EXECUTION COPY
DYN FUNDING CORPORATION,
Issuer
and
BANKERS TRUST COMPANY,
Trustee
----------------------------------
DYNCORP TRADE RECEIVABLES MASTER INDENTURE
Dated April 18, 1997
Table of Contents
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions................................................ 2
ARTICLE TWO
THE NOTES
Section 2.01. Form Generally.............................................. 29
Section 2.02. Form of Notes............................................... 29
Section 2.03. Denominations............................................... 29
Section 2.04. Execution, Authentication, Delivery and
Dating.................................................................... 29
Section 2.05. Registration, Registration of Transfer
and Exchange............................................................... 30
Section 2.06. Mutilated, Destroyed, Lost or Stolen
Notes...................................................................... 31
Section 2.07. Payment of Principal and Interest;
Principal and Interest Rights
Preserved.................................................................. 32
Section 2.08. Pners........................................................ 33
Section 2.09. Cancellation................................................. 33
Section 2.10. Purchase of Notes by Issuer.................................. 33
Section 2.11. New Issuances................................................ 34
ARTICLE THREE
AUTHENTICATION AND DELIVERY OF NOTES
Section 3.01. General Provisions.......................................... 36
Section 3.02. The Receivables............................................. 38
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of the Agreement..................39
Section 4.02. Application of Trust Money.................................. 39
ARTICLE FIVE
DEFAULTS AND REMEDIES
Section 5.01. Events of Default........................................... 41
Section 5.02. Acceleration of Maturity.................................... 43
Section 5.03. Collection of Indebtedness and Suits for Enforcement.........43
by Trustee.
Section 5.04. Remedies.................................................... 45
Section 5.05. Trustee May Enforce Claims Without
Possession of Notes....................................................... 45
Section 5.06. Application of Proceeds..................................... 46
Section 5.07. Limitation on Suits......................................... 46
Section 5.08. Unconditional Rights of Noteholders to
Receive Principal and Interest............................................ 47
Section 5.09. Restoration of Rights and Remedies.......................... 47
Section 5.10. Rights and Remedies Cumulative.............................. 48
Section 5.11. Delay or Omission Not Waiver................................ 48
Section 5.12. Control by Noteholders...................................... 48
Section 5.13. Waiver of Past Defaults..................................... 49
Section 5.14. Undertaking for Costs....................................... 49
Section 5.15. Waiver of Stay or Extension Laws............................ 49
Section 5.16. Sale of Trust Estate........................................ 50
Section 5.17. Action on Notes............................................. 51
ARTICLE SIX
THE TRUSTEE
Section 6.01. Certain Duties and Responsibilities......................... 52
Section 6.02. Notice of Default. ......................................... 53
Section 6.03. Certain Rights of Trustee................................... 53
Section 6.04. Not Responsible for Recitals or Issuance
of Notes................................................................... 55
Section 6.05. May Hold Notes............................................... 55
Section 6.06. Money Held in Trust.......................................... 55
Section 6.07. Compensation and Reimbursement............................... 56
Section 6.08. Corporate Trustee Required; Eligibility ..................... 56
Section 6.09. Resignation and Removal; Appointment
of Successor............................................................... 57
Section 6.10. Acceptance of Appointment by Successor....................... 58
Section 6.11. Merger, Conversion, Consolidation or Succession to Business
of Trustee................................................................. 59
Section 6.12. Trustee as Successor Servicer................................ 59
Section 6.13. Co-trustees and Separate Trustees............................ 59
Section 6.14. Rights of Trustee Upon Appointment of
Successor Servicer......................................................... 61
ARTICLE SEVEN
NOTEHOLDERS' LIST AND REPORTS BY TRUSTEE AND ISSUER
Section 7.01. Issuer to Furnish Trustee Names and
Addresses of Noteholders.................................................... 62
Section 7.02. Preservation of Information;
Communications to Noteholders............................................... 62
Section 7.03 Reports by and Inspections of Issuer......................... 62
Section 7.04. Annual and Quarterly Statements as to
Compliance................................................................. 64
Section 7.05. Contract Schedule............................................ 65
Section 7.06. Primary Contract List........................................ 65
ARTICLE EIGHT
REPRESENTATIONS AND COVENANTS OF ISSUER
Section 8.01. Payment of Principal and Interest............................ 67
Section 8.02. Maintenance of Office or Agency.............................. 67
Section 8.03. Unclaimed Funds.............................................. 67
Section 8.04. Corporate Existence.......................................... 68
Section 8.05. Protection of Trust Estate................................... 68
Section 8.06. Representations and Covenants of Issuer...................... 69
Section 8.07. Negative Covenants. ......................................... 71
Section 8.08. Issuer May Consolidate, Etc., Only on Certain Terms.......... 72
Section 8.09. Successor Substituted........................................ 73
Section 8.10. Money for Note Payments to Be Held in Trust.................. 73
Section 8.11. Performance of Obligations; Servicing Agreement ............. 74
Section 8.12. Corporate Separateness of Issuer............................. 76
ARTICLE NINE
ACCOUNTING AND RELEASES
Section 9.01. Collection of Money.......................................... 78
Section 9.02 Collection Account............................................ 78
Section 9.03. Reports by Trustee; Contract Schedule........................ 81
Section 9.04. Trust Estate; Contract Documents............................. 81
Section 9.05. Amendments to Servicing Agreement............................ 82
Section 9.06. Servicer as Custodian and Bailee of Trustee.................. 82
ARTICLE TEN
SUPPLEMENTAL INDENTURES
Section 10.01. Supplemental Indentures..................................... 83
Section 10.02. Execution of Supplemental Indentures........................ 84
Section 10.03. Effect of Supplemental Indenture............................ 84
Section 10.04. Reference in Notes to Supplemental Indentures............... 85
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Acts of Noteholders.......................................... 86
Section 11.02. Notices, Etc. to Trustee and Issuer.......................... 86
Section 11.03. Notices to Noteholders; Waiver............................... 87
Section 11.04. Effect of Headings and Table of Contents..................... 88
Section 11.05. Successors and Assigns....................................... 88
Section 11.06. Separability................................................. 88
Section 11.07. Benefits of Indenture........................................ 88
Section 11.08. Governing Law................................................ 88
Section 11.09. Counterparts................................................. 89
Section 11.10. Corporate Obligation......................................... 89
EXHIBITS AND SCHEDULES
Exhibit A Form of Credit and Collections Statement of Policy
Exhibit B Form of Opinion of Counsel to the Issuer
Exhibit C Form of Sale and Purchase Agreement
Exhibit D Form of Assignment of Claims Act Notice
Schedule A Contract Schedule
Schedule B Receivable Schedule
Schedule C List of Sellers
Schedule D Primary Contract List
DYNCORP TRADE RECEIVABLES MASTER INDENTURE, dated April 18, 1997
(herein, as amended, modified or supplemented from time to time as permitted
hereby, called this "Indenture"), between Dyn Funding Corporation, a corporation
organized and existing under the laws of the State of Delaware (herein, together
with its permitted successors and assigns, called the "Issuer"), and Bankers
Trust Company, a New York State banking corporation, as trustee (herein,
together with its successors in the trusts hereunder, called the "Trustee").
This Indenture may be supplemented at any time and from time to time by a
supplement (a "Supplement", and any Supplement together with this Indenture and
amendments hereof collectively referred to as the "Agreement"). This Indenture
and any Supplement are separately and consecutively paginated, and each is an
integral part of the Agreement. If a conflict exists between the terms and
provisions of this Indenture and any Supplement, the terms and provisions of the
Supplement shall be controlling with respect to the related Series.
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of the
Agreement to provide for an issue of its Contract Receivable Collateralized
Notes (the "Notes") as provided in the Agreement.
All covenants and agreements made by the Issuer herein are for the benefit and
security of the holders of the Notes. The Issuer is entering into the Agreement,
and the Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
Simultaneously with the delivery of this Indenture (a) the Issuer is
entering into Sale and Purchase Agreements with DynCorp, a corporation organized
and existing under the laws of the State of Delaware (the "Company"), and with
certain other subsidiaries of the Company named in such Sale and Purchase
Agreements (each referred to herein as a "Seller" and, with the Company when the
Company is being referred to as a seller of Receivables, collectively referred
to as the "Sellers") pursuant to which each of the Sellers will sell certain of
its receivables specified therein to the Issuer and (b) the Issuer, the Company
and the Trustee are entering into the Servicing Agreement pursuant to which the
Company will agree to service the Receivables and make collections thereon on
behalf of the Holders from time to time of the Notes.
Subsequent to the delivery of this Agreement, the Issuer may enter into
Sale and Purchase Agreements with certain subsidiaries of the Company named in
such Sale and Purchase Agreements (each
referred to herein as a "Seller") pursuant to which each of such Sellers, if
any, will sell certain of its receivables specified therein to the Issuer.
GRANTING CLAUSES
The Issuer hereby Grants to the Trustee, for the exclusive benefit of
the Holders of the Notes, all of the Issuer's right, title and interest in and
to (a) the Receivables and all proceeds received in respect of such Receivables,
(b) all of the Sale and Purchase Agreements, (c) the Servicing Agreement as it
relates to such Receivables, (d) the Collection Account, including all Eligible
Investments therein and all income from the investment of funds therein, (e) any
Lockbox Account, including all Eligible Investments therein and all income from
the investment of funds therein and (f) all proceeds in any way derived from any
of the foregoing items. Such Grants are made in trust to secure the Notes
equally and ratably without prejudice, priority or distinction, except as
expressly provided in the Agreement, between any Note and any other Notes, and
to secure (i) the payment of all amounts due on the Notes in accordance with
their terms, (ii) the payment of all other sums payable under the Agreement and
(iii) compliance with the provisions of the Agreement all as provided in the
Agreement.
The Trustee acknowledges such Grants, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform the duties herein
required to the end that the interests of the Noteholders may be adequately and
effectively protected.
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions.
Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of the Agreement, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms and to the
masculine, feminine and neuter genders of such terms.
Accountants' Certificate: A certificate of a firm of independent
certified public accountants of national reputation appointed by the Issuer and
reasonably acceptable to the Trustee, which may be the firm of independent
accountants that audits the financial statements of the Issuer or the Company.
3/64971.8
Accounts: The collective reference to the Collection Account, any
Lockbox Account and any other account so specified in the related Supplement.
Act and Acts of Noteholders: The meanings specified in Section 12.01
hereof.
Administrative Expenses: The sum of: (a) the amounts due the Trustee
under Section 6.07 hereof; (b) federal and state taxes of the Issuer and the
cost of preparing tax returns; (c) expenses relating to the maintenance of the
Receivables; (d) expenses incurred for general business operations of the
Issuer; and (e) all other expenses of the Issuer relating to the issuance of the
Notes (to the extent not paid out of the proceeds of the issuance of the Notes
or by the Servicer), including but not limited to, legal fees and expenses of
counsel and accountants' fees; provided, however, that Administrative Expenses
shall not include (a) the release of Excess Cash, (b) the Servicing Fee, (c) any
Deferred Purchase Price or (d) any damages or indemnities payable by the Issuer
to any Noteholder.
Affiliate: With respect to any Person, any other Person controlling or
controlled by or under common control with such 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, the terms "controlling" and "controlled" having meanings correlative
to the foregoing.
Aggregate Collateral Balance: As of any date of determination, the
sum of (a) the aggregate Stated Value of the Receivables Granted to the Trustee
and (b) all amounts on deposit in the Collection Account.
Amortization Date: With respect to any Series, the date specified in
the related Supplement.
Amortization Period: With respect to any Series, the period commencing
with the day after the Payment Date next preceding the Amortization Date to and
including the date on which the Notes of such Series are paid in full.
Assignment of Claims Act Notice: Any Assignment of Claims Acts Notice
substantially in the form of Exhibit D hereto.
Authorized Officer: With respect to the Company, the Issuer or any
Seller, the President or any Vice President, Secretary, Treasurer or Assistant
Treasurer of such entity.
Average Daily Revenue: As of any Determination Date or Purchase Date
during the Non-Amortization Period and with respect to any Government Contract
or Government Subcontract (including any Qualified Joint Venture Contract), (a)
the aggregate amount of revenue recognized by the Company in its unaudited
financial statements and reports under such Government Contract or Government
Subcontract during the three immediately preceding Determination Periods divided
by (b) the number of Calendar Days in such three preceding Determination
Periods; provided that if the related Seller has performed under such Government
Contract or Government Subcontract for a period of less than three months as of
such Determination Date or Purchase Date, the Average Daily Revenue will be
calculated on the basis of such lesser period; provided, further, that the
Average Daily Revenue shall not be calculated on the basis of a period of less
than 28 Calendar Days. With respect to any Government Contract or Government
Subcontract if the amount of Average Daily Revenue is expected to permanently
decrease by more than 10% from the Average Daily Revenue for such Government
Contract or Government Subcontract as of the preceding Determination Date or
Purchase Date for which Average Daily Revenue was calculated, then the Average
Daily Revenue will be adjusted immediately to an amount equal to such decreased
level to the same extent as if such decrease had been in effect since the first
day of the period over which the Average Daily Revenue is being calculated.
Board of Directors: The Board of Directors of the Issuer or any
committee of that Board duly authorized to act on behalf of that Board with
respect to any matters arising under the Agreement.
Board Resolution: Any action by the Board of Directors, as evidenced
by a copy of a resolution certified by the Secretary or an Assistant Secretary
of the Issuer to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification and delivery to the
Trustee.
Business Day: Any day that is not a Saturday, Sunday, holiday, or other
day on which commercial banking institutions in New York are authorized or
obligated by law or executive order to be closed.
Calendar Day: Any day of a month.
Called Principal: With respect to any Note, the Note Principal Balance
that is declared to be due and payable pursuant to (i) an Optional Redemption,
Mandatory Redemption or Special Redemption pursuant to the related Series
Supplement or (ii) an acceleration of maturity pursuant to Section 5.02 of this
Indenture.
Class: With respect to any Series, any one of the classes of Notes of
that Series as defined in the related Supplement.
Closing Date: As specified in the Supplement related to any Series of
Notes, the date on which such Notes are first executed and delivered to the
Purchasers thereof.
Code: The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
Collateral Value Percentage: With respect to (a) any Government
Receivable (including any Receivable arising under a Qualified Joint Venture
Contract), 92% of its Stated Value, (b) any Government Subcontract Receivable,
80% of its Stated Value and (c) any Commercial Receivable, 76% of its Stated
Value.
Collateral Value Ratio: As of any date of determination, the ratio
obtained by dividing (a) the sum of (i) the aggregate Stated Values of the
Receivables Granted to the Trustee, less the aggregate Stated Values of Excluded
Receivables, all valued at the applicable Collateral Value Percentage, and (ii)
all amounts on deposit in the Collection Account by (b) the Outstanding Note
Principal Balance.
Collection Account: The account so denominated and extablished
pursuant to Section 9.02 hereof.
Collections: With respect to any Receivable, to the extent that such
Receivable has not been repurchased by a Seller pursuant to its Sale and
Purchase Agreement, all cash collections and other cash proceeds of such
Receivable that are collected in available funds by the Issuer or the Servicer
for deposit into a Lockbox Account or a Seller's Lockbox.
Commercial Contract: Any Contract other than a Government Contract or
a Government Subcontract.
Commercial Receivable: Any Receivable under a Commercial Contract.
Commission: The Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or any successor agency having similar power.
Commitment Fee: Any fee so specified in the related Supplement.
Company: DynCorp, a Delaware corporation, and its successors and
assigns.
Compliance Audit: The meaning specified in Section 7.04 hereof.
Consolidated EBDAIT: For any period, (a) the sum of the amounts for
such period of (i) Consolidated Net Income, (ii) provision for taxes based on
income, (iii) Consolidated Interest Expense, (iv) depreciation expense, (v)
amortization expense, (vi) Restricted Stock Plan expense and (vii) Net ESOP
Contributions, less (b) the amount for such period of interest income (such
amount of interest income not to exceed $1,500,000 for any rolling twelve-month
period), all as determined on a consolidated basis in accordance with GAAP.
Consolidated Interest Expense: For any period, the total interest
expense of the Company and its subsidiaries on a consolidated basis with respect
to all outstanding indebtedness of the Company and its subsidiaries, including,
without limitation, all commissions, discounts, and other fees and charges owed
with respect to letters of credit and bankers' acceptance financings and net
costs under interest rate agreements, all as determined in accordance with GAAP.
Consolidated Net Cash Interest Expense: For any period, (a)
Consolidated Interest Expense, but excluding, however, interest expense not
payable in cash, amortization of debt discount and deferred financing costs,
less (b) interest income (such amount of interest income not to exceed
$1,500,000 for any rolling twelve-month period).
Consolidated Net Income: For any period, the net income (or loss) of
the Company and its subsidiaries on a consolidated basis for such period,
excluding the sum of (i) extraordinary: items, net of taxes based on income,
(ii) dividends on preferred stock, and (iii) amortization of issuance discount
on preferred stock, all as determined in accordance with GAAP.
Contract: An agreement between one of the Sellers and an Obligor, or
an open account of an Obligor evidenced by an invoice of a Seller, pursuant to
which such Obligor is obligated to pay for merchandise or services.
Receivables under GovernmentContracts or Government Subcontracts of a Seller
may be combined and aggregated in accordance with the following restrictions:
(i) the aggregate Stated Values of Receivables arising under each Government
Contract which is combined and aggregated must be less than $500,000; (ii) the
Stated Values of Receivables arising under each Government Subcontract, which is
combined and aggregated must be less than $250,000; (iii)
Government Contracts may only be combined with other Government Contracts from
the same Seller and Government Subcontracts may only be combined with other
Government Subcontracts of the same Seller and the Contract Schedule must
separately identify each Contract included within each aggregate; and (iv) the
aggregate Stated Values of all Receivables so combined and aggregated may not
exceed 5% of the Aggregate Collateral Balance.
Contract Schedule: The list in the form attached hereto as Schedule A
identifying (a) each Government Contract and Government Subcontract as to which
Receivables arising thereunder are initially Granted hereunder and subsequent to
the Closing Date, (b) each of those Contracts provided in clause (a) above that
is a Qualified Joint Venture Contract and (c) each Obligor as to which
Commercial Receivables arising thereunder are initially Granted hereunder and
subsequent to the Closing Date.
Corporate Trust Office: The principal office of the Trustee at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this Agreement is located at Four Albany
Street, New York, New York 10006 (Attention: Corporate Trust and Agency Group,
Structured Finance Team).
