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TRANSFER AND SERVICING AGREEMENT
among
NEWCOURT EQUIPMENT TRUST SECURITIES 1998-2
Issuer
ANTIGUA FUNDING CORPORATION
Depositor
AT&T CAPITAL CORPORATION
In its individual capacity and as Servicer
THE BANK OF NEW YORK
Indenture Trustee
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Dated as of December 1, 1998
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TABLE OF CONTENTS
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INTRODUCTION.....................................................................................1
ARTICLE I DEFINITIONS.....................................................................1
SECTION 1.1. Definitions.............................................................1
SECTION 1.2. Usage of Terms.........................................................11
SECTION 1.3. Calculations...........................................................11
SECTION 1.4. Section References.....................................................11
SECTION 1.5. No Recourse............................................................11
ARTICLE II CONVEYANCE OF CONTRACTS........................................................12
SECTION 2.1. Conveyance of Contracts and Related Assets.............................12
SECTION 2.2. Custody of Contract Files..............................................13
SECTION 2.3. Further Assurances.....................................................14
SECTION 2.4. Representations and Warranties of Depositor............................15
SECTION 2.5. Nonpetition Covenant...................................................17
SECTION 2.6. Purchase of Contracts Upon Breach of Representations
and Warranties.........................................................18
SECTION 2.7. Depositor Option to Substitute for Prepaid Contracts
and Defaulted Contracts................................................19
SECTION 2.8. Reassignment of Purchased and Replaced Contracts.......................20
ARTICLE III ADMINISTRATION AND SERVICING OF CONTRACTS......................................21
SECTION 3.1. Duties of the Servicer.................................................21
SECTION 3.2. Collection of Contract Payments; Modifications of Contracts............22
SECTION 3.3. Realization Upon Contracts.............................................24
SECTION 3.4. Insurance, Maintenance and Taxes.......................................25
SECTION 3.5. Maintenance of Security Interests in Equipment.........................27
SECTION 3.6. Covenants, Representations, and Warranties of Servicer.................27
SECTION 3.7. Sub-Servicers..........................................................29
SECTION 3.8. Total Servicing Fee; Payment of Expenses by Servicer...................29
SECTION 3.9. Servicer's Certificate.................................................30
SECTION 3.10 Annual Statement as to Compliance; Notice of Servicer
Termination Event......................................................30
SECTION 3.11 Annual Independent Accountants' Report.................................31
SECTION 3.12 Access to Certain Documentation and Information
Regarding Contracts....................................................32
SECTION 3.13 Certain Duties of the Servicer under the Trust Agreement...............32
SECTION 3.14 Duties of the Servicer under the Indenture.............................32
SECTION 3.15 Errors and Omissions Policy or Bond....................................33
ARTICLE IV COLLECTIONS AND DEPOSITS.......................................................34
SECTION 4.1. Initial Deposit........................................................34
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SECTION 4.2. Collections............................................................34
SECTION 4.3. Application of Collections.............................................35
SECTION 4.4. Net Deposits...........................................................36
SECTION 4.5. Expiration of Lease Contracts..........................................36
ARTICLE V TERMINATION....................................................................37
SECTION 5.1. Optional Purchase of All Contracts; Liquidation of Trust Assets........37
ARTICLE VI THE DEPOSITOR..................................................................38
SECTION 6.1. Liability of Depositor.................................................38
SECTION 6.2. Merger or Consolidation of, or Assumption of the Obligations of,
Depositor; Amendment of Certificate of Incorporation...................38
SECTION 6.3. Limitation on Liability of Depositor and Others........................39
SECTION 6.4. Depositor May Own Notes................................................39
ARTICLE VII THE SERVICER...................................................................40
SECTION 7.1. Liability of Servicer; Indemnities.....................................40
SECTION 7.2. Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer...........................................................41
SECTION 7.3. Limitation on Liability of Servicer and Others.........................42
SECTION 7.4. Servicer Not to Resign.................................................42
SECTION 7.5. Corporate Existence....................................................42
ARTICLE VIII SERVICER TERMINATION EVENTS....................................................43
SECTION 8.1. Servicer Termination Event.............................................43
SECTION 8.2. Consequences of a Servicer Termination Event...........................44
SECTION 8.3. Indenture Trustee to Act; Appointment of Successor.....................45
SECTION 8.4. Notification to Equity Certificateholder and Noteholders...............45
SECTION 8.5. Waiver of Past Defaults................................................45
ARTICLE IX MISCELLANEOUS PROVISIONS.......................................................47
SECTION 9.1. Amendment..............................................................47
SECTION 9.2. Protection of Title to Trust Assets....................................48
SECTION 9.3. Governing Law..........................................................50
SECTION 9.4. Severability of Provisions.............................................50
SECTION 9.5. Assignment.............................................................50
SECTION 9.6. Third-Party Beneficiaries..............................................50
SECTION 9.7. Counterparts...........................................................50
SECTION 9.8. Intention of Parties...................................................50
SECTION 9.9. Notices................................................................51
SECTION 9.10 Income Tax Characterization............................................51
SECTION 9.11 Limitation of Liability................................................51
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EXHIBITS
Exhibit A-1 -- Schedule of Lease Contracts and Leased Equipment
Exhibit A-2 -- Schedule of Loan Contracts
Exhibit B -- Form of Servicer's Certificate
Exhibit C -- Form of Subsequent Transfer Instrument
Exhibit D -- Form of Servicer's Certificate Regarding Substitution
Exhibit E -- Form of Certificate Regarding Substitution for Warranty Contracts
Exhibit F -- Form of Certificate Regarding Substitution for Defaulted and Prepaid Contracts
Exhibit G -- Form of Servicer's Certificate Regarding Purchase of Warranty Contracts
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THIS TRANSFER AND SERVICING AGREEMENT, dated as of December 1,
1998, is made among NEWCOURT EQUIPMENT TRUST SECURITIES 1998-2 (the "Issuer"),
ANTIGUA FUNDING CORPORATION, a Delaware corporation, as Depositor (the
"Depositor"), AT&T CAPITAL CORPORATION, a Delaware corporation, in its
individual capacity and as Servicer (in its individual capacity, "TCC"; in its
capacity as Servicer, the "Servicer"), and THE BANK OF NEW YORK, a New York
banking corporation, not in its individual capacity but solely as trustee under
the Indenture hereinafter referred to (the "Indenture Trustee").
In consideration of the mutual agreements herein contained, and
of other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. All terms defined in the Indenture or
the Trust Agreement (each as defined below) shall have the same meaning in this
Agreement. Whenever capitalized and used in this Agreement, the following words
and phrases, unless the context otherwise requires, shall have the following
meanings:
Accountants' Report: The report of a firm of nationally
recognized independent accountants described in Section 3.11.
Accounting Date: With respect to a Payment Date, the last day of
the preceding calendar month.
Administrative Fee: With respect to any Collection Period, all
administrative fees, expenses and charges collected in respect of the Contracts
during such Collection Period, including late fees, late payment interest,
documentation fees, insurance administration charges and that portion of any
Extension Fees allocated to the Servicer.
Affiliate: With respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
Agreement or this Agreement: This Transfer and Servicing
Agreement, all amendments and supplements thereto and all exhibits and schedules
to any of the foregoing.
Book Value: With respect to any Leased Equipment, the value of
such Leased Equipment as shown on the accounting books and records of TCC or the
applicable Originator,
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as appropriate, as of the Cut-Off Date. The Book Value for each item of Leased
Equipment shall be set forth on Exhibit A-1 hereto.
Business Day: Any day (other than a Saturday, Sunday or legal
holiday) on which commercial banking institutions in New York, New York, or any
other location of any successor Servicer or successor Indenture Trustee, are
open for regular business.
CFC: AT&T Commercial Finance Corporation, a Delaware corporation,
and its successors and assigns.
Closing Date: December 17, 1998.
Collection Account: The account designated as such in, and
established and maintained pursuant to, Section 8.02 of the Indenture.
Collection Period: With respect to a Payment Date, the calendar
month preceding the month in which such Payment Date occurs (such calendar month
being referred to as the "related" Collection Period with respect to such
Payment Date). With respect to an Accounting Date, the Collection Period in
which such Accounting Date occurs is referred to herein as the "related"
Collection Period with respect to such Accounting Date.
Collection Records: All manually prepared or computer generated
records relating to collection efforts or payment histories with respect to the
Contracts.
Contract File: The documents, electronic entries, instruments and
writings listed in Section 2.2 pertaining to a particular Contract.
Contract Pool Principal Balance: With respect to any Payment
Date, the sum of the Contract Principal Balances (computed as of the related
Accounting Date) for all Contracts.
Contract Principal Balance: As of any Accounting Date, with
respect to any Contract:
(i) if such Contract does not by its terms permit prepayment or
early termination, the present value of the unpaid Scheduled Payments
due on such Contract after such Accounting Date (excluding all
Scheduled Payments due on or prior to, but not received as of, such
Accounting Date, as well as any Scheduled Payments due after, but
received as of, such Accounting Date), after giving effect to any
Prepayments received on or prior to such Accounting Date, discounted
monthly at the rate of 6.843% per annum (assuming, for purposes of
such calculation, that each Scheduled Payment is due on the last day
of the applicable Collection Period);
(ii) if such Contract permits prepayment or early termination
only upon payment of an amount that is at least equal to the present
value (calculated in the manner described in clause (i) above) of the
unpaid Scheduled Payments due on such Contract
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after the date of such prepayment or early termination, the amount
specified in clause (i) above; and
(iii) if such Contract permits prepayment or early termination
without payment of an amount at least equal to the amount specified in
clause (ii) above, the lesser of (a) the unpaid principal balance of
such Contract as of such Accounting Date (after giving effect to any
Scheduled Payments due on or prior to such Accounting Date, whether or
not received, as well as any Prepayments, and any Scheduled Payments
due after such Accounting Date, received as of such Accounting Date),
and (b) the amount specified in clause (i) above;
provided that, for purposes of computing the Total Principal Payment Amount or
the Requisite Cash Collateral Amount for a given Payment Date (as well as all
Payment Dates thereafter), the Contract Principal Balance of any Contract which
became a Liquidated Contract during the related Collection Period or was
required to be purchased by TCC as of the last day of the related Collection
Period in accordance with Section 2.6(a), will be deemed to be zero on and after
the last day of such Collection Period.
Contract Representations and Warranties: As defined in Section
2.6(a).
Contracts: The Lease Contracts and the Loan Contracts.
Corporate Trust Office: With respect to the Owner Trustee, the
principal office of the Owner Trustee at which at any particular time its
corporate trust business shall be administered, which office on the date of
execution and delivery of this Agreement is located at 000 Xxxx Xxxxxx, 0xx
Xxxxx, Xxx Xxxx, XX 00000, Attention: Corporate Agency Trust; the telecopy
number for the Corporate Agency Trust Office of the Owner Trustee on the date of
execution and delivery of this Agreement is (000) 000-0000; with respect to the
Indenture Trustee, the principal office of the Indenture Trustee at which at any
particular time its corporate trust business shall be administered, which office
is located at 000 Xxxxxxx Xxxxxx, Xxxxx 12 East, New York, New York 10286,
Attention: Corporate Trust Administration--Asset Backed Finance Unit; the
telecopy number for the Corporate Trust Office of the Indenture Trustee on the
date of execution and delivery of this Agreement is (000) 000-0000.
Cut-Off Date: (i) With respect to the Contracts listed on
Exhibits A-1 and A-2 hereto as of the Closing Date, December 1, 1998, and (ii)
with respect to any Substitute Contract, the first day of the calendar month
during which such Substitute Contract was transferred to the Issuer in
accordance with the provisions of Section 2.6(b) or Section 2.7.
Defaulted Contract: With respect to any Collection Period, (i) a
Contract which, during such Collection Period, became a Liquidated Contract; or
(ii) a Contract as to which, during such Collection Period, the Obligor becomes
the subject of a bankruptcy, insolvency or receivership proceeding.
Deposit Date: With respect to any Collection Period, the Business
Day immediately preceding the related Determination Date.
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Depositor: Antigua Funding Corporation, a Delaware corporation,
or its successor in interest pursuant to Section 6.2.
Determination Date: With respect to any Collection Period, the
fifth Business Day immediately preceding the related Payment Date.
Eligible Contract: As to (i) any Warranty Contract for which a
Contract is being substituted pursuant to Section 2.6(b), and (i) any Prepaid
Contract or Defaulted Contract for which a Contract is being substituted
pursuant to Section 2.7, a Contract that (a) as of the date of its substitution,
satisfies all of the representations and warranties (which, except when
expressly stated to be as of origination, shall be deemed to be made as of the
Cut-off Date or the Subsequent Transfer Date) in the related Purchase Agreement
and does not cause any of the representations and warranties in Section 2.4,
after giving effect to such substitution, to be incorrect, (b) after giving
effect to the scheduled payments due prior to the Cut-Off Date, has a Contract
Principal Balance that is at least equal to the Required Payoff Amount of such
Warranty Contract or Defaulted Contract or, but for such Prepayment in Full, the
Required Payoff Amount of such Prepaid Contract, as the case may be, (c) has
Scheduled Payments payable monthly which are at least equal to the Scheduled
Payments due on the Warranty Contract, Prepaid Contract or Defaulted Contract,
as the case may be, through the term of such Warranty Contract, Prepaid Contract
or Defaulted Contract, (d) has a final Scheduled Payment that is not in excess
of the final Scheduled Payment on the Warranty Contract, Prepaid Contract or
Defaulted Contract, as the case may be, unless, for purposes of satisfying the
requirement of clause (b), the amount of the final Scheduled Payment on such
Contract is assumed to be the same as that on the Warranty Contract, Prepaid
Contract or Defaulted Contract, as the case may be, (e) has a final Scheduled
Payment due on a date that is not later than the date on which the final
Scheduled Payment date of the Warranty Contract, Prepaid Contract or Defaulted
Contract, as the case may be, is due, (f) is of the same type (viz., Lease
Contract or Loan Contract) as the Warranty Contract, Prepaid Contract or
Defaulted Contract, as the case may be, (g) was originated and added to the
Trust Assets using the same credit criteria and eligibility standards as the
Contracts transferred on the Closing Date, and (h) was purchased by the
Depositor from an Originator pursuant to a Purchase Agreement having
substantially the same terms and conditions (including, without limitation,
representations and warranties as to the Eligible Contract) as the Purchase
Agreements pursuant to which the Depositor purchased the Contracts transferred
to the Issuer on the Closing Date; provided that, notwithstanding clause (a), a
contract will not fail to constitute an Eligible Contract solely by virtue of
not satisfying the Contract Representations and Warranties contained in clauses
(I) and (P) thereof if the Rating Agency Condition is satisfied with respect
thereto.
Eligible Servicer: TCC, the Indenture Trustee or another Person
which at the time of its appointment as Servicer (i) is servicing a portfolio of
equipment lease contracts, installment sale contracts, promissory notes, loan
and security agreements and/or other similar types of receivables comparable to
the Contracts, (ii) is legally qualified and has the capacity to service the
Contracts, (iii) has demonstrated the ability professionally and competently to
service a portfolio of equipment lease contracts, installment sale contracts,
promissory notes, loan and security agreements and other similar types of
receivables comparable to the Contracts with reasonable skill and care, and (iv)
has available software which is adequate to perform its duties and
responsibilities under this Agreement.
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Equipment: With respect to any Contract, the property which is
leased or purchased pursuant to such Contract, or which otherwise provides
security for the payment of amounts payable thereunder.
Extension Fees: With respect to any Contract, any fee received by
the Servicer in consideration for the granting of an extension on the payment of
any Scheduled Payment due under such Contract. Any Extension Fees received shall
be allocated as follows: (1) 50% thereof shall be allocated to the Issuer and
shall constitute Pledged Revenues; and (2) 50% thereof shall be allocated to the
Servicer and shall constitute an Administrative Fee.
Indenture: The Indenture, dated as of December 1, 1998, between
the Issuer and the Indenture Trustee, as the same may be amended and
supplemented from time to time.
Indenture Trustee: The Person acting as Trustee under the
Indenture, its successors in interest and any successor Trustee under the
Indenture.
