Exhibit 4.1
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DVI _______________
ISSUER
AND
_________________________,
TRUSTEE
INDENTURE
Dated as of ________________
$_______ in aggregate principal amount of Asset-Backed Notes, Series ____,
consisting of:
$______ ____% ASSET BACKED NOTES, SERIES ______, CLASS A
$_______ ___% ASSET BACKED NOTES, SERIES ______, CLASS B
$______ ___% ASSET BACKED NOTES, SERIES ______, CLASS C
$_____ ___% ASSET BACKED NOTES, SERIES ______, CLASS D
$_____ ___% ASSET BACKED NOTES, SERIES ______, CLASS E
TABLE OF CONTENTS
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RECITALS OF THE ISSUER ....................................................... 1
GRANTING CLAUSE .............................................................. 1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01 Definitions....................................................3
SECTION 1.02 Compliance Certificates........................................3
SECTION 1.03 Form of Documents Delivered to Trustee.........................3
SECTION 1.04 Acts of Noteholders, etc.......................................4
SECTION 1.05 Notices........................................................5
SECTION 1.06 Notice to Noteholders; Waiver..................................5
SECTION 1.07 Table of Contents, Headings, etc...............................6
SECTION 1.08 Successors and Assigns.........................................6
SECTION 1.09 Severability Clause............................................6
SECTION 1.10 Benefits of Indenture..........................................6
SECTION 1.11 GOVERNING LAW..................................................6
SECTION 1.12 Legal Holidays.................................................7
SECTION 1.13 Execution in Counterparts......................................7
SECTION 1.14 Inspection.....................................................7
SECTION 1.15 Survival of Representations and Warranties.....................7
SECTION 1.16 Incorporation by Reference to Trust Indenture Act..............7
SECTION 1.17 Communications by Noteholders with Other Noteholders...........8
SECTION 1.18 Statements Required in Officer's Certificate...................8
SECTION 1.19 When Treasury Securities are Disregarded.......................8
SECTION 1.20 Rules by Trustee...............................................8
SECTION 1.21 No Adverse Interpretation of Other Agreements..................9
SECTION 1.22 No Recourse Against Others.....................................9
SECTION 1.23 Independence of Covenants......................................9
SECTION 1.24 Consent to Jurisdiction........................................9
SECTION 1.25 No Bankruptcy Petition.........................................9
SECTION 1.26 Voting Rights of Class F Instruments..........................10
SECTION 1.27 Indebtedness Treatment........................................10
ARTICLE II
THE NOTES
SECTION 2.01 General Provisions............................................11
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SECTION 2.02 Global Notes..................................................12
SECTION 2.03 Execution, Authentication, Delivery and Dating................15
SECTION 2.04 Registration, Transfer and Exchange...........................16
SECTION 2.05 Mutilated, Destroyed, Lost and Stolen Notes...................17
SECTION 2.06 Delivery of Class F Instruments...............................18
SECTION 2.07 Payment of Interest and Principal; Rights Preserved...........19
SECTION 2.08 Persons Deemed Owners.........................................20
SECTION 2.09 Cancellation..................................................20
SECTION 2.10. Noteholder Lists; Communications to Noteholders...............20
SECTION 2.11. ERISA Deemed Representations..................................21
ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS
SECTION 3.01 Accounts; Investments by Trustee..............................22
SECTION 3.02 Reserved......................................................24
SECTION 3.03 Collection of Moneys..........................................24
SECTION 3.04 Collection Account............................................25
SECTION 3.05 Class A Distribution Sub-Account; Class B Distribution Sub-
Account; Class C Distribution Sub-Account; Class D Distribution
Sub-Account; Class E Distribution Sub-Account; Class F
Distribution Sub-Account......................................28
SECTION 3.06 Reports; Notices of Certain Payments..........................30
SECTION 3.07. Trustee May Rely on Certain Information from Contributor and
Servicer......................................................30
SECTION 3.08 Reserve Account...............................................30
ARTICLE IV
CONTRACTS AND EQUIPMENT
SECTION 4.01 Representations and Warranties of the Issuer..................32
SECTION 4.02 Purchase upon Breach; Contribution and Servicing Agreement....32
SECTION 4.03 Release of Contracts and Equipment Following Substitution
or Purchase...................................................33
SECTION 4.04 Release of Contracts and Equipment Upon Final Contract
Payment.......................................................33
SECTION 4.05 Execution of Documents........................................34
ARTICLE V
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
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SECTION 5.01 Servicer Events of Default....................................35
SECTION 5.02 Substitute Servicer...........................................35
SECTION 5.03 Notification to Noteholders and Rating Agencies...............35
ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
SECTION 6.01 Events of Default.............................................36
SECTION 6.02 Acceleration of Maturity; Rescission and Annulment............37
SECTION 6.03 Other Remedies................................................38
SECTION 6.04 Trustee May File Proofs of Claim..............................38
SECTION 6.05 Trustee May Enforce Claims Without Possession of Notes........39
SECTION 6.06 Application of Money Collected................................39
SECTION 6.07 Limitation on Suits...........................................41
SECTION 6.08 Unconditional Right of Noteholders to Receive Payment.........42
SECTION 6.09 Restoration of Rights and Remedies............................42
SECTION 6.10. Rights and Remedies Cumulative................................42
SECTION 6.11 Delay or Omission Not Waiver..................................42
SECTION 6.12 Control by Noteholders........................................43
SECTION 6.13 Waiver of Defaults and Events of Default......................43
SECTION 6.14 Waiver of Stay or Extension Laws..............................44
SECTION 6.15 Sale of Trust Property........................................44
SECTION 6.16 Undertaking for Costs.........................................45
ARTICLE VII
THE TRUSTEE
SECTION 7.01 Certain Duties and Responsibilities...........................46
SECTION 7.02 Notice of Defaults or Events of Default.......................47
SECTION 7.03 Certain Rights of Trustee.....................................47
SECTION 7.04 Trustee's Disclaimer..........................................48
SECTION 7.05 Money Held in Trust...........................................48
SECTION 7.06 Compensation, Reimbursement, etc..............................48
SECTION 7.07 Eligibility; Disqualification.................................49
SECTION 7.08 Resignation and Removal; Appointment of Successor.............49
SECTION 7.09 Acceptance of Appointment by Successor........................50
SECTION 7.10. Merger, Conversion, Consolidation or Succession to Business...51
SECTION 7.11 Co-trustees and Separate Trustees.............................51
SECTION 7.12 Trustee to Hold Contracts.....................................52
SECTION 7.13 Financing Statements..........................................53
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SECTION 7.14 Trustee to Act; Appointment of Successor......................53
SECTION 7.15 Reports by Trustee to Holders.................................53
SECTION 7.16 Preferential Collection of Claims Against Issuer..............54
ARTICLE VIII
COVENANTS
SECTION 8.01 Payment of Principal and Interest.............................55
SECTION 8.02 Maintenance of Office or Agency; Chief Executive Office.......55
SECTION 8.03 Money for Payments to Noteholders to be Held in Trust.........55
SECTION 8.04 Issuer Existence; etc.........................................56
SECTION 8.05 Protection of Trust Property; Further Assurances..............57
SECTION 8.06 Compliance Certificates.......................................58
SECTION 8.07 Performance of Obligations; Contribution and Servicing
Agreement.....................................................58
SECTION 8.08 Negative Covenants............................................59
SECTION 8.09 Information as to the Issuer..................................60
SECTION 8.10. Payment of Taxes and Other Claims.............................61
SECTION 8.11 Indemnification...............................................61
SECTION 8.12 Contract Files to Trustee.....................................61
SECTION 8.13 Payment Advices...............................................61
ARTICLE IX
AMENDMENTS AND SUPPLEMENTAL INDENTURES
SECTION 9.01 Amendments and Supplemental Indentures........................63
SECTION 9.02 Execution of Amendments and Supplemental Indentures...........63
SECTION 9.03 Effect of Amendments and Supplemental Indentures..............64
SECTION 9.04 Reference in Notes to Amendments and Supplemental Indentures..64
SECTION 9.05 Compliance with Trust Indenture Act...........................64
SECTION 9.06 Revocation and Effect of Consents.............................64
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01 Optional Redemption; Election to Redeem.......................65
SECTION 10.02 Notice to Trustee.............................................65
SECTION 10.03 Notice of Redemption or Partial Redemption by the Issuer......65
SECTION 10.04 Deposit of the Redemption Price or Partial Redemption Price...66
SECTION 10.05 Notes Payable on Redemption Date..............................66
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ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01 Satisfaction and Discharge of Indenture.......................68
SECTION 11.02 Application of Trust Money....................................69
SECTION 11.03 Reinstatement.................................................69
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SCHEDULES
Schedule 1 - Contract Schedule
EXHIBITS
Exhibit A - Form of Class A Note
Exhibit B - Form of Class B Note
Exhibit C - Form of Class C Note
Exhibit D - Form of Class D Note
Exhibit E - Form of Class E Note
Exhibit F - Form of Class F Instrument
Exhibit G - Investment Letter
Exhibit H - Tax Certificate
APPENDICES
Appendix I - Defined Terms
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INDENTURE
This INDENTURE dated as of ________________, is between DVI _____ a
Delaware ________________ (herein called the "ISSUER"), and ______________, a
national banking association, as trustee (herein called the "TRUSTEE").
RECITALS OF THE ISSUER
The Issuer has duly authorized the issuance of $___________ in
aggregate principal amount of its ___% Asset Backed Notes, Series _____________,
Class A, Class B, Class C, Class D and Class E (together with the Class A Notes,
the Class B Notes, the Class C Notes and the Class D Notes, the "OFFERED
NOTES"), of substantially the tenor hereinafter set forth, and to provide
therefor the Issuer has duly authorized the execution and delivery of this
Indenture.
Subsequent to the execution and delivery of this Indenture, the
Issuer may, subject to the restrictions described herein, enter into a
Supplement directing the issuance of a sixth class of privately offered
securities (the "CLASS F INSTRUMENTS", and together with the Offered Notes, the
"NOTES") which will be subordinate to the Class A Notes, the Class B Notes, the
Class C Notes, the Class D Notes and the Class E Notes.
All things necessary to make the Notes, when executed by the Issuer
and authenticated and delivered hereunder, the valid obligations of the Issuer,
and to make this Indenture a valid agreement of the Issuer, in accordance with
its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the holders thereof, it is mutually covenanted and agreed, for the
benefit of all Noteholders, as follows:
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee, for the benefit and
security of the Noteholders and the Trustee as their interests appear herein,
all of the Issuer's right, title and interest in and to the Trust Property. The
Issuer also hereby assigns to the Trustee, for the benefit of the Noteholders
and the Trustee, its security interest in the Equipment (which shall be a first
priority perfected security interest in Equipment other than Equipment relating
to a Secured Equipment Note or Finance Lease and for which the Original
Equipment Cost is less than $20,000) subject to the underlying equipment lease
related to the Contracts and all of the Issuer's rights in all income, payments
and proceeds related thereto. The Grants of the Trust Property effected by this
Indenture shall include all rights, powers, and options (but none of the
obligations) of the Issuer with respect thereto, including, without limitation,
the immediate and continuing right to claim for, collect, receive, and give
receipts for Contract Payments in respect of the Contracts and all other moneys
payable thereunder, to give and receive notices and
other communications, to recover on the Equipment pursuant thereto, to make
waivers, amendments or other agreements, to exercise all rights and options, to
bring judicial proceedings in the name of the Issuer or otherwise, to terminate
a Contract pursuant to the terms thereof, enforce all rights and remedies of the
Issuer with respect to the duties, covenants, obligations, indemnities,
representations and warranties of the Contributor and the Servicer under the
Contribution and Servicing Agreement and generally to do and receive anything
that the Issuer is or may be entitled to do or receive thereunder or with
respect thereto. Such Grants are made in trust to secure (i) the payment of all
amounts due on the Notes in accordance with their terms, equally and ratably
without prejudice, priority, or distinction between any Note of the same class
and any other Note of the same class by reason of differences in time of
issuance or otherwise, except as otherwise may be provided in this Indenture or
any Supplement, (ii) the payment of all other sums payable under this Indenture
and (iii) compliance with the provisions of this Indenture and any Supplement
with respect to the Notes.
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 best of its ability and to the end that the interests of
the Noteholders may be adequately and effectively protected as hereinafter
provided.
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.01 DEFINITIONS.
For purposes of this Indenture, capitalized terms used herein but
not otherwise defined shall have the respective meaning assigned to such terms
in Appendix I hereto.
SECTION 1.02 COMPLIANCE CERTIFICATES.
Upon any application or request by the Issuer to the Trustee to take
any action under any provision of this Indenture or any Supplement, other than
any request that (i) the Trustee authenticate the Notes specified in such
request, (ii) the Trustee invest moneys in the Collection Account or the Reserve
Account pursuant to the written directions specified in such request, or (iii)
the Trustee pay moneys due and payable to the Issuer hereunder to the Issuer's
beneficial owner or other assignee specified in such request, the Trustee may
require the Issuer to furnish to the Trustee an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture or any
Supplement relating to the proposed action have been complied with, except that
in the case of any such requested action as to which other evidence of
satisfaction of the conditions precedent thereto is specifically required by any
provision of this Indenture or any Supplement, no additional certificate need be
furnished.
SECTION 1.03 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any Officer's Certificate delivered to the Trustee may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such Officer's Certificate or opinion and any Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an Authorized Officer or Authorized Officers
of the Transferor as to such factual matters unless such Authorized Officer or
counsel of the Transferor knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous. Any Opinion of Counsel may be based on the written
opinion of other counsel, in which event such Opinion of Counsel shall be
accompanied by a copy of such other counsel's opinion.
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Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture or any Supplement, they may, but need not, be
consolidated and form one instrument.
Wherever in this Indenture or any Supplement, in connection with any
application or certificate or report to the Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Section
7.01(a)(ii).
SECTION 1.04 ACTS OF NOTEHOLDERS, ETC.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture or any Supplement to be given
or taken by Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by agents duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, with a copy (or if expressly required
an original) to the Issuer and the Servicer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "ACT" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture or any Supplement and
(subject to Section 7.01) conclusive in favor of the Trustee and the Issuer, if
made in the manner provided in this Section 1.04.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the holder of any Note shall bind every future holder of
the same Note and the holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Issuer in
reliance thereon, whether or not notation of such action is made upon such Note.
(d) By accepting the Notes issued pursuant to this Indenture and any
Supplement, each Noteholder irrevocably appoints the Trustee hereunder as the
special attorney-in-fact for such
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Noteholder vested with full power on behalf of such Noteholder to effect and
enforce the rights of such Noteholder pursuant hereto and the provisions hereof
for the benefit of such Noteholder.
(e) Each holder of a Note, by acceptance of such Note, agrees to
treat such Note as indebtedness for federal, state and local income or franchise
tax purposes.
SECTION 1.05 NOTICES.
Any request, demand, authorization, direction, notice, consent,
waiver, Act of Noteholders, or other document provided or permitted by this
Indenture or any Supplement to be made upon, given or furnished to, or filed
with, the Trustee, the Issuer or the Servicer shall be sufficient for every
purpose hereunder if in writing and telexed, telecopied (with the original of
the telexed or telecopied material sent to the recipient by overnight courier on
the day of the telex or telecopy), mailed, first-class postage prepaid, or hand
delivered. Unless otherwise specifically provided herein, no such request,
demand, authorization, direction, notice, consent, waiver, Act of Noteholders or
other document shall be effective until received and any provision hereof
requiring the making, giving, furnishing, or filing of the same on any date
shall be interpreted as requiring the same to be sent or delivered in such
fashion that it will be received on such date. Any such request, demand,
authorization, direction, notice, consent, waiver, Act of Noteholders, or other
document shall be sent or delivered to the following addresses:
(i) if to the Trustee, at the Corporate Trust Office, _____________;
(ii) if to the Issuer, at ________________, with a copy to the
Servicer at the address set forth in clause (iv) below;
(iii) if to the Contributor, Attention: Securitization Manager at
▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Number for telecopy: (215)
230-5328; Number for telephonic confirmation: (▇▇▇) ▇▇▇-▇▇▇▇) or at any
other address previously furnished in writing to the Trustee, the Issuer
and the Servicer by the Contributor;
(iv) if to the Servicer, Attention: Servicing Manager at ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Number for telecopy: (▇▇▇) ▇▇▇-▇▇▇▇;
Number for telephonic confirmation: (▇▇▇) ▇▇▇-▇▇▇▇) or at any other
address previously furnished in writing to the Trustee, the Issuer and the
Contributor by the Servicer; or
(v) if to the Rating Agency, at __________________.
SECTION 1.06 NOTICE TO NOTEHOLDERS; WAIVER.
(a) Where this Indenture or any Supplement provides for notice to
Noteholders of any event, or the mailing of any report to Noteholders, such
notice or report shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first class postage prepaid, or sent by
private courier or confirmed telecopy (with a copy of the telecopied material
sent to the recipient by overnight courier on the day of the telecopy) to each
Noteholder affected by such event or to whom such report is required to be
mailed, at such Noteholder's address as it appears in the Note
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Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice or the mailing of such report. In
any case where a notice or report to Noteholders is mailed, neither the failure
to mail such notice or report, nor any defect in any notice or report so mailed,
to any particular Noteholder shall affect the sufficiency of such notice or
report with respect to other Noteholders. Where this Indenture or any Supplement
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Noteholders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.
(b) In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to mail or send notice to
Noteholders, in accordance with Section 1.06(a), of any event or any report to
Noteholders when such notice or report is required to be delivered pursuant to
any provision of this Indenture or any Supplement, then such notification or
delivery as shall be made with the approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder.
SECTION 1.07 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents and the Article and Section headings are for
convenience only and shall in no way modify or restrict any of the terms or
provisions hereof.
SECTION 1.08 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Issuer or the
Trustee shall bind its respective successors and permitted assigns, whether so
expressed or not.
SECTION 1.09 SEVERABILITY CLAUSE.
In case any provision in this Indenture, any Supplement 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 1.10 BENEFITS OF INDENTURE.
Nothing in this Indenture, any Supplement or in the Notes, express
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, any separate trustee or co-trustee appointed under Section
7.11 and the holders of Notes, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 1.11 GOVERNING LAW.
THIS INDENTURE, ANY SUPPLEMENT AND THE NOTES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. THIS INDENTURE IS SUBJECT TO
THE TRUST INDENTURE ACT OF 1939, AS AMENDED
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FROM TIME TO TIME, AS IN EFFECT ON ANY RELEVANT DATE (THE "TIA") AND SHALL BE
GOVERNED THEREBY OR CONSTRUED IN ACCORDANCE THEREWITH.
SECTION 1.12 LEGAL HOLIDAYS.
In any case where any Payment Date or the Stated Maturity Date or
any other date on which principal of or interest on any Note is proposed to be
paid shall not be a Business Day, then (notwithstanding any other provision of
this Indenture or of the Notes) such payment shall be made on the next
succeeding Business Day, and no interest shall accrue for the intervening
period.
SECTION 1.13 EXECUTION IN COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
SECTION 1.14 INSPECTION.
The Issuer agrees that, on reasonable prior notice, it will permit
the representatives of the Trustee or any Noteholder, during the Issuer's normal
business hours, to examine all of the books of account, records, reports and
other papers of the Issuer, to make copies thereof and extracts therefrom, to
cause such books to be audited by independent accountants selected by the Issuer
and reasonably acceptable to the Trustee or such Noteholder, as the case may be,
and to discuss its affairs, finances and accounts with its officers, employees
and independent accountants with an Authorized Officer of the Transferor (as
sole beneficiary of the Issuer) present (and by this provision the Issuer hereby
authorizes its accountants to discuss with such representatives such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested for the purpose of reviewing or evaluating the financial
condition or affairs of the Issuer or the performance of and compliance with the
covenants and undertakings of the Issuer in this Indenture, the Contribution and
Servicing Agreement, the other Transaction Documents, or any of the other
documents referred to herein or therein. Any expense incident to the exercise by
the Trustee or any Noteholder during the continuance of any Default or Indenture
Event of Default of any right under this Section 1.14 shall be borne by the
Issuer, but any expense due to the exercise of a right by any such Person prior
to the occurrence of a Default or Indenture Event of Default shall be borne by
such Person.
SECTION 1.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
The representations, warranties and certifications of the Issuer
made in this Indenture or in any certificate or other writing delivered by the
Issuer pursuant hereto shall survive the authentication and delivery of the
Notes hereunder, but unless explicitly provided to the contrary, they are made
only as of the Closing Date.
SECTION 1.16 INCORPORATION BY REFERENCE TO TRUST INDENTURE ACT.
The provisions of TIA Sections 310 through 317 inclusive that impose
duties on any Person (including the provisions automatically deemed included
herein unless expressly excluded
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by the provisions of this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the required provision of the TIA shall control.
SECTION 1.17 COMMUNICATIONS BY NOTEHOLDERS WITH OTHER NOTEHOLDERS.
A Noteholder may communicate with other Noteholders pursuant to TIA
Section 312(b) with respect to their rights under this Indenture or the Notes.
The Issuer, the Trustee and anyone else shall have the protection of Section
312(c) of the TIA.
SECTION 1.18 STATEMENTS REQUIRED IN OFFICER'S CERTIFICATE.
Each Officer's Certificate with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that the Person making such certification has read
such covenant or condition;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements contained in such certificate
are based;
(iii) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of such
Person, such covenant or condition has been complied with.
SECTION 1.19 WHEN TREASURY SECURITIES ARE DISREGARDED.
In determining whether the Noteholders of the required principal
amount of Notes have concurred in any direction, waiver or consent hereunder,
Notes owned by the Issuer or any other obligor on the Notes or by any Affiliate
of the Issuer or such obligor related thereto shall be disregarded, except that
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes which a Responsible
Officer of the Trustee actually knows are so owned shall be so disregarded.
Notes so owned which have been pledged in good faith shall not be disregarded if
the pledgee establishes to the reasonable 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 Affiliate of the Issuer or
such obligor.
SECTION 1.20 RULES BY TRUSTEE.
The Trustee may make reasonable rules for action by or at a meeting
of Noteholders.
8
SECTION 1.21 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Issuer or an Affiliate of the Issuer. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 1.22 NO RECOURSE AGAINST OTHERS.
All liability described in the Notes of any director, officer,
employee or member, as such, of the Issuer is waived and released.
SECTION 1.23 INDEPENDENCE OF COVENANTS.
All covenants and agreements in this Indenture shall be given
independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant shall
not avoid the occurrence of a Default or an Indenture Event of Default if such
action is taken or condition exists.
SECTION 1.24 CONSENT TO JURISDICTION.
Each of the Issuer and the Trustee irrevocably submits to the
jurisdiction of any New York State or Federal court sitting in the Borough of
Manhattan in the City of New York over any suit, action or proceeding arising
out of or relating to this Indenture or any Note. Each of the Issuer and the
Trustee irrevocably waives, to the fullest extent permitted by laws, any
objection which it may have to the laying of the venue of any such suit, action
or proceeding brought in such a court and any claim that any such suit, action
or proceeding brought in such a court has been brought in any inconvenient
forum. Each of the Issuer and the Trustee agrees that final judgment in any such
suit, action or proceeding brought in such a court shall be conclusive and
binding upon the Issuer or the Trustee, as the case may be, and may be enforced
in the courts of New York (or any other courts to the jurisdiction of which the
Issuer or the Trustee, as the case may be, is subject) by a suit upon such
judgment, provided that service of process is effected upon the Issuer as
permitted by law; PROVIDED, HOWEVER, that each of the Issuer and the Trustee
does not waive, and the foregoing provisions of this sentence shall not
constitute or be deemed to constitute a waiver of, (i) any right to appeal any
such judgment, to seek any stay or otherwise to seek reconsideration or review
of any such judgment or (ii) any stay of execution or levy pending an appeal
from, or a suit, action or proceeding for reconsideration or review of, any such
judgment.
SECTION 1.25 NO BANKRUPTCY PETITION.
Notwithstanding any provision contained herein, each of the
Noteholders and the Trustee covenants and agrees that prior to the date which is
one year and one day after the payment in full of all Notes issued by the
Issuer, it will not institute against, or join any other Person in instituting
against, the Issuer or its Owner Trustee or beneficial owner any bankruptcy,
reorganization, receivership, arrangement, insolvency or liquidation
proceedings, or other similar proceedings under any federal or state bankruptcy
or similar law. The Issuer represents, warrants, and covenants that it and its
Owner
9
Trustee have obtained, and will in the future obtain, a no-petition agreement
from each and every Person that enters into any agreement of any kind with the
Issuer or its Owner Trustee or beneficial owner. This Section 1.25 shall survive
the termination of this Indenture.
SECTION 1.26 VOTING RIGHTS OF CLASS F INSTRUMENTS.
Upon the irrevocable payment in full of all of the Class A Notes,
the Class B Notes the Class C Notes, the Class D Notes and the Class E Notes,
all voting and consent rights otherwise granted to the Class A Noteholders, the
Class B Noteholders, the Class C Noteholders, the Class D Noteholders and the
Class E Noteholders shall be exercised by the requisite percentage of holders of
the Class F Instruments, if any.
SECTION 1.27 INDEBTEDNESS TREATMENT.
This Indenture and the Notes have been structured with the intention
that the Notes will qualify under applicable tax law as indebtedness. Each
Noteholder agrees to treat the Notes for purposes of federal, state and local
income or franchise taxes (and any other tax imposed on or measured by income)
as indebtedness and to cause any Person acquiring an interest in a Note by,
through or under it to acknowledge the characterization of the Notes as
indebtedness and to agree to treat the Notes as indebtedness for such tax
purposes.
ARTICLE II
THE NOTES
SECTION 2.01 GENERAL PROVISIONS.
(a) The Notes issuable hereunder shall be issued as registered Notes
without coupons in no more than five classes as from time to time shall be
authorized by the Issuer. The Notes of all classes shall be known and entitled
generally as the "DVI Receivables Corp. VIII Asset-Backed Notes, Series ______"
The Notes of each class shall have further particular designation as the Issuer
may adopt for each class, and each Note issued hereunder shall bear upon the
face thereof the designation so adopted for the class to which it belongs. The
Trustee is hereby authorized and directed upon the written order of the Issuer
to authenticate and deliver Notes to be issued hereunder in five classes,
entitled "_____% Asset-Backed Notes, Series ______, Class A", "____%
Asset-Backed Notes, Series ______, Class B", "____% Asset-Backed Notes, ______,
Class C" "____% Asset-Backed Notes, Series ______, Class D" and "____%
Asset-Backed Notes, Series ______, Class E", respectively. The Issuer may issue
in accordance with Section 2.06 hereof, the Class F Instruments which will be
subordinate to the Class A Notes, the Class B Notes, the Class C Notes, the
Class D Notes and the Class E Notes by entering into a Supplement. The form of
each class of Offered Notes and of the Trustee's certificate of authentication
shall be in substantially the forms set forth in Exhibits A, B, C, D and E
hereto, with such appropriate insertions, omissions, substitutions, and other
variations as are required or permitted by this Indenture. The aggregate
principal amount of Notes which may be authenticated and delivered under this
Indenture is limited to $___________ except for Notes authenticated and
delivered upon registration of, transfer of, or in exchange for, or in lieu of,
other Notes pursuant to Section 2.04, 2.05, or 9.04. The Notes shall be issuable
only in registered form and only in denominations of at least $500,000 and
integral multiples of $1,000 thereof; PROVIDED that the foregoing shall not
restrict or prevent the transfer or issuance in accordance with Section 2.04 or
2.05 of any Note having a remaining outstanding principal amount of less than
$500,000; PROVIDED, FURTHER, that a single Note of each Class may be issued in a
different amount as may be necessary so that the Notes of such Class evidence
the full initial principal balance thereof. The Class F Instruments, if any,
shall be issued in the minimum denominations indicated in the related
Supplement.
(b) The aggregate amount of principal due and payable on each class
of Notes on each Payment Date shall be equal to the sum of (i) Monthly Principal
for such class and (ii) any other due and unpaid principal for such class.
Except (i) for optional redemption pursuant to Section 10.01, (ii) for
Prepayment Amounts or Partial Prepayment Amounts or (iii) as otherwise provided
in Section 6.02, no part of the principal of any Note shall be paid prior to the
Payment Date on which such principal is due in accordance with the preceding
provisions of this Section 2.01(b).
(c) Interest and principal on the Notes shall be payable on each
Payment Date commencing with the Initial Payment Date to Noteholders of record
on the Record Date. Interest on the Notes is required to be paid to Noteholders
in an amount equal to the Monthly Interest plus Overdue Interest. Interest on
the Notes shall be computed on the basis of a 360-day year consisting of twelve
30-day months PROVIDED that for Class A-1, interest shall be computed using the
actual number of days elapsed over a 360-day year.
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(d) All payments made with respect to any Note shall be made in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts and shall be applied first
to the interest then due and payable on such Notes and then to the principal
thereof.
(e) All Notes of the same class issued under this Indenture or any
Supplement shall be in all respects equally and ratably entitled to the benefits
hereof and thereof without preference, priority or distinction on account of the
actual time or times of authentication and delivery, all in accordance with the
terms and provisions of this Indenture or any Supplement. Payments of principal
and interest on Notes of the same class shall be made pro rata among all
outstanding Notes of such class, without preference or priority of any kind.
(f) The Issuer, the Trustee and each Class A, Class B, Class C,
Class D and Class E Noteholder by acceptance of its Class A, Class B, Class C,
Class D or Class E Note (and any Person that is a beneficial owner of any
interest in a Class A, Class B, Class C, Class D or Class E Note, by virtue of
such Person's acquisition of a beneficial interest therein) agrees to treat such
Note(s) for purposes of federal, state and local income or franchise taxes (and
any other tax imposed on or measured by income) as indebtedness. Each Class A,
Class B, Class C, Class D and Class E Noteholder agrees that it will cause any
Person acquiring an interest in a Class A, Class B, Class C, Class D or Class E
Note through it to acknowledge the Class A, Class B, Class C, Class D or Class E
Notes' characterization as indebtedness and to agree to comply with this
Indenture as to treatment of such Notes as indebtedness for such tax purposes.