Credit and Collection Practices: The Company's normal credit extension
practices and procedures and collection practices relating to the Contracts and
the Receivables thereunder, as amended from time to time, applied in accordance
with the statement of policy set forth in Exhibit A hereto.
Cut-Off Date: As to any Series of Notes, the "Cut-off Date" defined in
the related Supplement.
Date of Execution: The actual date of execution of this Indenture by
the Issuer and the Trustee as indicated by their respective acknowledgements
hereto annexed, and if the Issuer and the Trustee shall have executed this
Indenture at different dates, the later date.
Default: Any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default or, when used in association with
obligations created by an agreement other than the Agreement, the meaning
specified in such agreement.
Defaulted Receivable: Any Receivable that is not a Disputed Receivable
or an Ineligible Receivable and:
A. with respect to Government Receivables, that portion of a
Receivable (i) as to which any payment, or part thereof, remains unpaid
for 180 days from the original billing date, (ii) that portion of
which, consistent with the Credit and Collection Policy, would be
written off on the Company's financial statements or books of account
as uncollectible (excluding, however, any portion as to which
non-payment is the result of a dispute between the Government and the
Company regarding amounts payable by the Government to the Company
under the related Contract), or (iii) as to which the Government has
given notice to the Company, or the Company has reason to believe, that
such Receivable or portion thereof will not be paid (excluding,
however, any portion as to which non-payment is the result of a dispute
between the Government and the Company regarding amounts payable by the
Government to the Company under the related Contract); and
B. with respect to Commercial Receivables or Government
Subcontract Receivables, that portion of a Receivable (i) as to which
any payment, or part thereof, remains unpaid for 180 days from the
original billing date, (ii) as to which the related Obligor or Prime
Contractor becomes bankrupt, unless such Obligor or Prime Contractor
has the approval of a bankruptcy court of competent jurisdiction to
make payments under the related Contract and such payments are not the
subject of any legal challenge, (iii) that portion of which, consistent
with the Credit and Collection Policy, would be written off on the
Company's financial statements or books of account as uncollectible
(excluding, however, any portion as to which non-payment is the result
of a dispute regarding amounts payable to the Company under the related
Contract); provided that with respect to an Obligor or Prime Contractor
that is not rated Investment Grade and the Commercial Receivables or
Government Subcontract Receivables of which are Defaulted
Receivables pursuant to any of clauses (i) through (iii) of this
paragraph (b), all remaining Commercial Receivables or Government
Subcontract Receivables of such Obligor or Prime Contractor will be
deemed Defaulted Receivables unless the Company delivers to the Trustee
an Officer's Certificate to the effect that: (i) the Company has no
reason to believe that the remaining Commercial Receivables or
Government Subcontract Receivables of such Obligor or Prime Contractor
will not be paid or will become Defaulted Receivables; and (ii) the
aggregate of the Stated Values of all Defaulted Receivables of such
Obligor (including Defaulted Receivables which have previously been
repurchased or substituted for) net of any collections on such
Defaulted Receivables, does not exceed the greater of $50,000 or 10% of
the total of the Stated Values of all Commercial Receivables and
Government Subcontract Receivables of such Obligor or Prime Contractor
(including Defaulted Receivables which have previously been repurchased
or substituted for) net of any collections on such Defaulted
Receivables. If all of the Receivables of an Obligor or Prime
Contractor become Defaulted Receivables, the receivables of such
Obligor or Prime Contractor will subsequently be deemed to be Eligible
Receivables upon consent of the Required Holders.
Deferred Purchase Price: On any date of determination, any portion of
the Purchase Price of an Eligible Receivable that is unpaid on the Purchase
Date on which such Eligible Receivable was purchased and is still unpaid as of
such date of determination.
Determination Date: With respect to any Payment Date, two Business
Days prior to such Payment Date.
Determination Date Statement: The statement required to be delivered
by the Servicer, on or before the Determination Date, pursuant to Section 4.02
of the Servicing Agreement.
Determination Period: With respect to any Determination Date, the
approximately one-calendar month period, as set forth in Schedule A to the
Servicing Agreement, most recently ended prior to such Determination Date.
Disputed Receivable: As to any date of determination, that portion of a
Receivable (a) with respect to which the related Obligor has disputed the amount
billed by the Company, whether such dispute arises over alleged unsatisfactory
performance of work under the related Contract or the contractual amount owed
the Company for services rendered, costs incurred or work completed, or (b) as
to which the related Obligor has withheld payment because of a dispute, or
settlement, with respect to a debt of the Company due such Obligor including,
but not limited to, a notification from the Government of its intention to
offset to satisfy any such claim; provided, however, that all remaining
Receivables of (i) the related Commercial Obligor or (ii) under the related
Government Contract or Government Subcontract will be deemed Disputed
Receivables unless the Company delivers to the Trustee an Officer's Certificate
to the effect that the Company has no reason to believe that all such remaining
Receivables (A)
will become Defaulted Receivables or (B) will become Disputed Receivables.
Distribution Account: With respect to any Series, any account so
denominated and established pursuant to the related Supplement.
Duff & Phelps: Duff & Phelps Credit Rating Co., and the successors
and assigns thereof.
Eligible Account: (a) A segregated account or accounts maintained with
a depository institution or trust company whose long-term unsecured debt
obligations are rated by S&P and Duff & Phelps at the time of any deposit
therein in one of the three highest rating categories (or, if such obligations
are, at the time of such deposit, not rated by S&P or Duff & Phelps, then such
rating shall be from any of S&P or Duff & Phelps and Moody's) or (b) a
segregated trust account or accounts maintained with a federal or state
chartered depository institution subject to regulations regarding fiduciary
funds on deposit substantially similar to 12 C.F.R. Section 9.10(b).
Eligible Investments: One or more of the following:
a obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the
United States;
b. repurchase agreements on obligations specified in clause
(a) maturing not more than one month from the date of acquisition
thereof; provided that the long-term unsecured obligations of the party
agreeing to repurchase such obligations are at the time rated by S&P
and Duff & Phelps in one of the three highest rating categories
(without regard to numerical modifiers) available from S&P and Duff &
Phelps; and, provided, further, that the short-term debt obligations of
the party agreeing to repurchase shall be rated A-1 or higher by S&P
and Duff & Phelps.
c. federal funds, certificates of deposit, time deposits and
bankers' acceptances, each of which shall not have an original maturity
of more than 90 days, of any depository institution or trust company
incorporated under the laws of the United States or any state; provided
that the long-term unsecured debt obligations of such depository
institution or trust company at the date of acquisition thereof have
been rated by S&P and Duff & Phelps in one of the three highest rating
categories (without regard to numerical modifiers) available from S&P
and Duff & Phelps; and, provided, further, that the short-term
obligations of such depository institution or trust company shall be
rated A-1 or higher by S&P and Duff & Phelps;
d. commercial paper or commercial paper funds (having original
maturities of not more than 90 days) of any corporation incorporated
under the laws of the United States or any state thereof; provided that
any such commercial paper or commercial paper funds shall be rated A-1+
by S&P and Duff & Phelps; and
e. any no-load money market fund rated Am or Am-G or higher
by S&P, including but not limited to funds for which the Trustee is
investment manager or adviser;
provided that if either of S&P or Duff & Phelps does not rate the "Eligible
Investments" as described in clauses (a), (b), (c) or (d) of the definition
hereof, then such rating shall be from either of S&P or Duff & Phelps and
Moody's; provided further that Eligible Investments purchased from funds in the
Collection Account, any Distribution Account or any Reserve Fund shall include
only such obligations or securities that either may be redeemed daily or mature
no later than the Business Day next preceding the next Payment Date; and,
provided, further, that no instrument shall be an Eligible Investment if such
instrument evidences a right to receive only interest payments with respect to
the obligations underlying such instrument.
Eligible Receivable: (a) At any time, except as specified below, any
Government Receivable or Government Subcontract Receivable:
1. which is not a Defaulted Receivable;
2. which is not a Disputed Receivable;
3. which represents (A) amounts payable for services performed or
costs incurred under a Contract which have been billed to the related
Obligor, (B) amounts payable for services performed or costs incurred
under a Contract and which are unbilled but billable (pursuant to the
Company's policies) within 60 days of the Purchase Date on which
such Receivable is sold to the Issuer or (C) accrued fixed fees,
award fees, general and administrative expenses or overhead
expenses which arose under a Conbtract;
4. which is an "account" or a general intangible as defined in
the UCC, but, except for Permitted Milestone Accruals, only to the
extent that such Receivable constitutes rights fully earned by
performance;
5. is denominated and payable only in United States dollars;
6. which arose under a Contract which has been duly authorized and is
in full force and effect and which, together with such Contract,
constitutes the legal, valid and binding obligation enforceable against
such Obligor in accordance with its terms and is not the subject of, as
of the Purchase Date on which such Receivable is sold to the Issuer,
any material dispute, asserted offset, counterclaim or defense;
7. which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto and with respect to which no party to the Contract
related thereto is in violation of any such law, rule or regulation in
any material respect;
8. which, with respect to accrued and unbilled Receivables described in
clauses (iii)(B) and (C) above, arose under a Contract as to which the
related Seller has been performing for at least thirty days prior to
the Purchase Date on which such Receivable is sold to the Issuer; and
9. as to which, with respect to any Government Subcontract Receivable
arising under such Subcontract, if it relates to an Obligor which is
under the protection of a bankruptcy court, such bankruptcy court has
approved payment by such Obligor under the related Contract to the
related Seller.
(b) At any time, any Commercial Receivable:
1. which is not a Defaulted Receivable;
2. which is not a Disputed Receivable;
3. which represents amounts payable for services performed or costs
incurred under a Contract which have been billed to the related
Obligor;
4. which is an "account" or a "general intangible" as defined in the
UCC, but only to the extent that it constitutes rights fully earned
by performance;
5. is denominated and payable only in United States dollars;
6. which arose under a Contract which has been duly authorized and is
in full force and effect and which, together with such Contract,
constitutes the legal, valid and binding obligation of the Obligor of
such Receivable enforceable against such Obligor in accordance with its
terms and is not the subject of, as of the Purchase Date on which such
Receivable is sold to the Issuer, any material dispute, asserted
offset, counterclaim or defense whatsoever (except the discharge in
bankruptcy of such Obligor);
7. which, together with the Contract related thereto, does not
contravene in any material respect any laws, rules or regulations
applicable thereto and with respect to which no party to the Contract
related thereto is in violation of any such law, rule or regulation in
any material respect; and
8. as to which, if it relates to an Obligor which is under the
protection of a bankruptcy court, such bankruptcy court has approved
payment by such Obligor under the related Contract to the related
Seller.
(c) As of the Closing Date, all Receivables that are
"Eligible Receivables" (but not "Excluded Receivables")
under that certain transaction relative to the issuance of
the 8.54% Contract Receivable Collateralized Notes, Series
1992-1.
Enhancement: The rights and benefits provided to the Noteholders of any
Series or Class pursuant to any financial guaranty, insurance policy, letter of
credit, surety bond, cash collateral account, spread account, guaranteed rate
agreement, subordination agreement, maturity liquidity facility, tax
protection agreement, interest rate swap agreement or other similar arrangement
as specified in the related Supplement. The subordination of any Series or Class
to any other Series or Class shall be deemed to be an Enhancement.
Enhancement Agreement: Any agreement, instrument or
document governing the terms of any Enhancement or pursuant to
which any Enhancement is issued or outstanding as specified in
the related Supplement.
Enhancement Agreement Event of Default: The "events of
default" specified in the related Enhancement Agreement.
Enhancement Provider: The Person providing any Enhancement, as
specified in a Supplement, other than any Noteholders the Notes of which are
subordinated to any Series or Class as specified in the related Supplement. As
used herein any time that a provision requires the consent of an Enhancement
Provider, such consent must be from the Enhancement Provider for each Series.
ESOP: The Company's Employee Stock Ownership Plan, including
the trust fund established thereby.
Event of Default: The meaning specified in Section 5.01
hereof.
Excess Cash: With respect to each Determination Date, the amount, if
any, by which the Aggregate Collateral Balance, less the Stated Value of any
Excluded Receivables, exceeds the level required to maintain the Collateral
Value Ratio at 1.00 as of the last day of the preceding Determination Period.
Excluded Receivables: As of any date of determination
(without duplication):
(a) all Receivables which are Defaulted Receivables;
(b) all Receivables which are Disputed Receivables;
(c) all Receivables which are Ineligible Receivables;
(d) the excess of (i) the aggregate Stated Value of all
Receivables, or any specified portion of Receivables, which are
outstanding more than 120 days and less than 180 days from their
respective billing dates over (ii) (A) in the case of Commercial
Receivables, 7% of the Aggregate Collateral Balance on such date of
determination and (B) in the case of Government Receivables together
with Government Subcontract Receivables, 3%, of the Aggregate
Collateral Balance as calculated on each Determination Date;
(e) all Commercial Receivables or Government
Subcontract Receivables of an Obligor when the aggregate
Stated Value of Disputed Receivables and Ineligible
Receivables due from such Obligor exceeds 25% of the
aggregate Stated Value of all Receivables due from such
Obligor;
(f) (i) on each Determination Date only and with respect to
each Government Contract and Government Subcontract, the excess, if
any, of the aggregate Stated Value of all Government Receivables and
Government Subcontract Receivables accrued and unbilled under such
Contract as of the last day of the preceding Determination Period, less
the aggregate Stated Value of Government Receivables and Government
Subcontract Receivables billed under such Contract since the last day
of such preceding Determination Period, over the amount of Permitted
Accrued Receivables for such Contract and (ii) if after giving effect
to the limitation set forth in subclause (i) above, the total allowable
accrued and unbilled Government Receivables and Government Subcontract
Receivables exceeds 40% of the Aggregate Collateral Balance as of the
last day of the preceding Determination Period, those Receivables in
excess of 40%; and (iii) if after giving effect to the limitations set
forth in subclauses (i) and (ii) above, the total allowable accrued and
unbilled Government Subcontract Receivables exceeds 5% of the Aggregate
Collateral Balance
as of the last day of the preceding Determination Period,
those Government Subcontract Receivables in excess of 5%;
and
Q. with respect to Permitted Milestone Accruals, (i) the
excess, if any, of the aggregate Stated Value of such Receivables
arising under all Task Orders over 3% of the Aggregate Collateral
Balance and (ii) such Receivables that have not been billed (pursuant
to the Company's policies) within 60 days of the Purchase Date on which
such Receivables were sold to the Issuer.
GAAP: Generally Accepted Accounting Principles applied on a
basis consistent with the Company's financial statements as set
forth in its Form 10-K.
Government: The federal government of the United States of
America or any department, division, agency or instrumentality
thereof.
Government Contract: Any Contract the Obligor on which is
the Government or any Qualified Joint Venture Contract.
Government Receivable: (i) Any Receivable the payment of which is an
obligation of or is funded by the Government or (ii) any Receivable under (A) a
Government Contract or (B) a Qualified Joint Venture Contract; provided,
however, that with respect to subclause (ii)(B) above, (x) the Stated Value of
Receivables arising under any one such Qualified Joint Venture Contract in
excess of 5% of the Aggregate Collateral Balance shall not be Government
Receivables, and instead shall be Government Subcontract Receivables and (y) the
aggregate Stated Value of Receivables thereunder in excess of 20% of the
Aggregate Collateral Balance shall not be Government Receivables, and instead
shall be Government Subcontract Receivables for purposes of calculating
"Collateral Value Percentage", exclusive of amounts included in clause (x)
above.
Government Subcontract: A Contract between a Seller and a Prime
Contractor, through which the Seller is acting as a subcontractor to the
Government, and where the Seller is not itself in privity of contract with the
Government.
Government Subcontract Receivable: Any Receivable under a Government
Subcontract or any portion of a Receivable under a Joint Venture Contract so
described in the proviso to the definition of "Government Receivable".
Grant: To grant, bargain, sell, warrant, alienate, remise, demise,
release, convey, assign, transfer, mortgage, pledge, create and grant a first
priority security interest in and right of set-off against, deposit, set over
and confirm. A Grant of the Receivables shall include all rights, powers and
options (but none of the obligations) of the granting party thereunder,
including without limitation, the immediate continuing right to collect and
receive payments in respect of the Receivables; provided, however, that a Grant
of Government Receivables does not include the right of a Seller to enforce a
claim for payment of such Receivables under the related Contract.
Holder or Noteholder: The Person in whose name a Note is
registered in the Note Register.
Implied Rating: An Obligor with respect to Commercial Receivables and
Government Subcontract Receivables will have an "Implied Rating" if it meets one
of the following conditions as so certified by the Servicer to the Trustee: (i)
if any debt securities of such Obligor are rated by a Rating Agency the Implied
Rating will be equal to the senior unsecured debt rating of such Obligor or if
any such debt securities has a split
rating, the lower of such ratings then in effect, (ii) if the debt obligations
of such Obligor are not rated by a Rating Agency, but such obligations are
guaranteed by a holding company, an Affiliate or other entity which has a senior
unsecured debt rating from a Rating Agency, the Implied Rating will be equal to
such senior unsecured rating or (iii) if such Obligor is a Non-U.S. Obligor
whose debt obligations are not rated by a Rating Agency, but such obligations
are either guaranteed by the related national government or a majority of its
stock is owned by such national government the Implied Rating of such Obligor
will be equal to the Rating Agency's rating of such related national government.
For purposes of this definition and Section 7.06 hereof, Kaiser-Hill Co., LLC
will be deemed to have an Implied Rating of "BBB-" with respect to the Contract
listed on the Primary Contract List on the date hereof, as the same such
Contract may be amended or supplemented from time to time.
Indenture: This instrument as amended. All references in this
instrument to designated "Articles," "Sections," "Subsections" and other
subdivisions are to the designated Articles, Sections, Subsections and other
subdivisions of this instrument as originally executed. The words "herein,"
"hereof," "hereunder" and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section, Subsection or other
subdivision.
Independent: When used with respect to any specified Person means such
a Person, who (a) is in fact independent of the Issuer and any other obligor
upon the Notes or a Related Person of the Issuer or such other obligor, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer or in any such other obligor or in a Related Person of
the Issuer or such other obligor, and (c) is not connected with the Issuer or
any such other obligor as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions. Whenever it is
provided herein that any Independent Person's opinion or certificate shall be
furnished to the Trustee, such Person shall be appointed by Issuer Order and
approved by the Trustee and the Required Holders in the exercise of reasonable
care and such opinion or certificate shall state that the signer has read this
definition and that the signer is independent within the meaning thereof.