Independent Accountants: As defined in Section 3.11(a).
Initial Contract Pool Principal Balance: $1,342,869,226.
Insurance, Maintenance and Tax Accounts: The accounts which are
established and maintained pursuant to Section 3.4(a).
Insurance Policy: With respect to a Contract, any insurance
policy benefitting the lessor or secured party under the Contract providing loss
or physical damage, theft or similar coverage with respect to the Equipment.
Issuer: Newcourt Equipment Trust Securities 1998-2.
Lease Contracts: The lease contracts listed on Exhibit A-1 hereto
(excluding any such lease contract which has become a Purchased Contract or a
Replaced Contract, but including any Substitute Contract substituted therefor
and added to such Exhibit A-1 in accordance with the provisions of Section
2.6(b) or Section 2.7) and all rights and obligations under such contracts,
including, without limitation, all monies at any time paid or payable thereon or
in respect thereof from and after the Cut-Off Date (whether in the form of (i)
Scheduled Payments (including those Scheduled Payments due prior to, but not
received as of, the Cut-Off Date, but excluding those Scheduled Payments due on
or after, but received prior to, the Cut-Off Date), (ii) Prepayments, (iii)
Liquidation Proceeds, (iv) Extension Fees, (v) payments to be applied by the
Servicer to the payment of insurance charges, maintenance, taxes or other
similar obligations, (vi) payments to be retained by the Servicer in payment of
Administrative Fees, or otherwise), and all rights of the lessor in the related
Equipment (other than any ownership interest of the lessor in such Equipment),
Insurance Policies and any other security for the payment of amounts due under
such contracts.
Leased Equipment: With respect to any Lease Contract, the
Equipment subject to such Lease Contract, as more particularly described on
Exhibit A-1 hereto.
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Leasing Services: AT&T Capital Leasing Services, Inc., a
Massachusetts corporation, and its successors and assigns.
Lien: Any security interest, lien, charge, pledge, preference,
equity or encumbrance of any kind, including tax liens, mechanics' liens and any
liens that attach by operation of law.
Liquidated Contract: With respect to any Collection Period, (i) a
Contract which, during such Collection Period, was charged off as uncollectible
by the Servicer in accordance with its credit and collection policies and
procedures (which shall be no later than the date as of which the Servicer has
repossessed and disposed of the related Equipment and otherwise collected all
proceeds (including any proceeds of insurance to be applied as described in
Section 3.4(c)(ii)) which, in the Servicer's reasonable judgment, can be
collected under such Contract) following a default thereunder or upon damage to
or destruction of such Equipment (if such Equipment is not to be replaced or
repaired in accordance with Section 3.4(c)(i)), or (ii) a Contract as to which,
during such Collection Period, 10% or more of a Scheduled Payment shall have
become 180 days delinquent.
Liquidation Proceeds: All amounts received by the Servicer (i) in
connection with the liquidation of any Contract and disposition of the related
Equipment or (ii) as insurance proceeds with respect to any damaged or destroyed
Equipment to be applied as described in Section 3.4(c)(ii), in each case net of
(a) reasonable out-of-pocket expenses incurred by or on behalf of the Servicer
in connection with the collection of such Contract and the maintenance,
repossession, repair, storage and disposition of the related Equipment
(including taxes and insurance charges, to the extent in excess of amounts
available therefor and relating to such Contract in the Insurance, Maintenance
and Tax Accounts, as well as attorneys' fees) and (b) amounts that are required
to be refunded to the Obligor on such Contract; provided, however, that the
Liquidation Proceeds with respect to any Contract and disposition of the related
Equipment shall in no event be less than zero. Liquidation Proceeds shall be
allocated as follows: (1) in the case of any Loan Contract, all Liquidation
Proceeds shall be allocated to the Issuer; and (2) in the case of any Lease
Contract, Liquidation Proceeds shall be allocated pro rata between the Issuer,
on the one hand, and the Depositor, on the other, based upon the Required Payoff
Amount for such Lease Contract (determined as of the Collection Period during
which such Lease Contract became a Liquidated Contract) and the Book Value of
the related Leased Equipment, respectively; provided that, in the event the
Liquidation Proceeds exceed the sum of the Required Payoff Amount for a given
Lease Contract plus the Book Value of the related Leased Equipment, any such
excess shall be allocated solely to the Depositor.
Loan Contracts: The installment sale contracts, promissory notes,
loan and security agreements and other similar types of receivables listed on
Exhibit A-2 hereto (excluding any such contract, note, agreement or receivable
which has become a Purchased Contract or a Replaced Contract, but including any
Substitute Contract substituted therefor and added to such Exhibit A-2 in
accordance with the provisions of Section 2.6(b) or Section 2.7) and all rights
and obligations under such contracts, including, without limitation, all monies
at any time paid or payable thereon or in respect thereof from and after the
Cut-Off Date (whether in the form of (i) Scheduled Payments (including those
Scheduled Payments due prior to, but not
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received as of, the Cut-Off Date, but excluding those Scheduled Payments due
on or after, but received prior to, the Cut-Off Date), (ii) Prepayments,
(iii) Liquidation Proceeds, (iv) Extension Fees, (v) payments to be applied by
the Servicer to the payment of insurance charges, maintenance, taxes or other
similar obligations, (vi) payments to be retained by the Servicer in payment of
Administrative Fees, or otherwise), and all rights of the secured party in the
related Equipment, Insurance Policies and any other security for the payment of
amounts due under such contracts.
Monthly Records: All records and data maintained by the Servicer
with respect to the Contracts in accordance with its customary standards,
policies and procedures.
NCFC: Newcourt Communications Finance Corporation (f/k/a AT&T
Credit Corporation), a Delaware corporation, and its successors and assigns.
Note Distribution Account: The account designated as such in, and
established and maintained pursuant to, Section 8.04 of the Indenture.
Note Majority: Holders of Notes representing a majority of the
Principal Balance of each Class of the Notes then Outstanding.
Obligor: The lessee, borrower, purchaser or any other Person or
Persons who are obligated to make payments under a Contract.
Opinion of Counsel: A written opinion of counsel acceptable in
form and substance and from counsel acceptable to the Owner Trustee and, if such
opinion or a copy thereof is required to be delivered to the Indenture Trustee,
to the Indenture Trustee.
Original Term: With respect to any Contract, the term of such
Contract as of the Cut-Off Date (which shall include any renewals or extensions
of the original term thereof prior to the Cut-Off Date), as such term may be
extended in accordance with Section 3.2(c) or as a result of a bankruptcy
proceeding with respect to the related Obligor, but excluding, in the case of
any Lease Contract, any other extensions or renewals thereof.
Originators: Leasing Services, NCFC and CFC.
Owner Trustee: Citibank, N.A., acting not individually but solely
as trustee, or its successor in interest, and any successor Owner Trustee
appointed as provided in the Trust Agreement.
Payment Date: The fifteenth day of each calendar month (or, if
such fifteenth day is not a Business Day, the next succeeding Business Day),
commencing January 15, 1999; provided that, in the event that the Principal
Balance of the Class A-1 Notes has not been reduced to zero on or prior to the
Payment Date occurring in December 1999, the Payment Date for the Class A-1
Notes in January 2000 will be January 10, 2000 (or, if such day is not a
Business Day, the next preceding Business Day).
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Person: Any legal person, including any individual, corporation,
partnership, joint venture, estate, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof, or any other entity.
Pledged Revenues: (i) All Scheduled Payments on the Contracts
received on or after the Cut-Off Date (including all Scheduled Payments due
prior to, but not received as of, the Cut-Off Date, but excluding any Scheduled
Payments due on or after, but received prior to, the Cut-Off Date); (ii) any
Prepayments received on the Contracts on or after the Cut-Off Date (other than
(a) in the case of a Lease Contract, any portion thereof allocated to the
Depositor, or (b) in the case of a Prepaid Contract for which a substitution has
been made in accordance with Section 2.7, that portion thereof to which the
Depositor is entitled pursuant to Section 2.7); (iii) the Purchase Amount of any
Contracts purchased by TCC in accordance with Section 2.6(a) (other than any
portion thereof attributable to the Book Value of the Leased Equipment); (iv)
the amount paid by the Depositor to purchase the Contracts pursuant to Section
5.1; (v) that portion of the Liquidation Proceeds received in respect of any
Contracts and the disposition of the related Equipment on or after the Cut-Off
Date and allocated to the Issuer; (vi) that portion of any Extension Fees
received on or after the Cut-Off Date and allocated to the Issuer; and (vii) any
earnings on the investment of amounts credited to the Collection Account and the
Note Distribution Account.
Prepaid Contract: A Contract as to which a Prepayment in Full has
been received by the Servicer.
Prepayment: With respect to any Collection Period for any
Contract, a voluntary prepayment during such Collection Period of amounts due
and owing under such Contract; provided that, in the case of any Lease Contract,
the amount, if any, by which any such Prepayment exceeds the Required Payoff
Amount for such Contract shall be allocated to the Depositor in respect of the
related Leased Equipment.
Prepayment in Full: With respect to any Collection Period for any
Contract, a Prepayment during such Collection Period of all amounts payable
under such Contract, including, without limitation, a Prepayment in whole under
Section 3.2(d).
Principal Balance: As of any date, when used with respect to a
Class of Notes, the original principal balance of such Class, less all
distributions previously made to such Class in respect of principal.
Purchase Agreements: The Purchase and Sale Agreement, dated as of
February 1, 1998, among TCC, the Depositor, Leasing Services and NCFC; the
Purchase and Sale Agreement, dated as of April 1, 1998 among TCC, the Depositor,
Leasing Services and NCFC; the Purchase and Sale Agreement, dated as of June 1,
1998, among TCC, the Depositor and the Originators; the Purchase and Sale
Agreement, dated as of September 1, 1998, among TCC, the Depositor, Leasing
Services and NCFC; the Purchase and Sale Agreement, dated as of October 1, 1998,
among TCC, the Depositor and the Originators; the Purchase and Sale Agreement,
dated as of October 15, 1998, among TCC, the Depositor and NCFC; the Purchase
and Sale Agreement, dated as of December 1, 1998, among TCC, the Depositor and
the Originators; and any other
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comparable purchase agreement entered into among TCC, the Depositor
and an Originator pursuant to which an Originator has sold to the Depositor a
Substitute Contract.
Purchase Amount: With respect to a Contract and related Equipment
required to be purchased by TCC in accordance with Section 2.6(a), the sum of
(i) the Required Payoff Amount for such Contract as of the Accounting Date on
which such obligation to so purchase arises, plus (ii) in the case of a Lease
Contract, the Book Value of the related Leased Equipment (that portion of the
Purchase Amount attributable to such Book Value to be allocated to the
Depositor).
Purchased Contract: As of any Deposit Date, any Contract which
TCC has purchased as of the related Accounting Date, as required by Section
2.6(a), and as to which, on or before such Deposit Date, (i) that portion of the
Purchase Amount relating to the Required Payoff Amount for such Contract has
been deposited in the Collection Account, and (ii) that portion, if any, of the
Purchase Amount relating to the Book Value of the related Leased Equipment has
been distributed to the Depositor.
Related Assets: The assets, in addition to the Contracts,
transferred by the Depositor to the Issuer pursuant to Section 2.1(a) (or, in
the case of a Substitute Contract, the comparable paragraph of the related
Subsequent Transfer Instrument).
Related Documents: The Trust Agreement, the Indenture, the Equity
Certificate, the Notes, the Purchase Agreements, any Subsequent Transfer
Instruments and the Cash Collateral Account Agreement. The Related Documents
executed by any party are referred to herein as "such party's Related
Documents," "its Related Documents" or by a similar expression.
Replaced Contract: Any Warranty Contract, Prepaid Contract or
Defaulted Contract for which a Substitute Contract has been substituted in
accordance with Section 2.6(b) or Section 2.7, as applicable.
Required Payoff Amount: With respect to any Collection Period for
any Contract, the sum of (i) the Scheduled Payment due in such Collection
Period, together with any Scheduled Payments due in prior Collection Periods but
not yet received, plus (ii) the Contract Principal Balance of such Contract
(after taking into account the Scheduled Payment due in such Collection Period,
whether or not received).
Responsible Officer: When used with respect to the Servicer, the
Depositor or any other Person other than the Indenture Trustee, the President,
any Vice-President or Assistant Vice-President or the Controller of such Person,
or any other officer or employee having similar functions; when used with
respect to the Indenture Trustee, the meaning set forth in the Indenture.
Schedule of Contracts: Collectively, the schedules of Lease
Contracts and Loan Contracts (which shall be made available to the parties
hereto on a computer disk or other data storage medium) attached hereto as (or
described in) Exhibit A-1 and Exhibit A-2, respectively,
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as such Exhibits may be amended from time to time pursuant to Section 2.6(b) or
Section 2.7 to add Substitute Contracts and delete Replaced Contracts.
Scheduled Payment: With respect to any Collection Period for any
Contract during the Original Term of such Contract, the scheduled payment or
payments due under such Contract in such Collection Period other than those
portions of such payments which, under such Contract, are to be (i) applied by
the Servicer to the payment of insurance charges, maintenance, taxes and other
similar obligations, or (ii) retained by the Servicer in payment of
Administrative Fees.
Servicer: AT&T Capital Corporation, its successor in interest
pursuant to Section 8.2 or, after any termination of the Servicer upon a
Servicer Termination Event, any successor Servicer.
Servicer Termination Event: An event described in Section 8.1.
Servicer's Certificate: With respect to each Determination Date,
a certificate, completed by and executed on behalf of the Servicer, in
accordance with Section 3.9, substantially in the form attached hereto as
Exhibit B.
Servicing Account: The account designated as such in, and
established and maintained pursuant to, Section 8.05 of the Indenture.
Servicing Fee: With respect to any Collection Period, the fee
payable to the Servicer for services rendered during such Collection Period,
which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by the
Contract Pool Principal Balance determined as of the last day of the preceding
Collection Period (or, in the case of the Servicing Fee with respect to the
Collection Period commencing on December 1, 1998, the Contract Pool Principal
Balance as of such date).
Servicing Fee Rate: 1.25% per annum.
Sub-Servicer: The Person named as servicer or sub-servicer in any
agreement between the Servicer and such Person by which such Person is
contractually obligated to perform on the Servicer's behalf all or a part of the
servicing obligations described herein.
Subsequent Transfer Date: With respect to each Subsequent
Transfer Instrument, the date on which the related Substitute Contracts are
transferred to the Issuer.
Subsequent Transfer Instrument: Each Subsequent Transfer
Instrument executed by the Depositor in accordance with the provisions of
Section 2.6(b) or Section 2.7, by which the Depositor transfers Substitute
Contracts to the Issuer.
Substitute Contract: A lease contract or a loan contract
transferred by the Depositor to the Issuer in substitution for a Lease Contract
or Loan Contract, as appropriate, in
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accordance with the provisions of Section 2.6(b) or Section 2.7, such contract
being identified in a schedule to the applicable Subsequent Transfer Instrument.
TCC: AT&T Capital Corporation, a Delaware corporation.
Total Servicing Fee: The sum of the Servicing Fee, the
Administrative Fees and any earnings on the investment of amounts in the
Servicing Account.
Trust Accounts: The Collection Account, the Note Distribution
Account, the Servicing Account, the Insurance, Maintenance and Tax Accounts and
such other accounts as may be established in the name of the Issuer or the
Indenture Trustee pursuant to the Trust Agreement or this Agreement.
Trust Agreement: The Trust Agreement, dated as of December 1,
1998, between the Depositor and the Owner Trustee, as the same may be amended
and supplemented from time to time in accordance with the terms thereof.
UCC: The Uniform Commercial Code as in effect in the relevant
jurisdiction.
Warranty Contract: As defined in Section 2.6(b).
SECTION 1.2. Usage of Terms. With respect to all terms used in
this Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other gender; references to "writing"
include printing, typing, lithography, and other means of reproducing words in a
visible form; references to agreements and other contractual instruments include
all subsequent amendments thereto or changes therein entered into in accordance
with their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation."
