, by his acceptance thereof,
covenants and agrees that the rights of the Noteholder of such Class B Notes in
and claims to the assets of the Company, the Class B Notes and the Trust
Property shall be subordinate and junior in right of payment, in accordance
with the provisions of this Section and to the extent and in the manner set
forth in Sections 3.07(b) and 6.06 and the other provisions of this Indenture,
to the prior payment in full of the Class A Notes (subject to the provisions of
such Sections). For purposes of this Indenture, the Class A Notes shall not be
deemed to have been paid in full until the holders or owners of the Class A
Notes shall have received full payment of the Class A Notes in cash.
(b) Each Holder of a Class B Note, by its acceptance
thereof, authorizes and directs the Company and the Trustee to take such
actions on his behalf as may be necessary or appropriate to effectuate, as
between the holders of the Class A Notes and the Class B Notes, the
subordination as provided in this Section 2.10 and appoints the Company as its
attorney-in-fact for any and all such purposes.
(c) In the event that, notwithstanding paragraphs (a) and
(b) of this Section, any Noteholder shall have received any payment or
distribution in respect of a Class B Note contrary to such provisions, then
such payment or distribution shall be received and held in trust for the
holders or owners of the Class A Notes and shall be paid over or delivered to
the Trustee on behalf of the Class A Noteholders or their representatives, as
the case may be, for application to (in the case of cash) or as collateral for
(in the case of non-cash property or securities) the payment or prepayment of
the Class A Notes after giving effect to any concurrent payment or distribution
to the holders or owners of such Class A Notes.
SECTION 2.11. Noteholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Noteholders. If the Trustee is not the Note Registrar, the Company
or other obligor, if any, shall furnish to the Trustee at least five Business
Days prior to each Record Date and at such other times as the Trustee may
request in writing a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of Noteholders.
37
ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS
SECTION 3.01. Accounts; Investments by Trustee.
(a) The Servicer, pursuant to the Lock-Box Agreement, shall
maintain the Lock-Box Account, which account shall be maintained as an Eligible
Deposit Account, in the name of the Servicer for the benefit of the Trustee and
the Noteholders. The Lock-Box Account shall be an account maintained with Bank
of America or such other Lock-Box Bank as the Servicer may select; provided,
however, that the Servicer shall give the Trustee at least 30 days' prior
written notice of any change in the location of the Lock-Box Account, shall not
make any such change without the consent of the Trustee and shall give at least
60 days' prior written notice of the new location to each Lessee.
In addition, on or before the Closing Date, the Trustee
shall establish, in the name of the Trustee for the benefit of the Noteholders
as provided in this Indenture, the following accounts, which accounts shall be
segregated trust accounts maintained at the Corporate Trust Office:
(i) Collection Account;
(ii) Reserve Account;
(iii) Payahead Account; and
(iv) Lease Purchase Account.
Each of such Accounts shall be established and maintained as an Eligible Deposit
Account. Subject to the further provisions of this Section 3.01(a), the Trustee
sha11, upon receipt or upon transfer from another account, as the case may be,
deposit into such Accounts all amounts received by it which are required to be
deposited therein in accordance with the provisions of this Indenture. All such
amounts and all investments made with such amounts, including all income and
other gain from such investments, shall be held by the Trustee in such Accounts
as part of the Trust Property as herein provided, subject to withdrawal by the
Trustee in accordance with, and for the purposes specified in the provisions
of, this Indenture.
(b) The Trustee shall hold in trust but shall not be required
to deposit in any Account specified in Section 3. 01 (a) any payment received by
it until such time as the Trustee shall have identified to its reasonable
satisfaction the nature of such payment and, on the basis thereof, the proper
account or accounts into which such payment is to be deposited. In determining
into which of the Accounts, if any, any amount received by the Trustee is to be
deposited, the Trustee may conclusively rely (in the absence of gross negligence
or wilful misconduct on the part of the Trustee) on the
38
written instructions of the Servicer. Unless otherwise advised in writing by
the Servicer, the Trustee shall assume that any amount remitted to it is to be
deposited into the Collection Account pursuant to Section 3.02. The Trustee may
establish from time to time such deadline or deadlines as it shall determine
are reasonable or necessary in the administration of the Trust Property after
which all amounts received or collected by the Trustee on any day shall not be
deemed to have been received or collected until the next succeeding Business
Day.
(c) The Trustee shall have no right of set-off with respect
to the Lock-Box Account, the Collection Account, the Reserve Account, the
Payahead Account or the Lease Purchase Account, or any investment therein,
whether or not commingled. If at any time any Account ceases to be an Eligible
Deposit Account, the Trustee shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which Standard & Poor's may
consent) establish a new Account meeting the conditions specified in this
Section, and shall transfer any cash and/or any investments in the old Account
to such new Account.
(d) So long as no Default or Indenture Event of Default
shall have occurred and be continuing, the amounts in the Collection Account,
the Reserve Account, the Payahead Account and the Lease Purchase Account shall
be invested and reinvested by the Trustee pursuant to a Servicer Notice in one
or more Permitted Investments. Subject to the restrictions on the maturity of
investments set forth in Section 3.01(f), each such Servicer Notice may
authorize the Trustee to make the specific Permitted Investments set forth
therein, to make Permitted Investments from time to time consistent with the
general instructions set forth therein, or to make specific Permitted
Investments pursuant to instructions received in writing or by telegraph or
facsimile transmission from the employees or agents of the Servicer identified
therein, in each case in such amounts as such Servicer Notice shall specify. The
Company agrees to report as income for financial reporting and tax purposes (to
the extent reportable) all investment earnings on amounts in the Collection
Account, the Reserve Account, the Payahead Account and the Lease Purchase
Account.
(e) In the event that either (i) the Servicer shall have
failed to give investment directions to the Trustee by 12:00 P.M. New York time
on any Business Day on which there may be uninvested cash or (ii) a Default or
Indenture Event of Default shall have occurred and be continuing, then the
Trustee shall invest and reinvest the funds then in the Collection Account, the
Reserve Account, the Payahead Account and the Lease Purchase Account, as the
case may be, to the fullest extent practicable in one or more Permitted
Investments as specified in paragraph (c) of the definition of Permitted
Investments. All investments made by the Trustee shall mature no later than the
maturity date therefor permitted by Section 3.01(f).
(f) No investment of any amount held in the Collection
Account, the Reserve Account, the Payahead Account or the Lease Purchase Account
shall mature later than the second Business Day
39
immediately preceding the Monthly Payment Date which is scheduled to occur
immediately following the date of investment. All income or other gains from
the investment of moneys deposited in the Collection Account, the Reserve
Account, the Payahead Account and the Lease Purchase Account shall be
deposited by the Trustee in such account immediately upon receipt. Any net
loss of principal (determined on a month by month basis) resulting from such
investment of amounts in the Collection Account, the Reserve Account, the
Payahead Account or the Lease Purchase Account shall be charged to the
respective Account.
(g) Any investment of any funds in the Collection Account,
the Reserve Account, the Payahead Account or the Lease Purchase Account, and
any sale of any investment held in such accounts, shall be made under the
following terms and conditions:
(i) each such investment shall be made in the name of
the Trustee (in its capacity as such) for the benefit of the
Noteholders or in the name of a nominee of the Trustee;
(ii) the investment earnings of any investment shall be
credited to the Account for which such investment was made;
(iii) any certificate or other instrument evidencing
such investment shall be delivered directly to the Trustee or its
agent and the Trustee shall have sole possession of such instrument
and all income on such investment; and
(iv) the proceeds of any sale of an investment shall be
remitted by the purchaser thereof directly to the Trustee for deposit
in the Account in which such investment was held.
(h) If any amounts are needed for disbursement from the
Collection Account, the Reserve Account, the Payahead Account or the Lease
Purchase Account, and sufficient uninvested funds are not collected and
available therein to make such disbursement, in the absence of a Servicer Order
for the liquidation of investments held therein in an amount sufficient to
provide the required funds, the Trustee shall cause to be sold or otherwise
converted to cash a sufficient amount of the investments in such Account
selected by it in its absolute discretion and shall not be liable for any loss
resulting therefrom.
(i) The Trustee shall not in any way be held liable by
reason of any insufficiency in the Collection Account, the Reserve Account, the
Payahead Account or the Lease Purchase Account, resulting from losses on
investments (including from liquidations thereof) made in accordance with the
provisions of this Section 3.01 (but the institution serving as Trustee shall
at all times remain liable for its own debt obligations, if any, constituting
part of such investments). The Trustee shall not be liable for any investment
(or liquidation) made by it in accordance with this Section 3.01 on the grounds
that it could have made a more favorable investment (or liquidation).
40
SECTION 3.02. Collections; Applications.
(a) If (i)(A) the Servicer's short-term unsecured debt has
been rated A-1 or higher by Standard & Poor Is or (B) a Servicer letter of
credit issued by an institution rated A-1 or higher by Standard & Poor's has
been obtained by the Servicer and (ii) the Trustee has received confirmation
from the Rating Agency that there would not be a reduction in the then-current
rating of the Class A Notes or of the Class B Notes, the Servicer shall on or
before each Deposit Date remit, or cause the Lock-Box Bank to remit, to the
Collection Account all payments by the Lessees on the Leases (including any
Purchase Option Payment, any prepayments in full of a Lease and any applicable
Payahead Amounts related to such Collection Period), other than Servicing Fees
(to the extent that sufficient funds are allocated and available therefor as
provided in Section 3.07) and Administrative Fees (which may be retained by the
Servicer), and all Recoveries and Insurance Proceeds and Rate Cap Proceeds, as
collected during the Collection Period.
(b) Unless the conditions in Section 3.02(a) have been
satisfied, or if at any time a Servicer Event of Default has occurred and is
continuing and no successor Servicer has been appointed, the Servicer shall
remit or cause the Lock-Box Bank to remit the amounts referred to in Section
3.02 (a) into the Collection Account (including any such amounts then held by
the Servicer) as soon as practicable, but in no event later than the close of
business on the second Business Day after receipt thereof. As of the date
hereof, the provisions of this paragraph (b) are applicable and the Servicer
will notify the Company, and the Company will thereupon promptly notify the
Trustee, if paragraph (a) of this Section becomes applicable at any time after
the date hereof.
(c) Notwithstanding the provisions of subsections (a) and (b)
hereof, the Servicer may retain, or will be entitled to be reimbursed from,
amounts otherwise payable into, or on deposit in, the Collection Account with
respect to a Collection Period, amounts previously deposited in the Collection
Account but later determined to have resulted from mistaken deposits or payments
due before the applicable Cut-Off Date or postings or checks returned for
insufficient funds (provided that the Servicer accounts for such amounts in the
Monthly Servicer Report for the related Collection Period). The amount to be
retained or reimbursed hereunder shall not be included in funds available for
distribution with respect to the related Monthly Payment Date. The Trustee may
fully rely upon notice as to such matters from the Company or the Servicer.
(d) In those cases where a subservicer is servicing a Lease
pursuant to a subservicing agreement and where required by the Rating Agency to
maintain the ratings on the Notes, the Servicer shall cause the subservicer to
remit to the Collection Account as soon as practicable, but in no event later
than the close of business on the second Business Day after receipt thereof by
the subservicer (but subject to the provisions of Section 3.02 (c) of this
Agreement), the
41
amounts referred to in Section 3.02 (a) in respect of a Lease being serviced by
the subservicer.
(e) Pending their deposit into the Collection Account, all
collections, Insurance Proceeds, Recoveries and Liquidation Proceeds shall be
segregated by book-entry or similar form of identification on the Servicer's
books and records and identified as the property of the Company subject to the
lien of the Trustee.
(f) If at any time the Company shall receive any payment on
or in respect of any Lease, Equipment (including any Residual Amount) or other
Trust Property, it shall hold such payment in trust for the benefit of the
Trustee and the Noteholders, shall segregate such payment from the other
property of the Company, and shall, within two Business Days of receipt, deliver
such payment in the form received (with any necessary endorsement) by it to the
Trustee.
SECTION 3.03. Additional Deposits.
The Company shall be required to deposit into the Collection
Account the aggregate Retransfer Amount pursuant to Section 4.02 in accordance
with the provisions of such Section. All remittances shall be made to the
Collection Account, in Automated Clearinghouse Corporation next-day funds or
immediately available funds, not later than 3:00 p.m., New York time, on the
related Deposit Date. The Trustee shall deposit in the Collection Account the
aggregate of any Reserve Draw Amounts pursuant to Section 3.05, the aggregate of
any amounts received from JLACC under the Sale and Servicing Agreement, and the
Payahead Draw Amount due pursuant to Section 3.06, in each case on the Deposit
Date or Monthly Payment Date, as applicable.
SECTION 3.04. Daily Deposits.
The Servicer is required to make deposits into the Collection
Account on a daily basis pursuant to Section 3.02 (b) and not monthly pursuant
to Section 3.02(a) as of the date hereof and shall continue to be so obligated
until such date (if any) on which the Servicer by Servicer Notice certifies to
the Trustee that the conditions precedent to the applicability of Section
3.02(a) have been satisfied. For so long as the Servicer is so obligated to make
deposits on a daily basis, not later than 3:00 p.m. (New York time) on the
first Business Day of each week, commencing in the week following the initial
Lease Purchase Date, the Servicer will deliver to the Company and the Trustee a
written statement verifying the amount delivered by the Servicer from the Lock
Box Account to the Trustee for deposit into the Collection Account on each
Business Day during the preceding week.
SECTION 3.05. Reserve Account.
(a) On each Note Issuance Date, the Company shall deposit or
cause to be deposited into the Reserve Account, by wire transfer in immediately
available funds, such amount, if any, as is required to make the balance of
amounts in the Reserve Account be not less
42
than 1% of the Note Principal Balance (after giving effect to any issuance of
Notes on such Note Issuance Date).
(b) On each Monthly Payment Date, the Trustee shall transfer
from the Reserve Account to the Collection Account immediately available funds
in the amount of the Reserve Draw Amount, if any, in accordance with the
instructions contained in the applicable Monthly Servicer Report for such
Monthly Payment Date. "Reserve Draw Amount" shall mean the excess of (i) the
amount necessary to make distributions on such Monthly Payment Date pursuant to
clauses (i) through (iv) of Section 3.07(b) over (ii) amounts in the
Collection Account available for distribution on such Monthly Payment Date as
set forth in the Monthly Servicer Report for the related Collection Period, but
in no event will the Reserve Draw Amount be greater than the Available Reserve
Amount with respect to such Monthly Payment Date.
(c) On each Monthly Payment Date, if no Indenture Event of
Default has occurred and is continuing, the Trustee shall withdraw from the
Reserve Account and transfer to the Seller by wire transfer of immediately
available funds the Reserve Account Surplus, if any.
(d) Upon the first date on which the Notes are paid in full,
the Trustee, after the payment of all amounts payable from the Reserve Account
as provided herein and after payment of all amounts due to the Trustee
hereunder, shall withdraw from the Reserve Account all amounts on deposit in the
Reserve Account and pay such amounts to or upon the instructions of the Company.