SECTION 2.02 GLOBAL NOTES.
(a) Initially, the Class A Notes, the Class B Notes, the Class C
Notes and the Class D Notes shall be issued in the form of one or more Public
Global Notes and the Class E Notes shall be issued in the form of one or more
Rule 144A Global Note(s) which (i) shall represent, and shall be denominated in
an aggregate amount equal to, the aggregate principal amount of all Class A
Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class E
Notes to be issued hereunder, (ii) shall be delivered as one or more Notes held
by the Book Entry Custodian, or, if appointed to hold such Notes as provided
below, the Depositary shall be registered in the name of the Depositary or its
nominee, (iii) shall be substantially in the form of the Note specified pursuant
to Section 2.01, with such changes therein as may be necessary to reflect that
each such Note is a global security, and (iv) shall each bear a legend
substantially to the effect included in the form of the face of the Notes as set
forth in Exhibits A, B, C, D and E hereto. Notwithstanding anything in any
Transaction Document to the contrary, no Class E Note shall be purchased by a
Person who is not a U.S. Person, as defined herein and no Class E Note shall be
purchased by a Person who is not a "qualified institutional buyer" as defined in
Rule 144A of the Securities Act.
(b) Notwithstanding any other provisions of this Section 2.02 or of
Section 2.04, unless and until a Global Note is exchanged in whole for Notes in
definitive form, a Global Note may be transferred, in whole, but not in part,
and in the manner provided in this Section 2.02, only by the Depositary to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor Depositary selected or approved by the Issuer or to a nominee of
such successor Depositary or in the
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manner specified in Section 2.02(c). The Depositary shall order the Note
Registrar to authenticate and deliver the following Book-Entry Notes: with
respect to the Class E Notes only, a Rule 144A Global Note having an aggregate
initial Outstanding principal balance equal to the Initial Class Note Balance of
such Class, and, with respect to the Class A Notes, the Class B Notes, the Class
C Notes and the Class D Notes only, a Public Global Note, having an initial
Outstanding principal balance equal to zero. Note Owners shall hold their
respective Ownership Interests in and to such Notes through the book-entry
facilities of the Depositary. Without limiting the foregoing, Class A, Class B,
Class C and Class D Note Owners shall hold their respective Ownership Interests,
if any, in Public Global Notes only through Depositary Participants, Euroclear
or Cedel.
(c) If (i) the Depositary for the Notes represented by one or more
Global Notes at any time notifies the Issuer that it is unwilling or unable to
continue as Depositary of the Notes or if at any time the Depositary shall no
longer be a clearing agency registered under the Exchange Act and any other
applicable statute or regulation, and a successor Depositary is not appointed or
approved by the Issuer within 90 days after the Issuer receives such notice or
becomes aware of such condition, as the case may be, (ii) the Trustee, at the
direction of Noteholders evidencing not less than 66 2/3% of the Voting Rights,
elects to terminate the book-entry system through the Depositary or (iii) after
an Indenture Event of Default or a Servicer Event of Default, Noteholders
representing more than 50% of the Voting Rights advise the Depositary, or Book
Entry Custodian, as the case may be, in writing that the continuation of a
book-entry system through the Depositary, or the Book Entry Custodian, as the
case may be, is no longer in such Noteholder's best interest upon the request of
such Noteholder, but only with respect to the interests of such Noteholder, the
Issuer will promptly execute, and the Trustee, upon receipt of an Officer's
Certificate evidencing such determination by the Issuer, will promptly
authenticate and make available for delivery, Notes in definitive form without
coupons, in authorized denominations and in an aggregate principal amount equal
to the principal amount of the Global Note or Notes then outstanding in exchange
for such Global Note or Notes and this Section 2.02 shall no longer be
applicable to the Notes. Upon the exchange of the Global Notes for such Notes in
definitive form without coupons, in authorized denominations, such Global Notes
shall be canceled by the Trustee. Such Notes in definitive form issued in
exchange of the Global Notes pursuant to this Section 2.02(c) shall be
registered in such names and in such authorized denominations as the Depositary,
pursuant to instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee may conclusively rely on any such
instructions furnished by the Depositary and shall not be liable for any delay
in delivery of such instructions. The Trustee shall make such Notes available
for delivery to the Persons in whose names such Notes are so registered.
(d) As long as the Notes outstanding are represented by one or more
Global Notes:
(i) the Note Registrar and the Trustee may deal with the Depositary
for all purposes (including the payment of principal of and interest on
the Notes) as the authorized representative of the Note Owners;
(ii) the rights of Note Owners shall be exercised only through the
Depositary and shall be limited to those established by law and agreements
between such Note Owners and the Depositary and/or the Depositary
Participants. Unless and until Definitive Notes are issued, the Depositary
will make book-entry transfers among the Depositary Participants and
13
receive and transmit payments of principal of and interest on the Notes to
such Depositary Participants; and
(iii) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes evidencing
a specified percentage of the Voting Rights, the Depositary shall be
deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or Depositary
Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes (or Class of Notes) and
has delivered such instruction to the Trustee.
(e) If Notes are to be issued in global form other than as Global
Notes, the provisions governing such Notes shall be specified pursuant to an
Officer's Certificate with respect thereto and by an indenture supplemental
hereto.
(f) Whenever a notice or other communication to the Noteholders is
required under this Indenture, unless and until Notes have been issued in
definitive form to Note Owners, the Trustee shall give all such notices and
communications to the Depositary.
(g) The Trustee is hereby initially appointed as the Book Entry
Custodian and hereby agrees to act as such in accordance with the agreement that
it has with the Depositary authorizing it to act as such. The Book Entry
Custodian may, and, if it is no longer qualified to act as such, the Book Entry
Custodian shall, appoint, by written instrument delivered to the Issuer and the
Depositary, any other transfer agent (including the Depositary or any successor
Depositary) to act as Book Entry Custodian under such conditions as the
predecessor Book Entry Custodian and the Depositary or any successor Depositary
may prescribe, PROVIDED that the predecessor Book Entry Custodian shall not be
relieved of any of its duties or responsibilities by reason of any such
appointment of other than the Depositary. If the Trustee resigns or is removed
in accordance with the terms hereof, the successor Trustee or, if it so elects,
the Depositary shall immediately succeed to its predecessor's duties as Book
Entry Custodian. The Issuer shall have the right to inspect, and to obtain
copies of, any Notes held as Book-Entry Notes by the Book Entry Custodian.
(h) The provisions of this Section 2.02(h) shall apply to all
transfers of Definitive Notes, if any, issued in respect of Ownership Interests
in the Rule 144A Global Notes.
(1) No transfer of any Class of Note or interest therein shall be
made unless that transfer is made pursuant to an effective registration
statement under the Securities Act, and effective registration or
qualification under applicable state securities laws, or is made in a
transaction that does not require such registration or qualification. If a
transfer of any Definitive Note is to be made without registration under
the Securities Act (other than in connection with the initial issuance
thereof or a transfer thereof by the Depositary or one of its Affiliates),
then the Note Registrar shall refuse to register such transfer unless it
receives (and upon receipt, may conclusively rely upon) either: (i) a
certificate from such Noteholder substantially in the form attached as
Exhibit G hereto or such other certification reasonably acceptable to the
Trustee and a certificate from such Noteholder's prospective transferee
substantially in the form attached as Exhibit G hereto or such other
certification reasonably acceptable to the Trustee; or (ii) an Opinion of
Counsel satisfactory to the Trustee to the effect that such transfer may
be made
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without registration under the Securities Act (which Opinion of Counsel
shall not be an expense of the Issuer or any Affiliate thereof that is a
trust or of the Depositary, the Servicer, the Trustee or the Note
Registrar in their respective capacities as such), together with the
written certification(s) as to the facts surrounding such transfer from
the Noteholder desiring to effect such transfer and/or such Noteholder's
prospective transferee on which such Opinion of Counsel is based. If such
a transfer of any interest in a Book-Entry Note is to be made without
registration under the Securities Act, the transferor will be deemed to
have made each of the representations and warranties set forth on Exhibit
G hereto in respect of such interest as if it was evidenced by a
Definitive Note and the transferee will be deemed to have made each of the
representations and warranties set forth in either Exhibit G hereto in
respect of such interest as if it was evidenced by a Definitive Note. None
of the Depositary, the Trustee or the Note Registrar is obligated to
register or qualify any Class of Notes under the Securities Act or any
other securities law or to take any action not otherwise required under
this Indenture to permit the transfer of any Note or interest therein
without registration or qualification. Any Noteholder or Note Owner
desiring to effect such a transfer shall, and does hereby agree to,
indemnify the Depositary, the Trustee and the Note Registrar against any
liability that may result if the transfer is not so exempt or is not made
in accordance with such federal and state laws.
SECTION 2.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
(a) The Notes shall be executed manually or by facsimile signature
on behalf of the Issuer by a corporate trust officer of the Owner Trustee.
(b) Any Note bearing the signature of an individual who was at the
time of execution thereof a proper authorized signatory of the Issuer shall bind
the Issuer, notwithstanding that such individual did not hold such office at the
date of such Note.
(c) No Note shall be entitled to any benefit under this Indenture or
any Supplement or be valid or obligatory for any purpose unless there appears on
such Note a certificate of authentication substantially in the form provided for
herein, executed by the Trustee by manual signature, and such certificate upon
any Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder. Each Note shall be dated the
date of its authentication.
(d) The Notes may from time to time be executed by the Issuer and
delivered to the Trustee for authentication together with an Issuer Request to
the Trustee directing the authentication and delivery of such Notes and
thereupon the same shall be authenticated and delivered by the Trustee in
accordance with such Issuer Request.
All Notes and the interest thereon shall be nonrecourse obligations
of the Issuer and shall be payable from and secured by the Trust Property. The
Notes shall never constitute obligations of the Trustee, the Owner Trustee, the
Contributor, the Servicer, the Transferor or of any shareholder or any Affiliate
of such parties (other than any Affiliate that guarantees any Notes) or any
officers, directors, employees or agents of any thereof, and no recourse may be
had under or upon any obligation, covenant or agreement of this Indenture, any
Supplement or of any Notes, or for any claim based thereon or otherwise in
respect thereof, against any incorporator or against any past, present, or
future owner, partner of an owner or any officer, employee or director thereof
or of any successor entity, or any other
15
Person, either directly or through the Issuer, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed that this Indenture and the
obligations issued hereunder are solely obligations of the Issuer, and that no
such personal liability whatever shall attach to, or is or shall be incurred by,
any other Person under or by reason of this Indenture, any Supplement or any
Notes or implied therefrom, or for any claim based thereon or in respect
thereof, all such liability and any and all such claims being hereby expressly
waived and released as a condition of, and as a consideration for, the execution
of this Indenture and the issue of such Notes. Except as provided in any
Supplement, no Person other than the Issuer shall be liable for any obligation
of the Issuer under this Indenture or any Note or any losses incurred by any
Noteholder.
SECTION 2.04 REGISTRATION, TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept at the Corporate Trust Office
a register (the "NOTE REGISTER") in which, subject to such reasonable
regulations as the Trustee may prescribe, the Issuer shall provide for the
registration of Notes and of transfers of Notes. The Trustee is hereby appointed
"NOTE REGISTRAR" for the purpose of registering Notes and transfers of Notes as
herein provided.
(b) Upon surrender for registration of transfer of any Note at the
Corporate Trust Office, the Issuer shall execute and the Trustee upon request
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of the same class, of any authorized
denominations and of a like aggregate original principal amount.
(c) 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 and any Supplement, as
the Notes surrendered upon such registration of transfer or exchange.
(d) Every Note presented or surrendered for registration of transfer
or for exchange shall (if so required by the 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.
(e) No service charge shall be made for any registration of transfer
or exchange of Notes but the Issuer or the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, but this
provision shall not apply to any exchange pursuant to Section 9.04 not involving
any transfer.
(f) If Notes are issued or exchanged in definitive form under
Section 2.02, such Notes will not be registered by the Trustee unless each
prospective initial Noteholder acquiring a Note, each prospective transferee
acquiring a Note and each prospective owner (or transferee thereof) of a
beneficial interest in Notes acquiring such beneficial interest provides the
Servicer, the Issuer, the Trustee and any successor Servicer with a
representation that the statements in either subsections (1) or (2) of Section
2.11 is an accurate representation as to all sources of funds to be used to pay
the purchase price of the Notes.
16
(g) No transfer of a Note shall be deemed effective unless the
registration and prospectus delivery requirements of Section 5 of the Securities
Act of 1933, as amended, and any applicable state securities laws are complied
with, or such transfer is exempt from the registration and prospectus delivery
requirements under said Securities Act and laws. In the event that a transfer is
to be made without registration or qualification, such Noteholder's prospective
transferee shall deliver to the Trustee an investment letter substantially in
the form of Exhibit G hereto (the "INVESTMENT LETTER"). The Trustee is not under
any obligation to register the Notes under said Act or any other securities law
or to bear any expense with respect to such registration by any other Person or
monitor compliance of any transfer with the securities laws of the United States
regulations promulgated in connection thereto or ERISA unless the Notes are
issued or exchanged in definitive form under Section 2.02.
(h) No Class E Noteholder shall transfer, sell, assign, pledge or
otherwise grant a security interest in ("TRANSFER"), a Class E Note to any
Person that is not a United States person within the meaning of section
7701(a)(30) of the Code. In the event of any Transfer with respect to a Class E
Note, the Trustee shall require, in addition to any other applicable
requirements set forth in this Indenture, including without limitation, the
delivery of the Investment Letter, (A) the purchaser to execute a Tax
Certificate in substantially the form attached as Exhibit I hereto certifying to
the transferor and the Trustee as to the matters set forth therein and (B) the
transferee to certify, in form and substance reasonably acceptable to the
Trustee, that (1) the transferee is acquiring the Class E Note for its own
behalf and is not acting as agent or custodian for any other person or entity in
connection with such acquisition and (2) the transferee is a United States
person within the meaning of section 7701(a)(30) of the Code.
In addition, no Class E Noteholder shall Transfer a Class E Note to
any Person that is a grantor trust, partnership or S corporation (each a
"Pass-Through Entity") if substantially all of the value of the assets of the
Pass-Through Entity is attributable to the Pass-Through Entity's ownership
interest in securities of the Issuer other than the Class A, Class B, Class C
Notes and Class D Notes, nor may the Class E Notes be Transferred or sold to any
Person if, for the purposes of Section 7704 of the Code and the Treasury
regulations promulgated thereunder, after giving effect to such Transfer the
Issuer would be treated under the Code (by virtue of calculating the aggregate
number of Class E Noteholders and holders of the Class F Instrument (if issued))
as being owned by more than 100 persons. In the event of any Transfer with
respect to a Class D or Class E Note, the Trustee shall require, in addition to
any other applicable requirements set forth in this Agreement, including without
limitation, the delivery of the Investment Letter, (A) the purchaser to execute
a Tax Certificate substantially in the form attached as Exhibit I hereto in form
and substance reasonably acceptable to the Trustee certifying to the transferor
and the Trustee as to the matters set forth therein and (B) the transferee to
certify, in form and substance reasonably acceptable to the Trustee, that (1)
the transferee is acquiring the Class E Note for its own behalf and is not
acting as agent or custodian for any other person or entity in connection with
such acquisition and (2) the transferee is (x) not a Pass-through Entity or (y)
is a Pass- through Entity but after giving effect to such purchase of such Class
E Note by such person, substantially all of the value of the assets of the
Pass-Through Entity is not attributable to the Pass-Through Entity's ownership
interest in the Class E Notes.
SECTION 2.05 MUTILATED, DESTROYED, LOST AND STOLEN NOTES.
17
(a) If any mutilated Note is surrendered to the Trustee, the Issuer
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a replacement Note of the same class, of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
(b) If there shall be delivered to the Issuer and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Note and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of actual notice
to the Issuer or the Trustee that such Note has been acquired by a bona fide
purchaser, the Issuer shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a
replacement Note of the same class, of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
(c) In case the final installment of principal on any such
mutilated, destroyed, lost or stolen Note has become or will at the next Payment
Date become due and payable, the Issuer in its discretion may, instead of
issuing a replacement Note, pay such Note.
(d) Upon the issuance of any replacement Note under this Section,
the Issuer or the Trustee may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed as a result of the
issuance of such replacement Note.
(e) Every replacement Note issued pursuant to this Section in lieu
of any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture and any Supplement equally and
proportionately with any and all other Notes of the same class, duly issued
hereunder.
(f) The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06 DELIVERY OF CLASS F INSTRUMENTS.
(a) The Issuer may issue the Class F Instruments upon delivery to
the Trustee of the following: (i) a Supplement in form reasonably satisfactory
to the Trustee executed by the Issuer, the Trustee and any other applicable
party and specifying the items provided in Section 2.06(c) and any other terms
(the "PRINCIPAL TERMS"), (ii) any related credit enhancement agreements as
contemplated by such Supplement, (iii) written confirmation from each Rating
Agency that the issuance of such Class F Instruments will not result in a
Ratings Effect with respect to any class of Notes; PROVIDED, HOWEVER, that no
such written confirmation shall be required if the Class F Instruments are
issued on the Closing Date, (iv) such other closing documents, certificates and
Opinions of Counsel as may be required by this Indenture or the applicable
Supplement and (v) an Officer's Certificate from the Issuer stating that each of
the conditions to the issuance of the Class F Instruments set forth in this
Section 2.06 have been satisfied. In no event shall the Issuer issue a Class F
Instrument to the order of the Issuer or an Affiliate.
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(b) Any such Class F Instrument shall be substantially in the form
of Exhibit F hereto and shall bear, upon its face, the designation for such
class to which it belongs so selected by the Issuer and set forth in the related
Supplement. All Class F Instruments shall be identical in all respects except
for the denominations thereof and shall be equally and ratably entitled among
themselves to the benefits of this Indenture and any Supplement thereof without
preference, priority or distinction on account of the actual title or times of
authentication and delivery, all in accordance with the terms and provisions of
this Indenture and such Supplement. Notwithstanding anything contained in any
Supplement, such Class F Instruments, if any, shall be subordinate to the Class
A Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class E
Notes, and no Class F Instruments shall adversely affect the method of
allocating Available Funds to Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes or the Class E Notes for any period or alter or affect
the manner or timing of distributions to the Class A, Class B, Class C, Class D
or Class E Noteholders or the rights or priority of such holders in and to the
Trust Property.
(c) Any Supplement relating to Class F Instruments shall define or
provide for, but shall not be limited to, the following Principal Terms: (i) the
name or designation of the Class F Instruments, (ii) the initial balance of the
Class F Instrument (or method for calculating such amount), (iii) the rate of
interest applicable to such Class F Instrument (or formula for the determination
thereof, which may provide that such rate is a floating rate), (iv) the Class F
Percentage, (v) the Stated Maturity Date, (vi) the Redemption Price, if any,
(vii) the Payment Dates and the date or dates from which interest shall accrue
and (viii) if the Class F Instruments are entitled to receive less than the
entire amount distributable to the Issuer or its designee pursuant to Section
3.04(b)(xiii), the amount that the Class F Instruments are entitled to receive;
PROVIDED that no such Supplement shall conflict with the terms of this Indenture
in any respect.
(d) The Issuer will not issue, sell, assign, pledge or otherwise
grant a security interest in, the Class F Instruments without an Opinion of
Counsel acceptable in form and substance to the Trustee and addressed to the
Trustee delivered by outside counsel to the Issuer to the effect that for
federal income tax purposes (i) such issuance, sale, assignment, pledge or grant
of a security interest in the Class F Instruments will not affect the tax
characterization of any of the Class A Notes, Class B Notes or Class C Notes as
indebtedness or Class D Notes or Class E Notes as indebtedness or partnership
interests, (ii) such issuance, sale, assignment, pledge or grant of a security
interest in the Class F Instruments will not constitute a deemed reissuance of
the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes or
the Class E Notes under Treasury Regulations ss.1.1001-3 and (iii) such
issuance, sale, assignment, pledge or grant of a security interest in the Class
F Instruments will not prevent the income from the Trust Property from being
properly included in the consolidated federal income tax return of the DVI
Group.
SECTION 2.07 PAYMENT OF INTEREST AND PRINCIPAL; RIGHTS PRESERVED.
(a) Any installment of interest or principal payable on any Note
that is paid or duly provided for by the Issuer on the applicable Payment Date
shall be paid to the Person in whose name such Note was registered at the close
of business on the Record Date for such Payment Date by wire transfer of
immediately available funds to the account and number specified in the Note
Register on such Record Date for such Person or, if no such account or number is
so specified, then by check mailed to such Person's address as it appears in the
Note Register on such Record Date.
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(b) All reductions in the principal amount of a Note effected by
payments of installments of principal made on any Payment Date shall be binding
upon all holders of such Note and of any Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, whether or not such
payment is noted on such Note. All payments on the Notes shall be paid without
any requirement of presentment but each holder of any Note shall be deemed to
agree, by its acceptance of the same, to surrender such Note at the Corporate
Trust Office for the payment of the final installment of principal on such Note.
SECTION 2.08 PERSONS DEEMED OWNERS.
Prior to due presentment of a Note for registration or transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Noteholder as the owner of such Note for the purpose of receiving payment of
principal of and interest on such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Issuer, the Trustee nor any
agent of the Issuer or the Trustee shall be affected by notice to the contrary.
SECTION 2.09 CANCELLATION.
All Notes surrendered for registration of transfer or exchange or
final payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The 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
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Notes held by the Trustee may be disposed of in the
normal course of its business or as directed by an Issuer Order.
SECTION 2.10. NOTEHOLDER LISTS; COMMUNICATIONS TO NOTEHOLDERS.
(a) The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Noteholders. If the Trustee is not the Note Registrar, the Issuer or other
obligor, if any, shall furnish to the Trustee at least three Business Days prior
to each Record Date and at such other times as the Trustee may request in
writing a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Noteholders.
(b) If any Noteholder (herein referred to as an "APPLICANT") applies
in writing to the Trustee, and such application states that the applicant
desires to communicate with other Noteholders with respect to their rights under
this Indenture or under the Notes, then the Trustee shall, within three Business
Days after the receipt of such application, afford such applicant(s) access to
the information preserved at the time by the Trustee in accordance with Section
2.10(a).
(c) Every Noteholder, by receiving and holding the same, agrees with
the Issuer and the Trustee that neither the Issuer nor the Trustee nor any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Noteholders in accordance
with Section 2.10(b), regardless of the source from which such information
20
was derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under Section 2.10(b).
SECTION 2.11. ERISA DEEMED REPRESENTATIONS
Each prospective initial Noteholder acquiring Notes, each
prospective transferee acquiring the Notes, and each prospective owner (or
transferee thereof) of a beneficial interest in Notes (each a "Prospective
Owner") will be deemed to have represented by such purchase to the Issuer, the
Trustee, the Servicer and any successor Servicer that either (1) it is not
acquiring the Notes with the assets of a Plan; or (2) the acquisition and
holding of the Notes will not give rise to a nonexempt prohibited transaction
under Section 406(a) of ERISA or Section 4975 of the Code.
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ARTICLE III
ACCOUNTS; INVESTMENT OF MONEYS; COLLECTION
AND APPLICATION OF MONEYS; REPORTS
SECTION 3.01 ACCOUNTS; INVESTMENTS BY TRUSTEE.
(a) The Servicer, pursuant to a Lock-Box Agreement, shall establish
a Lock-Box Account, which account shall be an Eligible Deposit Account, in the
name of the Trustee for the benefit of the Noteholders. Each Lock-Box Account
shall be a segregated account initially established and maintained with
_____________________ or such other Lock-Box Bank as the Servicer may select;
PROVIDED, HOWEVER, that the Servicer (i) shall give the Trustee and the Rating
Agencies written notice of any change in the location of a Lock-Box Account and
(ii) shall give at least 10 days' prior written notice of the new location to
each Obligor.
In addition, on or before the Closing Date, the Trustee shall
establish in the name of the Trustee for the benefit of the Noteholders and the
Issuer to the extent of their interests therein as provided in this Indenture
and in the Contribution and Servicing Agreement, the following accounts, which
accounts shall be trust accounts maintained at the Corporate Trust Office:
(i) Collection Account;
(ii) Distribution Account; and
(iii) Reserve Account.
Each of such accounts shall be established and maintained as an Eligible Deposit
Account. In addition, the Trustee shall establish a sub-account to the
Distribution Account for each Class of Notes (such sub-accounts the "CLASS A
DISTRIBUTION SUB-ACCOUNT," the "CLASS B DISTRIBUTION SUB-ACCOUNT," the "CLASS C
DISTRIBUTION SUB-ACCOUNT" the "CLASS D DISTRIBUTION SUB-ACCOUNT," the "CLASS E
DISTRIBUTION SUB-ACCOUNT" and, if necessary, the "CLASS F DISTRIBUTION
SUB-ACCOUNT"). Subject to the further provisions of this Section 3.01(a), the
Trustee shall, upon receipt or upon transfer from another account, as the case
may be, deposit into such accounts all amounts received by it which are required
to be deposited therein in accordance with the written direction of the Servicer
and the provisions of this Indenture. All such amounts and all investments made
with such amounts, including all income and other gain from such investments,
shall be held by the Trustee in such accounts as part of the Trust Property as
herein provided, subject to withdrawal by the Trustee in accordance with, and
for the purposes specified in the written direction of the Servicer pursuant to
the provisions of, this Indenture.
The Collection Account shall be comprised of more than one such
Eligible Deposit Account, but shall, for the purposes of the Transaction
Documents, be deemed to be one account. Funds shall be withdrawn equally from
each such Eligible Account that constitutes the Collection Account to make all
payments from the Collection Account in accordance with the terms and conditions
of this Indenture.
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(b) The Trustee shall hold in trust but shall not be required to
deposit in any account specified in Section 3.01(a) any payment received by it
until such time as the Trustee shall have identified to its reasonable
satisfaction the nature of such payment and, on the basis thereof, the proper
account or accounts into which such payment is to be deposited. In determining
into which of the accounts, if any, referred to above any amount received by the
Trustee is to be deposited, the Trustee may conclusively rely (in the absence of
bad faith on the part of the Trustee) on the written instructions of the
Servicer. Unless otherwise advised in writing by the Servicer, the Trustee shall
assume that any amount remitted to it is to be deposited into the Collection
Account pursuant to Section 3.03(b). The Trustee may establish from time to time
such deadline or deadlines as it shall determine are reasonable or necessary in
the administration of the Trust Property after which all amounts received or
collected by the Trustee on any day shall not be deemed to have been received or
collected until the next succeeding Business Day.
(c) The Trustee shall have no right of set-off with respect to any
Lock-Box Account, the Collection Account, the Reserve Account, the Distribution
Account, the Class A Distribution Sub- Account, the Class B Distribution
Sub-Account, the Class C Distribution Sub-Account, the Class D Distribution
Sub-Account, the Class E Distribution Sub-Account, the Class F Distribution
Sub-Account or any investment therein, or any Trust Property, including
collections or proceeds with respect thereto regardless of when or how held by
the Trustee and whether or not commingled.
(d) So long as no Default or Indenture Event of Default shall have
occurred and be continuing, the amounts in the Collection Account and the
Reserve Account shall be invested and reinvested by the Trustee pursuant to a
Servicer Order in one or more Eligible Investments. Subject to the restrictions
on the maturity of investments set forth in Section 3.01(f), each such Servicer
Order may authorize the Trustee to make the specific Eligible Investments set
forth therein, to make Eligible Investments from time to time consistent with
the general instructions set forth therein, or to make specific Eligible
Investments pursuant to instructions received in writing or by telegraph or
facsimile transmission from the employees or agents of the Servicer identified
therein, in each case in such amounts as such Servicer Order shall specify. The
Issuer, and any Class F Instrumentholder, agrees to report as income for
financial reporting and tax purposes (to the extent reportable) all investment
earnings on amounts in the Collection Account and the Reserve Account.
(e) In the event that either (i) the Servicer shall have failed to
give investment directions to the Trustee by 12:00 P.M. New York time on any
Business Day on which there may be uninvested cash or (ii) a Default or
Indenture Event of Default shall have occurred and be continuing, then the
Trustee shall invest and reinvest the funds then in the Collection Account, the
Reserve Account, as the case may be, to the fullest extent practicable in one or
more Eligible Investments as specified in paragraph (vii) of the definition of
Eligible Investments. All investments made by the Trustee shall mature no later
than the maturity date therefor permitted by Section 3.01(f).
(f) No investment of any amount held in the Collection Account or
the Reserve Account shall mature later than the second Business Day immediately
preceding the Payment Date which is scheduled to occur immediately following the
date of investment; all such investments shall be held to maturity. All income
or other gains from the investment of moneys deposited in the Collection Account
or the Reserve Account shall be deposited by the Trustee in such account
immediately upon receipt. Any net loss of principal (determined on a month by
month basis) resulting from such investment
23
of amounts in the Collection Account or the Reserve Account shall be charged to
the Issuer, and the Issuer shall reimburse such account for such loss within
three Business Days.
(g) Any investment of any funds in the Collection Account or the
Reserve Account, and any sale of any investment held in such accounts, shall be
made under the following terms and conditions:
(i) each such investment shall be made in the name of the Trustee
(in its capacity as such) for the benefit of the Noteholders or in the
name of a nominee of the Trustee;
(ii) the investment earnings of any investment shall be credited to
the account for which such investment was made;
(iii) any certificate or other instrument evidencing such investment
shall be delivered directly to the Trustee or its agent and the Trustee
shall have sole possession of such instrument, and all income on such
investment; and
(iv) the proceeds of any sale of an investment shall be remitted by
the purchaser thereof directly to the Trustee for deposit in the account
in which such investment was held.