Ineligible Receivable: Any Receivable as to which a breach, on any
date, of any representation or warranty set forth in Section 4.02 of the related
Sale and Purchase Agreement has occurred and is continuing.
Initial Closing Date: April 18, 1997.
Initial Cut-off Date: April 16, 1997.
Interest Coverage Ratio: For any period, (a) Consolidated
EBDAIT, divided by (b) Consolidated Net Cash Interest Expense.
Interest Period: The interest period as specified in the
related Supplement.
Investment Grade: A rating of at least "BBB-" or "Baa3"
assigned by a Rating Agency; provided if an entity has a split
rating, the lesser rating then in effect.
Issuer: Dyn Funding Corporation, a Delaware corporation, unless a
successor Person shall have become the Issuer pursuant to the applicable
provisions of this Indenture, and thereafter "Issuer" shall mean such successor
Person.
Issuer Officer: The Chairman of the Board of Directors, the
President or any Vice President of the Issuer.
Issuer Order and Issuer Request: A written order or request
signed in the name of the Issuer by an Issuer Officer or its
Treasurer, an Assistant Treasurer, Controller, an Assistant
Controller, Secretary, or an Assistant Secretary, and delivered
to the Trustee.
Joint Venture Contract: A Government Subcontract the Obligor on which
is a joint venture between the Seller and other Person(s), which joint venture
has no direct-hire employees.
Lien: Any lien, mortgage, security interest, pledge, charge, equity,
encumbrance or right of any kind whatsoever (except any lien, mortgage, security
interest, pledge, charge, equity, encumbrance or right of any kind granted under
a Sale and Purchase Agreement) with respect to the Receivables.
Lockbox Account: Each lockbox account established and
maintained by the Issuer with a depositary institution solely in
the name of the Trustee.
Lockbox Bank: Each depositary institution with which a
Lockbox Account is maintained.
Mandatory Redemption: A redemption by the Issuer of all of
the Notes of a Series pursuant to the related Supplement.
Mandatory Redemption Level: A Collateral Value Ratio of
0.95.
Moody's: Moody's Investors Service, Inc., and the
successors and assigns thereof.
Net ESOP Contributions: For any period (a) cash contributions to the
ESOP, but only to the extent that such contributions are repaid by the ESOP to
the Company in the form of either (i) cash payments under loan agreements
between the Company and the ESOP, or (ii) cash proceeds from the sale of the
Company's common stock to the ESOP, plus (b) to the extent expensed, the fair
market value of the Company's common stock contributed to the ESOP, less (c) the
amount of principal payments pursuant to third party ESOP related financing
agreements, all determined on a consolidated basis in accordance with GAAP.
Non-Amortization Period: With respect to any Series, the period from
the Closing Date to the close of business on the Payment Date preceding the
Amortization Date for such Series.
Non-U.S. Obligor: An Obligor on a Contract relating to
Commercial Receivables or Government Subcontract Receivables that maintains its
principal place of business outside the United States of America.
Note Interest Payment: With respect to any Notes, the total
amount of interest payable on the Notes on any Payment Date, as
specified in the related Supplement.
Note Interest Rate: With respect to any Note, the note
interest rate payable on such Note as specified in the related
Supplement.
Note Payments: With respect to any Notes, the total amount
of principal and interest payable on the Notes on any Payment
Date, as specified in the related Supplement.
Note Principal Balance: With respect to any Note on any date of
determination, the principal balance thereof on the date of initial issuance,
plus amounts added to the principal balance thereof subsequent to the date of
initial issuance, minus all amounts distributed to the Noteholder of such Note
as of such date in respect thereof on account of principal.
Note Purchase Agreement: The Note Purchase Agreement relating to any
Series or Class of Notes by and among the Issuer, the Company and the Purchasers
of such Notes, as it may be supplemented or amended.
Note Register and Note Registrar: The respective meanings
specified in Section 2.05 hereof.
Noteholder or Holder: The Person in whose name a Note is
registered in the Note Register.
Notes: Any notes authorized by, and authenticated and
delivered under the Agreement.
Obligor: Each Person who is obligated to pay for merchandise or
services pursuant to a Contract (including any guarantor thereof) and, in the
case of a Government Subcontract, the related Prime Contractor.
Officer: With respect to any corporation, the Chairman of
the Board of Directors, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or the
Assistant Treasurer of such corporation.
Officer's Certificate: For any Person, a certificate delivered to the
Trustee that has been signed on behalf of that Person by an individual who is
identified in that certificate as being an Officer of that Person or any other
individual authorized to execute the certificate.
Opinion of Counsel: A written opinion of an attorney at law admitted to
practice before the highest court of any state of the United States or the
District of Columbia or a law firm that may, except as otherwise expressly
provided in this Indenture, be counsel for the Issuer and who shall be
satisfactory to the Trustee and the Required Holders or, if specified in the
related Supplement with respect to a related Series of Notes, to a specified
percentage of the Outstanding Note Principal Balance relating to such Series of
Notes. Whenever an Opinion of Counsel is required hereunder, such opinion may
rely on opinions of other counsel who are so admitted; provided that any such
other opinion expressly permits such reliance.
Optional Redemption: A redemption at the request of the
Issuer of Notes as specified in the related Supplement.
Outstanding: As of any date of determination, "Outstanding"
refers to all Notes theretofore authenticated and delivered under
the Agreement except:
R. Notes theretofore canceled by the Note
Registrar or delivered to the Note Registrar for
cancellation;
Notes or portions thereof for which payment or
redemption money in the necessary amount has been theretofore deposited
pursuant to Section 4.01 hereof with the Trustee or any Paying Agent
(other than the Issuer) in trust or set aside and segregated in trust
by the Issuer for the Holders of such Notes; provided that if such
Notes or portions thereof are to be redeemed, notice of such redemption
has been duly given pursuant to the Agreement.
T. Notes in exchange for or in lieu of which
other Notes have been authenticated and delivered pursuant
to this Indenture unless proof satisfactory to the Trustee
is presented that any such Notes are held by a holder in due
course; and
U. Notes alleged to have been destroyed, lost or
stolen and for which replacement Notes have been issued as
provided in Section 2.06 hereof;
provided that, in determining whether the Holders of the requisite principal
amount of the Outstanding Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Notes owned by the Issuer or any
other obligor upon the Notes or any Related Person of the Issuer or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Trustee Officer knows to be so owned shall be so disregarded. Notes
so owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Notes and that the pledgee is not the Issuer or
any other obligor upon the Notes or any Related Person of the Issuer or such
other obligor.
Outstanding Note Principal Balance: As of the time of
reference thereto, the unpaid principal amount of the Notes
Outstanding as of such time of reference.
Parent Undertaking: The Parent Undertaking, dated the
Closing Date, by the Company in favor of the Issuer and the
Trustee.
Paying Agent: Any Person authorized by the Issuer to pay the
principal of or interest on any Notes on behalf of the Issuer.
Payment Date: The 30th day of each month (except that Payment Dates in
the month of February shall be the last day of such month), or, if such day is
not a Business Day, the next succeeding Business Day.
Permitted Accrued Receivables: As to any Determination Date and any
Government Contract or Government Subcontract, an amount equal to the product of
(A) 60 and (B) the Average Daily Revenue for such Government Contract or
Government Subcontract; provided that the related Seller has performed services,
incurred costs or completed work under such Government Contract or Government
Subcontract during the period for which such Average Daily Revenue was
calculated.
Permitted Milestone Accruals: Any Government Receivable or Government
Subcontract Receivable which represent amounts payable for services performed or
costs incurred under Qualified Task Orders issued pursuant to Government
Contracts or Government Subcontracts and which is unbilled but billable solely
upon the Obligor's acceptance of the services performed or goods provided, but
which is expected to be billed (pursuant to the Company's policies) within 60
days of the Purchase Date on which such Receivable is sold to the Issuer.
Person: Any individual, corporation, partnership, joint venture,
limited liability company, association, joint stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
Primary Contract List: The list of Obligors on Contracts relating to
Commercial Receivables and Government Subcontract Receivables delivered to the
Trustee by the Issuer on the Closing Date and held by the Trustee, as such list
may be amended from time to time as provided in Section 7.06 hereof. The initial
Primary Contract List is attached hereto as Schedule D.
Prime Contractor: In the case of a Government Subcontract,
the Person other than a Seller, which is in privity of contract
with the Government.
Principal Distribution Amount: With respect to each Payment
Date and any Series of Notes, the amount specified in the related
Supplement.
Principal Terms: With respect to any Series: (a) the name or
designation; (b) the initial principal amount (or method for calculating such
amount); (c) the Note Interest Rate (or method for the determination thereof);
(d) the Payment Date or dates and the date or dates from which interest shall
accrue; (e) the method for allocating collections to Noteholders; (f) the
designation of any accounts and the terms governing the operation of such
accounts with respect to the Series; (g) the Servicing Fee; (h) the Enhancement
Provider and terms of any form of Enhancement with respect thereto; (i) the
terms of which the Notes of such Series may be exchanged for Notes of another
Series, repurchased by the Issuer or remarketed to other investors; (j) the
Stated Maturity; (k) the number of Classes of Notes of such Series and, if more
than one Class, the rights and priorities of each such Class; and (l) fees of
the Trustee and any other applicable terms.
Proceeding: Any suit in equity, action at law or other
judicial or administrative proceeding.
Purchase Date: Each date on which any Receivable is
purchased by the Issuer pursuant to the terms of any Sale and
Purchase Agreement.
Purchase Price: The Purchase Price for each Receivable being purchased
on any Purchase Date, determined as set forth in Section 2.01 of each Sale and
Purchase Agreement.
Purchase Limit: With respect to any Class of Notes, the
Purchase Limit specified in the related Supplement.
Purchasers: The purchasers of any Series or Class of Notes
pursuant to, and identified in, the Note Purchase Agreement for
such Series or Class.
Qualified Bank: A bank having long term unsecured debt obligations
rated by S&P and Duff & Phelps in one of the three highest rating categories
(or, if such obligations are not rated by S&P and Duff & Phelps, then such
rating shall be from either of S&P or Duff & Phelps and Moody's). For purposes
of the next preceding sentence, a bank shall be deemed to have such rating if
such bank is the principal subsidiary of a bank holding company
and the long term unsecured debt obligations of such bank holding company are
currently rated by S&P and Duff & Phelps in one of the three highest rating
categories (or, if such obligations are not rated by S&P and Duff & Phelps, then
such rating shall be from either of S&P or Duff & Phelps and Moody's). A bank
shall be deemed the principal subsidiary of a bank holding company if the bank's
net worth exceeds 66-2/3% of the consolidated net worth of such bank holding
company.
Qualified Joint Venture Contract: A Joint Venture Contract with respect
to which (i) the Company or a wholly owned subsidiary thereof possesses both
voting control over the Obligor and administrative responsibility for the
related Government Contract between the joint venture and the Government, (ii)
the Obligor has executed and issued to the Trustee an undated Assignment of
Claims Notice for the related Government Contract, in favor of an escrow agent
acting on behalf of the Trustee and the partners in the joint venture other than
the Seller and (iii) payments under the related Government Contract must be
directed to such escrow agent which, in turn, must direct to the Trustee the
portion thereof payable to the Seller under the Joint Venture Contract;
provided, however, that no Joint Venture Contract shall be a Qualified Joint
Venture Contract if, as of any date of determination:
(a) the aggregate Stated Value of Disputed
Receivables under Qualified Joint Venture Contracts
exceeds 25% of the aggregate Stated Value of all
Receivables under Qualified Joint Venture Contracts; or
(b) the aggregate Stated Value of Defaulted Receivables under
Qualified Joint Venture Contracts exceeds 10% of the aggregate Stated
Value of all Receivables under Qualified Joint Venture Contracts.
Qualified Task Order: An order issued under a long-term Government
Contract or Government Subcontract for the performance of services or provision
of goods, which order is not expected to generate more than $250,000 in revenues
in the aggregate.
Rating Agency: As applicable, S&P, Moody's and Duff &
Phelps.
Rating Agency Condition: With respect to any action, that a Rating
Agency shall have notified the Issuer and the Trustee in writing that such
action will not result in a reduction or withdrawal of the rating of any
outstanding Series or Class with respect to which it is a Rating Agency.
Receivable: All rights to payments from an Obligor under a Contract
listed on the Contract Schedule for such amounts which have been purchased by
the Issuer from time to time pursuant to a Sale and Purchase Agreement, whether
constituting an account or general intangible, including the right to payment of
any interest or finance charges and other obligations of such Obligor with
respect thereto. The term Receivables includes Commercial Receivables,
Government Subcontract Receivables and Government Receivables and excludes that
portion of any Receivable (i) that has been repurchased or substituted for by a
Seller pursuant to Section 4.04 or 4.05 of the related Sale and Purchase
Agreement and (ii) as to which all amounts payable have been collected by the
Servicer.
Receivables Information: Any information provided in
writing by an Authorized Officer of the Sellers under the
Sale and Purchase Agreements to the Purchasers.
Receivables Schedule: The schedule attached as Schedule B
hereto and setting forth the following information as of the
Initial Cut-off Date:
V. With respect to Commercial Receivables:
1. the name of each Obligor:
2. the aggregate Stated Value of the Receivables
of each Obligor;
3. the invoice number of each Commercial
Receivable;
4. the aggregate amount of Disputed
Receivables, if any; and
5. the aggregate amount of Defaulted
Receivables, if any.
W. With respect to Government Receivables
(including Receivables arising under Qualified Joint Venture
Contracts):
1. identification of each Government Contract;
2. the aggregate amount of billed Receivables
for each Government Contract;
3. the aggregate amount of accrued and unbilled
Receivables for each Government Contract;
4. the Average Daily Revenue for each Government
Contract;
5. the aggregate amount of Disputed
Receivables, if any;
6. the aggregate amount of Defaulted
Receivables, if any;
7. the partners in respect of a Qualified Joint
Venture Contract; and
8. the escrow agent, if any, in respect of such
Qualified Joint Venture Contract.
X. With respect to Government Subcontract Receivables:
1. identification of each Government
Subcontract and the related Prime Contractor;
3/64971.8
2. the aggregate amount of billed Receivables
for each Government Subcontract;
3. the aggregate amount of accrued and unbilled
Receivables for each Government Subcontract;
4. the Average Daily Revenue for each Government
Subcontract;
5. the aggregate amount of Disputed Receivables, if any; and
6. the aggregate amount of Defaulted Receivables, if any.
Y. A calculation of the Collateral Value Ratio, including a
statement of the amount of cash to be deposited into the Collection
Account pursuant to Section 3.01(k) hereof in order to produce a
Collateral Value Ratio of 1.00 as of the Initial Cut-off Date.
Record Date: With respect to the Notes, the date on which the Holders
of Notes entitled to receive the payment due on the Notes on the next succeeding
Payment Date are determined, such date as to any Payment Date being the
fifteenth day of the month in which such Payment Date occurs, or would occur but
for the thirtieth day of such month not being a Business Day.
Redemption Date: With respect to the Called Principal of any Note, the
date on which such Called Principal is declared to be due and payable pursuant
to a redemption or an acceleration of maturity pursuant to Section 5.02 hereof
or pursuant to the applicable Supplement. With respect to a Special Redemption
or Mandatory Redemption, the Redemption Date shall be the Payment Date next
succeeding the Determination Date on which such Special
3/64971.8
Redemption or Mandatory Redemption is determined to be required on any other
date specified in the Supplement.
Registered Holder: The Person whose name appears on the Note
Register as the registered holder of a Note.
Related Person: With respect to any Person, any trade or business,
whether or not incorporated, which, together with such Person, is under common
control, as described in Section 414(b) or (c) of the Code.
Repurchase Date: The date determined as described in Section
4.04 of the Sale and Purchase Agreement.
Repurchase Price: The amount calculated as described in
Section 4.04 of the Sale and Purchase Agreement.
Required Holder(s): As of any date of determination, the Registered
Holder or Registered Holders of at least 66-2/3% of the Outstanding Note
Principal Balance in the aggregate, unless otherwise indicated, of all Series
Outstanding at such time; provided, however, that, for purposes of this
definition, Outstanding Note Principal Balance shall be deemed to include the
Purchase Limit with respect to any applicable Class of Notes.
Required Reserve Balance: With respect to any Series, the
balance required pursuant to the related Supplement.
Reserve Fund: With respect to any Series, any reserve fund
so denominated and established pursuant to the related
Supplement.
Responsible Officer: Any officer of the Issuer, the Servicer or a
Seller who is familiar with, and customarily performs functions relating to, the
Issuer's, the Servicer's or a Seller's obligations under the Indenture, the
Servicing Agreement and the Sale and Purchase Agreements, as the case may be.
Retainages: Amounts to be contractually withheld by an
Obligor pursuant to an underlying Contract.
Sale: The meaning specified in Section 5.16 hereof.
Sale and Purchase Agreement: Each Sale and Purchase Agreement,
substantially in the form of Exhibit C hereto, between the Issuer and a Seller
whereby the Receivables securing the Notes are sold by such Seller to the
Issuer.
3/64971.8
S&P: Standard & Poor's Ratings Services, a division of the McGraw-Hill
Companies, Inc., and the successors and assigns thereof.
Scheduled Principal Debt: The amount of principal scheduled to be due
but not yet paid, on indebtedness of the Company and its subsidiaries on a
consolidated basis, including amounts due by reason of acceleration.
Indebtedness shall include notes, debentures, capitalized lease obligations,
mortgages and other obligations recorded as notes payable or debt in the
Company's financial statements, all as determined in accordance with GAAP;
provided, however, that all amounts due under (i) term loans, letters of credit,
revolving credit facilities, and lines of credit due to banking institutions and
(ii) all Series of Notes shall be excluded, unless payment of such amounts due
as to any Series has been accelerated as a result of a default by the Company
under the related Supplement or under the Indenture.
Seller: Each of the Company and any majority-owned subsidiaries of the
Company that (a) enters into Sale and Purchase Agreements following the Closing
Date, each being party to a Sale and Purchase Agreement and (b) the obligations
of which, pursuant to the Parent Undertaking, are guaranteed by DynCorp. Major
divisions of a Seller will be deemed to be Sellers, provided that such divisions
will not enter into separate Sale and Purchase Agreements.
Seller's Lockbox: Each lockbox account established and
maintained by a Seller or the Servicer in its own name with a
depository institution.
