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POOLING AND SERVICING AGREEMENT
among
CIT EQUIPMENT COLLATERAL 2001-1
as Issuer,
NCT FUNDING COMPANY, L.L.C.,
as Depositor,
CIT FINANCIAL USA, INC.
in its individual capacity and as Servicer
Dated as of February 1, 2001
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TABLE OF CONTENTS
Page
Article I DEFINITIONS..........................................................1
Section 1.01 Definitions....................................................1
Section 1.02 Usage of Terms................................................40
Section 1.03 Section References............................................40
Section 1.04 Accounting Terms..............................................40
Article II FUNDINGS OF TRUST; TRANSFERS OF CONTRACTS............. ...........41
Section 2.01 Creation and Funding of Trust; Transfer of Transferred
Assets to Trust.............................................41
Section 2.02 Conditions to Transfers.......................................42
Section 2.03 Acceptance by Trust...........................................44
Section 2.04 Conveyance of Substitute Contracts............................44
Section 2.05 Release of Excluded Amounts...................................46
Article III REPRESENTATIONS AND WARRANTIES....................................46
Section 3.01 Representations and Warranties Regarding the Depositor........47
Section 3.02 Representations and Warranties of the Servicer................49
Article IV PERFECTION OF TRANSFERS AND PROTECTION OF SECURITY INTERESTS.......51
Section 4.01 Custody of Contracts..........................................51
Section 4.02 Filings.......................................................52
Section 4.03 Name Change or Relocation.....................................52
Article V SERVICING OF CONTRACTS..............................................53
Section 5.01 Initial Servicer's Appointment and Acceptance; Responsibility
for Contract Administration.................................53
Section 5.02 General Duties................................................53
Section 5.03 Assignment or Replacement.....................................54
Section 5.04 Disposition Upon Termination of Contract......................54
Section 5.05 Subservicers..................................................54
Section 5.06 Further Assurance.............................................54
Section 5.07 Notice to Obligors............................................54
Section 5.08 Collection Efforts; Modification of Contracts.................55
Section 5.09 Prepayments of Certain Contracts..............................56
Section 5.10 Certain Extensions; Acceleration..............................56
Section 5.11 Taxes and Other Amounts.......................................56
Section 5.12 Suits by Servicer.............................................57
Section 5.13 Remittances...................................................57
Section 5.14 Servicer Advances.............................................57
Section 5.15 Realization Upon Defaulted Contract...........................57
Section 5.16 Maintenance of Insurance Policies.............................57
Section 5.17 Certain Other Duties With Respect to Trust....................58
Section 5.18 Servicing Compensation........................................58
Section 5.19 Payment of Certain Expenses by Servicer.......................58
Section 5.20 Records.......................................................58
Section 5.21 Inspection....................................................58
Section 5.22 Trust To Cooperate in Releases................................59
Section 5.23 Separate Entity Existence.....................................59
Section 5.24 Assignment of Servicing.......................................59
Article VI COVENANTS OF THE DEPOSITOR.........................................60
Section 6.01 LLC Existence.................................................60
Section 6.02 Contracts Not to be Evidenced by Promissory Notes.............60
Section 6.03 Security Interests............................................60
Section 6.04 Delivery of Collections.......................................60
Section 6.05 Regulatory Filings............................................60
Section 6.06 Compliance With Law...........................................60
Section 6.07 Activities....................................................60
Section 6.08 Indebtedness..................................................61
Section 6.09 Guarantees....................................................61
Section 6.10 Investments...................................................61
Section 6.11 Merger; Transfers.............................................61
Section 6.12 Payments......................................................61
Section 6.13 Other Agreements..............................................62
Section 6.14 Separate Entity Existence.....................................62
Section 6.15 Location; Records.............................................63
Section 6.16 Liability of Depositor; Indemnities...........................63
Section 6.17 Bankruptcy Limitations........................................64
Section 6.18 Limitation on Liability of Depositor and Others...............65
Section 6.19 Chief Executive Office........................................65
Article VII ESTABLISHMENT OF ACCOUNTS; PAYMENTS...............................65
Section 7.01 Trust Accounts; Collections...................................65
Section 7.02 Cash Collateral Account.......................................67
Section 7.03 Trust Account Procedures......................................67
Section 7.04 Securityholder Payments.......................................67
Section 7.05 Allocations and Payments......................................68
Section 7.06 Repurchases of, or Substitution for, Contracts for Breach of
Representations and Warranties..............................74
Section 7.07 Reassignment of Repurchased or Substituted Contracts..........74
Section 7.08 Financial's and Depositor's Repurchase Option.................75
Article VIII SERVICER DEFAULTS; SERVICING TRANSFER............................75
Section 8.01 Servicer Default..............................................75
Section 8.02 Servicing Transfer............................................76
Section 8.03 Appointment of Successor Servicer; Reconveyance; Successor
Servicer to Act.............................................77
Section 8.04 Notifications to Noteholders and the Equity
Certificateholders..........................................78
Section 8.05 Effect of Transfer............................................78
Section 8.06 Database File................................................ 79
Section 8.07 Successor Servicer Indemnification........................... 79
Section 8.08 Responsibilities of the Successor Servicer................... 79
Section 8.09 Servicer Not to Resign....................................... 80
Article IX SERVICER REPORTING................................................ 80
Section 9.01 Monthly Reports.............................................. 80
Section 9.02 Officer's Certificate........................................ 80
Section 9.03 Other Data................................................... 80
Section 9.04 Annual Reporting; Evidence as to Compliance...................80
Section 9.05 Annual Statement of Compliance from Servicer..................81
Article X TERMINATION.........................................................81
Section 10.01 Sale of Trust Assets..........................................81
Article XI MISCELLANEOUS......................................................82
Section 11.01 Amendments....................................................82
Section 11.02 Reserved......................................................83
Section 11.03 Governing Law.................................................83
Section 11.04 Notices.......................................................83
Section 11.05 Severability of Provisions....................................86
Section 11.06 Third Party Beneficiaries.....................................86
Section 11.07 Counterparts..................................................86
Section 11.08 Headings......................................................87
Section 11.09 No Bankruptcy Petition; Disclaimer and Subordination..........87
Section 11.10 Jurisdiction..................................................88
Section 11.11 Tax Characterization..........................................88
Section 11.12 Servicer Indemnity............................................88
Section 11.13 Limitation of Liability of Owner Trustee......................88
Section 11.14 WAIVER OF JURY TRIAL..........................................89
EXHIBITS
Exhibit A Form of Transfer Agreement ......................................A-1
Exhibit B Form of VFC Assignment...........................................B-1
Exhibit C Initial Schedule of Contracts....................................C-1
Exhibit D Form of Servicer's Monthly Report................................D-1
Exhibit E Form of Substitution Transfer Agreement..........................E-1
Exhibit F [Reserved].......................................................F-1
Exhibit G Schedule of Representations and Warranties.......................G-1
Exhibit H [Reserved].......................................................H-1
Exhibit I [Reserved].......................................................I-1
Exhibit J Minimum Value Filing Exceptions..................................J-1
This POOLING AND SERVICING AGREEMENT, dated as of February 1, 2001, is
among CIT Equipment Collateral 2001-1, a Delaware business trust (together with
its successors and assigns, the "Issuer" or the "Trust"), NCT Funding Company,
L.L.C., a Delaware limited liability company (together with its successors and
assigns, the "Depositor"), and CIT Financial USA, Inc. (together with its
successors and assigns, "CFUSA" and, in its capacity as the Servicer, the
"Servicer").
WHEREAS the Depositor desires to fund the Trust by selling, conveying and
assigning from time to time, pursuant hereto or Substitution Transfer Agreements
hereunder, designated Contracts or pools of Contracts together with certain
related security therefor and other related rights and property as further
described herein, which Contracts were originated by one or more Financing
Originators, or acquired by purchase and assignment by a Financing Originator
from the prior owner thereof, and subsequently conveyed (i) by certain Financing
Originators to CFUSA; (ii) by CFUSA to the Depositor, with respect to Contracts
and related assets both originated or acquired directly by CFUSA as a Financing
Originator, and acquired by CFUSA from the other Financing Originators as
described in clause (i) above; (iii) in the case of the VFC Contracts, by the
Depositor to the VFC Trust (as defined herein); and (iv) in the case of the VFC
Contracts, by the VFC Trust to the Depositor; and
WHEREAS the Trust is willing to purchase and accept assignment of such
Contracts and related assets; and
WHEREAS the Servicer is willing to service such Contracts and related
assets for the benefit and account of the Trust and the Holders pursuant to the
terms hereof;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
Article I
DEFINITIONS
Section 1.01 Definitions. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"Accounting Date" means, with respect to a Payment Date, the last day of
the preceding calendar month.
"Accrual Period" means, with respect to any Payment Date, with respect to
the Class A-1 Notes and the Class A-4 Notes, respectively, the period from and
including the immediately preceding Payment Date to but excluding such Payment
Date (or, in the case of the initial Accrual Period, from and including the
Closing Date to but excluding the first Payment Date following the Closing
Date), and with respect to each other Class of Notes, the period from and
including the 20th day of the immediately preceding calendar month to but
excluding the 20th day of the related calendar month, provided, that in each
case, the initial Accrual Period following the Closing Date shall be the period
from and including the Closing Date to but excluding March 20, 2001.
1
"Addition Notice" means, with respect to any transfer of Subsequent
Contracts to the Trust pursuant to Section 2.04 (and the Depositor's
corresponding prior purchase of such Contracts from CFUSA), a notice, which
shall be given at least five days prior to the related Subsequent Transfer Date,
identifying the Subsequent Contracts to be transferred, the Contract Principal
Balance of such Subsequent Contracts and the related Substitution Event (with
respect to an identified Contract or Contracts then in the Contracts Pool) to
which such Subsequent Contract relates, with such notice to be signed both by
the Depositor and CFUSA.
"Administration Agreement" means the Administration Agreement dated as of
February 1, 2001 by and among the Trust, CFUSA, the Depositor and the Indenture
Trustee.
"Administrator" shall be the party named as such under the Administration
Agreement.
"Affiliate" of any specified Person means any other Person controlling or
controlled by, or under common control with, such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Aggregate Principal Amount" means, with respect to any group of Notes, at
any date of determination, the sum of the Principal Amounts of such Notes on
such date of determination.
"Agreement" means this Pooling and Servicing Agreement, as amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
"Allocation Criteria" means, with respect to the allocation of Insurance
Proceeds or Liquidation Proceeds between the Trust (for inclusion as Pledged
Revenues) and the Depositor, as contemplated in the definition of Available
Pledged Revenues, that Insurance Proceeds or Liquidation Proceeds with respect
to the Contracts consisting of Leases are allocable pro rata between inclusion
as Available Pledged Revenues in respect of the Contract Pool, on the one hand,
and directly to the Depositor, on the other, based upon (i) for allocation to
Available Pledged Revenues, the Required Payoff Amount for such Lease
(determined as of the last day of the Collection Period during which such Lease
became a Defaulted Contract), and (ii) for allocation to the Depositor, the Book
Value of the related Equipment; provided, that in the event the Insurance
Proceeds or Liquidation Proceeds in respect of a particular Lease exceed the sum
of such Required Payoff Amount for such Lease plus the Book Value of the related
Equipment, any such excess shall be allocated solely to the Depositor.
"Amount Available" means, with respect to any Payment Date, (i) the sum of
the Available Pledged Revenues for such Payment Date and (ii) that portion of
the balance in the Cash Collateral Account available for withdrawal by the
Indenture Trustee in accordance with Section 7.05(d).
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"Applicable Security" means, with respect to a Vendor Loan, any (i)
Secondary Contract securing such Vendor Loan and (ii) Equipment securing such
Vendor Loan or a related Secondary Contract.
"Available Cash Collateral" means, with respect to a Payment Date, the
amount of funds equal to the lesser of (i) the amount on deposit in the Cash
Collateral Account (determined (a) exclusive of any Investment Earnings thereon
and (b) before giving effect to any deposit to be made or withdrawals from the
Cash Collateral Account with respect to such Payment Date), and (ii) the
Required Cash Collateral Amount.
"Available Pledged Revenues" means, as to any Payment Date, the sum of (i)
the Related Collection Period Pledged Revenues for such Payment Date, (ii) all
Purchase Amounts (other than any portion thereof attributable to the Book Value
of the Leased Equipment) and Servicer Advances on deposit in the Collection
Account as of the immediately preceding Deposit Date, (iii) the amount paid by
CFUSA or the Depositor to purchase the Contracts pursuant to Section 7.08 of
this Agreement on deposit in the Collection Account as of the immediately
preceding Deposit Date, and (iv) to the extent necessary to pay the Note
Interest Distributable Amount for such Payment Date, the Current Collection
Period Pledged Revenues for such Payment Date.
"Book Value" means, with respect to any Equipment subject to a Lease, the
value of such Equipment as shown on the accounting books and records of the
applicable Financing Originator (or the Depositor, in the case of Equipment
relating to Contracts being transferred pursuant to the VFC Assignment), as of
the Cut-Off Date for the related Lease (it being understood that Book Value
constitutes a measure of the lessor's residual interest in the Equipment as
shown on its books and records as of such date, net of the financial asset shown
on such books and records represented by the discounted Scheduled Payments owing
on the Lease).
"Business Day" means any day which is neither a Saturday or a Sunday, nor
another day on which banking institutions in the cities of Livingston, New
Jersey or New York, New York are authorized or obligated by law, executive
order, or governmental decree to be closed.
"Business Trust Statute" has the meaning specified in the Trust Agreement.
"Cash Collateral Account" means the Cash Collateral Account established and
maintained pursuant to Section 7.01 hereof.
"Cash Collateral Account Agreement" means the Loan Agreement dated as of
February 1, 2001, among the Depositor, the Trust, the Indenture Trustee, the
Servicer, the Cash Collateral Account Lenders and the Cash Collateral Account
Lenders' Agent, as the same may be amended, supplemented or otherwise modified
in accordance with the terms thereof.
"Cash Collateral Account Lenders" means the parties identified as lenders
in the Cash Collateral Account Agreement.
"Cash Collateral Account Lenders' Agent" means the party identified as
agent for the Cash Collateral Account Lenders in the Cash Collateral Account
Agreement.
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"Cash Collateral Initial Balance" means $61,418,927.
"Casualty Loss" means, with respect to any item of Equipment, the loss,
theft, damage beyond repair or governmental condemnation or seizure of such item
of Equipment.
"Certificate of Formation" means the limited liability company Certificate
of Formation of the Depositor.
"Certificate of Trust" has the meaning given such term in the Trust
Agreement.
"Certificate Register" has the meaning specified in the Trust Agreement.
"CFUSA" means CIT Financial USA, Inc., a Delaware corporation.
"CFUSA Contract" means a Contract originated or acquired by CFUSA
(including without limitation any Contract originated or acquired by CFUSA and
transferred to the Depositor and by the Depositor to the VFC Trust prior to the
Closing Date) but which is not a TCC Contract.
"CFUSA Contract Assets" means Contract Assets relating to CFUSA Contracts.
"CIT" means The CIT Group, Inc.
"Class" means any of the group of Notes or the Equity Certificate
identified herein as the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes, the Class D
Notes, or the Equity Certificate, as applicable.
"Class A Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class A-4 Notes.
"Class A Percentage" means 94%.
"Class A Principal Payment Amount" means: (1) with respect to any Payment
Date on or prior to the Payment Date on which the Principal Amount of the Class
A-1 Notes has been reduced to zero, the greater of (i) the excess of (x) the
Principal Amount of the Class A-1 Notes over (y) the Class A-1 Scheduled
Principal Balance and (ii) the excess of (x) the sum of the Principal Amount of
the Class A-1, Class A-2, Class A-3 and Class A-4 Notes over (y) the Class A
Target Principal Amount; and (2) with respect to any Payment Date thereafter,
the excess of (x) the sum of the Principal Amount of the Class A-2, Class A-3
and Class A-4 Notes over (y) the Class A Target Principal Amount; provided,
however, that in no event shall the Class A Principal Payment Amount exceed the
Principal Amount of the Class A Notes.
"Class A Target Principal Amount" means, with respect to any Payment Date,
the product of (i) the Class A Percentage and (ii) the Contract Pool Principal
Balance as of the related Accounting Date.
"Class A-1 Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class A-1 Interest Distributable Amount for the
4
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class A-1 Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to the product of (i) the Class A-1
Interest Rate, (ii) such excess, and (iii) a fraction equal to the number of
days in the related Accrual Period divided by 360.
"Class A-1 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-1 Monthly Interest Distributable Amount and
the Class A-1 Interest Carryover Shortfall for such Payment Date.
"Class A-1 Interest Rate" means 5.0325% per annum.
"Class A-1 Maturity Date" means December 20, 2001 (or, if such day is not a
Business Day, the next preceding Business Day).
"Class A-1 Monthly Interest Distributable Amount" means, (a) with respect
to the first Accrual Period and the related Payment Date, an amount equal to the
product of (i) the Class A-1 Interest Rate, (ii) the Initial Class A-1 Principal
Amount, and (iii) a fraction equal to the number of days in such Accrual Period
divided by 360, and (b) with respect to each subsequent Accrual Period and the
related Payment Date, an amount equal to the product of (i) the Class A-1
Interest Rate, (ii) the Principal Amount of the Class A-1 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-1 Noteholders on or prior to such immediately preceding
Payment Date (or, in the case of the first Payment Date, the Initial Class A-1
Principal Amount), and (iii) a fraction equal to the number of days in such
Accrual Period divided by 360.
"Class A-1 Notes" means the $180,000,000 aggregate principal amount of
5.0325% Receivable-Backed Notes, Class A-1, issued pursuant to the Indenture.
"Class A-1 Scheduled Principal Balance" means, with respect to each Payment
Date, the balance for such Payment Date as set forth in the following table.
5
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Payment Date Class A-1 Scheduled Principal Balance
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March 2001 $151,130,009
April 2001 $129,963,891
May 2001 $107,828,769
June 2001 $86,123,335
July 2001 $64,905,759
August 2001 $41,921,202
September 2001 $19,863,854
October 2001 $0
--
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"Class A-2 Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class A-2 Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class A-2 Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to the product of (i) the Class A-2
Interest Rate, (ii) such excess, and (iii) a fraction equal to one-twelfth.
"Class A-2 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-2 Monthly Interest Distributable Amount and
the Class A-2 Interest Carryover Shortfall for such Payment Date.
"Class A-2 Interest Rate" means 5.02% per annum.
"Class A-2 Maturity Date" means April 21, 2003 (or, if such day is not a
Business Day, the next succeeding Business Day thereafter).
"Class A-2 Monthly Interest Distributable Amount" means (a) with respect to
the first Accrual Period and the related Payment Date, an amount equal to the
product of (i) the Class A-2 Interest Rate, (ii) the Initial Class A-2 Principal
Amount, and (iii) a fraction equal to the number of days in such Accrual Period
divided by 360, and (b) with respect to each subsequent Accrual Period and the
related Payment Date, an amount equal to the product of (i) the Class A-2
Interest Rate, (ii) the Principal Amount of the Class A-2 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-2 Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to one-twelfth.
6
"Class A-2 Notes" means the $254,000,000 aggregate principal amount of
5.02% Receivable-Backed Notes, Class A-2, issued pursuant to the Indenture.
"Class A-3 Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class A-3 Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class A-3 Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to the product of (i) the Class A-3
Interest Rate, (ii) such excess, and (iii) a fraction equal to one-twelfth.
"Class A-3 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-3 Monthly Interest Distributable Amount and
the Class A-3 Interest Carryover Shortfall for such Payment Date.
"Class A-3 Interest Rate" means 5.23% per annum.
"Class A-3 Maturity Date" means October 20, 2004 (or, if such day is not a
Business Day, the next succeeding Business Day thereafter).
"Class A-3 Monthly Interest Distributable Amount" means (a) with respect to
the first Accrual Period and the related Payment Date, an amount equal to the
product of (i) the Class A-3 Interest Rate, (ii) the Initial Class A-3 Principal
Amount, and (iii) a fraction equal to the number of days in such Accrual Period
divided by 360, and (b) with respect to each subsequent Accrual Period and the
related Payment Date, an amount equal to the product of (i) the Class A-3
Interest Rate, (ii) the Principal Amount of the Class A-3 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-3 Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to one-twelfth.
"Class A-3 Notes" means the $233,000,000 aggregate principal amount of
5.23% Receivable-Backed Notes, Class A-3, issued pursuant to the Indenture.
Class A-4 Assumed Fixed Rate means a fixed rate of 5.435% per annum (based
on a 360 day year comprised of twelve 30-day months).
"Class A-4 Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class A-4 Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class A-4 Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to the product of (i) the Class A-4
Interest Rate, (ii) such excess, and (iii) a fraction equal to the number of
days in such Accrual Period divided by 360.
"Class A-4 Interest Distributable Amount" means, with respect to any
Payment Date, the sum of the Class A-4 Monthly Interest Distributable Amount and
the Class A-4 Interest Carryover Shortfall for such Payment Date.
"Class A-4 Interest Rate" means for each Accrual Period One-Month LIBOR
plus 0.19%.
7
"Class A-4 Maturity Date" means October 20, 2009 (or, if such day is not a
Business Day, the next succeeding Business Day thereafter).
"Class A-4 Monthly Interest Distributable Amount" means (a) with respect to
the first Accrual Period and the related Payment Date, an amount equal to the
product of (i) the Class A-4 Interest Rate, (ii) the Initial Class A-4 Principal
Amount, and (iii) a fraction equal to the number of days in such Accrual Period
divided by 360, and (b) with respect to each subsequent Accrual Period and the
related Payment Date, an amount equal to the product of (i) the Class A-4
Interest Rate, (ii) the Principal Amount of the Class A-4 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-4 Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to the number of days in such Accrual
Period divided by 360.
"Class A-4 Notes" means the $129,328,157 aggregate principal amount of
Floating Rate Receivable-Backed Notes, Class A-4, issued pursuant to the
Indenture.
"Class A-4 Swap Agreement" means the ISDA Master Agreement dated as of the
Closing Date between the Issuer and the Class A-4 Swap Counterparty, including
the related schedule and confirmation.
"Class A-4 Swap Counterparty" means Westdeutsche Landesbank Girozentrale,
in its capacity as Swap Counterparty under the Class A-4 Swap Agreement and its
successors and assigns in such capacity.
"Class B Floor" means, with respect to any Payment Date, an amount equal to
(i) 3.0% of the Initial Contract Pool Principal Balance, plus (ii) the Unfunded
Loss Amount, if any, for such Payment Date, minus (iii) the sum of the Principal
Amount of the Class C Notes and the Principal Amount of the Class D Notes (prior
to giving effect to any payments of principal on the Class C or Class D Notes on
such Payment Date) and the amount on deposit in the Cash Collateral Account
(after giving effect to withdrawals to be made on such Payment Date); provided,
however, that in no event will the Class B Floor be greater than the Principal
Amount of the Class B Notes immediately prior to such Payment Date nor less than
zero.
"Class B Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class B Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class B Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to the product of (i) the Class B
Interest Rate, (ii) such excess, and (iii) a fraction equal to one-twelfth.
"Class B Interest Distributable Amount" means, with respect to any Payment
Date, the sum of the Class B Monthly Interest Distributable Amount and the Class
B Interest Carryover Shortfall for such Payment Date.
"Class B Interest Rate" means 5.31% per annum.
"Class B Maturity Date" means October 20, 2009 (or, if such day is not a
Business Day, the next succeeding Business Day thereafter).
8
"Class B Monthly Interest Distributable Amount" means (a) with respect to
the first Accrual Period and the related Payment Date, an amount equal to the
product of (i) the Class B Interest Rate, (ii) the Initial Class B Principal
Amount, and (iii) a fraction equal to the number of days in such Accrual Period
divided by 360, and (b) with respect to each subsequent Accrual Period and the
related Payment Date, an amount equal to the product of (i) the Class B Interest
Rate, (ii) the Principal Amount of the Class B Notes on the immediately
preceding Payment Date, after giving effect to all payments of principal to
Class B Noteholders on or prior to such immediately preceding Payment Date, and
(iii) a fraction equal to one-twelfth.
"Class B Notes" means the $12,707,364 aggregate principal amount of 5.31%
Receivable-Backed Notes, Class B, issued pursuant to the Indenture.
"Class B Percentage" means 1.5%.
"Class B Principal Payment Amount" means the lesser of (i) the excess, if
any, of (a) the Total Principal Payment Amount over (b) the Class A Principal
Payment Amount and (ii) the excess, if any, of (a) the Principal Amount of the
Class B Notes over (b) the greater of (1) the Class B Target Principal Amount
and (2) the Class B Floor, if any; provided, however, that in no event will the
Class B Principal Payment Amount exceed the Principal Amount of the Class B
Notes.
"Class B Target Principal Amount" means, with respect to any Payment Date,
the product of (i) the Class B Percentage and (ii) the Contract Pool Principal
Balance as of the related Accounting Date.
"Class C Floor" means, with respect to any Payment Date, (i) 2.3% of the
Initial Contract Pool Principal Balance, plus (ii) the Unfunded Loss Amount, if
any, for such Payment Date, minus (iii) the sum of the Principal Amount of the
Class D Notes (prior to giving effect to any payments of principal on the Class
D Notes on such Payment Date) and the amount on deposit in the Cash Collateral
Account (after giving effect to withdrawals to be made on such Payment Date);
provided, however, that in no event will the Class C Floor be greater than the
Principal Amount of the Class C Notes immediately prior to such Payment Date nor
less than zero. Furthermore, if the Principal Amount of the Class B Notes
immediately prior to any Payment Date is less than or equal to the Class B Floor
for such Payment Date, the Class C Floor with respect to such Payment Date will
equal the Principal Amount of the Class C Notes immediately prior to such
Payment Date.