(h) The Trustee shall not in any way be held liable by reason of any
insufficiency in the Collection Account or the Reserve Account, resulting from
losses on investments made in accordance with the provisions of this Section
3.01 (but the institution serving as Trustee shall at all times remain liable
for its own debt obligations, if any, constituting part of such investments).
The Trustee shall not be liable for any investment losses or any liquidation
prior to its maturity or any investment made by it in accordance with this
Section 3.01 on the grounds that it could have made a more favorable investment.
SECTION 3.02 RESERVED.
SECTION 3.03 COLLECTION OF MONEYS.
(a) Except as otherwise expressly provided herein, the Trustee may
demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Trustee pursuant to
this Indenture. The Trustee shall apply all such money received by it as
provided in this Indenture. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment or performance
under any agreement or instrument that is part of the Trust Property, the
Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
proceedings. Notwithstanding the foregoing, the Trustee shall not be obligated
to act as Servicer prior to its being appointed Successor Servicer. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article VI. If at any time the Issuer shall receive any payment on or in respect
of any Contract or Equipment (including any Residual Payment), it shall hold
such payment in trust for the benefit of the Trustee and the Noteholders, shall
segregate such payment
24
from the other property of the Issuer, and shall, within two Business Days of
receipt, deliver such payment in immediately available funds to the Trustee.
(b) If at any time the Trustee shall receive any payment on or in
respect of any Contract or Equipment (including any Residual Payment), it shall,
within two Business Days of receipt, deposit such payment by it into the
Collection Account in accordance with the written direction of the Servicer.
SECTION 3.04 COLLECTION ACCOUNT.
(a) The Trustee shall deposit the following into the Collection
Account in accordance with the written instructions delivered to the Trustee by
the Servicer:
(i) promptly upon receipt, each Contract Payment or Servicer Advance
received by the Trustee, including all Contract Payments deposited with
the Trustee by the Contributor on the Closing Date;
(ii) promptly upon receipt, the proceeds of any purchase
of Contracts and Equipment pursuant to Section 4.02 of this Indenture;
(iii) promptly upon receipt, each Prepayment Amount or
Partial Prepayment Amount received by the Trustee and any amounts
remitted by the Contributor in connection with any substitution of
Contracts;
(iv) promptly upon receipt, any amount required to be
deposited in the Collection Account pursuant to this Indenture;
(v) promptly upon receipt, each Residual Payment
received by the Trustee;
(vi) promptly upon receipt, any proceeds received by the
Trustee pursuant to any insurance policy covering Equipment or any
other amounts received by the Trustee relating to a Contract or
Equipment; and
(vii) promptly upon receipt, any amounts the Trustee
receives pursuant to Section 3.03 of this Indenture.
(b) Unless the Notes have been declared due and payable
pursuant to Section 6.02 hereof and moneys collected by the Trustee are being
applied in accordance with Section 6.06 hereof, the Trustee shall by 3:00 P.M.,
New York City time, on each Payment Date disburse all Available Funds deposited
in the Collection Account (including any investment income with respect to
monies on deposit in the Collection Account) in the amounts required, and in the
following order of priority in accordance with the Monthly Servicer Report:
(i) to the Servicer, the Servicing Fee due to the
Servicer on such Payment Date;
25
(ii) to the Servicer, any unreimbursed Nonrecoverable
Advances or Servicer Advances previously made with respect to
Delinquent Contracts in accordance with Section 5.01 of the
Contribution and Servicing Agreement;
(iii) first, to the Class A Distribution Sub-Account, in
the following order of priority, the sum of:
(A) the Class A Monthly Interest; and
(B) the Class A Overdue Interest, if any;
(iv) to the Class B Distribution Sub-Account, in the
following order of priority, the sum of:
(A) the Class B Monthly Interest; and
(B) the Class B Overdue Interest, if any;
(v) to the Class C Distribution Sub-Account, in the
following order of priority, the sum of:
(A) the Class C Monthly Interest; and
(B) the Class C Overdue Interest, if any;
(vi) to the Class D Distribution Sub-Account, in the
following order of priority, in the sum of:
(A) the Class D Monthly Interest; and
(B) the Class D Overdue Interest, if any;
(vii) to the Class E Distribution Sub-Account, in the
following order of priority, the sum of:
(A) the Class E Monthly Interest; and
(B) the Class E Overdue Interest, if any;
(viii) PROVIDED that no Amortization Event shall have
occurred and be continuing, to the Class A Distribution Sub-Account, in
the following order of priority, the sum of:
(A) the Class A Overdue Principal, if any;
(B) the Class A Monthly Principal;
26
(ix) PROVIDED that no Amortization Event shall have
occurred and be continuing, to the Class B Distribution Sub-Account, in
the following order of priority, the sum of:
(A) the Class B Overdue Principal, if any;
and
(B) the Class B Monthly Principal;
(x) PROVIDED that no Amortization Event shall have
occurred and be continuing, to the Class C Distribution Sub-Account, in
the following order of priority, the sum of:
(A) the Class C Overdue Principal, if any;
and
(B) the Class C Monthly Principal;
(xi) PROVIDED that no Amortization Event shall have
occurred and be continuing, to the Class D Distribution Sub-Account, in
the following order of priority, the sum of:
(A) the Class D Overdue Principal, if any;
and
(B) the Class D Monthly Principal;
(xii) PROVIDED that no Amortization Event shall have
occurred and be continuing, to the Class E Distribution Sub-Account, in
the following order of priority, the sum of:
(A) the Class E Overdue Principal, if any;
and
(B) the Class E Monthly Principal;
(xiii) PROVIDED that no Amortization Event shall have
occurred and be continuing, to the Reserve Account, the Reserve Account
Deposit Amount;
(xiv) if an Amortization Event shall have occurred and is
continuing and is not subject to a continuing waiver from Noteholders
evidencing not less than 662/3% of the Voting Rights, in the following
order of priority:
FIRST, to the Class A Distribution
Sub-Account the amount necessary to reduce the Class
A Note Balance to zero; and
SECOND, to the Class B Distribution
Sub-Account the amount necessary to reduce the Class
B Note Balance to zero; and
27
THIRD, to the Class C Distribution
Sub-Account the amount necessary to reduce the Class
C Note Balance to zero;
FOURTH, to the Class D Distribution
Sub-Account the amount necessary to reduce the Class
D Note Balance to zero; and
FIFTH, to the Class E Distribution
Sub-Account the amount necessary to reduce the Class
E Note Balance to zero;
(xv) if the Servicer is no longer DVI, and the Servicer
has, in its good faith and reasonable business judgment, deemed the
Servicing Fee to be commercially unreasonable, then, to the Servicer,
the amount agreed upon between the then Servicer and the Trustee, each
in their good faith and commercially reasonable judgment, as necessary
to make the Servicing Fee commercially reasonable and to cover the
reasonable costs in transferring the servicing obligations; and
(xvi) any remaining Available Funds on deposit in the
Collection Account shall be paid to DVI Receivables Corp., as sole
beneficial owner of the Issuer, or, if the Class F Instrument has been
issued, to the Class F Distribution Sub-Account.
Noteholders evidencing not less than 662/3% of the Voting Rights shall have the
ability to waive or defer any Amortization Event by written notice delivered to
the Trustee. If at any time any amount or portion thereof previously distributed
pursuant to this Section 3.04(b) shall have been recovered, or shall be subject
to recovery, in any proceeding with respect to the Issuer or otherwise, then for
purposes of determining future distributions pursuant to this Section 3.04(b)
such amount or portion thereof shall be deemed not to have been previously so
distributed. The Trustee shall make the disbursements in accordance with the
Monthly Servicer Report on each Payment Date to the extent of Available Funds
for such Payment Date.
(c) If on any Payment Date, the Available Funds on deposit in
the Collection Account (the "DEPOSITED AVAILABLE FUNDS") are less than the sum
necessary to make the payments required pursuant to Section 3.04(b), clauses
(iii) through (xii) inclusive and clause (xiv), each as applicable (the sum of
such payments, the "PRIORITY PAYMENTS"), then the Trustee shall withdraw from
the Reserve Account, to the extent that such funds are on deposit in the Reserve
Account and after taking into account payments to be made pursuant to clauses
(i) and (ii) of Section 3.04(b), and deposit into the Distribution Account for
payment on such Payment Date, funds equal to the amount of the Priority Payments
less any Deposited Available Funds (such funds, the "AVAILABLE RESERVE ACCOUNT
FUNDS") for payment in accordance with Section 3.04(b)(iii) through and
including (xii) and (xiv) hereof, as applicable.
SECTION 3.05 Class A Distribution Sub-Account; Class B
Distribution Sub-Account; Class C Distribution Sub-Account; Class D Distribution
Sub-Account; Class E DISTRIBUTION SUB-ACCOUNT; CLASS F DISTRIBUTION SUB-ACCOUNT.
(a) On each Payment Date in accordance with the Monthly
Servicer Report the Trustee shall pay to the Class A Noteholders the amounts
then on deposit in the Class A Distribution Sub-
28
Account. Such payments are to be made, first to the Class A-1 Noteholders, PRO
RATA, in the following order of priority:
(i) the Class A Monthly Interest;
(ii) the Class A Overdue Interest, if any;
(iii) the Class A Overdue Principal, if any;
(iv) the Class A Monthly Principal; and
(v) any additional principal payable
pursuant to the Indenture.
(b) On each Payment Date in accordance with the Monthly
Servicer Report the Trustee shall pay to the Class B Noteholders, PRO RATA, the
amount then on deposit in the Class B Distribution Sub-Account. Such payments to
the Class B Noteholders shall be made in the following order of priority:
(i) the Class B Monthly Interest;
(ii) the Class B Overdue Interest, if any;
(iii) the Class B Overdue Principal, if any;
(iv) the Class B Monthly Principal; and
(v) any additional principal payable
pursuant to the Indenture.
(c) On each Payment Date in accordance with the Monthly
Servicer Report the Trustee shall pay to the Class C Noteholders, PRO RATA, the
amount then on deposit in the Class C Distribution Sub-Account. Such payments to
the Class C Noteholders shall be made in the following order of priority:
(i) the Class C Monthly Interest;
(ii) the Class C Overdue Interest, if any;
(iii) the Class C Overdue Principal, if any;
(iv) the Class C Monthly Principal; and
(v) any additional principal payable
pursuant to the Indenture.
(d) On each Payment Date in accordance with the Monthly
Servicer Report the Trustee shall pay to the Class D Noteholders, PRO RATA, the
amount then on deposit in the Class D Distribution Sub-Account. Such payments to
the Class D Noteholders shall be made in the following order of priority:
(i) the Class D Monthly Interest;
(ii) the Class D Overdue Interest, if any;
(iii) the Class D Overdue Principal, if any;
(iv) the Class D Monthly Principal; and
(v) any additional principal payable
pursuant to the Indenture.
(e) On each Payment Date in accordance with the Monthly
Servicer Report the Trustee shall pay to the Class E Noteholders, PRO RATA, the
amount then on deposit in the Class E Distribution Sub-Account. Such payments to
the Class E Noteholders shall be made in the following order of priority:
(i) the Class E Monthly Interest;
(ii) the Class E Overdue Interest, if any;
(iii) the Class E Overdue Principal, if any;
29
(iv) the Class E Monthly Principal; and
(v) any additional principal payable
pursuant to the Indenture.
(f) If the Class F Instruments have been issued, on each
Payment Date in accordance with the Monthly Servicer Report the Trustee shall
distribute to the Class F Instrumentholders, PRO RATA, the amount then on
deposit in the Class F Distribution Sub-Account in the priority set forth in the
Supplement.
SECTION 3.06 REPORTS; NOTICES OF CERTAIN PAYMENTS.
(a) Following each payment to the Noteholders, the Trustee
shall mail to the Issuer, Cede & Co. and the Rating Agencies, and make available
to each Noteholder, the Monthly Servicer Report furnished to the Trustee by the
Servicer on the Determination Date prior to such Payment Date (or if such report
has not been received, a written statement to such effect).
(b) The Trustee shall deliver to the Servicer, and within two
Business Days after the request of the Issuer, deliver to the Issuer a written
statement setting forth the amounts on deposit in the Collection Account and the
Reserve Account, and identifying the investments included therein.
SECTION 3.07. TRUSTEE MAY RELY ON CERTAIN
INFORMATION FROM CONTRIBUTOR AND SERVICER.
Pursuant to the Contribution and Servicing Agreement, the
Contributor and the Servicer are required to furnish to the Trustee from time to
time certain information and make various calculations which are relevant to the
performance of the Trustee's duties in this Article III and in Article IV of
this Indenture. The Trustee shall be entitled to rely conclusively in good faith
on any such information and calculations in the performance of its duties
hereunder, (i) unless and until a Responsible Officer of the Trustee has actual
knowledge that such information or calculations is or are incorrect, or (ii)
unless there is a manifest error in any such information; PROVIDED that the
Trustee shall verify the mathematical accuracy of the Class A Monthly Principal,
the Class B Monthly Principal, the Class C Monthly Principal, the Class D
Monthly Principal, the Class E Monthly Principal, the Class A Monthly Interest,
the Class B Monthly Interest, the Class C Monthly Interest, the Class D Monthly
Interest and the Class E Monthly Interest to be paid on each Payment Date.
SECTION 3.08 RESERVE ACCOUNT.
(a) On each Payment Date the Trustee shall promptly deposit
into the Reserve Account all amounts required to be deposited into the Reserve
Account and actually received by the Trustee pursuant to this Indenture. The
obligation of the Trustee to deposit amounts into the Reserve Account in
accordance with the terms of this Indenture shall be limited to the deposit of
amounts in the Collection Account pursuant to Section 3.04(b) hereof. The
Trustee shall not have any responsibility to determine the amount or adequacy of
funds on deposit in the Reserve Account, or the amount of any deposits to or
withdrawals from the Reserve Account. The Issuer, or Class F Instrumentholder,
if any, by its acceptance of the Class F Instrument, agrees to treat such assets
(and all earnings thereon) (the "RESERVE ACCOUNT PROPERTY") as its assets (and
earnings) for federal, state and local tax purposes and not to sell, transfer or
otherwise dispose of its interest therein.
30
(b) On each Payment Date, the Trustee shall, on the basis of
the Monthly Servicer Report, deposit in the Reserve Account, pursuant to Section
3.04(b), an amount equal to the Reserve Account Deposit Amount. If on any
Payment Date, Deposited Available Funds are less than the Priority Payments, the
Trustee shall withdraw from the Reserve Account the excess of the Priority
Payments over the Available Funds in accordance with Section 3.04(c) hereof. On
each Payment Date, if, after giving effect to all deposits and withdrawals
therefrom on such Payment Date, the balance in the Reserve Account is greater
than the Reserve Account Requirement, the Trustee shall release and, at the
instruction of the Servicer, shall pay the amount (such amount, a "RESERVE
ACCOUNT WITHDRAWAL") of the excess to the Issuer or its designee, or Class F
Instrumentholder, if any. Amounts properly paid to the Issuer or its designee,
or Class F Instrumentholder, if any, pursuant to this Section 3.08, either
directly from the Distribution Account without deposit in the Reserve Account or
from the Reserve Account, shall be deemed released from the Trust Property, and
the Issuer or its designee, or Class F Instrumentholder, if any, shall not in
any event thereafter be required to refund any such paid amounts.
(c) With respect to the Reserve Account Property, the Issuer
and the Trustee agree that any Reserve Account Property that is held in deposit
accounts shall be held solely in the name of the Trustee, on behalf of the
Noteholders. Each such deposit account shall be subject to the exclusive custody
and control of the Trustee, and the Trustee shall have sole signature authority
with respect thereto.
(d) Upon termination of this Indenture, any amounts on deposit
in the Reserve Account, after payment of amounts due to the Class A Noteholders,
the Class B Noteholders, the Class C Noteholder, the Class D Noteholder, the
Class E Noteholder upon Transferor's written request to the Trustee, shall be
paid to the Transferor (as sole beneficial owner of the Issuer), or Class F
Instrumentholder, if any.
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ARTICLE IV
CONTRACTS AND EQUIPMENT
SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE ISSUER.
The Issuer hereby restates and incorporates herein each of the
representations and warranties, IN MUTATIS MUTANDIS, set forth in Section 2.03
and Section 2.04 of the Contribution and Servicing Agreement. The Trustee shall
rely on such representations and warranties in accepting the Contracts and the
other Trust Property in trust and authenticating the Notes. Such representations
and warranties shall speak as of the Closing Date.
SECTION 4.02 PURCHASE UPON BREACH; CONTRIBUTION AND
SERVICING AGREEMENT.
The Issuer shall inform the Trustee promptly, in writing, upon
the discovery of a breach of any of the Contributor's representations and
warranties set forth in Section 2 of the Contribution and Servicing Agreement.
With respect to any breach of the Contributor's representations and warranties
set forth in Section 2 of the Contribution and Servicing Agreement which
materially and adversely affects the interest of the Noteholders in such
Contract or Contracts, the Issuer shall cause the Contributor to either (a)
replace such Contract and the related Equipment with a Substitute Contract in
accordance with the provisions of Section 5.03 of the Contribution and Servicing
Agreement (and for the Transferor to receive from the Contributor and transfer
to the Issuer such Substitute Contract) or (b) purchase from the Transferor
(which Transferor shall purchase from the Issuer and resell to the Contributor)
the Contract and the security interest in the related Equipment that are
affected by such breach, unless, in each such instance such breach has been
cured, or waived in all respects by Noteholders evidencing more than 50% of the
Voting Rights, within 90 days following the Issuer's discovery or receipt of
notice of such breach. In the event of a repurchase of a Contract, the Issuer
and the Transferor (as sole beneficial owner of the Issuer) shall cause the
Contributor to remit to the Trustee (upon written notice to the Trustee thereof)
the Repurchase Amount of such Contract (or, if such Contract is then a Defaulted
Contract, an amount equal to the Repurchase Amount as of the date such Contract
first became a Defaulted Contract, together with interest thereon at the
Discount Rate from the date such Contract first became a Defaulted Contract to
the end of the month in which the repurchase is to be made). The Trustee shall,
to the extent received, deposit such Repurchase Amounts and any cash received in
connection with a substitution in the Collection Account on or prior to 11:00
a.m. New York City time on the second Business Day after receipt thereof. The
sole remedy of the Trustee or the Noteholders against the Contributor with
respect to a breach of a representation or a warranty set forth in Section 2 of
the Contribution and Servicing Agreement, and against the Issuer or the
Transferor with respect to a breach under this agreement or the Pooling and
Trust Agreement by reason of such breach by the Contributor, shall be to require
the Contributor to purchase or substitute Contracts pursuant to the Contribution
and Servicing Agreement, PROVIDED that the limitation contained in this sentence
shall not otherwise limit the rights of any such Person under Section 5.02 of
the Contribution and Servicing Agreement. In the event that the Contributor
fails to purchase or substitute for any Contract that it is required to
substitute or repurchase pursuant to the Contribution and Servicing Agreement,
the Trustee, upon the written direction of the Noteholders, shall enforce the
Issuer's and the Transferor's rights against the Contributor under and in
accordance with the terms of the Contribution and Servicing Agreement and
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the Pooling and Trust Agreement, as assigned to the Trustee, to require the
purchase or replacement of the Contract.
SECTION 4.03 RELEASE OF CONTRACTS AND EQUIPMENT FOLLOWING
SUBSTITUTION OR PURCHASE.
In the event that (i) the Contributor shall have substituted a
Substitute Contract and a security interest in the Equipment subject thereto for
a Predecessor Contract and a security interest in the Equipment subject thereto
in accordance with Section 7 of the Contribution and Servicing Agreement, or
(ii) the Contributor shall have purchased a Contract and a security interest in
the related Equipment in accordance with Section 5.03 of the Contribution and
Servicing Agreement, the Predecessor Contract or the repurchased Contract, as
applicable, and the security interest in the Equipment subject thereto, shall be
released from the lien of this Indenture when the Trustee shall have (i) in the
case of the purchase of a Contract, deposited in the Collection Account all
amounts received pursuant to Section 5.03 of the Contribution and Servicing
Agreement, (ii) in the case of a Substitute Contract, received a fully executed
original of the Substitute Contract Transfer Form and the Contract File with
respect to such Substitute Contract plus any cash amount delivered as provided
in Section 7.01(d) of the Contribution and Servicing Agreement, (iii) received
written certification from an Authorized Officer of the Servicer that there are
no unreimbursed Servicer Advances with respect to such Contract and (iv)
delivered to the Contributor acknowledgment of its receipt of the related
Contract Files. If there are such unreimbursed amounts, any proceeds received
with respect to such Predecessor Contract or repurchased Contract, as
applicable, and the security interest in the related Equipment shall be applied
hereunder only to the extent necessary to repay such Servicer Advances (and
clause (iii) of the foregoing sentence shall be deemed satisfied) and to
reimburse the Collection Account for any other amounts drawn thereon and the
balance of such proceeds, if any, shall be paid to, or as directed by, the
Contributor.
In connection with the substitution of a Contract, if the
Discounted Contract Balance of such Substitute Contract is less than the
Discounted Contract Balance of the Predecessor Contract, the Contributor shall,
on the date of substitution, deposit an amount equal to such difference into the
Collection Account.
SECTION 4.04 RELEASE OF CONTRACTS AND EQUIPMENT UPON FINAL
CONTRACT PAYMENT.
(a) In the event that the Trustee shall have received written
certification from an Authorized Officer of the Servicer that the Trustee has
received from amounts paid by the Obligor or from the proceeds of the Equipment
subject to any Contract (i) the final Contract Payment due and payable under any
Contract (including, if applicable, any Purchase Option Payment paid by the
Obligor) or (ii) a Prepayment Amount in respect of any Contract and, following
such final Contract Payment or Prepayment Amount, no further payments on, or in
respect of, such Contract are or will be due and payable, such Contract and the
Equipment subject thereto shall be released from the lien of this Indenture
except if a Restricting Event or an Amortization Event shall have occurred and
then be continuing.
(b) If a Restricting Event or Amortization Event shall have
occurred and then be continuing, then each Contract and the security interest in
all Equipment (except for security interests relating to Equipment subject to a
conditional sales agreement or an equipment note) which would
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otherwise be released from the lien of this Indenture pursuant to this Section
4.04 shall instead remain subject to such lien and all of the provisions of this
Indenture, including, without limitation, Article VI hereof.
SECTION 4.05 EXECUTION OF DOCUMENTS.
The Trustee shall promptly execute and deliver such documents
(which shall be furnished to the Trustee by the Issuer) and take such other
actions as the Issuer, by Issuer Request, may reasonably request to fully
effectuate the release from this Indenture of any Contract and the security
interest relating to Equipment required to be so released pursuant to Sections
4.03 and 4.04 hereof.
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ARTICLE V
SERVICER EVENTS OF DEFAULT; SUBSTITUTE SERVICER
SECTION 5.01 SERVICER EVENTS OF DEFAULT.
If a Servicer Event of Default shall have occurred and be
continuing under Section 10.01 of the Contribution and Servicing Agreement, the
Trustee shall, upon the written request of Noteholders evidencing not less than
66-2/3% of the Voting Rights give written notice to the Servicer of the
termination of all of the rights and obligations of the Servicer (but none of
the Contributor's obligations thereunder, which shall survive any such
termination) under the Contribution and Servicing Agreement and the Trustee
shall act as successor Servicer in accordance with Section 10 of the
Contribution and Servicing Agreement.
SECTION 5.02 SUBSTITUTE SERVICER.
Notwithstanding the provisions of Section 5.01, the Trustee
may, if it shall be unwilling or unable to act as the Successor Servicer in
accordance with Section 5.01, appoint a Successor Servicer in accordance with
the provisions of Section 10.03 of the Contribution and Servicing Agreement.
SECTION 5.03 NOTIFICATION TO NOTEHOLDERS AND
RATING AGENCIES.
Upon any termination of the Servicer or appointment of a
Successor Servicer, and upon any resignation, discharge or removal of the Owner
Trustee or appointment of a successor Owner Trustee, the Trustee shall give
prompt notice of such termination, resignation, discharge, removal or
appointment, together with the conditions of default, if applicable, to the
Rating Agencies and each Noteholder in the manner provided herein.
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ARTICLE VI
EVENTS OF DEFAULT; REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
"INDENTURE EVENT OF DEFAULT," wherever used herein, means any
one of the following (whatever the reason for such Indenture Event of Default
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(i) default in the payment of (A) any interest payment
on any outstanding Class A Note, Class B Note, Class C Note, Class D
Note or Class E Note when it becomes due and payable, or (B) the then
outstanding principal balance of the Class A Notes on the Class A
Stated Maturity Date, of the Class B Notes on the Class B Stated
Maturity Date, of the Class C Notes on the Class C Stated Maturity
Date, of the Class D Notes on the Class D Stated Maturity Date or of
the Class E Notes on the Class E Stated Maturity Date or (C) any
payment of principal of or interest on any outstanding Note when it
becomes due and payable to the extent that sufficient Available Funds
were on deposit in the Collection Account and to the extent that
sufficient Available Reserve Account Funds are on deposit in the
Reserve Account with respect to such Payment Date;
(ii) default in the performance, or breach, of any
covenant set forth in Section 8.04, 8.07(c) or 8.08;
(iii) default in the performance, or breach, of any
covenant of the Issuer in the Notes or this Indenture (other than a
covenant described in (ii) above), or of any party to the Contribution
and Servicing Agreement or the other Transaction Documents and
continuance of such default or breach for a period of 30 days after the
earliest of (A) any officer of the Transferor or Corporate Trust
Officer of the Owner Trustee first acquiring knowledge thereof, (B) the
Trustee's giving written notice thereof to the Issuer or (C) the holder
of any Note giving written notice thereof to the Issuer;
(iv) if any representation or warranty of the Issuer,
the Transferor or the Contributor made in this Indenture, the
Subsequent Contract Transfer Agreement or the Contribution and
Servicing Agreement, respectively, or any other writing provided to the
Noteholders in connection with the foregoing documents shall prove to
be incorrect in any material respect as of the time when the same shall
have been made; PROVIDED, HOWEVER, that the breach of any
representation or warranty made by the Contributor in Section 2.03 or
2.04 of the Contribution and Servicing Agreement with respect to any of
the Contracts or the security interest in the Equipment subject thereto
shall not constitute an Indenture Event of Default if the Contributor
substitutes one or more Substitute Contracts and the security interest
in the Equipment subject thereto for such Contract and a security
interest in the related Equipment in accordance with Section 7.01 of
the Contribution and Servicing Agreement or repurchases a Contract and
the security interest in the related Equipment in accordance with
Section 5.03 of the Contribution and Servicing Agreement;
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(v) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the Issuer
in an involuntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization, or other similar law or
(B) a decree or order adjudging the Issuer a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment, or composition of or in respect of the Issuer
under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, 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 for relief or any such other
decree or order unstayed and in effect for a period of 90 consecutive
days; or
(vi) the commencement by the Issuer of a voluntary case
or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization, or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the consent
by it to the entry of a decree or order for relief in respect of the
Issuer in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization, or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator, or similar
official of the Issuer or of any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the
Issuer's failure to pay its debts generally as they become due, or the
taking of company action by the Issuer in furtherance of any such
action.
SECTION 6.02 ACCELERATION OF MATURITY; RESCISSION AND
ANNULMENT.
(a) If an Indenture Event of Default occurs and is continuing,
of which a Responsible Officer of the Trustee has received written notice
(PROVIDED that such written notice need not have been received by the Trustee in
connection with a payment default as described in Section 6.01(i)), then and in
every such case the Trustee with the consent of Noteholders evidencing not less
than 66-2/3% of the Voting Rights may declare the unpaid principal amount of all
the Notes to be due and payable immediately, by a notice in writing to the
Issuer, and upon any such declaration such principal amount shall become
immediately due and payable together with all accrued and unpaid interest
thereon, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Issuer.
(b) At any time after such a declaration of acceleration has
been made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article provided, Noteholders
evidencing not less than 66-2/3% of the Voting Rights, by written notice to the
Issuer and the Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Issuer has paid or deposited with the Trustee a
sum sufficient to pay:
(A) all sums paid or advanced, together with
interest thereon, by the Trustee hereunder and the reasonable
compensation, expenses, disbursements, and advances, if any,
of the Trustee, its agents and counsel;
37
(B) all principal of any Notes which have
become due otherwise than by such declaration of acceleration,
and interest thereon from the date when the same first became
due at the applicable Note Rate; and
(C) all interest which has become due with
respect to the Notes;
(ii) all Indenture Events of Default, other than the
non-payment of the aggregate principal amount of the Notes which has
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 6.13; and
(iii) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction.
No such rescission shall affect any subsequent Indenture Event of Default or
impair any right consequent thereon.
SECTION 6.03 OTHER REMEDIES.
(a) If an Indenture Event of Default occurs and is continuing
of which a Responsible Officer of the Trustee has received written notice
(PROVIDED that such written notice need not have been received by the Trustee in
the case of a payment default as described in Section 6.01(i)), the Trustee
shall give notice to each Noteholder as set forth in Section 7.02. The Trustee
shall then take such action, if any, as may be directed by Noteholders
evidencing not less than 66-2/3% of the Voting Rights.
(b) Following any acceleration of the Notes, the Trustee shall
have all of the rights, powers and remedies with respect to the Trust Property
as are available to secured parties under the Uniform Commercial Code or other
applicable law or as are otherwise available to it under applicable law to
protect and enforce the rights and remedies of the Trustee and the Noteholders
hereunder and under the other Transaction Documents; PROVIDED that, so long as
the Offered Notes are outstanding, the Trustee, in acting during the pendency of
an Indenture Event of Default shall act solely on behalf of the holders of the
Offered Notes and shall not take into account any Class F Instruments that may
have been issued in so acting. Such rights, powers and remedies may be exercised
by the Trustee in its own name as trustee of an express trust.