Series: Any series of Notes issued pursuant to a Supplement, which may
include within any such Series, a Class or Classes of Notes subordinate to
another such Class or Classes of Notes.
Series Issuance Date: With respect to any Series, the date on which the
Notes of such Series are to be originally issued in accordance with Section 2.11
hereof and the related Supplement.
Servicer: DynCorp, or any successor thereto, in its capacity
as Servicer under the Servicing Agreement.
Servicing Agreement: The Servicing Agreement dated the date
hereof by and among the Issuer, the Trustee and the Servicer, as
it may be supplemented or amended.
Servicing Fee: With respect to each Payment Date with
respect to a Series of Notes, the servicing fee specified in the
related Supplement.
3/64971.8
Special Redemption: A redemption by the Issuer of Notes as
specified in the related Supplement.
Stated Maturity: With respect to any Notes, the date specified in such
Note and the related Supplement as the fixed date on which the final installment
of the principal of such Note is due and payable.
Stated Value: (a) As to any Receivable that has been billed, the amount
billed (net of any Retainages under the related Contract) for services rendered,
cost incurred or work completed pursuant to the related Contract, (b) as to any
Government Receivable (including any Receivable under a Qualified Joint Venture
Contract) or Government Subcontract Receivable that is accrued and unbilled,
including any accrued fixed fee, award fee, general and administrative expense
and overhead expense, the amount which has been determined with respect to a
Determination Period, and without regard to the 0.15 discount under clause
(c)(iii) below, and (c) as to that portion of a Government Receivable (including
any Receivable under a Qualified Joint Venture Contract) or Government
Subcontract Receivable that is accrued and unbilled (other than amounts in (b)
above), the product of (i) the Average Daily Revenue for the related Contract,
(ii) the number of Calendar Days since the Purchase Date on which accrued and
unbilled Government Receivables (including any Receivable under a Qualified
Joint Venture Contract) arising under such Contract were last sold to the Issuer
(taking into account any adjustment to the related Average Daily Revenue during
such period) and (iii) 0.85; provided that on each Determination Date, the
Stated Value of accrued and unbilled Government Receivables (including any
Receivable under a Qualified Joint Venture Contract) and Government Subcontract
Receivables, as determined in clause (c) above shall be the actual amount of
such accrued and unbilled Receivables as of the last day of the preceding
Determination Period as determined by the Seller on such current Determination
Date, without regard to the 0.15 discount under clause (c)(iii) above.
Successor Servicer: Any servicer appointed by the Issuer or
the Trustee pursuant to Section 5.03 of the Servicing Agreement.
Supplement: With respect to any Series, a supplement to this Indenture
complying with the terms of Section 2.11 hereof, executed in connection with any
issuance of any Series of Notes.
Trustee: Bankers Trust Company, a New York State banking
corporation, or its agents, attorneys, custodians or nominees
unless a successor Person shall have become the Trustee pursuant
3/64971.8
to the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Person.
Trustee Officer: With respect to the Trustee, any officer assigned to
the Corporate Trust Office, including any managing director, vice president,
assistant vice president, assistant treasurer, assistant secretary or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and having direct
responsibility for the administration of this Agreement, and also, with respect
to a particular matter, any other officer, to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
Trust Estate: All money, instruments and other property subject or
intended to be subject to the lien of the Agreement, pursuant to the Granting
Clauses of the Agreement, for the benefit of the Holders of the Notes as of any
particular time (including, without limitation, all property and interests
Granted to the Trustee in the Agreement) and all right, title and interest of
the Trustee in, to and under the Servicing Agreement, each Sale and Purchase
Agreement and all money and property received or receivable by the Trustee
pursuant thereto or otherwise in respect of the Receivables and Eligible
Investments, including all proceeds thereof.
UCC: The Uniform Commercial Code as in effect in the
relevant jurisdiction.
Vice President: Any vice president, irrespective of whether
such title is modified by any other forms preceding or following.
Yield Maintenance Amount: With respect to any Series or
Class of Notes, the amount specified in the related Supplement.
3/64971.8
3/64971.8
ARTICLE TWO
THE NOTES
Form Generally.
Any Series or Class of Notes and the Trustee's certificate of
authentication related thereto shall be in substantially the form set forth as
an exhibit to the related Supplement with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture or such Supplement, and may have such letters, numbers or other
marks of identification, as may, consistently herewith, be determined by the
Officers of the Issuer executing such Notes, as evidenced by their execution of
such Notes. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods, all as determined by
the Officers of the Issuer executing such Notes, as evidenced by their execution
of such Notes.
Form of Notes.
The Notes of each Series shall be substantially in the form set forth
as an exhibit to the Supplement related to such Series.
Denominations.
Unless otherwise specified in the related Supplement and the Notes, the
Notes shall be issuable in fully registered form, in the minimum principal
amount of $500,000 and integral multiples of $100,000 in excess thereof;
provided that one Note may be issued in such denomination as may be necessary to
represent the remainder of the Note Principal Balance.
Execution, Authentication, Delivery and Dating.
The Notes shall be executed by manual signature on behalf of the Issuer
by its President or one of its Vice Presidents.
Notes bearing the manual signature of an individual who was at any time
a proper Officer of the Issuer shall bind the Issuer, notwithstanding the fact
that such individual has ceased to hold such offices prior to the authentication
and delivery of such
3/64971.8
Notes or did not hold such offices at the date of issuance of such Notes.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Notes executed by the Issuer to the
Trustee for authentication, and the Trustee shall authenticate and deliver such
Notes as in this Indenture or the related Supplement provided and not otherwise.
Notes which are authenticated and delivered by the Trustee to or upon
the order of the Issuer on the Closing Date shall be dated the Closing Date. All
other Notes which are authenticated after the Closing Date for any other purpose
hereunder shall be dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein or
in the related Supplement executed by the Trustee by manual signature, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
Registration, Registration of Transfer and
Exchange.
The Issuer shall cause to be kept a "Note Register" in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Trustee is hereby initially appointed "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided.
If a Person other than the Trustee is appointed by the Issuer as Note
Registrar, the Issuer will give the Trustee prompt written notice of the
appointment of a Note Registrar and of the location, and any change in the
location, of the Note Register, and the Trustee shall have the right to inspect
the Note Register at all reasonable times and to obtain copies thereof and the
Trustee shall have the right to rely upon a certificate executed on behalf of
the Note Registrar by an Officer thereof as to the names and addresses of the
Holders of the Notes and the principal amounts and numbers of such Notes.
Upon surrender for registration of transfer of any Note in certificated
form at the office or agency of the Issuer to be maintained as provided in
Section 8.02 hereof, the Issuer shall execute, and, upon an Issuer Order, the
Trustee shall
3/64971.8
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations of a like
aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes in
any authorized denominations and of the like aggregate principal amount, upon
surrender of such Notes to be exchanged at the office or agency of the Issuer.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and upon an Issuer Order, the Trustee shall authenticate and deliver, the Notes
that the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every such Note presented or surrendered for registration of transfer
or exchange shall (if so required by the Issuer or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by the Holder thereof
or his attorney duly authorized in writing, and by such other documents as the
Trustee may reasonably require, provided that the Trustee shall not require
legal opinions in connection with any such transfer or exchange.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of such Notes.
Mutilated, Destroyed, Lost or Stolen Notes.
If (a) any mutilated Note is surrendered to the Trustee, or the Issuer
and the Trustee receive evidence to their reasonable satisfaction of the
destruction, loss or theft of any Note (the
written statement of an institutional Noteholder shall be deemed
satisfactory for such purpose), and (b) there is delivered to the Issuer and the
Trustee such security or indemnity as may be required by them to save each of
them harmless (the unsecured agreement of indemnity of an institutional
Noteholder shall be deemed satisfactory for such purpose), then, in the absence
of notice to the Issuer or the Note Registrar that such Note has been acquired
by a bona fide purchaser, the Issuer shall execute and upon an Issuer Order the
Trustee shall authenticate and
3/64971.8
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a new Note of the same tenor and principal amount, bearing a number
not contemporaneously outstanding; provided, however, that if any such
mutilated, destroyed, lost or stolen Note shall have become or shall be about to
become due and payable, or shall have been selected or called for redemption,
instead of issuing a new Note, the Issuer may pay such Note without surrender
thereof, except that any mutilated Note shall be surrendered.
Upon the issuance of any new Note under this Section 2.06, the Issuer
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 2.06 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Payment of Principal and Interest; Principal and Interest Rights
Preserved.
A. Unless otherwise specified in an applicable Supplement, the Notes
shall bear interest from the applicable Closing Date until paid at the Note
Interest Rate. With respect to any Payment Date, interest on the Outstanding
Note Principal Balance of the Notes will accrue and be payable for the Interest
Period as defined in the related Supplement.
B. The principal of the Notes shall be payable as
specified in the related Supplement.
C. Payments on the Notes shall be made by the Trustee by wire transfer
of immediately available funds to the account of the Person entitled thereto at
a bank or other entity having appropriate facilities therefor if such Person
shall have so notified the Trustee in writing by the Record Date immediately
prior to such Payment Date and is the registered owner of Notes in the initial
aggregate principal amount equal to or in excess of $500,000. The final
installment of principal of and interest on each Note (or the Redemption Price
thereof in the case of a Note called for Optional Redemption) shall be payable
on or after its Stated Maturity. The Trustee shall notify the Person in whose
name a Note is registered at the close of business on the twenty-fifth day of
the month next preceding the month of the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such Note
will be paid. Such notice shall be mailed no earlier than the sixtieth day, and
no later than the thirty-fifth day (or, in the case of a final Payment Date
occurring in the month of February, the thirty-third day), prior to such Payment
Date. Within 30 days after the final installment of principal of and interest on
each Note (or the Redemption Price thereof in the case of a Note called for
Optional Redemption), the Holders will return the Notes to the Trustee.
3/64971.8
D. The Holders of the Notes as of the Record Date in respect of a
Payment Date shall be entitled to the interest accrued and payable and principal
payable on such Payment Date. Payments of principal to such Holders shall be
made in the proportion that the unpaid principal balance of the Notes registered
in the name of each such Holder on such Record Date bears to the aggregate
unpaid principal balance of all the Notes on such Record Date. All payment
obligations under a Note are discharged to the extent such payments are made to
the Holder of record.
E. Each Note delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Note shall carry the
rights to unpaid interest and principal that were carried by such other Note.
Persons Deemed Owners.
Prior to due presentment for registration of transfer of any Note, the
Issuer, the Trustee and any agent of the Issuer or of the Trustee may treat the
Person in whose name any Note is registered as the owner of such Note for the
purpose of receiving payments of principal of, premium, if any, and interest on
such Note and for all other purposes whatsoever, (whether or not such Note is
overdue), and neither the Issuer, the Trustee nor any agent of the Issuer or the
Trustee shall be bound by notice to the contrary.
Cancellation.
All Notes surrendered for payment, registration of transfer, exchange
or redemption shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Issuer may at
any time deliver to the Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
3/64971.8
lawful manner whatsoever, and all Notes so delivered shall be promptly canceled
by the Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section, except as expressly permitted by
this Indenture. All canceled Notes held by the Trustee shall be destroyed unless
the Issuer shall direct by a timely Issuer Order that they be returned to it.
Purchase of Notes by Issuer.
If the Issuer or any Affiliate of the Issuer offers to purchase Notes,
the Issuer must make such offer to all Noteholders pro rata in proportion to the
Note Principal Balance held by each Noteholder.
New Issuances.
A. The Issuer may from time to time issue one or more Series of Notes
pursuant to a Supplement. The Notes of all outstanding Series shall be equally
and ratably entitled as provided herein to the benefits of this Indenture
without preference, priority or distinction, all in accordance with the terms
and provisions of this Indenture except, with respect to any Series or Class, as
provided in the related Supplement. Interest on the Notes of all outstanding
Series shall be paid pro rata on each Payment Date unless otherwise indicated in
the Supplement relating to such outstanding Series. Principal of the Notes of
each outstanding Series shall be paid as indicated in the Supplement relating to
such outstanding Series.
B. On or before the Series Issuance Date relating to any new Series,
the parties hereto will execute and deliver a Supplement which will specify the
Principal Terms of such new Series and of any Classes within such Series. The
terms of such Supplement may modify or amend the terms of this Indenture solely
as applied to such new Series. The obligation of the Trustee to authenticate the
Notes of such new Series and to execute and deliver the related Supplement is
subject to the satisfaction of the following conditions:
(i) on or before the fifteenth Business Day immediately
preceding the Series Issuance Date, the Issuer shall have given the
Trustee, the Servicer, the Holders of each Series Outstanding and each
Rating Agency then rating any Outstanding Series of Notes written
notice of such issuance and the Series Issuance Date;
(ii) the Issuer shall have delivered to the
Trustee the related Supplement, executed by each party
hereto other than the Trustee;
(iii) the Issuer shall have delivered to the Trustee any
related Enhancement Agreement executed by each of the parties thereto,
other than the Trustee;
the Rating Agency Condition shall have been
satisfied with respect to such issuance;
(v) such issuance will not result in the occurrence of
an Event of Default and the Issuer shall have delivered to the Trustee
and any Paying Agent an Officer's Certificate, dated the Series
Issuance Date (upon which the Trustee may conclusively rely), to the
effect that such issuance will not result in the occurrence of an Event
of Default at some time in the future;
(vi) the Issuer shall have delivered to the Trustee an
Opinion of Counsel, dated the Series Issuance Date, to the effect that
the issuance of the Notes of such Series need not be registered under
the Securities Act of 1933, as amended, and will not result in the
requirement that any other Series of Notes not registered under the
Securities Act of 1933, as amended, be so registered (unless the Issuer
has elected, in its sole discretion, to register such Notes), and will
not result in the Trust Estate or the Issuer becoming subject to
registration as an investment company under the Investment Company Act
of 1940, as amended, and will not require this Agreement to be
qualified under the Trust Indenture Act of 1939, as amended;
(vii) the Issuer shall have delivered to the Trustee an
Opinion of Counsel, dated the Series Issuance Date, with respect to
such issuance to the effect that, for federal income and Delaware
income tax purposes, (x) such new issuance will not adversely affect
the characterization of the Notes of any outstanding issuance or Class
as debt of the Issuer, (y) such new issuance will not cause a taxable
event to any Noteholders and (z) such new issuance will be
characterized as debt of the Issuer; and
(viii) the Issuer shall have delivered to the Trustee an
Officer's Certificate certifying for the period six months prior to the
date of, and after giving effect to, a new issuance that (x) no Event
of Default shall have occurred, (y) the Collateral Value Ratio shall
have been maintained at not less than 1.00 and (z) any Reserve Fund
shall have been maintained at the Required Reserve Balance, each as
specified in the related Supplement.
C. Upon satisfaction of the above conditions, pursuant to Section 3.01
hereof, the Trustee shall execute the Supplement and the Issuer shall execute
and deliver the Notes of such Series for authentication and delivery to or upon
the order of the Issuer. The Trustee may, but shall not be obligated to, enter
into any such Supplement which affects the Trustee's own rights, duties or
immunities under the Agreement.
3/64971.8
3/64971.8
ARTICLE THREE
AUTHENTICATION AND DELIVERY OF NOTES
General Provisions.
Notes complying with the requirements of the foregoing Article may be
executed by the Issuer and delivered to the Trustee for authentication and
thereupon the same shall be authenticated and delivered by the Trustee upon
Issuer Request and upon receipt by the Trustee on the Initial Closing Date of
the following:
A. an Officer's Certificate from the Issuer: (i) evidencing
the authorization of the execution, authentication and delivery of the
Notes and specifying the Stated Maturity, aggregate principal amount
and Note Interest Rate of the Notes to be authenticated and delivered;
(ii) certifying the Certificate of Incorporation and Bylaws of the
Issuer (copies of which are attached); (iii) stating that no approval,
authorization, consent, order, registration, qualification, license or
permit of or with any court or governmental agency or body (other than
those that have already been obtained, copies of which are attached) is
required for the execution and delivery of the Notes, or the execution,
delivery and performance of the Indenture, by the Issuer; and (iv)
stating that the issuance of the Notes will not result in a breach of
any of the terms, conditions or provisions of, or constitute a default
under, the Issuer's articles of incorporation or bylaws or any
indenture, mortgage, deed of trust or other agreement or instrument to
which the Issuer is a party or by which it is bound, or any order of
any court or administrative agency entered in any Proceeding to which
the Issuer is a party or by which it may be bound or to which it may be
subject;
B. a Board Resolution of the Issuer authorizing the execution,
performance and delivery of the Indenture and any related Supplement
and the execution, authentication by the Trustee and delivery of the
Notes and specifying the Stated Maturity and principal amounts of Notes
to be authenticated and delivered, certified by the secretary or
assistant secretary of the Issuer, which certificate shall state that
such Board Resolution has not been amended, modified, revoked or
rescinded as of the date of such certification;
C. evidence of the good standing of the Issuer;
an Opinion of Counsel to the Issuer dated not earlier
than such Issuer Request, to the effect set forth in Exhibit B hereto;
E. an Accountant's Certificate (1) confirming the information
with respect to the Receivables set forth in Schedule B by reference to
sources provided by the Company and (2) specifying procedures
undertaken by them to review data and computations relating to the
following statements and confirming that the following statements are
accurate:
1. as of the Cut-off Date the aggregate Stated Value
of all Receivables included in the Trust Estate, valued at the
applicable Collateral Value Percentage, together with any
amount required to be deposited in the Collection Account
pursuant to Section 3.01(k) is sufficient to produce a
Collateral Value Ratio of not less than 1.00; and
2. as of the Cut-off Date the composition of the
Receivables included in the Trust Estate satisfies the
requirements of Section 2.02(j)(i)-(vi), (k) and (l) of
the Sale and Purchase Agreement.