"Class C Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class C Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class C Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to the product of (i) the Class C
Interest Rate, (ii) such excess, and (iii) a fraction equal to one-twelfth.
"Class C Interest Distributable Amount" means, with respect to any Payment
Date, the sum of the Class C Monthly Interest Distributable Amount and the Class
C Interest Carryover Shortfall for such Payment Date.
"Class C Interest Rate" means 5.53% per annum.
9
"Class C Maturity Date" means October 20, 2009 (or, if such day is not a
Business Day, the next succeeding Business Day thereafter).
"Class C Monthly Interest Distributable Amount" means (a) with respect to
the first Accrual Period and the related Payment Date, an amount equal to the
product of (i) the Class C Interest Rate, (ii) the Initial Class C Principal
Amount, and (iii) a fraction equal to the number of days in such Accrual Period
divided by 360, and (b) with respect to each subsequent Accrual Period and the
related Payment Date, an amount equal to the product of (i) the Class C Interest
Rate, (ii) the Principal Amount of the Class C Notes on the immediately
preceding Payment Date, after giving effect to all payments of principal to
Class C Noteholders on or prior to such immediately preceding Payment Date, and
(iii) a fraction equal to one-twelfth.
"Class C Notes" means the $16,943,152 aggregate principal amount of 5.53%
Receivable-Backed Notes, Class C, issued pursuant to the Indenture.
"Class C Percentage" means 2.0%.
"Class C Principal Payment Amount" means the lesser of (i) the excess, if
any, of (a) the Total Principal Payment Amount over (b) the sum of the Class A
Principal Payment Amount and the Class B Principal Payment Amount and (ii) the
excess, if any, of (a) the Principal Amount of the Class C Notes over (b) the
greater of (1) the Class C Target Principal Amount and (2) the Class C Floor, if
any; provided, however, that in no event will the Class C Principal Payment
Amount exceed the Principal Amount of the Class C Notes.
"Class C Target Principal Amount" means, with respect to any Payment Date,
the product of (i) the Class C Percentage and (ii) the Contract Pool Principal
Balance as of the related Accounting Date.
"Class D Floor" means, with respect to any Payment Date, (i) 1.7% of the
Initial Contract Pool Principal Balance, plus (ii) the Unfunded Loss Amount, if
any, for such Payment Date, minus (iii) the amount on deposit in the Cash
Collateral Account (after giving effect to withdrawals to be made on such
Payment Date); provided, however, that in no event will the Class D Floor be
greater than the Class D Principal Balance immediately prior to such Payment
Date nor less than zero. Furthermore, if the Principal Amount of the Class C
Notes immediately prior to any Payment Date is less than or equal to the Class C
Floor for such Payment Date, the Class D Floor with respect to such Payment Date
will equal the Principal Amount of the Class D Notes immediately prior to such
Payment Date.
"Class D Interest Carryover Shortfall" means, with respect to any Payment
Date, the excess, if any, of the Class D Interest Distributable Amount for the
preceding Payment Date over the amount that was actually distributed in respect
of interest on the Class D Notes on such preceding Payment Date, plus, to the
extent permitted by law, an amount equal to the product of (i) the Class D
Interest Rate, (ii) such excess, and (iii) a fraction equal to one-twelfth.
"Class D Interest Distributable Amount" means, with respect to any Payment
Date, the sum of the Class D Monthly Interest Distributable Amount and the Class
D Interest Carryover Shortfall for such Payment Date.
10
"Class D Interest Rate" means 6.11% per annum.
"Class D Maturity Date" means October 20, 2009 (or, if such day is not a
Business Day, the next succeeding Business Day thereafter).
"Class D Monthly Interest Distributable Amount" means (a) with respect to
the first Accrual Period and the related Payment Date, an amount equal to the
product of (i) the Class D Interest Rate, (ii) the Initial Class D Principal
Amount, and (iii) a fraction equal to the number of days in such Accrual Period
divided by 360, and (b) with respect to each subsequent Accrual Period and the
related Payment Date, an amount equal to the product of (i) the Class D Interest
Rate, (ii) the Principal Amount of the Class D Notes on the immediately
preceding Payment Date, after giving effect to all payments of principal to
Class D Noteholders on or prior to such immediately preceding Payment Date, and
(iii) a fraction equal to one-twelfth.
"Class D Notes" means the $21,178,941 aggregate principal amount of 6.11%
Receivable-Backed Notes, Class D, issued pursuant to the Indenture.
"Class D Percentage" means 2.5%.
"Class D Principal Payment Amount" means the lesser of (i) the excess, if
any, of (a) the Total Principal Payment Amount over (b) the sum of the Class A
Principal Payment Amount, the Class B Principal Payment Amount and the Class C
Principal Payment Amount and (ii) the excess, if any, of (a) the Principal
Amount of the Class D Notes over (b) the greater of (1) the Class D Target
Principal Amount and (2) the Class D Floor, if any; provided, however, that in
no event will the Class D Principal Payment Amount exceed the Principal Amount
of the Class D Notes.
"Class D Target Principal Amount" means, with respect to any Payment Date,
the product of (i) the Class D Percentage and (ii) the Contract Pool Principal
Balance as of the related Accounting Date.
"Closing Date" means March 9, 2001
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" means the account so designated established pursuant
to Section 7.01.
"Collection Account Property" means the Collection Account, all amounts and
investments held from time to time in the Collection Account (whether in the
form of deposit accounts, physical property, book-entry securities,
uncertificated securities or otherwise), and all proceeds of the foregoing.
"Collection Period" means a period beginning on the first day of a calendar
month and ending on, but not including, the first day of the next calendar
month, provided that the first Collection Period shall be the period beginning
on the Initial Cut-Off Date and ending on, but not including, the first day of
the calendar month immediately following the calendar month in which the Closing
Date occurs.
11
"Commission" means the United States Securities and Exchange Commission.
"Computer Disk" means the computer disk generated by the Servicer (or
applicable Financing Originator acting as subservicer as described in Section
5.05), which provides information relating to Contracts in the Contract Pool and
which was used by such party in selecting the related Contracts for conveyance
and inclusion in such Contract Pool, and includes the master file and the
history file as well as servicing information with respect to such Contracts.
"Contract" means each End-User Contract and each Vendor Loan listed on any
Schedule of Contracts but, unless otherwise specified herein, shall not refer to
any Secondary Contract.
"Contract Assets" means, with respect to any Contracts (including
Substitute Contracts) and related assets conveyed or being conveyed to the
Depositor pursuant to a Substitution Assignment Agreement, the VFC Assignment or
the Non-VFC Purchase Agreement, and concurrently conveyed or being conveyed by
the Depositor to the Trust pursuant to this Pooling Agreement or a Substitution
Transfer Agreement, all right, title and interest of CFUSA or the VFC Trust, as
the case may be, in, to and under:
(i) such Contracts, and all monies due or to become due in
payment of such Contracts on and after the relevant Cut-Off Date, and
including Scheduled Payments due but not yet received prior to the
relevant Cut-Off Date and all other Scheduled Payments (including in
respect of any Guaranteed Residual Investment) due or becoming due on
or after the relevant Cut-Off Date, any Prepayments, any payments in
respect of a casualty or early termination, any Liquidation Proceeds
received with respect thereto, but excluding any Scheduled Payments
both due and actually received prior to the related Cut-Off Date and
any Excluded Amounts;
(ii) the Financed Items related to such Contracts and, in the
case of any Vendor Loan, related Applicable Security, including all
proceeds from any sale or other disposition of such Financed Items
(but subject to the exclusion and release herein of Excluded Amounts)
and any Guaranteed Residual Investment;
(iii) the related Contract Files;
(iv) all payments made or to be made in the future with respect
to such Contracts or the Obligor thereunder under any Vendor
Agreements with the relevant Financing Originator and under any
guarantee or similar credit enhancement with respect to such
Contracts;
(v) all Insurance Proceeds with respect to each such Contract;
and
(vi) all income from and proceeds of the foregoing.
"Contract File" means, with respect to each Contract, the fully executed
original counterpart (for UCC purposes) of the Contract, the original
12
certificate of title or other title document with respect to the related
Equipment (if applicable), and otherwise such documents or electronic entries,
if any, that the Servicer (or applicable Financing Originator) keeps on file in
accordance with Customary Policies and Procedures evidencing ownership of such
Equipment (if applicable), and all other documents originally delivered to the
Financing Originator or held by the Servicer (or subservicer under Section 5.05)
with respect to any Contract.
"Contract File Locations" means, with respect to CIT Communications Finance
Corporation, New Jersey, with respect to CIT Technology Financing Services,
Inc., New Jersey and Florida, and with respect to CFUSA: Texas, Illinois, New
Jersey and Connecticut.
"Contract Pool" means, as of any date of determination, the aggregate of
the Contracts which have been conveyed to the Trust and which constitute as of
such date Trust Assets under the terms and provisions hereof.
"Contract Pool Principal Balance" means with respect to any Payment Date,
the sum of the Contract Principal Balances (computed as of the related
Accounting Date) for all Contracts.
"Contract Principal Balance" means as of any Accounting Date, with respect
to any Contract, the present value of the unpaid Scheduled Payments due on such
Contract after such Accounting Date (excluding all Scheduled Payments due on or
prior to, but not received as of, such Accounting Date, as well as any Scheduled
Payments due after, but received as of, such Accounting Date), after giving
effect to any Prepayments received on or prior to such Accounting Date,
discounted monthly at the Discount Rate (assuming, for purposes of such
calculation, that each Scheduled Payment is due on the last day of the
applicable Collection Period); provided that, for purposes of computing the
Total Principal Payment Amount or the Required Cash Collateral Amount for a
given Payment Date (as well as all Payment Dates thereafter), the Contract
Principal Balance of any Contract which became a Defaulted Contract during the
related Collection Period or was required to be purchased by CFUSA as of the
last day of the related Collection Period in accordance with Section 5.01 of the
Purchase and Sale Agreement, will be deemed to be zero on and after the last day
of such Collection Period.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Servicer or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Corporate Trust Office" means the corporate trust office of the Owner
Trustee in the State of Delaware, which office initially shall be located at 499
Mitchell Road, Millsboro, DE 19966 or such other office at such other address in
the State of Delaware as the Owner Trustee may designate from time to time by
notice to the Equity Certificateholder, the Servicer, the Administrator and the
Depositor.
"CPR" means a conditional prepayment rate which assumes that a fraction of
the outstanding Contract Pool is prepaid on each Payment Date and also assumes
that all Contracts have the same initial principal balance and amortize at the
same rate.
13
"CSA" means each conditional sales agreement, including, as applicable,
schedules, subschedules, supplements and amendments to a master conditional
sales agreement, pursuant to which specified assets were conditionally sold to
an Obligor at specified monthly, quarterly, semi-annual or annual payments.
"Current Collection Period Pledged Revenues" means, with respect to any
Payment Date, the amount of Pledged Revenues in the Collection Account as of the
immediately preceding Deposit Date which were received by the Servicer after the
end of the related Collection Period, including all Liquidation Proceeds so
received but excluding any Purchase Amount.
"Customary Policies and Procedures" means, with respect to any Contract
Assets, the customary standards, policies and procedures of the relevant
Financing Originator with respect to such Contract Assets in effect at the time
of the Cut-Off Date with respect thereto, as the same may be changed from time
to time (provided that any such change does not materially impair (i) the
collectibility of the related Contract, or (ii) the Servicer's ability to
perform its obligations under this Agreement with respect thereto).
"Cut-Off Date" means either or both (as the context may require) the
Initial Cut-Off Date and any Substitution Cut-Off Date, as applicable to the
Contract or Contracts in question.
"Date of Processing" means, with respect to any transaction or Pledged
Revenue, the date on which such transaction or Pledged Revenue is first recorded
(and, in the case of a transaction or Pledged Revenue related to a particular
Contract, identified as to such particular Contract) on the related Financing
Originator's or the Servicer's computer master file of Contracts (without regard
to the effective date of such recordation).
"Defaulted Contract" means a Contract in the Contract Pool with respect to
which there has occurred one or more of the following: (i) all or some portion
of any Scheduled Payment under the Contract (constituting at least ten percent
(10%) of such Scheduled Payment due) is more than 180 days delinquent from its
original due date (or, with respect to a Contract for which there exists
available payment recourse to a Vendor to satisfy the amount in default, and
which recourse was not yet available (pursuant to the contractual terms thereof)
or had not yet been paid by the Vendor prior to the end of such 180 day period,
then at such time thereafter as the Vendor shall have failed to pay such
defaulted amount in accordance with the provisions of the Program Agreement,
Vendor Assignment or other agreement with the Vendor providing such recourse),
(ii) the Servicer has determined in its sole discretion, in accordance with
Customary Policies and Procedures (and taking into account any available Vendor
recourse), that such Contract is not collectible; or (iii) the End-User under
such Contract (or applicable Vendor, if such Contract is a Vendor Loan) becomes
the subject of an Insolvency Event.
"Delinquent Contract" means any Contract as to which all or a portion of a
Scheduled Payment (constituting at least ten percent (10%) of such Scheduled
Payment due) is more than 60 days delinquent from its original due date.
14
"Deposit Date" means the Business Day immediately preceding each Payment
Date.
"Depositor" means the "Depositor" as defined in the preamble hereto, or any
successor entity thereto.
"Determination Date" means, with respect to any Payment Date, the second
Business Day prior to such Payment Date.
"Discount Rate" means 6.026%.
"Dollar" and "$" means lawful currency of the United States of America.
"Eligible Contract" means each Contract owned (prior to its conveyance by a
TCC Financing Originator to CFUSA under the VFC Conveyancing Agreement or the
Non-VFC Conveyancing Agreement, as the case may be, if a TCC Contract, prior to
its conveyance by CFUSA to the Depositor under the VFC Purchase Agreement or the
Non-VFC Purchase Agreement, as the case may be, if a CFUSA Contract, and prior
to its conveyance by the VFC Trust to the Depositor pursuant to the VFC
Assignment, if a VFC Contract) by a TCC Financing Originator, CFUSA or the VFC
Trust, as the case may, and with respect to which each of the following is true
(to the extent applicable to such type of Contract) at the time of its
conveyance to the Trust on the Closing Date (or Substitution Transfer Date, as
applicable):
(a) the information with respect to the Contract, any Secondary
Contract securing the obligations under such Contract, and the Financed
Items related to the Contract, delivered to the Servicer by or at the
direction of CFUSA under the Substitute VFC Purchase Agreement or the
Non-VFC Purchase Agreement, as the case may be, or by or at the direction
of the VFC Trust pursuant to the VFC Assignment is true and correct in all
material respects;
(b) immediately prior to the transfer of such Contract and any related
Equipment (or security interest therein) or Applicable Security to the
Depositor (and the Depositor's concurrent transfer thereof to the Trust),
such Contract was owned by CFUSA or the VFC Trust (and by the Depositor
following the transfer by CFUSA or the VFC Trust) free and clear of any
adverse claim, other than Permitted Liens; and immediately prior to the
transfer of such Contract (if a TCC Contract) and any related Equipment (or
security interest therein) or Applicable Security by the applicable TCC
Financing Originator to CFUSA, such Contract was owned by the applicable
TCC Financing Originator free and clear of any adverse claim, other than
with respect to Permitted Liens;
(c) the Contract is neither a Defaulted Contract nor a Delinquent
Contract;
(d) no provision of the Contract has been waived, altered or modified
in any material respect, except as indicated in the Contract File;
15
(e) the Contract is a valid and binding payment obligation of the
Obligor and is enforceable in accordance with its terms (except as may be
limited by applicable Insolvency Laws and the availability of equitable
remedies);
(f) the Contract is not subject to litigation, or to rights of
rescission, setoff, counterclaim or defense and, to CFUSA's or the
Servicer's knowledge, no such rights have been asserted or threatened with
respect to the Contract;
(g) the Contract, at the time it was made, had been originated in
compliance (in all material respects) with applicable law, and did not
violate the laws of the United States or any state in any material respect;
(h) (i) the Contract and any related Financed Item or interest therein
(other than Excluded Residual Investments) have not been sold, transferred,
assigned or pledged by the relevant Financing Originator, CFUSA (in respect
of TCC Contracts) or the VFC Trust (in the case of VFC Contracts) to any
other Person (other than (a) the sale of Contracts and any related financed
or interest therein to CFUSA or to the Depositor and then the VFC Trust and
(b) the financed sale of Equipment to an End-User effected through an
End-User Contract), and (ii) if such Contract finances Equipment, either
(A) such Contract is secured by a fully perfected lien or ownership
interest in favor of the relevant Financing Originator or, in the case of
Equipment relating to the VFC Contracts, the Depositor, on or in respect of
the related Equipment (other than as contemplated by the Minimum Value
Filing Exception), or, if the Contract is a Vendor Loan, the Vendor Loan is
secured by a fully perfected lien or ownership interest in favor of the
relevant Financing Originator or the VFC Trust in the related Applicable
Security, or (B) in the case of such a Contract secured by a Vehicle,
within 90 calendar days of the origination or acquisition of such Contract
by the relevant Financing Originator all applicable state registration or
recording procedures were initiated, and the Financing Originator's
interest in such Vehicle will be so noted or recorded within 180 days of
such acquisition or origination, or a certificate of title or similar
evidence of recordation on which the Financing Originator's interest has
been noted has been obtained;
(i) if the Contract constitutes an "instrument" or "chattel paper" for
purposes of the UCC, there is not more than one "secured party's original"
counterpart of the Contract and such original counterpart is in the
Contract File;
(j) all filings (including filings of UCC financing statements)
necessary (i) in respect of Contracts consisting of TCC Contracts, to
evidence or perfect the conveyance or transfer of the relevant TCC
Financing Originator's ownership interest in the TCC Contract, and the TCC
Financing Originator's corresponding interest in the related Equipment or
Applicable Security, as applicable, to CFUSA, and (ii) in respect of all
Contracts to evidence or perfect the conveyance or transfer of CFUSA's or
the VFC Trust's ownership interest in the Contract, and CFUSA's
corresponding interest in the related Equipment or Applicable Security, as
applicable, to the Depositor (as well as the concurrent conveyance of such
property hereunder, other than ownership interests in Equipment, from the
Depositor to the Trust), have been made or provided for in all appropriate
jurisdictions; provided, that UCC financing statement filings with respect
to Equipment or Applicable Security which name the Financing Originator as
secured party have not been amended to indicate either CFUSA (with respect
to TCC Contracts), the Depositor or the Trust as an assignee (although
16
separate UCC filings were made against the relevant Financing Originator's
interest in Applicable Security in each jurisdiction where a related Vendor
is located); and provided further, that only filings in the State of New
Jersey have been made in favor of the Trust as secured party against the
Depositor as debtor describing as collateral (among other things) the
Depositor's ownership interest in Equipment, in respect of the security
interest in Equipment owned by the Depositor which has been granted to the
Trust pursuant to Section 2.01 hereof.
(k) the Obligor is not, to CFUSA's knowledge, subject to bankruptcy or
other insolvency proceedings;
(l) the Obligor's billing address is in the United States or Puerto
Rico, and the Contract is a U.S. dollar-denominated obligation;
(m) the Contract does not require the prior written notification to or
consent of an Obligor or contain any other restriction on the transfer or
assignment of the Contract;
(n) either (x) the obligations of the related Obligor under such
Contract are irrevocable and unconditional and non-cancelable (it being
understood that Contracts which are prepayable in accordance with their
terms shall not, by virtue of that fact alone, be deemed revocable,
conditional or cancelable) or, if not irrevocable and unconditional, have
the benefit of a Vendor Guarantee or (y) with respect to certain Leases
with Lessees that are governmental entities or municipalities, if such
Lease is canceled in accordance with its terms, either (1) the Vendor that
assigned such Lease to the applicable Financing Originator is
unconditionally obligated to repurchase such lease from the Financing
Originator for a purchase price not less than the Contract Principal
Balance of such Lease (as of the date of cancellation), or (2) pursuant to
the Purchase and Sale Agreements, CFUSA has indemnified the Depositor
against such cancellation in an amount at least equal to the Contract
Principal Balance of such Lease (as of the date of cancellation), less any
amounts paid by the Vendor pursuant to clause (1);
(o) no selection procedure adverse to the interests of the Trust or
the Equity Certificateholder was used in selecting the Contract for the
Contract Pool;
(p) the Obligor under the Contract is required to maintain casualty
insurance or to self-insure with respect to the related Equipment in
accordance with Customary Policies and Procedures;
(q) the Contract constitutes chattel paper, an account, an instrument
or a general intangible, in each case as defined under the UCC;
(r) the Contract is not a "consumer lease" as defined in Section
2A-103(1)(e) of the UCC;
(s) if such Contract is a Lease, to the best knowledge of the relevant
Financing Originator, the Lessee thereunder has accepted and has had
reasonable opportunity to inspect the related Equipment;
17
(t) except as provided in clause (n) above, the Contract is not
subject to any guarantee by the Financing Originator, nor has the Financing
Originator established any specific credit reserve with respect to the
related Obligor;
(u) if such Contract is a Lease, such Lease is a "triple net lease"
under which the Obligor is responsible for the maintenance, taxes and
insurance with respect to the related Equipment in accordance with general
industry standards applicable to such item of Equipment;
(v) if such Contract is a Vendor Loan, such Vendor Loan is secured by
an Eligible Secondary Contract having an aggregate Contract Principal
Balance for such Eligible Secondary Contract (determined as of the relevant
Cut-Off Date for such Vendor Loan) not less than the outstanding principal
amount of such Vendor Loan;
(w) such Contract is not an obligation of the United States of America
or an agency, department, or instrumentality of the United States of
America;
(x) such Contract contains provisions customary to similar financing
agreements for Financed Items, which provisions are sufficient and
enforceable (except as may be limited by applicable Insolvency Laws and the
availability of equitable remedies) to enable the relevant Financing
Originator (or its assignees, including the VFC Trust, the Depositor and
the Trust) to realize against the Financed Items related thereto (to the
extent such Financed Items secure or support the payment of the Contract);
(y) if the Obligor in respect of such Contract is a state or local
governmental entity or municipality, the conveyance of such a Contract
under and pursuant to the Transaction Documents does not violate applicable
state or municipal laws or regulations (if any) restricting or prohibiting
the assignment of claims against or obligations of such Obligor; and
(z) such Contract was originated or acquired by the applicable
Financing Originator in accordance with its customary policies and
procedures as in effect at the time of such origination or acquisition.
"Eligible Investments" means any of the following:
(i) direct obligations of, and obligations fully guaranteed by,
the United States of America, the Federal Home Loan Mortgage
Corporation (if then rated Aaa by Moody's), the Federal National
Mortgage Association, or any agency or instrumentality of the United
States of America the obligations of which are backed by the full
faith and credit of the United States of America and which are
non-callable;
(ii) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, or federal funds sold by any
depository institution or trust company (including the Trustees or any
Affiliate of the Trustees, acting in their commercial capacity)
incorporated under the laws of the United States of America or any
state thereof or the District of Columbia (or any domestic branch or
agency of a foreign bank) and subject to supervision and examination
by federal and/or state authorities, so long as, at the time of such
18
investment or contractual commitment providing for such investment,
the commercial paper or other short-term debt obligations of such
depository institution or trust company have been rated at least P-1
or higher from Moody's, A-1+ from Standard & Poor's and, if rated by
Fitch, F-1+ from Fitch; or any other demand or time deposit or
certificate of deposit which is fully insured by the Federal Deposit
Insurance Corporation and which is rated at least P-1 by Moody's;
(iii) repurchase obligations with respect to any security
described in either clause (i) or (ii) above and entered into with any
institution whose commercial paper is at least rated P-1 from Moody's,
at least A-1+ by Standard & Poor's and, if rated by Fitch, at least
F-1+ by Fitch;
(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 have a credit rating of at least A2
or P-1 from Moody's, at least AAA from Standard & Poor's and, if rated
by Fitch, at least AAA from Fitch, at the time of such investment;
(v) commercial paper (which may be issued by CIT) having a rating
of at least P-1 from Moody's, at least A-1+ from Standard & Poor's
and, if rated by Fitch, at least F-1+ from Fitch, at the time of such
investment;
(vi) money market funds which are rated Aaa by Moody's, at least
AAAm or AAAm-G by Standard & Poor's and, if rated by Fitch, at least
AAA by Fitch, including funds which meet such rating requirements for
which the Trustees or an affiliate of the Trustees serves as an
investment advisor, administrator, shareholder servicing agent and/or
custodian or subcustodian, notwithstanding that (i) such Trustee or an
affiliate of such Trustee charges and collects fees and expenses from
such funds for services rendered, (ii) such Trustee charges and
collects fees and expenses for services rendered pursuant to this
instrument, and (iii) services performed for such funds and pursuant
to this instrument may converge at any time. (The Depositor and the
Servicer specifically authorize such Trustee or an affiliate of such
Trustee to charge and collect all fees and expenses from such funds
for services rendered to such funds, in addition to any fees and
expenses such Trustee may charge and collect for services rendered
pursuant to this instrument); and
(vii) any other investments approved by the Rating Agencies.