SECTION 6.04 TRUSTEE MAY FILE PROOFS OF CLAIM.
(a) In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other judicial proceeding relative to the Issuer, the Transferor, the
Contributor, the Servicer or any other obligor upon the Notes or the other
obligations secured hereby or relating to the property of the Issuer, the
Transferor, the Contributor, the Servicer or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Notes shall
then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Issuer,
the Transferor, the Contributor or the Servicer for the payment of overdue
principal or overdue interest or any such other obligation) shall be entitled
and empowered, by intervention in such proceeding or otherwise:
38
(i) to file and prove a claim for the whole amount of
principal and interest owing and unpaid in respect of the Notes and any
other obligation secured hereby and to file such other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Noteholders allowed in such judicial proceeding,
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
(iii) unless prohibited by applicable law and
regulations, to vote on behalf of the Noteholders in any election of a
trustee, a standby trustee or Person performing similar functions in
any such proceedings; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Trustee or the Noteholders allowed in any proceedings relative
to the Issuer, its creditors and its property;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Noteholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Noteholders
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.06.
(b) Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
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.
SECTION 6.05 TRUSTEE MAY ENFORCE CLAIMS WITHOUT
POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the
Notes may be prosecuted and enforced by the Trustee without the possession of
any of the Notes or the production thereof in any proceeding relating thereto,
and any such 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 in respect of which such judgment
has been recovered.
SECTION 6.06 APPLICATION OF MONEY COLLECTED.
Any money, securities or property collected by the Trustee
pursuant to this Article, and any moneys, securities or property that may then
be held or thereafter received by the Trustee, shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution
39
of the entire amount due on account of principal or interest, upon presentation
of the Notes and surrender thereof:
FIRST, to the payment of all costs and expenses of collection
incurred by the Trustee (including the reasonable fees and
expenses of any counsel to the Trustee) and all other amounts
due the Trustee under Section 7.06 (the parties hereto agree
that when the Trustee renders services following an Indenture
Event of Default under Section 6.01 (v) or (vi), compensation
for such services and expenses in connection therewith are
intended to constitute administrative expenses under
applicable bankruptcy law);
SECOND, to the payment of all unreimbursed Servicer Advances
due to the Servicer;
THIRD, only in the event that DVI is no longer the Servicer,
and the Servicer has, in its good faith and reasonable
business judgment, deemed the Servicing Fee to be commercially
unreasonable, then, to the Servicer, the amount agreed upon
between the then Servicer and the Trustee, each in their good
faith and commercially reasonable judgment, as necessary to
make the Servicing Fee commercially reasonable and to cover
the reasonable costs in transferring the servicing
obligations;
FOURTH, to the payment of all accrued and unpaid interest on
the outstanding Class A Note Balance to the date of payment
thereof, ratably to each Class A Noteholder, without
preference or priority of any kind;
FIFTH, to the payment of all accrued and unpaid interest on
the outstanding Class B Note Balance to the date of payment
thereof, ratably to each Class B Noteholder without preference
or priority of any kind;
SIXTH, to the payment of all accrued and unpaid interest on
the outstanding Class C Note Balance to the date of payment
thereof, ratably to each Class C Noteholder without preference
or priority of any kind;
SEVENTH, to the payment of all accrued and unpaid interest on
the outstanding Class D Note Balance to the date of payment
thereof, ratably to each Class D Noteholder without preference
or priority of any kind;
EIGHTH, to the payment of all accrued and unpaid interest on
the outstanding Class E Note Balance to the date of payment
thereof, ratably to each Class E Noteholder without preference
or priority of any kind;
NINTH, to the payment of the outstanding Class A Note Balance,
and any other amounts due to the Class A Noteholders, ratably,
without preference or priority of any kind, until the Class A
Note Balance has been reduced to zero;
TENTH, to the payment of the outstanding Class B Note Balance,
and any other amounts due to the Class B Noteholders ratably,
without preference or priority of any kind;
40
ELEVENTH, to the payment of the outstanding Class C Note
Balance, and any other amounts due to the Class C Noteholders
ratably, without preference or priority of any kind;
TWELFTH, to the payment of the outstanding Class D Note
Balance, and any other amounts due to the Class D Noteholders
ratably, without preference or priority of any kind;
THIRTEENTH, to the payment of the outstanding Class E Note
Balance, and any other amounts due to the Class E Noteholders
ratably, without preference or priority of any kind;
FOURTEENTH, to the payment of all accrued and unpaid interest
on outstanding Class F Instruments, if any, to the date of
payment thereof, ratably to each Holder of the Class F
Instruments without preference or priority of any kind;
FIFTEENTH, to the payment of the outstanding principal balance
of the Class F Instruments, if any, and any other amounts due
to the Holders of any Class F Instruments ratably, without
preference or priority of any kind; and
SIXTEENTH, in the event that DVI is the Servicer, to the
payment of all unreimbursed Servicing Fees due to the
Servicer; and
SEVENTEENTH, to the payment of the remainder, if any, to, or
at the order of, the Issuer.
SECTION 6.07 LIMITATION ON SUITS.
The holder of any Note shall not have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture or the
Notes, or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(i) such Noteholder has previously given written notice
to the Trustee of a continuing Indenture Event of Default;
(ii) the Noteholders evidencing not less than 25% of the
Voting Rights shall have made written request to the Trustee to
institute proceedings in respect of such Indenture Event of Default in
its own name as Trustee hereunder;
(iii) such Noteholder or Noteholders have offered to the
Trustee adequate indemnity against the costs, expenses and liabilities
to be incurred in compliance with such request;
(iv) the Trustee for 30 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(v) so long as any of the Notes remain outstanding, no
direction inconsistent with such written request has been given to the
Trustee during such 30-day period by Noteholders evidencing not less
than 66-2/3% of the Voting Rights;
41
it being understood and intended that no one or more Noteholder shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb, or prejudice the rights of any other
Noteholder, or to obtain or to seek to obtain priority or preference over any
other Noteholder or to enforce any right under this Indenture, except in the
manner herein provided. It is further understood and intended that so long as
any portion of the Notes remains outstanding, the Servicer shall not have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture (other than for the enforcement of Sections 3.04(b) and 4.04) or for
the appointment of a receiver or trustee, or for any other remedy hereunder.
SECTION 6.08 UNCONDITIONAL RIGHT OF NOTEHOLDERS
TO RECEIVE PAYMENT.
Notwithstanding any other provision in this Indenture, other
than the provisions hereof establishing priorities of payment or limiting the
right to recover amounts due on the Notes to recoveries from the Trust Property,
the holder of any Note shall have the absolute and unconditional right to
receive payment of the principal of and interest on such Note as such principal
and interest becomes due on the Payment Dates for such payments, including the
Stated Maturity Date for the applicable Class, and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Noteholder.
SECTION 6.09 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Noteholder has instituted any proceeding
to enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Noteholder, then and in every such case, subject to any
determination in such proceeding, the Issuer, the Trustee and the Noteholders
shall be restored severally and respectively to their former positions hereunder
and thereafter all rights and remedies of the Trustee and the Noteholders shall
continue as though no such proceeding had been instituted.
SECTION 6.10. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost, or stolen Notes in the last paragraph
of Section 2.05, no right or remedy herein conferred upon or reserved to the
Trustee or to the Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 6.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any holder of any
Note to exercise any right or remedy accruing upon any Indenture Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Indenture Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the Noteholders may be
exercised from
42
time to time, and as often as may be deemed expedient, by the Trustee or by the
Noteholders, as the case may be.
SECTION 6.12 CONTROL BY NOTEHOLDERS.
Except as may otherwise be provided in this Indenture, until
such time as the conditions specified in Section 11.01 have been satisfied in
full, Noteholders evidencing not less than 66-2/3% of the Voting Rights shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee. Notwithstanding the foregoing:
(i) no such direction shall be in conflict with any
rule of law or with this Indenture;
(ii) the Trustee shall not be required to follow any
such direction which the Trustee believes may be unduly prejudicial to
the rights of another Noteholder not joining in such direction or which
the Trustee believes might result in any personal liability on the part
of the Trustee for which the Trustee is not indemnified to its
reasonable satisfaction; and
(iii) the Trustee may take any other action deemed proper
by the Trustee which is not inconsistent with any such direction;
PROVIDED that the Trustee shall give notice of any such action to each
Noteholder.
SECTION 6.13 WAIVER OF DEFAULTS AND EVENTS OF
DEFAULT.
(a) Subject to the provisions of Sections 6.08 and 9.01,
Noteholders evidencing more than 50% of the Voting Rights, may, by one or more
instruments in writing, waive an existing Default or Indenture Event of Default
hereunder and its consequences, except a continuing Indenture Event of Default:
(i) in respect of the payment of the principal of or
interest on any outstanding Note (which may only be waived by the
holder of such Note), or
(ii) in respect of a covenant or provision hereof which
under Article IX cannot be modified or amended without the consent of
the holder of each outstanding Note affected (which only may be waived
by the holders of all outstanding Notes affected).
(b) A copy of each waiver pursuant to Section 6.13(a) shall be
furnished by the Issuer to the Trustee. Upon any such waiver, such Indenture
Event of Default shall cease to exist and shall be deemed to have been cured,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Indenture Event of Default or impair any right consequent
thereon.
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SECTION 6.14 WAIVER OF STAY OR EXTENSION LAWS.
The Issuer covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Issuer (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 6.15 SALE OF TRUST PROPERTY.
(a) The power to effect any sale of any portion of the Trust
Property pursuant to Section 6.03 shall not be exhausted by any one or more
sales as to any portion of the Trust Property remaining unsold, but shall
continue unimpaired until the entire Trust Property shall have been sold or all
amounts payable on the Notes shall have been paid. The Trustee may from time to
time, upon directions in accordance with Section 6.12, postpone any public sale
by public announcement made at the time and place of such sale.
(b) To the extent permitted by applicable law, the Trustee
shall not in any private sale sell the Trust Property, or any portion thereof,
unless either (i) until such time as the conditions specified in Section
11.01(a) have been satisfied in full, Noteholders evidencing not less than
66-2/3% of the Voting Rights consent to or direct the Trustee to make such sale;
or (ii) the proceeds of such sale would be not less than the sum of all amounts
due to the Trustee hereunder and the entire unpaid principal amount of all Class
A Notes, Class B Notes, Class C Notes, Class D Notes and Class E Notes then
outstanding and interest due or to become due thereon in accordance with Section
6.06 on the Payment Date next succeeding the date of such sale.
(c) In connection with a sale of all or any portion of the
Trust Property:
(i) any one or more Noteholders or the Trustee may bid
for and purchase the property offered for sale, and upon compliance
with the terms of sale may hold, retain, and possess and dispose of
such property, without further accountability, and any Noteholder may,
in paying the purchase money therefor, deliver in lieu of cash any
outstanding Notes or claims for interest thereon for credit in the
amount that shall, upon distribution of the net proceeds of such sale,
be payable thereon, and such Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned to
the Noteholders after being appropriately stamped to show such partial
payment;
(ii) the Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Property in connection with a sale thereof;
(iii) the Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Issuer to transfer and convey its
interest in any portion of the Trust Property in connection with a sale
thereof, and to take all action necessary to effect such sale; and
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(iv) no purchaser or transferee at such a sale shall be
bound to ascertain the Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any moneys.
(d) The method, manner, time, place and terms of any sale of
all or any portion of the Trust Property shall be commercially reasonable.
(e) The provisions of this Section 6.15 shall not be construed
to restrict the ability of the Trustee to exercise any rights and powers against
the Issuer or the Trust Property that are vested in the Trustee by this
Indenture, including, without limitation, the power of the Trustee to proceed
against the collateral subject to the lien of this Indenture and to institute
judicial proceedings for the collection of any deficiency remaining thereafter.
SECTION 6.16 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court may in its discretion require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.16 does not apply to a suit by the Trustee, a suit by a
Noteholder pursuant to Sections 6.07 and 6.08, or a suit by any Noteholder or
group of Noteholders of more than 10% in principal amount of all Class A Notes,
Class B Notes, Class C Notes, Class D Notes and Class E Notes then outstanding.
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ARTICLE VII
THE TRUSTEE
SECTION 7.01 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Indenture Event
of Default:
(i) the Trustee undertakes to perform only those duties
that are specifically set forth in this Indenture and no others and no
covenants or duties shall be implied herein in connection with the
Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates,
statements, opinions, reports or documents furnished to the Trustee and
conforming to the requirements of this Indenture. The Trustee, however,
shall examine the same to determine whether or not they conform to the
requirements of this Indenture.
(b) If an Indenture Event of Default has occurred and is
continuing, the Trustee shall exercise its rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, EXCEPT that:
(i) this subsection shall not be construed to limit the
effect of subsection (a) of this Section 7.01;
(ii) the Trustee shall not be liable for any error in
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the directions received by it pursuant to Section 6.12 or 6.13;
and
(iv) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any personal
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
indemnity reasonably satisfactory to it against such risk or liability
is not assured to it.
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(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 7.02 NOTICE OF DEFAULTS OR EVENTS OF DEFAULT.
Within five Business Days after a Responsible Officer receives
written notice or is otherwise notified of the occurrence of any Default or
Indenture Event of Default hereunder or Servicer Event of Default under the
Contribution and Servicing Agreement, the Trustee shall transmit by certified
mail return receipt requested, hand delivery or overnight courier, to all
Noteholders, as their names and addresses appear in the Note Register, the
Issuer, the Servicer, the Rating Agencies and the Contributor notice of such
Default, Indenture Event of Default or Servicer Event of Default hereunder known
to the Trustee, unless such Default, Indenture Event of Default or Servicer
Event of Default shall have been cured or waived.
SECTION 7.03 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 7.01:
(i) the Trustee may rely conclusively and shall be
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, note, debenture, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(ii) any request or direction of the Issuer mentioned
herein shall be sufficiently evidenced by an Issuer Request or Issuer
Order and any action of the Issuer may be sufficiently evidenced by an
Issuer Order;
(iii) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely upon an
Officer's Certificate;
(iv) the Trustee may consult with counsel as to legal
matters and the advice or opinion of any such counsel selected by the
Trustee with due care shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(v) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture at
the request or direction of any of the Noteholders pursuant to this
Indenture, unless such Noteholders shall have offered to the Trustee
security or indemnity reasonably satisfactory to it against the costs,
expenses and liabilities which might be incurred by it in compliance
with such request or direction;
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(vi) prior to the occurrence of an Indenture Event of
Default and after the curing or waiving of all Indenture Events of
Default, the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, note, debenture, other evidence of indebtedness, or other paper
or document, other than to examine such documents to determine whether
they conform as to form to the requirements of this Indenture, unless
requested in writing to do so by the Noteholders evidencing more than
50% of the Voting Rights; PROVIDED that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture, the Trustee
may require indemnity reasonably satisfactory to it against such
expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such examination shall be paid by the Issuer or, if
paid by the Trustee or any predecessor trustee, shall be promptly
repaid by the Issuer upon demand; and
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent, custodian, nominee or attorney appointed with due care by it
hereunder.
SECTION 7.04 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or
adequacy of this Indenture (except as against itself), the Pooling and Trust
Agreement, the Contribution and Servicing Agreement or the Notes and it shall
not be responsible for any statement in the Notes other than its certificate of
authentication or in any document used in the sale of the Notes. The Trustee
shall have no responsibility for, or duty, or liability in connection with
performance by the Servicer, and shall have no obligation to monitor the
performance of the Servicer. The Trustee shall not be accountable for the use or
application by the Issuer of the Notes or the proceeds thereof.
SECTION 7.05 MONEY HELD IN TRUST.
Money and investments held by the Trustee or other paying
agent shall be held in trust in one or more Eligible Accounts as required
hereunder. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with Issuer.
SECTION 7.06 COMPENSATION, REIMBURSEMENT, ETC.
(a) Pursuant to the Contribution and Servicing Agreement,
the Servicer has agreed:
(i) to pay to the Trustee from time to time such
compensation for all services rendered by it hereunder as the Servicer
and the Trustee have agreed in writing prior to the Closing Date (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), such payment to be
made independent of the other payment obligations of the Servicer
hereunder;
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(ii) except as otherwise expressly provided herein,
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 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;
(iii) to pay the Trustee its annual administrative fee
on the Closing Date;
(iv) to pay the reasonable fees and expenses of
Trustee's counsel on the Closing Date; and
(v) to pay the reasonable annual administrative fee of
each Lock-Box Bank.
(b) The Trustee hereby acknowledges and agrees that if the
Servicer fails to pay the amounts set forth in Section 7.06(a) of this
Indenture, the Trustee will continue to perform its obligations under this
Indenture, regardless of the Servicer's failure to pay such amounts, until the
appointment of a successor Trustee reasonably satisfactory to the Noteholders in
accordance with Section 7.08 of this Indenture; PROVIDED, HOWEVER, that in such
event, the Trustee shall withhold amounts otherwise payable to it pursuant to
Section 7.06(a) hereof from amounts payable to the Servicer pursuant to Section
3.04(b)(i).
SECTION 7.07 ELIGIBILITY; DISQUALIFICATION.
The Trustee hereunder (a) shall at all times be a national
banking association organized and doing business under the laws of the United
States of America or any state thereof authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
$100,000,000 or shall be a member of a bank holding system, the aggregate
combined capital and surplus of which is at least $100,000,000, and (b) shall be
subject to supervision or examination by Federal or state authority and, in the
case of any successor Trustee subject to regulations regarding fiduciary funds
on deposit substantially similar to 12 CFR ss. 9.10(b). If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 7.07, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section 7.07, the Trustee shall resign immediately in the manner and with the
effect specified in Section 7.08.
SECTION 7.08 RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by a successor Trustee reasonably
satisfactory to Noteholders evidencing more than 50% of the Voting Rights under
Section 7.09.
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(b) Subject to Section 7.08(a) the Trustee may resign at any
time by giving written notice thereof to the Issuer and by mailing notice of
resignation by first-class mail, postage prepaid, to the Rating Agencies and the
Noteholders at their addresses appearing on the Note Register.
(c) The Trustee may be removed at any time by written notice
from Noteholders evidencing more than 50% of the Voting Rights delivered to the
Trustee and the Issuer. The Issuer, with the consent of Noteholders evidencing
more than 50% of the Voting Rights, may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.07;
(ii) the Trustee is adjudged bankrupt or insolvent;
(iii) a receiver or other public officer takes
charge of the Trustee or its property;
or
(iv) the Trustee becomes incapable of acting.
(d) If the Trustee shall resign, be removed, or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Issuer, with the consent of Noteholders evidencing more than 50%
of the Voting Rights by an act of the Issuer, shall promptly appoint a successor
Trustee.
(e) If no successor Trustee shall have been so appointed by
the Issuer as hereinabove provided and accepted appointment in the manner
hereinafter provided within 30 days after any such resignation or removal,
existence of incapability, or occurrence of such vacancy, the Trustee or any
Noteholder may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
(f) The 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 all
Noteholders, as their names and addresses appear in the Note Register and to the
Rating Agencies. Each notice shall include the name of the successor Trustee and
the address of its Corporate Trust Office.
(g) A Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated therein.
SECTION 7.09 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on request of the Issuer
or the successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer
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and deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder. Upon request of any such successor Trustee, the
Issuer shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
(b) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article and no reduction in the then current ratings, if
any, on the Notes has occurred as a result of such appointment.
SECTION 7.10. MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS.
Any Person into which the Trustee may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, PROVIDED such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Notes shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion,
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Notes so authenticated with the same effect as if such successor
Trustee had itself authenticated such Notes.
SECTION 7.11 CO-TRUSTEES AND SEPARATE TRUSTEES.
(a) At any time or times, for the purpose of meeting the legal
requirements of any jurisdiction in which any of the Trust Property may at the
time be located, the Issuer and the Trustee shall have power to appoint, and,
upon the written request of the Trustee or the Noteholders evidencing more than
50% of the Voting Rights, the Issuer shall for such purpose join with the
Trustee in the execution, delivery, and performance of all instruments and
agreements necessary or proper to appoint one or more Persons approved by the
Trustee either to act as co-trustee, jointly with the Trustee, of all or any
part of such Trust Property, or to act as separate trustee of any such property,
in either case with such powers as may be provided in the instrument of
appointment, and to vest in such Person or Persons in the capacity aforesaid,
any property, title, right or power deemed necessary or desirable, subject to
the other provisions of this Section 7.11. 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 Indenture Event of Default has occurred and is continuing, the Trustee
alone shall have power to make such appointment.
(b) Should any written instrument from the 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.
(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms:
(i) The Notes shall be authenticated and delivered and
all rights, powers, duties, and obligations hereunder in respect of the
custody of securities, cash and other personal
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property held by, or required to be deposited or pledged with, the
Trustee hereunder, shall be exercised solely by the Trustee.
(ii) The rights, powers, duties, and obligations hereby
conferred or imposed upon the Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Trustee or by the Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to
the extent that, under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers,
duties and obligations shall be exercised and performed by such
co-trustee or separate trustee.
(iii) The Trustee at any time, by an instrument in
writing executed by it, with the concurrence of the Issuer evidenced by
an Issuer Order, may accept the resignation of or remove any co-trustee
or separate trustee appointed under this Section 7.11, and, in case an
Indenture Event of Default has occurred and is continuing, the Trustee
shall have power to accept the resignation of, or remove, any such
co-trustee or separate trustee without 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
7.11.
(iv) No co-trustee or separate trustee hereunder shall
be personally liable by reason of any act or omission of the Trustee or
any other such trustee hereunder and the Trustee shall not be
personally liable by reason of any act or omission of any co-trustee or
other such separate trustee hereunder selected and supervised by the
Trustee with due care or appointed in accordance with directions to the
Trustee pursuant to Section 6.12.
(v) Any Act of Noteholders delivered to the Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
SECTION 7.12 TRUSTEE TO HOLD CONTRACTS.
On or prior to the Closing Date, the Contributor, on behalf of
the Issuer, shall deliver to the Trustee (or its designee) the sole original,
manually executed counterpart of each Contract (or, if the original Contract is
in the form of a schedule or supplement to a master lease, all original
counterparts of such schedule or supplement previously in the possession of the
Contributor or the Issuer together with a true and correct copy of such master
lease) that constitutes "chattel paper" or an "instrument", as such terms are
defined in the UCC. The Trustee (or its designee) shall hold such documents
until such time as such Contract is released from the lien of this Indenture
pursuant to the provisions hereof.
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SECTION 7.13 FINANCING STATEMENTS.
The Trustee shall execute such UCC financing statements and
continuation statements as shall have been prepared by the Servicer and as shall
be necessary and shall furnish the Servicer with such limited powers of attorney
or other documents necessary or appropriate to enable the Servicer to fulfill
its obligations under Section 4 of the Contribution and Servicing Agreement and
to carry out its servicing and administration duties under the Contribution and
Servicing Agreement.
SECTION 7.14 TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR.
(a) On and after the time the Servicer receives a notice of
termination pursuant to Section 10.02 of the Contribution and Servicing
Agreement, the Trustee (subject to subsection (b) hereof) shall be the successor
in all respects to the Servicer in its capacity as servicer under the
Contribution and Servicing Agreement of the Contracts and, to such extent, shall
be subject to all the responsibilities, duties and liabilities (other than the
duty to advance funds and indemnify) relating thereto placed on the Servicer by
the terms and provisions thereof (but not the obligations of the Contributor
contained therein which shall survive any such termination as provided in
Section 10.02 thereof) and shall be entitled to receive from the Issuer the
Servicing Fee and other servicing compensation provided for in Section 4.04 of
the Contribution and Servicing Agreement; PROVIDED that the Trustee shall in no
way be responsible or liable for any action or actions of the Servicer before
the time the Servicer receives such a notice of termination.
(b) The Trustee may, if it is unwilling or unable to act as
the successor Servicer, give notice of such fact to each Noteholder and (i)
appoint a successor Servicer with a net worth of at least $15,000,000 and
reasonably acceptable to Noteholders evidencing more than 50% of the Voting
Rights and whose regular business includes the servicing of a similar type of
contracts and the financing of medical diagnostic imaging equipment, as the
successor Servicer under the Contribution and Servicing Agreement to assume all
of the rights and obligations of the Servicer thereunder, including, without
limitation, the Servicer's right thereunder to receive the Servicing Fee (but
not the obligations of the Contributor contained therein) or, (ii) if no such
institution is so appointed, petition a court of competent jurisdiction to
appoint an institution meeting such criteria as the Servicer thereunder. Pending
appointment of a successor Servicer under the Contribution and Servicing
Agreement, the Trustee shall act in such capacity as hereinabove provided. In
connection with such appointment and assumption, the Trustee shall cause such
successor Servicer to enter into a servicing agreement substantially in the form
of the Contribution and Servicing Agreement except that such agreement shall not
include any of the Contributor's representations, warranties or obligations and
the Trustee may make arrangements for the compensation of such successor
Servicer out of payments on Contracts and the related Contracts as it and such
successor Servicer shall agree; PROVIDED, HOWEVER, that no such compensation
shall be in excess of that provided in Section 4.04 of the Contribution and
Servicing Agreement.
SECTION 7.15 REPORTS BY TRUSTEE TO HOLDERS.
If required by the TIA, within 60 days after each Payment Date
beginning with _______, the Trustee shall mail to each Noteholder a brief report
dated as of such Payment Date that complies with TIA Section 313(a).
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SECTION 7.16 PREFERENTIAL COLLECTION OF CLAIMS
AGAINST ISSUER.
The Trustee is subject to and shall comply with TIA Section
311(a), excluding any creditor relationship listed in TIA Section 311(b).
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ARTICLE VIII
COVENANTS
SECTION 8.01 PAYMENT OF PRINCIPAL AND INTEREST.
The Issuer will duly and punctually pay the principal of and
interest on the Notes in accordance with the terms of the Notes and this
Indenture. An installment of interest shall be considered paid on the date it is
due if the Trustee holds on that date money designated for and sufficient to pay
the installment.
SECTION 8.02 MAINTENANCE OF OFFICE OR AGENCY;
CHIEF EXECUTIVE OFFICE.
(a) The Owner Trustee of the Issuer will maintain in the State
of Delaware an office or agency where notices and demands to or upon the Issuer
in respect of the Notes and this Indenture may be served.
(b) The corporate trust office of the Owner Trustee of the
Issuer, and the office at which the Issuer maintains its records with respect to
the Contracts, the Equipment, and the transactions contemplated hereby, is
located in Wilmington, Delaware. The Issuer will not change the location of such
office without giving the Trustee and each Noteholder at least 60 days' prior
written notice thereof (or, in the case of resignation or removal of the Owner
Trustee, such lesser time period as provided in the Pooling and Trust
Agreement).
SECTION 8.03 MONEY FOR PAYMENTS TO NOTEHOLDERS TO
BE HELD IN TRUST.
(a) All payments of amounts due and payable with respect to
any Notes that are to be made from amounts withdrawn from the Collection Account
pursuant to Section 3.04(b) or Section 6.06 shall be made on behalf of the
Issuer by the Trustee, and no amounts so withdrawn from the Collection Account
for payments of Notes shall be paid over to the Issuer under any circumstances
except as provided in this Section 8.03.
(b) In making payments hereunder, the Trustee will:
(i) allocate all sums received for payment to the
Noteholders on each Payment Date in accordance with the terms of this
Indenture;
(ii) hold all sums held by it for the payment of amounts
due with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided; and
(iii) comply with all requirements of the Internal
Revenue Code of 1986, as amended (or any successor statutes), and all
regulations thereunder, with respect to the withholding from any
payments made by it on any Notes of any applicable withholding taxes
55
imposed thereon and with respect to any applicable reporting
requirements in connection therewith, in each case, consistent with the
treatment of the Notes as indebtedness.
(c) Except as required by applicable law, any money held by
the Trustee in trust for the payment of any amount due with respect to any Note
and remaining unclaimed for two years after such amount has become due and
payable to the Noteholder shall be discharged from such trust and, subject to
applicable escheat laws, paid to the Issuer upon request; and such Noteholder
shall thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof, and all liability of the Trustee with respect to such trust
money shall thereupon cease.
SECTION 8.04 ISSUER EXISTENCE; ETC.
(a) The Issuer will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
Delaware _____ and the rights, licenses and franchises of the Issuer, and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of the Indenture, the Notes, or any of the Contracts.
(b) The Issuer shall at all times observe and comply in all
material respects with (i) its organizational documents as in effect on the date
hereof, (ii) all laws, regulations and court orders applicable to it, (iii) all
requirements of law in the declaration and payment of any distributions to its
record and beneficial owner(s), and (iv) all requisite and appropriate
formalities (including, without limitation, obtaining the consent of its sole
beneficial owner to authorize Issuer action as required, and as otherwise
required by law) in the management of its business and affairs and the conduct
of the transactions contemplated hereby, by the Subsequent Contract Transfer
Agreement and by the Contribution and Servicing Agreement. The limit the
Issuer's activities to the purchases of assets, issuance of securities, and
activities incidental thereto. No Affiliate of the Issuer pays the expenses of
the Issuer except as contemplated in the Transaction Documents, and no Affiliate
of the Issuer guarantees any obligation of the Issuer. Other than the purchase,
contribution, substitution or sale of assets, the Issuer has no intercorporate
transactions with DVI.
(c) The Issuer will, at all times: (i) maintain (A) trust and
financial books and records separate from those of any other Person and (B)
minutes of the meetings and other proceedings of its governing body and record
and beneficial owner(s); (ii) continuously maintain the resolutions, agreements
and other instruments underlying the transactions contemplated hereby, by the
Subsequent Contract Transfer Agreement and by the Contribution and Servicing
Agreement as official records of the Issuer; (iii) act solely in its official
name to maintain an arm's-length relationship with the Contributor and its
Affiliates; (iv) pay all of its operating expenses and liabilities from its own
funds; (v) maintain an office and telephone number separate from that of the
Contributor and the Transferor, (vi) maintain its assets separately from the
assets of the Contributor and the Transferor and (vii) characterize the
Contributor and the Transferor as separate entities in any report, tax return,
financial statement, other accounting or business transaction.