SECTION 3.06. Payahead Account.
(a) The Trustee shall withdraw and transfer amounts in the
Collection Account that represent the Payahead Amounts from the Collection
Account into the Payahead Account on each Monthly Payment Date.
(b) The Trustee shall withdraw from the Payahead Account and
transfer to the Collection Account on each Deposit Date in immediately available
funds the Payahead Draw Amount for the following Monthly Payment Date.
(c) On each Monthly Payment Date, all interest (including
accrued discount realized on liquidation of any Permitted Investment purchased
at a discount) and earnings (net of losses and investment expenses, if any)
accrued since the preceding Monthly payment Date on funds on deposit in the
Payahead Account shall be transferred to the Collection Account.
(d) Notwithstanding the foregoing, if (i) (a) the Servicer's
short-term unsecured debt has been rated A-1 or higher by Standard & Poor's or
(b) a Servicer letter of credit issued by an institution rated A-1 or higher by
Standard & Poor's has been obtained by the Servicer and (ii) the Trustee has
received confirmation from the Rating Agency that there would not be a
43
reduction in the then-current rating of the Class A Notes or of the Class B
Notes, then the Servicer may hold the Payahead Amounts together with its own
funds rather than deposit such amounts into the Payahead Account, and shall pay
the Payahead Draw Amount to the Trustee in next day funds on or prior to each
Deposit Date. As of the date hereof, the provisions of this paragraph are not
applicable and the Servicer will notify the Company, and the Company will
thereupon promptly notify the Trustee, if this paragraph becomes applicable at
any time after the date hereof.
(e) Upon the earlier to occur of (i) the Final Scheduled
Monthly Payment Date, and (ii) the date on which the Notes are paid in full, the
Trustee, after the payment of all amounts payable from the Payahead Account as
provided herein (and after payment of all amounts due to the Trustee hereunder),
shall withdraw from the Payahead Account all amounts on deposit in such
account and pay such amounts to the Company or its designee.
SECTION 3.07. Collection Account.
(a) The Trustee shall deposit the following into the
Collection Account promptly upon receipt thereof by the Trustee:
(i) each Rent Payment (including all Rent Payments
deposited with the Trustee by the Company on each Lease Purchase
Date);
(ii) any Retransfer Amount and any other proceeds of any
repurchase of Leases and Equipment pursuant to Section 4.02 that are
received by the Trustee;
(iii) each prepayment of any Lease received by the Trustee;
(iv) all Security Deposit Offsets (if any) and Recoveries
(if any) and Liquidation Proceeds (if any) on any Lease, in each case
received by the Trustee;
(v) all earnings on Permitted Investments in the Reserve
Account and the Lease Purchase Account;
(vi) all proceeds received by the Trustee pursuant to any
Insurance Policy covering Equipment or any other amounts received by
the Trustee relating to a Lease or Equipment;
(vii) all Rate Cap Proceeds, if any, received by the
Trustee pursuant to the Rate Cap Agreement; and
(viii) any other amount required to be deposited in the
Collection Account pursuant to Section 3.02.
(b) Unless the Notes have been declared due and payable
pursuant to Section 6.02 and moneys collected by the Trustee are being applied
in accordance with Section 6.06, the Trustee shall by
44
3:00 P.M. (New York City time) on the Business Day prior to each Monthly Payment
Date allocate all available funds on deposit in the Collection Account and
attributable to the related Collection Period (or, in the case of any Rate Cap
Proceeds, attributable to such Monthly Payment Date) (including any investment
income with respect to funds on deposit in the Collection Account)
(collectively, the "Available Payment Amount") in the amounts required for
application, and on such Monthly Payment Date shall make payments, in the
following order of priority:
(i) to the payment to the Trustee of the Trustee Fee
(including any overdue Trustee Fee) plus all other amounts due to the
Trustee hereunder; provided, however, that the aggregate amount
payable under this clause (i) in any single year will not exceed
$25,000; then
(ii) to the payment on each Monthly Payment Date to the
Servicer, the Servicing Fee (including any overdue Servicing Fee) due
to the Servicer on such Monthly Payment Date; then
(iii) to the payment of Monthly Interest, including any
Overdue Monthly Interest, to the Class A Noteholders; then
(iv) to the payment of Monthly Interest, including any
Overdue Monthly Interest, to the Class B Noteholders; then
(v) solely during the Note Issuance Period, to payment of
the Non-Utilization Premium, to the Committed Investors, pro rata in
accordance with the respective amounts thereof owing to such investors
pursuant to the Note Purchase Agreement; then
(vi) solely during the Note Issuance Period, to the
Reserve Account an amount that is equal to the amount necessary to
increase the amount on deposit therein (exclusive of interest and
earnings) to the Required Reserve Amount; then
(vii) solely during the Note Issuance Period, to the
deposit of any Principal Component of all Rent Payments into the Lease
Purchase Account; then
(viii) solely during the Note Amortization Period, to the
payment of Monthly Principal, including any Overdue Monthly Principal,
to the Class A Noteholders; then
(ix) solely during the Note Amortization Period, if the
sum of the Equity Base and the Class B Note Principal Balance (before
giving effect to any payments of principal on such date) is less than
$2,072,368, then to the payment to the Class A Noteholders of an
amount equal to the lesser of (i) the remaining Available Payment
Amount and (ii) the Class A Note Principal Balance; then
45
(x) solely during the Note Amortization Period, to the
payment of Monthly Principal, including any Overdue Monthly Principal,
to the Class B Noteholders; then
(xi) solely during the Note Amortization Period, to the
Reserve Account an amount that is equal to the lesser of (i) the
amount necessary to increase the amount on deposit therein to the
Required Reserve Amount and (ii) the interest Component of the Rent
Payments received during the related Collection Period; then
(xii) to the payment to the Trustee of the Trustee Fee
(including any overdue Trustee Fee) plus all other amounts due
to the Trustee hereunder, to the extent (if any) not paid pursuant to
clause (i) above; then
(xiii) all remaining funds, if any, to or upon the order of
the Company;
provided, however, that (A) if an Indenture Event of Default shall have occurred
and be continuing on such Monthly Payment Date, any amounts otherwise payable
under clauses (vi), (vii), (x), (xi), (xii) and (xiii) shall be paid to the
Class A Noteholders until the Class A Note Principal Balance has been reduced to
zero and all amounts owing on the Class A Notes have been paid in full, and (B)
if during the Note Amortization Period an Over-Issuance Condition shall have
occurred and be continuing, any amounts otherwise payable under clause (xiii) on
such Monthly Payment Date shall be paid to the Trustee and the Noteholders, in
accordance with the priorities of payment specified above, until the Note
Principal Balance of all Notes has been reduced to zero and all amounts owing on
the Notes and to the Trustee have been paid in full.
Distributions to Noteholders on a Monthly Payment Date will
be made pro rata to the Noteholders of record of each Class as of the Record
Date preceding such Monthly Payment Date. On any Monthly Payment Date,
Noteholders will not be entitled to any amount in excess of Monthly Interest
and Monthly Principal (including any Overdue Monthly Interest and Overdue
Monthly Principal), except as described above.
SECTION 3.08. Lease Purchase Account.
(a) On each Note Issuance Date, the Trustee shall deposit in
the Lease Purchase Account an amount equal to all of the net proceeds to the
Company received from the issuance of Notes on such Note Issuance Date. On each
Monthly Payment Date, the Trustee shall deposit in the Lease Purchase Account
all amounts required to be so deposited pursuant to Section 3.07(b)(vii).
(b) On each Lease Purchase Date during the Note Issuance
Period, the Trustee shall pay from the Lease Purchase Account to the Seller
directly on behalf of the Company, an amount equal to the
46
applicable purchase price for the Leases sold to the Company on such Lease
Purchase Date.
(c) If the Lease Purchase Account has not been reduced to
zero on the last day of the Note Issuance Period, the Trustee shall transfer any
amount remaining in the Lease Purchase Account on such date to the Collection
Account and such amount shall be distributed on the Monthly Payment Date
concurrent with or immediately following such date. Upon such distribution, the
Lease Purchase Account shall be closed.
SECTION 3.09. Reports; Notices of Certain Payments.
(a) Concurrently with each payment to the Noteholders on a
Monthly Payment Date, the Trustee shall mail to the Servicer (except that with
respect to clause (i) below no report shall be delivered to the Servicer), the
Rating Agency and each Noteholder the following information:
(i) the Monthly Servicer Report furnished to the Trustee
by the Servicer relating to such Monthly Payment Date (or if such
report has not been received, a written statement to such effect);
and
(ii) the amount on deposit as of such Monthly Payment
Date in the Collection Account, the Reserve Account, the Payahead
Account and the Lease Purchase Account, in each case after giving
effect to all of the withdrawals and applications or transfers
required on such Monthly Payment Date pursuant to this Article III.
(b) The Trustee shall within five Business Days after the
request of the Company or the Servicer, deliver to the Company and the Servicer
a written report setting forth the amounts on deposit in the Collection Account,
the Reserve Account, the Payahead Account and the Lease Purchase Account, and
identifying the investments included therein.
SECTION 3.10. Trustee May Rely on Certain Information.
Pursuant to the Sale and Servicing Agreement, the Company,
the Seller and the Servicer are required to furnish to the Trustee from time to
time certain information and make various calculations which are relevant to the
performance of the Trustee's duties in this Article III and in Article IV and
in Section 7.14 of this Indenture. The Servicer shall provide the Trustee with a
revised amortization schedule within 10 Business Days following the termination
of the Note Issuance Period and on the Business Day preceding each Determination
Date thereafter. In making distributions from any of the Accounts and any
transfer of amounts between such Accounts the Trustee may fully rely on
information provided to it as specified herein by the Seller, the Servicer or
the Company in writing, whether by way of a certificate, report or otherwise, or
failing delivery
47
thereof on such other information as the Trustee reasonably determines
appropriate.
ARTICLE IV
LEASES AND EQUIPMENT
SECTION 4.01. Representations and Warranties of the Company.
The Company hereby makes, as to itself, to the Trustee for
the benefit of the Noteholders and the Trustee (i) the representations and
warranties set forth in Section 3.01 of the Sale and Servicing Agreement and
(ii) the representations and warranties made by the Seller in Section 3.02 of
the Sale and Servicing Agreement with respect to the Leases and related Lease
Assets. The Trustee shall rely on such representations and warranties in
authenticating Notes to be issued on each Note Issuance Date and in accepting in
trust the Leases, the related Lease Assets and the other Trust Property
delivered to the Trustee upon the purchase thereof by the Company on each Lease
Purchase Date pursuant to the Sale and Servicing Agreement. Such representations
and warranties shall speak as of the date hereof, as of the Closing Date and as
of each Lease Purchase Date, as applicable.
SECTION 4.02. Purchase upon Breach; Sale and Servicing
Agreement.
The Company and the Servicer, as the case may be, shall
promptly inform the Trustee, and thereafter the Trustee shall promptly inform
the Noteholders, in writing, upon the discovery of a breach of any of the
Seller's or Company's representations and warranties set forth in or referred to
in Section 4.01, or of the Seller's breach of the representations and
warranties set forth in Section 3.02 of the Sale and Servicing Agreement or the
Servicer's breach of the covenants set forth in Section 4.05 of the Sale and
Servicing Agreement, which materially and adversely affects the interest of the
Noteholders in any Lease. Each such notice shall include a statement that such
breach materially and adversely affects the interest of the Noteholders in such
Lease. As of the Deposit Date in the month following the month (or, if the
Seller or the Servicer (as applicable) elects under the Sale and Servicing
Agreement, the last day of the month) in which the Company, the Seller or the
Servicer (as applicable) becomes aware or receives such written notice of such
breach, the Company, unless the Seller or the Servicer cures such breach, shall
replace in the Trust Property each such Lease that is materially and adversely
affected by such breach) by delivering the Retransfer Amount to the Trustee for
inclusion in the Trust Property (or, if the Seller shall have delivered to the
Company a Substitute Lease subject to and in accordance with the Sale and
Servicing Agreement, such Substitute Lease) and, upon receipt of the Retransfer
Amount (or such Substitute Lease), the Trustee shall release and retransfer such
Lease from the Trust Property. The
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Trustee, whereupon the balance of such proceeds, if any, shall be paid to, or as
directed by, the Seller.
SECTION 4.04. Release of Leases and Equipment Upon Final Rent
Payment.
(a) In the event that the Trustee shall have received written
certification from an Authorized Officer of the Servicer that the Trustee has
received from amounts paid by the Lessee or from the proceeds of the Equipment
subject to any Lease (i) the final Rent Payment due and payable under any Lease
(excluding, if applicable, any Purchase Option Payment), or (ii) a Retransfer
Amount or prepayment in respect of any Lease and, following such final Rent
Payment or Retransfer Amount or prepayment, no further payments on or in respect
of such Lease are or will be due and payable, such Lease and the related Lease
Assets shall be released from the lien of this Indenture.
(b) If an Early Amortization Event or Event of Default shall
have occurred and be continuing, then each Lease and related Lease Assets which
would otherwise be released from the lien of this Indenture pursuant to this
Section 4.04 shall instead remain subject to such lien and all of the provisions
of this Indenture, including without limitation Article VI hereof.
SECTION 4.05. Execution of Documents.
The Trustee shall, at the Company's cost and expense,
promptly execute and deliver such documents (which shall be furnished to the
Trustee by the Company) and take such other actions as the Company, by Company
Request, may reasonably request to fully effectuate the release from this
Indenture of any Lease and Equipment required to be so released pursuant to
Sections 4.03 and 4.04.
ARTICLE V
SERVICER EVENTS OF DEFAULT; SUBSTITUTE
SERVICER
SECTION 5.01. Servicer Events of Default.
If a Servicer Event of Default shall have occurred and be
continuing, the Trustee shall, upon the written request of the holders of Class
A and Class B Notes evidencing more than 66-2/3% of the aggregate outstanding
principal amount of the Class A and Class B Notes, give written notice to the
Servicer of the termination of all of the rights and obligations of the Servicer
(but none of the Seller's obligations thereunder or hereunder, which shall
survive any such termination) under the Sale and Servicing Agreement and this
Indenture and the Trustee shall act as substitute Servicer in accordance with
Section 8.02 of the Sale and Servicing Agreement.
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SECTION 5.02. Substitute Servicer.
Notwithstanding the provisions of Section 5.01, the Trustee
may, if it shall be unwilling or unable to act as the Successor Servicer in
accordance with Section 5.01, appoint a Successor Servicer in accordance with
the provisions of Section 8.02 of the Sale and Servicing Agreement.
SECTION 5.03. Notification to Noteholders.
Upon any termination of the Servicer or appointment of a
Successor Servicer, the Trustee shall give prompt notice of such termination or
appointment, together with the conditions of default, to the Rating Agency and
each Noteholder in the manner provided herein.
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
SECTION 6.01. Events of Default.