"Eligible Repurchase Obligations" means repurchase obligations with respect
to any security that is a direct obligation of, or fully guaranteed by, the
United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United
States of America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (c)(ii) of the
definition of Eligible Investments.
"Eligible Secondary Contract" shall mean each Secondary Contract
(i) that satisfies all the criteria set forth in the definition
of "Eligible Contract" except clauses (b), (h) (with respect to
ownership by the Financing Originator of the Contract) and (w)
thereof, and except that the term "Obligor" shall mean "End-User" in
all such criteria;
19
(ii) with respect to which Secondary Contract and the proceeds
thereof the relevant Financing Originator (or, in the case of VFC
Contracts, the VFC Trust, as assignee) has a duly perfected first
priority lien; and
(iii) with respect to which (A) if such Secondary Contract
secures a Vendor Loan constituting a TCC Contract, the transfer of the
TCC Financing Originator's security interest in such Secondary
Contract and the proceeds thereof to CFUSA, the transfer of CFUSA's
interest so acquired to the Depositor, and, if applicable, the
Depositor's transfer of its interest therein to the VFC Trust and the
VFC Trust's transfer of such interest back to the Depositor, is
effective to create in favor of the Depositor a lien therein and such
lien has been duly perfected, or (B) if the Secondary Contract instead
secures a Vendor Loan constituting an CFUSA Contract, then the
transfer of CFUSA's security interest in such Secondary Contract and
the proceeds thereof to the Depositor, and if applicable, the
Depositor's transfer of its interest therein to the VFC Trust and the
VFC Trust's transfer of such interest back to the Depositor, is
effective to create in favor of the Depositor a lien therein and such
lien has been duly perfected.
"Eligible Servicer" means CFUSA, the Trustees or any other Person qualified
to act as Servicer of the Contracts under applicable federal and state laws and
regulations, which Person services not less than $100,000,000 in outstanding
principal amount of equipment financing contracts.
"End-User" shall mean any party that uses the Financed Items pursuant to an
End-User Contract.
"End-User Contract" shall mean any CSA, Secured Note, Lease, IPA, or other
Financing Agreement covering Financed Items originated or acquired by an
Originator.
"Equipment" means with respect to any Contract, the tangible assets
constituting "goods" within the meaning of the UCC, in each case financed or
leased by an Obligor pursuant to a Contract, or which otherwise provide security
for the payment of amounts payable thereunder.
"Equity Certificate" has the meaning specified in the Trust Agreement.
"Equity Certificateholder" means the Person in whose name the Equity
Certificate is registered in the Certificate Register.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" has the meaning specified in the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended or
supplemented from time to time.
"Excluded Amounts" means (i) any collections on deposit in the Collection
Account or otherwise received by the Servicer on or with respect to the Contract
Pool or related Equipment, which collections are attributable to any taxes, fees
20
or other charges imposed by any Governmental Authority, (ii) any collections
representing reimbursements of insurance premiums or payments for services that
were not financed by the applicable Originator, (iii) collections relating to
security deposits, and (iv) collections representing Late Charges, documentation
fees, administrative charges or extension fees on any Contract, or maintenance
premiums in respect of related Equipment.
"Excluded Residual Investments" means Residual Investments, other than
Guaranteed Residual Investments.
"FDIC" shall mean the Federal Deposit Insurance Corporation, or any
successor thereto.
"Financed Items" means Equipment, Software, Services and other property and
services that are permitted to be financed under Contracts in accordance with
Customary Policies and Procedures of the applicable Financing Originator.
"Financing Agreement" means each financing agreement covering Financed
Items, other than a CSA, a Secured Note, a Lease or an IPA.
"Financing Originator" means any of the following as of the Closing Date:
CIT Technology Financing Services, Inc; CIT Communications Finance Corporation;
and CFUSA.
"Fitch" means Fitch, Inc., or any successor thereto.
"Governmental Authority" means the United States of America, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to, government.
"Guaranteed Residual Investment" means each Residual Investment with
respect to which the Financing Originator may look to either the Vendor or to
the related Obligor on an End-User Contract constituting a Lease, and not just
the value of the related Equipment itself, to recover its full Residual
Investment.
"Holder" has the meaning specified in the Indenture.
"Indebtedness" means, with respect to any Person at any date, without
duplication, (a) all indebtedness of such person for borrowed money or for the
deferred purchase price of property or services (other than current liabilities
incurred in the ordinary course of business and payable in accordance with
customary trade practices) or which is evidenced by a note, bond, debenture or
similar instrument, (b) all obligations of such Person under capital leases, (c)
all obligations of such Person in respect of acceptances or letters of credit
issued or created for the account of such Person, (d) all liabilities secured by
any Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof, and (e) obligations
of such Person under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (d) above.
21
"Indenture" means the Indenture, dated as of the date hereof, between the
Issuer and the Indenture Trustee, as amended, supplemented or otherwise modified
from time to time.
"Indenture Trustee" means the Person acting as Indenture Trustee under the
Indenture, its successors in interest and any successor trustee under the
Indenture.
"Independent", when used with respect to any specified Person, means such a
Person who (i) is in fact independent of the Issuer, the Depositor or the
Servicer, (ii) is not a director, officer or employee of any Affiliate of the
Issuer, the Depositor or the Servicer, (iii) is not a person related to any
officer or director of the Issuer, the Depositor or the Servicer or any of their
respective Affiliates, (iv) is not a holder (directly or indirectly) of more
than 10% of any voting securities of the Issuer, the Depositor or the Servicer
or any of their respective Affiliates, and (v) is not connected with the Issuer,
the Depositor or the Servicer as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
"Ineligible Contract" has the meaning specified in Section 7.06.
"Initial Class A-1 Principal Amount" means $180,000,000.
"Initial Class A-2 Principal Amount" means $254,000,000.
"Initial Class A-3 Principal Amount" means $233,000,000.
"Initial Class A-4 Principal Amount" means $129,328,157.
"Initial Class B Principal Amount" means $12,707,364.
"Initial Class C Principal Amount" means $16,943,152.
"Initial Class D Principal Amount" means $21,178,941.
"Initial Contract Assets" means those Contract Assets conveyed to the Trust
on the Closing Date.
"Initial Contract Pool Principal Balance" is $847,157,614.
"Initial Contracts" means those Contracts conveyed to the Trust on the
Closing Date.
"Initial Cut-Off Date" means February 1, 2001.
"Initial Principal Amount" means, when used in the context of a reference
to an individual Class of Notes, the initial principal amount applicable to such
Class as defined above.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Insolvency Law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part of its property,
or ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
22
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable Insolvency Law now or hereafter in effect, or the consent
by such Person to the entry of an order for relief in an involuntary case under
such law, taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property; or (c) or the making by such Person of any general
assignment for the benefit of creditors; or (d) the failure by such Person
generally to pay its debts as such debts become due; or (e) the admission by
such Person in writing of its inability generally to pay its debts when the same
become due; or (f) the taking of action by such Person in furtherance of any of
the foregoing.
"Insolvency Laws" means the Bankruptcy Code of the United States of America
and all other applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of payments,
or similar debtor relief laws from time to time in effect affecting the rights
of creditors generally.
"Insurance Policy" means, with respect to any Contract, an insurance policy
covering physical damage to or loss of the related Equipment.
"Insurance Proceeds" means, depending on the context, any amounts payable
or any payments made, to the Servicer (or applicable Financing Originator) under
any Insurance Policy.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Investment Earnings" means, the investment earnings (net of losses and
investment expenses) on amounts on deposit in the Collection Account, Note
Distribution Account and the Cash Collateral Account.
"IPA" means each installment payment agreement, including as applicable,
schedules, subschedules, supplements and amendments, pursuant to which the
relevant Originator financed the purchase or acquisition of specified assets by
an Obligor for specified monthly, quarterly, semiannual or annual payments.
"Issuer" is defined in the preamble hereto.
"Late Charges" means any late payment fees paid by Obligors on Contracts.
"Lease" means each agreement constituting a "lease" within the meaning of
Section 2A-103 of the UCC, and including, as applicable, schedules,
subschedules, supplements and amendments to a master lease, pursuant to which
the Originator, as lessor, leased specified assets to a Lessee at a specified
monthly, quarterly, semiannual or annual rental.
"Lessee" means, with respect to any Lease, the Obligor with respect to such
Lease.
23
"LIBOR Determination Date" means (a) for the Accrual Period from and
including the Closing Date to but excluding March 20, 2001, March 2, 2001, and
(b) for each Accrual Period thereafter, the second business day prior to the
commencement of such Accrual Period. For purposes of computing One Month LIBOR
on a LIBOR Determination Date, a business day is any business day on which
dealings in deposits in United States dollars are transacted in the London
interbank market.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), equity
interest, participation interest, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional transfer or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing.
"Liquidation Expenses" means, with respect to any Defaulted Contract, the
aggregate amount of all out-of-pocket expenses reasonably incurred by the
Servicer (including amounts paid to or expenses incurred by any subservicer,
other than subservicing fees, if any) in accordance with Customary Policies and
Procedures in connection with the repossession, refurbishing and disposition of
any related Equipment, and other out-of-pocket costs related to the liquidation
of any such Equipment, including reasonable attorneys fees incurred in the
attempted collection of any amount owing pursuant to such Defaulted Contract,
and including amounts determined by the Servicer in its reasonable discretion as
payable in respect of any sales, use, personal property or other taxes assessed
or to be assessed on repossessed or liquidated Equipment.
"Liquidation Loss" means, with respect to any Defaulted Contract, the
amount, if any, by which (a) the Required Payoff Amount for such Defaulted
Contract as of the date such Contract became a Defaulted Contract exceeds (b)
that portion of the Liquidation Proceeds for such Defaulted Contract allocated
to the Issuer.
"Liquidation Proceeds" means, with respect to a Defaulted Contract,
proceeds from the transfer, lease or re-lease of the related Financed Items,
Insurance Proceeds, and any other recoveries with respect to such Defaulted
Contract and the related Financed Items (including, without limitation, amounts
received pursuant to a Program Agreement), but net of Liquidation Expenses, Late
Charges, amounts payable to a Vendor in respect of (and in amounts not
exceeding) amounts previously paid by such Vendor in respect of such Contract
under Vendor recourse provisions, and amounts, if any, so received that are
required to be refunded to the Obligor on such Contract.
"Material Adverse Effect" means, with respect to any event or circumstance,
a material adverse effect on:
(i) the ability of CFUSA, any Financing Originator, the VFC
Trust, the Depositor, the Trust or the Servicer to perform in all
material respects its obligations under this Agreement or any other
Transaction Document;
24
(ii) the validity or enforceability of this Agreement, any other
Transaction Document, or the Contracts, or the collectibility of the
Contracts; or
(iii) the status, existence, perfection, priority or
enforceability of the Trust's interest in the Contracts and the other
Trust Assets.
"Material Modification" means a termination or release (including pursuant
to prepayment), or an amendment, modification or waiver, or equivalent similar
undertaking or agreement, by the Servicer with respect to a Contract which would
not otherwise be permitted under the standards and criteria set forth in
Sections 5.08, 5.09 and/or 5.10 hereof.
"Maturity Date" means, as applicable, the Class A-1 Maturity Date, Class
A-2 Maturity Date, Class A-3 Maturity Date, Class A-4 Maturity Date, Class B
Maturity Date, Class C Maturity Date, or Class D Maturity Date.
"Minimum Value Filing Exception" means the variation from the relevant
Financing Originator's normal policies and practices with respect to filing UCC
financing statements against an Obligor describing Equipment which is the
subject of a Contract, in each case as set forth in Exhibit J hereto.
"Monthly Report" has the meaning specified in Section 9.01.
"Moody's" means Moody's Investors Service, Inc., or any successor thereto.
"Non-VFC Contract Assets" means the Contract Assets pertaining to the
Non-VFC Contracts.
"Non-VFC Contracts" means Contracts conveyed by CFUSA to the Depositor
pursuant to the Non-VFC Purchase Agreement, as listed in Schedule A to the
Non-VFC Purchase Agreement.
"Non-VFC Conveyancing Agreement" means the Non-VFC Conveyancing Agreement,
dated as of February 1, 2001, by and among the Financing Originators as the same
may be amended, supplemented, restated or otherwise modified from time to time.
"Non-VFC Purchase Agreement" means the Non-VFC Purchase and Sale Agreement,
dated February 1, 2001, by and among CFUSA, as the seller, and the Depositor, as
purchaser, as the same may be amended, supplemented, restated or otherwise
modified from time to time.
"Note" means any one of the notes of the Trust of any Class executed and
authenticated in accordance with the Indenture.
"Note Distribution Account" means the account established and maintained as
such pursuant to Section 7.01.
"Note Interest Distributable Amount" means to the extent applicable, the
sum of the Class A-1 Interest Distributable Amount, the Class A-2 Interest
25
Distributable Amount, the Class A-3 Interest Distributable Amount, the Class A-4
Interest Distributable Amount, the Class B Interest Distributable Amount, the
Class C Interest Distributable Amount and the Class D Interest Distributable
Amount.
"Note Principal Distributable Amount" means with respect to any Payment
Date, the Total Principal Payment Amount, provided, however, that in no event
may the Note Principal Distributable Amount with respect to any Payment Date
exceed the Principal Amount of the Notes immediately prior to such Payment Date.
"Note Register" has the meaning given such term in Section 2.04 of the
Indenture.
"Noteholder" means any registered holder of a Note.
"Obligor" means, with respect to any Contract, the Person or Persons
obligated to make payments with respect to such Contract, including any
guarantor thereof (and including, with respect to a Contract consisting of a
Vendor Loan, the Vendor obligated in respect of such Vendor Loan).
"Officer's Certificate" means, with respect to any Person, a certificate
signed by an authorized officer of such Person and delivered to the party
entitled to receipt thereof under any applicable Transaction Document.
"One-Month LIBOR" means, as of any LIBOR Determination Date and with
respect to the related Accrual Period, the rate of interest per annum equal to
the London interbank offered rate for deposits in U.S. dollars having a maturity
of one month (commencing on the first day of such Accrual Period) which appears
on Telerate Page 3750 as of 11:00 a.m., London time, on such LIBOR Determination
Date. If such rate does not appear on Telerate Page 3750, One-Month LIBOR for
such LIBOR Determination Date will be determined on the basis of the rates at
which deposits in U.S. dollars having a maturity of one month and in a principal
amount of not less than U.S. $1,000,000, are offered at approximately 11:00
a.m., London time, on such LIBOR Determination Date to prime banks in the London
interbank market by the Reference Banks. The Servicer will request the principal
London office of each of the Reference Banks to provide a quotation of its rate
to the Indenture Trustee. If at least two such quotations are provided,
One-Month LIBOR will be the arithmetic mean (rounded upwards, if necessary, to
the nearest .01%) of such offered rates. If fewer than two such quotations are
provided, One-Month LIBOR will be the arithmetic mean (rounded upwards, if
necessary, to the nearest .01%) of the rates quoted at approximately 11:00 a.m.,
New York City time, on such LIBOR Determination Date to the Indenture Trustee by
three major banks in New York, New York, selected by the Servicer, for loans in
United States dollars to leading European banks having a maturity of one month
and in a principal amount of not less than U.S. $1,000,000; provided, however,
that if the banks selected as aforesaid do not quote a rate to the Indenture
Trustee as described in this sentence, One-Month LIBOR will be the One-Month
LIBOR in effect for the immediately preceding Accrual Period.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
(including internal counsel) for the Depositor or the Servicer and who shall be
reasonably acceptable to the Trust and the Indenture Trustee.
26
"Originator" means, with respect to each Contract, the party that is the
original lessor or financing party thereunder.
"Outstanding" has the meaning specified in the Indenture.
"Owner Trustee" means Allfirst Financial Center National Association, not
in its individual capacity, but solely as Owner Trustee under the Trust
Agreement, its successors in interest and any successor owner trustee under the
Trust Agreement.
"Payment Date" shall mean the twentieth (20th) day of each calendar month
or, if such twentieth (20th) day is not a Business Day, the next succeeding
Business Day, with the first such Payment Date hereunder being March 20, 2001.
"Paying Agent" means any Person described as such in Section 7.04(b).
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Liens" means
(a) with respect to Contracts in the Contract Pool:
(i) Liens for state, municipal or other local taxes if such taxes
shall not at the time be due and payable or if the Depositor shall
currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto;
(ii) Liens in favor of CFUSA created by a TCC Financing
Originator pursuant to the VFC Conveyancing Agreement or the Non-VFC
Conveyancing Agreement, as the case may be, or Liens in favor of the
Depositor created pursuant to the Purchase and Sale Agreements or
Liens in favor of the VFC Trust created pursuant to the VFC Pooling
Agreement, in each case transferred to the Trust pursuant hereto;
(iii) Liens in favor of the Trust created pursuant to this
Agreement; and
(iv) Liens in favor of the Indenture Trustee created pursuant to
the Indenture and/or this Agreement; and
(b) with respect to the related Equipment:
(i) materialmen's, warehousemen's, mechanics' and other liens
arising by operation of law in the ordinary course of business for
sums not due;
(ii) Liens for state, municipal or other local taxes if such
taxes shall not at the time be due and payable or if the Depositor
shall currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto;
27
(iii) Liens in favor of CFUSA created by a TCC Financing
Originator pursuant to the VFC Conveyancing Agreement or the Non-VFC
Conveyancing Agreement, as the case may be, or Liens in favor of the
Depositor created pursuant to the Purchase and Sale Agreements, in
each case transferred to the Trust pursuant hereto or Liens in favor
of the Depositor created pursuant to the VFC Purchase and Sale
Agreement;
(iv) Liens in favor of the Trust created pursuant to this
Agreement;
(v) Liens in favor of an Originator which have been transferred
to the applicable Financing Originator and pursuant to the Purchase
and Sale Agreements by such Financing Originator to the Depositor
(through CFUSA and the VFC Conveyancing Agreement or the Non-VFC
Conveyancing Agreement, as the case may be, in the case of TCC
Financing Originators, and through CFUSA, the Depositor and the VFC
Trust and the VFC Assignment in the case of the VFC Contracts) and in
each case transferred to the Trust pursuant hereto;
(vi) Liens in favor of the Indenture Trustee crated pursuant to
the Indenture and/or this Agreement;
(vii) (A) interests in favor of Dell Financial Services, L.P.
("DFS") which are subject to the prior payment of all Obligor
obligations in respect of Scheduled Payments on the related Contract
and which have been transferred by DFS along with the related Contract
to its limited purpose affiliate, DFS-SPV, L.P., and (B) interests in
favor of a Vendor which are subject to the prior payment of all
Obligor obligations in respect of Scheduled Payments on the related
Contract; and
(viii) Liens granted by the End-Users which are subordinated to
the interest of the Trust in such Equipment.
"Person" means any individual, corporation, estate, partnership, limited
liability company, joint venture, association, joint stock company, trust
(including any beneficiary thereof), unincorporated organization or government
or any agency or political subdivision thereof.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Servicer or any member of the Controlled Group may have any
liability.
"Pledged Revenues" means (i) all Scheduled Payments on the Contracts
received on or after the Cut-Off Date (excluding the Excluded Amounts); (ii) any
Prepayments received on the Contracts on or after the Cut-Off Date (other than
(a) in the case of a Lease, any portion thereof allocated to the Depositor, or
(b) in the case of a Prepaid Contract for which a substitution has been made in
accordance with Section 2.04 of this Agreement, that portion thereof to which
the Depositor is entitled pursuant to Section 2.04); (iii) the Purchase Amount
of any Contracts purchased by CFUSA in accordance with Section 7.06 of this
Agreement (other than any portion thereof attributable in the case of a Lease to
the Excluded Residual Investment of the related Equipment); (iv) the amount paid
28
by CFUSA or the Depositor to purchase the Contracts pursuant to Section 7.08 of
this Agreement; (v) that portion of the Liquidation Proceeds received in respect
of any Contracts and the disposition of the related Equipment on or after the
Cut-Off Date and allocated to the Trust; and (vi) any Investment Earnings on the
investment of amounts credited to the Collection Account and the Note
Distribution Account. Pledged Revenues shall not include any amounts received
with respect to any Excluded Residual Investment.
"Pooling Agreement" means this Pooling and Servicing Agreement, as amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
"Prepaid Contract" means any Contract that has terminated or been prepaid
in full prior to its scheduled expiration date (including because of a Casualty
Loss), other than a Defaulted Contract.
"Prepayment" means with respect to any Collection Period for any Contract,
a partial or full prepayment of amounts due and owing under such Contract.
"Principal Amount" means, with respect to a Class of Notes, the aggregate
Initial Principal Amount thereof reduced by (i) the aggregate amount of any
payments applied in reduction of such principal amount and (ii) the aggregate
amount of any payments then on deposit in the Note Distribution Account, if any,
for such Class of Notes established in accordance with the Indenture and to be
applied in reduction of such principal amount in accordance with such Indenture.
"Principal Deficiency Amount" means, with respect to any Payment Date, the
excess, if any, of (i) the Principal Amount of the Notes (after giving effect to
all distributions of principal from the Available Pledged Revenues (determined
without regard to clause (iv) of the definition thereof) on such Payment Date),
over (ii) the Contract Pool Principal Balance as of the related Accounting Date.
"Program Agreement" means each vendor finance program agreement pursuant to
which End-User Contracts originated by a Vendor are assigned to the applicable
Financing Originator.
"Prospectus" has the meaning given such term in the Underwriting Agreement.
"Purchase Amount" means, with respect to Ineligible Contracts, on any date
of determination, the aggregate Required Payoff Amount for such Ineligible
Contracts as of the related Accounting Date.
"Purchase and Sale Agreements" means, collectively, the Non-VFC Purchase
Agreement, the Substitute VFC Purchase Agreement and the VFC Purchase Agreement.
"Purchase Price" means, with respect to any Contract conveyed on the
Closing Date (or any Subsequent Transfer Date, as applicable), an amount equal
to the Contract Principal Balance of such Contract as of the applicable Cut-Off
Date.
29
"Qualified Eligible Investments" means Eligible Investments acquired by the
Indenture Trustee in its name and in its capacity as Indenture Trustee, which
are held by the Indenture Trustee in the Trust Accounts and with respect to
which (a) the Indenture Trustee has noted its interest therein on its books and
records, and (b) the Indenture Trustee has purchased such investments for value
without notice of any adverse claim thereto (and, if such investments are
securities or other financial assets or interests therein, within the meaning of
Section 8-102 of the UCC as enacted in the State of New York, without acting in
collusion with a securities intermediary in violating such securities
intermediary's obligations to entitlement holders in such assets, under Section
8-504 of such UCC, to maintain a sufficient quantity of such assets in favor of
such entitlement holders), and (c) either (i) such investments are in the
possession of the Indenture Trustee, or (ii) such investments, (A) if
certificated securities and in bearer form, have been delivered to the Indenture
Trustee, or in registered form, have been delivered to the Indenture Trustee and
either registered by the issuer in the name of the Indenture Trustee or endorsed
by effective endorsement to the Indenture Trustee or in blank; (B) if
uncertificated securities, the ownership of which has been registered to the
Indenture Trustee on the books of the issuer thereof (or another person, other
than a securities intermediary, either becomes the registered owner of the
uncertified security on behalf of the Indenture Trustee or, having previously
become the registered owner, acknowledges that it holds for the Indenture
Trustee); or (C) if securities entitlements (within the meaning of Section 8-102
of the UCC as enacted in the State of New York) representing interests in
securities or other financial assets (or interests therein) held by a securities
intermediary (within the meaning of said Section 8-102), a securities
intermediary indicates by book entry that a security or other financial asset
has been credited to the Indenture Trustee's securities account with such
securities intermediary. Any such Qualified Eligible Investment may be purchased
by or through the Indenture Trustee or any of its Affiliates.
"Qualified Institution" means (a) the corporate trust department of the
Indenture Trustee or (b) a depository 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), (i) (A) which has (or the
parent corporation of which has) either (1) a long-term unsecured debt rating
acceptable to the Rating Agencies or (2) a short-term unsecured debt rating or
certificate of deposit rating acceptable to the Rating Agencies or (B) which is
otherwise acceptable to the Rating Agencies and (ii) whose deposits are insured
by the FDIC.
"Rating Agency" as of any date means each of the nationally recognized
statistical rating organizations requested by the Depositor to provide ratings
on the Notes which is rating the Notes on such date.
"Rating Agency Condition" means, with respect to any action or series of
related actions or proposed transaction or series of related proposed
transactions, that each Rating Agency shall have notified the Depositor and the
Owner Trustee and the Indenture Trustee in writing that such action or series of
related actions or the consummation of such proposed transaction or series of
related transactions will not result in a Ratings Effect.
"Ratings Effect" means, with respect to any action or series of related
actions or proposed transaction or series of related proposed transactions, a
reduction or withdrawal of the rating of any outstanding Class with respect to
which a Rating Agency has previously issued a rating as a result of such action
30
or series of related actions or the consummation of such proposed transaction or
series of related transactions.
"Reallocated Principal" means, with respect to any Payment Date, an amount
equal to (a) the Total Principal Payment Amount, less (b) the sum of the Class A
Principal Payment Amount, the Class B Principal Payment Amount, the Class C
Principal Payment Amount and the Class D Principal Payment Amount.