SECTION 1.3. Calculations. All calculations of the amount of the
Servicing Fee shall be made on the basis of a 360-day year consisting of twelve
30-day months. All references to the Contract Principal Balance of a Contract as
of any date shall refer to the close of business on such date.
SECTION 1.4. Section References. All references to Articles,
Sections, paragraphs, subsections, exhibits and schedules shall be to such
portions of this Agreement unless otherwise specified.
SECTION 1.5. No Recourse. No recourse may be taken, directly or
indirectly, under this Agreement or any certificate or other writing delivered
in connection herewith or therewith, against any stockholder, officer or
director, as such, of the Depositor, TCC, the Servicer, the Indenture Trustee or
the Owner Trustee or of any predecessor or successor of the Depositor, TCC, the
Servicer, the Indenture Trustee or the Owner Trustee.
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ARTICLE II
CONVEYANCE OF CONTRACTS
SECTION 2.1. Conveyance of Contracts and Related Assets. (a)
Subject to the terms and conditions of this Agreement, the Depositor, pursuant
to the mutually agreed upon terms contained herein, hereby transfers, assigns,
and otherwise conveys to the Issuer, without recourse (but without limitation of
its obligations in this Agreement), as of the Closing Date (or, in the case of
any Substitute Contracts, as of the Subsequent Transfer Date), all of the right,
title and interest, including any security interest, whether now owned or
hereafter acquired, that the Depositor has or has power to convey, in and to the
following:
(i) the Contracts, including, without limitation, (A) all monies
at any time paid or payable thereon or in respect thereof from and
after the Cut-Off Date in the form of (1) Scheduled Payments
(including those Scheduled Payments due prior to, but not received as
of, the Cut-Off Date, but excluding those Scheduled Payments due on or
after, but received prior to, the Cut-Off Date), (2) Prepayments
(other than, in the case of a Lease Contract, any portion thereof
allocated to the Depositor in accordance with this Agreement), (3)
Liquidation Proceeds (but only that portion thereof allocated to the
Issuer in accordance with this Agreement), (4) Extension Fees, (5)
payments to be applied by the Servicer to the payment of insurance
charges, maintenance, taxes or other similar obligations, and (6)
payments to be retained by the Servicer in payment of Administrative
Fees, but excluding any payments made and attributable to the purchase
price or use of any Leased Equipment upon expiration of the related
Lease Contract (whether upon completion of the Original Term thereof,
Prepayment thereof or otherwise), (B) all rights of the lessor or the
secured party, as the case may be, in the Equipment related to the
Loan Contracts and all present or future leases and other contracts
relating to such Equipment and all revenues, payments, rights to
payment, profits, accounts, chattel paper, products and contract
rights arising from or related to such Equipment or any use thereof or
from any such lease or other contract, (C) all rights of the lessor or
secured party, as the case may be, in all Insurance Policies and any
other security (other than any ownership interest of the lessor in the
Leased Equipment) for the payment of amounts due under the Contracts
(including all rights, if any, the lessor or the secured party may
have against vendors and other third parties for payments of such
amounts), (D) all items contained in the related Contract Files and
any and all other documents that are kept on file in accordance with
the applicable Originator's customary procedures relating to the
Contracts, and (E) all proceeds of the foregoing;
(ii) all funds on deposit from time to time in the Trust Accounts
and all investments therein and proceeds thereof; and
(iii) the Purchase Agreements (to the extent they relate to the
Contracts), including (A) any Purchase Amount paid (other than any
portion thereof attributable to the Book Value of the Leased
Equipment), and (B) any deemed loan made by the Depositor to the
Originators and all security therefor, including the security interest
in the Contracts and Equipment granted by the Originators to the
Depositor to secure such
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deemed loan, as described in Section 2.2 of the Purchase Agreement,
and all proceeds of the foregoing.
The foregoing does not constitute, nor is it intended to result in, the creation
or assumption by the Issuer, the Owner Trustee, the Indenture Trustee, any
Noteholder or the Equity Certificateholder of any obligation of the Depositor,
the Servicer or any other Person in connection with the Contracts or the related
Equipment or any agreement or instrument relating thereto, including any
obligation to the Obligors.
(b) Subject to the terms and conditions of this Agreement, upon
the transfer of the Contracts and other assets pursuant to Section 2.1(a), the
Depositor will be entitled to (i) the Leased Equipment and any payments made and
attributable to the purchase price or use of the Leased Equipment upon
expiration of the related Lease Contract (whether upon completion of the
Original Term thereof, Prepayment thereof or otherwise), (ii) that portion of
any Prepayments and Liquidation Proceeds received on or after the Cut-Off Date
and allocated to the Depositor in accordance with this Agreement and (iii) that
portion of any Purchase Amount attributable to the Book Value of the Leased
Equipment.
(c) As security for the payment of amounts described in Section
2.1(a)(i)(3), the Depositor hereby grants to the Issuer a security interest in
all of the right, title and interest that the Depositor has or has power to
convey, whether now owned or hereafter acquired, in and to the Leased Equipment
and all proceeds thereof.
SECTION 2.2. Custody of Contract Files.
(a) The Owner Trustee, on behalf of the Issuer, hereby appoints
the Servicer, and the Servicer hereby accepts such appointment, to act as the
agent of the Issuer as custodian of the following documents or instruments (with
respect to each Contract), which will be, as of the Closing Date (or, in the
case of a Substitute Contract, as of the Subsequent Transfer Date), in the
possession of the Servicer or its agents:
(i) The fully executed original of the Contract or a facsimile
copy thereof (together with any agreements modifying the Contract,
including, without limitation, any extension agreements);
(ii) Documents evidencing or related to any Insurance Policy, or
copies thereof; and
(iii) Such documents, if any, that the applicable Originator
keeps on file in accordance with its customary procedures indicating
that the Equipment is owned or leased by the Obligor and subject to
the interest of the lessor or secured party.
(b) The Servicer agrees to maintain the Contract Files at the
locations where they are currently maintained, or at such other locations as
shall from time to time be identified to the Indenture Trustee by written
notice. The Servicer may temporarily move individual Contract
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Files or any portion thereof without notice as necessary to conduct collection
and other servicing activities in accordance with its customary practices and
procedures.
(c) As custodian, the Servicer shall have and perform the
following powers and duties:
(i) hold the Contract Files on behalf of the Equity
Certificateholder, the Depositor, the Owner Trustee, the Issuer, the
Noteholders and the Indenture Trustee, maintain accurate records
pertaining to each Contract to enable it to comply with the terms and
conditions of this Agreement and the Related Documents, maintain a
current inventory thereof and certify to the Trustee annually that it
continues to maintain possession of such Contract Files;
(ii) implement written policies and procedures with respect to
persons authorized to have access to the Contract Files and the
receipting for Contract Files taken from their storage area by an
employee of the Servicer for purposes of servicing or any other
purposes; and
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Equity
Certificateholder, the Depositor, the Owner Trustee, the Issuer, the
Noteholders and the Indenture Trustee.
(d) In performing its duties under this Section, the Servicer
agrees to act with reasonable care, using that degree of skill and care that it
exercises with respect to similar contracts owned and/or serviced by it. The
Servicer shall promptly report to the Indenture Trustee any failure by it to
hold the Contract Files as herein provided and shall promptly take appropriate
action to remedy any such failure. In acting as custodian of the Contract Files,
the Servicer agrees further not to assert any beneficial ownership interests in
the Contracts or the Contract Files. The Servicer agrees to indemnify the Equity
Certificateholder, the Depositor, the Owner Trustee, the Issuer, the Noteholders
and the Indenture Trustee for any and all liabilities, obligations, losses,
damages, payments, costs or expenses of any kind whatsoever which may be imposed
on, incurred or asserted against the Equity Certificateholder, the Depositor,
the Owner Trustee, the Issuer, the Noteholders or the Indenture Trustee as the
result of any act or omission by the Servicer relating to the maintenance and
custody of the Contract Files; provided, however, that the Servicer will not be
liable for any portion of any such amount resulting from the negligence or
willful misconduct of the Equity Certificateholder, the Depositor, the Owner
Trustee, the Issuer, any Noteholder or the Indenture Trustee.
SECTION 2.3. Further Assurances. Following the Closing Date (or,
in the case of a Substitute Contract, following the Subsequent Transfer Date),
the Depositor shall, at the reasonable request of the Owner Trustee, the
Indenture Trustee or the Servicer, and at the Depositor's expense, execute and
deliver any further instruments of transfer or other documents, and shall take
all such other actions that may be necessary, appropriate or desirable, to fully
convey the Contracts and the Related Assets to the Issuer or otherwise to
evidence, effectuate or implement the transactions contemplated hereby. In
addition, the Depositor, as agent for the
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Issuer, shall defend the Contracts and the Related Assets against any and all
claims and demands of all Persons at any time claiming the same or any interest
therein adverse to that of the Issuer.
SECTION 2.4. Representations and Warranties of Depositor. By its
execution of this Agreement, the Depositor makes the following representations
and warranties. Unless otherwise specified, such representations and warranties
speak as of the Closing Date (or, in the case of a Substitute Contract, as of
the Subsequent Transfer Date).
(a) Organization and Good Standing. The Depositor has
been duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and
authority to own its properties and to conduct its business as such
properties are currently owned and such business is currently conducted,
and had at all relevant times, and now has, power, authority and legal
right to acquire, own and transfer the Contracts and the other property
transferred to the Issuer.
(b) Due Qualification. The Depositor is duly qualified to
do business as a foreign corporation in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions where the
failure to do so would materially and adversely affect the performance
of its obligations under this Agreement and the Related Documents.
(c) Power and Authority. The Depositor has the power and
authority to execute and deliver this Agreement and the Depositor's
Related Documents and to carry out the terms hereof and thereof; the
Depositor has full power and authority to transfer and assign the Trust
Assets to be transferred and assigned to and deposited with the Issuer
by it and has duly authorized such transfer and assignment to the Issuer
by all necessary corporate action; and the execution, delivery and
performance of this Agreement and the Depositor's Related Documents have
been duly authorized by the Depositor by all necessary corporate action.
(d) No Consent Required. No consent, license, approval or
authorization of, or registration or declaration with, any Person or any
governmental authority, bureau or agency is required in connection with
the execution, delivery or performance of this Agreement and the Related
Documents, except for such as have been obtained, effected or made or as
described in paragraph (m) below.
(e) Valid Transfer; Binding Obligations. This Agreement
(together with, in the case of a Substitute Contract, the related
Subsequent Transfer Instrument) effects, as of the Closing Date (or, in
the case of a Substitute Contract, as of the Subsequent Transfer Date),
a valid transfer and assignment of the Contracts and the other Trust
Assets, enforceable against the Depositor and creditors of and
purchasers from the Depositor; and this Agreement and the Depositor's
Related Documents, when duly executed and delivered, shall constitute
legal, valid and binding obligations of the Depositor enforceable in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by
equitable limitations on the
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availability of specific remedies, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(f) No Violation. The execution and delivery of this
Agreement and the Related Documents, the consummation of the
transactions contemplated by this Agreement and the Related Documents
and the fulfillment of the terms of this Agreement and the Related
Documents shall not conflict with, result in any breach of any of the
terms and provisions of or constitute (with or without notice or lapse
of time, or both) a default under the certificate of incorporation or
by-laws of the Depositor, or any indenture, agreement, mortgage, deed of
trust or other instrument to which the Depositor is a party or by which
it is bound, or result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other than this
Agreement, or violate any law, order, rule or regulation applicable to
the Depositor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or any of its properties.
(g) No Proceedings. There are no proceedings or
investigations pending or, to the Depositor's knowledge, threatened
against the Depositor, before any court, regulatory body, administrative
agency or other tribunal or governmental instrumentality having
jurisdiction over the Depositor or its properties (A) asserting the
invalidity of this Agreement or any of the Related Documents, (B)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, (C)
seeking any determination or ruling that might materially and adversely
affect the performance by the Depositor of its obligations under, or the
validity or enforceability of, this Agreement or any of the Related
Documents, or (D) seeking to adversely affect (i) the federal income tax
or other federal, state or local tax attributes of the Equity
Certificate or the Notes or (ii) the federal, state or local tax
treatment of any of the transactions contemplated by this Agreement and
the Related Documents.
(h) Place of Business. The principal executive offices of
the Depositor, and the offices where the Depositor keeps its records
concerning the Contracts and related documents, are located at 0
Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
(i) Registration Statement. No stop order suspending the
effectiveness of the Registration Statement relating to the Notes has
been issued, and no proceeding for that purpose has been instituted or
is threatened, by the Securities and Exchange Commission.
(j) Filings. Since the effective date of the Registration
Statement relating to the Notes, there has occurred no event required to
be set forth in an amendment or supplement to the Registration Statement
or Prospectus that has not been so set forth, and there has been no
document required to be filed under the Securities Exchange Act of 1934
and the rules and regulations of the Securities and Exchange Commission
thereunder that upon such filing would be deemed to be incorporated by
reference in the Prospectus that has not been so filed.
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(k) Right to Transfer. The Depositor has the right to
transfer the Contracts and Related Assets to the Issuer pursuant to
Section 2.1(c) (or, in the case of a Substitute Contract, pursuant to
the comparable paragraph of the related Subsequent Transfer Instrument),
subject, in the case of amounts in the Insurance, Maintenance and Tax
Accounts, to the rights of the Obligors therein, free of any Lien. Upon
the transfer and assignment of the Contracts and Related Assets to the
Issuer pursuant to Section 2.1(a) (or, in the case of a Substitute
Contract, pursuant to the comparable paragraph of the related Subsequent
Transfer Instrument), the Issuer will have good title thereto and will
be the sole owner thereof (subject, in the case of amounts in the
Insurance, Maintenance and Tax Accounts, to the rights of the Obligors
therein), free of any Lien.
(l) No Impairment. No person has a participation in or
other right to receive Scheduled Payments under any Contract, and the
Depositor has taken no action to convey any right to any Person that
would result in such Person having a right to Scheduled Payments
received with respect to any Contract.
(m) Lawful Assignment. No Contract was originated in, or
is subject to the laws of, any jurisdiction the laws of which would make
unlawful, void or voidable the transfer and assignment of such Contract
from the Depositor to the Issuer under this Agreement. Each Contract may
be sold, assigned and transferred by the Depositor to the Issuer without
the consent of, or prior approval from, or any notification to, the
applicable Obligor, other than (i) certain Contracts (which, in
proportion to the aggregate of all of the Contracts, are not material)
that require notification of the assignment to the Obligor, which
notification will be given by the Servicer not later than 10 days
following the Closing Date, and (ii) certain Contracts (which, in
proportion to the aggregate of all of the Contracts, are not material)
that require the consent of the Obligor, which consent will be obtained
by the Servicer not later than 10 days following the Closing Date.
(n) All Filings Made. All filings and other actions
required to be made, taken or performed by any Person in any
jurisdiction to give the Issuer a first priority perfected lien or
ownership interest in the Contracts has been made, taken or performed.
(o) Schedule of Contracts Accurate. The information with
respect to the Contracts contained in the Schedule of Contracts is true
and correct in all material respects.
(p) No Adverse Selection. No selection procedures adverse
to the Noteholders were utilized in selecting the Contracts from those
lease and loan contracts available for transfer by the Depositor to the
Owner Trust.
SECTION 2.5. Nonpetition Covenant. None of the Depositor, the
Servicer, the Owner Trustee (in its individual capacity or on behalf of the
Trust) nor TCC shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the Issuer or the Depositor under any federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
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sequestrator or other similar official of the Issuer or the Depositor or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer or the Depositor.
SECTION 2.6. Purchase of Contracts Upon Breach of Representations
and Warranties. (a) Prior to or concurrently with (or, in the case of a
Substitute Contract, after) the execution and delivery of this Agreement, TCC,
the Originators and the Depositor have entered into the Purchase Agreements, the
rights of the Depositor under which (to the extent they relate to the Contracts)
have been assigned by the Depositor to the Issuer pursuant to Section 2.1(a).