"Indenture Event of Default," wherever used herein, means
anyone of the following (whatever the reason for such Indenture Event of Default
and whether it shall be voluntary or involuntary or be effected by operation
of law or pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(i) default in the payment of (a) any interest upon any
outstanding Note when it becomes due and payable or (b) any principal
of any outstanding Note when it becomes due and payable;
(ii) default in the performance, or breach, of any
covenant set forth in (a) Section 8.04, 8.07(c), 8.08, 8.10 or 8.14 or
(b) Section 8.13;
(iii) default in the performance, or breach, of any
covenant of the Company in the Notes or this Indenture (other than a
covenant described in clause (i) or (ii) above) or in the Note
Purchase Agreement or the Sale and Servicing Agreement and continuance
of such default or breach for a period of 30 days after the earliest
of (A) any officer of the Company first acquiring knowledge thereof, or
(B) written notice being given to the Company by the Trustee itself of
upon the request of Noteholders holding not less than 51% of the Note
Principal Balance of all Notes;
(iv) if any representation or warranty of the Company or
the Seller made in this Indenture, in the Note Purchase Agreement or
in the Sale and Servicing Agreement or any other writing provided to
the Noteholders in connection with the
51
foregoing documents shall prove to be incorrect in any material
respect as of the time when the same shall have been made; provided,
however, that the breach of any representation or warranty made by the
Seller in Section 3.02 of the Sale and Servicing Agreement with
respect to any of the Leases or the Equipment subject thereto shall
not constitute an Indenture Event of Default if the Seller cures such
breach within the period permitted by, or repurchases a Lease and the
related Equipment in accordance with, Section 3.03 of the Sale and
Servicing Agreement;
(v) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Company
in an involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization, or other similar law or
(B) a decree or order adjudging the Company a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization,
arrangement, adjustment, or composition of or in respect of the
Company under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator, or
other similar official of the Company or of any substantial part of
its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect for a period
of 90 consecutive days;
(vi) the commencement by the Company of a voluntary case
or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization, or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under
any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator,
or similar official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the Company's failure to pay its debts generally as they
become due, or the taking of corporate action by the Company in
furtherance of any such action;
(vii) the Company becomes obligated to register as an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended;
(viii) on two consecutive Monthly Payment Dates during the
Note Issuance Period (a) the Equity Base is less than 5%
52
of the Pool Balance or (b) the sum of the Equity Base and the Class B
Note Principal Balance is less than the Required Support Percentage of
the Pool Balance (in each case both before and after giving effect to
any purchase of Leases to occur on such date);
(ix) any Over-Issuance Condition occurs;
(x) on two consecutive Monthly Payment Dates after the
Note Issuance Period, the amount in the Reserve Account is below the
Required Reserve Amount (after giving effect to all withdrawals from
and deposits to the Reserve Fund on such dates); or
(xi) any Servicer Event of Default occurs.
SECTION 6.02. Acceleration of Maturity; Rescission and
Annulment.
(a) If an Indenture Event of Default occurs and is
continuing, then and in every such case the Note Issuance Period (unless earlier
terminated) shall immediately terminate and the Trustee, with the consent of the
holders of Class A and Class B Notes evidencing not less than 66-2/3% of the
aggregate outstanding principal amount of the Class A and Class B Notes, may
declare the unpaid principal amount of all the Notes to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by the Noteholders), and upon any such declaration such principal amount shall
become immediately due and payable together with all accrued and unpaid interest
thereon, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Company; provided, that in the case of any of
the Events of Default specified in clause (i)(a), (ii)(b), (v), (vi) or (ix) of
Section 6.01 with respect to the Company, without any notice to the Trustee or
the Company, the Notes (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company.
(b) At any time after such a declaration of acceleration has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, the holders of
Class A and Class B Notes evidencing not less than 66-2/3% of the aggregate
outstanding principal amount of the Class A and Class B Notes, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Company has paid or deposited with the Trustee a
sum sufficient to pay:
(A) all principal of the Class A and Class B Notes
which has become due otherwise than by such declaration of
acceleration, and interest thereon from the
53
date when the same first became due at the applicable Note
Rate;
(B) all interest which has became due with respect to
the Class A and Class B Notes and, to the extent that payment
of such interest is lawful, interest upon overdue interest
from the date when the same first became due at a rate per
annum equal to the applicable rate of interest for each such
Note;
(C) all sums paid or advanced, together with interest
thereon, by the Trustee hereunder and the reasonable
compensation, expenses, disbursements, and advances of the
Trustee and its agents and counsel;
(ii) all Indenture Events of Default, other than the
non-payment of the aggregate principal amount of the Notes which has
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 6.13; and
(iii) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction.
No such rescission shall affect any subsequent Indenture Event of Default or
impair any right consequent thereon.
SECTION 6.03. Other Remedies.
(a) If an Indenture Event of Default occurs and is continuing
of which a Responsible Officer of the Trustee has received written notice (other
than a payment default as described in clause (i) of Section 6.01), the Trustee
shall give notice to each Noteholder as set forth in Section 7.02. The Trustee
shall then take such action, if any, as may be directed by the holders of Class
A and Class B Notes evidencing not less than 66-2/3% of the aggregate
outstanding principal amount of the Class A and Class B Notes.
(b) Following any acceleration of the Class A and Class B
Notes, the Trustee shall have all of the rights, powers and remedies with
respect to the Trust Property set forth herein or as are otherwise available to
secured parties under the Uniform Commercial Code or other applicable law. Such
rights, powers and remedies may be exercised by the Trustee in its own name as
trustee of an express trust.
SECTION 6.04. Trustee May File Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other judicial proceeding relative to the Company, the Seller, the Servicer
or any other obligor upon the Class A and Class B Notes or the other obligations
secured hereby or relating to the property of the Company, the Seller, the
Servicer or of such other obligor or their creditors, the Trustee (irrespective
54
of whether the principal of the Class A and Class B Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company, the Seller or
the Servicer for the payment of overdue principal or overdue interest or any
such other obligation) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(i) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Class A and
Class B Notes and any other obligation secured hereby and to file
such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel) and of the Noteholders allowed in
such judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Class A and Class B 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 Class A and Class B Noteholders to pay to the Trustee any amount due it
for the reasonable compensation, expenses, disbursements and advances of the
Trustee and its agents and counsel, and any other amounts due the Trustee under
section 7.06.
(b) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Class A
or Class B Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Class A or Class B Notes or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any Class
A or Class B Noteholder in any such proceeding.
SECTION 6.05. Trustee May Enforce Claims Without Possession
of Notes.
All rights of action and claims under this Indenture or the
Class A and Class B Notes may be prosecuted and enforced by the Trustee without
the possession of any of the Class A or Class B Notes or the production thereof
in any proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Class A and Class
B Notes in respect of which such judgment has been recovered.
55
SECTION 6.06. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article,
and any moneys that may then be held or thereafter received by the Trustee,
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of the entire amount due on account of
principal or interest, upon presentation of the Class A and Class B Notes and
surrender thereof:
first, to the payment of the Trustee Fee and all costs and
expenses of collection incurred by the Trustee (including the
reasonable fees and expenses of any counsel to the Trustee) and all
other amounts due the Trustee under Section 7.06 (the parties hereto
agree that when the Trustee renders services following an Indenture
Event of Default under Section 6.01 (v) or (vi), compensation for such
services and expenses in connection therewith are intended to
constitute administrative expenses under applicable bankruptcy law);
provided that the aggregate amount payable under this clause first
shall not exceed $25,000;
second, if the Person then acting as Servicer is not the
Seller or an Affiliate of the Seller, to the payment of all
unreimbursed Servicing Fees due to the Servicer;
third, to the payment of all accrued and unpaid interest on
the outstanding Class A Note Principal Balance to the date of payment
thereof, without preference or priority of any kind;
fourth, to the payment of all accrued and unpaid interest on
the outstanding Class B Note Principal Balance to the date of payment
thereof, without preference or priority of any kind;
fifth, to the payment of the outstanding Class A Note
Principal Balance, and any other amounts due to the Class A
Noteholders ratably, without preference or priority of any kind;
sixth, to the payment of the Non-Utilization Premium, if any,
to the Committed Investors ratably, without preference or priority of
any kind;
seventh, to the payment of the outstanding Class B Note
Principal Balance, and any other amounts due to the Class B
Noteholders ratably, without preference or priority of any kind;
eighth, to the payment of all amounts specified in clause
first to the extent not paid thereunder (due to the limitation imposed
by the proviso therein);
ninth, if the Person then acting as Servicer is the Seller or
'an Affiliate of the Seller, to the payment of all unreimbursed
Servicing Fees due to the Servicer; and
56
tenth, to the payment of the remainder, if any, to or upon
the instructions of the Company.
SECTION 6.07. Limitation on Suits.
The holder of any Class A or Class B Note shall not have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture or the Class A or Class B Notes, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:
(i) such Noteholder has previously given written notice
to the Trustee of a continuing Indenture Event of Default;
(ii) the holders of Notes evidencing not less than 66-2/3%
of the aggregate outstanding principal amount of the Class A and B
Notes, taken together, shall have made written request to the Trustee
to institute proceedings in respect of such Indenture Event of Default
in its own name as Trustee hereunder;
(iii) such Noteholder or Noteholders have offered to the
Trustee adequate indemnity against the costs, expenses and liabilities
to be incurred in compliance with such request;
(iv) the Trustee for 30 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such proceeding; and.
(v) so long as any of the Class A or Class B Notes remain
outstanding, no direction inconsistent with such written request has
been given to the Trustee during such 30-day period by the holders of
Notes evidencing more than a majority of the aggregate outstanding
principal amount of the Class A and B Notes, taken together;
it being understood and intended that no one or more Noteholder shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb, or prejudice the rights of any other
Noteholder, or to obtain or to seek to obtain priority or preference over any
other Noteholder or to enforce any right under this Indenture, except in the
manner herein provided. It is further understood and intended that so long as
any portion of the Notes remains outstanding, the Servicer shall not have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture (other than for the enforcement of Section 4.04(a)) or for the
appointment of a receiver or trustee, or for any other remedy hereunder.
57
SECTION 6.08. Unconditional Right of Noteholders to Receive
Payment.
Notwithstanding any other provision in this Indenture, other
than the provisions hereof establishing priorities of payment or limiting the
right to recover amounts due on the Class A and Class B Notes to recoveries from
the property of the Trust Property, the holder of any Note shall have the
absolute and unconditional right to receive payment of the principal of and
interest on such Note as such principal and interest becomes due on the Monthly
Payment Dates for such payments, including the Scheduled Final Payment Date,
and, subject to the terms of Section 6.07, to institute suit for the enforcement
of any such payment, and such rights shall not be impaired without the consent
of such Noteholder.
SECTION 6.09. Restoration of Rights and Remedies.
If the Trustee or any Noteholder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Noteholder, then and in every
such case, subject to any determination in such proceeding, the Company, the
Trustee and the Noteholders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Noteholders shall continue as though no such proceeding had been
instituted.
SECTION 6.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost, or stolen Notes in the last paragraph
of Section 2.05, no right or remedy herein conferred upon or reserved to the
Trustee or to the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any holder of any
Note to exercise any right or remedy accruing upon any Indenture Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Indenture Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Noteholders, as the case may be.
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SECTION 6.12. Control by the Class A and Class B Noteholders.
Except as may otherwise be provided in this Indenture, until
such time as the conditions specified in Section 11-01 have been satisfied in
full, the holders of Class A and Class B Notes evidencing not less than 66-2/3%
of the aggregate outstanding Note Principal Balance of the Class A and Class B
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, subject (in each case) to the Trustee being
indemnified to its reasonable satisfaction. Notwithstanding the foregoing:
(i) no such direction shall be in conflict with any rule
of law or with this Indenture;
(ii) the Trustee shall not be required to follow any such
direction which the Trustee reasonably believes might result in any
personal liability on the part of the Trustee for which the Trustee is,
in its reasonable judgment, not adequately indemnified; and
(iii) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with any such direction;
provided that the Trustee shall give notice of any such action to each
Noteholder.
SECTION 6.13. Waiver of Defaults and Events of Default.
(a) Subject to the provisions of Sections 6.08 and 9.01,
the holders of Notes evidencing not less than 66-2/3% of the aggregate
outstanding principal amount of the Class A and Class B Notes, taken together,
may, by one or more instruments in writing, waive an existing Default or
Indenture Event of Default hereunder and its consequences, except a continuing
Indenture Event of Default:
(i) in respect of the payment of the principal of or
interest on any outstanding Note (which may only be waived by the holder
of such Note),
(ii) in respect of a covenant or provision hereof which
under Article IX cannot be modified or amended without the consent of
the holder of each outstanding Note affected (which may be waived only
by the holders of all outstanding Notes affected), or
(iii) in respect of any payment owing to the Trustee or
covenant or Provision in its favor (which may be waived only by the
Trustee);
(b) A copy of each waiver pursuant to Section 6.13 (a) shall
be furnished by the Company to the Trustee. Upon any such waiver, such Indenture
Event of Default shall cease to exist and shall be
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deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Indenture Event of Default or
impair any right consequent thereon.
SECTION 6.14. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 6.15. Sale of Trust Property.
(a) The power to effect any sale of any portion of the Trust Property
pursuant to Section 6.03 shall not be exhausted by any one or more sales as to
any portion of the Trust Property remaining unsold, but shall continue
unimpaired until the entire Trust Property shall have been sold or all amounts
payable on the Notes shall have been paid. The Trustee may from time to time,
upon directions in accordance with Section 6.12, postpone any public sale by
public announcement made at the time and place of such sale.
(b) To the extent permitted by applicable law, the Trustee shall not in any
private sale sell the Trust Property, or any portion thereof, unless either (i)
until such time as the conditions specified in Section 11.01(a) have been
satisfied in full, the holders of Notes evidencing 66-2/3% of the aggregate
outstanding principal amount of the Class A Notes and Class B Notes, taken
together, consent to or direct the Trustee to make such sale; or (ii) the
proceeds of such sale would be not less than the sum of all amounts due to the
Trustee hereunder and the entire unpaid principal amount of the Class A Notes
and the Class B Notes with respect to such Notes and interest due or to become
due thereon in accordance with Section 6.06 on the Monthly Payment Date next
succeeding the date of such sale.
(c) In connection with a sale of all or any portion of the Trust Property:
(i) any one or more Noteholders or the Trustee may bid for and purchase
the property offered for sale, and upon compliance with the terms of sale
may hold, retain, and possess and dispose of such property, without further
accountability, and any Noteholder may, in paying the purchase money
therefor, deliver in lieu of cash any outstanding Notes or claims for
interest thereon for credit in the amount that shall, upon distribution of
the net proceeds of such sale, be payable thereon, and such Notes, in case
the amounts so payable thereon
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shall be less than the amount due thereon, shall be returned to the
Noteholders after being appropriately stamped to show such partial payment;
(ii) the Trustee shall execute and deliver an appropriate instrument of
conveyance transferring its interest in any portion of the Trust Property
in connection with a sale thereof;
(iii) the Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Company to transfer and convey its interest in any
portion of the Trust Property in connection with a sale thereof, and to
take all action necessary to effect such sale; and
(iv) no purchaser or transferee at such a sale shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(d) The method, manner, time, place and terms of any sale of all or any
portion of the Trust Property shall be commercially reasonable.