"Record Date" means, with respect to any Payment Date, the Business Day
immediately preceding such Payment Date (so long as the Notes are in book-entry
form) or the last day of the prior calendar month (if certificated Notes have
been issued).
"Reference Banks" means four leading banks, selected by the Servicer and
identified to the Indenture Trustee, engaged in transactions in Eurodollar
deposits in the international Eurocurrency market and having an established
place of business in London.
"Related Collection Period Pledged Revenues" means, with respect to any
Payment Date, the amount of Pledged Revenues in the Collection Account as of the
Deposit Date which were received by the Servicer during the related Collection
Period, including all Liquidation Proceeds (other than in respect of Excluded
Residual Investment) so received but excluding any Purchase Amounts.
"Replaced Assets" has the meaning assigned such term in Section 2.04.
"Replaced Contracts" has the meaning assigned such term in Section 2.04.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Required Cash Collateral Amount" means with respect to any Payment Date,
an amount equal to the greater of (a) the sum of (1) 7.25% of the Contract Pool
Principal Balance as of the related Accounting Date, plus (2) the excess, if any
of (A) the Aggregate Principal Amount of the Notes (after giving effect to all
distributions of principal on such Payment Date) over (B) the sum of (a)the
Contract Pool Principal Balance as of the related Accounting Date and (b)
$10,589,470; provided, that in no event will the Required Cash Collateral Amount
exceed the Aggregate Principal Amount of the Notes as of any date of
determination.
"Required Holders" means (i) prior to the payment in full of the Class A
Notes Outstanding, Class A-1 Noteholders, Class A-2 Noteholders, Class A-3
Noteholders, and/or Class A-4 Noteholders holding Class A-1 Notes, Class A-2
Notes, Class A-3 Notes, and/or Class A-4 Notes evidencing more than 66 2/3% of
the Aggregate Principal Amount of all Class A Notes Outstanding, (ii) from and
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after the payment in full of the Class A Notes Outstanding, Holders of Class B
Notes holding Class B Notes evidencing more than 66 2/3% of the Aggregate
Principal Amount of all Class B Notes Outstanding, (iii) from and after the
payment in full of the Class B Notes Outstanding, Holders of Class C Notes
holding Class C Notes evidencing more than 66 2/3% of the Aggregate Principal
Amount of all Class C Notes Outstanding, and (iv) from and after the payment in
full of the Class C Notes Outstanding, Holders of Class D Notes holding Class D
Notes evidencing more than 66 2/3% of the Aggregate Principal Amount of all
Class D Notes Outstanding.
"Required Payoff Amount" means, with respect to any Collection Period for a
Contract, the sum of (i) the Scheduled Payment due in such Collection Period,
together with any Scheduled Payments due in prior Collection Periods but not yet
received, plus (ii) the Contract Principal Balance of such Contract (after
taking into account the Scheduled Payment due in such Collection Period whether
or not actually received).
"Requirements of Law" for any Person means the certificate of incorporation
or articles of association and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or order or
determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether Federal, state or local (including, without limitation, usury laws, the
Federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
"Residual Investment" means, with respect to certain Leases, any funds that
the Financing Originator shall have advanced against all or any portion of the
anticipated residual value of the leased Equipment upon the expiration of such
Lease in accordance with its terms, and in excess of the discounted present
value of the rental payments due under such Lease.
"Responsible Officer" means, with respect to the Owner Trustee, any officer
in its Corporate Trust Administration Department (or any similar group of a
successor Owner Trustee) who has primary responsibility for administering the
Trust or the Trust Agreement, or to whom a corporate trust matter is referred
because of knowledge of, familiarity with, and authority to act with respect to
a particular matter.
"Scheduled Payment" means, with respect to any Contract, the monthly or
quarterly or semi-annual or annual rent or financing (whether principal or
principal and interest) payment or other payment scheduled to be made by the
related Obligor under the terms of such Contract (or, if applicable, from a
Vendor or Obligor with respect to any Guaranteed Residual Investment); it being
understood that Scheduled Payments do not include any Excluded Amount or
Excluded Residual Investment, but does include Guaranteed Residual Investment.
"Schedule of Contracts" means the schedule of Contracts which are conveyed
to the Trust pursuant to this Agreement and the Transfer Agreement, executed and
delivered on the Closing Date, which schedule shall identify by any reasonable
means or designation the applicable Financing Originator with respect to each
Contract identified in such Schedule, and which includes the Contracts listed on
Exhibit C hereto. Such Schedule shall be supplemented from time to time (a) by
each subsequent Substitution Schedule of Contracts with respect to each
Substitution Transfer Agreement and related Substitute Contracts, which
32
Schedules of Contracts shall be deemed incorporated and made a part of the
original Schedule of Contracts on Exhibit C hereto; and (b) by the Servicer from
time to time to reflect the release by and removal from the Trust Assets of (i)
Contracts released in connection with (A) in respect of a Contract becoming a
Prepaid Contract in accordance herewith or having its final Scheduled Payment
paid in full in accordance with the Contract, or (B) in respect of a repurchase
from the Trust through payment of a Purchase Amount, and (ii) Replaced
Contracts. The comprehensive Schedule of Contracts is to be maintained by the
Servicer (with copies thereof, as the same shall be supplemented or amended as
described above, to be provided promptly to the Trust). With respect to the
Transfer Agreement (or Substitution Transfer Agreement, as applicable),
"Schedule of Contracts" shall mean the schedule attached thereto identifying the
Contracts being conveyed thereby.
"Schedule of Representations" means the Schedule of Representations and
Warranties set forth on Exhibit G hereto.
"Secondary Contract" shall mean, with respect to a Vendor Loan, each
End-User Contract securing such Vendor Loan.
"Secured Note" means each promissory note with a related security interest
evidenced by written agreement, pursuant to which the purchase of specified
assets by an Obligor or End-User is financed for specified monthly, quarterly,
semiannual or annual payments.
"Securities" means the Notes and the Certificate, or any of them.
"Securities Act" means the Securities Act of 1933, as amended from time to
time.
"Securityholders" means the Holders of the Notes or the Equity Certificate.
"Servicer" means initially CFUSA, until any Successor Servicer is appointed
pursuant to Article VIII hereof, and thereafter, means the Successor Servicer so
appointed.
"Servicer Advance" means, with respect to any Payment Date, the amounts, if
any, deposited by the Servicer in the Collection Account for such Payment Date
in respect of Scheduled Payments pursuant to Section 5.14 hereof.
"Servicer Default" has the meaning given such term in Section 8.01.
"Servicer Letter of Credit" has the meaning given such term in Section
7.01(b).
"Services" means, in connection with the financing of Software by an
Originator, the support and consulting services related to such Software, the
procurement of which was also financed by such Originator pursuant to a
Contract.
"Servicing Fee" has the meaning specified in Section 5.18 hereof.
"Servicing Fee Percentage" means 0.75%.
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"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts.
"Servicing Standard" means, with respect to the servicing and collection
activities of the Servicer concerning the Contract Assets, the conduct of such
activities with reasonable care, using that degree of skill and attention that
the relevant Financing Originator for such Contract Assets exercises with
respect to all comparable contracts and related assets that it services for
itself or others, and in accordance with Customary Policies and Procedures and
applicable law.
"Servicing Transfer" is defined in Section 8.02(b).
"Software" means the computer software programs financed or leased by an
Obligor pursuant to a Contract.
"Solvent" means, as to any Person at any time, that (a) the fair value of
the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable value of the
Property of such Person in an orderly liquidation of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person is able
to realize upon its Property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in a business or a
transaction, for which such Person's property would constitute unreasonably
small capital.
"Standard & Poor's" means Standard & Poor's Ratings Service, a division of
The McGraw Hill Companies, or any successor thereto.
"Subsidiary" means with respect to a Person, any corporation or other
entity of which securities or other ownership interests (whether directly or
indirectly in connection with contract rights) having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"Substitute Contract" means any Contract conveyed, assigned and transferred
by the Depositor or CFUSA to the Trust pursuant to Section 2.04.
"Substitute Contract Assets" means Contract Assets relating to Substitute
Contracts.
"Substitute Contract Qualification Conditions" means, with respect to any
Substitute Contract being transferred to the Trust pursuant to Section 2.04,
each of the following:
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(1) the accuracy of each of the following statements as of
of the related Cut-Off Date for such Contract:
(a) the Contract Principal Balance of such Substitute Contract is not
less than that of the related Replaced Contract[s];
(b) no adverse selection procedure shall have been employed in the
selection of such Substitute Contract from the Financing Originator's
portfolio;
(c) each such Substitute Contract satisfied the criteria set forth in
the definition of Eligible Contract herein; and
(d) if the Replaced Contract for which such Substitute Contract is
being substituted was a TCC Contract, then such Substitute Contract is
itself a TCC Contract, and if such Replaced Contract is an CFUSA Contract,
then such Substitute Contract is itself an CFUSA Contract; and
(2) with respect to any such Substitute Contract which is
replacing a Replaced Contract of the type described in clause (a)
of the definition of Substitution Event (a "Type"), the condition
that after giving effect to such transfer, the Contract Pool
Principal Balance of all Substitute Contracts transferred to the
Trust since the Closing Date in respect of Replaced Contracts of
the same Type shall not exceed 10% of the Contract Pool Principal
Balance as of the Initial Cut-Off Date.
"Substitute Transferred Assets" has the meaning assigned such term in
Section 2.04.
"Substitute VFC Purchase Agreement" means the Substitute VFC Purchase and
Sale Agreement, dated as of February 1, 2001, among CFUSA and the Depositor, as
the same may be amended, supplemented, restated or otherwise modified from time
to time.
"Substitution Assignment Agreement" means, with respect to any Substitute
Contracts, the agreement between CFUSA and the Depositor pursuant to which CFUSA
transfers the identified Substitute Contracts to the Depositor pursuant to the
Non-VFC Purchase Agreement or the Substitute VFC Purchase Agreement, as the case
may be.
"Substitution Cut-Off Date" means the date specified as such for the
relevant Substitute Contracts, in the related Substitution Transfer Agreement.
"Substitution Event" means, with respect to any transfer of a related
Substitute Contract to the Trust under Section 2.04, the occurrence of any of
the following: (a) one or more Contracts identified in the related Substitution
Notice as being an intended Replaced Contract with respect to such Substitute
Contract, has become a Defaulted Contract, (b) one or more Contracts identified
in the related Substitution Notice as being an intended Replaced Contract with
respect to such Substitute Contract, has been subjected to a Material
Modification, (c) one or more Contracts identified in the related Substitution
Notice as being an intended Replaced Contract with respect to such Substitute
Contract, has become an Ineligible Contract, or (d) one or more Contracts
identified in the related Substitution Notice as being an intended Replaced
35
Contract with respect to such Substitute Contract, has become a Prepaid Contract
and the Trust has not yet received the related Prepayment.
"Substitution Notice" means, with respect to any transfer of Substitute
Contracts to the Trust pursuant to Section 2.04 (and the applicable Financing
Originator's corresponding conveyance and assignment of such Substitute
Contracts), a notice, which shall be given at least five days prior to the
related Substitution Transfer Date, identifying the Substitute Contracts to be
transferred, the Contract Principal Balance of such Substitute Contracts and the
related Substitution Event (with respect to an identified Contract or Contracts
then in the Contract Pool, which will upon such substitution become a Replaced
Contract) to which such Substitute Contract relates, with such notice to be
signed both by the Depositor and the applicable Financing Originator[s].
"Substitution Schedule of Contracts" means a schedule or list,
substantially in the form of the initial Schedule of Contracts delivered on the
Closing Date, but listing each Substitute Contract being transferred to the
Trust pursuant to a related Substitution Transfer Agreement, as well as the
related Replaced Contracts being removed from the existing Contract Pool by
virtue of such substitution.
"Substitution Transfer Agreement" means the agreement identified as such in
Section 2.04(b) hereof.
"Substitution Transfer Date" means any date on which Substitute Contracts
are transferred to the Trust.
"Successor Servicer" has the meaning given such term in Section 8.02(b).
"Tax Opinion" means, with respect to any action, an Opinion of Counsel to
the effect that, for federal income tax purposes, (i) following such action the
Trust will not be deemed to be an association (or publicly traded partnership)
taxable as a corporation, (ii) following such action the Trust will be
disregarded as a separate entity from the Depositor, and (iii) such action will
not affect the tax characterization as debt of Notes of any outstanding Class
issued by the Trust for which an Opinion of Counsel has been provided that such
Notes are debt.
"TCC" means Capita Corporation, a Delaware corporation.
"TCC Assignment" has the meaning given such term in the VFC Conveyancing
Agreement.
"TCC Assignment Date" has the meaning given such term in the VFC
Conveyancing Agreement.
"TCC Contract" has the meaning given such term in the VFC Conveyancing
Agreement.
"TCC Contract Assets" has the meaning given such term in the VFC
Conveyancing Agreement.
36
"TCC Contract File" has the meaning given such term in the VFC Conveyancing
Agreement.
"TCC Financing Originator" means the Financing Originators (other than
CFUSA) in each case in the capacity of a TCC Financing Originator party to the
VFC Conveyancing Agreement or the Non-VFC Conveyancing Agreement, as the case
may be, with CFUSA.
"Telerate Page 3750" means the display page so designated on the Telerate
Service (or such other page as may replace that page on that service for the
purpose of displaying comparable notes or prices).
"Total Principal Payment Amount" means, with respect to any Payment Date,
the difference between (a) the aggregate Principal Amount of all Classes of
Notes immediately prior to that Payment Date and (b) the Contract Pool Principal
Balance as of the related Accounting Date; provided, that the amount referred to
in clause (b) shall be deemed to be zero on any Payment Date on which the
Contract Pool Principal Balance is less than $10,000,000.
"Transaction Documents" means this Pooling Agreement, the Transfer
Agreement, any Substitution Transfer Agreement, the VFC Conveyancing Agreement,
the VFC Purchase Agreement, the VFC Assignment, the VFC Pooling Agreement, any
TCC Assignment, the Non-VFC Conveyancing Agreement, the Non-VFC Purchase
Agreement, the Substitute VFC Purchase Agreement, the Trust Agreement, the
Administration Agreement, the Indenture, the Cash Collateral Account Agreement,
the Underwriting Agreement and the Class A-4 Swap Agreement, and any other
agreements contemplated herein or therein.
"Transfer Agreement" means, the Transfer Agreement dated the Closing Date
between the Depositor and the Trust pursuant to which the Depositor conveys and
assigns the Contracts and other related Transferred Assets to the Trust, in the
form attached hereto as Exhibit A.
"Transferred Assets" means with respect to any Contracts (including
Substitute Contracts) conveyed or being conveyed to the Trust pursuant to this
Agreement, all right and interest of the Depositor in, to and under the
following:
(i) such Contracts and other related Contract Assets (subject to
the proviso below);
(ii) related rights of the Depositor under the Purchase and Sale
Agreements and Substitution Assignment Agreement (if any) and the VFC
Assignment, including, without limitation, in respect of the
obligation of CFUSA to repurchase or substitute for such Contracts
under certain circumstances as specified therein; and
(iii) rights under the Transfer Agreement and each Substitution
Transfer Agreement; and
(iv) all income from and proceeds of the foregoing;
37
provided, that Transferred Assets shall not include any title to or ownership
interest in the Equipment related to such Contracts (although security interests
in such Equipment established pursuant to the related Contract, and proceeds
thereof, shall constitute Transferred Assets), and provided further, that the
security interest granted by the Depositor pursuant to Section 2.01 hereof in
related Equipment owned by it, shall constitute part of Transferred Assets.
"Trust" means the trust governed by the Trust Agreement, the assets and
property of which consists of the Trust Assets.
"Trust Accounts" means, collectively, the Collection Account, the Cash
Collateral Account and the Note Distribution Account, or any of them.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, physical property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated as
of February 1, 2001, between the Depositor and the Owner Trustee, as amended,
restated, supplemented or otherwise modified from time to time.
"Trust Assets" has the meaning given to such term in the Trust Agreement.
"Trust Estate" shall have the meaning specified in the Trust Agreement.
"Trustees" means the Owner Trustee and the Indenture Trustee, or any of
them individually as the context may require.
"UCC" means the Uniform Commercial Code as enacted from time to time in the
State of New York.
"Uncollectible Advance" means with respect to any Determination Date and
any Contract, the amount, if any, advanced by the Servicer pursuant to Section
5.14 which the Servicer has as of such Determination Date determined in good
faith will not be ultimately recoverable by the Servicer.
"Underwriting Agreement" means the Underwriting Agreement, dated March 2,
2001 among Banc One Capital Markets, Inc. (as an underwriter thereunder and as
representative of the underwriters) and the Depositor.
"Unfunded Loss Amount" means, with respect to any Payment Date, the excess,
if any, of (i) the remainder, if any, of (a) the Aggregate Principal Amount of
all of the Notes (prior to giving effect to the payment of principal on the
Notes on such Payment Date) minus (b) the lesser of (1) the Contract Pool
Principal Balance as of the related Accounting Date for the preceding Payment
Date, minus the Contract Pool Principal Balance as of the related Accounting
Date for such Payment Date, or (2) (A) the Related Collection Period Pledged
Revenue remaining after the payment of amounts owing to the Servicer and the
payment of all interest due on the Notes on such Payment Date, plus (B) the
38
amount of any withdrawal from the Cash Collateral Account for the payment of
principal in respect of Notes on such Payment Date over (ii) the Contract Pool
Principal Balance as of the related Accounting Date.
"Unreimbursed Servicer Advances" means, at any time, the amount of all
previous Servicer Advances (or portions thereof) as to which the Servicer has
not been reimbursed as of such time pursuant to Section 7.05 and which the
Servicer has determined in its sole discretion are Uncollectible Advances, and
with respect to which the Servicer has given a written certification to such
effect to the Trust (which certification may take the form of an entry on a
Monthly Report identifying Unreimbursed Servicer Advances).
"United States" means the United States of America.
"Vehicle" means any motor vehicle, the transfer of interests in which is
governed by a state certificate of title or registry system.
"Vendor" means, with respect to a Contract, the equipment manufacturer,
dealer or distributor, or software licensor or distributor, or other Person that
provided financing under such Contract in connection with the acquisition or use
by an End-User of such party's Equipment, Software, Services or other products.
"Vendor Agreements" means the collective reference to Vendor Assignments
and Program Agreements.
"Vendor Assignment" means each assignment agreement pursuant to which an
individual End-User Contract originated by a Vendor is assigned by such Vendor
to the Financing Originator.
"Vendor Guarantee" means the irrevocable obligation of a Vendor to pay to
the Financing Originator the aggregate outstanding principal amount of a
Contract which has been canceled by the related Obligor pursuant to the terms of
such Contract.
"Vendor Loan" means a limited recourse loan agreement payable by a Vendor
and secured by the Vendor's interest in Secondary Contracts and by the
Equipment, if any, related thereto.
"VFC Assignment" means the Release and Assignment instrument dated the
Closing Date, in the form attached hereto as Exhibit B, executed by the VFC
Trust conveying, assigning and releasing the VFC Contract Assets to the
Depositor.
"VFCC" means Variable Funding Capital Corporation.
"VFC Contract Assets" means the Contract Assets pertaining to the VFC
Contracts.
"VFC Contracts" means Contracts conveyed by the VFC Trust to the Depositor
pursuant to the VFC Assignment, as listed in the Schedule of Contracts attached
to the VFC Assignment.
39
"VFC Conveyancing Agreement" means the Amended and Restated Conveyancing
Agreement dated as of March 2, 1999, as amended and restated as of June 29,
2000, among the TCC Financing Originators and CFUSA, as the same has been or may
be amended, supplemented, restated or otherwise modified from time to time.
"VFC Trust" means the CIT Equipment Trust -- VFC Series created and
existing pursuant to the Trust Agreement dated as of February 25, 1999, as
amended by Amendment No. 1 dated as of June 27, 2000, by and between the
Depositor and the Bank of New York (Delaware), as owner trustee.
"VFC Pooling Agreement" means the Amended and Restated Pooling and
Servicing Agreement dated as of March 2, 1999, as amended and restated as of
June 29, 2000, by and among the VFC Trust, the Depositor and TCC, as the same
has been or may be amended, supplemented, restated or otherwise modified from
time to time.
"VFC Purchase Agreement" means the Amended and Restated Sale and
Contribution Agreement dated as of March 2, 1999, as amended and restated as of
June 29, 2000, by and among CFUSA, TCC and the Depositor, as the same has been
or may be amended, supplemented, restated or otherwise modified from time to
time.
"Vice President" of any Person means any vice president of such Person,
whether or not designated by a number or words before or after the title "Vice
President," who is a duly elected officer of such Person.
"Voting Power" means, with respect to any outstanding membership interest
of the Depositor, the power (expressed as a percentage) represented by such
membership interest of the aggregate voting power of all outstanding membership
interests of the Depositor having ordinary voting power, including the power to
vote for election of members of the Board of Directors (and, if any class
thereof has power to designate members of the Board of Directors or any special
committee thereof, the power so to designate).
Section 1.02 Usage of Terms. With respect to all terms in this Agreement,
the singular includes the plural and the plural the singular; words importing
any gender include the other genders; references to "writing" include printing,
typing, lithography and other means of reproducing words in a visible form;
references to agreements and other contractual instruments include all
amendments, modifications and supplements thereto or any changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement; references to Persons include their permitted successors and assigns;
and the term "including" means "including without limitation."
Section 1.03 Section References. All section references, unless otherwise
indicated, shall be to Sections in this Agreement.
Section 1.04 Accounting Terms. All accounting terms used but not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States.
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Article II
FUNDINGS OF TRUST; TRANSFERS OF CONTRACTS
Section 2.01 Creation and Funding of Trust; Transfer of Transferred Assets
to Trust. (a) The Trust has been created (i) pursuant to the terms and
conditions of an initial trust agreement, (ii) upon the execution and delivery
of the Trust Agreement and (iii) by the filing by the Owner Trustee of an
appropriately completed Certificate of Trust under the Business Trust Statute.
The Depositor, as settlor of the Trust, shall fund and convey assets to the
Trust pursuant to the terms and provisions hereof. The Trust shall be
administered pursuant to the provisions of this Agreement, the Administration
Agreement and the Trust Agreement for the benefit of the Noteholders and the
Equity Certificateholder. Each of the Owner Trustee and the Administrator (as
defined in the Administration Agreement) is hereby specifically recognized by
the parties hereto as empowered to conduct business dealings on behalf of the
Trust in accordance with the terms hereof and of the Trust Agreement and
Administration Agreement.
(b) Subject to the terms and conditions set forth herein, on the
Closing Date, the Depositor shall, in consideration of the purchase price of the
Contracts and the related Transferred Assets and the retention of the Equity
Certificate, transfer, assign, set over and otherwise convey to the Trust by
execution of the Transfer Agreement, without recourse (other than as expressly
provided herein), (i) all the right, title and interest of the Depositor in and
to the Contracts and the related Transferred Assets identified in such Transfer
Agreement, and (ii) all income from and proceeds of the foregoing. The "purchase
price" for the Contracts and the related Transferred Assets shall be an amount
equal to $845,590,940.59. Such purchase price shall be payable in immediately
available funds on the Closing Date.
(c) The parties hereto hereby agree and acknowledge that title to or
ownership of any related Equipment shall not be transferred to the Trust upon
such conveyance and that the Depositor shall retain its ownership interest (to
the extent the same has been so conveyed to the Depositor pursuant to the VFC
Purchase Agreement, the Non-VFC Purchase Agreement, the Substitute VFC Purchase
Agreement and the VFC Assignment) in such Equipment (provided, that the parties
agree and intend that any mere security interest, as opposed to title or
ownership interest, in the related Equipment which secures the Contract pursuant
to the terms thereof, is being assigned and conveyed as part of the Transferred
Assets in accordance with the definition thereof). The Depositor and the Trust
further intend and agree that, except as described in the preceding sentence
with respect to ownership interests in related Equipment, any such transfer is
intended to be a conveyance and transfer of ownership of the Contracts and the
related Transferred Assets (or Substitute Transferred Assets conveyed as
described in Section 2.04 below) and that such Contracts and the related
Transferred Assets shall not be part of the Depositor's estate in the event of
the filing of a bankruptcy petition by or against the Depositor under any
bankruptcy law. In the event, however, that notwithstanding such intent and
agreement, a transfer and assignment contemplated hereby and in the Transfer
Agreement (or Substitution Transfer Agreement, as applicable) is determined not
to be a conveyance of ownership, the Depositor hereby grants to the Trust a
first priority perfected security interest in (i) such Contracts and the related
Transferred Assets identified in such Transfer Agreement, and (ii) all income
from and proceeds of the foregoing, and this Agreement and the Transfer
41
Agreement (or Substitution Transfer Agreement, as applicable), collectively,
shall constitute a security agreement under applicable law, securing the related
obligations of the Trust to the Noteholder and the Equity Certificateholder, in
the order and priorities, and subject to the other terms and conditions of, this
Agreement and the other Transaction Documents, together with such other
obligations or interests as may arise hereunder and thereunder with respect to
such Contracts and the related Transferred Assets in favor of the parties
thereto.