Under the Purchase Agreements, TCC and the Originators have made certain
representations and warranties to the Depositor with respect to the Contracts
(the "Contract Representations and Warranties"), and each Purchase Agreement by
its terms provides that, upon transfer of the Contracts and Related Assets to
the Issuer pursuant to this Agreement, such representations and warranties are
deemed made as of the Cut-off Date or the Closing Date (or, in the case of a
Substitute Contract, the Subsequent Transfer Date), as applicable. As of the
second Accounting Date following its discovery or its receipt of notice of any
breach of the Contract Representations and Warranties that materially and
adversely affects the value of any Contract (including any Liquidated Contract),
TCC shall, subject to paragraph (b) of this Section 2.06, unless such breach
shall have been cured in all material respects, (i) purchase such Contract from
the Issuer, and (ii) in the case of a Lease Contract, purchase the related
Leased Equipment from the Depositor. On or before the related Deposit Date, TCC
shall pay the Purchase Amount to the Servicer on behalf of the Owner Trustee and
the Depositor, as their interests may appear. The obligations of the Depositor
with respect to any such breach of representations and warranties shall be
limited to taking any and all actions necessary to enable the Owner Trustee to
enforce directly the obligations of TCC to purchase the applicable Contract
under the Purchase Agreement. It is understood and agreed that, except as set
forth in the following paragraph, the obligation of TCC to purchase any
Contract, together with the related Equipment, as to which a breach has occurred
and is continuing shall, if such obligation is fulfilled, constitute the sole
remedy against TCC for such breach available to the Owner Trustee on behalf of
the Equity Certificateholder, to the Depositor or the Indenture Trustee on
behalf of the Noteholders and to the Depositor, as their interests may appear.
(b) TCC may, at its option, cause the Depositor on its behalf to
substitute an Eligible Contract (such Contract being referred to as the
"Substitute Contract") for a Contract that TCC is obligated to repurchase
pursuant to paragraph (a) of this Section 2.06 (such Contract being referred to
as the "Warranty Contract") upon satisfaction of the following conditions:
(i) the Depositor shall have delivered to the Owner Trustee a
duly executed Subsequent Transfer Instrument substantially in the form
of Exhibit C, which shall include (A) a schedule identifying the
Substitute Contract and separately noting whether it will constitute a
Lease Contract or a Loan Contract, and (B) an exhibit identifying the
Warranty Contract;
(ii) the Owner Trustee shall have received a certificate of a
Responsible Officer of the Servicer, substantially in the form
attached hereto as Exhibit D;
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(iii) the Substitute Contract is an Eligible Contract and the
Depositor shall have delivered a certificate of a Responsible Officer,
substantially in the form of Exhibit E hereto, to the Owner Trustee
and the Servicer certifying, among other things, that the Substitute
Contract is an Eligible Contract; and
(iv) the Depositor shall have delivered to the Servicer the
Contract File for the Substitute Contract and taken all other actions
required by the related Subsequent Transfer Instrument and this
Agreement in connection with the transfer of the Substitute Contract
to the Issuer.
Upon satisfaction of such conditions, the Owner Trustee shall add
the Substitute Contract to, and delete the Warranty Contract from, the Schedule
of Contracts attached hereto as Exhibit A-1 or Exhibit A-2, as applicable.
Any substitutions pursuant to this paragraph (b) may be
accomplished on a contract-by-contract basis or on an aggregate basis as to all
Warranty Contracts with respect to a given Collection Period.
(c) In addition to the foregoing and notwithstanding whether the
Contract and related Equipment shall have been purchased, or a Substitute
Contract substituted therefor, by TCC or the Depositor on its behalf, TCC shall
indemnify the Equity Certificateholder, the Depositor, the Owner Trustee, the
Issuer, the Noteholders and the Indenture Trustee against all costs, expenses,
losses, damages, claims and liabilities, including reasonable fees and expenses
of counsel, which may be asserted against or incurred by any of them as a result
of third party claims arising out of the events or facts giving rise to such
breach.
SECTION 2.7. Depositor Option to Substitute for Prepaid Contracts
and Defaulted Contracts. The Depositor may, at its option, substitute an
Eligible Contract ( such Contract being referred to as the "Substitute
Contract") for (a) a Defaulted Contract (provided that the aggregate of the
Required Payoff Amounts of Defaulted Contracts for which Substitute Contracts
have been received pursuant to this Section 2.7 shall not exceed 10% of the
Initial Contract Pool Principal Balance), or (b) a Prepaid Contract, upon
satisfaction of the following conditions:
(i) the Depositor shall have delivered to the Owner Trustee a
duly executed Subsequent Transfer Instrument substantially in the form
of Exhibit C, which shall include (A) a schedule identifying the
Substitute Contract and separately noting whether it will constitute a
Lease Contract or a Loan Contract, and (B) an exhibit identifying the
Defaulted Contract or Prepaid Contract, as the case may be;
(ii) the Owner Trustee shall have received a certificate of a
Responsible Officer of the Servicer, substantially in the form
attached hereto as Exhibit D;
(iii) the Substitute Contract is an Eligible Contract and the
Depositor shall have delivered a certificate of a Responsible Officer,
substantially in the form of Exhibit F
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hereto, to the Owner Trustee and the Servicer certifying, among other
things, that the Substitute Contract is an Eligible Contract;
(iv) the Depositor shall have delivered to the Servicer the
Contract File for the Substitute Contract and taken all other actions
required by the related Subsequent Transfer Instrument and this
Agreement in connection with the transfer of the Substitute Contract
to the Issuer; and
(v) such substitution shall be accomplished (A) in the case of a
Defaulted Contract, prior to the Determination Date immediately
following the Collection Period during which such Contract became a
Defaulted Contract, and (B) in the case of a Prepaid Contract, prior
to the Determination Date immediately following the Collection Period
during which the Prepayment in Full was received by the Servicer.
Upon satisfaction of such conditions, the Owner Trustee shall add
the Substitute Contract to, and delete the Defaulted Contract or Prepaid
Contract, as the case may be, from, the Schedule of Contracts attached hereto as
Exhibit A-1 or Exhibit A-2, as applicable.
Any substitutions pursuant to this Section 2.7 may be
accomplished on a contract-by-contract basis or on an aggregate basis as to all
Defaulted Contracts or Prepaid Contracts with respect to a given Collection
Period.
Upon completion of any such substitution for a Prepaid Contract,
the Depositor shall be entitled to receive that portion of the Prepayment in
Full which is in excess of the Scheduled Payments due during or prior to the
Collection Period during which such Prepayment in Full was received by the
Servicer. Such portion shall be paid to the Depositor from amounts in the
Collection Account in accordance with Section 8.03 of the Indenture.
SECTION 2.8. Reassignment of Purchased and Replaced Contracts.
Upon deposit in the Collection Account of that portion of any Purchase Amount
required to be deposited therein pursuant to Section 4.2(b)(i), or upon receipt
by the Issuer of a Substitute Contract pursuant to Section 2.6(b) or Section
2.7, and upon receipt of a certificate of Servicer in the form attached hereto
as Exhibit G or Exhibit D, as applicable, the Issuer shall convey and assign to
TCC or the Depositor, as their interests may appear, all of the Issuer's right,
title and interest in the Purchased or Replaced Contract and related Equipment
without recourse, representation or warranty, except as to the absence of liens,
charges or encumbrances created by or arising as a result of actions of the
Owner Trustee.
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ARTICLE III
ADMINISTRATION AND SERVICING OF CONTRACTS
SECTION 3.1. Duties of the Servicer. The Servicer is hereby
authorized to act as agent for the Issuer and the Depositor and in such capacity
shall manage, service, administer and make collections on the Contracts, and
perform the other actions required by the Servicer under this Agreement. The
Servicer agrees that its servicing of the Contracts shall be carried out in
accordance with customary and usual procedures of institutions which service
equipment lease contracts, installment sale contracts, promissory notes, loan
and security agreements and other similar types of receivables comparable to the
Contracts and, to the extent more exacting, the degree of skill and attention
that the Servicer exercises from time to time with respect to all comparable
such contracts that it services for itself or others. In performing such duties,
so long as TCC is the Servicer, it shall comply in all material respects with
its customary standards, policies and procedures in effect from time to time.
The Servicer may at any time change its customary standards, policies and
procedures; provided that any such change shall not materially impair the
collectibility of any Contract nor the Servicer's ability to perform its
obligations under this Agreement and the Related Documents. The Servicer's
duties shall include, without limitation, billing, collection and posting of all
payments, responding to inquiries of Obligors on the Contracts, investigating
delinquencies, sending invoices to Obligors, accounting for collections and
furnishing monthly and annual statements to the Owner Trustee and the Indenture
Trustee with respect to distributions, monitoring the status of Insurance
Policies with respect to the Equipment and performing the other duties specified
herein. The Servicer shall also administer and enforce all material rights and
responsibilities of the lessor or secured party under the Contracts and provided
for in the Insurance Policies, to the extent that such Insurance Policies relate
to the Contracts, the Equipment or the Obligors. To the extent consistent with
the standards, policies and procedures otherwise required hereby, the Servicer
shall follow its customary standards, policies and procedures and shall have
full power and authority to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary or
desirable, including the authority to forego collection efforts under
circumstances deemed appropriate by the Servicer in accordance with its
customary standards, policies and procedures. Without limiting the generality of
the foregoing, the Servicer is hereby authorized and empowered by the Owner
Trustee to execute and deliver, on behalf of the Equity Certificateholder, the
Depositor and the Issuer or any of them, any and all instruments of satisfaction
or cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Contracts and with respect to the
Equipment in accordance with its customary standards, policies and procedures.
The Servicer is hereby authorized to commence, in its own name (or in the name
of the Issuer, provided the Servicer has obtained the Owner Trustee's consent,
which consent shall not be unreasonably withheld), a legal proceeding to enforce
a Contract pursuant to Section 3.3 or to commence or participate in any other
legal proceeding (including, without limitation, a bankruptcy proceeding)
relating to or involving a Contract, an Obligor or the related Equipment. If the
Servicer commences or participates in such a legal proceeding in its own name,
the Issuer shall thereupon be deemed to have automatically assigned such
Contract to the Servicer solely for purposes of commencing or participating in
any such proceeding as a party or claimant, and the Servicer is authorized and
empowered by the Owner Trustee to execute and deliver in the Servicer's name any
notices, demands, claims,
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complaints, responses, affidavits or other documents or instruments in
connection with any such proceeding. The Owner Trustee shall furnish the
Servicer with any powers of attorney and other documents which the Servicer may
reasonably request and which the Servicer deems necessary or appropriate and
take any other steps which the Servicer may deem necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties under
this Agreement.
SECTION 3.2. Collection of Contract Payments; Modifications of
Contracts.
(a) Consistent with the standards, policies and procedures
required by this Agreement, the Servicer shall make reasonable efforts to
collect all payments called for under the terms and provisions of the Contracts
as and when the same shall become due, and shall follow such collection
procedures as it follows with respect to all comparable contracts that it
services for itself or others and otherwise act with respect to the Contracts,
the related Equipment, the Insurance Policies and the other Trust Assets in such
manner as will, in the reasonable judgment of the Servicer, maximize the amount
to be received by the Issuer and the Depositor with respect thereto. The
Servicer is authorized in its discretion to waive any Administrative Fees or
Extension Fees that may be collected in the ordinary course of servicing any
Contract.
(b) The Servicer may at any time agree to a modification or
amendment of a Contract in accordance with its credit and collection policies
and procedures (it being acknowledged that any modification or amendment of a
Contract resulting from a bankruptcy proceeding with respect to the Obligor will
not be deemed to have been agreed to by the Servicer hereunder):
(i) in order to (A) change the Obligor's regular due date to a
date within the Collection Period in which such due date occurs or (B)
re-amortize (over the remainder of the original term) the Scheduled
Payments on a Contract following a partial Prepayment (provided that
the sum of such partial Prepayment and the Contract Principal Balance
of the Contract after the re-amortization is at least equal to the
Required Payoff Amount for such Contract prior to the partial
Prepayment), or
(ii) for any other purpose, provided that no such modification or
amendment shall:
(A) change the amount or the due date of any Scheduled
Payment (except as provided in clauses (i)(A) and (B) above,
Section 3.2(c)(i) or Section 3.2(d)),
(B) release the related Equipment from the Contract, unless
(1) equipment of equal or greater value is substituted, (2) the
remaining related Equipment has a value at least equal to the
Required Payoff Amount of the Contract plus the Book Value of
such remaining equipment, or (3) the release is pursuant to a
partial Prepayment (which, in the case of a partial Prepayment on
a Lease Contract, meets the requirements of Section 3.2(d)) and
the ratio of the value of the related Equipment to the Contract
Principal Balance of the Contract
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after such Prepayment and release is at least equal to such ratio
prior to such Prepayment and release;
(C) cause any of the representations or warranties contained
in the Contract Representations and Warranties (excluding, for
this purpose, those representations and warranties contained in
clauses (F), (N) (except as such representation or warranty
relates to the requirement that payments be made on the Contract
regardless of the condition or suitability of the related
Equipment and notwithstanding any defense, set-off or
counterclaim against the manufacturer, lessor or lender), (B) or
(AA)) to cease to be true; or
(D) except as provided in clause (ii)(A) above, result in
the Contract Principal Balance or Required Payoff Amount of the
Contract being less than it would have been absent such
modification or amendment.
(c) The Servicer may grant payment extensions on a Contract in
accordance with its credit and collection policies and procedures (it being
acknowledged that any extensions on a Contract resulting from a bankruptcy
proceeding with respect to the Obligor will not be deemed to have been granted
by the Servicer hereunder) if the Servicer believes in good faith that such
extension is necessary to avoid a termination and liquidation of such Contract
and will maximize the amount to be received by the Issuer with respect to such
Contract; provided, however, that:
(i) the aggregate period of all extensions granted on a Contract
shall not exceed six months; and
(ii) in no event may any Contract be extended beyond the
Collection Period immediately preceding the final Stated Maturity
Date.
Nothing in this Section 3.2(c) shall be deemed to prevent the Servicer from
extending or renewing, or otherwise accepting the continued performance by the
Obligor under, a Contract after expiration of its stated term.
(d) The Servicer may, in its discretion, allow a Prepayment, in
whole or in part, of any Lease Contract which, by its terms, is not prepayable,
but only if the amount of such Prepayment (or, in the case of a partial
Prepayment, the sum of such Prepayment and the remaining Contract Principal
Balance of the Lease Contract after application of such Prepayment), together
with such additional amounts as are (i) available to the Servicer for the
purpose of prepaying such Lease Contract (excluding any monies otherwise
constituting Pledged Revenues) and (ii) deposited in the Collection Account
contemporaneously with the deposit therein of such Prepayment, is at least equal
to the Required Payoff Amount for such Lease Contract.
(e) The Servicer shall remit all payments by or on behalf of the
Obligors (other than amounts constituting Administrative Fees) received by the
Servicer to the Servicing
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Account as soon as practicable, but in no event later than the second Business
Day after receipt thereof.