F. an Officer's Certificate from the Issuer, dated as of the
date of such Issuer Request, to the effect (which may be combined with
the Officer's Certificate required by Section 3.01(a) hereof) that, in
the case of the Receivables included in the Trust Estate on the Closing
Date or to be included in the Trust Estate on the date of closing
specified in the related Supplement;
1. the Issuer is the owner of such
Receivables arising under such Contract;
2. the Issuer has not assigned any interest or
participation in such Receivable except pursuant to
this Indenture (or, if any, such interest or
participation has been assigned, it has been released);
3. the Issuer has full right to Grant a security
interest in and assign and pledge the Trust Estate to
the Trustee; and
4. UCC financing statements with respect to the
Trust Estate have been filed with the Secretary of
State of the State of Delaware;
G. an executed copy of the Servicing Agreement;
an executed copy of each Sale and Purchase Agreement;
I. such other documents as the Trustee may reasonably
require;
J. an amount shall have been deposited in the
Collection Account representing the amount of cash required
to result in a Collateral Value Ratio of 1.00 as of the
Initial Cut-off Date; and
K. any required deposit to the Reserve Fund
pursuant to the related Supplement, which deposit may be
made out of the proceeds of the sale of the Notes; and
3/64971.8
L. an Officer's Certificate from the Issuer
certifying as of the Initial Cut-off Date the information
set forth in Sections 2.02(g), 2.02(j)(i)-(vi) and 2.02(k)
and (1) of the Sale and Purchase Agreements.
The Receivables.
The Issuer represents and warrants to the Trustee that the Receivables
listed on Schedule B hereof conform as of the Initial Cut-off Date for the
related Series, and additional Receivables purchased by the Issuer on any
Purchase Date after the Closing Date, will conform, to each of the
representations and warranties contained in Section 4.02 of the applicable Sale
and Purchase Agreement.
3/64971.8
3/64971.8
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Satisfaction and Discharge of the Agreement.
The Agreement shall cease to be of further effect with respect to the
Notes except as to (a) rights of registration of transfer and exchange, (b)
substitution of mutilated, destroyed, lost or stolen Notes, (c) the rights of
Noteholders to receive payments of principal thereof and interest thereon, (d)
the rights, obligations and immunities of the Trustee hereunder, and (e) the
rights of Noteholders as beneficiaries hereof with respect to the property so
deposited with the Trustee and payable to all or any of them, and the Trustee,
on demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of the Agreement with respect to the
Notes when:
1. all Notes theretofore authenticated and delivered (other
than (1) Notes which have been destroyed, lost or stolen and which have
been replaced, or paid as provided in Section 2.06, and (2) Notes for
whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided in Section 8.03) have
been delivered to the Trustee for cancellation or an indemnity
reasonably satisfactory to the Trustee on account thereof has otherwise
been provided (the unsecured agreement of indemnity of the Noteholders
shall be deemed satisfactory for such purpose);
2. the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer with respect to the
Notes; and
3. the Issuer has delivered to the Trustee an
Officer's Certificate stating that all amounts payable
hereunder to the Noteholders have been paid.
Notwithstanding the satisfaction and discharge of the Agreement, the
obligations of the Issuer to the Trustee under Section 6.07 and of the Trustee
to the Noteholders under Section 4.02 shall survive.
Application of Trust Money.
All monies deposited with the Trustee pursuant to Section 4.01 hereof
shall be held in trust and applied by it, in accordance with the provisions of
the Notes and the applicable Supplement, to make payments, either directly or
through any Paying Agent, as the Trustee may determine to the Person entitled
thereto of the principal and interest payable on the Notes in respect of which
such money has been deposited with the Trustee.
3/64971.8
3/64971.8
ARTICLE FIVE
DEFAULTS AND REMEDIES
Events of Default.
"Event of Default" with respect to any Note of any Outstanding Series
wherever used herein, means any one of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
a. Default by the Issuer in the payment of any principal,
interest, Commitment Fees or premium in respect of any Note when the
same becomes due and payable pursuant to the Indenture or any
Supplement, which Default shall continue for a period of one Business
Day after the related Payment Date; or
b. Default in the performance, or breach, of any covenant or
warranty of the Issuer in the Agreement (other than a covenant or
warranty a Default in the performance, or breach, of which is elsewhere
in this Section 5.01 or in Article Nine specifically dealt with) or in
the Servicing Agreement or a Sale and Purchase Agreement (other than
those representations in Section 4.02 thereof), as applicable, that
would have a material adverse effect on the interests of the
Noteholders, and the continuance of such Default or breach for a period
of 30 days after the earlier to occur of (a) receipt by the Issuer of
written notice thereof or (b) a Responsible Officer of the Issuer shall
have had actual knowledge thereof; or
c. the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Issuer as bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Issuer under the Federal Bankruptcy Code or any other applicable
federal or state law, or appointing a receiver, liquidator, assignee,
or sequestrator (or other similar official) of the Issuer or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or
d. the institution by the Issuer of Proceedings to be
adjudicated as bankrupt or insolvent or for the appointment of or
taking possession by, a trustee, a receiver, custodian, liquidator or
similar official of the Issuer, or any such Proceedings are commenced
against the Issuer and the Issuer by any act indicates its approval
thereof, consent thereto or acquiescence therein, or the filing by it
of a petition or answer or consent seeking reorganization or relief
under the Federal Bankruptcy Code or any other similar applicable
federal or state law, or the consent by it to the filing of any such
petition; or
e. any order, judgment or decree is entered in
any Proceeding decreeing the dissolution of the Issuer and
such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
f. a final judgment is rendered against the Issuer in an
amount greater than $100,000 and, within 60 days after entry thereof,
such judgment is not discharged or execution thereof stayed pending
appeal, or within 60 days after the expiration of any such stay, such
judgment is not discharged; or
g. the Issuer makes an assignment for the
benefit of creditors or is generally not paying its debts as
such debts become due; or
h. any representation or warranty (other than
those representations in Article IV of the Sale and Purchase
Agreement for which the sole remedy is the obligation to
repurchase such Receivables pursuant to Section 4.04 thereof) made in
writing by or on behalf of the Issuer herein or in any instrument
furnished in compliance herewith or in reference to the Agreement or
otherwise in connection with the transactions contemplated by the
Agreement shall be false in any material respect on the date as of
which made, and such breach shall not have been remedied within 30 days
after the earlier to occur of (a) receipt by the Issuer of written
notice thereof or (b) a Responsible Officer of the Issuer shall have
had actual knowledge thereof; or
i. the Issuer fails to perform or observe, or fails to cause
to be performed or observed, any other agreement, term or condition
contained herein that would have a material adverse effect on the
interests of the Noteholders and such default shall not have been
remedied within 30 days after the earlier to occur of (a) receipt by
the Issuer of written notice thereof and (b) a Responsible Officer of
the Issuer shall have had actual knowledge thereof; or
j. the occurrence of an event of default
pursuant to Section 5.01 of the Servicing Agreement.
3/64971.8
Acceleration of Maturity.
A. If an Event of Default specified in clause (3), (4) or (5) of
Section 5.01 hereof occurs, all of the Notes at the time Outstanding shall be
immediately due and payable at par together with interest accrued thereon and
all other accrued amounts owing under the Agreement; and
B. If any Event of Default other than that specified in Section 5.02(a)
hereof occurs, the Trustee, if directed by an Act of the Noteholders of all
Series evidencing 51% of the Outstanding Note Principal Balance, shall by notice
in writing to the Issuer and the Noteholders, declare all of the Notes and other
accrued amounts owing under the Agreement to be, and all of such Notes and such
other amounts owing under the Agreement shall thereupon be and become,
immediately due and payable together with interest accrued on such Notes.
Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Issuer covenants that upon the acceleration of the maturity of the
Notes pursuant to Section 5.02 hereof, the Issuer will, upon demand of the
Trustee, immediately pay to the Trustee for the benefit of the Holder of each
Note the whole amount then due and payable on such Note for principal and
interest, with interest upon the overdue principal and, to the extent that
payments of such interest shall be legally enforceable, upon overdue
installments of interest pursuant to Section 2.07(a) hereof, in the order set
forth in Section 5.06 hereof and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
3/64971.8
If the Issuer fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as Trustee of an express trust, may institute a
Proceeding for the collection of the sums
so due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer and collect the monies
adjudged or decreed to be payable in the manner provided by law.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in the Agreement or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Trustee by the Agreement or by law.
In case there shall be pending Proceedings relative to the Issuer under
Title 11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or other similar law, or in case a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the Issuer or its
property, or in case of any other comparable judicial Proceedings relative to
the Issuer or the creditors or property of the Issuer, the Trustee, regardless
whether the principal of any Notes shall then be due and payable as therein
expressed or by declaration or otherwise and regardless whether the Trustee
shall have made any demand pursuant to the provisions of this Section 5.03,
shall be entitled and empowered, by intervention in such Proceedings or
otherwise:
A. to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes, and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in
any Proceedings relative to the Issuer or other obligor upon the Notes,
or to the creditors or property of the Issuer or such other obligor,
B. unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of the Notes
in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy
or insolvency Proceedings or Person performing similar
functions in comparable Proceedings, and
C. to collect and receive any monies or other property payable
or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Trustee on their behalf; and any trustee, receiver or liquidator,
custodian or other similar official is hereby authorized by each of the
Noteholders to make payments to the Trustee, and, in the event that the
Trustee shall consent to the making of payments directly to the
Noteholders, to pay to the Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee except as a result of negligence
or bad faith.
Amounts payable to the Trustee under this section are intended to
constitute Administrative Expenses. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or vote for or accept or adopt
on behalf of any Noteholder any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Noteholder in any
such Proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar person.
In any Proceedings brought by the Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Notes, and it shall not be necessary to make any Holders of the Notes
parties to any such Proceedings.
Remedies.
If an Event of Default shall have occurred and be continuing, the
Trustee shall, at the direction of the Required Holders, do one or more of the
following:
A. institute Proceedings for the collection of
all amounts then payable on the Notes or under the
Agreement, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Trust Estate
securing the Notes monies adjudged due;
B. sell all or a portion of the Trust Estate securing the
Notes or rights of interest therein, at one or more public or private
sales called and conducted in any manner permitted by law; provided
that the Trustee must obtain the prior consent of all Noteholders if
the proceeds of such sale are expected to be less than the Outstanding
Note Principal Balance;
C. institute Proceedings from time to time for
the complete or partial foreclosure of the Agreement with
respect to the Trust Estate securing the Notes; and
D. exercise any remedies of a secured party
under the UCC and take any other appropriate action to
protect and enforce the rights and remedies of the Trustee
or the Holders of the Notes hereunder.
Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under the Agreement or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any Proceeding relating thereto, and any such
Proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, be for the ratable benefit of the Holders
of the Notes and any other parties entitled thereto pursuant to the applicable
Supplement.
Application of Proceeds.
Any money collected by the Trustee pursuant to this Article Five shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in the case of the distribution of the entire amount due on account of
principal of and any interest on such Notes, upon presentation and surrender
thereof:
First: To the payment of any amounts due the Trustee
under Section 6.07 hereof;
3/64971.8
Second: To the payment of the amounts then due and owing upon
the Notes, first, for interest including interest on any principal of
or accrued interest on such Notes which was not paid when due, which
amounts shall bear interest as provided in the last sentence of Section
2.07(a) hereof, but only to the extent that the payment of interest on
overdue interest shall be legally enforceable; second, for principal;
and third, for any premium, including any Yield Maintenance Amount;
Third: To the payment of any unpaid amount, known to
the Trustee, due other Persons in respect of expenses of the
Issuer; and
Fourth: To the payment of any remaining balance to the
Issuer.
Limitation on Suits.
No Holder of any Note shall have any right to institute any
Proceedings, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
the Trustee has failed to declare all of the
Outstanding Notes due and payable as required by Section
5.02 hereof;
B. such Holder has previously given written
notice to the Trustee of a continuing Event of Default;
C. such Holder shall have made written request
to the Trustee to institute Proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
D. such Holder has offered to the Trustee
reasonable indemnity against the costs, expenses and
liabilities to be incurred in compliance with such request;
E. the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to
institute any such Proceeding; and
F. no direction inconsistent with such written
request has been given to the Trustee during such
60-day period by the Required Holders;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of the Agreement to affect, disturb or prejudice the rights of any other Holders
of Notes or to obtain or to seek to obtain priority or preference over any other
Holders or to enforce any right under the Agreement, except in the manner herein
provided and for the equal and ratable benefit of all the Holders of Notes.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups
of Holders of Notes, each representing less than a majority of the then
aggregate Outstanding amount of the Outstanding Notes, the Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding
any other provisions of this Indenture.
Unconditional Rights of Noteholders to Receive Principal and
Interest.
Notwithstanding any other provision in the Agreement, the Holder of any
Note shall have the right which is absolute and unconditional to receive payment
of the principal of and interest in respect of such Note as such principal and
interest becomes due and payable and to institute suit for the enforcement of
any such payment, and such right shall not be impaired without the consent of
such Holder.
Restoration of Rights and Remedies.
3/64971.8
If the Trustee or any Noteholder has instituted any Proceeding to
enforce any right or remedy under the Agreement and such Proceeding has been
discontinued or abandoned, or has been determined adversely to the Trustee or to
such Noteholder, then and in every such case the Issuer, the Trustee and the
Noteholder shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Trustee and the Noteholders shall continue as
though no such Proceeding had been instituted.
Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee or
to the Noteholder is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy occurring upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Noteholders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Noteholders, as
the case may be.
Control by Noteholders.
So long as any Notes are Outstanding, the Required Holders shall have
the right to direct the time, method and place of conducting any Proceeding for
any remedy available to the Trustee with respect to the Notes or exercising any
trust or power conferred on the Trustee with respect to the Notes; provided
that:
A. the Trustee shall have the right to decline
any such direction if the Trustee, being advised by counsel,
determines that the action so directed is in conflict with
any rule of law or with the Agreement, and
the Trustee may take any other action deemed proper
by a Trustee Officer that is not inconsistent with such direction;
provided, however, that, subject to Section 6.01 hereof, the Trustee
need not take any action that a Trustee Officer determines might
involve the Trustee in liability or be unjustly prejudicial to the
Noteholders not consenting.
Waiver of Past Defaults.
The Required Holders may on behalf of the Holders of all the Notes
waive in writing any past Default with respect to the Notes and its
consequences, except a Default:
A. in the payment of the principal or interest
in respect of any Note, or
B. in respect of a covenant or provision hereof
that under Section 10.01 hereof (except Subsection (b)(iii)
thereof) cannot be modified or amended without the consent
of the Holder of each Outstanding Note affected.
Upon any such written waiver, such Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of the Agreement; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Undertaking for Costs.
3/64971.8
All parties to the Agreement agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
the Agreement, or in any suit against the Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Noteholder, or group of Noteholders, (in
compliance with Section 5.07 hereof), holding in the aggregate more than 10% in
principal amount of the Outstanding Notes, or to any suit instituted by any
Noteholder for the enforcement of the payment of the principal or interest in
respect of any Note on or after the Payment Date on which any of such amounts
was due (or, in the case of redemption, on or after the applicable Redemption
Date).
Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time here- after in force,
which may adversely affect the covenants or the performance of the Agreement;
and the Issuer (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
Sale of Trust Estate.
A. The method, manner, time, place and terms of any Sale of all or any
portion of the Trust Estate pursuant to Section 5.04 shall be commercially
reasonable. The Trustee may from time to time postpone any Sale by public
announcement made at the time and place of such Sale. The Trustee hereby
expressly waives its right to any amount fixed by law as compensation for any
Sale.
B. In connection with a Sale of all or any portion of the Trust Estate
pursuant to Section 5.04 hereof, any Noteholder may bid for and purchase the
property offered for Sale, and upon compliance with the terms of such Sale may
hold, retain and possess and dispose of such property, without further
accountability, and may, in paying the purchase money therefor, deliver any
Outstanding Notes or claims for interest thereon in lieu of cash up to the
amount that shall, upon distribution of the net proceeds of such Sale, be
payable thereon, and such Notes, in case the amounts so payable thereon shall be
less than the amount due thereon, shall be returned to the Holders thereof after
being appropriately stamped to show such partial payment.
C. The Trustee may bid for and acquire any portion of the Trust Estate
securing the Notes in connection with a public sale thereof, and may pay all or
part of the purchase price by crediting against amounts owing on the Notes other
amounts secured by the Agreement, all or part of the net proceeds of such Sale
after deducting the costs, charges and expenses incurred by the Trustee in
connection with such Sale notwithstanding the provisions of Section 6.07 hereof.
The Notes need not be produced in order to complete any such Sale, or in order
for the net proceeds of such Sale to be credited against amounts owing on the
Notes. The Trustee may hold, lease, operate, manage or otherwise deal with any
property so acquired in any manner permitted by law.
The Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the Trust
Estate in connection with a Sale thereof. In addition, the Trustee is hereby
irrevocably appointed the agent and attorney-in-fact of the Issuer to transfer
and convey its interest in any portion of the Trust Estate in connection with a
Sale thereof, and to take all action necessary to effect such Sale. No purchaser
or transferee at such a Sale shall be bound to ascertain the Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
Action on Notes.
The Trustee's right to seek and recover judgment on the Notes or under
the Agreement shall not be affected by the seeking or obtaining of or
application for any other relief under or with respect to the Agreement. Neither
the lien of the Agreement nor any rights or remedies of the Trustee or the
Noteholders shall be impaired by the recovery of any judgment by the Trustee
against the Issuer or by the levy of any execution under such judgment upon any
portion of the Trust Estate or upon any of the assets of the Issuer.
3/64971.8
3/64971.8
ARTICLE SIX
THE TRUSTEE
Certain Duties and Responsibilities.
A. Except during the continuance of an Event of Default,
1. the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in the
Agreement, and no implied covenants or obligations shall be
read into the Agreement against the Trustee; and
2. in the absence of bad faith or gross negligence on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
the Agreement; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they substantially conform to the
requirements of the Agreement.
B. In case an Event of Default has occurred and is continuing and a
Trustee Officer shall have actual knowledge or written notice of such Event of
Default, the Trustee shall exercise such of the rights and powers vested in it
by the Agreement, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the
3/64971.8
circumstances in the conduct of his own affairs. Prior to the occurrence of an
Event of Default or after all Events of Default which may have occurred have
been cured or waived, the Trustee shall exercise such of the rights and powers
vested in it by the Agreement.
C. No provision of the Agreement shall be construed
to relieve the Trustee from liability for its own grossly
negligent action, its own grossly negligent failure to act, or
its own willful misconduct, except that:
1. this Subsection (c) shall not be construed to
limit the effect of Subsection (a) of this Section 6.01;
2. the Trustee shall not be liable for any error of
judgment made reasonably and in good faith by a Trustee
Officer, unless it shall be proved that the Trustee was
grossly negligent in ascertaining the pertinent facts;
to the extent required by the terms hereof, the Trustee shall
act in accordance with the directions of the Required Holders and, to
the extent not so provided herein, with respect to any act requiring
the Trustee to exercise its own discretion, the Trustee shall act in
accordance with the direction of the Required Holders relating to the
time, method and place of conducting any Proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under the Agreement and the Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with any such instruction; and
4. no provision of the Agreement shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it unless such risk
or liability relates to its ordinary services under the Agreement.