(d) In furtherance of and not in limitation of any of the foregoing,
the Depositor with respect to each item of Equipment owned by it as described
above, by execution and delivery of this Agreement and the Transfer Agreement
(or Substitution Transfer Agreement, as applicable), hereby and thereby on and
as of the Closing Date (or Substitution Transfer Date, as applicable) grants to
the Trust and the Indenture Trustee a first priority perfected security interest
in such item of owned Equipment, securing in each case an amount payable by the
Trust in respect of the Notes corresponding to the Contract Principal Balance
from time to time of the related Contract; it being understood, however, that
(i) recourse to such Equipment in realization of the benefits of such security
interest shall only occur if the related Contract has become a Defaulted
Contract, and (ii) the application of Liquidation Proceeds realized therefrom
shall be governed in accordance with the provisions hereof generally applicable
to such Pledged Revenue and allocation in accordance with the Allocation
Criteria.
Section 2.02 Conditions to Transfers. The Depositor shall transfer to the
Trust the Contracts and other Transferred Assets described in Section 2.01 above
only upon the satisfaction of each of the following conditions on or prior to
the Closing Date and shall be deemed to have represented in respect of the
Closing Date that all such conditions are satisfied upon the Depositor's
delivery of the Transfer Agreement:
(a) the Depositor shall have delivered to the Owner Trustee on behalf
of the Trust the duly executed Transfer Agreement, which shall include a
Schedule of Contracts listing the Contracts being transferred on the Closing
Date;
(b) the VFC Trust shall have delivered to the Depositor and the Owner
Trustee on behalf of the Trust the duly executed VFC Assignment with respect to
the VFC Contracts being conveyed by the VFC Trust on the Closing Date;
(c) A letter from KPMG LLP, or another nationally recognized
accounting firm, addressed to the Depositor and the Underwriters and stating
that such firm has reviewed a sample of the Initial Contracts and performed
specific procedures for such sample with respect to certain contract terms and
which identifies those Initial Contracts which do not conform;
(d) Copies of resolutions of the Board of Directors of CFUSA, the
Servicer and the Depositor or of the Executive Committee of the Board of
Directors of CFUSA, the Servicer and the Depositor approving the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which any of them is a party, as applicable, and the transactions
contemplated hereunder and thereunder, certified in each case by the Secretary
or an Assistant Secretary of CFUSA, the Servicer and the Depositor;
42
(e) Officially certified, recent evidence of due incorporation or
formation, as the case may be and good standing of each of CFUSA and the
Depositor under the laws of Delaware;
(f) (i) Evidence of proper filing or provision for filing with
appropriate offices in the jurisdictions in which a UCC financing statement was
filed naming the Depositor as debtor and the VFC Trust as secured party, with
respect to the VFC Contracts, of a UCC assignment identifying the VFC Contracts
as collateral being assigned back to the Depositor, executed by the VFC Trust;
(ii) evidence of proper filing or provision for filing with appropriate offices
in the applicable Contract File Locations and the state of the chief executive
office of the applicable Financing Originator of UCC financing statements
executed by the applicable Financing Originator, as debtor, and naming CFUSA as
secured party (and the Depositor as assignee), to perfect the grant of a
security interest from the applicable Financing Originator to CFUSA and then to
the Depositor pursuant to the applicable Purchase and Sale Agreements; (iii)
evidence of proper filing or provision for filing with appropriate offices in
the Contract File Locations and the state of the chief executive office of CFUSA
of UCC financing statements executed by CFUSA, as debtor, and naming the
Depositor as secured party, to perfect the grant of a security interest from
CFUSA to the Depositor pursuant to the applicable Purchase and Sale Agreements;
(iv) evidence of proper filing or provision for filing with appropriate offices
in the Contract File Locations and the state of the chief executive office of
the Depositor of UCC financing statements executed by the Depositor, as debtor,
and naming the Trust as secured party, to perfect the grant of a security
interest from the Depositor to the Trust pursuant to Article II hereof; (v)
evidence of proper filing or provision for filing with appropriate offices in
the Contract File Locations and the state of the chief executive office of the
Trust of UCC financing statements executed by the Trust, as debtor, and naming
the Indenture Trustee as secured party, to perfect the grant of a security
interest from the Trust to the Indenture Trustee pursuant to the Indenture;
(g) Evidence of deposit in the Cash Collateral Account of the initial
Required Cash Collateral Amount;
(h) A fully executed Substitute VFC Purchase Agreement;
(i) a fully executed Non-VFC Conveyancing Agreement;
(j) a fully executed Non-VFC Purchase Agreement;
(k) A fully executed VFC Assignment;
(l) A fully executed Trust Agreement;
(m) A fully executed Administration Agreement; and
(n) A fully executed Indenture; a fully executed Class A-4 Swap
Agreement;
(o) A fully executed Pooling Agreement;
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(p) an opinion of Schulte Roth & Zabel LLP to the effect that for
federal income tax purposes, the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes, Class B Notes, Class C Notes and Class D Notes will be
characterized as debt and the Trust will not be characterized as an association
(or publicly traded partnership) taxable as a corporation;
(q) each of the representations and warranties made by CFUSA pursuant
to Article III of the Purchase and Sale Agreements shall be true and correct as
of the Closing Date (including the representation made thereunder as to
compliance with the UCC filing criteria as set forth in clause (j) of the
definition of Eligible Contract), and CFUSA shall have performed in all material
respects all obligations to be performed by it under the Purchase and Sale
Agreements on or prior to the Closing Date;
(r) each of the representations and warranties made by the Depositor
and the Servicer pursuant to Article III hereof shall be true and correct as of
the Closing Date;
(s) the Depositor shall, at its own expense, on or prior to the
Closing Date indicate in its computer files that the Transferred Assets
identified in the Transfer Agreement have been conveyed to the Trust pursuant to
this Agreement and the Transfer Agreement;
(t) no event has occurred and is continuing, or would result from the
conveyance on the Closing Date that constitutes a Servicer Default; and
(u) the Depositor or the Servicer shall have provided the Owner
Trustee on behalf of the Trust a statement or computer disk listing the Contract
Pool Principal Balance on the Closing Date of the contracts being transferred on
the Closing Date.
The failure to satisfy any of the foregoing conditions to transfer or to
obtain a waiver thereof shall not be deemed to adversely affect the validity of
any such transfer.
Section 2.03 Acceptance by Trust. On the Closing Date, if all the
conditions specified in Section 2.02 above have been satisfied, the Trust shall
issue, and the Owner Trustee, or the Indenture Trustee as its authenticating
agent under the Trust Agreement, shall authenticate, to, or upon the order of,
the Depositor and in accordance with the Trust Agreement, the Equity Certificate
representing ownership of a beneficial interest in 100% of the Trust and the
Trust shall issue, and the Indenture Trustee shall authenticate, to, or upon the
order of, the Depositor in accordance with the terms of the Indenture the Notes
secured by the Collateral. The Trust hereby acknowledges its acceptance of the
Trust Assets, and declares that it shall maintain such right and interest in the
Trust Assets in accordance with the terms of this Agreement and the Trust
Agreement upon the trust herein and therein set forth.
Section 2.04 Conveyance of Substitute Contracts. (a) Subject to the
limitations set forth in (and the other terms and conditions of) this Section
2.04, the Depositor may substitute other Contracts and related assets for
Contracts and related Transferred Assets previously conveyed to the Trust and in
the Contract Pool, by conveying such other Contracts and related assets to the
Trust pursuant to the procedures and documentation specified below. Upon the
44
effectiveness of such substitution, such other Contracts and related Transferred
Assets (such Contracts, "Substitute Contracts", and collectively, "Substitute
Transferred Assets") shall, for all purposes of this Agreement and the Trust
Agreement, constitute and be considered as part of the Trust Assets, and the
Contracts already in the Contract Pool and related Transferred Assets for which
the Substitute Assets have been substituted (such Contracts, "Replaced
Contracts", and collectively, "Replaced Assets") shall no longer constitute
Trust Assets. Upon consummation of such substitution, the Trust shall be deemed
to have assigned to the Depositor all of the Trust's right, title and interest
in and to the Replaced Assets, without recourse, representation or warranty.
In addition, the parties hereto intend and agree that any conveyance
described in this Section 2.04 is made with the intent and effect described in
subsection (c) of Section 2.01 above.
(b) Subject to the conditions set forth in this subsection (b) below,
and pursuant to one or more related Substitution Transfer Agreements, the
Depositor shall transfer, assign, set over and otherwise convey to the Trust,
without recourse (other than as expressly provided herein), (i) all the right
and interest of the Depositor in and to the Substitute Contracts listed on the
related Substitution Schedule of Contracts, and (ii) all other rights and
property interests consisting of Transferred Assets related to such Substitute
Contracts. The Depositor shall effect such transfers only upon the satisfaction
of each of the following conditions on or prior to the related Substitution
Transfer Date (and the delivery of a related Substitution Notice by the
Depositor shall be deemed a representation and warranty by the Depositor that
such conditions have been or will be, as of the related Substitution Transfer
Date, satisfied):
(i) At least five days prior to the related Substitution Transfer
Date, the Depositor shall have provided the Owner Trustee on behalf of
the Trust and the Indenture Trustee with a Substitution Notice
complying with the definition thereof contained herein;
(ii) there shall have occurred, with respect to each such
Substitute Contract, a corresponding Substitution Event with respect
to one or more intended Replaced Contracts then constituting Contracts
in the Contract Pool;
(iii) the Substitute Contract(s) being conveyed to the Trust,
satisfy the Substitute Contract Qualification Conditions;
(iv) the Depositor shall have delivered to the Owner Trustee on
behalf of the Trust a duly executed written assignment agreement in
substantially the form of Exhibit E hereto (a "Substitution Transfer
Agreement"), which shall include a Substitution Schedule of Contracts
identifying the Substitute Contracts and the related Replaced
Contracts;
(v) CFUSA shall have delivered to the Depositor and the Owner
Trustee on behalf of the Trust a duly executed Substitution Assignment
Agreement with respect to such conveyance;
(vi) no selection procedures adverse to the interests of either
the Trust, the Noteholders or the Equity Certificateholder shall have
been utilized in selecting the Substitute Contracts;
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(vii) each of the representations and warranties made by CFUSA
pursuant to Article III of the Substitute VFC Purchase Agreement or
Non-VFC Purchase Agreement, as the case may be, shall be true and
correct as of the related Substitution Transfer Date (including the
representation made as to compliance with the UCC filing criteria set
forth in clause (j) of the definition of Eligible Contract), and CFUSA
shall have performed in all material respects all obligations to be
performed by it under the Substitute VFC Purchase Agreement or Non-VFC
Purchase Agreement, as the case may be, on or prior to such
Substitution Transfer Date; and
(viii) the Servicer and CFUSA and the applicable Financing
Originator shall, at their own expense, on or prior to the
Substitution Transfer Date, have indicated in their respective
computer files that the Substitute Contracts identified on the
Substitution Schedule of Contracts attached to the related
Substitution Transfer Agreement have been assigned and conveyed to the
Trust through the Depositor pursuant to this Pooling Agreement and the
Substitute VFC Purchase Agreement or Non-VFC Purchase Agreement, as
the case may be.
The failure to satisfy any of the foregoing conditions to transfer or to
obtain a waiver thereof shall not be deemed to adversely affect the validity of
any such transfer.
Section 2.05 Release of Excluded Amounts. The Trust hereby agrees to
release to the Servicer, an amount equal to the Excluded Amounts immediately
upon identification thereof, which release shall be automatic and shall require
no further act by the Trust, provided that the Trust shall execute and deliver
such instruments of release and assignment, or otherwise confirm the foregoing
release, as may reasonably be requested in writing by the Servicer. Upon such
release, such Excluded Amounts shall not constitute and shall not be included in
the Trust Assets.
Article III
REPRESENTATIONS AND WARRANTIES
CFUSA, under the Purchase and Sale Agreements, has made, and upon execution
of each Substitution Assignment Agreement is deemed to remake with respect to
the relevant Contract Assets conveyed by the VFC Assignment, the Non-VFC
Purchase Agreement, or the Substitution VFC Purchase Agreement, as the case may
be, each of the representations and warranties set forth in the Schedule of
Representations, and has consented to the assignment by the Depositor to the
Trust of the Depositor's rights with respect thereto. Such representations speak
as of the Closing Date in the case of the Initial Contracts, and as of the
applicable Substitution Transfer Date in the case of the Substitute Contracts,
but shall survive the transfer and assignment of the related Contracts to the
Trust. Pursuant to Section 2.01 of this Agreement, the Depositor has sold,
assigned, transferred and conveyed to the Trust as part of the Transferred
Assets its rights under the Purchase and Sale Agreements, including without
limitation, the representations and warranties of CFUSA therein as set forth in
the Schedule of Representations, together with all rights of the Depositor with
respect to any breach thereof including any right to require CFUSA to repurchase
or substitute for any Contract in accordance with the Purchase and Sale
46
Agreements. It is understood and agreed that the representations and warranties
set forth or referred to in this Section shall survive delivery of the Contract
Files to the Trust or any custodian.
The Depositor hereby confirms to the Trust that it has entered into the
Purchase and Sale Agreements with CFUSA, that CFUSA has made the representations
and warranties in the Schedule of Representations, that such representations and
warranties run to and are for the benefit of the Trust, and that pursuant to
Section 2.01 of this Agreement the Depositor has transferred and assigned to the
Trust all rights of the Depositor to cause CFUSA under the Purchase and Sale
Agreements to repurchase or substitute for Contracts conveyed thereunder in the
event of a breach of such representations and warranties applicable to such
Contract.
Section 3.01 Representations and Warranties Regarding the Depositor. By its
execution of this Agreement, and each Substitution Transfer Agreement, the
Depositor represents and warrants to the Trust, the Owner Trustee, the Indenture
Trustee, the Noteholders and the Equity Certificateholder that, as of the date
of the Closing Date and Substitution Transfer Date (and, with respect to the
representation set forth in subsection (k) of this Section 3.01 below, as of the
date the certificate, written report or written statement referred to in such
subsection is furnished):
(a) Organization and Good Standing. The Depositor is a limited
liability company duly organized, validly existing and in good standing under
the laws of Delaware and has the requisite power to own its assets and to
transact the business in which it is currently engaged. The Depositor is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the business transacted by it or properties owned or leased by
it requires such qualification and in which the failure so to qualify would have
a material adverse effect on the business, properties, assets, or condition
(financial or other) of the Depositor or the Trust.
(b) Authorization; Valid Transfer; Binding Obligations. The Depositor
has the power and authority to make, execute, deliver and perform this Agreement
and the other Transaction Documents to which it is a party, and all of the
transactions contemplated under this Agreement and the other Transaction
Documents to which it is a party, and to create the Trust and cause it to make,
execute, deliver and perform its obligations under this Agreement and the other
Transaction Documents to which it is a party and has taken all necessary
corporate action to authorize the due execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a party and to
cause the Trust to be created. This Agreement and the Transfer Agreement and any
Substitution Transfer Agreement shall effect a valid transfer and assignment of
the relevant Transferred Assets, enforceable against the Depositor and creditors
of and purchasers from the Depositor. This Agreement and the other Transaction
Documents to which the Depositor is a party have been duly executed and
delivered by the Depositor and constitute the legal, valid and binding
obligation of the Depositor enforceable in accordance with their terms, except
as enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies. The Depositor is selling the Transferred
Assets to the Trust with the intention of removing the Transferred Assets from
the estate of the Depositor pursuant to the applicable provisions of the
Bankruptcy Code as it may be amended from time to time including, without
47
limitation, section 541(b)(8) of the Bankruptcy Code as amended pursuant to
section 912 of Senate Bill S.220 (107th Cong. 1st Sess.) or any successor
thereto if and when such bill is enacted into law.
(c) No Consent Required. The Depositor is not required to obtain the
consent of any other Person or any consent, license, approval or authorization
from, or registration or declaration with, any Governmental Authority in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement or the other Transaction Documents to which it is a party.
(d) No Violations. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which it is a party by the
Depositor, and the consummation of the transactions contemplated hereby and
thereby, will not violate any Requirements of Law applicable to the Depositor,
or constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Depositor is a party or by which the Depositor or any of
the Depositor's properties may be bound, or result in the creation or imposition
of any security interest, lien, charge, pledge, preference, equity or
encumbrance of any kind upon any of its properties pursuant to the terms of any
such mortgage, indenture, contract or other agreement, other than as
contemplated by the Transaction Documents.
(e) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to the
knowledge of the Depositor threatened, against the Depositor or any of its
properties or with respect to this Agreement or the other Transaction Documents
to which it is a party (1) which, if adversely determined, would in the
reasonable judgment of the Depositor have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of the
Depositor or the Trust or the transactions contemplated by this Agreement or the
other Transaction Documents to which the Depositor is a party or (2) seeking to
adversely affect the federal income tax or other federal, state or local tax
attributes of the Notes.
(f) Taxes. The Depositor has filed or caused to be filed all material
tax returns which, to its knowledge, are required to be filed and has paid all
taxes shown to be due and payable on such returns or on any material assessments
made against it or any of its property and all other material taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any amount of tax due, the validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in accordance with generally accepted accounting principles have been
provided on the books of the Depositor); no tax lien has been filed and, to the
Depositor's knowledge, no claim is being asserted, with respect to any such tax,
fee or other charge.
(g) Schedule of Representations. The representations and warranties
set forth on the Schedule of Representations are true and correct as of the
Closing Date (or Substitution Transfer Date, as applicable) with respect to the
Transferred Assets being conveyed to the Trust on such date.
(h) Solvency. The Depositor, at the time of and after giving effect to
each conveyance made hereunder, is Solvent on and as of the date thereof.
48
(i) Place of Business; Name Changes. The location of the Depositor's
sole place of business or chief executive office (within the meaning of Article
9 of the UCC) is as set forth in Section 11.04 below, and such location has not
been changed within the four months preceding any Transfer Date (or if so
changed, all necessary actions in connection with such change have been or are
being timely taken in accordance with Section 4.03 hereof). The Depositor has
not changed its name, whether by amendment of its certificate of formation, by
reorganization or otherwise, within the four months preceding any Transfer Date
(or if so changed, all necessary actions in connection with such change have
been or are being timely taken in accordance with Section 4.03 hereof).
(j) Not an Investment Company. The Depositor is not an "investment
company" (and does not control, and is not under the control of, an investment
company) within the meaning of the Investment Company Act of 1940, as amended
(or the Depositor is exempt from all provisions of such Act).
(k) Accuracy of Information. No certificate, written report or written
statement furnished by the Depositor to the Servicer, the Trust, the Owner
Trustee, any Securityholder or the Administrator in connection with this Pooling
Agreement or any other Transaction Document was inaccurate in any material
respect as of the date it was dated or (except as otherwise disclosed to the
Servicer, the Trust, the Owner Trustee, such Securityholder or the
Administrator, as the case may be, at such time) as of the date so furnished.
Such representations (except to the extent expressly stated by their terms to
speak as of a different date or time) speak as of the Closing Date and each
Transfer Date and Substitution Transfer Date, if any, but shall survive the
transfer and assignment of the Contracts to the Trust.
Section 3.02 Representations and Warranties of the Servicer. The Servicer
represents and warrants to the Trust, the Owner Trustee, the Indenture Trustee,
the Noteholders and the Equity Certificateholder that, as of the date of the
execution and delivery of this Agreement and as of the Closing Date and each
Substitution Transfer Date:
(a) Organization and Good Standing. The Servicer is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the corporate power to own its assets and
to transact the business in which it is currently engaged. The Servicer is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or otherwise) of the Servicer or the
Trust. The Servicer (or any permitted subservicer hereunder with respect to
affected Contracts, if the Servicer is not so licensed) is properly licensed in
each jurisdiction to the extent required by the laws of such jurisdiction to
service the Contracts in accordance with the terms hereof.
(b) Authorization; Binding Obligations. The Servicer has the power and
authority to make, execute, deliver and perform this Agreement and the other
Transaction Documents to which the Servicer is a party and all of the
transactions contemplated under this Agreement and the other Transaction
Documents to which the Servicer is a party, and has taken all necessary
49
corporate action to authorize the due execution, delivery and performance of
this Agreement and the other Transaction Documents to which the Servicer is a
party. This Agreement and the other Transaction Documents to which the Servicer
is a party have been duly executed and delivered by the Servicer and constitute
the legal, valid and binding obligation of the Servicer enforceable in
accordance with their terms, except as enforcement of such terms may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable remedies.
(c) No Consent Required. The Servicer is not required to obtain the
consent of any other Person or any consent, license, approval or authorization
from, or registration or declaration with, any Governmental Authority in
connection with the execution, delivery, performance, validity or enforceability
of this Agreement and the other Transaction Documents to which the Servicer is a
party.
(d) No Violations. The execution, delivery and performance of this
Agreement and the other Transaction Documents to which the Servicer is a party
by the Servicer will not violate any Requirements of Law applicable to the
Servicer, or constitute a material breach of any mortgage, indenture, contract
or other agreement to which the Servicer is a party or by which the Servicer or
any of the Servicer's properties may be bound, or result in the creation of or
imposition of any security interest, lien, pledge, preference, equity or
encumbrance of any kind upon any of its properties pursuant to the terms of any
such mortgage, indenture, contract or other agreement, other than as
contemplated by the Transaction Documents.
(e) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to the
knowledge of the Servicer threatened, against the Servicer or any of its
properties or with respect to this Agreement, or any other Transaction Document
to which the Servicer is a party which, if adversely determined, would in the
reasonable judgment of the Servicer have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of the
Servicer or the Trust or the transactions contemplated by this Agreement or any
other Transaction Document to which the Servicer is a party.
(f) Accuracy of Information. No certificate, written report or written
statement, furnished by the Servicer to the Trust Depositor, the Trust, the
Owner Trustee, any Securityholder or the Administrator in connection with this
Pooling Agreement or any other Transaction Document was inaccurate in any
material respect as of the date it was dated or (except as otherwise disclosed
to the Trust Depositor, the Trust, the Owner Trustee, such Securityholder or the
Administrator, as the case may be, at such time) as of the date so furnished.
Each financial statement furnished pursuant to clause (i) of Section 9.04 is
complete and correct in all material respects and fairly presents the financial
condition of the Servicer (or its parent entity, if the Servicer is a
wholly-owned subsidiary of another entity), as of the reporting date specified
therein, and the results of operations of the Servicer (or such parent entity,
as applicable) for the period then ended, all in accordance with generally
accepted accounting principles as in effect in the jurisdiction of the entity
for which such financial statement is furnished.
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(g) No Servicer Default. No event has occurred and is continuing and
no condition exists which constitutes a Servicer Default.
Article IV
PERFECTION OF TRANSFERS AND PROTECTION OF SECURITY INTERESTS
Section 4.01 Custody of Contracts. (a) Subject to the terms and conditions
of this Section 4.01, the contents of each Contract File shall be held in the
custody of the Servicer (including through any subservicer contemplated under
Section 5.05), for the benefit of, and as agent for, the Noteholders, the Equity
Certificateholder, the Indenture Trustee and the Issuer, as the owner thereof.
(b) The Servicer agrees to maintain the Contract Files at its offices
where they are currently maintained, or at such other offices of the Servicer
(or a subservicer contemplated under Section 5.05) as shall from time to time be
established by the Servicer or such subservicer (or in certain instances at
offsite storage facilities in the same general geographic area as an office of
the Servicer or subservicer, pursuant to contractual agreement between the
Servicer or subservicer and the Person owning or maintaining such offsite
facility). The Servicer may temporarily move individual Contract Files or any
portion thereof without notice or other such compliance, as necessary to conduct
collection and other servicing activities in accordance with the Servicing
Standard; provided, however, that the Servicer will take all action necessary to
maintain the perfection of the Trust's interest in the Trust Assets and the
proceeds thereof. It is intended that by the Servicer's agreement pursuant to
Section 4.01(a) above and this Section 4.01(b), the Trust and the Owner Trustee
for the benefit of the Trust shall be deemed to have possession of the Contract
Files for purposes of Section 9-305 of the Uniform Commercial Code of the State
in which the Contract Files are located.
(c) As custodian, the Servicer shall have and perform the following
powers and duties:
(i) hold the Contract Files on behalf of the Noteholders and the
Equity Certificateholder and the Trust; maintain accurate records pertaining to
each Contract to enable it to comply with the terms and conditions of this
Agreement; and maintain a current inventory thereof;
(ii) maintain and comply with Customary Policies and Procedures
with respect to Persons authorized to have access to the Contract Files;
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Noteholder and the Equity
Certificateholder and the Trust; and
(iv) indicate in the appropriate computer records that the
Contracts as of the Closing Date (or Substitution Transfer Date, as the case may
be) have been conveyed to the Trust.
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(d) In performing its duties under this Section 4.01, the Servicer
agrees to act in accordance with the applicable Servicing Standard. In acting as
custodian of the Contract Files, the Servicer further agrees not to assert any
legal or beneficial ownership interest in the Contracts or the Contract Files,
except as provided in Section 5.02.
(e) The Servicer agrees to indemnify the Noteholders and the Equity
Certificateholder, the Owner Trustee, the Indenture Trustee and the Trust for
any and all liabilities, obligations, losses, damages, payments, costs, or
expenses of any kind whatsoever which may be imposed on, incurred by or asserted
against any of such parties as the result of any act or omission by the Servicer
relating to the maintenance and custody of the Contract Files or any other
breach or noncompliance of the Servicer in the performance of its duties and
obligations as Servicer hereunder; provided, however, that the Servicer will not
be liable to any such party for any portion of any such amount resulting from
the gross negligence or willful misconduct of such party.