SECTION 3.3. Realization Upon Contracts. Consistent with the
standards, policies and procedures required by this Agreement, the Servicer
shall, except as provided in the following paragraph, take such action as is
reasonably necessary (including making commercially reasonable efforts to
repossess (or otherwise comparably convert the ownership of) and dispose of the
related Equipment) to collect from the Obligor or otherwise all amounts payable
under any Contract as to which the Obligor is in default in the making of one or
more Scheduled Payments thereunder, if the Servicer has determined such default
is not likely to be cured. The Servicer will not be required to repossess (or
otherwise comparably convert the ownership of) any Equipment the repossession of
which, in accordance with the Servicer's credit and collection policies and
procedures, and based on the Servicer's good faith estimate of the value of the
Equipment and its availability, would not be reasonable. The Servicer is
authorized to follow such customary practices and procedures as it shall deem
necessary or advisable, consistent with the standard of care required by Section
3.1, which practices and procedures may include the sale of the related
Equipment at public or private sale, the submission of claims under an Insurance
Policy and other actions by the Servicer in order to realize upon such a
Contract. The foregoing is subject to the provision that, in any case in which
the Equipment shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the repossession of such Equipment unless
it shall determine in its reasonable judgment that such repair and/or
repossession shall increase the proceeds of liquidation of the related Contract
by an amount greater than the amount of such expenses. All amounts received upon
liquidation of a Contract (except as otherwise provided below), including any
proceeds derived from the disposition of the related Equipment, shall be
remitted by the Servicer to the Servicing Account as soon as practicable, but in
no event later than the second Business Day after receipt thereof. The Servicer
shall, to the extent the proceeds of such liquidation are sufficient therefor,
be entitled to recover all reasonable out-of-pocket expenses incurred by it in
the course of liquidating a Contract, which amounts may be retained by the
Servicer from such proceeds (and shall not be required to be deposited as
provided in Section 3.2(e)) to the extent of such expenses. The Servicer shall
be entitled to retain in the Servicing Account, from liquidation proceeds, a
reserve for out-of-pocket liquidation expenses in an amount equal to such
expenses, in addition to those previously incurred, as it reasonably estimates
will be incurred. Upon completion of such liquidation, the remainder of any such
reserve, after reimbursement to the Servicer of all out-of-pocket liquidation
expenses, shall constitute Liquidation Proceeds and be transferred as provided
in Section 4.2(a). The Servicer shall, in accordance with Section 3.4(f), pay on
behalf of the Issuer and the Depositor any sales, use, personal property and
other taxes assessed on repossessed Equipment, as well as any sales or similar
taxes on the disposition thereof, and shall be entitled to reimbursement of any
such tax from liquidation proceeds with respect to the related Contract as
provided in Section 3.4(b).
Although it is intended that the Servicer repossess and dispose
of any Equipment in a commercially reasonable manner with a view to realizing
proceeds at least equal to the fair market value of the Equipment, the Servicer
may, in its discretion, choose to dispose of Equipment through a new lease or in
some other manner which provides for payment for the Equipment over time. In any
such event, the Servicer will be required to pay from its own funds,
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and deposit in the Servicing Account, an amount which, in its reasonable
judgment, is equal to the fair market value of such Equipment (less any related
out-of-pocket liquidation expenses), and the Servicer will be entitled to all
payments received thereafter in respect of such Equipment. Any such amounts so
deposited by the Servicer shall be treated as additional Liquidation Proceeds
with respect to the related Contract and Equipment.
SECTION 3.4. Insurance, Maintenance and Taxes.
(a) The Servicer shall establish one or more insurance,
maintenance and tax accounts (collectively, the "Insurance, Maintenance and Tax
Accounts") in the name of the Servicer and for the benefit of the respective
Obligors and, to the extent provided herein, the Issuer and the Depositor. The
Servicer shall deposit into the Insurance, Maintenance and Tax Accounts any
payments made by or on behalf of Obligors which constitute (i) insurance charges
paid by an Obligor to the lessor or secured party under a Contract, (ii) any
insurance payments or recoveries paid by an insurance company or comparable
third party and related to the damage to, or destruction of, the Equipment
related to such Contract (unless paid directly by such insurance company or
comparable third party directly to the Obligor), (iii) any payments made by or
on behalf of Obligors which constitute amounts paid by an Obligor to the lessor
or secured party under a Contract in respect of the maintenance of the related
Equipment, and (iv) taxes paid by the Obligor with respect to the related
Contract or Equipment (except for any such payments in respect of taxes which
were paid by the applicable Originator prior to the Cut-Off Date, which payments
shall constitute Scheduled Payments hereunder). None of the foregoing payments
shall constitute Pledged Revenues except under the circumstances described in
clause (c)(ii) below.
(b) The Servicer may pay from its own funds, or may withdraw
amounts from the Insurance, Maintenance and Tax Accounts, when and if
appropriate, to pay, when due (i) all insurance charges in the amounts received
under clause (a)(i) above, (ii) any amounts payable under any applicable
maintenance contract or otherwise with respect to the maintenance of the related
Equipment in the amounts received under clause (a)(iii) above, and (iii) all
taxes in the amounts received under clause (a)(iv) above. If the Servicer has
paid any such insurance charges, maintenance costs or taxes from its own funds
(including any such amounts that may have been paid prior to the Closing Date
(or, in the case of a Substitute Contract, prior to the Subsequent Transfer
Date)), the Servicer shall be entitled to reimbursement therefor from any
appropriate amounts available therefor in the Insurance, Maintenance and Tax
Accounts, from payments thereafter received from the applicable Obligor in
respect thereof or from liquidation proceeds in the event such Contract is
liquidated. The Servicer is authorized in its discretion to waive its right to
receive reimbursement of any such amount.
(c) Amounts on deposit in the Insurance, Maintenance and Tax
Accounts which represent amounts received by the Servicer pursuant to clause
(a)(ii) above shall be applied by the Servicer as follows: (i) if equipment is
purchased to replace the Equipment that was damaged or destroyed, and such
replacement equipment is (in the reasonable opinion of the Servicer) of
comparable use and equivalent value to the Equipment that was damaged or
destroyed, or if the Equipment is to be repaired, the Servicer shall release
such amount so received from the insurance company or comparable third party in
payment or reimbursement for such replacement equipment or such repair; and (ii)
if such replacement option is not exercised
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or the Equipment is not to be repaired, then the Servicer shall treat such
amount as Liquidation Proceeds and (A) if the related Contract is a Loan
Contract, transfer such amount from the Insurance, Maintenance and Tax
Accounts to the Collection Account, and (B) if the related Contract is a Lease
Contract, (I) transfer that portion thereof which is allocated to the Issuer
(as described in the second sentence of the definition of "Liquidation
Proceeds") from the Insurance, Maintenance and Tax Accounts to the Collection
Account, and (II) distribute the balance thereof from the Insurance, Maintenance
and Tax Accounts to the Depositor.
(d) The Servicer may xxx to enforce or collect upon the Insurance
Policies, in its own name, if possible, or as agent of the Issuer and the
Depositor. If the Servicer elects to commence a legal proceeding to enforce an
Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of the Issuer and the Depositor under such Insurance
Policy to the Servicer for purposes of collection only. If, however, in any
enforcement suit or legal proceeding it is held that the Servicer may not
enforce an Insurance Policy on the grounds that it is not a real party in
interest or a holder entitled to enforce the Insurance Policy, the Owner
Trustee, on behalf of the Issuer and the Depositor, shall take such steps as the
Servicer deems necessary to enforce such Insurance Policy, including bringing
suit in its name or the name of the Owner Trustee for the benefit of the Equity
Certificateholder and the Depositor and the Indenture Trustee for the benefit of
the Noteholders.
(e) Consistent with its customary standards, policies and
procedures, with respect to each Contract, the Servicer shall maintain insurance
against casualty loss with respect to any Equipment financed by or leased
pursuant to the Contract, to the extent the Contract requires the lessor or
secured party under the Contract to maintain such insurance, and shall otherwise
require the Obligor under the Contract to maintain such insurance, to the extent
the Contract requires that such insurance be maintained by the Obligor. The
Servicer shall not otherwise be liable to the Owner Trustee, the Indenture
Trustee, the Depositor or any Noteholder or Equity Certificateholder for any
casualty loss with respect to any Equipment related to a Contract, except to the
extent otherwise explicitly provided in this Agreement.
(f) The Servicer shall determine and pay when due all sales, use,
personal property and other taxes payable in respect of the Equipment related to
each Contract. To the extent the Servicer has previously received from the
related Obligor payments with respect to such taxes and has deposited such
payments in the Insurance, Maintenance and Tax Accounts in accordance with
clause (a)(iv) above, the Servicer shall, in accordance with clause (b)(iii)
above, either (i) pay such taxes from amounts withdrawn from the Insurance,
Maintenance and Tax Accounts, or (ii) pay such taxes from its own funds and
thereafter reimburse itself from amounts withdrawn from the Insurance,
Maintenance and Tax Accounts. In the event the Servicer has not previously
received payments from the Obligor for this purpose, or to the extent any such
payments received were insufficient to pay the taxes due, the Servicer shall
nonetheless pay such taxes from its own funds and shall xxxx the Obligor for any
amounts so paid. The Servicer shall be entitled to reimbursement for any taxes
so paid from its own funds, as provided in clause (b)(iii) above. Failure on the
part of the Servicer to perform its duties in a timely fashion under this clause
shall constitute a breach of this Agreement by the Servicer for which indemnity
will be available in accordance with Section 7.1.
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(g) The Servicer shall give prompt written notice to the
Indenture Trustee of the Servicer's failure to pay when due any insurance charge
or tax payment required to be paid pursuant to this Section 3.4 and the reason
for such failure. Upon receipt of any such notice, or if the Indenture Trustee
has otherwise received notice of any such failure to pay an insurance charge or
tax payment, the Indenture Trustee shall take such actions as are reasonably
necessary (including the withdrawal of monies, if any, available therefor in the
Insurance, Maintenance and Tax Accounts and attributable to payments previously
made by the related Obligor and payment of such insurance charge or tax payment)
to cause any such amounts to be paid. The Indenture Trustee shall be permitted
to withdraw monies from the Insurance, Maintenance and Tax Accounts for purposes
of performing its obligations under this paragraph, but shall not, in any event,
be required to use its own funds for such purposes.
SECTION 3.5. Maintenance of Security Interests in Equipment. To
the extent the Servicer's credit and collection policies and procedures in this
regard would so require (it being acknowledged that, in certain instances, such
credit and collection policies and procedures would not so require), the
Servicer shall take such steps as are necessary to maintain perfection of any
security interest created by each Contract in the related Equipment on behalf of
the Issuer and the Depositor, including, but not limited to, obtaining the
execution by the Obligors and the recording, registering, filing, re-recording,
re-filing, and re-registering of all security agreements, financing statements
and continuation statements as are necessary to maintain such security interest
granted by the Obligors under the respective Contracts. The Owner Trustee hereby
authorizes the Servicer, and the Servicer agrees (to the extent the Servicer's
credit and collection policies and procedures in this regard would so require),
to take any and all steps necessary to re-perfect such security interest on
behalf of the Issuer and the Depositor as necessary because of the relocation of
Equipment or for any other reason.
SECTION 3.6. Covenants, Representations, and Warranties of
Servicer. By its execution and delivery of this Agreement, the Servicer makes
the following representations, warranties and covenants.
(a) The Servicer covenants as follows:
(i) Liens in Force. The Equipment securing each
Contract shall not be released in whole or in part from any
interest the lessor or secured party may have in such
Equipment under the terms of the Contract, except upon
payment in full of the Contract or as otherwise contemplated
herein;
(ii) No Impairment. The Servicer shall do nothing to
impair the rights of the Issuer, the Equity
Certificateholder, the Depositor or the Noteholders in the
Contracts, the Insurance Policies or the other Trust Assets;
and
(iii) No Amendments. The Servicer shall not extend or
otherwise amend the terms of any Contract with respect to
the Scheduled Payments thereon, except (A) in accordance
with Section 3.2, or (B) at such time as the Notes are no
longer Outstanding, with the consent of the Owner Trustee.
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(iv) Licenses and Approvals. The Servicer will maintain
all necessary licenses and approvals in all jurisdictions
where the failure to do so would materially and adversely
affect the performance of its obligations under this
Agreement and the Related Documents.
(b) The Servicer represents, warrants and covenants as of
the date of execution and delivery of this Agreement:
(i) Organization and Good Standing. The Servicer has
been duly organized and is validly existing and in good
standing under the laws of its jurisdiction of organization,
with power, authority and legal right to own its properties
and to conduct its business as such properties are currently
owned and such business is currently conducted, and had at
all relevant times, and now has, power, authority and legal
right to enter into and perform its obligations under this
Agreement and the Servicer's Related Documents;
(ii) Due Qualification. The Servicer is duly qualified
to do business as a foreign corporation in good standing,
and has obtained all necessary licenses and approvals, in
all jurisdictions where the failure to do so would
materially and adversely affect the performance of its
obligations under this Agreement and the Related Documents;
(iii) Power and Authority. The Servicer has the power
and authority to execute and deliver this Agreement and to
carry out the terms hereof; and the execution, delivery and
performance of this Agreement and the Servicer's Related
Documents have been duly authorized by the Servicer by all
necessary corporate action;
(iv) Binding Obligation. This Agreement and the
Servicer's Related Documents shall each constitute the
legal, valid and binding obligation of the Servicer
enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by equitable
limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(v) No Violation. The execution and delivery of this
Agreement, the consummation of the transactions contemplated
by this Agreement and the Servicer's Related Documents, and
the fulfillment of the terms hereof, shall not conflict
with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or
lapse of time, or both) a default under, the articles of
incorporation or bylaws of the Servicer, or any indenture,
agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound, or
result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument,
other than this Agreement
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or any Related Document, or violate any law, order, rule or
regulation applicable to the Servicer of any court or of any
federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over
the Servicer or any of its properties;
(vi) No Proceedings. There are no proceedings or
investigations pending or, to the Servicer's knowledge,
threatened against the Servicer, before any court,
regulatory body, administrative agency or other tribunal or
governmental instrumentality having jurisdiction over the
Servicer or its properties (A) asserting the invalidity of
this Agreement or any of the Servicer's Related Documents,
(B) seeking to prevent the issuance of the Equity
Certificate or the Notes or the consummation of any of the
transactions contemplated by this Agreement or any of the
Servicer's Related Documents, or (C) seeking any
determination or ruling that might materially and adversely
affect the performance by the Servicer of its obligations
under, or the validity or enforceability of, this Agreement
or any of the Servicer's Related Documents or (D) seeking to
adversely affect (i) the federal income tax or other
federal, state or local tax attributes of the Equity
Certificate or the Notes or (ii) the federal, state or local
tax treatment of any of the transactions contemplated by
this Agreement and the Related Documents; and
(vii) No Consents. The Servicer is not required to
obtain the consent of any other party or any consent,
license, approval or authorization, or registration or
declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement or
any of the Servicer's Related Documents.
(viii) All Filings Made. All filings and other actions
required to be made, taken or performed by any Person in any
jurisdiction to give the Issuer a first priority perfected
lien or ownership interest in the Contracts has been made,
taken or performed.
(ix) Schedule of Contracts Accurate. The information
with respect to the Contracts contained in the Schedule of
Contracts is true and correct in all material respects.
SECTION 3.7. Sub-Servicers. The Servicer may, without the Owner
Trustee's or the Indenture Trustee's consent, maintain or enter into one or more
agreements with Sub-Servicers for the servicing and administration of the
Contracts by such Sub-Servicers. Notwithstanding the terms or existence of any
such agreement between the Servicer and a Sub-Servicer, the Servicer shall not
be relieved of any of its obligations under this Agreement by reason of such
agreement and shall be obligated to the same extent and under the same terms and
conditions as if the Servicer alone was servicing and administering the
Contracts, and neither the Owner Trustee nor the Indenture Trustee shall have
any obligation to deal with anyone other than the Servicer with respect to the
servicing of the Contracts.
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SECTION 3.8. Total Servicing Fee; Payment of Expenses by
Servicer. On each Payment Date, the Servicer shall be entitled to receive out of
the Collection Account the Servicing Fee (less that portion thereof to be
retained and applied by the Trustee in accordance with the Cash Collateral
Account Agreement) for the related Collection Period pursuant to Section 8.03(i)
of the Indenture. The Servicer shall be entitled to retain, as additional
servicing compensation under this Agreement, any Administrative Fees and any
earnings on the investment of amounts in the Servicing Account. The Servicer
shall be required to pay all expenses incurred by it in connection with its
activities under this Agreement (including taxes imposed on the Servicer and
all expenses incurred in connection with reports to Noteholders). In addition,
the Servicer (i) shall pay to the Indenture Trustee, and the Indenture Trustee
shall be entitled to, certain annual fees and shall reimburse the Indenture
Trustee for all ordinary and reasonable out-of-pocket expenses incurred or made
by it in connection with the performance of its duties under the Indenture
and its other Related Documents (excluding those incurred or made in the
performance of its duties under Article V of the Indenture, as referred to in
Section 6.07(b) of the Indenture), and (ii) shall pay to the Owner Trustee, and
the Owner Trustee shall be entitled to, certain annual fees and shall reimburse
the Owner Trustee for all ordinary and reasonable out-of-pocket expenses
incurred or made by it in connection with the performance of its duties under
the Trust Agreement. Such expenses shall include the reasonable compensation and
expenses, disbursements and advances of the agents, counsel, accountants and
experts of the Indenture Trustee and the Owner Trustee, as appropriate.