D. Whether or not therein expressly so provided, every provision of the
Agreement relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
6.01.
E. The Trustee shall, at its own expense, maintain at all times during
which any Notes are Outstanding and keep in full force and effect, (i) fidelity
insurance, (ii) theft of documents insurance, (iii) forgery insurance and (iv)
errors and omissions insurance.
Notice of Default.
Upon the occurrence of any Event of Default of which a Trustee Officer
has actual knowledge or has received notice thereof, the Trustee shall transmit
by mail to all Holders of Notes and Duff & Phelps, as their names and addresses
appear on the Note Register, notice of such Event of Default hereunder known to
the Trustee.
Certain Rights of Trustee.
Except as otherwise provided in Section 6.01 hereof:
A. the Trustee may conclusively rely and shall fully be
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, note or other paper or document
reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
B. any request or direction of the Issuer
mentioned herein shall be sufficiently evidenced by an
Issuer Request or Issuer Order and any resolution of the
Board of Directors may be sufficiently evidenced by a Board
Resolution;
C. whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officer's
3/64971.8
Certificate. The Issuer shall provide a copy of such
Officer's Certificate to the Noteholders at or prior to the
time the Trustee receives such Officer's Certificate;
D. as a condition to the taking, suffering or omitting of any
action by it hereunder, the Trustee may consult with counsel and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
E. the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture or to honor the
request or direction of any of the Noteholders pursuant to this
Indenture, unless such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
F. the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, note or other paper or document, but the Trustee,
in its discretion, may make such further inquiry or investigation
3/64971.8
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Issuer,
personally or by agent or attorney;
G. the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, attorneys, custodians or nominees and the Trustee shall
not be responsible for any (i) misconduct or negligence on the part of
any agent, attorney, custodians or nominees appointed with due care by
it hereunder or (ii) the supervision of such agents, attorneys,
custodians or nominees after such appointment with due care;
H. the Trustee shall not be liable for any
actions taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights conferred upon the Trustee by the Agreement;
I. the Trustee shall not be required to make any
initial or periodic examination of any documents or records
related to the Receivables for the purpose of establishing
the presence or absence of defects, the compliance by the
Issuer with its representations and warranties or for any
other purpose; and
J. in the event that the Trustee is also acting
as Paying Agent and Note Registrar, the rights and
protections afforded to the Trustee pursuant to this Article
Six shall also be afforded to such Paying Agent and Note Registrar.
Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the certificate
of authentication, shall be taken as the statements of the Issuer, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no
representation as to the validity or sufficiency of the Agreement, the Notes,
any Receivable or any related document. The Trustee shall not be accountable for
the use or application by the Issuer of Notes or the proceeds thereof, including
deposits, or withdrawals from, the Collection Account or any other account
established to effectuate the transactions contemplated hereby in accordance
herewith.
May Hold Notes.
The Trustee, any Paying Agent, Note Registrar or any other agent of the
Issuer, in its individual or any other capacity, may become the owner or pledgee
of Notes and may otherwise deal with the Issuer with the same rights it would
have if it were not Trustee, Paying Agent, Note Registrar or such other agent.
Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds held by the Trustee in trust hereunder except to the extent
required herein or required by law. The Trustee shall be under no liability for
interest on any money received by it hereunder except as otherwise agreed upon
by the Trustee and the Issuer.
3/64971.8
Compensation and Reimbursement.
The Issuer agrees:
A. to pay or cause the Servicer to pay the
Trustee from time to time reasonable compensation for all
services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
B. except as otherwise expressly provided herein, to reimburse
or cause the Servicer to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including,
without limitation, all costs and expenses incurred by the Trustee in
connection with the exercise by the Trustee of any remedies under the
Indenture and the reasonable compensation and the expenses and
disbursements of its agents and counsel, except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith); and
C. to indemnify the Trustee, its officers, directors,
employees and agents for, and to hold it harmless against, any loss,
liability, expense, damage or injury suffered or sustained by reason of
any acts or omissions, or alleged acts or omissions without negligence
or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
The Trustee's right to receive amounts pursuant to this Section 6.07
shall at all times be subordinate to the lien of the Notes, except as provided
in Section 5.06 hereof and Section 4.02 of the related Supplement, and the
Trustee shall receive amounts pursuant to Section 5.06 hereof and Section 4.02
of the related Supplement, only to the extent that the payment thereof will not
result in an Event of Default and the failure to pay such amounts to the Trustee
will not constitute an Event of Default. The Trustee hereby agrees not to cause
the filing of a petition in bankruptcy against the Issuer for the non-payment to
the Trustee of any amounts provided by this Section 6.07 until at least 91 days
after the payment in full of all the Notes issued under this Indenture.
Corporate Trustee Required; Eligibility
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any State, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $100,000,000, subject
to supervision or examination by federal or state authority and having an office
within the United States of America; provided, however, that in the event
Bankers Trust Company or its corporate successor is not Trustee, the Trustee
must be a Qualified Bank. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.08, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article Six.
3/64971.8
Resignation and Removal; Appointment of Successor.
A. No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article Six shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.10 hereof.
B. The Trustee may resign at any time by giving written notice thereof
to the Issuer. If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
C. The Trustee may be removed at any time by Act of
the Required Holders, delivered to the Trustee and to the Issuer.
D. If at any time:
1. the Trustee shall cease to be eligible under
Section 6.08 hereof and shall fail to resign after written
request therefor by the Issuer or by any such Noteholder, or
2. the Trustee shall become legally incapable of acting with respect to
the Notes or shall be adjudged a bankrupt or insolvent or a receiver or
liquidator of the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, (1) the Issuer by a Board Resolution may remove the
Trustee, or (2) subject to Section 5.14 hereof, any Noteholder who has been a
bona fide Holder of a Note for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
E. If the Trustee shall resign, be removed or become incapable of
acting in accordance with the provisions of this Section 6.09, or if a vacancy
shall occur in the office of the Trustee for any cause, the Issuer, by a Board
Resolution, shall promptly appoint a successor Trustee subject to the approval
of the Required Holders. If within 90 days after such resignation, removal or
incapability or the occurrence of such vacancy, a successor Trustee shall not
have been appointed by the Issuer, a successor Trustee shall be appointed by Act
of the Required Holders delivered to the Issuer and the retiring Trustee. The
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee. To qualify, the successor so
appointed shall satisfy the requirements set forth in Section 6.08 hereof. If no
successor Trustee shall have been so appointed by the Issuer or the Noteholders
and shall have accepted appointment in the manner hereinafter provided, any
Noteholder who has been a bona fide Holder of a Note for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee.
F. The Issuer shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of the
Notes as their names and addresses appear in the Note Register. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
G. The obligations of the Issuer under this Indenture
shall survive the resignation or removal of the Trustee.
H. No Trustee under this Indenture shall be
personally liable for any action or omission of any successor
Trustee.
Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Issuer, the Noteholders and the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts, duties and obligations of the retiring Trustee; but, on
request of the Issuer, the Required Holders or the successor Trustee, such
retiring Trustee shall, upon payment of any amounts due it under Section 6.07
hereof then unpaid, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring
3/64971.8
Trustee, and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder, subject
nevertheless to its lien, if any, provided for in Section 6.07 hereof. Upon
request of any such successor Trustee or the Required Holders, the Issuer shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts.
Merger, Conversion, Consolidation or Succession to Business of
Trustee.
Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Notes have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and deliver the
Notes so authenticated with the same effect as if such successor Trustee had
itself authenticated such Notes.
Trustee as Successor Servicer.
The Trustee hereby expressly agrees to assume the obligations of the
successor to the Servicer pursuant to and in accordance with the provisions of
Section 5.03 of the Servicing Agreement, subject to the right of the Trustee to
appoint a successor servicer contained in such Section 5.03.
Co-trustees and Separate Trustees.
At any time or times, for the purpose of meeting the legal requirements
of any jurisdiction in which any of the Trust Estate may at any time be located,
the Issuer and the Trustee shall have power to appoint, and, upon the written
request of the Trustee or of the Required Holders, the Issuer shall for such
purpose join with the Trustee in the execution, delivery and performance of, all
instruments and agreements necessary or proper to appoint, one or more Persons
approved by the Trustee either to act as
3/64971.8
co-trustee, jointly with the Trustee, of all or any part of such Trust Estate,
or to act as separate trustee of any such property, in either case with such
powers as may be provided in the instrument of appointment, and to vest in such
Person or Persons in the capacity aforesaid, any property, title, right or power
deemed necessary or desirable, subject to the other provisions of this Section.
If the Issuer does not join in such appointment within 15 days after the receipt
by it of a request so to do, or in case an Event of Default has occurred and is
continuing, the Trustee alone shall have power to make such appointment.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
a. The Notes shall be authenticated and delivered and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder, shall
be exercised, solely by the Trustee.
b. The rights, powers, duties and obligations
hereby conferred or imposed upon the Trustee shall be
conferred or imposed upon and exercised or performed by the
Trustee or by the Trustee and such co-trustee or separate trustee
jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law
of any jurisdiction in which any particular act is to be performed, the
Trustee shall be incompetent or unqualified to perform such act, in
which event such rights, powers, duties and obligations shall be
exercised and performed by such co-trustee or separate trustee.
c. The Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by a Board
Resolution, may accept the resignation of or remove any co-trustee or
separate trustee appointed under this Section 6.13, and, in case an
Event of Default has occurred and is continuing, the Trustee shall have
power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Issuer. Upon the
written request of the Trustee, the Issuer shall join with the Trustee
in the execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or
removal. A successor to any co-trustee or separate trustee so resigned
or removed may be appointed in the manner provided in this Section
6.13.
d. No co-trustee or separate trustee hereunder
shall be personally liable by reason of any act or omission
of the Trustee, or any other such trustee hereunder.
e. Any Act of Noteholders delivered to the
Trustee shall be deemed to have delivered to each such
co-trustee and separate trustee.
Rights of Trustee Upon Appointment of
Successor Servicer.
At any time following the effective date of a designation of a
Successor Servicer pursuant to Section 5.03 of the Servicing Agreement, the
Trustee is authorized at any time to date and to deliver to the Government
Contract Obligors the Assignment of Claims Act Notices. In case any authorized
signatory of a Seller whose signature appears on an Assignment of Claims Act
Notice shall cease to have such authority before the delivery of such Assignment
of Claims Act Notice, such signature shall nevertheless be valid following the
designation of a Successor Servicer as if such authority had remained in force.
The Trustee may notify the Obligors, at any time following the effective date of
the designation of a Successor Servicer, of the ownership of the Company under
this Agreement and may also direct that payments of all amounts due, or that
become due, under any or all Receivables be made directly to the Trustee or its
designee. In furtherance of the foregoing, the Trustee shall be entitled to take
all such actions as it deems necessary or advisable to exercise dominion and
control over the collection and servicing of the Receivables, including such
action as shall be necessary or desirable to cause all Collections to come into
the possession of the Trustee rather than the Seller or the Company.
3/64971.8
3/64971.8
ARTICLE SEVEN
NOTEHOLDERS' LIST AND REPORTS BY TRUSTEE AND ISSUER
Section 7.01. Issuer to Furnish Trustee Names and Addresses of
Noteholders.
The Issuer will furnish or cause to be furnished to the Trustee (a)
upon each transfer of a Note, a list, in such form as the Trustee may reasonably
require, of the names, addresses and taxpayer identification numbers of the
Holders of Notes as they appear on the Note Register as of such Record Date, and
(b) at such other times, as the Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that for so long as the Trustee is the Note
Registrar, no such list shall be required to be furnished; provided, further,
that for so long as the Trustee is the Note Registrar, the Trustee shall furnish
to the Issuer such list in the same manner prescribed in clause (b) above.
Section 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Trustee as provided in Section 7.01 hereof and
the names, addresses and taxpayer identification numbers of the Holders of Notes
received by the Trustee in its capacity as Note Registrar. The Trustee may
destroy any list furnished to it as provided in Section 7.01 hereof upon receipt
of a new list so furnished.
(b) If any Holder of Notes applies in writing to the Trustee stating
that it desires to communicate with other Holders of Notes or with the Holders
of all Notes with respect to their rights under the Agreement or under the
Notes, then the Trustee shall, within five Business Days after the receipt of
such appli cation, afford such Holder access to the information preserved at the
time by the Trustee in accordance with Subsection (a) of this Section 7.02.
Section 7.03. Reports by and Inspections of Issuer.
(a) Issuer will deliver or cause to be delivered, in
duplicate, to each Noteholder and the Trustee:
3/64971.8
(i) as soon as practicable and in any event within 50 days
after the end of each quarterly period (other than the last quarterly
period) in each fiscal year, statements of income and cash flows for
the Issuer for the period from the beginning of the current fiscal year
to the end of such quarterly period, and a balance sheet of the Issuer
as at the end of such quarterly period, setting forth in each case
figures for the corresponding period in the preceding fiscal year, all
in reasonable detail and certified by the authorized financial officer
of the Issuer, subject to changes resulting from normal year-end
adjustments;
(ii) as soon as practicable and in any event within 95 days after
the end of each fiscal year, audited statements of income and cash
flows for the Issuer for such year, and a balance sheet of the Issuer
as at the end of such year, setting forth in each case corresponding
figures from the preceding annual financial statements, all in
reasonable detail and certified by a firm of independent accountants;
(iii) promptly upon receipt thereof, a copy of any report submitted
to the Issuer by independent accountants in connection with any annual,
interim or special audit made by them of the financial records of the
Issuer;
(iv) together with each delivery of financial statements required
by clauses (i) and (ii) above, the Issuer will deliver to each
Purchaser that is also a Noteholder and to any other Noteholder who so
requests in writing and to the Trustee, an Officer's Certificate
stating that the signer has reviewed the terms of the Agreement, the
Servicing Agreement, the Sale and Purchase Agreements and the Notes and
has made, or caused to be made under his supervision, a review in
reasonable detail of the transactions and condition of the Issuer
during the fiscal period covered by such financial statements and that
(a) such review has not disclosed the existence during or at the end of
such fiscal period, and that the signer has no knowledge of the
existence, as at the date of the Officer's Certificate, of any
condition or event which constitutes a Default or Event of Default
under any of the aforementioned agreements or Notes or which
constitutes a breach of a representation, warranty or covenant with
respect to any of the aforementioned agreements or Notes, or (b) if any
such condition or event existed or exists, specifying the nature and
period of existence thereof and what action the Issuer has taken or is
taking or proposes to take with respect thereto;
3/64971.8
(v) promptly upon an Officer of the Issuer obtaining knowledge
(a) both that a condition or event exists and that such condition or
event constitutes an Event of Default, (b) that any Holder of a Note
has given any notice or taken any other action with respect to a
claimed Default or Event of Default under the Agreement, (c) of any
condition or event which, in the opinion of management of the Issuer,
would have a material adverse effect on the business, condition
(financial or other), assets, properties or operations of the Issuer,
or (d) of the institution of any litigation involving claims against
the Issuer equal to or greater than $100,000 with respect to any single
cause of action or of any adverse determination in any litigation
involving a potential liability to the Issuer equal to or greater than
$100,000 with respect to any single cause of action, or with respect to
all related causes of action, an aggregate amount equal to or greater
than $200,000, an Officer's Certificate specifying the nature and
period of existence of any such condition or event, or specifying the
notice given or action taken by such holder or Person and the nature of
such claimed Default, Event of Default, event or condition, and what
action the Issuer has taken, is taking or proposes to take with respect
thereto; and
(vi) with reasonable promptness, such other information and data
with respect to the Issuer as from time to time may be reasonably
requested by a Noteholder.
(b) The Issuer will permit any authorized representative designated by
the Trustee or any Noteholder, to visit and inspect any of the properties of the
Issuer, to examine the corporate books and financial records of the Issuer, and
make copies thereof or extracts therefrom and to discuss the affairs, finances,
and accounts of the Issuer with its principal officers, as applicable, and its
independent public accountants, all at such reasonable times and as often as the
Trustee or any holder of Notes may reasonably request. Any expense incident to
the exercise by the Trustee or any Noteholder of any right under this Section
7.03 shall be borne by the Trustee, subject to Section 6.01(c)(iv) hereof, or
the Noteholder, as the case may be; provided that, if an inspection is begun
during the continuance of an Event of Default hereunder or under any other
indenture of the Issuer, the expense incident to such audit shall be borne by
the Issuer.
Section 7.04. Annual and Quarterly Statements as to Compliance.
(a) The Issuer shall cause a firm of independent public accountants
which is a member of the American Institute of Certified Public Accountants to
deliver to the Trustee on or
3/64971.8
before April 15 of each year, beginning April 15, 1998, an Accountants'
Certificate stating whether, based upon their audit of the Issuer's financial
statements for the preceding fiscal year, the Issuer has maintained the
Collateral Value Ratio at not less than 1.00 as reported on each Determination
Date, or, if such independent public accountants have knowledge of an Event of
Default in the fulfillment of any such obligations, and such Event of Default
shall be continuing, specifying each such Event of Default known to such firm of
independent public accountants and the nature and status thereof (a "Compliance
Audit").
(b) The Issuer shall cause such firm of independent public accountants
to deliver an Accountants' Certificate containing a quarterly Compliance Audit,
within 50 days following the end of such calendar quarter, upon:
(i) a request by the Required Holders, provided such request
covers either the first, second or third quarter (but limited to not
more than one such request per fiscal year) of the Issuer's fiscal year
and is given with 90 days' notice; and
(ii) the occurrence of a Special Redemption, after which a
Compliance Audit shall be delivered, unless waived by the Required
Holders, for the succeeding four quarters following such Special
Redemption, excluding the fourth quarter of any fiscal year following
which an annual Compliance Audit shall be deemed to satisfy this clause
(ii).
Section 7.05. Contract Schedule.
(a) At any time during the respective Non-Amortization
Period, the Issuer may add, remove or replace Government
Contracts, Government Subcontracts or Commercial Obligors set
forth on the Contract Schedule.
(b) Within 10 days of each anniversary of the date of this Indenture,
or upon the written request of a Noteholder at any other time, the Trustee shall
provide to such Noteholder a Contract Schedule, as provided to the Trustee by
the Issuer, as of the most recent Determination Date.
Section 7.06. Primary Contract List.