Section 4.02 Filings. On or prior to the Closing Date, the Servicer shall
cause UCC financing statement(s) to be filed or provided for, and from time to
time the Servicer shall take and cause to be taken such other actions and
execute such other documents as are necessary to perfect or further perfect and
protect the Trust's first priority interest in the Trust Assets against all
other Persons. Such additional actions may include without limitation, the
filing of financing statements, amendments thereto and continuation statements,
the execution of transfer instruments and the making of notations on or taking
possession of records or documents of title.
Section 4.03 Name Change or Relocation. (a) During the term of this
Agreement, neither the Servicer nor the Depositor shall change, nor shall the
Servicer permit any Financing Originator to change, its name, identity or
structure or relocate its chief executive office without first giving at least
30 days' prior written notice to the Servicer, the Owner Trustee, and the
Indenture Trustee.
(b) If any change in either the Servicer's, a Financing Originator's
or the Depositor's name, identity or structure or other action would make any
financing or continuation statement or notice of lien seriously misleading
within the meaning of applicable provisions of the UCC or any title statute, the
Servicer, no later than four months after the effective date of such change,
shall file such amendments as may be required to preserve and protect the
Trust's interests in the Trust Assets and the proceeds thereof. In addition,
neither any Financing Originator, the Servicer nor the Depositor shall change
its place of business or chief executive office (within the meaning of Article 9
of the UCC), from the locations specified in Section 11.04 hereof unless it has
first taken such action as is necessary to preserve and protect the Trust's
interest in the Trust Assets.
Promptly after taking any of the foregoing actions (but not later than 20
calendar days), the Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies an Opinion of Counsel reasonably acceptable to
the Owner Trustee, the Indenture Trustee and the Rating Agencies stating that,
in the opinion of such counsel, all financing statements or amendments necessary
to preserve and protect the interests of the Trust and Indenture Trustee in the
Trust Assets have been filed, and reciting the details of such filing.
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Article V
SERVICING OF CONTRACTS
Section 5.01 Initial Servicer's Appointment and Acceptance; Responsibility
for Contract Administration. CFUSA shall be and is hereby appointed as the
Servicer and custodian (as contemplated in Article IV hereof) pursuant to this
Agreement with respect to the Contract Assets in the Contract Pool. CFUSA
accepts the appointment and agrees to act as the Servicer and custodian pursuant
to this Agreement.
Except to the extent otherwise specified herein or as contemplated in
Section 5.05, the Servicer will have the sole obligation to manage, administer,
service and make collections on the Contracts and perform or cause to be
performed all contractual and customary undertakings of the Originator of the
Contracts to the Obligor. The Trust, at the written request of a Servicing
Officer, shall furnish the Servicer with any powers of attorney or other
documents necessary or appropriate in the opinion of the Servicer to enable the
Servicer to carry out its servicing and administrative duties hereunder. The
Servicer is hereby appointed the Servicer hereunder until such time as any
Servicing Transfer may be effected pursuant to Article VIII hereof.
Section 5.02 General Duties. The Servicer will service, administer and
enforce the Contracts in the Contract Pool on behalf of the Trust and will have
full power and authority to do any and all things in connection with such
servicing and administration which it deems necessary or desirable and as shall
not contravene the provisions of this Agreement or any other Transaction
Document. The Servicer will manage, service, administer, and make collections on
the Contracts in the Contract Pool in accordance with the Servicing Standard.
The Servicer's duties will include collection and posting of all payments,
responding to inquiries of Obligors regarding the Contracts in the Contract
Pool, investigating delinquencies, accounting for collections, furnishing
reports with respect to collections and payments as contemplated in Article IX
hereof, making Servicer Advances in accordance with Section 5.14 hereof, and
using its best efforts to maintain the perfected first priority interest of the
Trust in the Trust Assets. The Servicer will have full power and authority,
acting alone, to do any and all things in connection with such managing,
servicing, administration, and collection that it deems necessary or desirable.
If the Servicer commences a legal proceeding to enforce a Defaulted Contract
pursuant to Section 5.15 or commences or participates in a legal proceeding
(including a bankruptcy proceeding) relating to or involving a Contract in the
Contract Pool, the Trust will be deemed to have automatically assigned such
Contract to the Servicer solely for purposes of, and to the extent necessary
for, commencing or participating in any such proceeding as a party or claimant
(but in all cases subject to the continuing interest of the Trust and its
assignees in the proceeds and recoveries from such proceedings, as and to the
extent provided in the Transaction Documents), and the Servicer is authorized
and empowered by the Trust, pursuant to this Section 5.02, to execute and
deliver, on behalf of itself and the Trust, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other notices, demands, claims, complaints, responses, affidavits or other
documents or instruments in connection with any such proceedings. If in any
enforcement suit or legal proceeding it is held that the Servicer may not
enforce a Contract on the ground that it is not a real party in interest or a
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holder entitled to enforce the Contract, then the Owner Trustee will, at the
Servicer's expense and written direction, take steps on behalf of the Trust to
enforce the Contract, including bringing suit in the Trust's name.
Section 5.03 Assignment or Replacement. At the request of an Obligor, the
Servicer may in its sole discretion consent to the assignment by such Obligor of
its rights under a Contract in the Contract Pool or the sublease of a unit of
the Equipment relating to such a Contract, so long as such Obligor remains
liable for all of its obligations under such Contract; provided, that the
Servicer may release such Obligor from its obligations if the Obligor's assignee
is determined by the Servicer to be of at least equivalent credit risk, all in
accordance with Customary Policies and Procedures. Upon the request of any
Obligor, the Servicer may, in its sole discretion, provide for the substitution
or replacement of any unit of Equipment for a substantially similar unit of
Equipment, so long as such Obligor remains liable for all of its obligations
under such Contract.
Section 5.04 Disposition Upon Termination of Contract. Upon the termination
of a Contract included in the Contract Pool as a result of a default by the
Obligor thereunder, and upon any such Contract becoming a Defaulted Contract,
the Servicer will use commercially reasonable efforts to dispose of any related
Equipment. Without limiting the generality of the foregoing, if the Servicer
disposes of any such Equipment by purchasing such Equipment or by selling such
Equipment to any of its Affiliates, such disposition shall be for a purchase
price equal to the fair market value thereof (as determined by the Servicer in
its reasonable discretion). The Servicer will deposit any Prepayments and any
Liquidation Proceeds derived from any such disposition in accordance with
Article VII hereof.
Section 5.05 Subservicers. The Servicer may enter into servicing agreements
with one or more subservicers (including the Financing Originators or any other
Affiliate of the Servicer) to perform all or a portion of the servicing
functions on behalf of the Servicer; provided that the Servicer shall remain
obligated and be liable to the Trust for servicing and administering the
Contracts in the Contract Pool in accordance with the provisions of this
Agreement without diminution of such obligation and liability by virtue of the
appointment of such subservicer, to the same extent and under the same terms and
conditions as if the Servicer alone were servicing and administering such
Contracts. The fees and expenses of the subservicer (if any) will be as agreed
between the Servicer and its subservicer and neither the Owner Trustee, the
Trust, the Indenture Trustee nor any Noteholder or Equity Certificateholder will
have any responsibility therefor. All actions of a subservicer taken pursuant to
such a subservicing agreement will be taken as an agent of the Servicer with the
same force and effect as though performed by the Servicer.
Section 5.06 Further Assurance. The Trust will execute and deliver to the
Servicer, and the Servicer will prepare and furnish any subservicer with, any
powers of attorney and other documents necessary or appropriate to enable the
Servicer or a subservicer, as applicable, to carry out its servicing and
administrative duties under this Agreement and the other Transaction Documents.
Section 5.07 Notice to Obligors. Except as contemplated in clause (m) of
the definition of Eligible Contract, the Servicer will not be required to notify
any Obligor that such Obligor's Contract or related Equipment, or any security
interest in such Contract or such Equipment, has been transferred, assigned, and
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conveyed pursuant to the VFC Conveyancing Agreement, the Non-VFC Conveyancing
Agreement, the Purchase and Sale Agreements, the VFC Pooling Agreement, the VFC
Assignment or pursuant to this Agreement; provided that, in the event that the
Servicer resigns or is replaced, then if the place for payment pursuant to any
Contract is changed, the Successor Servicer must give each related Obligor
prompt written notice of the appointment of the Successor Servicer and the place
to which such Obligor should make payments pursuant to each such Contract.
Section 5.08 Collection Efforts; Modification of Contracts. (a) The
Servicer will make reasonable efforts to collect all payments called for under
the terms and provisions of the Contracts in the Contract Pool as and when the
same become due, in accordance with the Servicing Standard. The Servicer is
authorized in its discretion to waive any Late Charges, or other administrative
fees, expenses and charges collectible in respect of a Contract in the Contract
Pool, including late payment interest, documentation fees, insurance
administration charges, and extension fees.
(b) The Servicer also may, subject to Sections 5.09 and 5.10, at the
request of an Obligor and at the Servicer's option, waive, amend, modify or
otherwise vary any other provision of a Contract in accordance with Customary
Policies and Procedures (it being understood that any modification or amendment
of a Contract resulting from an Insolvency Event with respect to the related
Obligor will not be deemed to have been granted by the Servicer hereunder),
including without limitation:
(i) in order to (A) change the Obligor's regular due date to a
date within the Collection Period in which such due date occurs, or (B)
re-amortize (over the remainder of the original Contract term) the Scheduled
Payments on a Contract following a partial Prepayment (provided, that the sum of
such partial Prepayment and the Contract Principal Balance of the affected
Contract after re-amortization is at least equal to the Contract Principal
Balance for such Contract prior to giving effect to the partial Prepayment), or
(ii) for any other purpose; provided, that no such modification or
amendment shall:
(A) change the amount or the due date of any Scheduled
Payment (except as provided in clauses (i)(A) and (B) above, Section 5.09 and
Section 5.10 below);
(B) release the related Equipment from the Contract, unless
(1) the release complies with Section 5.03 above, or (2) the release is pursuant
to a partial Prepayment (which, in the case of a partial Prepayment on a Lease,
meets the requirements of Section 5.09 below) and the ratio of the fair market
value (determined by the Servicer in its reasonable discretion) of the related
Equipment to the Contract Principal Balance of the affected Contract after
giving effect to such Prepayment and release, is at least equal to such ratio
existing prior to such event;
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(C) except as provided in clause (ii)(A) above, result in
the Contract Principal Balance of the Contract being less than it would have
been absent such modification or amendment; or
(D) if such modification or amendment had been in effect on
the relevant Transfer Date with respect to the Contract, cause or have caused
the Contract not to constitute an Eligible Contract.
Section 5.09 Prepayments of Certain Contracts. The Servicer may, at its
option and in accordance with Customary Policies and Procedures, agree to permit
a Contract in the Contract Pool that is not otherwise contractually prepayable
by its terms and is not a Defaulted Contract, to become a Prepaid Contract
through a voluntary Prepayment by the Obligor (which shall not be deemed to
include prepayment due to a Casualty Loss); provided, that the Servicer will not
permit the voluntary full or partial Prepayment of such a Contract unless the
amount of such Prepayment (or, in the case of a partial Prepayment, the sum of
such Prepayment and the remaining Contract Principal Balance of the Contract
after application of such Prepayment), together with such additional amounts as
are (i) otherwise available to or supplied by the Servicer for the purpose of
prepaying such Contract, and (ii) deposited in the Collection Account
contemporaneously with the deposit therein of such Prepayment, is at least equal
to the Required Payoff Amount for such Contract determined as of the beginning
of the current Collection Period.
Section 5.10 Certain Extensions; Acceleration. (a) The Servicer may
(subject to subsection (b) below) grant payment extensions on a Contract in the
Contract Pool, consistent with Customary Policies and Procedures (it being
understood that any extensions on a Contract resulting from an Insolvency Event
with respect to the related Obligor will not be deemed to have been granted by
the Servicer hereunder) if the Servicer believes in good faith that such
extension is necessary to avoid a termination and liquidation of such Contract
and will maximize the amount to be received by the Trust with respect to such
Contract; provided, however, that the aggregate period of all extensions granted
on a Contract shall not exceed six months. Nothing in this Section 5.10 shall be
deemed to prevent the Servicer from extending or renewing, or otherwise
accepting the continued performance by the Obligor under, a Contract after
expiration of its stated term.
(b) The Servicer also, consistent with Customary Policies and
Procedures, may accelerate (or elect not to accelerate) the maturity of all or
any Scheduled Payments under any Contract in the Contract Pool under which a
default under the terms thereof has occurred and is continuing (after the lapse
of any applicable grace period); provided that the Servicer is required to
accelerate the Scheduled Payments due under any Contract in the Contract Pool
(and take other action in accordance with applicable Customary Policies and
Procedures, including repossessing or otherwise converting the related
Equipment, to realize upon the value of such Contract and the related Equipment)
to the fullest extent permitted by the terms of such Contract, promptly after
such Contract becomes a Defaulted Contract.
Section 5.11 Taxes and Other Amounts. To the extent provided for in any
Contract in the Contract Pool, the Servicer will make reasonable efforts
consistent with the Servicing Standard to collect (or cause to be collected) all
payments with respect to amounts due for taxes, assessments and insurance
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premiums relating to such Contract or the related Equipment and remit such
amounts to the appropriate Governmental Authority or insurer on or prior to the
date such payments are due.
Section 5.12 Suits by Servicer. Notwithstanding anything herein to the
contrary, the Servicer does not have any obligation pursuant to this Agreement
to appear in, prosecute or defend any legal action which is not incidental to
its servicing duties under this Agreement.
Section 5.13 Remittances. The Servicer will remit and service all
Collections in accordance with Article VII hereof.
Section 5.14 Servicer Advances. For any Collection Period, if the Servicer
determines that any Scheduled Payment (or portion thereof) which was due and
payable pursuant to a Contract in the Contract Pool during such Collection
Period was not received prior to the end of such Collection Period, the Servicer
shall make a Servicer Advance in an amount up to the amount of such delinquent
Scheduled Payment (or portion thereof), to the extent that in its sole
discretion it determines that it can recover such amount from subsequent
Collections under the related Contract; provided, however, if a Person other
than an affiliate of CIT becomes the Servicer hereunder, such Person shall not
be required to make a Servicer Advance. The Servicer will deposit any Servicer
Advances into the Collection Account on or prior to 11:00 a.m. (New York time)
on the Deposit Date, in immediately available funds. The Servicer will be
entitled to be reimbursed for Servicer Advances pursuant to Article VII hereof.
Section 5.15 Realization Upon Defaulted Contract. The Servicer will use its
best efforts consistent with the Servicing Standard to repossess or otherwise
comparably convert the ownership of any Equipment relating to a Defaulted
Contract and will act as transfer and processing agent for Equipment or
Applicable Security which it repossesses. The Servicer will follow such other
practices and procedures, consistent with the Servicing Standard, in order to
realize upon such Equipment or Applicable Security, which practices and
procedures may include reasonable efforts to enforce all obligations of Obligors
and repossessing and selling such Equipment or Applicable Security at public or
private sale in circumstances other than those described in the preceding
sentence. Without limiting the generality of the foregoing, the Servicer may
sell any such Equipment or Applicable Security to the Servicer or its Affiliates
for a purchase price equal to the then fair market value thereof (determined by
the Servicer in its reasonable discretion). In any case in which any such
Equipment or Applicable Security has suffered damage, the Servicer will not
expend funds in connection with any repair or toward the repossession of such
Equipment or Applicable Security unless it determines in its discretion that
such repair and/or repossession will increase the Liquidation Proceeds by an
amount greater than the amount of such expenses. The Servicer will remit to the
Collection Account the Liquidation Proceeds received in connection with the
transfer or disposition of Equipment or Applicable Security relating to a
Defaulted Contract in accordance with Article VII hereof.
Section 5.16 Maintenance of Insurance Policies. The Servicer will use
reasonable efforts, consistent with the Servicing Standard, to ensure that each
Obligor complies with applicable insurance requirements set forth in the related
Contract; provided that the Servicer, in accordance with Customary Policies and
Procedures, may allow Obligors to self-insure. If an Obligor fails to maintain
property damage insurance to the extent required under its Contract, the
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Servicer may, consistent with Customary Policies and Procedures, purchase and
maintain such insurance on behalf of, and at the expense of (if the applicable
Contract so provides), the Obligor. In connection with its activities as
Servicer of Contracts in the Contract Pool, the Servicer agrees to present, on
behalf of itself, the Trust and the Noteholders or Equity Certificateholders,
claims to the insurer under each Insurance Policy and any such liability policy,
and to settle, adjust and compromise such claims, in each case, consistent with
the terms of each Contract.
Section 5.17 Certain Other Duties With Respect to Trust. The Servicer
shall, and hereby agrees that it will, monitor the Trust's compliance with all
applicable provisions of state and federal securities laws, notify the Trust and
the Administrator of any actions to be taken by the Trust necessary for
compliance with such laws and prepare on behalf of the Trust and the
Administrator all notices, filings or other documents or instruments required to
be filed under such laws.
Section 5.18 Servicing Compensation. As compensation for its servicing
activities with respect to the Contract Pool, and also in consideration of its
expenses as set forth in Section 5.19, the Servicer shall be entitled to receive
a servicing fee in respect of any Collection Period (or portion thereof) (with
respect to each Collection Period, the "Servicing Fee"), equal to the sum of (i)
one-twelfth of the product of (A) the Servicing Fee Percentage and (B) the
Contract Pool Principal Balance as of the first day of such Collection Period
and (ii) any amount described in the clause (iv) of the definition of "Excluded
Amounts."
Section 5.19 Payment of Certain Expenses by Servicer. The Servicer will be
required to pay all expenses incurred by it in connection with its activities
under this Agreement, including fees and disbursements of independent
accountants, counsel, the Owner Trustee, the Indenture Trustee, taxes imposed on
the Servicer, expenses incurred in connection with payments and reports pursuant
to this Agreement, and all other fees and expenses not expressly stated under
this Agreement (including ongoing fees and expenses of the Owner Trustee) to be
for the account of the Trust or the Depositor, but excluding Liquidation
Expenses incurred as a result of activities contemplated by Section 5.15 (which
may be netted from Liquidation Proceeds). The Servicer will be required to pay
all reasonable fees and expenses owing to the Owner Trustee or the Indenture
Trustee in connection with the maintenance of the Collection Account. The
Servicer shall be required to pay such expenses for its own account and shall
not be entitled to any payment or reimbursement therefor other than the
Servicing Fee, payable from Collections as provided herein.
Section 5.20 Records. The Servicer shall, during the period it is Servicer
hereunder, maintain such books of account and other records as will enable the
Trust or the Administrative Agent to determine the status of each Contract in
the Contract Pool.
Section 5.21 Inspection. (a) The Servicer shall afford the Owner Trustee
and the Indenture Trustee and their respective authorized agents not more
frequently than once during each calendar year at the Servicer's expense, not to
exceed $1,000 in expenses and upon reasonable prior written request, reasonable
access during normal business hours to the Servicer's records relating to the
Contracts in the Contract Pool, and will cause its personnel to assist in any
58
examination of such records by any such Person, and allow copies of the same to
be made. The examination referred to in this Section will be conducted in a
manner which does not unreasonably interfere with the Servicer's normal
operations or customer or employee relations. Without otherwise limiting the
scope of the examination, such examining party may, using generally accepted
audit procedures, verify the status of each such Contract and review the
Computer Disk and records relating thereto for conformity to reports prepared by
the Servicer pursuant to Article IX hereof, and compliance with the standards
represented to exist as to each such Contract in this Agreement and the other
Transaction Documents.
(b) At all times during the term hereof, the Servicer shall keep available
a copy of the Schedule of Contracts at its principal executive office for
inspection by any such party referred to in subsection (a) of this Section 5.21.
Section 5.22 Trust To Cooperate in Releases. At the same time as (i) any
Lease in the Contract Pool terminates and the Equipment related to such Lease is
sold, (ii) any Contract in the Contract Pool becomes a Prepaid Contract and in
connection therewith the Equipment related to such Prepaid Contract is sold,
(iii) the final Scheduled Payment is made in full on a Contract in the Contract
Pool, (iv) a Contract previously in the Contract Pool becomes a Replaced
Contract in accordance with Section 2.04, or is repurchased by deposit of a
Purchase Amount as provided herein, or (v) the Servicer substitutes or replaces
any unit of Equipment as contemplated in Section 5.03, the Trust shall to the
extent requested by the Servicer release the Trust's interest in the Equipment
relating to such affected Contract or such substituted or replaced Equipment, as
the case may be; provided that such release will not constitute a release of the
Trust's interest in the proceeds of Equipment the subject of a Contract still in
the Contract Pool (other than with respect to Equipment that is replaced
pursuant to Section 5.03). In connection with any transfer of such Equipment,
the Trust and the Indenture Trustee shall execute and deliver to the Servicer
any assignments, bills of sale, termination statements and any other releases
and instruments as the Servicer may request and prepare at its expense in order
to effect such release and transfer; provided that neither the Trust nor the
Indenture Trustee shall be deemed to make any representation or warranty,
express or implied, with respect to any such Equipment in connection with such
transfer and assignment. Nothing in this Section 5.22 shall diminish the
Servicer's obligations pursuant to Article VII with respect to the proceeds of
any such transfer.
Section 5.23 Separate Entity Existence. The Servicer agrees to take or
refrain from taking or engaging in with respect to the Depositor, as applicable,
each of the actions or activities specified in the "substantive
nonconsolidation" opinion of Schulte Roth & Zabel LLP (or in any related
Certificate of Financial) delivered on the Closing Date, upon which the
conclusions expressed therein are based.
Section 5.24 Assignment of Servicing. The Servicer may sell, transfer,
assign or convey its rights as Servicer to any Eligible Servicer, upon written
notice to the Trustees and the Rating Agencies, without the consent of the
Securityholders or the Trustees, provided that the Rating Agency Condition is
satisfied. No such sale, transfer, assignment or conveyance shall become
effective until such Eligible Servicer shall have assumed all of the
responsibilities and obligations of the Servicer under the Transaction
Documents.
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Article VI
COVENANTS OF THE DEPOSITOR
Section 6.01 LLC Existence. During the term of this Agreement, the
Depositor will keep in full force and effect its existence, rights and
franchises as a limited liability company under the laws of the jurisdiction of
its formation 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 this Agreement, the other Transaction
Documents and each other instrument or agreement necessary or appropriate to the
proper administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between the Depositor and its
Affiliates will be conducted on an arm's-length basis.
Section 6.02 Contracts Not to be Evidenced by Promissory Notes. The
Depositor will take no action to cause any Contract not originally consisting of
or evidenced by an instrument (except to the extent part of chattel paper) (as
such terms are defined in the UCC), to be evidenced by an instrument, except in
connection with the enforcement or collection of such Contract.
Section 6.03 Security Interests. The Depositor will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on any Contract in the Contract Pool or on any other
Trust Asset or on any related Equipment, whether now existing or hereafter
transferred to the Trust, or any interest therein (except for Permitted Liens).
The Depositor will immediately notify the Trust and the Indenture Trustee of the
existence of any Lien (other than Permitted Liens) on any Contract in the
Contract Pool or on any other Trust Assets or on any related Equipment; and the
Depositor shall defend the right and interest of the Trust in, to and under the
Contracts in the Contract Pool and the related Equipment, against all claims of
third parties; provided, however, that nothing in this Section 6.03 shall
prevent or be deemed to prohibit (i) the Depositor from suffering to exist
Permitted Liens upon any of the Contracts in the Contract Pool or any related
Equipment, or (ii) repurchases or substitutions by CFUSA pursuant to the
Purchase and Sale Agreements.
Section 6.04 Delivery of Collections. The Depositor agrees to pay to the
Servicer promptly any misdirected Collections received by the Depositor in
respect of the Contracts in the Contract Pool, for application in accordance
with Article VII.
Section 6.05 Regulatory Filings. The Depositor shall make any filings,
reports, notices, applications and registrations with, and seek any consents or
authorizations from, the United States Securities and Exchange Commission and
++any state securities authority on behalf of the Trust as may be necessary or
that the Depositor deems advisable to comply with any federal or state
securities or reporting requirements or laws.
Section 6.06 Compliance With Law. Depositor hereby agrees to comply in all
material respects with all Requirements of Law applicable to the Depositor.
Section 6.07 Activities. The Depositor shall not engage in any business or
activity of any kind, or enter into any transaction or indenture, mortgage,
instrument, agreement, contract, lease or other undertaking, which is not
60
directly related to the transactions contemplated and authorized by this
Agreement or the other Transaction Documents; provided, however, that the
Depositor may purchase and sell (or grant Liens in respect of) contracts and/or
other related assets similar to the Contracts to other Persons in securitization
or other non-recourse financing transactions involving CFUSA or any of its
Affiliates on terms and conditions (with respect to the liabilities imposed upon
the Depositor by virtue of such transactions, as well as in respect of
agreements or restrictions concerning activities of the Depositor and its
relations or interactions with CFUSA or a Financing Originator or other
applicable Affiliate relevant to "bankruptcy remoteness" or "substantive
consolidation" analysis), in each case substantially similar to such terms and
conditions applicable to the Depositor hereunder and under the other Transaction
Documents.