(d) The Issuer shall conduct its business solely in its own
name so as to not mislead others as to the identity of the trust with which
those others are concerned, and particularly will avoid the appearance of
conducting business on behalf of the Contributor or any of its Affiliates or
that the
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assets of the Issuer are available to pay the creditors of the Contributor or
any of its Affiliates. Without limiting the generality of the foregoing, all
oral and written communications, including, without limitation, letters,
invoices, purchase orders, contracts, statements and loan applications, will be
made solely in the name of the Issuer.
(e) The Issuer will be operated so as not to be substantively
consolidated for bankruptcy purposes with the Contributor.
(f) The Issuer will not amend its organizational documents
without the prior consent of Noteholders evidencing more than 50% of the Voting
Rights.
(g) The Issuer shall also comply with the other applicable
provisions of TIA Section 314.
SECTION 8.05 PROTECTION OF TRUST PROPERTY;
FURTHER ASSURANCES.
The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such UCC financing statements,
continuation statements, instruments of further assurance, and other
instruments, and will take such other action as may be necessary or advisable
to:
(i) Grant more effectively all or any portion of the
Trust Property;
(ii) maintain or preserve the lien of this Indenture or
carry out more effectively the purposes hereof;
(iii) publish notice of, or protect the validity of, any
Grant or assignment made or to be made by this Indenture and perfect
the security interest contemplated hereby in favor of the Trustee in
the Contracts and any security interest in the related Equipment;
(iv) enforce or cause the Servicer to enforce any of
the Contracts; or
(v) preserve and defend title to any Contract
(including the right to receive all payments due or to become due
thereunder subsequent to the applicable Cut-off Date), the security
interest of the Trustee in the Equipment, or other property included in
the Trust Property and preserve and defend the rights of the Trustee
and the Noteholders in such Contract (including the right to receive
all payments due or to become due thereunder subsequent to the
applicable Cut-off Date), Equipment and other property against the
claims of all persons and parties.
The Issuer, upon the Issuer's failure to do so, hereby designates the Trustee
its agent and attorney-in-fact to execute any UCC financing statement,
continuation statement or other document or instrument required pursuant to this
Section 8.05; PROVIDED, HOWEVER, that such designation shall not be deemed to
create a duty in the Trustee to monitor the compliance of the Issuer with the
foregoing covenants, and PROVIDED FURTHER that the duty of the Trustee to
execute any instrument required pursuant to this Section 8.05 shall arise only
if a Responsible Officer of the Trustee has actual knowledge of any failure of
the Issuer to comply with the provisions of this Section 8.05.
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SECTION 8.06 COMPLIANCE CERTIFICATES.
The Issuer will deliver to the Trustee and the Rating
Agencies, within 90 days after the end of each fiscal year, an Officer's
Certificate of the Transferor, as sole owner of the beneficial interests of the
Issuer, stating, in addition to the statements required by Section 1.18, as to
each signer thereof, that
(i) a review of the activities of the Issuer during
such year and of performance under this Indenture has been made under
such officers' supervision and
(ii) to the best of such officers' knowledge, based on
such review, (a) the Issuer has fulfilled all of its obligations under
this Indenture throughout such year and (b) the Servicer has fulfilled
all of the Servicer's obligations under the Contribution and Servicing
Agreement.
(iii) whether the officer knows of any Defaults by the
Issuer under this Indenture throughout such year or, if there has been
a Default in the fulfillment of any such obligation, specifying each
such Default known to him and the nature and status thereof and the
nature of the action taken with respect thereto.
SECTION 8.07 PERFORMANCE OF OBLIGATIONS;
CONTRIBUTION AND SERVICING AGREEMENT.
(a) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, any Supplement, the
Notes, the Subsequent Contract Transfer Agreement, the Note Purchase Agreement,
the Underwriting Agreement and any other applicable Transaction Documents.
(b) The Issuer will clearly ▇▇▇▇ its books and records to
reflect each assignment and transfer of a Contract and the security interest in
the Equipment subject thereto from the Transferor.
(c) If the Issuer shall have actual knowledge of the
occurrence of a default under either the Contribution and Servicing Agreement or
the Subsequent Contract Transfer Agreement, the Issuer shall promptly notify the
Trustee and the Noteholders thereof, and shall specify in such notice the
action, if any, the Issuer is taking in respect of such default. Unless
consented to by Noteholders evidencing more than 50% of the Voting Rights, the
Issuer may not waive any default under or amend the Contribution and Servicing
Agreement or the Subsequent Contract Transfer Agreement.
(d) The Issuer shall, and shall cause the Contributor to,
update any information required to be provided pursuant to Rule 144A(d) (4) of
the Securities Act to subsequent purchasers of the Class E Notes to prevent such
information from becoming materially false and materially misleading in a manner
adverse to any Noteholder.
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SECTION 8.08 NEGATIVE COVENANTS.
The Issuer will not:
(i) sell, transfer, exchange or otherwise dispose of
any portion of the Trust Property except as expressly permitted by this
Indenture or any Supplement; PROVIDED THAT nothing contained herein
shall prohibit the transfer by the Issuer of amounts payable to the
Issuer pursuant to Section 3.04(b);
(ii) claim any credit on, or make any deduction from,
the principal of, or interest on, any of the Notes by reason of the
payment of any taxes levied or assessed upon any portion of the Trust
Property;
(iii) seek dissolution or liquidation in whole or in part
or reorganization of its business or affairs;
(iv) (A) permit the validity or effectiveness of this
Indenture or any Grant hereby to be impaired, or permit the lien of
this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations under this Indenture, except as may be expressly permitted
hereby, (B) permit any lien, charge, security interest, mortgage or
other encumbrance to be created on or to extend to or otherwise arise
upon or burden the Trust Property or any part thereof or any interest
therein or the proceeds thereof other than the lien of this Indenture
and the rights of Obligors, or (C) permit the lien of this Indenture
not to constitute a valid first priority perfected security interest in
the Contracts and a valid security interest in the Equipment;
(v) engage in any business or activity in violation of
the provisions contained in the Pooling and Trust Agreement;
(vi) at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or
extension law or other law that would prohibit or forgive the Issuer
from paying all or any portion of the principal of or interest on the
Notes as contemplated herein or in the Notes, wherever enacted, now or
at any time hereafter in force, or that may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully
do so) the Issuer 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;
(vii) merge or consolidate with any other Person unless
(i) the entity surviving such merger or consolidation is a Person
organized under the laws of the United States or any jurisdiction
thereof, (ii) the surviving entity, if not the Issuer, shall execute
and deliver to the Servicer and the Trustee, in form and substance
satisfactory to each of them, (x) an instrument expressly assuming all
of the obligations of the Issuer hereunder, and (y) an opinion of
counsel to the effect that such Person is a Person of the type
described in the preceding clause (i), has effectively assumed the
obligations of the Issuer hereunder, that all conditions precedent
provided
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for in this Indenture relating to such transaction have been complied
with, that in the opinion of such counsel, all UCC financing statements
and continuation statements and amendments thereto have been executed
and filed that are necessary fully to preserve and protect the interest
of the Trustee in the Trust Property, and reciting the details of such
filings, or stating that no such action shall be necessary to preserve
and protect such interest, (iii) the Issuer shall deliver to the
Trustee a letter from each Rating Agency to the effect that such
transaction will not, in and of itself, result in a downgrading of the
rating for the Notes and (iv) immediately after giving effect to such
transaction, no event of default under any Transaction Document, and no
event which, after notice or lapse of time, or both, would become an
event of default, shall have occurred and be continuing. The Issuer and
any surviving entity, if not the Issuer, will keep all of its material
assets within the United States at all times. The Issuer will not make
any material change in its business; or
(viii) 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 Contract or any other instrument
included in the Trust Property other than any such release occasioned
by the early termination of a Contract after receipt of the Prepayment
Amount, or which would result in the amendment, hypothecation,
subordination, termination, or discharge of, or impair the validity or
effectiveness of, any Contract or such other instrument, except as
expressly provided in this Indenture or the Contribution and Servicing
Agreement.
SECTION 8.09 INFORMATION AS TO THE ISSUER. The
Issuer shall file with the Trustee and the Rating Agencies:
(a) within 15 days after filing with the Commission, copies of
the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may by rules
and regulations prescribe) which it is required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act.
(b) immediately upon becoming aware of the existence of any
condition or event which constitutes a Default or an Indenture Event of Default,
a written notice describing its nature and period of existence and what action
the Issuer is taking or proposes to take with respect thereto;
(c) promptly upon the Issuer's becoming aware of:
(i) any proposed or pending investigation of it by any
governmental authority or agency, or
(ii) any pending or proposed court or administrative
proceeding
which involves or may involve the possibility, individually or in the aggregate,
of materially and adversely affecting the properties, business, profits or
condition (financial or otherwise) of the Issuer, a written notice specifying
the nature of such investigation or proceeding and what action the Issuer is
taking or proposes to take with respect thereto and evaluating its merits; and
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(d) with reasonable promptness, any other data and information
which may be reasonably requested from time to time.
SECTION 8.10. PAYMENT OF TAXES AND OTHER CLAIMS.
The Issuer will pay or discharge or cause to be paid or
discharged, before any penalty accrues from the failure to so pay or discharge,
(1) all taxes, assessments and governmental charges levied or imposed upon the
Issuer or upon the income, profits or property (including any property that is
part of the Trust Property) of the Issuer and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Issuer; PROVIDED, HOWEVER, that the Issuer shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim the amount, applicability or validity of which is being
contested in good faith by appropriate proceedings and for which adequate
provision has been made or where the failure to effect such payment or discharge
is not adverse in any material respect to the Noteholders.
SECTION 8.11 INDEMNIFICATION.
The Issuer agrees to indemnify and hold harmless the Trustee
(which shall include its directors, officers, employees and agents) and each
Noteholder (each an "INDEMNIFIED PARTY") against any and all liabilities,
losses, damages, penalties, costs and expenses (including the fees and expenses
of counsel and the costs of defense and legal fees and expenses) which may be
incurred or suffered by such Indemnified Party without negligence, bad faith or
willful misconduct on its part as a result of claims, actions, suits or
judgments asserted or imposed against it and arising out of the transactions
contemplated hereby, by the Pooling and Trust Agreement or by the Contribution
and Servicing Agreement, including, without limitation, any claims resulting
from any use, operation, maintenance, repair, storage or transportation of any
item of Equipment, whether or not in the Issuer's possession or under its
control, and any tort claims and any fines or penalties arising from any
violation of the laws or regulations of the United States or any state or local
government or governmental authority; PROVIDED that, except to the extent
otherwise provided in Section 6.06, all amounts payable pursuant to this Section
8.11 shall be fully subordinated to amounts payable under the Class A Notes, the
Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes to the
extent that any amounts otherwise due and payable under the terms of this
Indenture have not been fully paid. In every circumstance where the Issuer has
agreed to indemnify or hold harmless the Noteholders for legal fees, counsel
fees and related costs and expenses, it is understood and agreed, and the
Noteholders by their acceptance of their respective Notes agree, that such
indemnification and holding harmless is limited to the reasonable fees, related
costs and expenses of the Noteholders Counsel only. The provisions of this
Section 8.11 shall survive the termination of this Indenture.
SECTION 8.12 CONTRACT FILES TO TRUSTEE.
On or prior to the Closing Date or each Substitute Date, as
applicable, the Contributor, on behalf of the Issuer, shall deliver to the
Trustee the original counterpart of each Contract that constitutes "chattel
paper" or an "instrument", as such terms are defined in the UCC.
SECTION 8.13 PAYMENT ADVICES. Each payment by
the Issuer or the Servicer to the Trustee pursuant to any of the provisions of
the Transaction Documents shall be accompanied
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by written advice containing sufficient information to identify the Contract
and/or Equipment to which such payment relates, the Section of the Transaction
Documents pursuant to which such payment is made, and the proper application
pursuant to the provisions of the applicable Transaction Document of the amounts
being paid.
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ARTICLE IX
AMENDMENTS AND SUPPLEMENTAL INDENTURES
SECTION 9.01 AMENDMENTS AND SUPPLEMENTAL INDENTURES.
This Indenture or the Notes may be amended from time to time
by the parties hereto, without the consent of any of the Noteholders, (i) to
cure any ambiguity, to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other provisions
with respect to matters or questions arising under this Indenture or the Notes
which shall not be materially inconsistent with the provisions of this Indenture
or the Notes, PROVIDED THAT such action shall not adversely affect in any
respect the interests of any Noteholder or (ii) to make any change to comply
with the TIA or any amendment thereto, or to comply with any requirement of the
Commission in connection with the qualification of the Indenture under the TIA.
This Indenture or the Notes may also be amended from time to
time by the parties hereto with the consent of the Holders of Notes evidencing
more than 66-2/3% of the Voting Rights (and with prior written notice to the
Rating Agency) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or the Notes or of
modifying in any manner the rights of the Holders of Notes; PROVIDED, HOWEVER,
that no amendment to this Indenture or any supplemental indenture may (i) cause
a reduction in the then current ratings, if any, of the Notes, (ii) increase or
reduce in any manner the amount of, or accelerate or delay the timing of
collections of payments on the related Contracts or distributions that are
required to be made for the benefit of such Noteholders, (iii) reduce the
aforesaid percentage of the Notes of such series which is required to consent to
any such amendment or waiver, or (iv) release any of the Trust Property from the
lien hereof (except as otherwise permitted herein) or modify Section 2.06, 3.04,
6.06, 6.08, 6.13 or 9.01, without the consent of each affected Noteholder. The
Issuer shall furnish to the Rating Agencies copies of all amendments to and
supplements to this Indenture.
It shall not be necessary for the consent of the Noteholders
under this Section 9.01 to approve the particular form of any proposed amendment
or supplement, but it shall be sufficient if such consent approves the substance
thereof.
SECTION 9.02 EXECUTION OF AMENDMENTS AND SUPPLEMENTAL
INDENTURES.
In executing any amendment to this Indenture, the Notes or any
supplemental indenture pursuant to Section 9.01 of this Indenture, the Trustee
shall be entitled to receive, and (subject to Section 7.01) shall be fully
protected in relying upon (i) an Officer's Certificate stating that all
conditions precedent for entering into such amendment or supplemental indenture
as set forth in the Indenture have been met and (ii) an Opinion of Counsel
stating that the execution of such amendment to this Indenture, the Note, or any
supplemental indenture is authorized or permitted by this Indenture. The Trustee
may, but shall not be obligated to, enter into any supplemental indenture which
affects the Trustee's own rights, duties, protections, or immunities under this
Indenture or otherwise.
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SECTION 9.03 EFFECT OF AMENDMENTS AND
SUPPLEMENTAL INDENTURES.
Upon the execution of any amendment to this Indenture, the
Notes or any supplemental indenture under this Article, this Indenture, the
Notes or any supplemental indenture shall be modified in accordance therewith,
and such amendment or supplemental indenture shall form a part of this
Indenture, the Notes or any supplemental indenture for all purposes, and every
Noteholder of Notes theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 9.04 REFERENCE IN NOTES TO AMENDMENTS AND
SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
amendment to this Indenture or any supplemental indenture pursuant to this
Article may, and shall if required by the Trustee, bear a notation in form
approved by the Trustee as to any matter provided for in such amendment or
supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Trustee and the Issuer, to any such
amendment or supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Trustee in exchange for outstanding
Notes.
SECTION 9.05 COMPLIANCE WITH TRUST INDENTURE ACT.
The Issuer hereby covenants and agrees that every amendment or
supplement to this Indenture or the Notes shall comply with the TIA as then in
effect.
SECTION 9.06 REVOCATION AND EFFECT OF CONSENTS.
Subject to this Indenture, each amendment, waiver or
instrument evidencing other action shall become effective in accordance with its
terms. Until an amendment, waiver or other action becomes effective, a consent
to it by a Noteholder is a continuing consent by the Noteholder even if notation
of the consent is not made on any Note.
The Issuer may, but shall not be obligated to, fix a record
date for the purpose of determining the Noteholders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then those Persons
who were Noteholders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to consent to such amendment, supplement
or waiver or to revoke any consent previously given, whether or not such Persons
continue to be Noteholders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.01 OPTIONAL REDEMPTION; ELECTION TO REDEEM.
(a) The Notes may be redeemed in part by the Issuer at the
Partial Redemption Price on any Payment Date on which the outstanding Pool B
Aggregate Discounted Contract Balance is less than 20% of the outstanding Pool B
Aggregate Discounted Contract Balance as of the Closing Date. The Notes may be
redeemed by the Issuer, in whole but not in part, at the Redemption Price on any
Payment Date on which the Pool A Aggregate Discounted Contract Balance is less
than 10% of the Pool A Aggregate Discounted Contract Balance as of the Closing
Date and the Pool B Aggregate Discounted Contract Balance is less than 20% of
the Pool B Aggregate Discounted Contract Balance as of the Closing Date. The
Issuer, by an Authorized Officer of the Transferor, shall set the Redemption
Date and the Redemption Record Date and give notice thereof to the Trustee.
Notice of redemption or partial redemption having been given as provided in the
Indenture, the Notes shall, on the applicable Redemption Date, become due and
payable at the Redemption Price or Partial Redemption Price, as applicable. The
respective Noteholders shall be paid the Redemption Price or Partial Redemption
Price, as applicable, by the Trustee to the extent of Available Funds on deposit
in the Collection Account, and upon presentation and surrender of the Notes on
behalf of the Issuer; PROVIDED, HOWEVER, that installments of principal and
interest which are due on or prior to the Redemption Date shall be payable to
the respective Noteholders registered as such on the relevant Record Dates or
Redemption Record Dates, as applicable, according to their terms.
(b) The Issuer, by order of an Authorized Officer of the
Transferor, shall set the Redemption Date and the Redemption Record Date and
give notice thereof to the Trustee pursuant to Section 10.02.
SECTION 10.02 NOTICE TO TRUSTEE.
In the case of any redemption or partial redemption pursuant
to Section 10.01, the Issuer shall, at least 20 days prior to the Redemption,
notify the Trustee and the Rating Agencies of such Redemption Date and the
principal amount of Notes to be redeemed in part. The notice shall be
accompanied by an Officer's Certificate stating that the redemption or partial
redemption complies with the provisions of this Indenture.
SECTION 10.03 NOTICE OF REDEMPTION OR PARTIAL REDEMPTION
BY THE ISSUER.
Notice of redemption or partial redemption pursuant to Section
10.01 shall be given by first class mail, postage prepaid, mailed at least 15
days but not more than 60 days prior to the applicable Redemption Date, to each
holder of a Note, at its address in the Note Register.
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All notices of redemption or partial redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price or Partial Redemption
Price, as applicable;
(3) that on the Redemption Date, the Redemption
Price or Partial Redemption Price, as
applicable, will become due and payable upon
each such Note, and that interest on the
redeemed portion of such Note shall cease to
accrue if payment is made on such date;
(4) the private placement number or CUSIP
number, if any, of the Notes;
(5) Corporate Trust Office where Notes are to be
surrendered for payment of the Redemption
Price; and
(6) the Redemption Record Date.
Notice of redemption or partial redemption, as applicable, of
Notes shall be given by the Issuer, by order of an Authorized Officer of the
Transferor, or, at the request of such Authorized Officer of the Transferor, by
the Trustee in the name and at the expense of the Issuer. Failure to give notice
of redemption or partial redemption, as applicable, or any defect therein, to
any holder of a Note shall not impair or affect the validity of the redemption
or partial redemption, as applicable, of any other Note. If a private placement
number or CUSIP number is listed in such notice or printed on the Note, the
notice may state that no representation is made as to the correctness or
accuracy of such private placement number or CUSIP number.
SECTION 10.04 DEPOSIT OF THE REDEMPTION PRICE OR
PARTIAL REDEMPTION PRICE.
On or before the Business Day immediately preceding any
Redemption Date, the Issuer shall deposit with the Trustee an amount of monies
sufficient to pay the Redemption Price or Partial Redemption Price, as
applicable, of all Notes outstanding on such Redemption Date (less any portion
of such payment to be made from monies in the Collection Account).
SECTION 10.05 NOTES PAYABLE ON REDEMPTION DATE.
(a) Notice of redemption in full having been given as provided
in Section 10.03, the Notes shall, on the applicable Redemption Date, become due
and payable at the Redemption Price and on such Redemption Date (unless the
Issuer shall default in the payment of the Redemption Price) such Notes shall
cease to bear interest. The Noteholders shall be paid the Redemption Price by
the Trustee on behalf of the Issuer; PROVIDED, HOWEVER, that installments of
principal and interest which are due on or prior to the Redemption Date shall be
payable to the Noteholders registered as such on the relevant Record Dates
according to their terms and the provisions of Section 2.07. If the holders of
any Note called for redemption in full shall not be so paid upon surrender, the
principal and interest shall, until paid, bear interest from the Redemption Date
at the related Note Rate.
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(b) Notice of partial redemption having been given as provided
in Section 10.03, that portion of the Notes shall, on the applicable Redemption
Date, become due and payable at the Partial Redemption Price and on such
Redemption Date (unless the Issuer shall default in the payment of the
Redemption Price) such Notes shall continue to bear interest only on the
principal balances remaining outstanding. The Noteholders shall be paid the
Partial Redemption Price by the Trustee on behalf of the Issuer; PROVIDED,
HOWEVER, that installments of principal and interest which are due on or prior
to the Redemption Date shall be payable to the Noteholders registered as such on
the relevant Record Dates according to their terms and the provisions of Section
2.07. If the holders of any Note called for partial redemption shall not be so
paid, the principal and interest shall, until paid, bear interest from the
Redemption Date at the related Note Rate.
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ARTICLE XI
SATISFACTION AND DISCHARGE
SECTION 11.01 SATISFACTION AND DISCHARGE OF INDENTURE.
(a) This Indenture shall cease to be of further effect (except
as to any surviving rights herein expressly provided for), and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments and
certifications acknowledging satisfaction and discharge of this Indenture, when:
(i) either:
(A) all Notes theretofore authenticated and
delivered (other than (x) Notes which have been destroyed,
lost, or stolen and which have been replaced or paid as
provided in Section 2.05 and (y) Notes for whose payment money
has theretofore been deposited in trust or segregated and held
in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 8.03(c))
have been irrevocably paid and delivered to the Trustee for
cancellation; or
(B) the final installments of principal on
all such Notes not theretofore delivered to the Trustee for
cancellation:
(1) have become due and payable, or
(2) will become due and payable at
their Stated Maturity Date within one year,
and the Issuer has deposited or caused to be deposited with
the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Trustee for
cancellation, for principal and interest to the date of such
deposit (in the case of Notes which have become due and
payable) or to the Stated Maturity Date thereof;
(ii) the Issuer has paid or caused to be paid all other
sums payable hereunder by the Issuer for the benefit of the
Noteholders; and
(iii) the Issuer has delivered to the Trustee an
Officer's Certificate of the Transferor stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
At such time, the Trustee shall deliver to the Issuer or, upon Issuer Order, its
assignee, all cash, securities and other property held by it as part of the
Trust Property other than funds deposited with the Trustee pursuant to Section
11.01(a)(i)(B) for the payment and discharge of the Notes and a certificate from
a Responsible Officer certifying the satisfaction and discharge of this
Indenture.
68
(b) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Issuer under Sections 7.06 and 8.11, and, if
money shall have been deposited with the Trustee pursuant to Section
11.01(a)(i)(B), the obligations of the Trustee under Section 11.02 and Section
8.03(c) shall survive.
SECTION 11.02 APPLICATION OF TRUST MONEY.
Subject to the provisions of Section 8.03(c), all money
deposited with the Trustee pursuant to Sections 11.01 and 8.03 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment to the Persons entitled thereto of the principal and
interest for whose payment such money has been deposited with the Trustee.
SECTION 11.03 REINSTATEMENT.
If the Trustee is unable to apply any money in accordance with
Section 11.01 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Issuer's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 11.01 until such time as the Trustee is permitted
to apply all such money in accordance with Section 11.01.
69
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
DVI ______
By:
---------------------------------------
Name:
Title:
---------------------------------------,
as Trustee
By:
---------------------------------------
Name:
Title:
SCHEDULE 1
CONTRACT SCHEDULE
EXHIBIT A
TO INDENTURE
[FORM OF CLASS A NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT
OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES
TO TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED
TO HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT ACQUIRING THIS NOTE WITH THE ASSETS OF A
PLAN; OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT GIVE RISE TO A
NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975
OF THE CODE.
No. 1 Principal Amount $__________
Due: _________________ CUSIP No. ___________
_____% ASSET-BACKED NOTE, SERIES ______, CLASS A
DVI _____________, a Delaware corporation/limited liability
company/partnership/business trust (the "ISSUER"), for value received, hereby
promises to pay to CEDE & CO. or registered assigns, the principal sum of
_______________________and __/100 Dollars ($__________) in monthly installments
equal to the sum of (i) the Class A Monthly Principal, (ii) the Class A Overdue
Principal and (iii) any other principal that may be due hereon pursuant to the
Indenture during an Amortization Event together with (i) the Class A Monthly
Interest and (ii) the Class A Overdue Interest due thereon on the ____ day of
each month (or if such date is not a Business Day, the next succeeding Business
A-1-1
Day, commencing ________________ (each, a "PAYMENT DATE"), and not later than
___________, all remaining principal and interest (computed on the basis of a
360-day year of actual number of days elapsed) are due and payable in their
entirety as set forth in the Indenture.
Payments of principal and interest on this Note shall be made
on each Payment Date in such coin or currency of the United States of America as
at such time is legal tender for payment of public and private debts to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the Record Date, or Redemption Record Date, as
applicable, for such Payment Date, which shall be the last Business Day of the
month preceding the month in which the Payment Date occurs (or in the case of
the initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class A Notes
of the Issuer designated as its _____% Asset-Backed Notes, Series ______, Class
A with aggregate principal amount of $__________ and to be issued under an
Indenture dated as of ________________ (herein called the "INDENTURE"), between
the Issuer and ____________________________________, as trustee (herein called
the "TRUSTEE", which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties,
and immunities thereunder of the Issuer, the Trustee, and the holders of the
Notes and of the terms upon which the Notes are, and are to be, authenticated
and delivered. The Trust Property secures the Notes equally and ratably without
prejudice, priority, or distinction between any Note of the same tranche and any
other Note of the same tranche by reason of difference in time of issuance or
otherwise, and also secures the payment of certain other amounts and certain
other obligations as set forth in the Indenture. This Note is issued under and
is subject to the terms, provisions and conditions of the Indenture, to which
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.
Each Class A Noteholder by acceptance of its Class A Note (and
any Person which is a beneficial owner of any interest in a Class A Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class A Notes (or beneficial interest therein) for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness. Each Class A Noteholder agrees that it
will cause any Person acquiring an interest in a Class A Note through it to
acknowledge the Class A Notes' characterization as indebtedness and to treat the
Class A Notes as indebtedness for such tax purposes.
If an Indenture Event of Default or Amortization Event shall
occur and be continuing, the Notes may be declared due and payable in the manner
and with the effect provided in the Indenture.
As provided in the Indenture and subject to the limitations
set forth therein and above, the transfer of this Note is registrable in the
Note Register, upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee
A-1-2
duly executed by, the holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Notes, of authorized denominations and for the
same original aggregate principal amount, will be issued to the designated
transferee or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Indenture on any Payment Date on which the
outstanding Pool B Aggregate Discounted Contract Balance is less than 20% of the
Pool B Aggregate Discounted Contract Balance on the Closing Date in the manner
provided in the Indenture. The Notes may be redeemed by the Issuer, in whole but
not in part, at the redemption price set forth in the Indenture on any Payment
Date on which the Pool A Aggregate Discounted Contract Balance is less than 10%
of the Pool A Aggregate Discounted Contract Balance as of the Closing Date and
the Pool B Aggregate Discounted Contract Balance is less than 20% of the Pool B
Aggregate Discounted Contract Balance as of the Closing Date in the manner
provided in the Indenture.
The Notes are issuable only in registered form without coupons
in denominations as provided in the Indenture and subject to certain limitations
therein set forth. No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Note and the Indenture may be amended or supplemented as
set forth in the Indenture.
By accepting this Note, the holder hereof irrevocably appoints
the Trustee under the Indenture as the special attorney-in-fact for the holder
vested with full power on behalf of the holder to effect and enforce the rights
of such holder and the provisions of the Indenture for the benefit of the
holder. The preceding provision in no way shall limit the right of the holder
hereof to demand payment hereunder or bring an action to enforce payment hereof.
All capitalized terms used in this Note which are defined in
the Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State of
New York, without regard to the conflict of laws principles thereof.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
This Class A Note does not purport to summarize the Indenture
and reference is made to the Indenture for information with respect to
interests, rights, benefits, obligations, proceeds and
A-1-3
duties evidenced hereby and the rights, duties and immunities of the Trustee.
Copies of the Indenture and all amendments thereto will be provided to any
Noteholder, at its expense, upon a written request to the Trustee, at
_________________.
A-1-4
IN WITNESS WHEREOF, ____________________ has caused this
instrument to be duly executed.
-----------------------------
By:
---------------------------------------
Name:
Title:
Dated:
------------------------------
This is one of the Notes referred to in the within mentioned Indenture.
--------------------------,
as Trustee
By:
-----------------------------------------------
Authorized Signatory
A-1-5
EXHIBIT B
TO INDENTURE
[FORM OF CLASS B NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT
OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES
TO TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED
TO HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER EITHER (1) IT IS NOT ACQUIRING THIS NOTE WITH THE ASSETS OF A PLAN; OR
(2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT GIVE RISE TO A NONEXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975 OF THE
CODE.
