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to Systems in the principal amount of $4,253,000 (Trust
Note) that bore interest at the rate of 16� percent per
annum compounded quarterly and was secured by a security
interest in favor of seller in the rents from the master
leases and the equipment. The Trust Note required payment
of interest only for each of the first 4 quarters, in
arrears in the amount of $168,942.50 per quarter, and pay-
ment in the amount of $260,781.95 for each of the remaining
28 quarters.
As mentioned above, each payment due from the Trust
under the Trust Note was exactly offset by the aggregate
quarterly payments of fixed rent that the Trust was
entitled to receive from Equilease under the master leases.
The Investment Memorandum states as follows:
The term of each [Master] Lease coincides
with the term of the Trust Note. Payment of
fixed rent under each Lease will be due quarterly
in arrears commencing with the end of the first
quarter following the Closing and thereafter on
the last day of the calendar quarter to which
each such payment relates, and, if paid, all such
payments will be sufficient to pay the quarterly
installments under the Trust Note as and when
due. Any distributable cash flow to the Trust
will be dependent on the re-leasing of the
Equipment after the expiration of the initial
term of the User Leases, although the fixed rent
payments during that time, if paid, will be
sufficient to pay all installments on the Trust
Note as and when due.
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Last modified: May 25, 2011