SECTION 3.9. Servicer's Certificate. No later than 10:00 a.m. New
York City time on each Determination Date, the Servicer shall deliver to the
Owner Trustee, the Indenture Trustee and each Rating Agency a Servicer's
Certificate executed by a Responsible Officer of the Servicer containing, among
other things, (i) all information necessary to enable the Indenture Trustee to
make the withdrawals and distributions required by Sections 8.03, 8.04 and 8.06
of the Indenture, (ii) all information necessary to enable the Indenture Trustee
to send the statements to Noteholders required by Section 7.05 of the Indenture,
and (iii) all information necessary to enable the Indenture Trustee to reconcile
all deposits to, and withdrawals from, the Servicing Account and the Collection
Account for the related Collection Period and Payment Date, including the
accounting required by Section 4.4. Contracts purchased by TCC on the related
Deposit Date or by the Depositor on the related Accounting Date, and each
Contract which became a Liquidated Contract or which was paid in full during the
related Collection Period, shall be identified by account number (as set forth
in the Schedule of Contracts). A copy of such Servicer's Certificate may be
obtained by any Noteholder (or by any Note Owner, upon certification that such
Person is a Note Owner and payment of any expenses associated with the
distribution thereof) by a request in writing to the Indenture Trustee addressed
to the Corporate Trust Office.
SECTION 3.10. Annual Statement as to Compliance; Notice of
Servicer Termination Event.
(a) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and each Rating Agency, on or before March 31 (or 90 days
after the end of the Servicer's fiscal year, if other than December 31) of each
year, beginning on March 31, 1999, a certificate signed by any Responsible
Officer of the Servicer, dated as of December 31 (or other applicable date) of
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the immediately preceding year, stating that (i) a review of the activities of
the Servicer during the preceding 12-month period (or such other period as shall
have elapsed from the Closing Date to the date of the first such certificate)
and of its performance under this Agreement has been made under such officer's
supervision, and (ii) to such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
period, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and each Rating Agency, promptly after having obtained
knowledge thereof, but in no event later than two Business Days thereafter,
written notice in a certificate signed by any Responsible Officer of the
Servicer of any event which with the giving of notice or lapse of time, or both,
would become a Servicer Termination Event under Section 8.1(a). The Depositor or
the Servicer shall deliver to the Owner Trustee, the Indenture Trustee, the
Servicer or the Depositor (as applicable) and each Rating Agency promptly after
having obtained knowledge thereof, but in no event later than three Business
Days thereafter, written notice in a certificate signed by any Responsible
Officer of the Servicer of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under any other clause
of Section 8.1.
SECTION 3.11. Annual Independent Accountants' Report.
(a) The Servicer shall cause a firm of nationally recognized
independent certified public accountants (the "Independent Accountants"), who
may also render other services to the Servicer, to deliver to the Owner Trustee,
the Indenture Trustee and each Rating Agency, on or before March 31 (or 90 days
after the end of the Servicer's fiscal year, if other than December 31) of each
year, beginning on March 31, 1999, with respect to the twelve months ended the
immediately preceding December 31 (or other applicable date) (or such other
period as shall have elapsed from the Closing Date to the date of such
certificate), a statement (the "Accountant's Report") addressed to the Board of
Directors of the Servicer, to the Owner Trustee and to the Indenture Trustee, to
the effect that such firm has (i) audited the financial statements of the
Servicer (or, if the Servicer is a wholly owned subsidiary of another entity,
the financial statements of such parent entity) and issued its report thereon
and that such audit was made in accordance with generally accepted auditing
standards (as in effect in the jurisdiction of the Servicer or its parent
entity, as applicable), which require that the Independent Accountants plan and
perform the audit to obtain reasonable assurance as to whether the financial
statements of the Servicer (or its parent entity, as applicable) are free of
material misstatement, and (ii) examined management's assertion that the
Servicer maintained effective control over the servicing of equipment lease
contracts, installment sales contracts, promissory notes, loan and security
agreements and/or other similar types of receivables under servicing agreements
substantially similar one to another, in accordance with established or stated
criteria, and that such examination was performed in accordance with standards
established by the American Institute of Certified Public Accountants. In the
event such firm requires the Indenture Trustee to agree to the procedures
performed by such firm, the Servicer shall direct the Indenture Trustee in
writing to so agree; it being understood and agreed that the Indenture Trustee
will deliver such letter of agreement in conclusive reliance upon the direction
of the Servicer, and the Indenture
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Trustee makes no independent inquiry or investigation as to, and shall have no
obligation or liability in respect of, the sufficiency, validity or correctness
of such procedures.
(b) The Accountants' Report shall also indicate that the firm is
independent of the Depositor and the Servicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public Accountants.
(c) A copy of the Accountants' Report may be obtained by any
Noteholder (or by any Note Owner, upon certification that such Person is a Note
Owner and payment of any expenses associated with the distribution thereof) by a
request in writing to the Indenture Trustee addressed to the Corporate Trust
Office.
SECTION 3.12. Access to Certain Documentation and Information
Regarding Contracts. The Servicer shall provide to representatives of the Owner
Trustee and the Indenture Trustee reasonable access to the documentation
regarding the Contracts. In each case, such access shall be afforded without
charge but only upon reasonable request and during normal business hours.
Nothing in this Section shall derogate from the obligation of the Servicer to
observe any applicable law, rule or contractual provision with an Obligor
prohibiting disclosure of information regarding the Obligors, and the failure of
the Servicer to provide access as provided in this Section as a result of such
obligation shall not constitute a breach of this Section.
SECTION 3.13. Certain Duties of the Servicer under the Trust
Agreement. The Servicer shall, and hereby agrees that it will, monitor the
Issuer's compliance with all applicable provisions of federal securities laws,
notify the Issuer of any actions to be taken by the Issuer necessary for
compliance with such laws and prepare on behalf of the Issuer all notices,
filings or other documents or instruments required to be filed under such laws.
SECTION 3.14. Duties of the Servicer under the Indenture. The
Servicer shall, and hereby agrees that it will, perform on behalf of the Issuer
and the Owner Trustee the following duties of the Issuer or the Owner Trustee,
as applicable, under the Indenture (references are to the applicable Sections in
the Indenture):
(a) the direction to the Paying Agents, if any, to
deposit moneys with the Indenture Trustee (Section 3.03);
(b) the obtaining and preservation of the Issuer's
qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes and each other instrument and
agreement included in the Trust Estate (Section 3.04);
(c) the preparation of all supplements, amendments,
financing statements, continuation statements, instruments of further
assurance and other instruments, in accordance with Section 3.05 of the
Indenture, necessary to protect the Trust Estate (Section 3.05);
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(d) the annual delivery of Opinions of Counsel, in
accordance with Section 3.06 of the Indenture, as to the Trust Estate,
and the annual delivery of the Officer's Certificate and certain other
statements, in accordance with Section 3.09 of the Indenture, as to
compliance with the Indenture (Sections 3.06 and 3.09);
(e) the preparation and obtaining of documents and
instruments required for the release of the Issuer from its obligations
under the Indenture (Section 4.01);
(f) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officer's Certificate and the obtaining of the Opinion of Counsel and
the Independent Certificate relating thereto (Section 4.01);
(g) the preparation of any written instruments required
to confirm more fully the authority of any co-trustee or separate
trustee and any written instruments necessary in connection with the
resignation or removal of any co-trustee or separate trustee (Sections
6.08 and 6.11);
(h) the opening of one or more accounts in the Issuer's
name, the preparation of Issuer Orders, Officer's Certificates and
Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment of funds in the Trust Accounts (Sections
8.02, 8.04 and 8.05);
(i) the determination, and giving notice, of the amounts,
if any, specified in clauses (i) through (iii) of Section 8.06(c) of the
Indenture for each Payment Date (Section 8.06);
(j) the preparation of Issuer Orders and the obtaining of
Opinions of Counsel with respect to the execution of supplemental
indentures (Sections 9.01, 9.02 and 9.03);
(k) the preparation of all Officer's Certificates,
Opinions of Counsel and Independent Certificates with respect to any
requests by the Issuer to the Indenture Trustee to take any action under
the Indenture (Section 11.01); and
(l) the recording of the Indenture, if applicable
(Section 11.15).
SECTION 3.15. Errors and Omissions Policy or Bond. Within 30 days
after the Closing Date, the Servicer shall obtain, and shall thereafter
maintain, a policy or policies of insurance or a financial guaranty bond
covering errors and omissions by the Servicer. Such policy or bond shall be in
such form and amount as is generally customary among persons that service a
portfolio of equipment lease contracts, installment sale contracts, promissory
notes, loan and security agreements and/or other similar types of receivables
having an unpaid balance of at least $100,000,000 and which are generally
regarded as servicers acceptable to institutional investors. Each such policy or
bond shall name the Issuer, the Indenture Trustee and the
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Depositor as additional insured parties or loss payees thereunder as their
respective interests may appear.
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ARTICLE IV
COLLECTIONS AND DEPOSITS
SECTION 4.1. Initial Deposit. On the Closing Date, the Servicer
shall deposit in the Servicing Account (i) all Scheduled Payments and
Prepayments of Contracts received by the Servicer on or after the Cut-Off Date
(including those Scheduled Payments due prior to, but not received as of, the
Cut-Off Date, but excluding those Scheduled Payments due on or after, but
received prior to, the Cut-Off Date) and on or prior to the second Business Day
immediately preceding such date and (ii) all Liquidation Proceeds (including
proceeds of Insurance Policies to be treated as such in accordance with Section
3.4) realized in respect of the Contracts and related Equipment and applied by
the Servicer after the Cut-Off Date.
SECTION 4.2. Collections.
(a) Pursuant to the Indenture, the Indenture Trustee has
established the Servicing Account. The Servicer shall make deposits to and
transfers from the Servicing Account, and shall be entitled to make withdrawals
therefrom, as provided in this Agreement. The Servicer shall remit to the
Servicing Account all payments by or on behalf of the Obligors on the Contracts
(other than amounts constituting Administrative Fees) and all Liquidation
Proceeds (including (1) proceeds of Insurance Policies to be treated as such in
accordance with Section 3.4 and (2) deficiency amounts paid by the Servicer with
respect to the disposition of Equipment to be treated as such in accordance with
the last paragraph of Section 3.3) received by the Servicer, in each case, as
soon as practicable, but in no event later than the second Business Day after
receipt thereof. Within three Business Days after the deposit of such payments
and proceeds therein, the Servicer shall transfer all amounts credited to the
Servicing Account on account of such payments and proceeds (i) to the extent
they constitute Pledged Revenues, to the Collection Account, and (ii) to the
extent they represent amounts allocated to the Depositor, to the Depositor.
Notwithstanding the foregoing, the Servicer may utilize an alternative
remittance schedule acceptable to the Servicer if the Servicer provides to the
Indenture Trustee written confirmation from each Rating Agency that such
alternative remittance schedule will not result in the downgrading or withdrawal
by the Rating Agency of the rating then assigned to the Notes. Amounts from time
to time in the Servicing Account shall be invested in accordance with Section
8.07 of the Indenture, and the Servicer shall be entitled to any earnings on
such investments as additional servicing compensation hereunder. In the event of
any losses on such investments, the Servicer shall deposit in the Servicing
Account the amount thereof, net of any earnings otherwise distributable to the
Servicer.
(b) The Servicer shall remit to the Collection Account (i) that
portion of any Purchase Amount relating to the Required Payoff Amount received
by the Servicer upon the purchase by TCC of any Contract pursuant to Section
2.6(a), and (ii) that portion of the amount paid by the Depositor to purchase
the Contracts pursuant to Section 5.1 as is required to be deposited in the
Collection Account pursuant to such Section.
(c) Notwithstanding the provisions of subsections (a) and (b)
hereof, the Servicer will be entitled to be reimbursed from amounts on deposit
in the Servicing Account or
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the Collection Account with respect to a Collection Period for amounts
previously deposited in the Servicing Account or the Collection Account but
later determined by the Servicer in good faith to (i) have resulted from
mistaken deposits or postings or checks returned for insufficient funds, or (ii)
be required to be repaid to an Obligor. The amount to be reimbursed hereunder
may be retained pursuant to Section 4.4 at any time or may otherwise be paid to
the Servicer on the related Payment Date pursuant to Section 8.03(i) of the
Indenture upon certification by the Servicer of such amounts and the provision
of such information to the Indenture Trustee as may be necessary to verify the
accuracy of such certification.
(d) The Servicer shall remit directly to the Depositor that
portion of any Purchase Amount relating to the Book Value of any Leased
Equipment received by the Servicer upon the purchase by TCC of any Contract
pursuant to Section 2.6(a).
SECTION 4.3. Application of Collections. For the purposes of this
Agreement, all collections for a Collection Period shall be applied by the
Servicer as follows:
(a) With respect to each Contract, payments by or on
behalf of the Obligor thereof (other than Administrative Fees with
respect to such Contract, to the extent collected) shall be applied to
Scheduled Payments and Prepayments in accordance with the terms of such
Contract and the Servicer's credit and collection policies and
procedures. With respect to each Liquidated Contract, that portion of
the Liquidation Proceeds allocated to the Issuer shall be applied, for
purposes of this Agreement and the Indenture only, to Scheduled Payments
and Prepayment on the Contract as if the Liquidation Proceeds had been
paid by the Obligor on the Accounting Date, and then to any other
amounts due and payable with respect to such Contract. The Servicer
shall not be entitled to any Administrative Fees with respect to a
Liquidated Contract unless the Required Payoff Amount for such Contract
has been deposited in the Collection Account.
(b) With respect to each Contract that has become a
Purchased Contract as of any Deposit Date, that portion of the Purchase
Amount relating to the Required Payoff Amount shall be applied, for
purposes of this Agreement and the Indenture only, to Scheduled Payments
and Prepayment on the Contract as if the Purchase Amount had been paid
by the Obligor on the related Accounting Date. All payments by or on
behalf of an Obligor received with respect to any Purchased Contract
after the Accounting Date immediately preceding the Deposit Date on
which the Purchase Amount was paid by TCC, shall be paid to TCC and
shall not be included in Pledged Revenues.
(c) With respect to each Contract that has been purchased
by the Depositor pursuant to Section 5.1, the purchase price shall be
applied, for purposes of this Agreement and the Indenture only, to
Scheduled Payments and Prepayments on the Contract as if such purchase
price had been paid by the Obligor on the Accounting Date. All payments
by or on behalf of an Obligor received with respect to any Contract so
purchased after the Accounting Date on which the purchase price was paid
by the Depositor, shall be paid to the Depositor and shall not be
included in the Amount Available.
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SECTION 4.4. Net Deposits. So long as no Servicer Termination
Event shall have occurred and be continuing with respect to the Servicer, the
Servicer may make the remittances or transfers to be made by it pursuant to
Section 4.2 net of amounts (which amounts may be netted prior to any such
remittance or transfer) that would otherwise be distributed to it pursuant to
Section 8.03(i) of the Indenture; provided, however, that the Servicer shall
account for all of such amounts in the related Servicer's Certificate as if such
amounts were deposited and distributed separately; and provided, further, that
the amounts that would otherwise be distributed to the Servicer pursuant to
Section 8.03(i) of the Indenture shall not include that portion of the Servicing
Fee for the related Collection Period to be applied by the Indenture Trustee in
accordance with the Cash Collateral Account Agreement. If an error is made by
the Servicer in calculating the amount to be deposited or retained by it, with
the result that an amount less than required is deposited in the Collection
Account, the Servicer shall make a payment of the deficiency to the Collection
Account immediately upon becoming aware, or receiving notice from the Indenture
Trustee, of such error.
SECTION 4.5. Expiration of Lease Contracts. In the case of any
Lease Contract which has reached the end of its Original Term, is not in default
and as to which, in accordance with the terms of such Lease Contract, the lessor
thereunder is entitled to the related Equipment, the Servicer shall take such
action as the Depositor shall direct to cause title to such Equipment in the
Depositor to be free and clear of any Liens created by this Agreement or any
Related Document. Any payments thereafter made by the Obligor in respect of such
Equipment, whether on the related Lease Contract or otherwise, shall be the
property of the Depositor or its designated assignee.