No. 1 Principal Amount $_________
Due: ________________ CUSIP No. ___________
____% ASSET-BACKED NOTE, SERIES ______, CLASS B
DVI _________________, a Delaware corporation/limited
liability company/partnership/business trust (the "ISSUER"), for value received,
hereby promises to pay to CEDE & CO. or registered assigns, the principal sum of
_____________________ and __/100 Dollars
B-1
($_________) in monthly installments equal to the sum of (i) the Class B Monthly
Principal, (ii) the Class B Overdue Principal and (iii) any other principal that
may be due hereon pursuant to the Indenture during an Amortization Event
together with (i) the Class B Monthly Interest and (ii) the Class B Overdue
Interest due thereon on the ____ day of each month (or if such date is not a
Business Day, the next succeeding Business Day, commencing ________________
(each, a "PAYMENT DATE"), and not later than ________________, all remaining
principal and interest (computed on the basis of a 360-day year of twelve 30-day
months) are due and payable in their entirety as set forth in the Indenture.
Payments of principal and interest on this Note shall be made
on each Payment Date in such coin or currency of the United States of America as
at such time is legal tender for payment of public and private debts to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the Record Date, or Redemption Record Date, as
applicable, for such Payment Date, which shall be the last Business Day of the
month preceding the month in which the Payment Date occurs (or in the case of
the initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class B Notes
of the Issuer designated as its ____% Asset-Backed Notes, Series ______, Class B
with aggregate principal amount of $_________ and to be issued under an
Indenture dated as of ________________ (herein called the "INDENTURE"), between
the Issuer and __________________________, as trustee (herein called the
"TRUSTEE", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties, and
immunities thereunder of the Issuer, the Trustee, and the holders of the Notes
and of the terms upon which the Notes are, and are to be, authenticated and
delivered. The Trust Property secures the Notes equally and ratably without
prejudice, priority, or distinction between any Note of the same class and any
other Note of the same class by reason of difference in time of issuance or
otherwise, and also secures the payment of certain other amounts and certain
other obligations as set forth in the Indenture. This Note is issued under and
is subject to the terms, provisions and conditions of the Indenture, to which
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.
Each Class B Noteholder by acceptance of its Class B Note (and
any Person which is a beneficial owner of any interest in a Class B Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class B Notes (or beneficial interest therein) for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness. Each Class B Noteholder agrees that it
will cause any Person acquiring an interest in a Class B Note through it to
acknowledge the Class B Notes' characterization as indebtedness and to agree to
comply with the Indenture as to treatment of the Class B Notes as indebtedness
for such tax purpose.
If an Indenture Event of Default or Amortization Event shall
occur and be continuing, the Notes may be declared due and payable in the manner
and with the effect provided in the Indenture.
B-2
As provided in the Indenture and subject to the limitations
set forth therein and above, the transfer of this Note is registrable in the
Note Register, upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Notes,
of authorized denominations and for the same original aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Indenture on any Payment Date on which the
outstanding Pool B Aggregate Discounted Contract Balance is less than 20% of the
Pool B Aggregate Discounted Contract Balance on the Closing Date in the manner
provided in the Indenture. The Notes may be redeemed by the Issuer, in whole but
not in part, at the redemption price set forth in the Indenture on any Payment
Date on which the Pool A Aggregate Discounted Contract Balance is less than 10%
of the Pool A Aggregate Discounted Contract Balance as of the Closing Date and
the Pool B Aggregate Discounted Contract Balance is less than 20% of the Pool B
Aggregate Discounted Contract Balance as of the Closing Date in the manner
provided in the Indenture.
The Notes are issuable only in registered form without coupons
in denominations as provided in the Indenture and subject to certain limitations
therein set forth. No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Note and the Indenture may be amended or supplemented as
set forth in the Indenture.
By accepting this Note, the holder hereof irrevocably appoints
the Trustee under the Indenture as the special attorney-in-fact for the holder
vested with full power on behalf of the holder to effect and enforce the rights
of such holder and the provisions of the Indenture for the benefit of the
holder. The preceding provision in no way shall limit the right of the holder
hereof to demand payment hereunder or bring an action to enforce payment hereof.
All capitalized terms used in this Note which are defined in
the Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State of
New York, without regard to the conflict of laws principles thereof.
B-3
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
This Class B Note does not purport to summarize the Indenture
and reference is made to the Indenture for information with respect to
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Indenture
and all amendments thereto will be provided to any Noteholder, at its expense,
upon a written request to the Trustee, at __________________.
B-4
IN WITNESS WHEREOF, ___________________ has caused this
instrument to be duly executed.
-----------------------------------------
By:
---------------------------------------
Name:
Title:
Dated:
--------------------------------
This is one of the Notes referred to in the within mentioned Indenture.
______________________, as Trustee
By:
---------------------------------------
Authorized Signatory
B-5
EXHIBIT C
TO INDENTURE
[FORM OF CLASS C NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT
OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES
TO TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED
TO HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT ACQUIRING THIS NOTE WITH THE ASSETS OF A
PLAN; OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT GIVE RISE TO A
NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975
OF THE CODE.
No. 1 Principal Amount $_________
Due ________________ CUSIP No. ___________
____% ASSET-BACKED NOTE, SERIES ______, CLASS C
DVI _____________________, a Delaware corporation/limited
liability company/partnership/business trust (the "ISSUER"), for value received,
hereby promises to pay to CEDE & CO. or registered assigns, the principal sum of
__________________ and __/100 Dollars
C-1
($_________) in monthly installments equal to the sum of (i) the Class C Monthly
Principal, (ii) the Class C Overdue Principal and (iii) any other principal that
may be due hereon pursuant to the Indenture during an Amortization Event
together with (i) the Class C Monthly Interest and (ii) the Class C Overdue
Interest due thereon on the ____ day of each month (or if such date is not a
Business Day, the next succeeding Business Day, commencing ________________
(each, a "PAYMENT DATE"), and not later than ________________, all remaining
principal and interest (computed on the basis of a 360-day year of twelve 30-day
months) are due and payable in their entirety as set forth in the Indenture.
Payments of principal and interest on this Note shall be made
on each Payment Date in such coin or currency of the United States of America as
at such time is legal tender for payment of public and private debts to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the Record Date, or Redemption Record Date, as
applicable, for such Payment Date, which shall be the last Business Day of the
month preceding the month in which the Payment Date occurs (or in the case of
the initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class C Notes
of the Issuer designated as its ____% Asset-Backed Notes, Series ______, Class C
with aggregate principal amount of $_________ and to be issued under an
Indenture dated as of ________________ (herein called the "INDENTURE"), between
the Issuer and ________________________, as trustee (herein called the
"TRUSTEE", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties, and
immunities thereunder of the Issuer, the Trustee, and the holders of the Notes
and of the terms upon which the Notes are, and are to be, authenticated and
delivered. The Trust Property secures the Notes equally and ratably without
prejudice, priority, or distinction between any Note of the same class and any
other Note of the same class by reason of difference in time of issuance or
otherwise, and also secures the payment of certain other amounts and certain
other obligations as set forth in the Indenture. This Note is issued under and
is subject to the terms, provisions and conditions of the Indenture, to which
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.
Each Class C Noteholder by acceptance of its Class C Note (and
any Person which is a beneficial owner of any interest in a Class C Note, by
virtue of such Persons' acquisition of a beneficial interest therein) agrees to
treat the Class C Notes (or beneficial interest therein) for purposes of
federal, state and local income or franchise taxes and any other tax imposed on
or measured by income, as indebtedness. Each Class C Noteholder agrees that it
will cause any Person acquiring an interest in a Class C Note through it to
acknowledge the Class C Notes' characterization as indebtedness and to agree to
comply with the Indenture as to treatment of the Class C Notes as indebtedness
for such tax purpose.
If an Indenture Event of Default or Amortization Event shall
occur and be continuing, the Notes may be declared due and payable in the manner
and with the effect provided in the Indenture.
C-2
As provided in the Indenture and subject to the limitations
set forth therein and above, the transfer of this Note is registrable in the
Note Register, upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Notes,
of authorized denominations and for the same original aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Indenture on any Payment Date on which the
outstanding Pool B Aggregate Discounted Contract Balance is less than 20% of the
Pool B Aggregate Discounted Contract Balance on the Closing Date in the manner
provided in the Indenture. The Notes may be redeemed by the Issuer, in whole but
not in part, at the redemption price set forth in the Indenture on any Payment
Date on which the Pool A Aggregate Discounted Contract Balance is less than 10%
of the Pool A Aggregate Discounted Contract Balance as of the Closing Date and
the Pool B Aggregate Discounted Contract Balance is less than 20% of the Pool B
Aggregate Discounted Contract Balance as of the Closing Date in the manner
provided in the Indenture.
The Notes are issuable only in registered form without coupons
in denominations as provided in the Indenture and subject to certain limitations
therein set forth. No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Note and the Indenture may be amended or supplemented as
set forth in the Indenture.
By accepting this Note, the holder hereof irrevocably appoints
the Trustee under the Indenture as the special attorney-in-fact for the holder
vested with full power on behalf of the holder to effect and enforce the rights
of such holder and the provisions of the Indenture for the benefit of the
holder. The preceding provision in no way shall limit the right of the holder
hereof to demand payment hereunder or bring an action to enforce payment hereof.
All capitalized terms used in this Note which are defined in
the Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State of
New York, without regard to the conflict of laws principles thereof.
C-3
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
This Class C Note does not purport to summarize the Indenture
and reference is made to the Indenture for information with respect to
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Indenture
and all amendments thereto will be provided to any Noteholder, at its expense,
upon a written request to the Trustee, at _________________.
C-4
IN WITNESS WHEREOF, ____________________ has caused this
instrument to be duly executed.
---------------------------------------
By:
---------------------------------------
Name:
Title:
Dated:
This is one of the Notes referred
to in the within mentioned Indenture.
, as Trustee
-----------------------------
By:
---------------------------------------
Authorized Signatory
C-5
EXHIBIT D
TO INDENTURE
[FORM OF CLASS D NOTES]
NO BENEFICIAL OWNERS OF THIS NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT
OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED NOTES HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE INDENTURE.
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD, OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO BELOW.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES
TO TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED
TO HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT ACQUIRING THIS NOTE WITH THE ASSETS OF A
PLAN; OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT GIVE RISE TO A
NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975
OF THE CODE.
No. 1 Principal Amount $_________
Due: ________________ CUSIP No. ___________
____% ASSET-BACKED NOTE, SERIES ______, CLASS D
___________________, a Delaware corporation/limited liability
company/partnership/business trust (the "ISSUER"), for value received, hereby
promises to pay to CEDE & CO. or registered assigns, the principal sum of
_____________ and __/100 Dollars ($_________) in monthly installments equal to
the sum of (i) the Class D Monthly Principal, (ii) the Class D Overdue
D-1
Principal and (iii) any other principal that may be due hereon pursuant to the
Indenture during an Amortization Event together with (i) the Class D Monthly
Interest and (ii) the Class D Overdue Interest due thereon on the ____ day of
each month (or if such date is not a Business Day, the next succeeding Business
Day, commencing ________________ (each, a "PAYMENT DATE"), and not later than
________________, all remaining principal and interest (computed on the basis of
a 360-day year of twelve 30-day months) are due and payable in their entirety as
set forth in the Indenture.
THE RIGHTS TO RECEIVE PAYMENTS WITH RESPECT TO THIS CLASS D
NOTE ARE SUBORDINATE TO THE PRIOR PAYMENT IN FULL ON EACH PAYMENT DATE OF
CERTAIN AMOUNTS DUE AND PAYABLE ON THE CLASS A NOTES, THE CLASS B NOTES AND THE
CLASS C NOTES AS PROVIDED IN THE INDENTURE.
Payments of principal and interest on this Note shall be made
on each Payment Date in such coin or currency of the United States of America as
at such time is legal tender for payment of public and private debts to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the Record Date or Redemption Date, as applicable,
for such Payment Date, which shall be the last Business Day of the month
preceding the month in which the Payment Date occurs (or in the case of the
initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class D Notes
of the Issuer designated as its ____% Asset-Backed Notes, Series ______, Class D
with aggregate principal amount of $_________ and to be issued under an
Indenture dated as of ________________ (herein called the "INDENTURE"), between
the Issuer and ______________________, as trustee (herein called the "TRUSTEE",
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, and
immunities thereunder of the Issuer, the Trustee, and the holders of the Notes
and of the terms upon which the Notes are, and are to be, authenticated and
delivered. The Trust Property secures the Notes equally and ratably without
prejudice, priority, or distinction between any Note of the same class and any
other Note of the same class by reason of difference in time of issuance or
otherwise, and also secures the payment of certain other amounts and certain
other obligations as set forth in the Indenture. This Note is issued under and
is subject to the terms, provisions and conditions of the Indenture, to which
Indenture the Holder of this Note by virtue of the acceptance hereof assents and
by which such Holder is bound.
Each Class D Noteholder by acceptance of its Class D Note (and
any Person that is a beneficial owner of any interest in a Class D Note, by
virtue of such Person's acquisition of a beneficial interest therein) agrees to
treat the Class D Notes for purposes of federal, state and local income or
franchise taxes (and any other tax imposed on or measured by income) as
indebtedness. Each Class D Noteholder agrees that it will cause any Person
acquiring an interest in a Class D Note through it to acknowledge the Class D
Notes' characterization as indebtedness and to agree to comply with this
Indenture as to treatment of the Class D Notes as indebtedness for such tax
purposes.
D-2
If an Indenture Event of Default or Amortization Event shall
occur and be continuing, the Notes may be declared due and payable in the manner
and with the effect provided in the Indenture.
As provided in the Indenture and subject to the limitations
set forth therein and above, the transfer of this Note is registrable in the
Note Register, upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Notes,
of authorized denominations and for the same original aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Indenture on any Payment Date on which the
outstanding Pool B Aggregate Discounted Contract Balance is less than 20% of the
Pool B Aggregate Discounted Contract Balance on the Closing Date in the manner
provided in the Indenture. The Notes may be redeemed by the Issuer, in whole but
not in part, at the redemption price set forth in the Indenture on any Payment
Date on which the Pool A Aggregate Discounted Contract Balance is less than 10%
of the Pool A Aggregate Discounted Contract Balance as of the Closing Date and
the Pool B Aggregate Discounted Contract Balance is less than 20% of the Pool B
Aggregate Discounted Contract Balance as of the Closing Date in the manner
provided in the Indenture.
The Notes are issuable only in registered form without coupons
in denominations as provided in the Indenture and subject to certain limitations
therein set forth. No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
This Note and the Indenture may be amended or supplemented as
set forth in the Indenture.
By accepting this Note, the holder hereof irrevocably appoints
the Trustee under the Indenture as the special attorney-in-fact for the holder
vested with full power on behalf of the holder to effect and enforce the rights
of such holder and the provisions of the Indenture for the benefit of the
holder. The preceding provision in no way shall limit the right of the holder
hereof to demand payment hereunder or bring an action to enforce payment hereof.
All capitalized terms used in this Note which are defined in
the Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State of
New York, without regard to the conflict of laws principles thereof.
D-3
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
This Class D Note does not purport to summarize the Indenture
and reference is made to the Indenture for information with respect to
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Indenture
and all amendments thereto will be provided to any Noteholder, at its expense,
upon a written request to the Trustee, at _______________.
D-4
IN WITNESS WHEREOF, _____________________ has caused this
instrument to be duly executed.
By:
----------------------------------
Name:
Title:
Dated:
---------------------------------------
This is one of the Notes referred to in the within mentioned Indenture.
, as Trustee
------------------------------------
By:
---------------------------------------
Authorized Signatory
D-5
EXHIBIT E
TO INDENTURE
[FORM OF CLASS E NOTES]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
BY ACCEPTANCE OF THIS NOTE, THE HOLDER AND ANY BENEFICIAL OWNER AGREES
TO TREAT THIS NOTE AS INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES.
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAW OF ANY STATE. ANY RESALE,
TRANSFER OR OTHER DISPOSITION OF THIS NOTE WITHOUT SUCH REGISTRATION OR
QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH
REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION
2.04 OF THE INDENTURE REFERRED TO HEREIN.
BY ITS ACCEPTANCE HEREOF, THE HOLDER AND ANY BENEFICIAL OWNER IS DEEMED
TO HAVE REPRESENTED TO THE ISSUER, THE TRUSTEE, THE SERVICER AND ANY SUCCESSOR
SERVICER THAT EITHER (1) IT IS NOT ACQUIRING THIS NOTE WITH THE ASSETS OF A
PLAN; OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT GIVE RISE TO A
NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406(a) OF ERISA OR SECTION 4975
OF THE CODE.
THIS CLASS E NOTE MAY NOT BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED
UNLESS (i) SUCH TRANSFEREE IS A "UNITED STATES PERSON" AS DEFINED IN SECTION
7701(a)(30) OF THE CODE; (ii) (A) SUCH TRANSFEREE IS NOT A GRANTOR TRUST,
PARTNERSHIP OR S CORPORATION FOR UNITED STATES FEDERAL INCOME TAX PURPOSES OR
(B) SUCH TRANSFEREE IS A GRANTOR TRUST, PARTNERSHIP OR S CORPORATION FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES, BUT AFTER GIVING EFFECT TO SUCH TRANSFER OF
CLASS E NOTES TO SUCH TRANSFEREE, SUBSTANTIALLY ALL OF THE VALUE OF THE INTEREST
OF AN OWNER OF THE TRANSFEREE IN THE TRANSFEREE WILL NOT BE ATTRIBUTABLE TO THE
PASS-THROUGH ENTITY'S OWNERSHIP INTEREST IN SECURITIES ISSUED BY THE ISSUER
OTHER THAN THE CLASS A, CLASS B AND CLASS C NOTES AND (ii) FOR THE PURPOSES OF
SECTION 7704 OF THE CODE AND THE TREASURY REGULATIONS PROMULGATED THEREUNDER,
E-1
AFTER SUCH TRANSFER THE ISSUER WOULD NOT BE TREATED AS HAVING MORE THAN 100
PARTNERS.
No. 1 Principal Amount $_________
Due: ________________ CUSIP No. ___________
____% ASSET-BACKED NOTE, SERIES ______, CLASS E
_________________, a Delaware corporation/limited liability
company/partnership/business trust (the "ISSUER"), for value received, hereby
promises to pay to CEDE & CO. or registered assigns, the principal sum of
_____________ and __/100 Dollars ($_________) in monthly installments equal to
the sum of (i) the Class E Monthly Principal, (ii) the Class E Overdue Principal
and (iii) any other principal that may be due hereon pursuant to the Indenture
during an Amortization Event together with (i) the Class E Monthly Interest and
(ii) the Class E Overdue Interest due thereon on the ____ day of each month (or
if such date is not a Business Day, the next succeeding Business Day, commencing
________________ (each, a "PAYMENT DATE"), and not later than ________________,
all remaining principal and interest (computed on the basis of a 360-day year of
twelve 30-day months) are due and payable in their entirety as set forth in the
Indenture.
THE RIGHTS TO RECEIVE PAYMENTS WITH RESPECT TO THIS CLASS E
NOTE ARE SUBORDINATE TO THE PRIOR PAYMENT IN FULL ON EACH PAYMENT DATE OF
CERTAIN AMOUNTS DUE AND PAYABLE ON THE CLASS A NOTES, THE CLASS B NOTES, THE
CLASS C NOTES AND THE CLASS D NOTES AS PROVIDED IN THE INDENTURE.
Payments of principal and interest on this Note shall be made
on each Payment Date in such coin or currency of the United States of America as
at such time is legal tender for payment of public and private debts to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
at the close of business on the Record Date or Redemption Date, as applicable,
for such Payment Date, which shall be the last Business Day of the month
preceding the month in which the Payment Date occurs (or in the case of the
initial Payment Date, the Closing Date), by wire transfer of immediately
available funds to the account and number specified in the Note Register on such
Record Date for such Person or, if no such account or number is so specified,
then by check mailed to such Person's address as it appears in the Note Register
on such Record Date. The holder hereof shall surrender this Note at the
principal Corporate Trust Office of the Trustee for the final installment of
principal of this Note.
This Note is one of a duly authorized issue of Class E Notes
of the Issuer designated as its ____% Asset-Backed Notes, Series ______, Class E
with aggregate principal amount of $_________ and to be issued under an
Indenture dated as of ________________ (herein called the "INDENTURE"), between
the Issuer and ________________, as trustee (herein called the "TRUSTEE", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties, and immunities thereunder
of the Issuer, the Trustee, and the holders of the Notes and of the terms upon
which the Notes are, and are to be, authenticated and delivered. The Trust
Property secures the Notes equally and ratably without prejudice, priority, or
distinction between any Note of
E-2
the same class and any other Note of the same class by reason of difference in
time of issuance or otherwise, and also secures the payment of certain other
amounts and certain other obligations as set forth in the Indenture. This Note
is issued under and is subject to the terms, provisions and conditions of the
Indenture, to which Indenture the Holder of this Note by virtue of the
acceptance hereof assents and by which such Holder is bound.
The Issuer, the Trustee and each Class E Noteholder by
acceptance of its Class E Note (and any Person that is a beneficial owner of any
interest in a Class E Note, by virtue of such Person's acquisition of a
beneficial interest therein) agrees to treat the Class E Notes for purposes of
federal, state and local income or franchise taxes (and any other tax imposed on
or measured by income) as indebtedness. Each Class E Noteholder agrees that it
will cause any Person acquiring an interest in a Class E Note through it to
acknowledge the Class E Notes' characterization as indebtedness and to agree to
comply with this Indenture as to treatment of the Class E Notes as indebtedness
for such tax purposes.
If an Indenture Event of Default or Amortization Event shall
occur and be continuing, the Notes may be declared due and payable in the manner
and with the effect provided in the Indenture.
As provided in the Indenture and subject to the limitations
set forth therein and above, the transfer of this Note is registrable in the
Note Register, upon surrender of this Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Trustee duly executed by, the holder hereof
or his attorney duly authorized in writing, and thereupon one or more new Notes,
of authorized denominations and for the same original aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes may be redeemed in part by the Issuer at the partial
redemption price set forth in the Indenture on any Payment Date on which the
outstanding Pool B Aggregate Discounted Contract Balance is less than 20% of the
Pool B Aggregate Discounted Contract Balance on the Closing Date in the manner
provided in the Indenture. The Notes may be redeemed by the Issuer, in whole but
not in part, at the redemption price set forth in the Indenture on any Payment
Date on which the Pool A Aggregate Discounted Contract Balance is less than 10%
of the Pool A Aggregate Discounted Contract Balance as of the Closing Date and
the Pool B Aggregate Discounted Contract Balance is less than 20% of the Pool B
Aggregate Discounted Contract Balance as of the Closing Date in the manner
provided in the Indenture.
The Notes are issuable only in registered form without coupons
in denominations as provided in the Indenture and subject to certain limitations
therein set forth. No service charge shall be made for any such registration of
transfer or exchange, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of
transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.
E-3
This Note and the Indenture may be amended or supplemented as
set forth in the Indenture.
By accepting this Note, the holder hereof irrevocably appoints
the Trustee under the Indenture as the special attorney-in-fact for the holder
vested with full power on behalf of the holder to effect and enforce the rights
of such holder and the provisions of the Indenture for the benefit of the
holder. The preceding provision in no way shall limit the right of the holder
hereof to demand payment hereunder or bring an action to enforce payment hereof.
All capitalized terms used in this Note which are defined in
the Indenture and not otherwise defined herein shall have the meanings assigned
to them in the Indenture.
As provided in the Indenture, this Note and the Indenture
shall be governed by, and construed in accordance with, the laws of the State of
New York, without regard to the conflict of laws principles thereof.
Unless the certificate of authentication hereon has been
executed by the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
This Class E Note does not purport to summarize the Indenture
and reference is made to the Indenture for information with respect to
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and immunities of the Trustee. Copies of the Indenture
and all amendments thereto will be provided to any Noteholder, at its expense,
upon a written request to the Trustee, at __________________.
E-4
IN WITNESS WHEREOF, _________________________ has caused this
instrument to be duly executed.
-----------------------------------------
By:
By:
--------------------------------------
Name:
Title:
-----------------------------------------
Dated:
This is one of the Notes referred to in the within mentioned Indenture.
, as Trustee
------------------------------------
By:-----------------------------------------
Authorized Signatory
E-5
EXHIBIT F
TO INDENTURE
[FORM OF CLASS F INSTRUMENT TO BE PROVIDED WITH ANY
SUPPLEMENT PURSUANT TO WHICH CLASS F INSTRUMENTS ARE ISSUED]
F-1
EXHIBIT G
TO INDENTURE
INVESTMENT LETTER
_______________, 199__
[Issuer]
DVI Financial Services Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[Trustee]
Re: $ % Asset-Backed Notes, Series ______,
Class ______ CUSIP NUMBER
---------------------------------------------------
Ladies and Gentlemen:
___________________________ (the "SELLER") intends to transfer
$_____________ in aggregate principal amount of the captioned Notes to
_____________________ (the "PURCHASER").
1. In connection with such transfer, and in accordance with
Section 2.04 of the Indenture, dated as of ________________ (the "INDENTURE";
all capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Indenture), between __________ (the "ISSUER") and
_________________, not in its individual capacity but solely as Trustee (the
"TRUSTEE"), pursuant to which the Notes were issued, the Seller hereby certifies
to you the following facts: Neither the Seller nor anyone acting on its behalf
has offered, transferred, pledged, sold or otherwise disposed of the Notes, any
interest in the Notes or any other similar security to, or solicited any offer
to buy or accept a transfer, pledge or other disposition of the Notes, any
interest in the Notes or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising or in
any other manner, or taken any other action which would constitute a
distribution of the Notes under the Securities Act of 1933, as amended (the
"1933 ACT"), or under state securities laws, or which would render the
disposition of the Notes a violation of Section 5 of the 1933 Act or applicable
state securities laws or require registration pursuant thereto.
2. The Purchaser warrants and represents to, and covenants
with, the Trustee pursuant to Section 2.04 of the Indenture that:
(a) The Purchaser agrees to be bound, as Noteholder, by all of
the terms, covenants and conditions of the Indenture and the Notes, and
from and after the date hereof, the Purchaser
G-1
assumes for the benefit of each of the Trustee and the Seller all of
the Seller's obligations as Noteholder thereunder;
(b) The Purchaser understands that the Notes have not been and
may never be registered under the 1933 Act or the securities laws of
any state;
(c) The Purchaser is acquiring the Notes for investment for
its own account or the account of another qualified institutional buyer
(within the meaning of Rule 144A under the ▇▇▇▇ ▇▇▇) only and not for
any other person or with a view to the distribution thereof in
violation of applicable securities laws;
(d) The Purchaser considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Notes;
(e) The Purchaser has been furnished with all information
regarding the Notes that it has requested from the Seller or the
Trustee and has been afforded the opportunity to ask all questions it
reasonably desires to ask of the Seller (and all such questions have
been answered to the Purchaser's satisfaction); and
(f) Neither the Purchaser nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the Notes,
any interest in the Notes or any other similar security to, or
solicited any offer to buy or accept a transfer, pledge or other
disposition of the Notes, any interest in the Notes or any other
similar security from, or otherwise approached or negotiated with
respect to the Notes, any interest in the Notes or any other similar
security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action which would constitute a distribution of the
Notes under the 1933 Act or applicable state securities laws or which
would render the disposition of the Notes a violation of Section 5 of
the 1933 Act or applicable state securities laws or require
registration pursuant thereto, nor will it act, nor has it authorized
or will it authorize any person to act, in such manner with respect to
the Notes.
(g) The Purchaser will strictly comply with the Indenture as
to treatment of the Class ___ Notes as indebtedness of the Transferor
for purposes of federal, state and local income or franchise taxes and
any other tax imposed on or measured by income.
3. The Purchaser represents and warrants to the Issuer, the
Trustee, the Servicer and any successor Servicer that either (1) it is not
acquiring this Note with the assets of a Plan; or (2) the acquisition and
holding of this Note will not give rise to a nonexempt prohibited transaction
under Section 406(a) of ERISA or section 4975 of the code.
4. The Purchaser understands and agrees with the Seller that
the Seller is transferring the Notes pursuant to the exemption from registration
under the 1933 Act provided by Rule 144A thereunder ("RULE 144A") and the
Purchaser hereby represents and warrants to the Seller and the Trustee that the
Purchaser is a "qualified institutional buyer" as defined in Rule 144A.
G-2
The Purchaser acknowledges that it is familiar with Rule 144A
and understand that you are and will continue to rely on the statements made
herein.
5. This Certification may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Investment
Letter to be executed by their duly authorized officers as of the date first
above written.
-------------------------------- ------------------------------------
Seller Purchaser
By: By:
-------------------------- ---------------------------------
Its: Its:
-------------------------- ---------------------------------
Taxpayer Identification Taxpayer Identification
No. No.
-------------------------- ------------------------------
G-3
EXHIBIT H
TAX CERTIFICATE
[With respect to the Class E Notes]
The undersigned hereby certifies and represents as follows to the
parties listed in the Indenture to which this certification relates with respect
to the Class E Notes described therein:
This Tax Certificate ("certificate") is delivered in
connection with the acquisition of, transfer to or possession by the
undersigned, whether as beneficial owner (the "Beneficial Owner"), or nominee on
behalf of the Beneficial Owner of the above-described Class E Notes.
Each Holder must complete Part I, Part II (if the holder is a
nominee), Part III, Part IV and in all cases sign and otherwise complete this
certificate. Each Holder shall submit with this certificate an IRS Form W-9 (or
any such successor form) to such Holder.