Section 6.08 Indebtedness. The Depositor shall not create, incur, assume or
suffer to exist any Indebtedness or other liability whatsoever, except (i)
obligations incurred under this Agreement or other Transaction Documents, or
incidental thereto, or (ii) liabilities incident to the maintenance of its
corporate existence in good standing, or (iii) obligations in connection with
transactions described in the proviso to Section 6.07, as limited thereby.
Section 6.09 Guarantees. The Depositor shall not become or remain liable,
directly or contingently, in connection with any Indebtedness or other liability
of any other Person, whether by guarantee, endorsement (other than endorsements
of negotiable instruments for deposit or collection in the ordinary course of
business), agreement to purchase or repurchase, agreement to supply or advance
funds, or otherwise, except as contemplated hereby and in connection with
transactions described in Section 6.07, as limited thereby.
Section 6.10 Investments. The Depositor shall not make or suffer to exist
any loans or advances to, or extend any credit to, or make any investments (by
way of transfer of property, contributions to capital, purchase of stock or
securities or evidences of indebtedness, acquisition of the business or assets,
or otherwise) in, any Person except (i) for purchases or other acquisitions of
Contracts and related Contract Assets pursuant to the Purchase and Sale
Agreements or purchases or other acquisitions of similar contracts and related
assets permitted by Section 6.07, or (ii) the holding of ownership interests in
Equipment contemplated herein or in transactions permitted by Section 6.07, or
(iii) for investments in Eligible Investments in accordance with the terms of
this Agreement.
Section 6.11 Merger; Transfers. The Depositor shall not enter into any
transaction of merger or consolidation, or liquidate or dissolve itself (or
suffer any liquidation or dissolution) or acquire or be acquired by any Person,
or convey, sell, lease or otherwise dispose of all or substantially all of its
property or business, except as provided for in this Agreement.
Section 6.12 Payments. The Depositor shall not declare or pay, directly or
indirectly, any dividend or make any other payment (whether in cash or other
property) with respect to the profits, assets or capital of the Depositor or any
Person's interest therein, or purchase, redeem or otherwise acquire for value
any of its equity ownership interests now or hereafter outstanding, except that
the Depositor may effect payments of its earnings in respect of Trust Assets to
its members in each case so long as it would continue to be Solvent after giving
effect thereto, and otherwise in accordance with the Transaction Documents.
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Section 6.13 Other Agreements. The Depositor shall not become a party to,
or permit any of its properties to be bound by, any indenture, mortgage,
instrument, contract, agreement, lease or other undertaking, except this
Agreement and the other Transaction Documents to which it is a party and any
agreement relating to another securitization transaction permitted by Section
6.07; nor shall it amend or modify the provisions of its Certificate of
Formation or Limited Liability Company Agreement except in accordance with the
Transaction Documents and with the consent of the Required Holders, or issue any
power of attorney except to the Owner Trustee, the Indenture Trustee or the
Servicer pursuant to the Transaction Documents (or other similar powers of
attorney in connection with transactions permitted by the proviso to Section
6.07).
Section 6.14 Separate Entity Existence. The Depositor shall:
(i) Maintain its own deposit account or accounts, separate from
those of any Affiliate, with commercial banking institutions. The funds of the
Depositor will not be diverted to any other Person or for other than authorized
uses of the Depositor.
(ii) Ensure that, to the extent that it shares the same officers
or other employees as any of its members or Affiliates, the salaries of and the
expenses related to providing benefits to such officers and other employees
shall be fairly allocated among such entities, and each such entity shall bear
its fair share of the salary and benefit costs associated with all such common
officers and employees.
(iii) Ensure that, to the extent that it jointly contracts with
any of its members or Affiliates to do business with vendors or service
providers or to share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, and each such entity shall bear its fair
share of such costs. To the extent that the Depositor contracts or does business
with vendors or service providers when the goods and services provided are
partially for the benefit of any other Person, the costs incurred in so doing
shall be fairly allocated to or among such entities for whose benefit the goods
and services are provided, and each such entity shall bear its fair share of
such costs. All material transactions between Depositor and any of its
Affiliates shall be only on an arm's length basis.
(iv) To the extent that the Depositor and any of its members or
Affiliates have offices in the same location, there shall be a fair and
appropriate allocation of overhead costs among them, and each such entity shall
bear its fair share of such expenses.
(v) Conduct its affairs strictly in accordance with its Limited
Liability Company Agreement and its Certificate of Formation, and observe all
necessary, appropriate and customary limited liability company formalities,
including, but not limited to, holding all regular and special members' and
manager/directors' meetings appropriate to authorize all entity action, keeping
separate and accurate records of such meetings and its actions, passing all
resolutions or consents necessary to authorize actions taken or to be taken, and
maintaining accurate and separate books, records and accounts, including, but
not limited to, payroll and intercompany transaction accounts.
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(vi) Take or refrain from taking or engaging in, as applicable,
each of the actions or activities specified in the "true sale" and "substantive
nonconsolidation" opinions of Schulte Roth & Zabel LLP delivered on the Closing
Date (or in any related certificate delivered in connection therewith), upon
which the conclusions expressed therein are based.
Section 6.15 Location; Records. The Depositor shall not move outside the
State of New Jersey, the location of its chief executive office, without thirty
(30) days' prior written notice to the Trust, the Indenture Trustee and the
Servicer, and will promptly take all actions required (including, but not
limited to, all filings and other acts necessary or advisable under the UCC of
each relevant jurisdiction) in order to continue the first priority perfected
security interest of the Indenture Trustee in Trust Assets. The Depositor will
give the Indenture Trustee, the Trust and the Servicer prompt notice of a change
within the State of New Jersey of the location of its chief executive office.
Section 6.16 Liability of Depositor; Indemnities. The Depositor shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Depositor under this Agreement.
The Depositor shall indemnify, defend and hold harmless the Trust, the
Owner Trustee (including in its individual capacity), the Indenture Trustee
(including in its individual capacity) and the Servicer (and any of their
respective officers, directors, employees or agents) from and against any taxes
that may at any time be asserted against any such Person with respect to the
transactions contemplated herein and in the other Transaction Documents,
including any sales, gross receipts, general corporation, tangible personal
property, personal property replacement privilege or license taxes (but, in the
case of the Trust, not including any taxes asserted with respect to, and as of
the date of, the transfer of Contracts to the Trust or the issuance and original
sale of the Notes, or asserted with respect to ownership of Contract Assets, or
federal or other income taxes arising out of payments from Collections on the
Trust Assets) and costs and expenses in defending against the same.
The Depositor shall indemnify, defend and hold harmless the Trust, the
Owner Trustee (including in its individual capacity), the Indenture Trustee
(including in its individual capacity) and the Servicer (and any of their
respective officers, directors, employees or agents) and the Securityholders
from and against any loss, liability or expense incurred by reason of the
Depositor's willful misfeasance, bad faith or negligence (other than errors in
judgment) in the performance of its duties under this Agreement, or by reason of
reckless disregard of its obligations and duties under this Agreement.
The Depositor shall indemnify, defend and hold harmless the Trust, the
Owner Trustee (including in its individual capacity), the Indenture Trustee
(including in its individual capacity) and the Servicer (and any of their
respective officers, directors, employees or agents) and any Noteholders from
and against all costs, expenses, losses, claims, damages and liabilities arising
out of or incurred in connection with the acceptance or performance (or failure
of performance) of the trusts and duties herein and, in the case of the Owner
Trustee, in the Trust Agreement and, in the case of the Indenture Trustee, in
the Indenture, except to the extent that such cost, expense, loss, claim, damage
or liability in the case of (i) the Owner Trustee shall be due to the willful
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misfeasance, bad faith or negligence of the Owner Trustee, or shall arise from
the breach by the Owner Trustee of any of its representations or warranties set
forth in Section 7.03 of the Trust Agreement, or (ii) the Indenture Trustee
shall be due to the willful misfeasance, bad faith or negligence of the
Indenture Trustee.
The Depositor shall be liable directly to and will indemnify any injured
party or any other creditor of the Trust for all losses, claims, damages,
liabilities and expenses of the Trust to the extent that the Depositor would be
liable if the Trust were a partnership under the Delaware Revised Uniform
Limited Partnership Act in which the Depositor were a general partner; provided,
however, that the Depositor shall not be liable for any losses incurred by the
Equity Certificateholder in the capacity of an investor in the Equity
Certificate or a Noteholder in the capacity of an investor in the Notes. In
addition, any third party creditors of the Trust (other than in connection with
the obligations described in the immediately preceding sentence for which the
Depositor shall not be liable) shall be deemed third party beneficiaries of this
paragraph. The obligation of the Depositor under this paragraph shall be
evidenced by the Equity Certificate.
The Depositor shall indemnify, defend and hold harmless the Owner Trustee
(including in its individual capacity) and the Indenture Trustee (including in
its individual capacity) from and against any loss, liability or expense
incurred by reason of the Depositor's or Trust's violation of federal or state
securities laws in connection with the offering and sale of the Notes and the
Certificate.
Indemnification under this Section shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation; provided,
however, that the indemnification under this Section, notwithstanding anything
to the contrary, is limited to the assets of the Depositor (including its rights
under Article VI of the Substitute VFC Purchase Agreement; Article VI of the
Non-VFC Purchase Agreement or Article VI of the VFC Purchase Agreement);
provided, further, any indemnity payments to be made pursuant to this Section
shall not be made from the Trust Assets (except to the extent any of the same
have been distributed to the Depositor free and clear of any interest of the
Trust therein and except to the extent CFUSA as co-obligor is obligated to make
such payment pursuant to Article VI of the Substitute VFC Purchase Agreement;
Article VI of the Non-VFC Purchase Agreement or Article VI of the VFC Purchase
Agreement), and such indemnity payments, if unpaid, shall not constitute a claim
against the Trust or the Trust Assets (except in respect of rights against CFUSA
in respect of the aforementioned Articles of the Purchase and Sale Agreements).
If the Depositor (or CFUSA pursuant to the aforementioned Articles of the
Purchase and Sale Agreements) shall have made any indemnity payments pursuant to
this Section and the Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Depositor (or CFUSA, as applicable), without
interest.
Indemnification under this Section shall survive the resignation or removal
of the Owner Trustee or the Indenture Trustee, as the case may be, and the
termination of the Trust Agreement or this Agreement.
Section 6.17 Bankruptcy Limitations. The Depositor shall not, without the
affirmative vote of each of the manager/directors of the Depositor (which must
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include the affirmative vote of at least one duly appointed Independent Director
as defined in the Certificate of Formation and the Limited Liability Company
Agreement of the Depositor) (A) dissolve or liquidate, in whole or in part, or
institute proceedings to be adjudicated bankrupt or insolvent, (B) consent to
the institution of bankruptcy or insolvency proceedings against it, (C) file a
petition seeking or consent to reorganization or relief under any applicable
federal or state law relating to bankruptcy, (D) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Depositor or a substantial part of its property, (E) make a
general assignment for the benefit of creditors, (F) admit in writing its
inability to pay its debts generally as they become due, or (G) take any entity
action in furtherance of the actions set forth in clauses (A) through (F) above;
provided, however, that no manager/director may be required by any member of the
Depositor to consent to the institution of bankruptcy or insolvency proceedings
against the Depositor so long as it is Solvent.
Section 6.18 Limitation on Liability of Depositor and Others. The Depositor
and any director or officer or employee or agent of the Depositor may rely in
good faith on any document of any kind, prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor
shall not be under any obligation to appear in, prosecute or defend any legal
action that shall not be incidental to its obligations under this Agreement, and
that in its opinion may involve it in any expense or liability.
Section 6.19 Chief Executive Office. During the term of this Agreement, the
Depositor will maintain its chief executive office in one of the States of the
United States, except Louisiana, Tennessee, Colorado, Kansas, New Mexico,
Oklahoma, Utah or Wyoming.
Article VII
ESTABLISHMENT OF ACCOUNTS; PAYMENTS
Section 7.01 Trust Accounts; Collections. (a) On or before the Closing
Date, the Depositor (or the Servicer on its behalf) shall cause the Indenture
Trustee to establish the Collection Account, the Note Distribution Account and
the Cash Collateral Account, each in the name of the Indenture Trustee for the
benefit of the Noteholders and the Equity Certificateholder. The Servicer is
hereby required to ensure that each of the Trust Accounts is established and
maintained as a segregated corporate trust account with a Qualified Institution.
If any institution with which any of the accounts established pursuant to this
Section 7.01(a) ceases to be a Qualified Institution, the Servicer shall within
30 days after notice of such event establish a replacement account at a
Qualified Institution, and effect (or cause to be effected) a concurrent
transfer of all amounts in the current non-qualifying account to the replacement
account.
(b) (i) Subject to subsection 7.01(b)(ii) hereof, the Servicer shall
deposit or cause to be deposited, without deposit into any intervening account,
into the Collection Account as promptly as practical after the Date of
Processing (but in any case not later than the second Business Day following the
Date of Processing thereof), all Pledged Revenues on deposit with the Servicer
in the form of available funds, and all Pledged Revenues otherwise received by
the Servicer (and all Investment Earnings from investments of the Collection
Account).
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(ii) Notwithstanding anything in this Agreement to the contrary,
for so long as, and only so long as,
(A) the Servicer or the direct or indirect parent of the
Servicer shall have and maintain a short-term debt rating of at least A-1 by
Standard & Poor's and either a short-term debt rating of P-1 or a long-term debt
rating of at least A2 by Moody's, or
(B) the Servicer obtains a letter of credit, surety bond or
insurance policy (the "Servicer Letter of Credit") under which demands for
payment may be made to secure timely remittance of monthly collections to the
Collection Account and the Trustees are provided with a letter from each Rating
Agency to the effect that the utilization of such alternative remittance
schedule and any amendment required to be made to this Agreement in connection
therewith will not result in a qualification, reduction or withdrawal of its
then-current rating of the Notes,
the Servicer may make the deposits to the Collection Account specified in
subsection 7.01(b)(i) hereof on a monthly basis, but not later than the Deposit
Date following the last day of the Collection Period within which such payments
were processed by the Servicer, in an amount equal to the net amount of such
deposits and payments which would have been made to the Collection Account
during such Collection Period but for the provisions of this subsection
7.01(b)(ii). In the event that the Servicer is permitted to make remittances of
collections to the Collection Account pursuant to Section 7.01(b)(ii)(B) hereof,
this Agreement may be modified, to the extent necessary to provide for the
Servicer Letter of Credit, without the consent of any Securityholder. The
Servicer shall notify the Trustees if the Servicer no longer complies with the
requirements set forth in clause (A) or (B) above.
(c) Subject to Section 7.01(b)(ii), the Servicer shall deposit or
cause to be deposited, on the Closing Date and on each Substitution Transfer
Date, in immediately available funds into the Collection Account, all Pledged
Revenues received after the applicable Cut-Off Date and through and including
the date which is two Business Days preceding the Closing Date or Substitution
Transfer Date, as the case may be, in respect of Contracts being transferred to
the Trust on such date.
(d) Notwithstanding Sections 7.01(b) and (c), if (i) the Servicer
makes a deposit into the Collection Account in respect of Pledged Revenues of a
Contract in the Contract Pool and such Pledged Revenues were received by the
Servicer in the form of a check which is not honored for any reason, or (ii) the
Servicer makes a mistake with respect to the amount of any Pledged Revenues and
deposits an amount that is less than or more than the actual amount of such
Collection, the Servicer shall appropriately adjust the amount subsequently
deposited into the Pledged Revenues Account to reflect such dishonored check or
mistake. Any Scheduled Payment in respect of which a dishonored check is
received shall be deemed not to have been paid.
(e) All amounts received by the Indenture Trustee pursuant to the
Class A-4 Swap Agreement shall be deposited in the Note Distribution Account for
the benefit of the Class A-4 Noteholders.
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Section 7.02 Cash Collateral Account. (a) On the Closing Date, the
Depositor shall deposit the sum of $42,357,881 into the Cash Collateral Account
from the net proceeds of the sale of the Notes and the Indenture Trustee shall
deposit into the Cash Collateral Account proceeds received by the Indenture
Trustee of loans made by the Cash Collateral Account Lenders equal to
$19,061,046.
(b) If on any Payment Date, the amounts on deposit in the Cash
Collateral Account (after giving effect to all deposits thereto or withdrawals
therefrom on such Payment Date) is greater than the Required Cash Collateral
Amount, the Indenture Trustee upon receipt of written instructions from the
Servicer shall distribute the excess of the amount on deposit in the Cash
Collateral Account over the Required Cash Collateral Amount as provided in the
Cash Collateral Account Agreement. Amounts properly distributed pursuant to the
prior sentence shall be deemed released from the Trust Estate and the security
interest herein granted to the Indenture Trustee, and the Trust shall in no
event be required to refund such distributed amounts.
Section 7.03 Trust Account Procedures. If the Servicer so directs, in
writing (with a copy to the Owner Trustee and the Indenture Trustee), the
Qualified Institution maintaining any Trust Account, shall invest the amounts
therein in Eligible Investments of the type specified in such written direction
that mature not later than one Business Day prior to the next succeeding Payment
Date (or that mature on such earlier Business Day as the Rating Agencies shall
approve, with a copy of such approval provided to the Indenture Trustee). Once
such funds of any Trust Account are invested, the Servicer shall not change or
permit a change in the investment of such funds. Subject to the other provisions
hereof, the Indenture Trustee shall have sole control over each such investment
and the income thereon, and any certificate or other instrument evidencing any
such investment, if any, shall be delivered directly to the Indenture Trustee or
its agent, together with each document of transfer, if any, necessary to
transfer title to such investment to the Indenture Trustee in a manner which
complies with this Section 7.03. All Investment Earnings on investments of funds
in the Collection Account and Note Distribution Account shall be deposited in or
maintained within the Collection Account pursuant to Section 7.01 and
distributed on the next Payment Date pursuant to Section 7.05. All Investment
Earnings in the Cash Collateral Account shall be distributed in accordance with
the Cash Collateral Account Agreement. The Servicer, the Depositor and the Trust
agree and acknowledge that the Indenture Trustee is to have "control" (within
the meaning of Section 8-102 of the UCC as enacted in New York) of collateral
consisting of "Investment Property" (within the meaning of Section 9-115 of the
UCC as enacted in New York) for all purposes of this Agreement. In the absence
of timely written direction from the Servicer, the Indenture Trustee shall
invest or cause to be invested amounts in the Trust Accounts in Eligible
Investments of the type specified in clause (vi) of the definition of Eligible
Investments herein. The Indenture Trustee shall not be liable for investment
losses in Eligible Investments as directed by the Servicer.
Section 7.04 Securityholder Payments. (a) On each Payment Date, each
Noteholder and the Equity Certificateholder as of the related Record Date shall
be paid amounts payable on such date pursuant to Section 7.05 below by check
mailed to such Noteholder or the Equity Certificateholder at the address for
such Noteholder or the Equity Certificateholder appearing on the Note Register
or the Certificate Register, or by wire transfer if such Noteholder or the
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Equity Certificateholder has provided written instructions for such payment
method to the Indenture Trustee and Owner Trustee, respectively, at least ten
days prior to such Payment Date.
(b) The Indenture Trustee shall serve as the Paying Agent hereunder
and shall make the payments to the Noteholders and the Equity Certificateholder
required hereunder. The Indenture Trustee hereby agrees that all amounts held by
it for payment hereunder will be held in trust for the benefit of the
Noteholders and the Equity Certificateholder, as their interests may appear.
Section 7.05 Allocations and Payments.
(a) Distributions from Collection Account. On each Payment Date, the
Indenture Trustee shall (based solely on the information contained in the
Servicer's Monthly Report delivered on the related Determination Date, upon
which the Indenture Trustee may conclusively rely) distribute the following
amounts and in the order of priority specified below. Within each order of
priority, amounts shall be deemed withdrawn first from Available Pledged
Revenues, and second (but only as to amounts described in clauses (ii) and (iii)
below) from amounts deposited in the Collection Account pursuant to Section 7.02
and 7.05(d).
(i) first, from the Available Pledged Revenues then on deposit in
the Collection Account, to the Servicer, the Servicing Fee and the reimbursement
for Servicer Advances for the related Collection Period and any amounts
specified in Section 2.05 hereof, to the extent the Servicer has not reimbursed
itself in respect of such amounts;
(ii) second, from the Amount Available then remaining on deposit
in the Collection Account, to the Note Distribution Account an amount equal to
the Note Interest Distributable Amount for such Payment Date (assuming for this
purpose that the Class A-4 Notes bear interest at the Class A-4 Assumed Fixed
Rate);
(iii) third, from the Amount Available then remaining on deposit
in the Collection Account, to the Note Distribution Account, an amount equal to
the Note Principal Distributable Amount for such Payment Date;
(iv) fourth, from the Amount Available then remaining on deposit
in the Collection Account, to the Cash Collateral Account, the amount, if any,
necessary to increase the balance therein to the Required Cash Collateral
Amount;
(v) fifth, from the Amount Available then remaining on deposit in
the Collection Account, to the parties entitled thereto in accordance with the
Cash Collateral Account Agreement, any amounts due and unpaid thereunder;
(vi) sixth, from the Amount Available then remaining on deposit
in the Collection Account, to payment of any shortfalls in the payment of
interest on the Class A-4 Notes due to the failure of the Class A-4 Swap
Counterparty to pay amounts payable to the Indenture Trustee under the Class A-4
Swap Agreement, together with interest on such shortfalls at the Class A-4
Interest Rate; and
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(vii) seventh, any remaining Amount Available to the Indenture
Trustee for distribution to the Equity Certificateholder.
In the event the Servicer's Monthly Report shows that, as of any Determination
Date, there are amounts on deposit in the Collection Account which do not
constitute Pledged Revenues due to clause (ii)(b) of the definition thereof and
to which the Depositor is entitled pursuant to Section 2.04 hereof, the
Indenture Trustee shall forthwith pay such amount to or upon the written order
of the Depositor.
(b) Allocations and Payments Prior to an Event of Default. On each
Determination Date prior to an Event of Default, the Servicer, pursuant to
written monthly payment instructions and notification, shall instruct the
Indenture Trustee to withdraw and transfer, and on the succeeding Payment Date
the Indenture Trustee acting in accordance with such written instructions shall
withdraw and transfer, the amounts required to be withdrawn from the Note
Distribution Account in order to make the following payments or allocations from
the Amount Available for the related Payment Date (in each case, such payment or
transfer to be made only to the extent funds remain available therefor after all
prior payments and transfers for such Payment Date have been made), in the
following order of priority:
(i) pay to the Indenture Trustee on behalf of the Class A-1
Noteholders, Class A-2 Noteholders, Class A-3 Noteholders, and the Class A-4
Noteholders, an amount equal to interest accrued in respect of the related Class
A-1 Notes at the Class A-1 Interest Rate, Class A-2 Notes at the Class A-2
Interest Rate, Class A-3 Notes at the Class A-3 Interest Rate, and Class A-4
Notes at the Class A-4 Assumed Fixed Rate for the Accrual Period immediately
preceding such Payment Date, together with any such amounts that accrued in
respect of prior Accrual Periods for which no allocation was previously made;
provided that if the Amount Available remaining to be allocated pursuant to this
clause is less than the full amount required to be so allocated, such remaining
Amount Available shall be allocable to the Holders of the Class A-1 Notes, Class
A-2 Notes, Class A-3 Notes and the Class A-4 Notes pro rata based upon the
aggregate amount of interest due to each class (in the case of the Class A-4
Notes, at the Class A-4 Assumed Fixed Rate); provided further that if on the
relevant Payment Date any amount is payable to the Class A-4 Swap Counterparty
under the Class A-4 Swap Agreement the Indenture Trustee shall (pursuant to the
written instructions of the Servicer), from the amount available to pay interest
on the Class A-4 Notes pursuant to this clause (i), apply such amount first to
pay the Class A-4 Swap Counterparty and thereafter apply the balance of such
amount available to the payment of interest on the Class A-4 Notes. If on the
date of any such distribution, any amount is payable to the Indenture Trustee
under the Class A-4 Swap Agreement, the Indenture Trustee shall (pursuant to the
written instructions of the Servicer) apply all of the amount available to pay
interest on the Class A-4 Notes pursuant to this clause (i) together with any
amount received under the Class A-4 Swap Agreement to the payment of interest on
the Class A-4 Notes. All instructions required to be provided by the Servicer
are deemed given if included in the Monthly Report or in a separate writing.