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ARTICLE V
TERMINATION
SECTION 5.1. Optional Purchase of All Contracts; Liquidation of
Trust Assets.
(a) At such time as the sum of the Aggregate Principal Balance of
the Notes is less than 10% of the Initial Contract Pool Principal Balance, the
Depositor shall have the option to purchase the corpus of the Issuer (excluding
any rights the Issuer may have with respect to the Cash Collateral Account);
provided, however, that the amount to be paid for such purchase (as set forth in
the following sentence) shall, in any event, be sufficient to pay the full
amount of unpaid principal of and interest payable on the Notes on the related
Payment Date. To exercise such option, the Depositor shall, (i) furnish written
notice to the Servicer, the Owner Trustee and the Indenture Trustee of its
intent to exercise such option, not later than 25 days (or such lesser number of
days as shall be satisfactory to the Indenture Trustee) prior to the related
Payment Date, and (ii) on the related Accounting Date, pay to the Servicer the
aggregate purchase price for the Contracts (which shall be an amount equal to
the sum of the Required Payoff Amounts for all of the Contracts), plus the
appraised value of any other property (including the right to receive any future
recoveries) held as part of the Issuer, such appraisal to be conducted by an
appraiser mutually agreed upon by the Depositor and the Indenture Trustee (or,
if the Notes are no longer Outstanding, the Owner Trustee), and shall succeed to
all interests in and to the Trust Assets. The fees and expenses related to such
appraisal shall be paid by the Depositor. The Servicer shall immediately deposit
the purchase price so paid into the Collection Account, to be treated as
Available Pledged Revenues and distributed in accordance with Section 8.03 of
the Indenture.
(b) Notice of any termination of the Issuer shall be given by the
Servicer to the Owner Trustee and the Indenture Trustee as soon as practicable
(but in no event more than three Business Days) after the Servicer has received
notice thereof.
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ARTICLE VI
THE DEPOSITOR
SECTION 6.1. Liability of Depositor. The Depositor shall be
liable hereunder only to the extent of the obligations in this Agreement
specifically undertaken by the Depositor and the representations made by the
Depositor.
SECTION 6.2. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor; Amendment of Certificate of Incorporation.
(a) The Depositor shall not merge or consolidate with any other
Person or permit any other Person to become the successor to the Depositor's
business except in accordance with the requirements of this Section. The
certificate of incorporation of any corporation (i) into which the Depositor may
be merged or consolidated, (ii) resulting from any merger or consolidation to
which the Depositor shall be a party, or (iii) succeeding to the business of
Depositor, shall contain provisions relating to limitations on business and
other matters substantively identical to those contained in the Depositor's
certificate of incorporation. Any such successor corporation shall execute an
agreement of assumption of every obligation of the Depositor under this
Agreement and each Related Document and, whether or not such assumption
agreement is executed, shall be the successor to the Depositor under this
Agreement without the execution or filing of any document or any further act on
the part of any of the parties to this Agreement. The Depositor shall provide
prompt written notice of any merger, consolidation or succession pursuant to
this Section 6.2 to the Owner Trustee, the Indenture Trustee and the Rating
Agencies. Notwithstanding the foregoing, the Depositor shall not merge or
consolidate with any other Person or permit any other Person to become a
successor to the Depositor's business, unless (w) immediately after giving
effect to such transaction, no representation or warranty made pursuant to
Section 2.4 shall have been breached (for purposes hereof, such representations
and warranties shall speak as of the date of the consummation of such
transaction) and no event that, after notice or lapse of time, or both, would
become an Event of Default or a Servicer Termination Event shall have occurred
and be continuing, (x) the Depositor shall have delivered to the Owner Trustee
and the Indenture Trustee a certificate of a Responsible Officer of the
Depositor and an Opinion of Counsel each stating that such consolidation, merger
or succession and such agreement of assumption comply with this Section 6.2 and
that all conditions precedent, if any, provided for in this Agreement relating
to such transaction have been complied with, (y) the Depositor shall have
delivered to the Owner Trustee and the Indenture Trustee an Opinion of Counsel,
stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements and amendments thereto have been executed
and filed that are necessary to preserve and protect the interest of the Issuer
in the Trust Assets and reciting the details of the filings or (B) no such
action shall be necessary to preserve and protect such interest, and (z) the
Rating Agency Condition shall have been satisfied.
(b) The Depositor hereby agrees that it shall not (i) take any
action prohibited by Article XVI of its certificate of incorporation or (ii)
without the prior written consent of the Owner Trustee and the Indenture Trustee
and without satisfaction of the Rating Agency
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Condition, amend Article III, Article IX, Article XIV or Article XVI of its
certificate of incorporation.
SECTION 6.3. Limitation on Liability of Depositor and Others. The
Depositor and any director or officer or employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising under this Agreement. The Depositor shall not be under any obligation to
appear in, prosecute or defend any legal action that is not incidental to its
obligations as transferor of the Contracts under this Agreement and that in its
opinion may involve it in any expense or liability.
SECTION 6.4. Depositor May Own Notes. Each of the Depositor and
any Affiliate of the Depositor may in its individual or any other capacity
become the owner or pledgee of Notes with the same rights as it would have if it
were not the Depositor or an Affiliate thereof except as otherwise specifically
provided herein or in the Related Documents. Notes so owned by or pledged to the
Depositor or such Affiliate shall have an equal and proportionate benefit under
the provisions of this Agreement or any Related Document, without preference,
priority, or distinction as among all of the Notes; provided that the Notes
owned by the Depositor or any Affiliate thereof, during the time such Notes are
owned by them, shall be without voting rights for any purpose set forth in this
Agreement or any Related Document. The Depositor shall notify the Owner Trustee
and the Indenture Trustee in writing promptly after it or any of its Affiliates
become the owner or pledgee of a Note.
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ARTICLE VII
THE SERVICER
SECTION 7.1. Liability of Servicer; Indemnities.
(a) The Servicer (in its capacity as such and, in the case of
TCC, without limitation of its obligations under the Purchase Agreement) shall
be liable hereunder only to the extent of the obligations in this Agreement
specifically undertaken by the Servicer and the representations made by the
Servicer.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, their
respective officers, directors, agents and employees, the Equity
Certificateholder and the Noteholders from and against any and all costs,
expenses, losses, claims, damages and liabilities to the extent that such cost,
expense, loss, claim, damage or liability arose out of, or was imposed upon the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the Equity
Certificateholder or the Noteholders through the Servicer's breach of this
Agreement, the gross negligence, willful misfeasance or bad faith of the
Servicer in the performance of its duties under this Agreement or by reason of
reckless disregard of its obligations and duties under this Agreement.
(c) The Servicer shall indemnify, defend and hold harmless the
Owner Trustee, in its individual capacity, its officers, directors, agents and
employees, from and against all costs, taxes (other than income taxes on fees
and expenses payable to the Owner Trustee), expenses, losses, claims, damages
and liabilities arising out of or incurred in connection with the acceptance or
performance of the trusts and duties contained in the Trust Agreement and the
Related Documents, except to the extent that such cost, taxes (other than income
taxes), expense, loss, claim, damage or liability (A) is due to the willful
misfeasance or gross negligence of the Owner Trustee, or (B) arises from the
Owner Trustee's breach of any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement.
(d) The Servicer shall indemnify, defend and hold harmless the
Indenture Trustee, in its individual capacity, its officers, directors, agents
and employees, from and against all costs, taxes (other than income taxes on
fees and expenses payable to the Indenture Trustee), expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained in the Indenture
and the Related Documents, except to the extent that such cost, taxes (other
than income taxes), expense, loss, claim, damage or liability (A) is due to the
willful misfeasance or gross negligence of the Indenture Trustee, or (B) arises
from the Indenture Trustee's breach of any of its representations or warranties
set forth in Section 6.13 of the Indenture. Indemnification under this Section
7.1(d) shall be available, however, only if and to the extent that reimbursement
pursuant to Section 6.07 of the Indenture is not available (either because the
Indenture Trustee is deemed not to be entitled to reimbursement under such
Section 6.07 for such cost, taxes (other than income taxes), expense, loss,
claim, damage or liability, or because insufficient funds are available to the
Indenture Trustee pursuant to such Section 6.07).
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(e) Indemnification under this Article shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation.
If the Servicer has made any indemnity payments pursuant to this Article and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Servicer, together with any
interest earned thereon.
(f) TCC, in its individual capacity, hereby acknowledges that the
indemnification provisions in each of the Purchase Agreements benefitting the
Depositor (to the extent they relate to the Contracts) have been assigned to the
Issuer, the Owner Trustee and the Indenture Trustee, and are enforceable by each
hereunder.
(g) The provisions of this Section shall survive the resignation
or removal of the Owner Trustee or the Indenture Trustee and the termination of
the Related Documents.
SECTION 7.2. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer. The Servicer shall not merge or consolidate with
any other Person, convey, transfer or lease substantially all its assets as an
entirety to another Person, or permit any other Person to become the successor
to the Servicer's business unless, after the merger, consolidation, conveyance,
transfer, lease or succession, the successor or surviving entity shall be an
Eligible Servicer and shall be capable of fulfilling the duties of the Servicer
contained in this Agreement. Any corporation (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger or consolidation to which
the Servicer shall be a party, (iii) which acquires by conveyance, transfer, or
lease substantially all of the assets of the Servicer, or (iv) succeeding to the
business of the Servicer, in any of the foregoing cases shall execute an
agreement of assumption to perform every obligation of the Servicer under this
Agreement and, whether or not such assumption agreement is executed, shall be
the successor to the Servicer under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties to this
Agreement, anything in this Agreement to the contrary notwithstanding; provided,
however, that nothing contained herein shall be deemed to release the Servicer
from any obligation. The Servicer shall provide written notice of any merger,
consolidation or succession pursuant to this Section to the Owner Trustee, the
Indenture Trustee and each Rating Agency. Notwithstanding the foregoing, the
Servicer shall not merge or consolidate with any other Person or permit any
other Person to become a successor to the Servicer's business, unless (a)
immediately after giving effect to such transaction, no representation or
warranty made pursuant to Section 3.6 shall have been breached (for purposes
hereof, such representations and warranties shall speak as of the date of the
consummation of such transaction) and no event that, after notice or lapse of
time, or both, would become a Servicer Termination Event shall have occurred and
be continuing, (b) the Servicer shall have delivered to the Owner Trustee and
the Indenture Trustee a certificate of a Responsible Officer of the Servicer and
an Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (c) the Servicer shall have delivered to
the Owner Trustee and the Indenture Trustee an Opinion of Counsel, stating that,
in the opinion of such counsel, either (1) all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary to preserve and protect the interest of the Owner Trustee in
the Trust Assets and reciting the details of the filings or (2) no
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such action shall be necessary to preserve and protect such interest, and
(d) the Rating Agency Condition has been satisfied.
SECTION 7.3. Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Issuer, the Equity
Certificateholder, the Depositor, the Noteholders, the Owner Trustee or the
Indenture Trustee except as provided in this Agreement, for any action taken or
for refraining from the taking of any action in good faith pursuant to this
Agreement; provided, however, that this provision shall not protect the Servicer
or any such person against any liability that would otherwise be imposed by
reason of a breach of this Agreement or willful misfeasance, bad faith or gross
negligence (excluding errors in judgment) in the performance of duties, by
reason of reckless disregard of obligations and duties under this Agreement or
any violation of law by the Servicer or such person, as the case may be;
provided further, that this provision shall not affect any liability to
indemnify the Owner Trustee and the Indenture Trustee for costs, taxes,
expenses, claims, liabilities, losses or damages paid by the Owner Trustee or
the Indenture Trustee, each in its individual capacity. The Servicer and any
director, officer, employee or agent of the Servicer may rely in good faith on
the advice of counsel or on any document of any kind prima facie properly
executed and submitted by any Person respecting any matters arising under this
Agreement.
SECTION 7.4. Servicer Not to Resign. Subject to the provisions of
Section 7.2, the Servicer shall not resign from the obligations and duties
imposed on it by this Agreement as Servicer except upon a determination that by
reason of a change in legal requirements the performance of its duties under
this Agreement would cause it to be in violation of such legal requirements in a
manner which would have a material adverse effect on the Servicer, and a Note
Majority does not elect to waive the obligations of the Servicer to perform the
duties which render it legally unable to act or to delegate those duties to
another Person. Any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Owner Trustee and the Indenture Trustee. No resignation of the Servicer
shall become effective until a successor Servicer that is an Eligible Servicer
shall have assumed the responsibilities and obligations of the Servicer;
provided, however, that in the event a successor Servicer is not appointed
within 60 days after the Servicer has given notice of its resignation and has
provided the Opinion of Counsel required by this Section, the Servicer may
petition a court for its removal.
SECTION 7.5. Corporate Existence. The Servicer shall maintain its
existence, rights and franchises as a corporation under the laws of the
jurisdiction of its incorporation, and will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which the failure to so qualify would have an adverse effect on the validity or
enforceability of any Contract or this Agreement or on the ability of the
Servicer to perform its duties under this Agreement.
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ARTICLE VIII
SERVICER TERMINATION EVENTS
SECTION 8.1. Servicer Termination Event. For purposes of this
Agreement, each of the following shall constitute a "Servicer Termination
Event":
(a) Any failure by the Servicer to deposit within the
time periods specified in this Agreement in the Collection Account for
distribution to Noteholders, or to distribute to the Depositor, any
proceeds or payment required to be so deposited or distributed under the
terms of this Agreement (or, if TCC is the Servicer, the Purchase
Agreement) that continues unremedied for a period of five Business Days
(three Business Days with respect to payment of Purchase Amounts) after
written notice is received by the Servicer from the Indenture Trustee or
after discovery of such failure by a Responsible Officer of the
Servicer; or
(b) Failure by the Servicer to deliver to the Indenture
Trustee and the Owner Trustee the Servicer's Certificate by the third
Business Day prior to the related Payment Date, or failure on the part
of the Servicer to observe its covenants and agreements set forth in
Section 7.2; or
(c) Failure on the part of the Servicer duly to observe
or perform in any material respect any other covenants or agreements of
the Servicer set forth in this Agreement (or, if TCC is the Servicer,
any of the Purchase Agreements (to the extent they relate to the
Contracts), which failure (i) materially and adversely affects the
rights of the Issuer, the Equity Certificateholder or the Noteholders,
and (ii) continues unremedied for a period of 30 days after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Servicer by the Owner Trustee, the
Indenture Trustee or any Noteholder; or
(d) (i) The commencement of an involuntary case under the
federal bankruptcy laws, as now or hereinafter in effect, or another
present or future federal or state bankruptcy, insolvency or similar law
and such case is not dismissed within 60 days; or (ii) the entry of a
decree or order for relief by a court or regulatory authority having
jurisdiction in respect of the Servicer in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or another
present or future, federal or state, bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Servicer or of any
substantial part of their respective properties or ordering the winding
up or liquidation of the affairs of the Servicer; or
(e) The commencement by the Servicer of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or any
other present or future, federal or state, bankruptcy, insolvency or
similar law, or the consent by the Servicer to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Servicer or of
any substantial part
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of its property or the making by the Servicer of an assignment for the
benefit of creditors or the failure by the Servicer generally to pay its
debts as such debts become due or the taking of corporate action by the
Servicer in furtherance of any of the foregoing; or
(f) Any representation, warranty or statement of the
Servicer made in this Agreement or any certificate, report or other
writing delivered by the Servicer pursuant hereto shall prove to be
incorrect in any material respect as of the time when the same shall
have been made, the incorrectness of such representation, warranty or
statement has a material adverse effect on the Issuer or Noteholders,
and, within 30 days after written notice thereof shall have been given
to the Servicer or the Depositor by the Owner Trustee, the Indenture
Trustee or any Noteholder, the circumstances or condition in respect of
which such representation, warranty or statement was incorrect shall not
have been eliminated or otherwise cured.