Part I
1. _______________ (Name of Beneficial Owner) is not a
foreign corporation, foreign partnership, foreign
trust or foreign estate (as those terms are defined
in the Code and Treasury Regulations);
2. The Beneficial Owner's office address and place of
incorporation (if applicable) is _______________; and
3. The Beneficial Owner's U.S. employer identification
number is ---------------.
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner,
the undersigned certifies that this certificate has been made in reliance upon
information contained in:
____ an IRS Form W-9
____ a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trustee at least thirty (30) days prior to the date that
the form relied upon becomes obsolete, and (ii) in connection with a change in
Beneficial Owners, the undersigned agrees to submit a new Tax Certificate to the
Trustee promptly after such change.
I-1
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof,
agrees to notify the Trustee within sixty (60) days of the date that the
Beneficial Owner becomes a foreign person. The undersigned understands that this
certificate may be disclosed to the Internal Revenue Service by the Trustee and
any false statement contained therein could be punishable by fines, imprisonment
or both.
Part IV - Representation
The undersigned hereby represents, warrants and agrees that it
:
(1) (a) is purchasing the Class E Note for its own
account and is the sole beneficial owner of such Note;
(b) either (i) is not, for federal income tax
purposes, a partnership, trust, estate or "S Corporation" (as defined in the
Code) (each a "Pass-through Entity") or (ii) is for federal income tax purposes,
a Pass-through Entity, but after giving effect to our purchase of such Note less
than 50 percent of the aggregate value of our assets would consist of Class E
Notes; and
(c) such Note has not been transferred through an
"established securities market"
within the meaning of Section 7704(b) of the Code;
(2) if we are a Pass-through Entity, we covenant that the
portion of our assets consisting of Class E Notes will remain below 50 percent
at all times; and
(3) if it resells or transfers any of the Class E Notes, it
will obtain from each subsequent purchaser or transferee a letter containing the
same representations and agreements as set forth herein.
The undersigned understands and agrees that no initial or subsequent
sale or other transfer of a Class E Note may be made unless such sale or
transfer (i) is accompanied by delivery of a tax statement in the form of this
letter, (ii) is made to a "United States Person" as defined in Section
7701(a)(30) of the code, as certified in such tax statement, and (iii) will not
cause the Issuer to be treated as a publicly traded partnership for United
States federal income tax purposes. Any attempted transfer, assignment,
conveyance, participation or subdivision in contravention of the preceding
restrictions, as reasonably determined by the Trustee, shall be void AB INITIO
and the purported transferor, seller or subdivider of such Class E Note shall
continue to be treated as the Holder of such Note for all purposes of the
Indenture.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be executed by its duly authorized officer as of the date first
above written.
-------------------------------------
Purchaser
By:
---------------------------------
Its:
---------------------------------
I-2
APPENDIX I
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Definition of terms used in the Contribution and Servicing
Agreement, the Indenture, the Subsequent Contract Transfer Agreement, any Trust
Agreement and the Underwriting Agreement. The following terms, unless the
context otherwise requires, shall have the following meanings and such meanings
shall be equally applicable to both the singular and plural forms of such terms:
ACT: with respect to any Noteholder, as defined in Section
1.04(a) of the Indenture.
AFFILIATE: of any specified Person, any other Person (i) which
directly or indirectly controls, or whose directors or officers directly or
indirectly control, or is controlled by, or is under common control with, such
specified Person, (ii) which beneficially owns or holds, or whose directors or
officers beneficially own or hold, 5% or more of any class of the voting stock
(or, in the case of an entity that is not a corporation, 5% of the equity
interest) of such specified Person, or (iii) 5% or more of the voting stock (or,
in the case of an entity that is not a corporation, 5% of the equity interest)
of which is owned or held by such specified Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise.
AGGREGATE DISCOUNTED CONTRACT BALANCE: means, with respect to
any date of
determination, the sum of the Discounted Contract Balances of all Contracts.
AGGREGATE NOTE BALANCE: means the sum of (i) the Note Balance
for the Class A Notes, (ii) the Note Balance for the Class B Notes, (iii) the
Note Balance for the Class C Notes, (iv) the Note Balance for the Class D Notes
and (v) the Note Balance for the Class E Notes .
AMORTIZATION EVENT: means the occurrence of any one of the
following events and notice from Noteholders evidencing not less than 66-2/3% of
the Voting Rights to the Trustee declaring that such event shall constitute an
Amortization Event:
(i) The entry by a court having jurisdiction
in the premises of (A) a decree or order for relief in respect
of DVI, Inc. in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or (B) a decree or order
adjudging DVI, Inc. a bankrupt or insolvent, or approving as
properly filed a petition servicing reorganization,
arrangement, adjustment, or composition of or in respect of
DVI, Inc. under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator, or other similar official of DVI, Inc.
or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance
of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 90
consecutive days; or
(ii) The commencement by DVI, Inc. of a
voluntary case or proceeding under any applicable federal or
state bankruptcy, insolvency, reorganization, or other similar
law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to
the entry of a decree or order for relief in respect of DVI,
Inc. in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization, or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or
relief under any applicable federal or state law, or the
consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator, or similar
official of DVI, Inc. or of any substantial part of its
property, or the making by it of an assignment for the benefit
of creditors, or DVI, Inc.'s failure to pay its debts
generally as they become due, or the taking of corporate
action by DVI, Inc. in furtherance of any such action; or
(iii) On and as of any Determination Date,
(x) the quotient of (1) the sum of the Discounted Contract
Balances of all Contracts listed as more than 90 days
delinquent as of the last day of the three immediately
preceding calendar months, divided by (2) three exceeds (y)
the product of (1) 0.08 and (2) the quotient of (A) the sum of
the Aggregate Discounted Contract Balance as of the last day
of the three immediately preceding Collection Periods, divided
by (B) three; or
(iv) As of any Determination Date, the sum
of Discounted Contract Balances of all Contracts that have
been classified as Defaulted Contracts since the Closing Date
(such Discounted Contract Balances to be determined
immediately prior to the classification as a Defaulted
Contract) exceeds the product of (1) 0.06 and (2) the
Aggregate Discounted Contract Balance on the Closing Date.
AUTHORIZED OFFICER: with respect to any matter, any officer of
or other Person representing the Issuer, the Transferor, the Contributor, the
Servicer, the Trustee, the Owner Trustee or a Noteholder, as the case may be,
who is authorized to act for that party.
AVAILABLE FUNDS: means, with respect to each Payment Date, the
excess of (i) all amounts on deposit in the Collection Account on the second
Business Day preceding such Payment Date over (ii) any portion thereof
representing Contract Payments due, or voluntary prepayments deposited therein,
subsequent to the end of the related Collection Period.
AVAILABLE RESERVE ACCOUNT FUNDS: has the meaning set forth in
Section 3.04(c) of the Indenture.
BALLOON PAYMENT: means, with respect to any Contract, a final
Contract Payment that is at least equal to six times any other Contract Payment
related to such Contract.
BOOK-ENTRY CUSTODIAN: means, the Person appointed pursuant to
the terms of the Indenture to act in accordance with a certain Letter of
Representations agreement such person has with DTC, in which DTC delegates its
duties to maintain the Book-Entry Notes to such Person and authorizes such
Person to perform such duties.
2
BOOK-ENTRY NOTE(S): means each Note for so long as such Note
is registered in the name of its depository or its nominee in accordance with
the terms and conditions of the Indenture.
BUSINESS DAY: any day other than a Saturday, a Sunday or a day
on which banking institutions in New York City or in the city in which the
Corporate Trust Office is located are authorized or required by law or executive
order to close.
CAPITAL STOCK: the Transferor's common stock, $1.00 par value.
CLASS A DISTRIBUTION SUB-ACCOUNT: the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Indenture.
CLASS A MONTHLY INTEREST: means, for any Payment Date, the
product of (i) one-twelfth, (ii) the Class A Note Rate and (iii) the Class A
Note Balance on the immediately preceding Payment Date (or, in the case of the
first Payment Date, the Closing Date) after giving effect to all principal
payments on the Class A Notes on such Payment Date. The Class A Monthly Interest
shall be calculated based upon a twelve month year of thirty days in each month,
except for the first Payment Date, for which interest shall accrue from the
Closing Date to but excluding such Payment Date.
CLASS A MONTHLY PRINCIPAL: means (A) on any Payment Date other
than the Class A Stated Maturity Date, the product of (x) the Class A Percentage
and (y) Monthly Principal, and (B) on the Class A Stated Maturity Date, the
entire amount of the then outstanding Class A Note Balance.
CLASS A NOTE BALANCE: means, as of the Closing Date,
$___________ and thereafter shall equal the Class A Note Balance as of the
Closing Date reduced by all principal payments on all of the Class A Notes.
CLASS A NOTEHOLDER: at any time, any Person in whose name a
Class A Note is registered in the Note Register.
CLASS A NOTES: any Class A Note described in Article II of,
and authorized by, and authenticated and delivered under, the Indenture.
CLASS A OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class A Noteholders on all prior Payment Dates.
CLASS A OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class A Monthly Principal due on
the Class A Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class A Noteholders on all prior Payment Dates.
CLASS A PERCENTAGE: _____%.
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CLASS A STATED MATURITY DATE: means the Payment Date occurring
in _____________.
CLASS B DISTRIBUTION SUB-ACCOUNT: the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Indenture.
CLASS B MONTHLY INTEREST: means, for any Payment Date, the
product of (i) one-twelfth, (ii) the Class B Note Rate and (iii) the Class B
Note Balance on the immediately preceding Payment Date (or, in the case of the
first Payment Date, the Closing Date) after giving effect to all principal
payments on the Class B Notes on such Payment Date. The Class B Monthly Interest
shall be calculated based upon a twelve month year of thirty days in each month,
except for the first Payment Date, for which interest shall accrue from the
Closing Date to but excluding such Payment Date.
CLASS B MONTHLY PRINCIPAL: means (A) on any Payment Date other
than the Class B Stated Maturity Date, the product of (x) the Class B Percentage
and (y) Monthly Principal, and (B) on the Class B Stated Maturity Date, the
entire amount of the then outstanding Class B Note Balance.
CLASS B NOTE BALANCE: means, as of the Closing Date,
$_________ and thereafter shall equal the Class B Note Balance as of the Closing
Date reduced by all principal payments on the Class B Notes.
CLASS B NOTE RATE: ____________ percent (_____%) per annum.
CLASS B NOTEHOLDER: at any time, any Person in whose name a
Class B Note is registered in the Note Register.
CLASS B NOTES: any Class B Notes described in Article II of,
and authorized by, and authenticated and delivered under, the Indenture.
CLASS B OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class B Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class B Noteholders on all prior Payment Dates.
CLASS B OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class B Monthly Principal due on
the Class B Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class B Noteholders on all prior Payment Dates.
CLASS B PERCENTAGE: ____%.
CLASS B STATED MATURITY DATE: means the Payment Date occurring
in ____________.
CLASS C DISTRIBUTION SUB-ACCOUNT: the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Indenture.
4
CLASS C MONTHLY INTEREST: means, for any Payment Date, the
product of (i) one-twelfth, (ii) the Class C Note Rate and (iii) the Class C
Note Balance on the immediately preceding Payment Date (or, in the case of the
first Payment Date, the Closing Date) after giving effect to all principal
payments on the Class C Note on such Payment Date. The Class C Monthly Interest
shall be calculated based upon a twelve month year of thirty days in each month,
except for the first Payment Date, for which interest shall accrue from the
Closing Date to but excluding such Payment Date.
CLASS C MONTHLY PRINCIPAL: means, (A) on any Payment Date
other than the Class C Stated Maturity Date, an amount equal to the product of
(x) the Class C Percentage and (y) the Monthly Principal and (B) on the Class C
Stated Maturity Date, the entire amount of the then outstanding Class C Note
Balance.
CLASS C NOTEHOLDER: at any time, any Person in whose name a
Class C Note is registered in the Note Register.
CLASS C NOTE BALANCE: means, as of the Closing Date,
$_________ and thereafter shall equal the Class C Note Balance as of the Closing
Date reduced by all principal payments on the Class C Notes.
CLASS C NOTE RATE: means ____________ percent (_____%) per
annum.
CLASS C NOTES: any Class C Notes described in Article II of,
and authorized by, and authenticated and delivered under, the Indenture.
CLASS C OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class C Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class C Noteholders on all prior Payment Dates.
CLASS C OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class C Monthly Principal due on
the Class C Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class C Noteholders on all prior Payment Dates.
CLASS C PERCENTAGE: ____%.
CLASS C STATED MATURITY DATE: means the Payment Date occurring
in ____________.
CLASS D DISTRIBUTION SUB-ACCOUNT: the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Indenture.
CLASS D MONTHLY INTEREST: means, for any Payment Date, the
product of (i) one- twelfth, (ii) the Class D Note Rate and (iii) the Class D
Note Balance on the immediately preceding Payment Date (or, in the case of the
first Payment Date, the Closing Date) after giving effect to all principal
payments on the Class D Notes on such Payment Date. The Class D Monthly Interest
shall be calculated based upon a twelve month year of thirty days in each month,
except for the first
5
Payment Date, for which interest shall accrue from the Closing Date to but
excluding such Payment Date.
CLASS D MONTHLY PRINCIPAL: means (A) on any Payment Date other
than the Class D Stated Maturity Date, the product of (x) the Class D Percentage
and (y) Monthly Principal, and (B) on the Class D Stated Maturity Date, the
entire amount of the then outstanding Class D Note Balance.
CLASS D NOTE BALANCE: means, as of the Closing Date,
$_________ and thereafter shall equal the Class D Note Balance as of the Closing
Date reduced by all principal payments on the Class D Notes.
CLASS D NOTE RATE: ___________ percent (_____%) per annum.
CLASS D NOTEHOLDER: means at any time, any Person in whose
name a Class D Note is registered in the Note Register.
CLASS D NOTES: any Class D Notes described in Article II of,
and authorized by, and authenticated and delivered under, the Indenture.
CLASS D OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class D Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class D Noteholders on all prior Payment Dates.
CLASS D OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class D Monthly Principal due on
the Class D Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class D Noteholders on all prior Payment Dates.
CLASS D PERCENTAGE: ____%.
CLASS D STATED MATURITY DATE: means the Payment Date occurring
in ____________.
CLASS E DISTRIBUTION SUB-ACCOUNT: the sub-account or
sub-accounts by that name established and maintained by the Trustee pursuant to
Section 3.01 of the Indenture.
CLASS E MONTHLY INTEREST: means, for any Payment Date, the
product of (i) one-twelfth, (ii) the Class E Note Rate and (iii) the Class E
Note Balance on the immediately preceding Payment Date (or, in the case of the
first Payment Date, the Closing Date) after giving effect to all principal
payments on the Class E Note on such Payment Date. The Class E Monthly Interest
shall be calculated based upon a twelve month year of thirty days in each month,
except for the first Payment Date, for which interest shall accrue from the
Closing Date to but excluding such Payment Date.
CLASS E MONTHLY PRINCIPAL: means, (A) on any Payment Date
other than the Class E Stated Maturity Date, an amount equal to the product of
(x) the Class E Percentage and (y) the
6
Monthly Principal and (B) on the Class E Stated Maturity Date, the entire amount
of the then outstanding Class E Note Balance.
CLASS E NOTEHOLDER: at any time, any Person in whose name a
Class E Note is registered in the Note Register.
CLASS E NOTE BALANCE: means, as of the Closing Date,
$_________ and thereafter shall equal the Class E Note Balance as of the Closing
Date reduced by all principal payments on the Class E Notes.
CLASS E NOTE RATE: means ____________ percent (_____%) per
annum.
CLASS E NOTES: any Class E Notes described in Article II of,
and authorized by, and authenticated and delivered under, the Indenture.
CLASS E OVERDUE INTEREST: means, for any Payment Date, the
excess, if any, of (a) the aggregate amount of Class E Monthly Interest payable
on all prior Payment Dates over (b) the aggregate amount of interest actually
paid to the Class E Noteholders on all prior Payment Dates.
CLASS E OVERDUE PRINCIPAL: means, as of any Payment Date, the
excess, if any, of (a) the aggregate amount of Class E Monthly Principal due on
the Class E Notes on all prior Payment Dates over (b) the aggregate amount of
principal actually paid to the Class E Noteholders on all prior Payment Dates.
CLASS E PERCENTAGE: ____%.
CLASS E STATED MATURITY DATE: means the Payment Date occurring
in ____________.
CLASS F DISTRIBUTION SUB-ACCOUNT: the sub-account or
sub-accounts by that name that may be established and maintained by the Trustee
pursuant to Section 3.01 of the Indenture.
CLASS F INSTRUMENTS: any Class F Instruments described in
Article II of the Indenture, that may be issued from time to time under the
Indenture and the related Supplement.
CLASS F INSTRUMENTHOLDER: at any time, any Person in whose
name a Class F Instrument is registered in the Note Register.
CLOSING DATE: _________________.
CODE: means the Internal Revenue Code of 1986, as amended.
COLLECTION ACCOUNT: the account or accounts by that name
established and maintained by the Trustee pursuant to Section 3.01 of the
Indenture.
COLLECTION PERIOD: with respect to each Payment Date related
thereto, the entire calendar month immediately preceding such Payment Date.
7
COMMISSION: means the Securities and Exchange Commission.
COMPANY: DVI Receivables Corp. VIII, a Delaware corporation
and its permitted successors and assigns (the "Transferor").
CONTRACT: each separate noncancelable Finance Lease, Fair
Market Value Lease, Leveraged Lease Loan, Lease Receivable Purchase or Secured
Equipment Note acquired from time to time by the Transferor from the
Contributor, directly or indirectly, pursuant to the Contribution and Servicing
Agreement. The term shall include any Contract transferred to the Transferor on
the Closing Date or, directly or indirectly, any Substitution Date in connection
with any substitution in accordance with the Contribution and Servicing
Agreement, respectively.
CONTRACT FILE: The following documents or instruments with
respect to each Contract:
(i) The executed original counterpart of the Contract
that constitutes "chattel paper" or an "instrument" for purposes of
Section 9-105(1)(b) and 9-305 of the UCC;
(ii) Documents evidencing or related to any insurance
policy with respect to the related Equipment;
(iii) A copy of each delivery and acceptance certificate
with respect to each Contract that is a lease or a copy of each
original invoice for the related Equipment and the receipt of delivery
related thereto with respect to each Contract that is a loan;
(iv) A copy of the financing statement filed with
respect to the related Equipment with evidence of proper recording;
(v) A copy of any related agreement with the vendor,
dealer or manufacturer of the Equipment or with any Person from whom
DVI acquired the Contract and rights in the related Equipment (if
applicable); and
(vi) Copies of such documents that the Servicer or its
Affiliates keep on file indicating that the Equipment is subject to the
interest of the Trustee, in accordance with their customary procedures
relating to the individual Contract, Obligor or Equipment.
CONTRACT PAYMENT: any payment which the Obligor is required to
make pursuant to a Contract on or before, with respect to the Initial Contracts,
October 2005, other than (i) certain amounts included in such payments for which
the Contributor is not the ultimate beneficiary thereof, including, but not
limited to, property taxes, sales taxes, manufacturer's maintenance costs,
insurance premiums and supplies and transaction costs and (ii) Purchase Option
Payments.
CONTRACT SCHEDULE: means the schedule of Contracts attached to
the Contribution and Servicing Agreement and the Indenture as amended from time
to time, setting forth the following information as to each Contract: (i) the
Contract Number, (ii) the original Equipment cost, if available, (iii) the
Discounted Contract Balance as of the Cut-off Date, (iv) the Obligor, (v) the
State of location of the related Equipment, (vi) the commencement date and
original term of each
8
Contract, (vii) the remaining term and amount of the Contract Payments for each
original Contract as of the Cut-off Date, (viii) the type of related Equipment,
(ix) the related cash flow schedule, (x) the type of Contract and (xi) the
applicable Pool on such Contracts. The Contract Schedule shall be deemed
supplemented and amended to incorporate therein any Substitute Contracts.
CONTRACT TRANSFER DATE: any date on or prior to the Closing
Date that, pursuant to the Contribution and Servicing Agreement, the Contributor
may transfer a Contract to the Transferor.
CONTRIBUTED PROPERTY: means all of the Contributor's right,
title and interest in and to (a) all Contracts, including those listed on the
Contract Schedule delivered by the Contributor to the Transferor and all
Substitute Contracts (including its interest in the proceeds of such Contracts
and including the assignment of the security interest of the Obligor of a
Leveraged Lease Loan in the equipment lease that is subject thereto), including
all payments received on or with respect to such Contracts after the Cut-off
Date but excluding the Retained Interest, and including any Broker Agreement
Rights relating to such Contracts, (b) any documents in the Contract Files
relating to the Contracts listed on the Contract Schedule delivered by the
Contributor to the Transferor, (c) Insurance Policies and Insurance Proceeds
relating to the Contracts (or the related Equipment) listed on the Contract
Schedule delivered by the Contributor to the Transferor, (d) an assignment or
grant, as the case may be, of a security interest in the Equipment (which shall
be a first priority perfected security interest in Equipment other than
Equipment relating to a Secured Equipment Note or Finance Lease and for which
the Original Equipment Cost is less than $20,000) and any collateral, including,
without limitation, any credit enhancement (other than accounts receivable of an
Obligor), which relates specifically to a Contract and (e) all payments, income
and proceeds of the foregoing or relating thereto.
CONTRIBUTION AND SERVICING AGREEMENT: the Contribution and
Servicing Agreement dated as of ________________ between the Company and the
Contributor, as the same may be amended or modified from time to time in
accordance with the provisions hereof and thereof.
CONTRIBUTION DATE: means, with respect to the Initial
Contracts, the Closing Date, and, with respect to any Substitute Contract, the
related Substitution Date.
CONTRIBUTOR: DVI Financial Services Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors.
CORPORATE TRUST OFFICE: the principal corporate trust office
of the Trustee located on the Closing Date at ______________, or at such other
address as the Trustee may designate from time to time by notice to the
Noteholders and the Transferor.
CUT-OFF DATE: for each Initial Contract, ____________; and as
to any Substitute Contract, the last day of the month prior to the month in
which such Substitute Contract is substituted.
DEFAULT: any occurrence that is, or with notice or the lapse
of time or both would become, an Indenture Event of Default.
9
DEFAULTED CONTRACT: any Contract with respect to which under
the Contribution and Servicing Agreement, (i) any Contract Payment (or portion
thereof) is delinquent for more than 180 days as of the last day of the calendar
month or (ii) the Servicer has declined to make a Servicer Advance with respect
to any delinquent amounts in accordance with the Contribution and Servicing
Agreement on the grounds that such advance would be a Nonrecoverable Advance or
(iii) any Contract has been rejected by or on behalf of the Obligor in a
bankruptcy proceeding or (iv) the Lessor with respect to any Leveraged Lease
Loan has rejected the related lease in a bankruptcy proceeding. For purposes of
clause (i), the delinquency of a Contract Payment shall be measured based on the
Contract Payments required to be made during the term of such Contract as of the
date that such Contract became part of the Trust Property without giving effect
to any modifications, (except those modifications permitted pursuant to Section
4.02 of the Contribution and Servicing Agreement) waivers or extensions
subsequently granted by the Servicer.
DEFINITIVE NOTE: a Note issued in definitive form pursuant to
the terms and conditions of Article Two of the Indenture.
DELINQUENCY CONDITION: shall be deemed to exist on and as of
any Determination Date if (x) the quotient of (1) the sum of the Discounted
Contract Balances of all Contracts listed as more than 90 days delinquent as of
the last day of the three immediately preceding calendar months, divided by (2)
_____ exceeds (y) the product of (1) ____ and (2) the quotient of (A) the sum of
the Aggregate Discounted Contract Balance as of the last day of the _____
immediately preceding Collection Periods, divided by (B) _____.
DELINQUENT CONTRACT: means, as of any Determination Date, any
Contract (other than a Contract which became a Defaulted Contract prior to such
Determination Date) with respect to which the Obligor has not paid all Contract
Payments due as of the end of the immediately preceding Collection Period. The
delinquency of a Contract Payment shall be measured based on the Contract
Payments required to be made during the term of such Contract as of the date
such Contract became part of the Trust Property without giving effect to any
modifications, waivers or extensions subsequently granted by the Servicer.
DEPOSITARY: means The Depository Trust Company until a
successor depositary shall have become such pursuant to the applicable
provisions of the Indenture and thereafter "Depositary" shall mean or include
each Person who is then a Depositary thereunder. For purposes of the Indenture,
unless otherwise specified pursuant to Section 2.02 thereof, any successor
Depositary shall, at the time of its designation and at all times while it
serves as Depositary, be a clearing agency registered under the Exchange Act,
and any other applicable statute or regulation.
DEPOSITARY PARTICIPANT: means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Depositary
effects book-entry transfers and pledges of securities deposited with the
Depositary.
DEPOSITED AVAILABLE FUNDS: has the meaning set forth in
Section 3.04(c) of the Indenture.
10
DETERMINATION DATE: with respect to any Payment Date, the
third Business Day immediately preceding each Payment Date.
DISCOUNT RATE: _______% per annum.
DISCOUNTED CONTRACT BALANCE: means, with respect to any
Contract, on any date of determination, an amount equal to the sum of (a)
present value of each remaining Contract Payment to become due under a Contract
before the last day of the month prior to the month of the Stated Maturity Date,
discounted monthly from the last day of the Collection Period in which such
Contract Payment is to become due at a rate equal to one-twelfth (or with
respect to the period from the Closing Date to but excluding the Initial Payment
Date, a fraction, the numerator of which is equal to the number of days from the
Closing Date to but excluding the Initial Payment Date, and the denominator of
which is equal to 360) of the Discount Rate and (b) one hundred percent (100%)
of the unpaid balance, as of such date of determination of Contract Payments due
with respect to such Contract which were not the subject of a Servicer Advance;
PROVIDED, HOWEVER, that, except for purposes of computing the Repurchase Amount
or for computing the Discounted Contract Balance of a Predecessor Contract, (x)
on the date a Contract becomes a Defaulted Contract, the Discounted Contract
Balance for such Contract will be zero and (y) any Purchase Option Payments
shall not be included in the Discounted Contract Balance. For purposes of
calculating the Discounted Contract Balance of a Contract, any Contract Payment
for which the Contributor received on or prior to the Cut-off Date a security
deposit or an advance payment shall be deemed to be zero.
DISTRIBUTION ACCOUNT: The account or accounts by that name
established and maintained by Trustee pursuant to Section 3.01 of the Indenture.
DVI: DVI Financial Services Inc., a corporation organized and
existing under the laws of the State of Delaware, and its successors.
DVI FAIR MARKET VALUE LEASE: A Fair Market Value Lease
originated by DVI.
DVI GROUP: As of any relevant date, the affiliated group
within the meaning of section 1504 of the Code of which DVI, Inc., or any
successor thereto, is the common parent, or of which DVI, the Transferor and the
Issuer are members, and shall mean any group eligible to file consolidated or
combined returns for state, local or foreign tax purposes which includes DVI and
the Transferor, regardless of the identity of the common parent.
DVI, INC.: DVI, Inc., a corporation organized and existing
under the laws of the State of Delaware, and its successors.
ELIGIBLE CONTRACT: means any Contract which meets the
Contributor's credit requirements in effect on the Closing Date and satisfies
each of the representations and warranties set forth in Section 2.03 of the
Contribution and Servicing Agreement with respect to the Initial Contracts and,
with respect to Substitute Contracts, also satisfy the requirements of Section
7.01(d) of the Contribution and Servicing Agreement on the related Substitution
Date.
ELIGIBLE DEPOSIT ACCOUNT: any one or more of the following
accounts:
11
(i) a segregated account with an Eligible Institution;
or
(ii) a segregated trust account with the corporate trust
department of a depositary institution organized under the laws of the
United States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank) subject
to regulations regarding fiduciary funds on deposit, having corporate
trust powers and acting as a trustee for funds deposited in such
account acceptable to the Rating Agencies.
ELIGIBLE INSTITUTION: any one or more of the following
institutions: (i) the corporate trust department of the Trustee, or (ii) a
depositary institution organized under the laws of the United States of America
or any one of the states thereof or the District of Columbia acceptable to the
Rating Agencies (or any domestic branch of a foreign bank), which (a)(1) has
either (w) a long-term unsecured debt rating acceptable to the Rating Agencies
or (x) a short-term unsecured debt rating or certificate of deposit rating
acceptable to the Rating Agencies or (2) the parent corporation of which has
either (y) a long-term unsecured debt rating acceptable to the Rating Agencies
or (z) a short-term unsecured debt rating or certificate of deposit rating
acceptable to the Rating Agencies and (b) whose deposits are insured by the
Federal Deposit Insurance Corporation.