(a) On the Initial Closing Date the Issuer shall deliver to
the Trustee the Primary Contract List.
(b) The Issuer may add Obligors to the Primary Contract
List:
3/64971.8
(i) without the consent of the Noteholders if the
Obligor to be added has an Implied Rating of Investment
Grade or higher by a Rating Agency; and
(ii) with the consent of the Required Holders, provided, that
the Issuer shall notify the Noteholders, in writing, of its desire to
add such Obligor and, if the Required Holders do not reject such
Obligor within 30 days after notice has been sent by the Issuer, such
consent shall be deemed given and the Obligor may be added to the
Primary Contract List.
(c) The Issuer shall review the Primary Contract List on each
Determination Date and shall remove an Obligor from the Primary Contract List
if:
(i) all of the Receivables of such Obligor become
Defaulted Receivables; or
(ii) the Implied Rating of such Obligor was Investment Grade
or higher at the time such Obligor was placed on the Primary Contract
List and the Issuer has actual knowledge such Implied Rating
subsequently falls below Investment Grade or is withdrawn, by a Rating
Agency; provided, however, that such Obligor may be subsequently added
to the Primary Contract list pursuant to the provisions of Subsection
(b) above.
3/64971.8
3/64971.8
ARTICLE EIGHT
REPRESENTATIONS AND COVENANTS OF ISSUER
Section 8.01. Payment of Principal and Interest.
The Issuer will duly and punctually pay the principal and interest in
respect of the Notes.
Section 8.02. Maintenance of Office or Agency.
The Issuer will maintain an office or agency within the United States
of America where Notes may be presented or surrendered for payment, where Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Issuer in respect of the Notes and the Agreement may
be served. The Issuer hereby initially appoints the Trustee such office or
agency. The Issuer will give prompt written notice to the Trustee and the
Noteholders of the location, and of any change in the location, of any such
office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Trustee at its
Corporate Trust Office as its agent to receive all such presentations,
surrenders, notices and demands.
Section 8.03. Unclaimed Funds.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuer, in trust for the payment of the principal of or interest on any
Note and remaining unclaimed for three years after such principal or interest
has become due and payable shall be paid to the Issuer on Issuer Request, or (if
then held by the Issuer) shall be discharged from such trust; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money (but only to the extent of the amounts so
paid to the Issuer), and all liability of the Issuer as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such release or payment, may at the expense of
the Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in New York, New York and in the city in which the Corporate Trust Office is
located, notice that such money remains unclaimed and that, after a date
specified therein,
3/64971.8
which shall be not less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Issuer. The
Trustee may also adopt and employ, at the expense of the Issuer, any other
reasonable means of notification of such release of payment (including, but not
limited to, mailing notice of such release to Holders whose Notes have been
called but have not been surrendered for redemption or whose right to or
interest in monies due and payable but not claimed is determinable from the
records of any Paying Agent, at the last address of record of each such Holder).
Section 8.04. Corporate Existence.
The Issuer will keep in full effect its existence, rights and
franchises as a corporation under the laws of the State of Delaware and will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Agreement and the Notes. The
Issuer shall at all times operate in accordance with its Certificate of
Incorporation and By-laws.
Section 8.05. Protection of Trust Estate.
The Issuer will from time to time prepare, or cause to be prepared,
execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action as the Trustee or the
Required Holders deem necessary or advisable to:
(a) grant more effectively all or any portion of the Trust
Estate for the Notes;
(b) maintain or preserve the lien (and the priority thereof)
of the Agreement or to carry out more effectively the purposes
hereof;
(c) perfect, publish notice of, or protect the validity of
any Grant made or to be made by the Agreement; or
(d) preserve and defend title to the Trust Estate securing the Notes
and the rights therein of the Trustee and the Holders of the Notes secured
thereby against the claims of all persons and parties.
The Issuer hereby designates the Trustee its agent and attorney-in-fact
to execute any financing statement, continuation statement or other instrument
required by the Trustee pursuant to this Section 8.05.
3/64971.8
The Issuer shall pay or cause to be paid any taxes levied on the
account of the beneficial ownership by the Issuer of Contracts that secures the
Notes.
Section 8.06. Representations and Covenants of Issuer.
(a) As of each Closing Date, the Issuer will hereby represent and
warrant to the Trustee and the Noteholders of such Series being issued on such
date that as of such date:
(i) Organization and Good Standing; Licensing. The Issuer
is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has the corporate power to
own its assets and to transact the business in which it is currently
engaged. The Issuer is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
character of the business transacted by it or properties owned or
leased by it requires such qualification and in which the failure so to
qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or other) of the Issuer.
(ii) Authorization; Binding Obligations. The Issuer has the
power and authority to make, execute, deliver and perform the Agreement
and all the transactions contemplated under the Agreement, and has
taken all necessary corporate action to authorize the execution,
delivery and performance of the Agreement. When executed and delivered,
the Agreement will constitute the legal, valid and binding obligation
of the Issuer enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and by the availability of equitable remedies.
(iii) No Consent Required. The Issuer is not required to
obtain the consent of any other party or any consent, license, approval
or authorization from, or registration or declaration with, any
governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of the
Agreement, except such as have been obtained.
(iv) No Violations. The execution, delivery and
performance of the Agreement by the Issuer will not violate
any provision of any existing law or regulation or any order
or decree of any court applicable to the Issuer or the
charter or bylaws of the Issuer, or constitute a breach of
3/64971.8
any mortgage, indenture, contract or other agreement to which the
Issuer is a party or by which the Issuer may be bound.
(v) Litigation. No litigation or administrative proceeding
of or before any court, tribunal or governmental body is currently
pending, or to the knowledge of the Issuer threatened, against the
Issuer or any of its properties or with respect to the Agreement or the
Notes which, if adversely determined, would in the opinion of the
Issuer have a material adverse effect on the transactions contemplated
by the Agreement.
(vi) Offering of Notes. Neither the Issuer nor any agent
acting on its behalf has, directly or indirectly, offered any Note or
any similar security of the Issuer for sale to, or solicited any offer
to buy any Note or any similar security of the Issuer from, or
otherwise approached or negotiated with respect thereto with, any
Person which, and neither the Issuer nor any agent acting on its behalf
has taken or will take any action which, would subject the issuance or
sale of any Note to the provisions of Section 5 of the Securities Act
of 1933, as amended, or to the provisions of any securities or Blue Sky
law of any applicable jurisdiction.
(vii) Disclosure. Neither the Agreement nor any other
document, certificate or statement in writing furnished by or on behalf
of the Issuer in connection with the offering of the Notes issued
hereunder contains any untrue statement of a material fact or omits to
state a fact material to the issuance of the Notes necessary in order
to make the statements contained herein and therein not misleading.
(viii) Investment Company Act. The Issuer is not an
"investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(ix) Taxes. The Issuer has no delinquent amounts
owing to any governmental entity in respect of taxes.
(x) Use of Proceeds. The Issuer shall use the proceeds from
the sale of the Notes issued hereunder, simultaneously with such sale,
to purchase the Receivables securing the Notes from the Sellers, make
any required deposit to the Reserve Fund and pay expenses relating to
the issuance of the Notes.
(xi) Regulation G. The Issuer does not own and has
no intention of acquiring any "margin stock" as defined in
3/64971.8
Regulation G (12 CFR Part 207) of the Board of Governors of the Federal
Reserve System (herein called "margin stock"). None of the proceeds of
sale of any Note issued hereunder will be used, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any margin stock or for the purpose of
maintaining, reducing or retiring any indebtedness which was originally
incurred to purchase or carry any stock that is currently a margin
stock or for any other purpose which might constitute this transaction
a "purpose credit" within the meaning of such Regulation G. Neither the
Issuer nor any agent acting on its behalf has taken or will take any
action which might cause the Agreement or the Notes to violate
Regulation G, Regulation T or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities
Exchange Act of 1934, as amended, in each case as in effect now or as
the same may hereafter be in effect, nor will the Issuer at any time
acquire or hold any margin stock at any time during the term of the
Agreement. Notwithstanding the foregoing, nothing herein shall prevent
the Issuer from repurchasing its own stock.
(xii) Insolvency. There is no insolvency of the Issuer or
admission in writing by the Issuer of its inability to pay its debts as
they come due, or the commencement by the Issuer of a voluntary case
under the Bankruptcy Code, or any other federal or state bankruptcy,
insolvency or similar law, or consent by the Issuer to the appointment
of, or taking possession by, a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or of
any substantial part of its property, or the making by the Issuer of an
assignment for the benefit of creditors, or the failure by the Issuer
to pay its debts generally as such debts become due or the taking of
corporate action by the Issuer in furtherance of any of the foregoing.
(xiii) Tax Treatment. The Issuer, by entering into this
Indenture, and each Noteholder, by its acceptance of a Note, agree to
treat the Notes for all purposes including federal, state and local
income, single business and franchise tax purposes as indebtedness of
the Issuer.
(xiv) Legal Name. The Issuer is not doing business
under any other name.
(b) As of the Closing Date, the Issuer hereby covenants that
it will exercise all due diligence in order to assure that it
complies with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority,
3/64971.8
noncompliance with which would materially adversely affect its business,
condition (financial or other), prospects, assets, property or operations.
Section 8.07. Negative Covenants.
The Issuer will not:
(a) sell, transfer, exchange, pledge or otherwise dispose of
any part of the Trust Estate except as expressly permitted by the
Agreement; or
(b) claim any credit on, or make any deduction from, the principal or
interest payable in respect of the Notes by reason of the payment of any taxes
levied or assessed upon any part of the Trust Estate; or
(c) incur any debt other than as permitted in its
Certificate of Incorporation;
(d) relocate its chief executive office without providing
the Trustee with 90 days' notice thereof; or
(e) without the consent of the Required Holders (i) amend its
Certificate of Incorporation, (ii) amend or waive the provisions of the
Servicing Agreement or any Sale and Purchase Agreement or (iii) consent to the
assignment of the Seller's or the Servicer's rights or obligations under any
Sale and Purchase Agreement or the Servicing Agreement, respectively.
Section 8.08. Issuer May Consolidate, Etc., Only on Certain
Terms.
The Issuer shall not consolidate or merge with or into any other Person
or convey or transfer its properties and assets
substantially as an entirety to any Person, unless:
(a) such consolidation, merger, conveyance, or transfer is
permitted by the Issuer's Certificate of Incorporation;
(b) the Person (if other than the Issuer) formed or surviving such
consolidation or merger or that acquires by conveyance or transfer the
properties and assets of the Issuer substantially as an entirety shall be a
Person (i) organized and existing under the laws of the United States of America
or any state or the District of Columbia and (ii) which is subject to the
limitations on conduct contained in Articles 9 and 10 of the Amended Certificate
of Incorporation of the Issuer, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee and the Noteholders,
in form
3/64971.8
satisfactory to the Trustee and the Noteholders, the due and punctual payment of
the principal of and interest on all Notes and the performance of every covenant
of the Agreement on the part of the Issuer to be performed or observed;
(c) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be
continuing; and
(d) the Issuer shall have delivered to the Trustee and the Noteholders
an Officer's Certificate and an Opinion of Counsel each stating that (i) such
consolidation, merger, conveyance or transfer and such supplemental indenture
comply with this Article, (ii) all conditions precedent in this Article Eight
provided for relating to such transaction have been complied with, (iii) such
supplemental indenture is duly authorized, executed and delivered and is valid,
binding and enforceable against such person and (iv) such consolidation, merger,
conveyance or transfer shall not have a material adverse effect on the corporate
separateness of the Issuer from the Servicer.
Section 8.09. Successor Substituted.
Upon any consolidation or merger, or any conveyance or transfer of the
properties and assets of the Issuer substantially as an entirety in accordance
with Section 8.08 hereof, the Person formed by or surviving such consolidation
or merger (if other than the Issuer) or the Person to which such conveyance or
transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Issuer under the Agreement with the same effect as
if such Person had been named as the Issuer herein. In the event of any such
conveyance or transfer, the Person named as the Issuer in the first paragraph of
this instrument or any successor which shall theretofore have become such in the
manner prescribed in this Article Eight may be dissolved, wound-up and
liquidated at any time thereafter, and such Person thereafter shall be released
from its liabilities as obligor and maker on all the Notes and from its
obligations under the Agreement.
Section 8.10. Money for Note Payments to Be Held in Trust.
As provided in the related Supplement, all payments of amounts due and
payable with respect to the Notes which are to be made from amounts withdrawn
from the Collection Account shall be made on behalf of the Issuer by the Trustee
or by the Paying Agent, and no amounts so withdrawn from the Collection Account
shall be paid over to or at the direction of the Issuer except as provided in
this Section 8.10 and in the related Supplement.
3/64971.8
Whenever the Issuer shall have a Paying Agent other than the Trustee,
it will, on or before the Business Day next preceding each Payment Date, direct
the Trustee to deposit with such Paying Agent on or before such Payment Date an
aggregate sum sufficient to pay the amounts then becoming due, such sum to be
(i) held in trust for the benefit of Persons entitled thereto and (ii) invested,
pursuant to an Issuer Order, by the Paying Agent in an Eligible Investment in
accordance with the terms of the related Supplement, the earned income of such
investment to be remitted to the Issuer, unless an Event of Default, Mandatory
Redemption or Special Redemption has occurred and is continuing. For all
investments made by a Paying Agent under this Section 8.10, such Paying Agent
shall be entitled to all of the rights and obligations of the Trustee under the
related Supplement, such rights and obligations being incorporated in this
Paragraph by this reference.
The Issuer will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee (and if the Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section 8.10, that such Paying
Agent, in acting as Paying Agent, is an express agent of the Trustee and,
further, that such Paying Agent will:
(a) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and pay such sums to such Persons as herein provided;
(b) give the Trustee notice of any Default by the Issuer (or any other
obligor upon the Notes) in the making of any payment required to be made with
respect to the Notes; and
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of the Agreement or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Trustee upon the same trusts as
those upon which such sums were held by such Paying Agent; and upon such payment
by any Paying Agent to the Trustee, such Paying Agent shall be released from all
further liability with respect to such money.
Section 8.11. Performance of Obligations; Servicing Agreement.
3/64971.8
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in the Servicing Agreement.
(b) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any instrument included in the Trust Estate, or
which would result in the amendment, hypothecation, subordination, termination
or discharge of, or impair the validity or effectiveness of any such instrument,
except as expressly provided in the Agreement, the Servicing Agreement or such
other instrument.
(c) If the Issuer shall have knowledge of the occurrence of an Event of
Default under the Servicing Agreement, the Issuer shall promptly notify the
Trustee thereof, and shall specify in such notice the action, if any, the Issuer
is taking in respect of such Event of Default. If such Event of Default arises
from the failure of the Servicer to perform any of its duties or obligations
under the Servicing Agreement with respect to the Receivables securing the
Notes, the Issuer may remedy such failure, provided that a failure by the
Servicer to pay the fees and expenses of the Trustee pursuant to Section 3.06 of
the Servicing Agreement shall not release the Issuer from its obligation to pay
such fees and expenses pursuant to Section 6.07 hereof. So long as any such
Event of Default under the Servicing Agreement shall be continuing, the Trustee
may, and upon the direction of the Issuer or the Required Holders the Trustee
shall, terminate all of the rights and powers of the Servicer under the
Servicing Agreement pursuant to Section 5.02 of the Servicing Agreement. Unless
directed or permitted by the Trustee and the Required Holders, the Issuer may
not waive any such Event of Default under the Servicing Agreement or terminate
the rights and powers of the Servicer under the Servicing Agreement.
(d) Upon any termination of the Servicer's rights and powers pursuant
to Section 5.02 of the Servicing Agreement, all rights, powers, duties,
obligations and responsibilities of the Servicer
(other than any rights of the Servicer as a Seller) with respect to the
Receivables (including, without limitation, the obligations set forth in Section
5.02 of the Servicing Agreement) shall vest in and be assumed by the Trustee,
and the Trustee shall be the successor in all respects to the Servicer in its
capacity as servicer with respect to such Receivables under the Servicing
Agreement, except for any obligations of the Servicer under Section 4.04 of the
Servicing Agreement. The Trustee may resign as the Servicer by giving written
notice of such resignation to the Issuer and in such event will be released from
such duties and obligations, such release not to be effective until the date a
new servicer enters into a servicing agreement
3/64971.8
with the Issuer as provided below. Upon delivery of any such notice to the
Issuer, the Issuer shall obtain a new servicer, satisfactory in all respects to
the Trustee and the Required Holders, which successor servicer shall enter into
a servicing agreement with the Issuer and the Trustee, such agreement to be
substantially similar to the Servicing Agreement. If, within 30 days after the
delivery of the notice referred to above, the Issuer shall not have obtained
such a new servicer, the Trustee may appoint, or may petition a court of
competent jurisdiction to appoint, a successor servicer to service the
Receivables. In connection with any such appointment, the Trustee may make such
arrangements for the compensation of such successor as it, such successor, and
the Issuer shall agree and shall enter into an agreement with such successor for
the servicing of such Receivables, such agreement to be in form and substance
satisfactory to the Trustee and the Required Holders. Any such compensation of
the successor servicer shall not be in excess of that payable to the Servicer
under the Servicing Agreement, unless the Servicer or some other Person agrees
to pay such additional compensation or such additional compensation as is
approved by the Required Holders. If the Trustee shall succeed to the Servicer's
duties as servicer of the Contracts as provided herein, it shall do so in its
individual capacity and not in its capacity as Trustee and, accordingly, the
provisions of Article Six shall be inapplicable to the Trustee in its duties as
the successor to the Servicer and the servicing of the Receivables. Neither the
Trustee nor the Issuer shall appoint a successor
servicer whose appointment would result in the rating assigned to the
Notes on the Closing Date by the Rating Agencies being reduced to a lower rating
so long as there is a Person who satisfies the requirements of this Section for
a successor servicer and is willing to accept an appointment as successor
servicer as provided in this Section and whose appointment as successor servicer
would not so lower such rating.
Section 8.12. Corporate Separateness of Issuer.
The Issuer shall at all times hold itself out to the public, including
its parent, under the Issuer's own name and as a separate and distinct entity
from its parent. At all times at least one director and one executive officer of
the Issuer (or one individual serving in both capacities) shall be a Person who
is not a director, officer or employee of any Person owning of
record more than 10% of the outstanding shares of common stock of the
Issuer or any Person which owns beneficially more than 10% of the outstanding
common stock of the Issuer. The Issuer shall maintain separate corporate
records, financial statements and books of account from those of its parent,
shall not commingle its assets with any other Person (except to the
3/64971.8
limited extent permitted by Section 3.02 of the Servicing Agreement) and shall
take appropriate Board of Directors action to authorize its corporate actions.