(e) The provisions of this Section 6.15 shall not be construed to restrict
the ability of the Trustee to exercise any rights and powers against the Company
or the Trust Property that are vested in the Trustee by this Indenture or
pursuant to applicable law, including, without limitation, the power of the
Trustee to proceed against the collateral subject to the lien of this Indenture
and to institute judicial proceedings for the collection of any deficiency
remaining thereafter.
SECTION 6.16. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court may in its discretion require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.16
does not apply to a suit by the Trustee, a suit by a Noteholder pursuant to
Section 6.08, or a suit by any Noteholder or group of Noteholders of more than
10% in principal amount of the Notes then outstanding.
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ARTICLE VII
THE TRUSTEE
SECTION 7.01. Certain Duties and Responsibilities.
(a) Except during the continuance of an Indenture Event of Default:
(i) the Trustee undertakes to perform only those duties that are
specifically set forth in this Indenture and no others and no covenants or
duties shall be implied herein in connection with the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. The
Trustee, however, shall examine the same to determine whether or not they
conform on their face to the requirements of this Indenture, but the
Trustee shall not be required to determine, confirm or recalculate
information contained in such certificates or opinions.
(b) If an Indenture Event of Default has occurred and is continuing, the
Trustee shall exercise its rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
(c) The Trustee shall not be liable for any action taken or omitted by it
in good faith in connection with the performance of its duties hereunder,
except for its own willful misconduct or gross negligence. In particular, but
without limiting the generality of the foregoing:
(i) the Trustee shall not be liable for any error in judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts;
(ii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
directions received by it from the Noteholders in accordance with this
Indenture; and
(iii) the Trustee shall not be liable for acting in good faith reliance
on the information provided to the Trustee as described in Section 3.10.
(d) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any personal financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
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rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee (solely in its role as Trustee and not in its role as
substitute Servicer) shall be subject to the provisions of this Section.
(f) The Trustee is hereby authorized to execute and deliver the Sale and
Servicing Agreement by duly executing the consent and agreement line at the end
of the Sale and Servicing Agreement.
SECTION 7.02. Notice of Defaults or Events of Default.
Within one Business Day after a Responsible Officer receives written
notice of the occurrence of any Default or Indenture Event of Default hereunder
or Servicer Event of Default under the Sale and Servicing Agreement, the Trustee
shall transmit by certified mail return receipt requested, hand delivery or
overnight courier, to all Noteholders, as their names and addresses appear in
the Note Register, the Company, the Servicer, the Rating Agency and the Seller
notice of such Default, Indenture Event of Default or Servicer Event of Default
hereunder known to the Trustee, unless such Default, Indenture Event of Default
or Servicer Event of Default shall have been cured or waived.
SECTION 7.03. Certain Rights of Trustee.
Subject to the provisions of Section 7.01:
(i) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, note,
debenture, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(ii) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any action
of the Company may be sufficiently evidenced by a Company Order;
(iii) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate;
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(iv) the Trustee may consult with counsel as to legal matters and the
advice or opinion of any such counsel selected by the Trustee with due care
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(v) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(vi) except as provided in Section 7.01, the Trustee shall not be bound
to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, note, debenture, other evidence of
indebtedness, or other paper or document, other than to examine such
documents to determine whether they conform as to form to the requirements
of this Indenture, unless requested in writing to do so by the holders of
not less than a majority in aggregate outstanding principal amount of Class
A and Class B Notes, taken together; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely
to be incurred by it in the making of such investigation is, in the opinion
of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such examination shall be paid
by the Company, subject to the priorities of payment in Section 3.07(b) and
6.06 hereof and to the other requirements and restrictions on payments
specified in Article III or, if paid by the Trustee or any predecessor
trustee, shall be promptly repaid by the Company upon demand, subject to
the priorities of payment in Section 3.07(b) and 6.06 hereof and to the
other requirements and restrictions on payments specified in Article III;
provided that any insufficiency of amounts available for such payments will
not represent a claim against the Company and no provision of this
paragraph shall limit the Servicer's obligations under Section 7.06;
(vii) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
custodians, nominees or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent, custodian,
nominee or attorney appointed with due care by it hereunder; and
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(viii) the Trustee shall not be liable for any action it takes or omits
to take if it believes in good faith that such action or inaction is
authorized or within its rights or powers.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture (except as against itself), the Sale and Servicing Agreement, any
Xxxx of Sale, the Rate Cap Agreement, the Note Purchase Agreement, the Notes or
the Trust Property and it shall not be responsible for any statement in the
Notes other than its certificate of authentication or in any document used in
the sale of the Notes other than any statement in writing provided by the
Trustee for use in such document. The Trustee shall have no responsibility for,
or duty, or liability in connection with (i) performance by the Servicer, and
shall have no obligation to monitor the performance of the Servicer or (ii) the
use of the Note proceeds. The Trustee makes no representations about, and has no
responsibility or liability with respect to, the tax consequences of the
transactions contemplated by this Indenture, including, without limiting the
generality of the foregoing, the tax status of the Trust Property and the Notes
and the tax consequences to the Servicer, the Seller, the Company or the
Noteholders of any such transactions.
SECTION 7.05. Money Held in Trust.
Money and investments held by the Trustee or other paying agent shall be
held in trust in one or more trust accounts as required hereunder.
SECTION 7.06. Compensation, Reimbursement, etc.
The Servicer agrees:
(i) to pay, to the extent that such amounts are not paid pursuant to
Section 3.07(b), to the Trustee from time to time compensation for all
services rendered by it hereunder as specified by the Trustee Fee Letter
(which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust), such payment to be
made independent of the other payment obligations of the Servicer
hereunder; and
(ii) except as otherwise expressly provided herein, to reimburse, to
the extent that such amounts are not paid pursuant to Section 3.07(b), the
Trustee upon its request for all reasonable expenses, disbursements, and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement, or advance as may be attributable to its gross negligence or
bad faith.
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(iii) to pay the Trustee its annual administrative fee in advance on
the Closing Date;
(iv) to pay the Trustee all indemnified amounts specified in Section
8.11;
(v) to indemnify and hold the Trustee harmless from any and all
claims, damages, losses, costs or expenses (including, without limitation
attorneys' fees and disbursements) incurred by the Trustee in any manner or
way related to the Lock Box Account or the Lock Box Agreement; and
(vi) to pay the reasonable fees and expenses of the Trustee's counsel
on the Closing Date, subject to the limit specified in the Trustee Fee
Letter.
Limitations specified in this Indenture as to rights to collect payments from
the Company or out of the Trust Property are not intended to limit in any
respect the obligations of the Servicer pursuant to this Section. The provisions
of this Section 7.06 shall survive any termination of this Indenture in
accordance with Section 11.01 hereof and the payments and indemnities provided
for herein shall be provided to the Trustee by the initial Servicer irrespective
of any resignation or removal of it as the initial Servicer.
SECTION 7.07. Eligibility; Disqualification.
The Trustee hereunder shall at all times be a corporation organized and
doing business under the laws of the United States of America, any state thereof
or the District of Columbia authorized under such laws to exercise corporate
trust powers, be acceptable to the Rating Agency, have a combined capital and
surplus of at least $100,000,000 or shall be a member of a bank holding system,
the aggregate combined capital and surplus of which is at least $100,000,000,
provided that the Trustee, or the bank holding company system of which the
Trustee is a member shall be subject to supervision or examination by Federal or
state authority and, in the case of any successor Trustee, subject to
regulations regarding fiduciary funds on deposit substantially similar to 12
C.F.R. ss. 9.10(b). If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section 7.07, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 7.07, the Trustee shall resign
immediately in the manner and with the effect specified in Section 7.08.
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SECTION 7.08. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by a successor Trustee under Section 7.09.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company and by mailing notice of resignation by first-class mail, postage
prepaid, to the Rating Agency and the Noteholders at their addresses appearing
on the Note Register.
(c) The Trustee may be removed at any time by the Act of the holders of
Notes evidencing not less than 66-2/3%; in aggregate outstanding principal
amount of the Class A Notes and the Class B Notes, taken together, delivered to
the Trustee and the Company. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.07;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the Trustee or
its property; or
(iv) the Trustee becomes incapable of acting.
(d) If the Trustee shall resign, be removed, or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
with the consent of the holders of Notes evidencing not less than 66-2/3% in
aggregate outstanding principal amount of the Class A Notes and the Class B
Notes, taken together, by an act of the Company, shall promptly appoint a
successor Trustee.
(e) If no successor Trustee shall have been so appointed by the Company as
hereinbefore provided and accepted appointment in the manner hereinafter
provided within 30 days after any such resignation or removal, existence of
incapability, or occurrence of such vacancy, the Trustee or any Noteholder may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to all Noteholders,
as their names and addresses appear in the Note Register and to the Rating
Agency. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust office.
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(g) Any liability of any Trustee arising hereunder prior to the resignation
or removal of such Trustee shall survive the appointment of a successor Trustee.
SECTION 7.09. Acceptance of Appointment by Successor.
(a) Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
(b) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article and the effectiveness of such appointment will not, as evidenced by
confirmation in writing by the Rating Agency, result in any reduction or
withdrawal of the then current rating of the Class A Notes or of the Class B
Notes by the Rating Agency.
SECTION 7.10. Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Trustee may be merged or converted or with which
it may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Notes shall have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion, or consolidation to such
authenticating Trustee may adopt such authentication and deliver the Notes so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.
SECTION 7.11. Co-trustees and Separate Trustees.
(a) At any time or times, for the purpose of meeting the legal requirements
of any jurisdiction in which any of the Trust Property may at the time be
located, the Company and the Trustee shall have power to appoint, and, upon the
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written request of the Trustee or the holders of Notes evidencing more than
50% of the aggregate outstanding principal amount of the Class A and B Notes,
taken together, the Company shall for such purpose join with the Trustee in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint one or more Persons approve by the Trustee either to act as
co-trustee, jointly with the Trustee, of all or any part of such Trust Property,
or to act as separate trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment, and to vest in such
Person or Persons in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this Section.
If the Company does not join in such appointment within 15 days after the
receipt by it of a request so to do, or in case an Indenture Event of Default
has occurred and is continuing, the Trustee alone shall have power to make such
appointment.
(b) Should any written instrument from the Company be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Company.
(c) Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(i) The Notes shall be authenticated and delivered and all rights,
powers, duties, and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised solely
by the Trustee.
(ii) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed
by 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 Company evidenced by a Company Order, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section, and, in case an Indenture Event of Default
has occurred and is continuing, the Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without
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the concurrence of the Company. Upon the written request of the Trustee,
the Company shall join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee or
separate trustee so resigned or removed may be appointed in the manner
provided in this Section.
(iv) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Trustee or any other such
trustee hereunder and the Trustee shall not be personally liable by reason
of any act or omission of any co-trustee or other such separate trustee
hereunder selected and supervised by the Trustee with due care or appointed
in accordance with directions to the Trustee pursuant to Section 6.12.
(v) Any Act of Noteholders delivered to the Trustee shall be deemed to
have been delivered to each such co-trustee and separate trustee.
SECTION 7.12. Servicer to Hold Leases.
The Servicer may hold the sole original, manually executed counterpart of
each Lease that constitutes chattel paper, together with any documents relating
thereto that may from time to time be delivered to the Servicer, until such time
as such Lease is released from the lien of this Indenture pursuant to the
provisions hereof; provided that upon a Servicer Event of Default, the Trustee
may take possession of such original copies as necessary to protect the
Noteholders' rights, powers and remedies with respect to the Trust Property. The
Servicer will cause the electronic ledger to be clearly and unambiguously marked
to show that such Leases have been transferred by the Seller to the Company and
pledged by the Company to the Trustee for the benefit of the Noteholders;
provided, however, if the Servicer elects not to hold the above documents, the
Servicer shall cause the Trustee to hold the Lease File and the List of Leases,
and in such case the electronic ledger will be marked to show that such Lease
has been sold by the Seller to the Company and pledged by the Company to the
Trustee for the benefit of the Noteholders.
SECTION 7.13. Financing Statements.
The Trustee shall execute such UCC financing statements and continuation
statements as shall have been prepared by the Servicer and shall furnish the
Servicer with such limited powers of attorney or other documents necessary or
appropriate to enable the Servicer to fulfill its obligations under Section 7.06
of the Sale and Servicing Agreement and to carry out its servicing and
administration duties under the Sale and Servicing Agreement.
SECTION 7.14. Reports by Trustee to Noteholders. At least three Business
Days prior to each Monthly Payment Date, the Servicer shall prepare and deliver
to the Trustee and the Rating Agency for distribution to each Noteholder, and,
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upon receipt thereof from the Servicer, the Trustee shall deliver to each
Noteholder, a statement setting forth for the related Collection Period the
following information (which in the case of items (ii), (iii) and (iv) shall be
based on a Note in a principal amount of $1,000):
(i) the total amount available in the Collection Account on the Monthly
Payment Date;
(ii) the amount of the distribution allocable to principal, including
Overdue Monthly Principal, on each of the Class A and Class B Notes;
(iii) the amount of the distribution allocable to interest, including
any Overdue Monthly Interest, on each of the Class A and Class B Notes;
(iv) the Servicing Fee, including any overdue Servicing Fee;
(v) the Pool Balance as of the end of the related Collection Period;
(vi) the Available Reserve Amount, after giving effect to any deposit
or withdrawal from the Reserve Account with respect to such Monthly Payment
Date, and specifying the amount of each such deposit or withdrawal,
and such Available Reserve Amount expressed as a percentage of the Pool
Balance and any change in the Required Reserve Amount;
(vii) the total Principal Balance of Defaulted Leases as of the last
day of the related Collection Period;
(viii) the Note Principal Balances of the Class A and Class B Notes as
of such Monthly Payment Date (after giving effect to any distributions on
such Monthly Payment Date);
(ix) the Three-Month Average Delinquency Ratio as of the last day of
the end of the related Collection Period and the Delinquency Ratio as of
the last day of the related Collection Period;
(x) the Three-Month Average Default Ratio as of the last day of the
related Collection Period and the Default Ratio as of the last day of the
related Collection Period;
(xi) the amount of all prepayments in full of the Leases as of the end
of the related Collection Period;
(xii) the aggregate Payahead Amount with respect to the Leases as of
the end of the related Collection Period; and
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(xiii) the past due experience of the Leases (with respect to the
different aging categories set forth in the Confidential Private Placement
Memorandum dated June 1997, as amended and supplemented by the Company as
of the Closing Date) as of the last day of the end of the related
Collection Period.