ELIGIBLE INVESTMENTS: any and all of the following:
(i) direct obligations of, and obligations fully
guaranteed for timely payment by, the United States of America, the
Federal Home Loan Mortgage Corporation, the Federal National Mortgage
Association, the Federal Home Loan Banks or any agency or
instrumentality of the United States of America which has a rating of
at least Aaa by ▇▇▇▇▇'▇ and AAA by Duff & ▇▇▇▇▇▇ at the time of such
investment the obligations of which are backed by the full faith and
credit of the United States of America;
(ii) (A) demand and time deposits in, certificates of
deposit of, banker's acceptances issued by or federal funds sold by any
depository institution or trust company (including the Trustee or its
agent acting in their respective commercial capacities) incorporated
under the laws of the United States of America or any State thereof and
subject to supervision and examination by federal and/or state
authorities, so long as at the time of such investment or contractual
commitment providing for such investment, such depository institution
or trust company has a long term unsecured debt rating of at least A1
by ▇▇▇▇▇'▇ and AA+ by Duff & ▇▇▇▇▇▇ or A+ by Fitch and a short term
unsecured debt rating in the highest available rating category of each
of the Rating Agencies and provided that each such investment has an
original maturity of no more than 365 days, and (B) any other demand
or time deposit or deposit which is fully insured by the Federal
Deposit Insurance Corporation;
(iii) repurchase obligations with a term not to exceed 30
days with respect to any security described in clause (i) above and
entered into with a depository institution or trust company (acting as
a principal) rated A or higher by S&P, AA+ by Duff & ▇▇▇▇▇▇ or A by
Fitch and at least A1 or higher by ▇▇▇▇▇'▇ or Prime-1 by ▇▇▇▇▇'▇;
provided, however, that collateral transferred pursuant to such
repurchase obligation must (A) be valued weekly at current market price
plus accrued interest, (B) pursuant to such valuation, equal, at all
times, 105% of the cash transferred by the Trustee in exchange for such
collateral and (C)
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be delivered to the Trustee or, if the Trustee is supplying the
collateral, an agent for the Trustee, in such a manner as to
accomplish perfection of a security interest in the collateral by
possession of certificated securities;
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United
States of America or any State thereof which has a long term unsecured
debt rating in the highest available rating category of each of the
Rating Agencies at the time of such investment;
(v) commercial paper having an original maturity of
less than 365 days and issued by an institution having a long term
unsecured debt rating of A1 by ▇▇▇▇▇'▇, AA+ by Duff & ▇▇▇▇▇▇ or A+ by
Fitch and a short term unsecured debt rating in the highest available
rating category of each of the Rating Agencies at the time of such
investment;
(vi) a guaranteed investment contract approved in
writing by each of the Rating Agencies and issued by an insurance
company or other corporation having a long term unsecured debt rating
in the highest available rating category of each of the Rating Agencies
at the time of such investment;
(vii) money market funds having ratings in the highest
available rating category of each of the Rating Agencies at the time of
such investment; any such money market funds which provide for demand
withdrawals being conclusively deemed to satisfy any maturity
requirements for Eligible Investments set forth in the Indenture; and
(viii) any investment approved in writing by each of the
Rating Agencies.
EQUIPMENT: the underlying equipment subject to a Contract,
which is principally medical diagnostic and therapeutic equipment, together with
the income and proceeds thereof.
ERISA: means the Employee Retirement Income Security Act of
1974, as amended.
EXCHANGE ACT: means the Securities Exchange Act of 1934, as
amended.
EXCLUDED AMOUNTS: means any payments received from an Obligor
in connection with any late charges, taxes, fees or other charges imposed by any
Governmental Authority, any indemnity payments made by an Obligor for the
benefit of the originator or vendor under the related Contract or any payments
collected from an Obligor for the benefit of the originator or vendor which
relate to maintenance payments pursuant to the related Contract or maintenance
agreement, as applicable.
FAIR MARKET VALUE LEASE: means any Contract in the form of a
lease that contains a purchase option based on either (a) a stated non de
minimus percentage of the original cost of the related Equipment or (b) the fair
market value of the related Equipment at the expiration, or earlier termination,
of the Contract. A Fair Market Value Lease is identified as "FMV" on the
Contract Schedule.
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FINANCE LEASE: means any Contract in the form of a lease that
contains an end of term purchase option for a nominal amount. A Finance Lease is
identified as "FL" on the Contract Schedule.
GAAP: Generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
GLOBAL NOTE: either a Rule 144A Global Note or a Public Global
Note.
GRANT: grant, bargain, sell, convey, assign, transfer,
mortgage, pledge, create and perfect a security interest in and right of set-off
against, deposit, set over and confirm.
INDENTURE: the Indenture between the Issuer and the Trustee
dated as of _________ and as from time to time supplemented or amended pursuant
to the applicable provisions thereof.
INDENTURE EVENT OF DEFAULT: as defined in Section 6.01 of the
Indenture.
INITIAL AGGREGATE DISCOUNTED CONTRACT BALANCE: an amount equal
to $--------------.
INITIAL CONTRACT: any Contract acquired by the Transferor on
the Closing Date as set forth on Schedule 1 of the Indenture.
INITIAL PAYMENT DATE: means ________________.
INSURANCE POLICY: means, with respect to an item of Equipment,
any insurance policy required to be maintained by the Obligor pursuant to the
related Contract that covers physical damage to the Equipment.
INSURANCE PROCEEDS: means proceeds paid (i) by any insurer
pursuant to any Insurance Policy covering a Contract or (ii) if the Obligor has
self-insured with respect to a Contract, by the Obligor, in either case, net of
reasonable costs of collecting such proceeds not otherwise reimbursed.
INSURED EXPENSES: means expenses covered by any Insurance
Policy.
ISSUER: means DVI ___________, a Delaware _________.
ISSUER ORDER or ISSUER REQUEST: a written order or request
delivered to the Trustee and signed in the name of the Issuer by an Authorized
Officer.
LEASE RECEIVABLE PURCHASE: means any Contract in the form of a
purchase by DVI from a lessor of lessor's right, title and interest in Contract
Payments related to an underlying
14
equipment lease and that is secured by the lessor's rights in the related
Equipment. A Lease Receivable Purchase is identified as "LRP" on the Contract
Schedule.
LESSOR: means the Person who is the lessor under the equipment
lease related to a Leveraged Lease Loan or Lease Receivable Purchase.
LEVERAGED LEASE LOAN: means any Contract in the form of a loan
that is (a) made by the Contributor to a lessor of the related Equipment
pursuant to an underlying noncancelable equipment lease and (b) secured by a
pledge by such lessor to the Contributor of all of its right, title and interest
to such noncancelable equipment lease (including such lessor's right to receive
rental payments from the lessee on such equipment lease) and the related
Equipment. A Leveraged Lease Loan is identified as "LL" on the Contract
Schedule.
LOCK-BOX ACCOUNT: means an account designated as such,
established and maintained pursuant to Section 3.01 of the Indenture.
LOCK-BOX AGREEMENT: means the agreement dated as of _____, by
and between the Contributor and _____________, pursuant to which a Lock-Box
Account is established and maintained.
LOCK-BOX BANK: means, as of any date, the bank or trust
company at which a Lock- Box Account is established and maintained as of such
date.
MONTHLY INTEREST: means as of any Payment Date, the sum of (i)
the Class A Monthly Interest, (ii) the Class B Monthly Interest, (iii) the Class
C Monthly Interest, (iv) the Class D Monthly Interest, and (v) the Class E
Monthly Interest.
MONTHLY PRINCIPAL: means, with respect to any Payment Date, an
amount equal to the excess of (a) the Aggregate Discounted Contract Balance at
the close of business on the last day of the second preceding Collection Period
over (b) the Aggregate Discounted Contract Balance at the close of business on
the last day of the immediately preceding Collection Period.
MONTHLY SERVICER REPORT: the report attached as Exhibit B to
the Contribution and Servicing Agreement.
NONRECOVERABLE ADVANCE: any Servicer Advance previously made
in respect of a Delinquent Contract by the Servicer pursuant to the terms of the
Contribution and Servicing Agreement, which in the good faith judgment of the
Servicer and pursuant to an Officer's Certificate, will not be ultimately
recoverable by the Servicer from payments by the related Obligor or disposition
of the related Equipment.
NOTE BALANCE: means, as of the Closing Date, $___________ for
the Class A Notes, $_________ for the Class B Notes, $_________ for the Class C
Notes, $_________ for the Class D Notes and $_________ for the Class E Notes and
thereafter shall equal the Note Balance for such class reduced by all principal
payments on such class of Notes.
15
NOTE OWNER: means, with respect to a Global Note, the Person
who is the owner of such Global Note, as reflected on the books of the
Depositary, or on the books of a Person maintaining an account with the
Depositary (directly as a Depositary Participant or an indirect participant, in
each case in accordance with the rules of the Depositary).
NOTE PURCHASE AGREEMENT: Any agreement (other than the
Underwriting Agreement) between the Issuer and the parties specified therein,
relating to the purchase of privately placed Notes.
NOTE RATE: the annualized rate of interest on the relevant
class of Notes (_____% on the Class A Notes, _____% on the Class B Notes, _____%
on the Class C Notes, _____% on the Class D Notes, _____% on the Class E Notes
and the interest rate set forth in the Supplement for the Class F Instruments).
NOTE REGISTER: as defined in Section 2.04 of the Indenture.
NOTEHOLDER: at any time, any Person in whose name a Note is
registered in the Note Register.
NOTEHOLDER COUNSEL: means the single legal counsel as selected
by Noteholders evidencing more than 50% of the Voting Rights.
NOTES: any of the Class A Notes, Class B Notes, Class C Notes,
Class D Notes or Class E Notes described in Article II of the Indenture, and
authorized by, and authenticated and delivered under, the Indenture or any
Supplement.
OBLIGOR: the obligor under any Contract, including any
guarantor.
OFFERED NOTES: means the Class A Notes, the Class B Notes and
the Class C Notes.
OFFICER'S CERTIFICATE: a certificate delivered to the Trustee
and signed by Chairman, the President, a Vice President, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the relevant
entity.
OPINION OF COUNSEL: a written opinion of counsel, which shall
be reasonably satisfactory in form and substance to the Person to whom it is to
be delivered. Except as otherwise expressly provided in the Indenture, such
opinion may be delivered by inside or outside counsel for the Contributor, the
Transferor or the Issuer.
ORIGINAL EQUIPMENT COST: (i) with respect to each Contract
originated by DVI, the vendor's invoice price of the related Equipment at the
time of origination of the related Contract and (ii) with respect to each
Contract acquired by DVI from others, the amount recorded on DVI's records as
paid by DVI to acquire such Contract and the broker's interest in the related
Equipment.
OUTSTANDING OR OUTSTANDING: When used with reference to the
Notes and as of any particular date, any Note theretofore and thereupon being
authenticated and delivered except:
16
(i) any Note canceled by the Trustee at or before
said date;
(ii) any Note, or portion thereof, for payment of
redemption of which monies equal to the principal amount or redemption price
thereof, as the case may be, with interest to the date of maturity or
redemption, shall have theretofore been irrevocably deposited with the Trustee
(whether upon or prior to maturity or the redemption date of such Note);
(iii) any Note in lieu of or in substitution for
which another Note shall have been authenticated and delivered; and
(iv) any Note owned by the Transferor or any
Affiliate of the Transferor (except that, in determining whether the Trustee
shall be protected in relying upon any request, demand, authorization,
direction, notice, consent or waiver of Noteholders under the Indenture, only
Notes which the Trustee knows to be so owned shall be disregarded).
OVERDUE INTEREST: means, for any Payment Date, the sum of (i)
the Class A Overdue Interest, (ii) the Class B Overdue Interest, (iii) the Class
C Overdue Interest, (iv) the Class D Overdue Interest and (v) the Class E
Overdue Interest.
OWNERSHIP INTEREST: an ownership interest in a Global Note.
OWNER TRUSTEE: ______, acting not in its individual capacity
but solely as owner trustee under the Trust Agreement.
PARTIAL PREPAYMENT AMOUNT: with respect to the Collection
Period and a Contract for which the Obligor has requested to make a voluntary
partial prepayment and for which no Substitute Contract has been provided, an
amount equal to the excess, if any, of (A) the difference between (i) the
Discounted Contract Balance of such Contract as of the first day of such
Collection Period together with one month of interest thereon at the Discount
Rate and (ii) the Discounted Contract Balance of such Contract as of the first
day of such Collection Period calculated based on the amount of each Contract
Payment payable by the Obligor after giving effect to the reduction of such
Contract Payment which will result from such partial prepayment, minus (B) any
Contract Payments actually received by the Servicer with respect to the prepaid
portion of such Contract for the current Collection Period on or before the date
of such partial prepayment.
PARTIAL REDEMPTION PRICE: with respect to any Offered Note,
and as of any date of partial redemption fixed by the Issuer, an amount equal to
the sum of (x) the product of (i) the quotient of (A) the aggregate Discounted
Contract Balance of the Contracts in Pool B as of such date of partial
redemption, divided by (B) the Aggregate Discounted Contract Balance as of such
date of partial redemption and (ii) the outstanding Note Balance of such Offered
Note and (y) interest accrued thereon to, but not including, such Redemption
Date at the applicable Note Rate.
PAYMENT DATE: the ________ day of each month (or if such date
is not a Business Day, the immediately succeeding Business Day), commencing
________________.
17
PBGC: means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
PERSON: any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
PLACEMENT AGENT(S): means Prudential Securities Incorporated
and ▇▇▇▇▇▇ Brothers Inc.
PLAN: means an "employee benefit plan" within the meaning of
Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Code.
POOL: means either Pool A or Pool B.
POOL A: the Contracts identified on the Contract Schedule as
constituting Pool A and the other Trust Property related thereto.
POOL A AGGREGATE DISCOUNTED CONTRACT BALANCE: means, with
respect to any date of determination, the sum of the Discounted Contract
Balances of all Contracts in Pool A.
POOL A NON-PERFORMING CONTRACT SUBSTITUTION: shall have the
meaning ascribed thereto in Section 7.01(a)(1) of the Contribution and Servicing
Agreement.
POOL A PREPAID CONTRACT SUBSTITUTION: shall have the meaning
ascribed thereto in Section 7.01(a)(2) of the Contribution and Servicing
Agreement.
POOL B: the Contracts identified on the Contract Schedule as
constituting Pool B and the other Trust Property related thereto.
POOL B AGGREGATE DISCOUNTED CONTRACT BALANCE: means, with
respect to any date of determination, the sum of the Discounted Contract
Balances of all Contracts in Pool B.
POOL B GENERAL CONTRACT SUBSTITUTION: shall have the meaning
ascribed thereto in Section 7.01(b)(1) of the Contribution and Servicing
Agreement.
POOL B PREPAID CONTRACT SUBSTITUTION: shall have the meaning
ascribed thereto in Section 7.01(b)(2) of the Contribution and Servicing
Agreement.
PREDECESSOR NOTES: with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 of the Indenture in lieu of a
lost, destroyed or stolen Note (or a mutilated Note surrendered to the Trustee)
shall be deemed to evidence the same debt as the lost, destroyed or stolen Note
(or a mutilated Note surrendered to the Trustee).
18
PREDECESSOR CONTRACT: with respect to any Substitute Contract
acquired by the Transferor by substitution pursuant to Section 7 of the
Contribution and Servicing Agreement and by the Issuer by substitution pursuant
to Section 7 of the Pooling and Trust Agreement, the Contract or Contracts for
which such Substitute Contract or any intervening Substitute Contract has been
substituted.
PREPAYMENT AMOUNT: means, with respect to any Contract, the
sum of (1) the Discounted Contract Balance as of the first day of the Collection
Period preceding such prepayment, together with one month of interest thereon at
the Discount Rate, (2) any unreimbursed Servicer Advances with respect to such
Contract and (3) any Contract Payments due and outstanding under such Contract
that are not the subject of a Servicer Advance.
PRINCIPAL TERMS: as defined in Section 2.06(b) of the
Indenture.
PRIORITY PAYMENTS: shall have the meaning ascribed thereto in
Section 3.04(c) of the Indenture.
PROSPECTUS SUPPLEMENT: the prospectus supplement, dated the
Closing Date, relating to the Offered Notes.
PUBLIC GLOBAL NOTE: a Book-Entry Note evidencing all or part
of an issuance of the Class A Notes, Class B Notes, Class C Notes, or Class D
Notes to which the provisions of Article II of the Indenture shall apply.
PURCHASE OPTION PAYMENT: means as specified in each Contract,
any payment made by the Obligor to purchase the Equipment covered thereby,
including any funds received in respect of (w) an end of term purchase option
for $1, (x) an end of term option to purchase the Equipment at a stated
percentage of the original cost of the Equipment, (y) an option to purchase the
Equipment at the fair market value of the Equipment determined at the end of the
Contract term or (z) an end of term option to extend the term of the lease for
another immediately successive twelve month period upon the expiration of which
the lessee will own the equipment.
RATING AGENCIES: _________________.
RATINGS EFFECT: a reduction or withdrawal of a rating on a
class of Notes by a Rating Agency.
RECORD DATE: with respect to any Payment Date, the fifth
Business Day immediately preceding such Payment Date.
RECOVERIES: with respect to any Contract, any cash sale
proceeds, vendor recourse, payments under personal and other guaranties,
litigation judgments and the present value (calculated at the implicit yield on
each of the Defaulted Contracts) of re-lease rents.
REDEMPTION DATE: with respect to any redemption or partial
redemption of Notes, a date fixed pursuant to Section 10.01 of the Indenture.
19
REDEMPTION PRICE: with respect to any Note, and as of any
redemption date fixed by the Issuer, the sum of (x) the outstanding Note Balance
of such Note, and (y) interest accrued thereon to, but not including, such
Redemption Date at the applicable Note Rate.
REDEMPTION RECORD DATE: with respect to any redemption of
Notes, a date fixed pursuant to Section 10.01 of the Indenture.
RELATED PERSON: means any Person (whether or not incorporated)
which is under common control with the Contributor within the meaning of Section
14(c) of the Code, or of Section 4001(b) of ERISA.
REPORTABLE EVENT: means any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, a withdrawal from a Pension Plan
described in Section 4063 of ERISA, or a cessation of operations described in
Section 4062(3) of ERISA.
REPURCHASE AMOUNT: means, with respect to any Contract, the
sum of (1) the Discounted Contract Balance as of the first day of the Collection
Period preceding such repurchase, together with one month of interest thereon at
the Discount Rate and (2) any unreimbursed Servicer Advances with respect to
such Contract.
RESERVE ACCOUNT: The account specified in Section 3.01(a) of
the Indenture.
RESERVE ACCOUNT BALANCE: An amount equal to deposits of all
Reserve Account Deposit Amounts as reduced by (a) all Reserve Account Draws and
(b) all Reserve Account Withdrawals paid to the Transferor, or the Class F
Instrumentholder, if any.
RESERVE ACCOUNT DEPOSIT AMOUNT: means, on any Payment Date, an
amount equal to the excess of (A) the Reserve Account Required Amount over (B)
the amount on deposit in the Reserve Account (after giving effect to any Reserve
Account Draws on such Payment Date).
RESERVE ACCOUNT DRAW: For each Payment Date, the amount, if
an, withdrawn by the Trustee from the Reserve Account for payment of the
Priority Payments pursuant to Section 3.04(c) of the Indenture.
RESERVE ACCOUNT PROPERTY: The property set forth in Section
3.08(a) of the Indenture.
RESERVE ACCOUNT REQUIRED AMOUNT: means, with respect to the
Initial Payment Date, $____________ (the "Initial Reserve Account Required
Amount"); and, with respect to each Payment Date thereafter, means
____________________.
RESERVE ACCOUNT WITHDRAWAL: For each Payment Date, the amount
of such excess, if any, withdrawn from the Reserve Account for payment to the
Issuer or the Class F Instrumentholder pursuant to Section 3.08 of the
Indenture.
RESIDUAL PAYMENT: any amount received by the Servicer or the
Trustee as a Purchase Option Payment under a Contract or proceeds of the sale of
an item of Equipment subject to the lien
20
of the Indenture or rental payments from the re-leasing of an item of Equipment
subject to the lien of the Indenture after the final Contract Payment due and
payable under the initial terms of the Contract to which such item of Equipment
is subject is made.
RESIDUAL PRINCIPAL BALANCE: means the excess of (x) the
Aggregate Discounted Contract Balance, over (y) the sum of the Class A Note
Balance, the Class B Note Balance, the Class C Note Balance, the Class D Note
Balance and the Class E Note Balance.
RESPONSIBLE OFFICER: means, with respect to the Trustee, any
President, Senior Vice President, Vice President, Assistant Vice President,
Trust Officer or Assistant Secretary with direct responsibility for the
administration of the Trustee's obligations and duties under the Indenture and
with respect to a particular matter, any officer to whom such matter is referred
because of such other officer's knowledge or familiarity with the particular
subject.
RESTRICTING EVENT: the condition that exists on any Payment
Date if any one of the following conditions exists: (i) a Delinquency Condition
exists or (ii) an Indenture Event of Default has occurred and is then
continuing.
RETAINED INTEREST: All right, title and interest of the
Contributor in and to (i) the Contributed Property prior to and including the
Cut-off Date (ii) any periodic payment set forth in a Contract in respect of
maintenance, insurance or taxes and (iii) any Purchase Option Payments.
RULE 144A GLOBAL NOTE: means a Note evidencing all or a part
of an issuance of the Class E Notes, registered in the name of the Depositary or
its nominee, and delivered to the Depositary pursuant to the Depositary's
instruction, in accordance with Section 2.02 of the Indenture and bearing the
legend prescribed in Section 2.02 of the Indenture.
SCHEDULED TERMINATION DATE: with respect to any Contract, the
date upon which such Contract is scheduled to terminate in accordance with its
terms.
SECURED EQUIPMENT NOTE: means any Contract in the form of a
loan to the user of the related Equipment secured by such Equipment. A Secured
Equipment Note is identified as "LOAN" on the Contract Schedule.
SECURITYHOLDER: any Noteholder, as defined in the related
Indenture, or any Certificateholder, as defined in the related Trust Agreement.
SECURITIES ACT: The Securities Act of 1933 as amended.
SERVICER: the Contributor and any Successor Servicer appointed
pursuant to the terms of the Contribution and Servicing Agreement.
SERVICER ADVANCE: an advance made by the Servicer in
accordance with Section 5.01 of the Contribution and Servicing Agreement.
21
SERVICER EVENT OF DEFAULT: as defined in Section 10.01 of the
Contribution and Servicing Agreement.
SERVICER ORDER: a written order or request delivered to the
Trustee and signed in the name of the Servicer by an Authorized Officer.
SERVICING FEE: an amount equal to the product of (i)
one-twelfth (or with respect to the Initial Payment Date, a fraction, the
numerator of which is equal to the number of days from the Closing Date to but
excluding the Initial Payment Date, and the denominator of which is equal to
360), (ii) the Servicing Fee Rate and (iii) the Aggregate Discounted Contract
Balance as of the beginning of the previous Collection Period.
SERVICING FEE RATE: ____%.
SPECIAL PURPOSE ENTITY: a business trust which at all times
since its formation and at all times thereafter shall have complied with each of
the following:
(i) AFFILIATE SECURITIES. Such entity has not acquired
securities of the Transferor.
(ii) ALLOCATIONS. Such entity has allocated fairly and
reasonably any overhead for shared office space and uses separate
stationery, invoices and checks.
(iii) ARM'S LENGTH TRANSACTIONS. Such entity has not entered
into, nor has it been a party to, any transaction with the Transferor
or any affiliates of the Transferor except (i) for the Transaction
Documents and the transactions contemplated thereby and (ii) in the
ordinary course of its business and on terms which are intrinsically
fair and are no less favorable to it than would be obtained in a
comparable arm's-length transaction with an unrelated third party.
(iv) COMMINGLING. Such entity has not commingled its funds or
assets with those of any other entity, and has held its assets in its
own name.
(v) DIVISIONS. Such entity has not identified the Transferor,
or any affiliates of the Transferor, as a division or part of it.
(vi) FORMALITIES. Such entity has observed all corporate trust
formalities.
(vii) GUARANTEES. Such entity has not assumed or guaranteed or
become obligated for the debts of any other entity or held out its
credit as being available to satisfy the obligations of any other
entity.
(viii) IDENTIFICATION. Such entity has held and identified
itself as a separate and distinct entity under its own name and not as
a division or part of any other person or entity.
(ix) LOANS. Such entity has not made loans to any Person other
than the Notes.
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(x) NO DISSOLUTION. Such entity has not engaged in, sought, or
consented to any dissolution, winding up, liquidation, consolidation,
merger, asset sale, transfer of ownership interest, or amendment of its
certificate of formation without the prior written consent of the
Independent Directors of the Transferor.
(xi) NO OTHER ASSETS. Such entity has not had any assets as of
the Closing Date other than those related to its trust property.
(xii) NO OTHER BUSINESS. As of the Closing Date, such entity
has not engaged in any business unrelated to the ownership of its
assets.
(xiii) NO OTHER INDEBTEDNESS. As of the Closing Date, such
entity has no indebtedness other than the indebtedness evidenced by the
Notes and existing under the Indenture, and liabilities in the ordinary
course of business relating to the ownership and operation of its
assets.
(xiv) OWN LIABILITIES. Such entity has paid its own
liabilities out of its own funds and assets.
(xv) OWN NAME. Such entity has conducted its business in its
own name.
(xvi) PLEDGES. Such entity has not pledged its assets for the
benefit of any other person or entity other than pursuant to the
Transaction Documents.
(xvii) PURPOSE. Such entity was organized solely for the
purposes set forth in Section ___ of the _____ Agreement.
(xviii) SEPARATE ACCOUNTS. Such entity has maintained its
accounts, books and records separate from any other person or entity
and in accordance with GAAP.
(xix) SEPARATE RECORDS. Such entity has maintained its
accounting records and other entity documents separate from any other
person or entity.
STATED MATURITY DATE: with respect to the Class A Notes, the
Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes, the
Payment Date occurring in __________.
SUBORDINATION DEFICIENCY EVENT: the occurrence of the Class A
Note Balance being greater than the Aggregate Discounted Contract Balance as of
the date of determination.
SUBSTITUTE CONTRACT: an Eligible Contract substituted by the
Contributor pursuant to either Section 5.03 or Section 7.01 of the Contribution
and Servicing Agreement.
SUBSTITUTE CONTRACT TRANSFER FORM: a Substitute Contract
Transfer Form, substantially in the form of Exhibit A to the Pooling and Trust
Agreement.
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SUBSTITUTION DATE: any Business Day on which the Contributor
transfers a Substitute Contract to the Transferor (which Substitute Contract is
subsequently assigned to the Issuer and then pledged by the Issuer to the
Trustee).
SUCCESSOR SERVICER: the Trustee or any successor to the
Servicer pursuant to the Contribution and Servicing Agreement.
SUPPLEMENT: means a supplement to the Indenture complying with
the terms of the Indenture.
TRANSACTION DOCUMENTS: collectively, the Contribution and
Servicing Agreement, the Pooling and Trust Agreement, the Indenture, the
Underwriting Agreement, any Note Purchase Agreement(s) and any and all
agreements relating to the servicing of the Contracts and the issuance of the
Notes.
TRANSFERRED PROPERTY: means all of the Transferor's right,
title and interest to (a) the Contributed Property, (b) all of the Transferor's
rights under the Contribution and Servicing Agreement and each Substitute
Contract Transfer Form and (c) all payments, income and proceeds of the
foregoing or relating thereto.
TRANSFEROR: means DVI Receivables Corp. VIII, a Delaware
corporation, and its permitted successors and assigns (the "Company").
TRANSFEROR ORDER or TRANSFEROR REQUEST: a written order or
request delivered to the Trustee and signed in the name of the Transferor by an
Authorized Officer.
TRUST AGREEMENT: means the trust agreement dated as of
________________ by and among the Transferor and the Trustee.
TRUST INDENTURE ACT OR TIA: means the Trust Indenture Act of
1939, as amended from time to time, as in effect on any relevant date.
TRUST PROPERTY: (a) the Contributed Property, (b) all moneys
from time to time held by the Trustee pursuant to Section 3.01 of the Indenture
pending deposit in one of the accounts referred to therein, (c) all moneys from
time to time on deposit in each Lock-Box Account, Collection Account, the
Reserve Account, the Distribution Account, Class A Distribution Sub- Account,
Class B Distribution Sub-Account, Class C Distribution Sub-Account, Class D
Distribution Sub-Account, the Class E Distribution Sub-Account and Class F
Distribution Sub-Account, if any, including all investments and income from the
investment of such moneys, (d) the Contribution and Servicing Agreement, (e) the
Pooling and Trust Agreement and (f) all income, payments and proceeds of any of
the foregoing.
TRUSTEE: the Person named as the "Trustee" in the first
paragraph of the Indenture until a successor Person shall have become the
Trustee pursuant to the applicable provisions of the Indenture or the Trust
Agreement, as the case may be, and thereafter "Trustee" shall mean such
successor Person; PROVIDED, that the provisions of Sections 7.06 and 8.11 of the
Indenture, as
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applicable to any Person at any time serving as Trustee under the Indenture,
shall survive (with respect to any period prior to the date of such termination)
the termination of such Person's status as Trustee under the Indenture and the
succession of any other Person to such status.
UNDERWRITERS: means Graduated Securities' Incorporated and
▇▇▇▇▇▇ Brothers Inc.
UNDERWRITING AGREEMENT: means the underwriting agreement dated
as of __________, by and among the Underwriters, the Contributor, the Issuer and
the Transferor.
UNIFORM COMMERCIAL CODE or UCC: with respect to a particular
jurisdiction, the Uniform Commercial Code, as in effect from time to time in
such jurisdiction, or any successor statute thereto.
VOTING RIGHTS: For so long as any Notes remain outstanding,
and shall encompass, for so long as any Class A Note, Class B Note, Class C
Note, Class D Note or Class E Note is outstanding, the voting rights of each
such class which shall include, as of the date of determination (i) the votes of
Class A Noteholders evidencing 100% of the then-outstanding Class A Note
Balance, (ii) the votes of Class B Noteholders evidencing 100% of the
then-outstanding Class B Note Balance, (iii) the votes of the Class C
Noteholders evidencing 100% of the then-outstanding Class C Note Balance, (iv)
the votes of Class D Noteholders evidencing 100% of the then-outstanding Class D
Note Balance and (v) the votes of the Class E Noteholders evidencing 100% of the
then-outstanding Class E Note Balance. When none of the Class A Notes, Class B
Notes, Class C Notes, Class D Notes and Class E Notes is outstanding, 100% of
the Voting Rights shall be exercised by the Holders of the Class F Instrument,
if any. When used in the Transaction Documents, "50% of the Voting Rights" and
"662/3% of the Voting Rights" shall be deemed to refer to fifty and sixty-six
and 2/3 percent, respectively, of each class of Notes then Outstanding as
measured by the Outstanding Note Balance of such class on such date of
determination.
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