SECTION 8.2. Consequences of a Servicer Termination Event. If a
Servicer Termination Event shall occur and be continuing, the Indenture Trustee
may, and at the written direction of a Note Majority (or, at such time as the
Notes are no longer Outstanding, an Equity Certificate Majority) shall, by
notice given in writing to the Servicer and the Owner Trustee, terminate all of
the rights and obligations of the Servicer under this Agreement. On or after the
receipt by the Servicer of such written notice, all authority, power,
obligations and responsibilities of the Servicer under this Agreement, whether
with respect to the Equity Certificate, the Notes, the Trust Assets or
otherwise, shall be terminated and automatically shall pass to, be vested in and
become obligations and responsibilities of the Indenture Trustee (unless and
until a successor Servicer is appointed in accordance with Section 8.3);
provided, however, that the Indenture Trustee shall have no liability with
respect to any obligation which was required to be performed by the terminated
Servicer prior to the date that the Indenture Trustee becomes the Servicer or
any claim of a third party based on any alleged action or inaction of the
terminated Servicer. The Indenture Trustee is authorized and empowered by this
Agreement to execute and deliver, on behalf of the terminated Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination. The terminated Servicer agrees to
cooperate with the Indenture Trustee in effecting the termination of the
responsibilities and rights of the terminated Servicer under this Agreement,
including, without limitation, the transfer to the Indenture Trustee for
administration by it of all cash amounts that shall at the time be held by the
terminated Servicer for deposit, or have been deposited by the terminated
Servicer, in any of the Trust Accounts or thereafter received with respect to
the Contracts and the delivery to the Indenture Trustee of all Contract Files,
Monthly Records and Collection Records and a computer tape in readable form (in
the format then being used by the Servicer) as of the most recent Business Day
containing all information necessary to enable the Indenture Trustee or a
successor Servicer to service the Contracts and the other Trust Assets. The
terminated Servicer shall grant the Owner Trustee, the Indenture Trustee and the
successor Servicer reasonable access to the terminated Servicer's premises at
the terminated Servicer's expense.
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SECTION 8.3. Indenture Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 8.2, the Indenture Trustee shall be the
successor in all respects to the Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for in this Agreement, and
shall be subject to all the responsibilities, restrictions, duties, liabilities
and termination provisions relating thereto placed on the Servicer by the terms
and provisions of this Agreement. As compensation therefor, the Indenture
Trustee shall be entitled to receive the Total Servicing Fee. The Owner Trustee
and the Indenture Trustee shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
(b) Notwithstanding the foregoing, the Indenture Trustee may, if
it shall be unwilling to so act, or shall, if it is legally unable to so act,
appoint, or petition a court of competent jurisdiction to appoint, any Eligible
Servicer as the successor to the Servicer hereunder in the performance of all or
any part of the responsibilities, duties or liabilities of the Servicer
hereunder. Pending appointment of a successor pursuant to the preceding
sentence, the Indenture Trustee shall act as successor Servicer unless it is
legally unable to do so, in which event the outgoing Servicer shall continue to
act as Servicer until a successor has been appointed and accepted such
appointment.
(c) In connection with such appointment and assumption, the
Indenture Trustee may make such arrangements for the compensation of such
successor out of payments on the Contracts as it and such successor shall agree;
provided, however, that no such monthly compensation shall, without the written
consent of the Depositor and 100% of the Noteholders, exceed the Total Servicing
Fee. The Indenture Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
(d) If a successor Servicer is acting as Servicer hereunder, it
shall be subject to termination under Section 8.2 upon the occurrence of any
Servicer Termination Event applicable to it as Servicer.
(e) At such time as any successor Servicer (including the
Indenture Trustee) becomes Servicer hereunder, it shall agree to perform all of
the obligations of the Servicer under, and be subject to the terms of, the Cash
Collateral Account Agreement, and shall take such actions as the parties to the
Cash Collateral Account Agreement may reasonably request to evidence such
agreement.
SECTION 8.4. Notification to Equity Certificateholder and
Noteholders. Upon any termination of, or appointment of a successor to, the
Servicer pursuant to this Article VIII, the Owner Trustee shall give prompt
written notice thereof to the Equity Certificateholder and to each Rating
Agency, and the Indenture Trustee shall give prompt written notice thereof to
Noteholders at their respective addresses appearing in the Note Register.
SECTION 8.5. Waiver of Past Defaults. A Note Majority may waive
any default by the Servicer in the performance of its obligations hereunder and
its consequences. Upon any such waiver of a past default, such default shall
cease to exist, and any Servicer Termination
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Event arising therefrom shall be deemed to have been remedied for every purpose
of this Agreement. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
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ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. Amendment.
(a) This Agreement may be amended by the Depositor, the Servicer,
the Issuer and the Indenture Trustee without the consent of any of the
Noteholders (i) to cure any ambiguity, (ii) to correct or supplement any
provisions in this Agreement that may be inconsistent with any other provision
herein, or (iii) to make any other provisions with respect to matters or
questions arising under this Agreement that are not inconsistent with the
provisions hereof; provided, however, that such action shall not, as evidenced
by an Opinion of Counsel, adversely affect in any material respect the interests
of the Noteholders.
(b) This Agreement may also be amended from time to time by the
Depositor, the Servicer, the Issuer and the Indenture Trustee with the consent
of a Note Majority (which consent of any Holder of a Note given pursuant to this
Section or pursuant to any other provision of this Agreement shall be conclusive
and binding on such Holder and on all future Holders of such Note and of the
Note issued upon the transfer thereof or in exchange thereof or in lieu thereof
whether or not notation of such consent is made upon the Note) for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement, or of modifying in any manner the rights of the
Holders of Notes; provided, however, that no such amendment shall (a) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Contracts or distributions required to be made on any
Note or the rate of interest payable thereon, (b) amend any provisions of
Section 5.06 or 8.03 of the Indenture in such a manner as to affect the priority
of payment of interest or principal to Noteholders, or (c) reduce the aforesaid
percentage required to consent to any such amendment or any waiver hereunder,
without the consent of the Holders of all Notes then Outstanding and affected
thereby; and provided, further, that no such amendment shall be effective unless
and until the Rating Agency Condition has been satisfied.
(c) Promptly after the execution of any such amendment or
consent, the Indenture Trustee shall furnish written notification of the
substance of such amendment or consent to each Noteholder.
(d) It shall not be necessary for the consent of Noteholders
pursuant to Section 9.1(b) to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents (and any other
consents of Noteholders provided for in this Agreement) and of evidencing the
authorization of the execution thereof by Noteholders shall be subject to such
reasonable requirements as the Indenture Trustee may prescribe, including the
establishment of record dates.
(e) Prior to the execution of any amendment to this Agreement,
the Owner Trustee and the Indenture Trustee shall be entitled to receive and
conclusively rely upon an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by
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this Agreement, in addition to the Opinion of Counsel referred to in Section
9.2(h). The Owner Trustee and the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects the Owner Trustee's or
the Indenture Trustee's, as the case may be, own rights, duties or immunities
under this Agreement or otherwise.
SECTION 9.2. Protection of Title to Trust Assets.
(a) The Depositor shall execute and file such financing
statements and cause to be executed and filed such continuation and other
statements (including those prepared by the Servicer pursuant to Section
3.14(c)), all in such manner and in such places as may be required by law fully
to preserve, maintain and protect the interest of the Issuer, the Owner Trustee
and the Indenture Trustee in the Trust Assets and in the proceeds thereof;
except that (i) UCC-1 financing statements and continuation statements, listing
the Obligor as debtor and the related Equipment as collateral, need be filed
only as required by Section 3.5; and (ii) no assignments of any such financing
statements relating to the Equipment shall be filed to reflect the assignment of
the Contracts by the Originators to the Depositor and by the Depositor to the
Issuer. The Depositor shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following such
filing.
(b) Neither the Depositor nor the Issuer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed by the Depositor in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Owner Trustee and
the Indenture Trustee at least 60 days' prior written notice thereof, and shall
promptly file appropriate amendments to all previously filed financing
statements and continuation statements.
(c) Each of the Depositor, the Servicer and the Issuer shall give
the Owner Trustee and the Indenture Trustee at least 60 days' prior written
notice of any relocation of its principal executive office if, as a result of
such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or
of any new financing statement. The Servicer shall at all times maintain each
office from which it services Contracts and its principal executive office
within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Contract accurately and in sufficient detail to permit (i) the reader thereof to
know at any time the status of such Contract, including payments and recoveries
made and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Contract and the amounts
from time to time deposited in the Collection Account in respect of such
Contract.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of transfer and assignment under this Agreement of the
Contracts to the Issuer, the Servicer's master computer records (including any
backup archives) that refer to any Contract
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indicate clearly that the Contract is owned by the Issuer. Indication of the
Issuer's ownership of a Contract shall be deleted from or modified on the
Servicer's computer systems when, and only when, the Contract has been paid in
full, liquidated (including receipt of all recoveries reasonably expected to be
collected) or purchased by the Depositor or TCC.
(f) Upon receipt by the Servicer of reasonable prior notice, the
Servicer shall permit any of the Owner Trustee, the Indenture Trustee and their
respective agents, at any time during the Servicer's normal business hours to
inspect, audit and make copies of and abstracts from the Servicer's records
regarding any Contracts or any other portion of the Trust Assets. Upon receipt
by the Servicer of reasonable prior notice, the Servicer shall permit any of the
Owner Trustee, the Indenture Trustee and the Depositor and their respective
agents, at any time during the Servicer's normal business hours but no more
frequently than once per calendar year (or, if a Servicer Termination Event
shall have occurred and be continuing, as often as reasonably requested), to
inspect, audit and make copies of and abstracts from the Servicer's records
regarding the Servicer's servicing procedures and the Servicer's properties
relating to its servicing activities.
(g) The Servicer shall furnish to the Owner Trustee and the
Indenture Trustee at any time upon request a list (which may, at the option of
the Servicer, be on a computer disk or other electronic storage medium) of all
Contracts then held as part of the Trust Assets, together with a reconciliation
of such list to the Schedule of Contracts and to each of the Servicer's
Certificates furnished before such request indicating removal of Contracts from
the Issuer. Upon request, the Servicer shall furnish a copy of any list to the
Depositor. Subject to the following sentence, the Owner Trustee shall hold any
such list and Schedule of Contracts for examination by interested parties during
normal business hours at the Corporate Trust Office upon reasonable notice by
such Persons of their desire to conduct an examination. The Owner Trustee shall
and shall cause its representatives to hold in confidence all information
thereon relating to the identity of the Obligors except to the extent disclosure
may be required by 'SS' 9-208 of the UCC or by other applicable law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Owner Trustee may reasonably determine that such disclosure
is consistent with its obligations under the Indenture.
(h) The Depositor and the Servicer shall deliver to the Owner
Trustee and the Indenture Trustee simultaneously with the execution and delivery
of this Agreement and of each amendment thereto and upon the occurrence of the
events giving rise to an obligation to give notice pursuant to Section 9.2(b) or
(c), an Opinion of Counsel either (a) stating that, in the opinion of such
Counsel, all financing statements and continuation statements have been executed
and filed that are necessary fully to preserve and protect the interest of the
Issuer and the Indenture Trustee in the Contracts and the other Trust Assets,
and reciting the details of such filings or referring to prior Opinions of
Counsel in which such details are given, or (b) stating that, in the opinion of
such counsel, no such action is necessary to preserve and protect such interest.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee, within 90 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months after
the Closing Date, an Opinion of Counsel, either
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(a) stating that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Issuer and the Indenture Trustee in the
Contracts, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (b) stating that, in the
opinion of such counsel, no action shall be necessary to preserve and protect
such interest.
SECTION 9.3. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 9.4. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Equity
Certificate or the Notes or the respective rights of the Holders thereof.
SECTION 9.5. Assignment. Notwithstanding anything to the contrary
contained in this Agreement, except as provided in Section 7.2 or Section 8.2
(and as provided in the provisions of the Agreement concerning the resignation
of the Servicer), this Agreement may not be assigned by the Depositor or the
Servicer without (i) the prior written consent of the Owner Trustee, the
Indenture Trustee and a Note Majority, and (ii) satisfaction of the Rating
Agency Condition.
SECTION 9.6. Third-Party Beneficiaries. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Nothing in this Agreement, express
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any benefit or any legal or equitable right, remedy or
claim under this Agreement.
SECTION 9.7. Counterparts. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and all of which counterparts shall constitute but one and the same
instrument.
SECTION 9.8. Intention of Parties. The parties hereto intend
that, in the event that the conveyance of the Contracts and other Trust Assets
pursuant to this Agreement is determined to be made as security for a loan made
by the Issuer, the Equity Certificateholder or the Noteholders to the Depositor,
the Depositor hereby grants to the Issuer to secure such loan a first priority
security interest in all of the Depositor's right, title and interest in and to
the rights and property intended to be conveyed to the Issuer pursuant to
Section 2.1(a). This Agreement shall, in such event, constitute a security
agreement under applicable law.
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SECTION 9.9. Notices. All demands, notices and communications
under this Agreement shall be in writing, personally delivered or mailed by
certified mail-return receipt requested or by overnight delivery, or by
facsimile transmission, and shall be deemed to have been duly given upon receipt
(a) in the case of TCC, the Depositor or the Servicer, at the following address:
0 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attention: General Counsel, (b)
in the case of the Owner Trustee, at its Corporate Trust Office, and (c) in the
case of the Indenture Trustee, at its Corporate Trust Office, or at such other
address as shall be designated by any such party in a written notice to the
other parties.
SECTION 9.10. Income Tax Characterization. The Depositor has
structured the Trust Agreement, the Indenture, the Cash Collateral Account
Agreement, the Notes and the Equity Certificate with the intention that the
Notes will qualify under applicable federal, state, local and foreign tax law as
indebtedness of the Depositor secured by the Contracts. The Depositor and the
Servicer agree to treat and to take no action inconsistent with the treatment of
the Notes as such indebtedness for purposes of federal, state, local and foreign
income or franchise taxes and any other tax imposed on or measured by income.
SECTION 9.11. Limitation of Liability. It is expressly understood
and agreed by the parties hereto that (a) this Agreement is executed and
delivered by Citibank, N.A., not individually or personally but solely as Owner
Trustee of the Issuer under the Trust Agreement, in the exercise of the powers
and authority conferred and vested in it, (b) each of the representations,
undertakings and agreements herein made on the part of the Issuer is made and
intended not as personal representations, undertakings and agreements by The
Bank of New York but is made and intended for the purpose for binding only the
Issuer, (c) nothing herein contained shall be construed as creating any
liability on Citibank, N.A., individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties to this Agreement and by any person claiming by,
through or under them and (d) under no circumstances shall Citibank, N.A. be
personally liable for the payment of any indebtedness or expenses of the Issuer
or be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Issuer under this Agreement or
any related documents.
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IN WITNESS WHEREOF, the Issuer, the Depositor, TCC, the Servicer
and the Indenture Trustee have caused this Transfer and Servicing Agreement to
be duly executed by their respective officers as of the day and year first above
written.
ISSUER:
NEWCOURT EQUIPMENT TRUST
SECURITIES 1998-2
By Citibank, N.A.,
not in its individual capacity but solely as Owner
Trustee
By /s/ X. Xxxxx
-----------------------------------------------
Name: X. Xxxxx
-----------------------------------------
Title: Senior Trust Officer
----------------------------------------
DEPOSITOR:
ANTIGUA FUNDING CORPORATION
By /s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxx
-----------------------------------------
Title: Executive Vice President and Treasurer
----------------------------------------
AT&T CAPITAL CORPORATION
In its individual capacity and as Servicer
By /s/ Xxxxx X. Xxxxx
-----------------------------------------------
Name: Xxxxx X. Xxxxx
-----------------------------------------
Title: Executive Vice President and Treasurer
----------------------------------------
INDENTURE TRUSTEE:
THE BANK OF NEW YORK
not in its individual capacity but solely as Indenture
Trustee
By /s/ Xxxxxx X. Laser
-----------------------------------------------
Name: Xxxxxx X. Laser
-----------------------------------------
Title: Assistant Vice President
----------------------------------------
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