Within a reasonable period of time after the end of each calendar year, but
not later than the latest date permitted by law, the Servicer shall deliver to
the Trustee, and the Trustee shall furnish, to each Person who any time during
such calendar year shall have been a Noteholder, a statement, prepared by the
Servicer and delivered to the Trustee, containing the sum of the amounts
determined in clauses (ii) and (iii) for such calendar year, or, in the event
such Person shall have been a Noteholder during a portion of such calendar year,
for the applicable portion of such year, for the purposes of such Noteholder's
preparation of federal income tax returns and, to the extent requested by a
Noteholder to comply with applicable law, such additional information as will
enable the Noteholder to prepare its state and local income and franchise tax
returns. In addition, any Noteholder may obtain from the Trustee, by written
request to the Trustee, a copy of any Monthly Servicer Report or any annual
compliance statement pursuant to Section 4.09 of the Sale and Servicing
Agreement that has been delivered to the Trustee.
ARTICLE VIII
COVENANTS
SECTION 8.01. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and interest on
the Notes in accordance with the terms of the Notes and this Indenture. An
installment of interest shall be considered paid on the date it is due if the
Trustee holds on that date money designated for and sufficient to pay the
installment.
SECTION 8.02. Maintenance of Office or Agency; Chief Executive Office.
(a) The Company will maintain in the State of California an office or
agency where notices and demands to or upon the Company in respect of the Notes
and this Indenture may be served.
(b) The chief executive office of the Company, and the office at which the
Company maintains its records with respect to the Leases, the Equipment, and the
transactions contemplated hereby, is located in San Ramon, California. The
Company will not change the location of such office without giving the Trustee,
the Rating Agency and each Noteholder at least 60 days' prior written notice
thereof.
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SECTION 8.03. Money for Payments to Noteholders to Be Held in Trust.
(a) All payments of amounts due and payable with respect to any Notes that
are to be made from amounts withdrawn from the Collection Account, the Reserve
Account, the Payahead Account or the Lease Purchase Account pursuant to Section
3.07(b) or Section 6.06 shall be made on behalf of the Company by the Trustee,
and no amounts so withdrawn from the Collection Account, the Reserve Account,
the Payahead Account or the Lease Purchase Account for payments of Notes shall
be paid over to the Company under any circumstances except as provided in this
Section 8.03.
(b) In making payments hereunder, the Trustee will:
(i) allocate all sums received for payment to the Noteholders on each
Monthly Payment Date in accordance with the terms of this Indenture;
(ii) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
and
(iii) comply with all requirements of the Internal Revenue Code of
1986, as amended (or any successor statutes), and all regulations
thereunder, with respect to the withholding from any payments made by it on
any Notes of any applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in connection therewith.
(c) Except as required by applicable law, any money held by the Trustee in
trust for the payment of any amount due with respect to any Note shall be held
in a non-interest bearing account and if the same remains unclaimed for three
years after such amount has become due and payable to the Noteholder, the
Trustee shall be discharged from such trust and, subject to applicable escheat
laws, paid to the Company upon request; and such Noteholder shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee with respect to such trust money shall thereupon
cease.
SECTION 8.04. Corporate Existence; etc.
(a) The Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and the
rights, licenses and franchises of the Company, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, or any of the Leases.
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(b) The Company shall at all times observe and comply in all material
respects with (i) all laws, regulations and court orders applicable to it,
(ii) all requirements of law in the declaration and payment of dividends on its
Capital Stock, and (iii) all requisite and appropriate corporate and other
formalities (including, without limitation, annual and all other appropriate
meetings of the Company's board of directors and, if required by law, its
charter or otherwise, meetings and votes of shareholders to authorize corporate
action) in the management of its business and affairs and the conduct of the
transactions contemplated hereby and by the Sale and Servicing Agreement.
(c) The Company will, at all times: (i) maintain (A) corporate and
financial books and records separate from those of and other Person and (B)
minutes of the meetings and other proceedings of its shareholders and board of
directors; (ii) continuously maintain the resolutions, agreements and other
instruments underlying the transactions contemplated hereby and by the Sale and
Servicing Agreement as official records of the Company; (iii) act solely in its
corporate name and through its duly authorized officers or agents to maintain
an arm's length relationship with the Seller and its Affiliates; (iv) pay all of
its operating expenses and liabilities from its own funds (including any funds
advanced to it by the Servicer); (v) maintain office space separate from that
of the Seller on the premises currently rented by the Seller and (vi)
maintain its assets separately from the assets of the Seller.
(d) The Company shall conduct its business solely in its own name through
its duly authorized officers or agents so as to not mislead others as to the
identity of the corporation with which those others are concerned, and
particularly will avoid the appearance of conducting business on behalf of the
Seller or any of its Affiliates or that the assets of the Company are available
to pay the creditors of the Seller or any of its Affiliates. Without limiting
the generality of the foregoing, all oral and written communications,
including without limitation, letters, invoices, purchase orders, contracts,
statements and loan applications, will be made solely in the name of the
Company.
(e) The Company will be operated so as not to be substantively consolidated
for bankruptcy purposes with the Seller.
(f) At least one director of the Company shall at all times be a person who
is not a director, officer or employee of any direct or ultimate parent or
Affiliate of the Seller.
(g) The Company will not initiate or approve any amendment to its
Certificate of Incorporation without the prior written consent of the Trustee
and written confirmation by the Rating Agency that the adoption of such
amendment will not result in a reduction or withdrawal of the then-current
rating by such Rating Agency of the Class A Notes or the Class B Notes.
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(h) The Company will pay all reasonable costs and expense of the Rating
Agency to maintain its ratings on the Notes.
SECTION 8.05. Protection of Trust Property; Further Assurances.
The Company will from time to time execute and deliver all such supplements
and amendments hereto and all such UCC financing statements, continuation
statements, instruments of further assurance and other instruments, and will
take such other action as may be necessary or advisable to:
(i) grant more effectively all or any portion of the Trust Property;
(ii) maintain or preserve the lien of this Indenture or carry out more
effectively the purposes hereof;
(iii) publish notice of, or protect the validity of, any Grant made or
to be made by this Indenture and perfect the security interest contemplated
hereby in favor of the Trustee in the Leases and the related Equipment and
the other property constituting the Trust Property;
(iv) enforce or cause the Servicer to enforce any of the Leases;
(v) preserve and defend title to any Lease (including the right to
receive all payments due or to become due thereunder), Equipment, or other
property included in the Trust Property and preserve and defend the rights
of the Trustee and the Noteholders in such Lease (including the right to
receive all payments due or to become due thereunder), Equipment and other
property against the claims of all persons and parties; or
(vi) if the Servicer elects to hold the Lease Files and the related
documents, cause the electronic ledger, with respect to each Lease and the
Schedule of Leases, to clearly and unambiguously show that such Lease has
been pledged by the Company to the Trustee for the benefit of the
Noteholders.
The Company, upon the Company's failure to do so, hereby designates the Trustee
its agent and attorney-in-fact to execute any UCC financing statement,
continuation statement or other document or instrument required pursuant to this
Section 8.05; provided, however, that such designation shall not be deemed to
create a duty in the Trustee to monitor the compliance of the Company with the
foregoing covenants, and provided further that the duty of the Trustee to
execute any instrument required pursuant to this Section 8.05 shall arise only
if a Responsible Officer of the Trustee has actual knowledge of any failure of
the Company to comply with the provisions of this Section 8.05.
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SECTION 8.06. Compliance Certificates.
The Company will deliver to the Trustee, the Rating Agency, within 90 days
after the end of each fiscal year, a written statement signed by the President
or a Vice President and by the Chief Financial Officer of the Company, stating,
in addition to the statements required by Section 1.17 (i)-(iv), as to each
signer thereof, that
(i) a review of the activities of the Company during such year and of
performance under this Indenture has been made under his supervision and
(ii) to the best of such officers' knowledge, based on such review, the
Servicer has fulfilled all of it obligations under this Indenture
throughout such year.
(iii) whether the officer knows of any Defaults by the Company under
this Indenture throughout such year or, if there has been a Default in the
fulfillment of any such obligation, specifying each such Default known to
him and the nature and status thereof and the nature of the action taken
with respect thereto.
SECTION 8.07. Performance of Obligations; Sale and Servicing Agreement.
(a) The Company will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Notes, the Note Purchase
Agreement, the Sale and Servicing Agreement and the Rate Cap Agreement.
(b) The Company will clearly xxxx its books and records to reflect each
assignment and transfer of Leases and the relate Equipment subject thereto from
the Seller.
(c) If any Authorized Officer shall have knowledge of the occurrence of a
default under the Sale and Servicing Agreement, the Company shall promptly
notify the Trustee, the Rating Agency and the Noteholders thereof, and shall
specify in such notice the action if any, the Company is taking in respect of
such default. Unless consented to by the holders of not less than 66 2/3% in
outstanding principal amount of the Class A Notes and Class B Notes, taken
together, the Company may not waive any default under or amend the Sale and
Servicing Agreement.
SECTION 8.08. Negative Covenants.
The Company will not:
(i) sell, transfer, exchange or otherwise dispose of any portion of the
Trust Property except as expressly permitted by this Indenture;
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(ii) claim any credit on, or make any deduction from, the principal of,
or interest on, any of the Notes by reason of the payment of any taxes
levied or assessed upon any portion of the Trust Property;
(iii) engage in any business or activity other than in connection with,
or relating to the ownership of, the Leases and the Equipment, the issuance
of the Notes, the specific transactions contemplated hereby, and similar
activities with respect to ownership and financing of other pools
receivables;
(iv) seek dissolution or liquidation in whole or in part or
reorganization of its business or affairs;
(v) (A) permit the validity or effectiveness of this Indenture or any
Grant hereby to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations under this
Indenture, except as may be expressly permitted hereby, (B) permit any lien
charge, security interest, mortgage or other encumbrance to be created on
or to extend to or otherwise arise upon or burden the Trust Property or any
part thereof or any interest therein or the proceeds thereof other than the
lien of this Indenture and the rights of Lessees, or (C) permit the lien of
this Indenture not to constitute a valid first priority perfect security
interest in the Leases and a valid perfected security interest in the
Seller's (and the Company's) interests in the Equipment and the other Trust
Property;
(vi) conduct its business or engage in any activity in violation of the
provisions contained in its Certificate of Incorporation or make any
material change in its business or incur any indebtedness to any Person
other than as express contemplated by the Notes, this Indenture, the Sale
and Servicing Agreement and documents relating thereto;
(vii) at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or other law
that would prohibit or forgive the Company from paying all or any portion
of the principal of or interest on the Notes as contemplated herein or in
the Notes, wherever enacted, now or at any time hereafter in force, or that
may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) the Company hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as
thou no such law had been enacted;
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(viii) issue or register the transfer of any of its Capital Stock to
any Person other than the Seller;
(ix) merge or consolidate with any other Person except on terms, if
any, approved in writing by the Trustee, each Noteholder and the Rating
Agency;
(x) take any action or permit any action to be taken by others which
would release any Person from any of such Person's covenants or obligations
under any Lease or any other instrument included in the Trust Property
other than any such release occasioned by the early termination of a Lease
after receipt of the Retransfer Amount, or which would result in the
amendment, hypothecation, subordination, termination, or discharge of, or
impair the validity or effectiveness of, any Lease or such other
instrument, except as expressly provided in this Indenture or the Sale and
Servicing Agreement; or
(xi) purchase any Lease on any date unless at the time of such purchase
(and after giving effect thereto) (a) no Default, Indenture Event of
Default, Servicer Event of Default or Early Amortization Event shall occur
or be continuing, (b) the aggregate Note Principal Balance of all Notes
does not exceed the amount specified for such date in Schedule I to this
Indenture, (c) the Equity Base is not less than 5% of the Pool Balance and
the sum of the Equity Base and the Class B Note Principal Balance is not
less than the Required Support Percentage of the Pool Balance (in each case
both before and after giving effect to the purchase of Leases to occur on
such date), and (d) the Company is in compliance with its obligations under
the Note Purchase Agreement and under the Rate Cap Agreement.
SECTION 8.09. Information as to the Company. The Company shall deliver to
the Trustee, each Noteholder and the Rating Agency:
(a) immediately upon becoming aware of the existence of any condition or
event which constitutes a Default or an Indenture Event of Default, a written
notice describing its nature and period of existence and what action the Company
is taking or proposes to take with respect thereto; and
(b) promptly upon the Company's becoming aware of (i) any proposed or
pending investigation of it by any governmental authority or agency, or (ii) any
pending or proposed court or administrative proceeding which (in either case)
involves or may involve the possibility, individually or in the aggregate, of
materially and adversely affecting the properties, business, profits or
condition (financial or otherwise) of the Company, a written notice specifying
the nature of such investigation or proceeding and what action the Company is
taking or proposes to take with respect thereto and evaluating its merits.
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SECTION 8.10. Payment of Taxes and Other Claims.
Subject to the priorities of payment and other restrictions and
limitations specified in Article III and the other provisions hereof, the
Company will pay or discharge or cause to be paid or discharged, before any
penalty accrues from the failure to so pay or discharge, (1) all taxes,
assessments and governmental charge levied or imposed upon the Company or upon
the income, profits or property (including any property that is part of the
Trust Property) of the Company and (2) all lawful claims for labor, materials
and supplies which, if unpaid, might by law become a lien upon the property of
the Company; provided, however, that the (i) Company shall not be required to
pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim the amount, applicability or validity of which is being
contested in good faith by appropriate proceedings and for which adequate
provision has been made or when the failure to effect such payment or discharge
is not adverse in any material respect to the Noteholders and (ii) the Company
shall not apply to any such payments any funds constituting Trust Property other
than amounts (if any) constituting Excess Collections. The Company shall be
included as a consolidated entity in the federal tax returns filed by the
Seller.
SECTION 8.11. Indemnification.
The Company agrees to indemnify and hold harmless the Trustee, (which shall
include its directors, officers, employees and agents) and each Noteholder (each
an "Indemnified Party") against any and all liabilities, losses, damages,
penalties, costs and expenses (including the fees and expenses of counsel and
the cost of defense and legal fees and expenses) which may be incurred or
suffered by such Indemnified Party without negligence, bad faith or willful
misconduct on its part as a result of claims, actions, suit or judgments
asserted or imposed against it and arising out of the transactions contemplated
hereby or by the Sale and Servicing Agreement, including, without limitation,
any claims resulting from any use, operation, maintenance, repair, storage or
transportation of any item of Equipment, whether or not in the Company's
possession or under its control, and any tort claims and any fines or penalties
arising from any violation of the laws or regulations of the United States or
any state or local government or governmental authority including, without
limitation, securities laws, and, in the case of the Trustee, in connection with
the acceptance or administration of this trust, including all costs and expenses
of defending itself against any claim in connection with the exercise or
performance (or inaction) of any of its powers or duties hereunder. The
provisions of this Section 8.11 shall survive the termination of this Indenture
in accordance with Section 11.01 hereof.
SECTION 8.12. Use of Proceeds. The Company will use the net proceeds from
the issuance of Notes on each Note Issuance Date, to make a purchase of Leases
and Lease Assets pursuant to and accordance with the Sale and Servicing
Agreement.