The Issuer shall not engage in business transactions (other than the
transactions contemplated in this Indenture) with any of its Affiliates on terms
and conditions less favorable to the Issuer than those available to the Issuer
for comparable transactions with Persons who are not Affiliates of the Issuer.
The Issuer shall maintain its chief executive office and principal place of
business in the State of Delaware and separate and apart from any office of the
Servicer.
The Issuer will maintain the Issuer's separate existence and identity
and will take all steps necessary to make it apparent to third parties that the
Issuer is an entity with assets and liabilities distinct from those of each
Seller or any other subsidiary or Affiliate of any Seller. Such steps and
indicia of the Issuer's separate identity will include the following:
(a) The Issuer will maintain its own stationery and other business
forms that are separate and distinct from those of any Seller or any other
subsidiary or Affiliate of any Seller.
(b) The Issuer will strictly observe corporate formalities in its
dealings with its Affiliates. Among other things, the Issuer will maintain its
own books of account, financial reports and corporate records separate and
distinct from those of any Seller or any other subsidiary or Affiliates of any
Seller.
(c) The Issuer will conduct its business solely in its own corporate
name, and in such a separate manner so as not to mislead others with whom they
are dealing.
3/64971.8
3/64971.8
ARTICLE NINE
ACCOUNTING AND RELEASES
Section 9.01. Collection of Money.
Except as otherwise expressly provided herein and in the related
Supplement, the Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Trustee pursuant to the Agreement, including all payments due on account of any
of the Receivables pledged to secure the Notes. The Trustee shall hold all such
money and property received by it in trust for the Holders of the Notes and
shall apply it as provided in the Agreement. Except as otherwise expressly
provided in the Agreement, if any Default occurs in the making of any payment or
performance under the Servicing Agreement, the Trustee may, and upon the request
of the Required Holders (as evidenced by the Note Register) shall, take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate Proceedings. Any such action
shall be without prejudice to any right to claim a Default or Event of Default
under the Agreement and to proceed thereafter as provided in Article Six hereof.
Section 9.02 Collection Account. (a) Prior to the initial authentication and
delivery of Notes, the Issuer shall open, at a depository institution (which may
be the Trustee), an Eligible Account denominated "Collection Account -- Bankers
Trust Company, as trustee in respect of Contract Receivable Collateralized
Notes". The Collection Account shall be held, in the corporate trust department
of such depositary institution, in trust and funds in the Collection Account
shall be held as provided in Section 6.06 of this Indenture. The Issuer shall
give the Trustee at least five Business Days' written notice of any change in
the location of the Collection Account and any related account identification
information. All payments to be made from time to time to the Holders of Notes,
out of funds in the Collection Account pursuant to the Agreement shall be made
by the Trustee as the Paying Agent of the Issuer or, pursuant to Section 8.10
hereof, by any other Paying Agent appointed by the Issuer. All moneys deposited
from time to time in the Collection Account, including the deposits to be made
by the Servicer in the Collection Account pursuant to the Servicing Agreement,
and all investments made with such moneys, shall be held by the Trustee as part
of the Trust Estate as herein provided. All funds
3/64971.8
withdrawn from the Collection Account pursuant to Section 9.02(d) and (e) hereof
for the purpose of making payments to holders shall be applied in accordance
with Section 8.10 hereof.
(b) So long as no Default or Event of Default shall have occurred and
be continuing, all or a portion of the Collection Account shall be invested and
reinvested by the Trustee at the Issuer's written direction in one or more
Eligible Investments bearing interest or sold at discount. All income or other
gain from investment of moneys deposited in the Collection Account shall be
deposited in such Account immediately upon receipt, and any loss resulting from
such investment shall be charged to such Account. Notwithstanding the definition
of "Eligible Investments", in the case of an Account maintained with the Paying
Agent, Eligible Investments on which the Paying Agent is the obligor (including
repurchase agreements on which the Paying Agent in its commercial capacity is
liable as principal), may mature on the Payment Date next succeeding the date of
investment.
(c) So long as the Notes have not been declared due and payable
pursuant to Section 5.02 hereof, the Trustee shall take the following actions in
the following order of priority, as applicable:
(i) on any Business Day, if the amount on deposit in any
Reserve Fund established on the related Closing Date for such Series is
less than the Required Reserve Balance for the Series related thereto,
withdraw funds from the Collection Account for deposit in such Reserve
Fund until the amount on deposit therein equals such Required Reserve
Balance;
(ii) on any Business Day, upon receipt of a request from the
Servicer pursuant to Section 3.04 of the Servicing Agreement, withdraw
funds from the Collection Account to repay the Servicer any amounts
that duplicate other payments in the account or that are not part of
the Trust Estate, including, but not limited to, funds deposited in
error into the Collection Account;
(iii) on any Business Day during the Non-Amortization Period,
upon receipt of an Issuer Request including a certification that the
Collateral Value Ratio, taking into account the proposed withdrawal of
funds, is at least 1.00 on such Business Day, withdraw funds from the
Collection Account in an amount equal to any Deferred Purchase Price
and release such funds to the Issuer;
3/64971.8
(iv) on any Business Day during the Non-Amortization Period,
upon receipt of an Issuer Request including a certification that the
Collateral Value Ratio, taking into account the proposed withdrawal of
funds, is at least 1.00 on such Business Day, withdraw funds from the
Collection Account in an amount equal to the unpaid portion, if any, of
Excess Cash that was payable to the Issuer on a prior Payment Date and
release such funds to the Issuer; and
(v) on any Business Day during the Non-Amortization Period,
upon receipt of an Issuer Order, withdraw funds from the Collection
Account and apply such funds to the purchase of Eligible Receivables,
subject to Section 2.02 of each Sale and Purchase Agreement;
provided, however, that the Trustee shall not withdraw funds from the Collection
Account or any Lock-box Account pursuant to clauses (iii) or (iv) above unless
on such Business Day (a) no Default or Event of Default exists, (b) no Special
Redemption amounts remain unpaid, (c) no Mandatory Redemption is in effect and
(d) amounts on deposit in any Reserve Fund are at least equal to the Required
Reserve Balance.
(d) So long as the Notes have not been declared due and payable
pursuant to Section 5.02 hereof, no later than the Business Day preceding each
Payment Date during the Non-Amortization Period, the Trustee as directed in the
Determination Date Statement shall withdraw funds from the Collection Account,
in the amounts required, for application as follows:
first, to any Reserve Fund, until the amount on deposit
therein equals the Required Reserve Balance; provided however that
amounts required to be deposited in any Reserve Fund established after
the Initial Closing Date in excess of 3% of the principal amount of the
related Note Principal Balance shall be subordinate in funding to the
amounts applied hereunder in respect of the Required Reserve Balance
established on the Initial Closing Date;
second, to the Distribution Account the sum of (i) an amount
equal to all interest due and payable on the Notes on the succeeding
Payment Date, (ii) the amount, if any, required for a Special
Redemption, Mandatory Redemption or Optional Redemption on such Payment
Date, (iii) the Commitment Fees, if any and (iv) any other principal to
be paid as designated by the Issuer;
third, to the Servicer, all amounts owing to the
Servicer on such Payment Date; and
3/64971.8
fourth, to the payment of Administrative Expenses due
and payable at the direction of the Issuer; and
fifth, to the Issuer all amounts that are determined to
be Excess Cash.
(e) So long as the Notes have not been declared due and payable
pursuant to Section 5.02 hereof, on the Business Day preceding each Payment Date
on and after the Amortization Date, the Trustee as directed in the Determination
Date Statement shall withdraw the aggregate of the amount on deposit in the
Collection Account as of that Business Day preceding the related Determination
Date from the Collection Account, in the amounts required, for application as
follows:
first, to any Reserve Fund, until the amount on deposit
therein equals the Required Reserve Balance; provided however that
amounts required to be deposited in any Reserve Fund established after
the Initial Closing Date in excess of 3% of the principal amount of the
related Note Principal Balance shall be subordinate in funding to the
amounts applied hereunder in respect of the Required Reserve Balance
established on the Initial Closing Date;
second, to the Distribution Account, an amount equal to all
interest and principal due and payable on the Notes, either as a
Principal Distribution Amount or to redeem such Notes, on the
succeeding Payment Date;
third, to the Servicer, an amount equal to all amounts
owing to the Servicer on the succeeding Payment Date; and
fourth, to the payment of Administrative Expenses due
and payable at the direction of the Issuer.
Section 9.03. Reports by Trustee; Contract Schedule.
(a) The Trustee shall report to the Issuer and the Servicer with
respect to the amount of each Account or any Reserve Fund and the identity of
the investments included therein, as the Issuer or the Servicer may from time to
time request and shall provide accounting of deposits into and withdrawals from
the Accounts and any Reserve Fund, and of the investments made therein.
(b) The Trustee shall hold the Contract Schedule and the Receivable
Schedule as provided to the Trustee by the Servicer.
Section 9.04. Trust Estate; Contract Documents.
3/64971.8
(a) Subject to the payment of its fees and expenses, the Trustee may,
and when required by the provisions of the Agreement shall, execute instruments
to release property from the lien of the Agreement, or convey the Trustee's
interest in the same, in a manner and under circumstances which are not
inconsistent with the provisions of the Agreement. No party relying upon an
instrument executed by the Trustee as provided in this Article Nine shall be
bound to ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(b) In order to facilitate the servicing of the Receivables by the
Servicer, the Servicer is hereby authorized in the name and on behalf of the
Trustee and the Issuer, to execute instruments of satisfaction or cancellation,
or of partial or full release or discharge, and other comparable instruments
with respect to the Receivables (and the Trustee shall execute any such
documents on request of the Servicer), subject to the obligations of the
Servicer under the Servicing Agreement.
(c) Upon Issuer Order, the Trustee shall, at such time as there are no
Notes Outstanding, release and transfer, without recourse, all of the Trust
Estate that secured the Notes (other than any cash held for the payment of the
Notes pursuant to Section 4.02 hereof).
Section 9.05. Amendments to Servicing Agreement.
The Trustee may, without the consent of any Noteholder, enter into or
consent to any amendment or supplement to the Servicing Agreement for the
purpose of increasing the obligations or duties of any party other than the
Trustee or the Noteholders.
The Trustee may, in its discretion, decline to enter into or consent to
any such supplement or amendment if its own rights, duties or immunities shall
be adversely affected.
Section 9.06. Servicer as Custodian and Bailee of Trustee.
In order to facilitate the servicing of the Receivables by
the Servicer, the Servicer shall retain all proceeds of any
Collections which it receives, prior to their deposit in the Collection
Account, any Lock-box Account or the Distribution Account, as the case may be,
in accordance with the Servicing Agreement, solely as custodian and bailee of
the Trustee. Solely for purposes of perfection under Section 9-305 of the UCC of
the state in which such property is held by the Servicer, the Trustee hereby
acknowledges that the Servicer is acting as custodian and bailee of the Trustee
in holding such property pursuant to the
3/64971.8
Servicing Agreement, and any other items constituting a part of the Trust Estate
which from time to time come into the possession of the Servicer. It is intended
that, by the Servicer's acceptance of such custodianship and bailment pursuant
to the Servicing Agreement, the Trustee, as a secured party, will be deemed to
have possession of such monies and such other items for purposes of Section
9-305 of the UCC of the state in which such property is held by the Servicer.
3/64971.8
3/64971.8
ARTICLE TEN
SUPPLEMENTAL INDENTURES
Section 10.01. Supplemental Indentures.
(a) The Issuer and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto for the purpose of
modifying this Indenture without the consent of the Noteholders for the
following purposes:
(i) to add to the duties or obligations of the Issuer
or the Trustee hereunder;
(ii) to maintain or improve the rating of the Notes
then given by a Rating Agency; or
(iii) to evidence and provide for the acceptance of appointment by a
successor Trustee and to add to or change any of the provisions of the
Agreement as shall be necessary to facilitate the administration of the
Trust Estate by more than one Trustee.
(b) With the consent of the Required Holders of the Notes, the Issuer
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto for the purpose of modifying the Agreement;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(i) change the Stated Maturity of the principal of, or any
installment of principal or interest on, any Note, or reduce the
principal amount thereof or the Note Interest Rate thereon or the
Redemption Price with respect thereto, change the provisions of the
Agreement relating to the application of proceeds of the Trust Estate
to the payment of principal of Notes or change any place where, or the
coin or currency in which, any Note or the interest thereon is payable,
or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the applicable Redemption Date);
(ii) reduce the percentage in principal amount of the Outstanding
Notes, the consent of the Holders of which is required for the
execution of any such supplemental indenture, or the consent of the
Holders of which is required for any waiver of compliance with certain
3/64971.8
provisions of the Agreement or certain Defaults hereunder
and their consequences provided for in the Agreement;
(iii) impair or adversely affect the Trust Estate except
as otherwise permitted herein;
(iv) permit the creation of any lien ranking prior to or on a
parity with the lien of the Indenture with respect to any part of a
Trust Estate or terminate the lien of the Agreement on any property at
any time subject hereto or deprive the Holder of any Note of the
security afforded by the lien of the Agreement;
(v) change the percentage required to direct the
Trustee to sell or liquidate the Trust Estate pursuant to
Section 5.04 hereof; or
(vi) modify any of the provisions of this Section or Section 5.13
hereof, except to increase any such percentage or to provide that
certain other provisions of the Agreement
cannot be modified or waived without the consent of the Holder
of each Outstanding Note as evidenced by the Note Register affected
thereby.
(c) The Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise except to the extent required by law.
(d) Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section 10.01, the Issuer shall mail to
the Holders of the Notes as their names appear on the Note Register to which
such supplemental indenture relates, a copy of such supplemental indenture. Any
failure of the Issuer to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
Section 10.02. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by the Agreement, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may,
3/64971.8
but shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under the Agreement or
otherwise.
Section 10.03. Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture under this Article
Ten, the Agreement shall be modified in accordance therewith, and such
supplemental indenture shall form a part of the Agreement for all purposes, and
every Holder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
Section 10.04. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article Ten may, and if required by the
Trustee shall, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Issuer, to any such supplemental indenture may be prepared and executed by the
Issuer and authenticated and delivered by the Trustee in exchange for the
Outstanding Notes.
3/64971.8
3/64971.8
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by the Agreement to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agent
duly appointed in writing and satisfying any requisite percentages as to minimum
number or dollar value of outstanding principal amount represented by such
Noteholders; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee, and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the Issuer,
if made in the manner provided in this Section 11.01.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder (and any
transferee thereof) of every Note issued upon the registration thereof or in
exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Trustee or the Issuer in reliance thereon, whether or
not notation of such action is made upon such Note.
Section 11.02. Notices, Etc. to Trustee and Issuer.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by the Agreement
to be made upon, given or furnished to, or filed with:
3/64971.8
(a) the Trustee by any Noteholder or by the Issuer shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to a
Trustee Officer, by facsimile transmission or by other means acceptable to the
Trustee to or with the Trustee at its Corporate Trust Office; or
(b) the Issuer by the Trustee or by any Noteholder shall be sufficient
for every purpose hereunder (except as provided in Section 6.01(2) hereof) if in
writing and mailed, first-class postage prepaid, to the Issuer addressed to it
at 1105 North Market Street, Suite 1150, Wilmington, Delaware 19899, Attention:
President, or at any other address previously furnished in writing to the
Trustee by the Issuer. A copy of each notice to the Issuer shall be sent in
writing and mailed, first-class postage prepaid, to the Company at 2000 Edmund
Halley Drive, Reston, Virginia 22091-3436, Attention: Senior Vice President and
Chief-Financial Officer.
Section 11.03. Notices to Noteholders; Waiver.
With respect to any Series issued on the Initial Closing Date, unless
otherwise instructed by the Purchasers, the Trustee and the Issuer shall send a
duplicate copy to the Purchasers of every notice sent by each hereunder. The
Issuer shall send a copy of the Officer's Certificate delivered pursuant to
Section 6.03(2) hereof to the Purchaser.
Where the Agreement provides for notice to Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed by registered or certified mail or first
class postage prepaid or national overnight courier service to each Noteholder
affected by such event, at his address as it appears on the Note Register, not
later than the latest date, and not earlier than the earliest date, prescribed
for the giving of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders, and any notice which is mailed in the
manner herein provided shall conclusively be presumed to have been duly given.
Notwithstanding the foregoing, notice to be given pursuant to Sections
7.06(b)(ii) and 11.02(c) hereof shall be sent in duplicate in such manner and to
such officers of each Noteholder as such Noteholder may from time to time
specify.
Where the Agreement provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by
3/64971.8
Noteholders shall be filed with the Trustee but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
In the event that, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be a sufficient giving of such notice.
The Issuer shall give prompt written notice to Duff & Phelps, of any of
the following occurrences: (a) the appointment of a successor Trustee, (b) the
execution of a supplemental indenture pursuant to Article Ten, (c) the adoption
of any amendment to the Servicing Agreement, and (d) the payment of the entire
principal of the Notes. Such notice shall be sufficient if furnished in writing
to Duff & Phelps Credit Rating Co., 55 East Monroe, Suite 4000, Chicago,
Illinois 60603, Attention: J.
Grant Jones.
Section 11.04. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 11.05. Successors and Assigns.
All covenants and agreements in the Agreement by the Issuer shall bind
its successors and assigns, whether so expressed or not.
Section 11.06. Separability.
In case any provision in the Agreement or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.07. Benefits of Indenture.
Nothing in the Agreement or in the Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the Noteholders, any benefit.
Section 11.08. Governing Law.
3/64971.8
The Agreement and each Note shall be construed in accordance with and governed
by the laws of the State of New York applicable to agreements made and to be
performed therein.
Section 11.09. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 11.10. Corporate Obligation.
No recourse may be taken, directly or indirectly, against any
incorporator, subscriber to the capital stock, stockholder, officer, director or
employee of the Issuer or of any predecessor or successor of the Issuer with
respect to the Issuer's obligations on the Notes or under the Agreement.
3/64971.8
3/64971.8
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized and attested, all as of the day and year first above written.
DYN FUNDING CORPORATION
By: ________________________
Name:
Title:
BANKERS TRUST COMPANY, not in
its individual capacity, but
solely as Trustee
By: _________________________
Name:
Title:
3/64971.8