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SECTION 8.13. Maximum Note Principal Balance. The Company will not purchase
any Lease on any Lease Purchase Date unless, after giving effect thereto, the
Assumed Longest Amortization of all Leases included in the Trust Property will
not result in the Note Principal Balance of the Notes on any date exceeding the
amount specified for such date in Schedule I to this Indenture (an
"Over-Issuance Condition"). For purposes of this Section, "Assumed Longest
Amortization" means the amortization of the Principal Balance of the Leases
assuming that (i) no Lease is or becomes a Defaulted Lease and (ii) no
prepayment occurs on any Lease, (iii) no Lease is subject to repurchase by the
Seller or purchase by the Servicer pursuant to the Sale and Servicing Agreement
and (iv) the payment schedule for each Lease is extended for three months
immediately after giving effect to the purchase of such Lease by the Company.
SECTION 8.14. Rate Cap Provider. If on any day the Rate Cap Provider shall
cease to be an Eligible Rate Cap Provider, then within 60 days thereafter (or
such longer period, if any, as the Rating Agency confirms in writing would not
result in a reduction or withdrawal of the rating of the Notes of either Class
by the Rating Agency), the Company shall (i) cause the replacement of the Rate
Cap Provider with a substitute Person that is an Eligible Rate Cap Provider, or
(ii) obtain a supporting letter of credit or other credit enhancement for the
existing Rate Cap Provider such that the Rate Cap Provider (after giving effect
to such enhancement) is an Eligible Rate Cap Provider, and (in each case) obtain
confirmation in writing by the Rating Agency that, based on such actions, no
reduction or withdrawal of the then-current rating of either Class of Notes
would occur. The Rate Cap Agreement shall at all times provide that the level of
LIBOR above which the Rate Cap Provider is required to make payments thereunder
is not greater than 7.5% per annum.
ARTICLE IX
AMENDMENTS AND SUPPLEMENTAL INDENTURES
SECTION 9.01. Amendments and Supplemental Indentures.
This Indenture or the Notes may be amended or supplemented by the parties
hereto, without notice to or consent of the Noteholders, but with notice to the
Rating Agency and confirmation by such Rating Agency that no reduction or
withdrawal of the rating of either Class of Notes would be caused by such
amendment or supplement, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or the
Notes or of modifying in any manner the rights of such Noteholders, provided
that such action will not, in the opinion of counsel reasonably satisfactory to
the Trustee, materially and adversely affect the interests of any such
Noteholders. The parties hereto agree and each Noteholder, by its acceptance of
a Note, shall be deemed to have agreed that an amendment hereto solely to
increase the authorized amount of Class B Notes issuable hereunder by not more
than $1,000,000 does not materially or adversely affect the interests of any
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Noteholder. This Indenture or the Notes may also be amended or supplemented by
the Company and the Trustee with the consent of the holders of Class A and Class
B Notes evidencing at least a majority of the voting rights of such then
outstanding Class A and Class B Notes for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of modifying in any manner the rights of such Noteholders;
provided, however, that no amendment to this Indenture or any supplemental
indenture may (i) cause a reduction in the then current rating of the Class A
Notes or the Class B Notes, (ii) increase or reduce in any manner the amount of,
or accelerate or delay the timing of collections of payments on the related
Leases or distributions that are required to be made for the benefit of such
Noteholders, (iii) reduce the aforesaid percentage of the Class A and Class B
Notes of such series which is required to consent to any such amendment or
waiver, (iv) change the Scheduled Final Payment Date or (v) release any of the
Trust Property from the lien hereof (except as otherwise permitted herein) or
modify Section 2.06, 3.07, 6.06, 6.08, 6.13 or 9.01, without the consent of
each affected Noteholder. Furthermore, any amendment, modification or waiver of
the Indenture that affects the rights, duties or obligations of the Trustee may
only be effected with the Trustee's prior written consent.
It shall not be necessary for the consent of the Class A and Class B
Noteholders under this Section to approve the particular form of any proposed
amendment or supplement, but it shall be sufficient if such consent approves the
substance thereof.
SECTION 9.02. Execution of Amendments and Supplemental Indentures.
In executing any amendment to this Indenture, the Notes or any supplemental
indenture pursuant to Section 9.01 of this Indenture, the Trustee shall be
entitled to receive, and (subject to Section 7. 01) shall be fully protected in
relying upon, an opinion of Counsel stating that the execution of such amendment
to this Indenture, the Notes or any supplemental indenture is authorized or
permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any supplemental indenture which affects the Trustee's own rights,
duties, protections, or immunities under this Indenture or otherwise.
SECTION 9.03. Effect of Amendments and Supplemental Indentures.
Upon the execution of any amendment to this Indenture, the Notes or any
supplemental indenture under this Article, this Indenture, the Notes or any
supplemental indenture shall be modified in accordance therewith, and such
amendment or supplemental indenture shall form a part of this Indenture, the
Notes or any supplemental indenture for all purposes, and every Noteholder of
Notes theretofore or thereafter authenticated and delivered hereunder shall be
bound thereby. After an amendment or supplement under this Section becomes
effective, the Company shall mail to the Noteholders affected thereby and to the
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Rating Agency a notice briefly describing the amendment or supplement. Any
failure of the Company to mail such notice, or any defects therein, shall not,
however, in any way impair or affect the validity of such amendment or
supplement.
SECTION 9.04. Reference in Notes to Amendments and Supplemental Indentures.
Notes authenticated and delivered after the execution of any amendment to
this Indenture or any supplemental indenture pursuant to this Article may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such amendment or supplemental
indenture. if the Company shall so determine, new Notes so modified as to
conform, in the opinion of the Trustee and the Company, to any such amendment or
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for outstanding Notes.
SECTION 9.05. Revocation and Effect of Consents.
Subject to this Indenture, each amendment, waiver or instrument evidencing
other action shall become effective in accordance with its terms. Until an
amendment, waiver or other action becomes effective, a consent to it by a
Noteholder is a continuing consent by the Noteholder even if notation of the
consent is not made on any Security.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Noteholders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then those Persons who were
Noteholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Noteholders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01. Optional Redemption; Election to Redeem.
(a) The Notes may be redeemed by the Company, in whole but not in part, at
the Redemption Price on any Monthly Payment Date on which the Note Principal
Balance is less than 10% of the Note Principal Balance as of the first day of
the Note Amortization Period (after giving effect to payments of principal on
such Monthly Payment Date).
(b) The Company, by an Authorized Officer, shall set the Redemption Date
and the Record Date (which shall be the Record Date that would otherwise be
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applicable for the Monthly Payment Date on which such Redemption Date is to
occur) and shall give notice thereof to the Trustee pursuant to Section 10.02.
SECTION 10.02. Notice to Trustee.
In the case of any redemption pursuant to Section 10.01, the Company shall,
at least 35 days prior to the Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee and the Rating Agency of such
Redemption Date and the principal amount of Notes to be redeemed. The notice
shall be accompanied by an Officer's Certificate stating that the redemption
complies with the provisions of this Indenture.
SECTION 10.03. Notice of Redemption by the Company.
Notice of redemption pursuant to Section 10.01 shall be given by first
class mail, postage prepaid, mailed at least 30 days but not more than 60 days
prior to the applicable Redemption Date, to each Noteholder at its address in
the Note Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) that on the Redemption Date, the Redemption Price will become due and
payable upon each such Note, and that interest thereon shall cease to
accrue if payment is made on such date; and
(4) the CUSIP number, if any, of the Notes of each Class.
(5) Corporate Trust Office where Notes are to be surrendered for payment of
the Redemption Price.
Notice of redemption of Notes shall be given by the Company, by an
Authorized officer, or, at the request of such Authorized Officer, by the
Trustee in the name and at the expense of the Company. Failure to give notice of
redemption, or any defect therein, to any holder of an Note shall not impair or
affect the validity of the redemption of any other Note. If a CUSIP number is
listed in such notice or printed on the Note, the notice may state that no
representation is made as to the correctness or accuracy of such CUSIP number.
SECTION 10.04. Deposit of the Redemption Price.
On or before the Business Day next preceding any Redemption Date, the
Company shall deposit with the Trustee an amount of monies sufficient to pay the
Redemption Price of all Notes outstanding on such Redemption Date (less any
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portion of such payment to be made from monies in the Collection Account and
from the Reserve Account).
SECTION 10.05. Notes Payable on Redemption Date.
Notice of redemption having been given as provided in Section 10-03, the
Notes shall, on the applicable Redemption Date, become due and payable at the
Redemption Price and on such Redemption Date (unless the Company shall default
in the payment of the Redemption Price) such Notes shall cease to bear interest.
The Noteholders shall be paid the Redemption Price by the Trustee on behalf of
the Company; provided, however, that installments of principal and interest
which are due on or prior to the Redemption Date shall be payable to the
Noteholders registered as such on the relevant Record Dates according to their
terms and the provisions of Section 2.07. If the holders of any Note called for
redemption shall not be so paid upon surrender, the principal and interest
shall, until paid, bear interest from the Redemption Date at the related Rate.
ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01. Satisfaction and Discharge of Indenture.
(a) This Indenture shall cease to be of further effect (except as to any
surviving rights herein expressly provided for), and the Trustee, on demand of
and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when each of the
following conditions are satisfied:
(i) either:
(A) all Notes theretofore authenticated and delivered (other than
(x) Notes which have been destroyed, lost, or stolen and which have
been replaced or paid as provided in Section 2.05 and (y) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to
the Company or discharged from such trust, as provided in Section
8.03(c) have been irrevocably paid and delivered to the Trustee for
cancellation; or
(B) the final installments of principal on all such Notes not
theretofore delivered to the Trustee for cancellation:
(1) have become due and payable, or
(2) will become due and payable at their Scheduled Final
Payment Date within one year, and the Company has deposited or
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caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount sufficient to pay and
discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the
case of Notes which have become due and payable) or to the
Scheduled Final Payment Date thereof;
(ii) all amounts payable hereunder for the benefit of the Trustee and
the Noteholders have been paid in full; and
(iii) the Company has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
At such time, the Trustee shall deliver to the Company or, upon Company Order,
its assignee, all cash, securities and other property held by it as part of the
Trust Property other than funds deposited with the Trustee pursuant to Section
11.01(a)(i)(B) for the payment and discharge of the Notes.
(b) Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company under Sections 7.06 and 8.11, and, if money shall
have been deposited with the Trustee pursuant to Section 11.01(a)(i)(B), the
obligations of the Trustee under Section 11.02 and Section 8.03(c) shall
survive.
SECTION 11.02. Application of Trust Money.
Subject to the provisions of Section 8.03(c), all money deposited with the
Trustee pursuant to Sections 11.01 and 8.03 shall be held in trust and applied
by it, in accordance with the provisions of the Notes and this Indenture, to the
payment to the Persons entitled thereto of the principal and interest for whose
payment such money has been deposited with the Trustee.
SECTION 11.03. Reinstatement.
If the Trustee is unable to apply any money in accordance with Section
11.01 by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Company's obligations under this Indenture and
the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 11.01 until such time as the Trustee is permitted to apply
all such money in accordance with Section 11.01.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seal to be hereunto affixed and
witnessed, all as of the day and year first above written.
JLA FUNDING CORPORATION II, Issuer
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Treasurer
JLA CREDIT CORPORATION, Servicer
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: SVP/CFO
LTCB TRUST COMPANY, Trustee
By:
-------------------------------
Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seal to be hereunto affixed and
witnessed, all as of the day and year first above written.
JLA FUNDING CORPORATION II, Issuer
By:
-------------------------------
Name:
Title:
JLA CREDIT CORPORATION, Servicer
By:
-------------------------------
Name:
Title:
LTCB TRUST COMPANY, Trustee
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: SVP
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
Worst Case/Cap Schedule SCHEDULE I
Total Notes Month
-------------------------------
15,000,000.00 1 9/11/97
27,000,000.00 2 10/16/97
36,000,000.00 3 11/16/97
48,000,000.00 4 12/16/97
62,000,000.00 5 1/16/98
75,000,000.00 6 2/16/98
75,000,000.00 7 3/16/98
75,000,000.00 8 4/16/98
75,000,000.00 9 5/16/98
75,000,000.00 1 6/16/98
75,000,000.00 2 7/16/98
75,000,000.00 3 8/16/98
73,461,213.92 4 9/16/98
71,861,067.66 5 10/16/98
70,246,603.52 6 11/16/98
68,617,693.38 7 12/16/98
66,974,207.97 8 1/16/99
65,321,453.18 9 2/16/99
63,657,102.40 10 3/16/99
61.985,534.12 11 4/16/99
60,299,243.33 12 5/16/99
58,654,686.16 13 6/16/99
56,998,579.51 14 7/16/99
55,335,795.26 15 8/16/99
53,664,468.51 16 9/16/99
51,979,507.39 17 10/16/99
50,287,346.39 18 11/16/99
48,591,425.89 19 12/16/99
46,891,631.45 20 1/16/00
45,195,219.21 21 2/16/00
43,519,810.51 22 3/16/00
41,871,927.34 23 4/16/00
40,241,821.88 24 5/16/00
38,615,051.02 25 6/16/00
36,988,187.58 26 7/16/00
35,360,020.68 27 8/16/00
33,722,955.95 28 9/16/00
32,084,767.14 29 10/16/00
30,442,315.65 30 11/16/00
28,848,154.35 31 12/16/00
27,304,688.72 32 1/16/01
25,822,700.44 33 2/16/01
24,375,921.26 34 3/16/01
22,978,992.30 35 4/16/01
21,636,401.25 36 5/16/01
20,346,021.54 37 6/16/01
19,155,258.12 38 7/16/01
17,971,528.10 39 8/16/01
16,777,648.77 40 9/16/01
15,580,262.25 41 10/16/01
14,381,681.83 42 11/16/01
13,200,398.40 43 12/16/01
12,025,377.08 44 1/16/02
10,853,147.21 45 2/16/02
9,693,401.94 46 3/16/02
8,566,820.69 47 4/16/02
7,462,169.59 48 5/16/02
6,359,713.42 49 6/16/02
5,275,980.04 50 7/16/02
4,192,140.82 51 8/16/02
3,098,873.17 52 9/16/02
2,001,341.80 53 10/16/02
929,656.74 54 11/16/02
0.00 55 12/16/02
EXHIBIT A
[FORM OF CLASS A NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE SECURITIES LAWS. THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE ONLY (A)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
ACT, (B) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE ACT IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT SUBJECT, IN THE CASE OF CLAUSES (B) OR (C)
ABOVE, TO COMPLIANCE BY THE HOLDER AND THE TRANSFEREE WITH THE PROVISIONS OF THE
INDENTURE, DATED AS OF AUGUST 15, 1997, AMONG JLA FUNDING CORPORATION II (THE
"COMPANY"), JLA CREDIT CORPORATION, AS SERVICER, AND LTCB TRUST COMPANY, AS
TRUSTEE (THE "TRUSTEE"), APPLICABLE TO SUCH TRANSFER.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AGREES TO TREAT THIS NOTE AS INDEBTEDNESS
FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES. THIS NOTE OR ANY INTEREST
HEREIN SHALL NOT BE TRANSFERRED TO ANY PERSON UNLESS SUCH PERSON SHALL HAVE
PROVIDED TO THE ISSUER AND THE TRUSTEE A CERTIFICATION, IN THE FORM APPROVED BY
THE COMPANY AND THE TRUSTEE, (I) THAT IT IS NOT AND FOR SO LONG AS IT HOLDS
NOTES WILL NOT BE A BENEFIT PLAN INVESTOR (AS DEFINED IN 29 C.F.R. ss.
2510.3-101 OR ANY SUCCESSOR PROVISION), OR (II) THAT (A) IN ANY CASE IN WHICH
THE NOTES ARE ACQUIRED BY SUCH PURCHASER WITH THE ASSETS OF AN "EMPLOYEE BENEFIT
PLAN" WITHIN THE MEANING OF SECTION 3(3) OF ERISA OR A "PLAN" WITHIN THE
MEANING OF SECTION 4975(E)(1) OF THE CODE (ANY SUCH PLAN OR EMPLOYEE BENEFIT
PLAN, A "PLAN") AND FOR ANY PERIOD FOR WHICH A NOTE IS (OR IS DEEMED FOR ERISA
PURPOSES TO BE) ASSETS OF A PLAN, THAT THE ACQUISITION OR TRANSFER, AND
SUBSEQUENT HOLDING, WILL NOT CONSTITUTE, CAUSE OR OTHERWISE GIVE RISE TO A
TRANSACTION DESCRIBED IN SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR
WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE, AND (B) NO
VIOLATION OF STATE, LOCAL OR OTHER APPLICABLE LAW WILL ARISE BY VIRTUE OF SUCH
PERSON'S ACQUISITION, HOLDING AND SUBSEQUENT TRANSFER OF A NOTE.
No. Note Principal Balance $
Cusip No.
FLOATING RATE ASSET-BACKED NOTE, CLASS A
JLA FUNDING CORPORATION II, a Delaware corporation (the "Company"), for
value received, hereby promises to pay to ________________________or registered
assigns, the principal sum of _______________________________________
(____________) which shall be payable in monthly installments to the extent of
available funds pursuant to the Indenture (as defined below), each equal to the
sum of (i) the Monthly Principal allocable to this Class A Note and (ii) the
Overdue Monthly Principal
A-1
allocable to this Class A Note, on the 16th day of each month commencing in the
first calendar month following the end of the Note Issuance Period and ending
not later than the Scheduled Final Payment Date, when all remaining principal
and interest are due and payable in their entirety (each, a "Monthly Payment
Date"), and to pay interest (computed on the basis of a 360-day year and the
actual number of days elapsed) accruing from the Note Issuance Date hereof.
Interest on this Note will be payable on each Monthly Payment Date on the Class
A Note Principal Balance hereof commencing on the Monthly Payment Date occurring
in the calendar month immediately succeeding the month in which the Note
Issuance Date of this Note occurs, at a per annum rate that, for each Interest
Period, will equal the sum of LIBOR plus 0.30% (the "Class A Rate"). As used
herein, "LIBOR" means, with respect to any Interest Period, the per annum rate
for deposits in United States dollars for a one-month period which appears on
Telerate Page 3750 as of 11:00 a.m., London time, on the Interest Determination
Date. If such rate does not appear on Telerate Page 3750 on such day, the rate
will be determined on the basis of the rates at which deposits in U.S. dollars
are offered by the Reference Banks at approximately 11:00 a.m., London time, on
the related Interest Determination Date to prime banks in the London interbank
market for a period of one month. The Trustee will request the principal London
office of each of the Reference Banks to provide a quotation of its rate. If
at least two such quotations are provided, the rate for that Interest
Determination Date will be the arithmetic mean of the quotations. If fewer than
two quotations are provided as requested, the rate for that Interest
Determination Date will be the arithmetic mean of the rates rounded upwards to
the nearest 1/16 of 1.0% (one percent) quoted by two or more major banks in
New York City, selected by the Trustee in its sole discretion, at approximately
11:00 a.m., New York City time, on that Interest Determination Date for loans in
U.S. dollars to leading banks in London interbank market for a period of one
month. "Interest Determination Date" means, with respect to any Interest Period,
the second Business Day preceding the first day of such Interest Period.
"Reference Banks" shall mean Barclays Bank PLC, Citibank, N.A., Chase Manhattan
Bank and Deutsche Bank AG. "Interest Period" means, with respect to any Note and
any Monthly Payment Date, the period from and including the previous Monthly
Payment Date (or, in the case of the first Monthly Payment Date for such Note,
from and including the Note Issuance Date for such Note), to but excluding such
Monthly Payment Date.
Payments of principal and interest on this Note shall be made on each
Monthly Payment Date in such coin or currency of the United States of America as
at such time is legal tender for payment of public and private debts to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the Record Date for such Monthly Payment Date, which
shall be the last day of the month preceding the month in which the Monthly
Payment Date occurs (or in the case of the initial Monthly Payment Date, the
Note Issuance Date hereof), by wire transfer of immediately available funds to
the account and number specified in the Note Register on such Record Date for
A-2
such Person or, if no such account or number is so specified, then by check
mailed to such Person's address as it appears in the Note Register on such
Record Date. The holder hereof shall surrender this Note at the principal
Corporate Trust Office of the Trustee for the final installment of principal of
this Note.
This Note is one of a duly authorized issue of Class A Notes of the Company
designated as its Floating Rate Asset-Backed Notes, Class A, with an aggregate
principal amount of up to $70,658,000 and which, together with up to
$4,342,000 aggregate principal amount of Floating Rate Asset Backed Notes, Class
B (the "Class B Notes"), are being or have been issued on any date or dates
during the Note Issuance Period (as defined in the Indenture) under an
Indenture, dated as of August 15, 1997 (as may be amended from time to time, the
"Indenture"), among the Company, the Servicer and LTCB Trust Company, as
trustee (herein called the "Trustee, which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties, and immunities thereunder of the Company, the Trustee, and
the holders of the Notes and of the terms upon which the Notes are, and are to
be, authenticated and delivered. The Class B Notes are subordinated to the Class
A Notes as and to the extent set forth in the Indenture. The Trust Property
secures all of the Notes equally and ratably without preference, priority, or
distinction between any Note of the same Class and any other Note of the same
Class by reason of difference in time or times of issuance and delivery or
otherwise, and also secures the payment of certain other amounts and certain
other obligations as set forth in the Indenture.
If an Indenture Event of Default shall occur and be continuing, the Notes
may be declared due and payable in the manner and with the effect provided in
the Indenture.
As provided in the Indenture and subject to restrictions on transfer and
the other limitations set forth therein and above, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency designated by the Company pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same original aggregate principal
amount, will, in accordance with the Indenture, be issued to the designated
transferee or transferees.
The Notes may be redeemed by the Company, in whole but not in part, at the
Redemption Price on any Monthly Payment Date on which the outstanding Note
Principal Balance of the Notes is less than 10% of the Note Principal Balance
of the Notes as of the first day of the Note Amortization Period (after giving
effect to payments of principal on such Monthly Payment Date) in the manner
provided in the Indenture.
A-3
The Notes are issuable only in registered form without coupons in
denominations as provided in the Indenture and subject to certain limitations
therein set forth. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Notes are limited recourse obligations of the Company. The sole source
of payment of the Notes will be the assets comprising the Trust Property. The
Notes do not represent an obligation of, or an interest in, the Seller, the
Servicer or any affiliate of any of them. The Notes are limited in right of
payment to certain collections and recoveries respecting the Leases and certain
payments from the Collection Account, the Reserve Account and the Payahead
Account, all as more specifically set forth in the Indenture. A copy of the
Indenture may be examined during normal business hours at the office of the
Servicer, and at such other places, if any, designated by the Trustee, by any
Noteholder upon request.
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Noteholders under
the Indenture at any time by the Seller, the Servicer and the Trustee with the
consent of the Holders of Notes evidencing not less than a majority of the
entire Note Principal Balance and, in certain circumstances, each affected
Noteholder. Any such consent by the Holder of this Note shall be conclusive and
binding on such Holder and on all future Holders of this Note and of any Note
issued upon the transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent is made upon this Note. The Indenture also
permits the amendment thereof, in certain limited circumstances, without prior
notice to or the consent of the Holders of any of the Notes.
Each Noteholder, by its acceptance of a Note, covenants and agrees that
such Noteholder will not, at any time prior to the day that is one year and one
day following the payment in full of all amounts owing pursuant to the Notes and
the Indenture, institute against the Seller or the Company, or join in any
institution against the Seller or the Company of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States Federal or state bankruptcy or similar law in connection with any
obligations under or relating to the Notes or the Indenture.
A-4
By accepting this Note, the holder hereof irrevocably appoints the Trustee
under the Indenture as the special attorney-in-fact for the holder vested with
full power on behalf of the holder to effect and enforce the rights of such
holder and the provisions of the Indenture for the benefit of the holder. The
preceding provision in no way shall limit the right of the holder hereof to
demand payment hereunder or bring an action to enforce payment hereof.
Capitalized terms used and not defined in this Note which are defined in
the Indenture have the meanings specified in the Indenture.
As provided in the Indenture, this Note and the Indenture shall be governed
by, and construed in accordance with, the laws of the State of New York, without
regard to the conflict of laws principles thereof.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, JLA Funding Corporation II has caused this instrument
to be duly executed.
JLA FUNDING CORPORATION II
By:
-----------------------
Title:
CERTIFICATE OF AUTHENTICATION
Dated:_________________________
This is one of the Notes
referred to in the within
mentioned Indenture.
LTCB TRUST COMPANY,
not in its individual
capacity but solely in
its capacity as Trustee
By:
----------------------------
Authorized Signatory
A-5
ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
-------------------------
-------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date:
Your signature:
(Sign exactly as your name appears on the other side of this Note)
Signature(s) Guaranteed by:
(All signatures must be guaranteed by a member of a Signature
Guarantee Medallion Program.)
A-6
EXHIBIT B
(FORM OF CLASS B NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE SECURITIES LAWS. THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE ONLY (A)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
ACT, (B) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE ACT IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A OR (C) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT SUBJECT, IN THE CASE OF CLAUSES (B) OR (C)
ABOVE, TO COMPLIANCE BY THE HOLDER AND THE TRANSFEREE WITH THE PROVISIONS OF THE
INDENTURE, DATED AS OF AUGUST 15, 19971 AMONG JLA FUNDING CORPORATION II (THE
"COMPANY"), JLA CREDIT CORPORATION, AS SERVICER, AND LTCB TRUST COMPANY, AS
TRUSTEE (THE "TRUSTEE"), APPLICABLE TO SUCH TRANSFER.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AGREES TO TREAT THIS NOTE AS INDEBTEDNESS
FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES. THIS NOTE OR ANY INTEREST
HEREIN SHALL NOT BE TRANSFERRED TO ANY PERSON UNLESS SUCH PERSON SHALL HAVE
PROVIDED TO THE ISSUER AND THE TRUSTEE A CERTIFICATION, IN THE FORM APPROVED BY
THE COMPANY AND THE TRUSTEE, (I) THAT IT IS NOT AND FOR SO LONG AS IT HOLDS
NOTES WILL NOT BE A BENEFIT PLAN INVESTOR (AS DEFINED IN 29 C.F.R. ss.
2510.3-101 OR ANY SUCCESSOR PROVISION), OR (II) THAT (A) IN ANY CASE IN WHICH
THE NOTES ARE ACQUIRED BY SUCH PURCHASER WITH THE ASSETS OF AN "EMPLOYEE BENEFIT
PLAN" WITHIN THE MEANING OF SECTION 3(3) OF ERISA OR A "PLAN" WITHIN THE
MEANING OF SECTION 4975(E)(1) OF THE CODE (ANY SUCH PLAN OR EMPLOYEE BENEFIT
PLAN, A "PLAN") AND FOR ANY PERIOD FOR WHICH A NOTE IS (OR IS DEEMED FOR ERISA
PURPOSES TO BE) ASSETS OF A PLAN, THAT THE ACQUISITION OR TRANSFER, AND
SUBSEQUENT HOLDING, WILL NOT CONSTITUTE, CAUSE OR OTHERWISE GIVE RISE TO A
TRANSACTION DESCRIBED IN SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR
WHICH A STATUTORY OR ADMINISTRATIVE EXEMPTION IS UNAVAILABLE, AND (B) NO
VIOLATION OF STATE, LOCAL OR OTHER APPLICABLE LAW WILL ARISE BY VIRTUE OF SUCH
PERSON'S ACQUISITION, HOLDING AND SUBSEQUENT TRANSFER OF A NOTE.
No. Note Principal Balance $
Cusip No.
FLOATING RATE ASSET-BACKED NOTE, CLASS B
JLA FUNDING CORPORATION II, a Delaware corporation (the "Company"), for
value received, hereby promises to pay to ________________or registered assigns,
the principal sum of ________________________________ (_________________), which
shall be payable in monthly installments to the extent of available funds
pursuant to the Indenture (as defined below), each equal to the sum of (i) the
B-1
Monthly Principal allocable to this Class B Note and (ii) the Overdue Monthly
Principal allocable to this Class B Note, on the 16th day of each month
commencing in the first calendar month following the end of the Note Issuance
Period and ending not later than the Scheduled Final Payment Date, when all
remaining principal and interest are due and payable in their entirety (each, a
"Monthly Payment Date"), and to pay interest (computed on the basis of a 360-day
year and the actual number of days elapsed) accruing from the Note Issuance Date
hereof. Interest on this Note will be payable on each Monthly Payment Date on
the Class B Note Principal Balance hereof commencing on the Monthly Payment Date
occurring in the calendar month immediately succeeding the month in which the
Note Issuance Date of this Note occurs, at a per annum rate that, for each
Interest Period, will equal the sum of LIBOR plus 0.65% (the "Class B Rate").
As used herein, "LIBOR" means, with respect to any Interest Period, the per
annum rate for deposits in United States dollars for a one-month period which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on the Interest
Determination Date. If such rate does not appear on Telerate Page 3750 on such
day, the rate will be determined on the basis of the rates at which deposits in
U.S. dollars are offered by the Reference Banks at approximately 11:00 a.m.,
London time, on the related Interest Determination Date to prime banks in the
London interbank market for a period of one month. The Trustee will request the
principal London office of each of the Reference Banks to provide a quotation of
its rate. If at least two such quotations are provided, the rate for that
Interest Determination Date will be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate for that Interest
Determination Date will be the arithmetic mean of the rates rounded upwards to
the nearest 1/16 of 1.0% (one percent) quoted by two or more major banks in
New York City, selected by the Trustee in its sole discretion, at approximately
11:00 a.m., New York City time, on that Interest Determination Date for loans in
U.S. dollars to leading banks in London interbank market for a period of one
month. "Interest Determination Date" means, with respect to any Interest Period,
the second Business Day preceding the first day of such Interest Period.
"Reference Banks" shall mean Barclays Bank PLC, Citibank, N.A., Chase Manhattan
Bank and Deutsche Bank AG. "Interest Period" means, with respect to any Note and
any Monthly Payment Date, the period from and including the previous Monthly
Payment Date (or, in the case of the first Monthly Payment Date for such Note,
from and including the Note Issuance Date for such Note), to but excluding such
Monthly Payment Date.
THE RIGHTS TO RECEIVE PAYMENTS WITH RESPECT TO THIS CLASS B NOTE ARE
SUBORDINATE TO THE PRIOR PAYMENT IN FULL ON EACH MONTHLY PAYMENT DATE OF ALL
AMOUNTS OF PRINCIPAL AND INTEREST DUE AND PAYABLE ON THE CLASS A NOTES AS
PROVIDED IN THE INDENTURE.
Payments of principal and interest on this Note shall be made on each
Monthly Payment Date in such coin or currency of the United States of America as
at such time is legal tender for payment of public and private debts to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on the Record Date for such Monthly Payment Date, which
B-2
shall be the last day of the month preceding the month in which the Monthly
Payment Date occurs (or in the case of the initial Monthly Payment Date, the
Note Issuance Date hereof), by wire transfer of immediately available funds to
the account and number specified in the Note Register on such Record Date for
such Person or, if no such account or number is so specified, then by check
mailed to such Person's address as it appears in the Note Register on such
Record Date. The holder hereof shall surrender this Note at the principal
Corporate Trust Office of the Trustee for the final installment of principal of
this Note.
This Note is one of a duly authorized issue of Class B Notes of the Company
designated as its Floating Rate Asset-Backed Notes, Class B, with an aggregate
principal amount of up to $4,342,000 and which, together with up to $70,658,000
aggregate principal amount of Floating Rate Asset Backed Notes, Class A (the
"Class A Notes"), are being or have been issued on any date or dates during the
Note Issuance Period (as defined in the Indenture) under an Indenture, dated as
of August 15, 1997 (as may be amended from time to time, the "Indenture"),
among the Company, the Servicer and LTCB Trust Company, as trustee (herein
called the "Trustee," which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties, and immunities thereunder of the Company, the Trustee, and the holders
of the Notes and of the terms upon which the Notes are, and are to be,
authenticated and delivered. The Class B Notes are subordinated to the Class A
Notes as and to the extent set forth in the Indenture. The Trust Property
secures all of the Notes equally and ratably without preference, priority, or
distinction between any Note of the same Class and any other Note of the same
Class by reason of difference in time or times of issuance and delivery or
otherwise, and also secures the payment of certain other amounts and certain
other obligations as set forth in the Indenture.
If an Indenture Event of Default shall occur and be continuing, the Notes
may be declared due and payable in the manner and with the effect provided in
the Indenture.
As provided in the Indenture and subject to restrictions on transfer and
the other limitations set forth therein and above, the transfer of this Note is
registrable in the Note Register, upon surrender of this Note for registration
of transfer at the office or agency designated by the Company pursuant to the
Indenture, duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Notes, of authorized denominations and for the same original aggregate principal
amount, will, in accordance with the Indenture, be issued to the designated
transferee or transferees.
B-3
The Notes may be redeemed by the Company, in whole but not in part, at the
Redemption Price on any Monthly Payment Date on which the outstanding Note
Principal Balance of the Notes is less than 10% of the Note Principal Balance
of the Notes as of the first day of the Note Amortization Period (after giving
effect to payments of principal on such Monthly Payment Date) in the manner
provided in the Indenture.
The Notes are issuable only in registered form without coupons in
denominations as provided in the Indenture and subject to certain limitations
therein set forth. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Notes are limited recourse obligations of the Company. The sole source
of payment of the Notes will be the assets comprising the Trust Property. The
Notes do not represent an obligation of, or an interest in, the Seller, the
Servicer or any affiliate of any of them. The Notes are limited in right of
payment to certain collections and recoveries respecting the Leases and certain
payments from the Collection Account, the Reserve Account and the Payahead
Account, all as more specifically set forth in the Indenture. A copy of the
Indenture may be examined during normal business hours at the office of the
Servicer, and at such other places, if any, designated by the Trustee, by any
Noteholder upon request.
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights of the Noteholders under
the Indenture at any time by the Seller, the Servicer and the Trustee with the
consent of the Holders of Notes evidencing not less than a majority of the
entire Note Principal Balance and, in certain circumstances, each affected
Noteholder. Any such consent by the Holder of this Note shall be conclusive and
binding on such Holder and on all future Holders of this Note and of any Note
issued upon the transfer hereof or in exchange herefor or in lieu hereof whether
or not notation of such consent is made upon this Note. The Indenture also
permits the amendment thereof, in certain limited circumstances, without prior
notice to or the consent of the Holders of any of the Notes.
Each Noteholder, by its acceptance of a Note, covenants and agrees that
such Noteholder will not, at any time prior to the day that is one year and one
day following the payment in full of all amounts owing pursuant to the Notes and
the Indenture, institute against the Seller or the Company, or join in any
institution against the Seller or the Company of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
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United States Federal or state bankruptcy or similar law in connection with any
obligations under or relating to the Notes or the Indenture.
By accepting this Note, the holder hereof irrevocably appoints the Trustee
under the Indenture as the special attorney-in-fact for the holder vested with
full power on behalf of the holder to effect and enforce the rights of such
holder and the provisions of the Indenture for the benefit of the holder. The
preceding provision in no way shall limit the right of the holder hereof to
demand payment hereunder or bring an action to enforce payment hereof.
Capitalized terms used and not defined in this Note which are defined in
the Indenture have the meanings specified in the Indenture.
As provided in the Indenture, this Note and the Indenture shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to the conflict of laws principles thereof.
Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, JLA Funding Corporation II has caused this instrument
to be duly executed.
JLA FUNDING CORPORATION II
By:
-----------------------
Title:
CERTIFICATE OF AUTHENTICATION
Dated:_________________________
This is one of the Notes
referred to in the within
mentioned Indenture.
LTCB TRUST COMPANY,
not in its individual
capacity but solely in
its capacity as Trustee
By:____________________________
Authorized Signatory
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ASSIGNMENT FORM
If you the holder want to assign this Note, fill in the form below and have your
signature guaranteed:
I or we assign and transfer this Note to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR
TAX IDENTIFICATION NUMBER)
-------------------------
-------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
--------------------------------------------------------------------------------
Date:
Your signature:
(Sign exactly as your name appears on the other side of this Note)
Signature(s) Guaranteed by:
(All signatures must be guaranteed by a member of a Signature
Guarantee Medallion Program.)
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EXHIBIT C
FORM OF TRANSFEREE LETTER
[letterhead of Transferee]
Date:
JLA Funding Corporation II
00000 Xxxxxxx Xxxxxxxxx - Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
LTCB Trust Company, as Trustee
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: JLA Funding Corporation II
--------------------------
Dear Sirs:
We are the transferee in a private sale or other transfer from ___________
(the "Transferor") of $_________________ in aggregate original principal amount
of Floating Rate Asset-Backed Notes, Class A (the "Class A Notes"), and
$_________________ in aggregate original principal amount of Floating Rate
Asset-Backed Notes, Class B (the "Class B Notes" and, collectively with the
Class A Notes, the "Notes") issued by JLA Funding Corporation II (the
"Company"), pursuant to the Indenture, dated as of August 15, 1997 (as may be
amended from time to time, the "Indenture"), among the Company, JLA Credit
Corporation and LTCB Trust Company, as Trustee (the "Trustee") . Capitalized
terms used and not otherwise defined herein have the meanings specified in the
Indenture.
In connection with our acquisition of the Notes, we hereby represent,
warrant, certify and agree as follows:
(A) We confirm that (check as applicable]:
____ We are an institutional investor that is an "accredited investor"
as defined under paragraph (1), (2), (3) or (7) of Rule 501(a) under
the Securities Act of 1933, as amended (the "Securities Act") (an
"Institutional Accredited Investor") or, if the Notes are to
be purchased by us for one or more institutional accounts ("investor
accounts") for which we are acting as a fiduciary or agent, each such
investor account is an Institutional Accredited Investor.
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____ We are a "qualified institutional buyer" as that term is defined
in Rule 144A under the Securities Act (a "Qualified Institutional
Buyer") or, if the Notes are to be purchased by us for one or more
investor accounts for which we are acting as a fiduciary or agent, each
such investor account is a Qualified Institutional Buyer.
(B) We are purchasing the Notes solely for our own account or accounts
for which we exercise sole investment discretion and not as nominee or
agent for any other person.
(C) We have such knowledge and experience in financial and business
matters and with respect to investments in securities that we are capable
of evaluating the merits and risks of an investment in the Notes, and we
are (and each account, if any, for which we are purchasing is) able to bear
the economic risk of such investment for an indefinite period. We have had
such opportunity to ask questions of and receive answers from the
Transferor and the Company concerning our purchase of the Notes and all
matters relating thereto and we have been afforded such access to
information (including financial information) about the Company and JLACC
as have enabled us to evaluate our investment in the Notes and we have
received all such information as we have deemed necessary to make an
informed decision with respect to our purchase of the Notes.
(D) We understand that the Notes are not being registered under the
Securities Act or any state securities laws and that the Company is relying
upon an exemption from registration as an "investment company" under the
Investment Company Act of 1040, as amended (the "Investment Company Act").
We understand that the Notes are being transferred to us in a transaction
that is exempt from the registration requirements of the Securities Act and
such laws. We understand that there is no market for, nor is there any
assurance that a market will develop, for the Notes, and we will not
reoffer or resell the Notes by any form of general solicitation or general
advertising.
(E) We understand that, if in the future we decide to sell or otherwise
transfer any Note, such Note may be sold or transferred only (A) to a
person that we reasonably believe is a Qualified Institutional Buyer in a
transaction meeting the requirements of Rule 144A under the Securities Act,
or (B) to an Institutional Accredited Investor pursuant to another
available exemption from the registration requirements of the Securities
Act subject, in the case of clauses (A) and (B) above, to compliance by the
transferee and us with the provisions of the Indenture including, without
limitation, the delivery by the proposed transferee of a Transferee Letter
substantially in the form of this letter and, in the case of clause (B),
the delivery of an opinion of counsel of counsel to the transferee, in form
and substance acceptable to the Trustee and the Issuer, if requested by the
Trustee or the Issuer.
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(F) We understand that the Notes will bear legends substantially to the
following effect:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT") OR ANY STATE SECURITIES LAWS. THE HOLDER OF THIS NOTE
BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
NOTE ONLY (A) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE ACT, (B) TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE ACT IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A OR (C) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
SUBJECT, IN THE CASE OF CLAUSES (B) OR (C) ABOVE, TO COMPLIANCE BY THE
HOLDER AND THE TRANSFEREE WITH THE PROVISIONS OF THE INDENTURE, DATED AS OF
AUGUST 15, 1997, AMONG JLA FUNDING CORPORATION II (THE "COMPANY"), JLA
CREDIT CORPORATION, AS SERVICER, AND LTCB TRUST COMPANY, AS TRUSTEE (THE
"TRUSTEE"), APPLICABLE TO SUCH TRANSFER.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AGREES TO TREAT THIS NOTE AS
INDEBTEDNESS FOR FEDERAL, STATE AND LOCAL INCOME TAX PURPOSES. THIS NOTE OR
ANY INTEREST HEREIN SHALL NOT BE TRANSFERRED TO ANY PERSON UNLESS SUCH
PERSON SHALL HAVE PROVIDED TO THE ISSUER AND THE TRUSTEE A CERTIFICATION,
IN THE FORM APPROVED BY THE COMPANY AND THE TRUSTEE, (I) THAT IT IS NOT AND
FOR SO LONG AS IT HOLDS NOTES WILL NOT BE A BENEFIT PLAN INVESTOR (AS
DEFINED IN 29 C.F.R. ss. 2510.3-101 OR ANY SUCCESSOR PROVISION), OR (II)
THAT (A) IN ANY CASE IN WHICH THE NOTES ARE ACQUIRED BY SUCH PURCHASER WITH
THE ASSETS OF AN "EMPLOYEE BENEFIT PLAN" WITHIN THE MEANING OF SECTION 3(3)
OF ERISA OR A "PLAN" WITHIN THE MEANING OF SECTION 4975 (E) (1) OF THE CODE
(ANY SUCH PLAN OR EMPLOYEE BENEFIT PLAN, A "PLAN") AND FOR ANY PERIOD FOR
WHICH A NOTE IS (OR IS DEEMED FOR ERISA PURPOSES TO BE) ASSETS OF A PLAN,
THAT THE ACQUISITION OR TRANSFER, AND SUBSEQUENT HOLDING, WILL NOT
CONSTITUTE, CAUSE OR OTHERWISE GIVE RISE TO A TRANSACTION DESCRIBED IN
SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE FOR WHICH A STATUTORY OR
ADMINISTRATIVE EXEMPTION IS UNAVAILABLE, AND (E) NO VIOLATION OF STATE,
LOCAL OR OTHER APPLICABLE LAW WILL ARISE BY VIRTUE OF SUCH PERSON'S
ACQUISITION, HOLDING AND SUBSEQUENT TRANSFER OF A NOTE.
(G) We hereby represent and warrant, further, that either (i) we are
not and for so long as we hold Notes will not be a "benefit plan investor"
(as defined in 29 C.F.R. ss. 2510.3-101 or any successor provision) or (ii)
in any case in which Notes are being acquired by us with the assets of an
"employee benefit plan" within the meaning of Section 3(3) of ERISA or a
"plan" within the meaning of Section 4975 (e) (1) of the Code (any such
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plan or employee benefit plan, a "Plan") and for any period for which a
Note is (or is deemed for ERISA purposes to be) assets of a Plan, that the
acquisition or transfer, and subsequent holding, of any such Notes will not
constitute, cause or otherwise give rise to a transaction described in
Section 406 of ERISA or Section 4975 of the Code for which a statutory or
administrative exemption is unavailable.
We agree that we will obtain from any purchaser of our Notes a letter
executed by such purchaser in the form of this letter.
We hereby indemnify each of you, your respective affiliates and each other
Noteholder for any losses, claims, damages or liabilities (including fees and
expenses of counsel) incurred by you or them as a result, directly or
indirectly, of (i) any statements made by us in this letter, or in any document
delivered by us relating hereto, (ii) our making any transfer or other
disposition of any Note in a manner that violates the provisions of this letter,
such Note or the indenture, or (iii) any failure of a direct purchaser from us
to have furnished to each of you a letter in the form hereof.
Our Notes should be registered as follows:
Name:
Address:
Tax Identification Number:
Physical Location of the Notes:
Contact:
Very truly yours,
[NAME OF PURCHASER)
By:
---------------------------------------------
Title:
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