(ii) pay to the Indenture Trustee on behalf of the Class B
Noteholders an amount equal to the Class B Interest Distributable Amount;
provided, that if the Amount Available remaining to be allocated pursuant to
this clause is less than the full amount
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required to be so paid, such remaining Amount Available shall be paid to the
Holders of Class B Notes pro rata based on their respective entitlement pursuant
to this clause;
(iii) pay to the Indenture Trustee on behalf of the Class C
Noteholders, an amount equal to the Class C Interest Distributable Amount;
provided, that if the Amount Available remaining to be allocated pursuant to
this clause is less than the full amount required to be so paid, such remaining
Amount Available shall be paid to the Holders of Class C Notes pro rata based on
their respective entitlement pursuant to this clause;
(iv) pay to the Indenture Trustee on behalf of the Class D
Noteholders an amount equal to the Class D Interest Distributable Amount;
provided, that if the Amount Available remaining to be allocated pursuant to
this clause is less than the full amount required to be so paid, such remaining
Amount Available shall be paid to the Holders of Class D Notes pro rata based on
their respective entitlement pursuant to this clause;
(v) prior to the Payment Date on which the Principal Amount of
the Class A-1 Notes has been reduced to zero, pay to the Indenture Trustee, on
behalf of the Class A-1 Noteholders, the Class A Principal Payment Amount;
(vi) on the Payment Date on which the Principal Amount of the
Class A-1 Notes shall be reduced to zero, pay to the Indenture Trustee, on
behalf of the Class A Noteholders, the Class A Principal Payment Amount,
allocated as follows:
(1) to the Class A-1 Noteholders, the remaining Principal
Amount of the Class A-1 Notes; and
(2) the remaining Class A Principal Payment Amount, if any,
to the Class A-2 Noteholders until the Principal Amount of the Class A-2 Notes
has been reduced to zero, then to the Class A-3 Noteholders until the Principal
Amount of the Class A-3 Notes has been reduced to zero, then to the Class A-4
Noteholders until the Principal Amount of the Class A-4 Notes has been reduced
to zero;
(vii) after the Payment Date on which the Class A-1 Principal
Balance has been reduced to zero, pay to the Indenture Trustee, on behalf of the
Class A Noteholders, the Class A Principal Payment Amount, to the Class A-2
Noteholders until the Principal Amount of the Class A-2 Notes has been reduced
to zero, then to the Class A-3 Noteholders until the Principal Amount of the
Class A-3 Notes has been reduced to zero, then to the Class A-3 Noteholders
until the Principal Amount of the Class A-3 Notes has been reduced to zero, then
to the Class A-4 Noteholders until the Principal Amount of the Class A-4 Notes
has been reduced to zero;
(viii) pay to the Indenture Trustee on behalf of the Class B
Noteholders, the Class B Principal Payment Amount;
(ix) pay to the Indenture Trustee on behalf of the Class C
Noteholders, the Class C Principal Payment Amount;
(x) pay to the Indenture Trustee on behalf of the Class D
Noteholders, the Class D Principal Payment Amount; and
(xi) the Reallocated Principal, if any, to the Indenture Trustee
for the benefit, sequentially, of the Class A-1, Class A-2, Class A-3, Class
A-4, Class B and Class C Noteholders.
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(c) Allocations and Payments after an Event of Default. On each
Determination Date after the occurrence of an Event of Default, the Servicer,
pursuant to monthly payment instructions and notification, shall instruct the
Indenture Trustee to withdraw and transfer, and on the succeeding Payment Date
the Indenture Trustee acting in accordance with such instructions shall withdraw
and transfer, the amounts required to be withdrawn from the Note Distribution
Account in order to make the following payments or allocations from the Amount
Available for the related Payment Date (in each case, such payment or transfer
to be made only to the extent funds remain available therefor after all prior
payments and transfers for such Payment Date have been made), in the following
order of priority:
(i) pay to the Indenture Trustee on behalf of the Class A-1
Noteholders, Class A-2 Noteholders, Class A-3 Noteholders, and the Class A-4
Noteholders, an amount equal to interest accrued in respect of the related Class
A-1 Notes at the Class A-1 Interest Rate, Class A-2 Notes at the Class A-2
Interest Rate, Class A-3 Notes at the Class A-3 Interest Rate, and Class A-4
Notes at the Class A-4 Assumed Fixed Rate for the Accrual Period immediately
preceding such Payment Date, together with any such amounts that accrued in
respect of prior Accrual Periods for which no allocation was previously made;
provided that if the Amount Available remaining to be allocated pursuant to this
clause is less than the full amount required to be so allocated, such remaining
Amount Available shall be allocable to the Holders of the Class A-1 Notes, Class
A-2 Notes, Class A-3 Notes and Class A-4 Notes pro rata based upon the aggregate
amount of interest due to each class (in the case of the Class A-4 Notes, at the
Class A-4 Assumed Fixed Rate); provided further that if on the relevant Payment
Date any amount is payable to the Class A-4 Swap Counterparty under the Class
A-4 Swap Agreement, the Indenture Trustee shall, from the amount available to
pay interest on the Class A-4 Notes pursuant to this clause (i), apply such
amount first to pay the Class A-4 Swap Counterparty, and thereafter apply the
balance of such amount available to the payment of interest on the Class A-4
Notes. If on the date of any such distribution, any amount is payable to the
Indenture Trustee under the Class A-4 Swap Agreement, the Indenture Trustee
shall apply all of the amount available to pay interest on the Class A-4 Notes
pursuant to this clause (i) together with any amount received under the Class
A-4 Swap Agreement to the payment of interest on the Class A-4 Notes at the
Class A-4 Interest Rate. Any shortfall in the payment of interest on the Class
A-4 Notes at the Class A-4 Interest Rate due entirely to the failure of the
Class A-4 Swap Counterparty to make a required payment under the Class A-4 Swap
Agreement will not constitute an Event of Default under the Indenture and upon
such an occurrence, the Class A-4 Noteholders will only be entitled to receive
the Class A-4 Interest Distributable Amount at the Class A-4 Assumed Fixed Rate.
All instructions required to be provided by the Servicer are deemed given if
included in the Monthly Report or in a separate writing.
(ii) pay to the Indenture Trustee on behalf of the Class B
Noteholders an amount equal to the interest accrued thereon at the Class B
Interest Rate for the Accrual Period immediately preceding
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such Payment Date, together with any amounts that accrued in respect of prior
Accrual Periods for which no allocation was previously made; provided, that if
the Amount Available remaining to be allocated pursuant to this clause is less
than the full amount required to be so paid, such remaining Amount Available
shall be paid to the Holder of each Class B Note pro rata based on the
outstanding Principal Amount thereof;
(iii) pay to the Indenture Trustee on behalf of the Class C
Noteholders, an amount equal to the interest accrued thereon at the Class C
Interest Rate for the Accrual Period immediately preceding such Payment Date,
together with any such amounts that accrued in respect of prior Accrual Periods
for which no allocation was previously made; provided, that if the Amount
Available remaining to be allocated pursuant to this clause is less than the
full amount required to be so paid, such remaining Amount Available shall be
paid to the Holder of each Class C Note pro rata based on the outstanding
Principal Amount thereof;
(iv) pay to the Indenture Trustee on behalf of the Class D
Noteholders, an amount equal to the interest accrued thereon at the Class D
Interest Rate for the Accrual Period immediately preceding such Payment Date,
together with any such amounts that accrued in respect of prior Accrual Periods
for which no allocation was previously made; provided, that if the Amount
Available remaining to be allocated pursuant to this clause is less than the
full amount required to be so paid, such remaining Amount Available shall be
paid to the Holder of each Class D Note pro rata based on the outstanding
Principal Amount thereof;
(v) pay to the Indenture Trustee, on behalf of the Class A-1
Noteholders, the Total Principal Payment Amount for such Payment Date; provided
(i) that if the Amount Available remaining to be allocated pursuant to this
clause is less than the full amount required to be so paid, such remaining
Amount Available shall be allocated to each Class A-1 Note pro rata based on the
outstanding Principal Amount thereof and (ii) if the amount to be allocated
pursuant to this clause exceeds the amount needed to repay the outstanding
Principal Amount of the Class A-1 Notes in full, then such excess shall be
applied in repayment of principal on the Class A-2, Class A-3 and Class A-4
Notes, pro rata;
(vi) [reserved];
(vii) [reserved];
(viii) pay to the Indenture Trustee, on behalf of the Class A-2,
Class A-3 and Class A-4 Noteholders, pro rata, the Total Principal Payment
Amount for such Payment Date; provided (i) that if the Amount Available
remaining to be allocated pursuant to this clause is less than the full amount
required to be so paid, such remaining Amount Available shall be allocated to
each Class A-2, Class A-3 and Class A-4 Note, pro rata, based on the outstanding
Principal Amount thereof and (ii) if the amount to be allocated pursuant to this
clause exceeds the amount needed to repay the outstanding Principal Amount of
the Class A-2 Notes, Class A-3 Notes and the Class A-4 Notes in full, then such
excess shall be applied in repayment on the Class B Notes;
(ix) pay to the Indenture Trustee, on behalf of the Class B
Noteholders, the Total Principal Payment Amount for such Payment Date; provided
(i) that if the Amount Available remaining to be allocated
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pursuant to this clause is less than the full amount required to be so paid,
such remaining Amount Available shall be allocated to each Class B Note pro rata
based on the outstanding Principal Amount thereof, and (ii) if the amount to be
allocated pursuant to this clause exceeds the amount needed to repay the
outstanding Principal Amount of the Class B Notes in full, then such excess
shall be applied in repayment of principal on the Class C Notes;
(x) pay to the Indenture Trustee, on behalf of the Class C
Noteholders, the Total Principal Payment Amount for such Payment Date; provided
(i) that if the Amount Available remaining to be allocated pursuant to this
clause is less than the full amount required to be so paid, such remaining
Amount Available shall be allocated to each Class C Note pro rata based on the
outstanding Principal Amount thereof, and (ii) if the amount to be allocated
pursuant to this clause exceeds the amount needed to repay the outstanding
Principal Amount of the Class C Notes in full, then such excess shall be applied
in repayment of principal on the Class D Notes;
(xi) pay to the Indenture Trustee, on behalf of the Class D
Noteholders, the Total Principal Payment Amount for such Payment Date; provided
that if the Amount Available remaining to be allocated pursuant to this clause
is less than the full amount required to be so paid, such remaining Amount
Available shall be allocated to each Class D Note pro rata based on the
outstanding Principal Amount thereof; and
(xii) the Reallocated Principal, if any, to the Indenture Trustee
for the benefit, sequentially, of the Class A-1, Class A-2, Class A-3, Class
A-4, Class B and Class C Noteholders.
(d) On the Business Day preceding each Payment Date, the Indenture
Trustee shall, in accordance with written directions from the Servicer, withdraw
from amounts on deposit in the Cash Collateral Account, and deposit into the
Collection Account, an amount equal to the lesser of the Available Cash
Collateral Amount for such Payment Date and the sum of the following amounts, if
any:
(i) the amount, if any, by which the Available Pledged Revenues
with respect to such Payment Date, is less than the amount specified in clauses
(b)(i)-(iv) of this Section 7.05 (or in the case of a payment after an Event of
Default, in clauses (c) (i) - (iv) of this Section 7.05), with interest on the
Class A-4 Notes calculated at the Class A-4 Assumed Fixed Rate; plus
(ii) the Principal Deficiency Amount, if any, for such Payment
Date; plus
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(iii) with respect to the Maturity Date for any Class of Notes or
on the first Payment Date on which the Contract Pool Principal Balance is less
than $10,000,000, the amount, if any, by which the Available Pledged Revenues,
after payment of all amounts specified in clauses (b)(i) through (b)(iv) (or in
the event of a payment after an Event of Default clauses (c) (i) through
(c)(iv)) of Section 7.05, is less than (A) in the case of the Maturity Date for
a Class of Notes, the remaining Principal Amount of such Class of Notes, and (B)
in the case of the first Payment Date on which the Contract Pool Principal
Balance is less than $10,000,000 the Principal Amount of all outstanding Notes.
In the event that the Available Pledged Revenues for any Payment Date are less
than the total amount, if any, specified above for such Payment Date, the amount
actually withdrawn by the Indenture Trustee shall be applied in the order of
priority specified above, and, within each clause specified above, in the order
of priority specified in Section 7.05(b) or (c), as the case may be. The
Servicer shall give the Indenture Trustee and the Cash Collateral Account
Lenders' Agent notice, at least two Business Days prior to each Payment Date, of
the amounts, if any, specified in clauses (i) through (iii) above for such
Payment Date.
Section 7.06 Repurchases of, or Substitution for, Contracts for Breach of
Representations and Warranties. Upon a discovery by the Servicer of an
inaccuracy or breach of a representation or warranty set forth in the Schedule
of Representations which has been made or deemed made with respect to a Contract
in the Contract Pool, which inaccuracy or breach materially adversely affects
the Trust's or any Noteholder's or the Equity Certificateholder's interest in
such Contract (without regard to the benefits of the Cash Collateral Account,
any reserve fund, over collateralization or other similar enhancement) or the
collectibility thereof (an "Ineligible Contract"), the Servicer shall promptly
notify CFUSA thereof. As provided in the Substitute VFC Purchase Agreement and
the Non-VFC Purchase Agreement and in accordance with this Section 7.06, CFUSA
is obligated to repurchase each such Ineligible Contract, at a repurchase price
equal to the Purchase Amount (determined as of the date such repurchase is to be
funded), not later than the second Deposit Date following the date the Servicer
becomes aware of any such breach or inaccuracy and which breach or inaccuracy
has not otherwise been cured; provided, however, that if CFUSA is able to effect
a substitution for any such Ineligible Contract in compliance with Section 2.04,
CFUSA may, in lieu of repurchasing such Ineligible Contract, effect a
substitution for such Ineligible Contract with a Substitute Contract not later
than the date a repurchase of such Ineligible Contract would be required
hereunder; and provided further, that with respect to a breach or inaccuracy of
any such representations or warranties relating to the Contract Pool (or all
Contracts conveyed on the Closing Date or Substitution Transfer Date, as the
case may be) in the aggregate and not to any particular Contract, CFUSA (or the
Servicer acting on its behalf) may select Contracts (without adverse selection)
to repurchase (or substitute for) such that had such Contracts not been included
as part of the related Transferred Assets (and, in the case of a substitution,
had such Substitute Contract been included as part of the related Transferred
Assets instead of the selected Ineligible Contract) there would have been no
breach or inaccuracy of such representation or warranty. Notwithstanding any
other provision of this Agreement, the obligation of CFUSA under the Purchase
and Sale Agreements and described in this Section 7.06 shall not terminate or be
deemed released by any party hereto upon a Servicing Transfer pursuant to
Article VIII. The right to enforce the repurchase or substitution obligation
described in this Section shall constitute the sole remedy of the Trust, the
Indenture Trustee, the Depositor, the Noteholders and the Equity
Certificateholder with respect to the inaccuracy or breach related to such
Ineligible Contract. The Purchase Amount shall be allocated in accordance with
the Allocation Criteria.
Section 7.07 Reassignment of Repurchased or Substituted Contracts. Upon
deposit into the Collection Account of the Purchase Amount with respect to an
Ineligible Contract as described in Section 7.06 (or upon the Substitution
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Transfer Date related to a Substitute Contract described in Section 7.06), or of
the repurchase price set forth in Section 7.08, the Indenture Trustee shall
release and reassign to CFUSA all of the Trust's right and interest in the
repurchased or substituted Contract and related Transferred Assets upon receipt
of written instruction from the Servicer without recourse, representation or
warranty, and such reassigned Contract shall no longer thereafter be included in
any calculations of Contract Principal Balances required to be made hereunder or
otherwise be deemed a part of the Trust Assets.
Section 7.08 CFUSA's and Depositor's Repurchase Option. As provided in the
Substitute VFC Purchase Agreement and the Non-VFC Purchase Agreement, as the
case may be, on written notice to the Indenture Trustee at least twenty (20)
days prior to a Payment Date, and provided that the aggregate Principal Amount
of Notes outstanding on such Payment Date is less than 10% of the Initial
Contract Pool Principal Balance, CFUSA, through the Depositor, may (but is not
required to) repurchase from the Trust on that Payment Date all outstanding
Contracts in the Contract Pool at a price equal to the sum of (a) the aggregate
outstanding Principal Amount of the Notes plus accrued unpaid interest
(calculated, for purposes of this Section 7.08 as to the Class A-4 Notes at the
Class A-4 Assumed Fixed Rate) thereon as of such Payment Date, and (b) the
amount of unreimbursed Servicer Advances (if any) as well as accrued and unpaid
monthly Servicing Fees to the date of such repurchase plus (c) any other amounts
that would otherwise be payable from Available Pledged Revenues on such Payment
Date (assuming sufficient Pledged Revenues were available to effect such
payments) pursuant to Article VII, minus (d) Pledged Revenues and other
Available Pledged Revenues on deposit in the Collection Account and available to
make such payments on such Payment Date. Such price is to be deposited in the
Collection Account not later than the Deposit Date preceding such Payment Date,
against the Indenture Trustee's and Depositor's release of the Contract Assets
and the related Contract Files to CFUSA.
Article VIII
SERVICER DEFAULTS; SERVICING TRANSFER
Section 8.01 Servicer Default. "Servicer Default" means the occurrence of
any of the following:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Owner Trustee or the Indenture
Trustee to make any payment, transfer or deposit, or to deliver the Monthly
Report pursuant to this Agreement, which failure continues unremedied for a
period of five (5) Business Days after the first to occur of (i) written notice
from the Owner Trustee (with a copy to the Indenture Trustee) or the Indenture
Trustee (with a copy to the Owner Trustee) of such failure shall have been given
to the Servicer, or (ii) the date the Servicer becomes aware thereof; or
(b) failure on the part of the Servicer duly to observe or perform any
other covenants or agreements of the Servicer set forth in this Agreement which
has a material adverse effect on the Noteholders or the Equity
Certificateholder, which continues unremedied for a period of thirty (30) days
after the first to occur of (i) the date on which written notice of such failure
requiring the same to be remedied shall have been given to the Servicer by the
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Indenture Trustee or to the Servicer and the Indenture Trustee by the
Noteholders or the Equity Certificateholder or the Indenture Trustee on behalf
of such Noteholders of Notes aggregating not less than 25% of the Principal
Amount of any Class adversely affected thereby, and (ii) the date on which the
Servicer becomes aware thereof, and such failure continues to materially
adversely affect the Noteholders or the Equity Certificateholders for such
period; or
(c) any representation, warranty or certification made by the Servicer
in this Agreement or in any certificate delivered pursuant hereto shall prove to
have been incorrect when made, which has a material adverse effect on the
Noteholders or Equity Certificateholder and which continues to be incorrect in
any material respect for a period of thirty (30) days after the first to occur
of (i) the date on which written notice of such incorrectness requiring the same
to be remedied shall have been given to the Servicer and the Owner Trustee by
the Indenture Trustee, or to the Servicer, the Owner Trustee and the Indenture
Trustee by Noteholders or the Equity Certificateholders or by the Indenture
Trustee on behalf of Noteholders of Notes aggregating not less than 25% of the
Principal Amount of any Class adversely affected thereby, and (ii) the date on
which the Servicer becomes aware thereof, and such incorrectness continues to
materially adversely affect the Noteholders or Equity Certificateholders for
such period; or
(d) an Insolvency Event shall occur with respect to the Servicer.
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (a) above for a period of five (5) Business Days or
referred to under clause (b) or (c) for a period of sixty (60) days (in addition
to any period provided in (a), (b) or (c)) shall not constitute a Servicer
Default until the expiration of such additional five (5) Business Days or sixty
(60) days, respectively, if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Servicer and such delay or failure was
caused by an act of God or other similar occurrences. Upon the occurrence of any
such event the Servicer shall not be relieved from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of this
Pooling Agreement and the Servicer shall provide the Owner Trustee, the
Indenture Trustee and the Depositor prompt notice of such failure or delay by
it, together with a description of its efforts to so perform its obligations.
The Servicer shall promptly notify the Indenture Trustee in writing of any
Servicer Default.
Section 8.02 Servicing Transfer. (a) If a Servicer Default has occurred and
is continuing, the Required Holders or the Indenture Trustee (subject to the
right of the Indenture Trustee to indemnification pursuant to Section 6.07 of
the Indenture) may and shall at the direction of the Required Holders, by
written notice (a "Termination Notice") delivered to the parties hereto,
terminate all (but not less than all) of the Servicer's rights and obligations
under this Pooling Agreement with respect to the Trust Assets.
(b) Upon delivery of the Termination Notice (or, if later, on a date
designated therein), and on the date that a successor Servicer shall have been
appointed pursuant to Section 8.03 (such appointment being herein called a
"Servicing Transfer"), all rights, benefits, fees, indemnities, authority and
power of the Servicer under this Pooling Agreement, whether with respect to the
Contracts in the Contract Pool, the Contract Files or otherwise, shall pass to
and be vested in such successor (the "Successor Servicer") pursuant to and under
this Section 8.02; and, without limitation, the Successor Servicer is authorized
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and empowered to execute and deliver on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do any and all acts or things necessary or appropriate to effect the purposes
of such notice of termination. The Servicer agrees to cooperate with the
Successor Servicer in effecting the termination of the responsibilities and
rights of the Servicer under this Pooling Agreement, including, without
limitation, the transfer to the Successor Servicer for administration by it of
all cash amounts which shall at the time be held by the Servicer for deposit, or
have been deposited by the Servicer, in the Collection Account, or for its own
account in connection with its services hereafter or thereafter received with
respect to the Contracts in the Contract Pool. The Servicer shall transfer to
the Successor Servicer (i) all records held by the Servicer relating to such
Contracts in such electronic form as the Successor Servicer may reasonably
request and (ii) any related Contract Files in the Servicer's possession. In
addition, the Servicer shall permit access to its premises and employees
(including all computer records and programs) to the Successor Servicer or its
designee, and shall pay the reasonable transition expenses of the Successor
Servicer. Upon a Servicing Transfer, the Successor Servicer shall also be
entitled to receive the Servicing Fee for performing the obligations of the
Servicer.
Section 8.03 Appointment of Successor Servicer; Reconveyance; Successor
Servicer to Act. Upon delivery of the Termination Notice (or, if later, on a
date designated therein), the Servicer shall continue to perform all servicing
functions under this Pooling Agreement until the date specified in the
Termination Notice or, if no such date is specified, until a date mutually
agreed by the Servicer and the Indenture Trustee. The Indenture Trustee shall as
promptly as possible after the giving of or receipt of a Termination Notice,
appoint a Successor Servicer, and such Successor Servicer shall accept its
appointment by a written assumption and by delivery of an opinion of counsel
(which shall not be at the expense of the Indenture Trustee) to the Successor
Servicer relating to corporate matters and enforceability, in each case in a
form acceptable to the Indenture Trustee and the Owner Trustee. Any Successor
Servicer shall be a financial institution having a net worth of at least
$50,000,000 and whose regular business includes the servicing of contracts
similar to the Contracts in the Contract Pool.
In the event that a Successor Servicer has not been appointed and has not
accepted its appointment within 60 days of the delivery of a Termination Notice,
then the Indenture Trustee shall offer the Depositor, and the Depositor shall
offer CFUSA, the right to accept retransfer of all the Trust Assets, and such
party may accept retransfer of such Trust Assets in consideration of the
Depositor's delivery to the Collection Account on or prior to the next upcoming
Payment Date of a sum equal to the Aggregate Principal Amount of all Notes then
outstanding, together with accrued and unpaid interest thereon through such date
of deposit; provided, that the Indenture Trustee, if so directed by, the
Required Holders, need not accept and effect such reconveyance in the absence of
evidence (which may include valuations of an investment bank or similar entity,
which shall not be at the expense of the Indenture Trustee) reasonably
acceptable to such Indenture Trustee or Required Holders that such retransfer
would not constitute a fraudulent conveyance of the Depositor or CFUSA;
provided, further, CFUSA may not accept such retransfer unless it shall have
delivered to each Rating Agency, with a copy to the Indenture Trustee, an
Opinion of Counsel (which shall not be an employee of the Issuer) that such
retransfer would not constitute a fraudulent conveyance of the Depositor or
CFUSA or that such retransfer would not constitute a preferential payment by the
Depositor or CFUSA.
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In the event that a Successor Servicer has not been appointed and has not
accepted its appointment at the time when the then Servicer has ceased to act as
Servicer, the Indenture Trustee without further action shall automatically be
appointed the Successor Servicer. Notwithstanding the foregoing, if the
Indenture Trustee is legally unable or prohibited from so acting or is unwilling
to so act, it shall petition a court of competent jurisdiction to appoint any
established financial institution having a net worth of at least $50,000,000 and
whose regular business includes the servicing of contracts similar to the
Contracts in the Contract Pool as the Successor Servicer hereunder. On or after
a Servicing Transfer, the Successor Servicer shall be the successor in all
respects to the Servicer in its capacity as servicer under this Pooling
Agreement, and the transactions set forth or provided for in this Pooling
Agreement, and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof, and the terminated Servicer shall be relieved of such responsibilities,
duties and liabilities arising after such Servicing Transfer; provided, however,
that the Successor Servicer shall not be liable for any acts or omissions of the
departing Servicer occurring prior to such Servicing Transfer or for any breach
by the departing Servicer of any of its representations and warranties contained
in this Pooling Agreement or in any related Transaction Document or other
agreement. As compensation therefor, the Successor Servicer shall be entitled to
receive the Servicing Fee. The Trust, the Noteholders and the Equity
Certificateholders, the Indenture Trustee and such successor shall take such
action, consistent with this Pooling Agreement, as shall be necessary to
effectuate any such succession. To the extent the terminated Servicer has made
Servicer Advances, it shall be entitled to reimbursement of the same
notwithstanding its termination hereunder, to the same extent as if it had
continued to service the Trust Assets hereunder. In addition, it is understood
and agreed that if an Event of Default has occurred and a Servicer Transfer is
being effected by action of the Indenture Trustee hereunder, any documented
expenses reasonably incurred by the Indenture Trustee in connection with
effecting such Servicer Transfer shall be deemed expenses reimbursable from
Available Pledged Revenues.
Section 8.04 Notifications to Noteholders and the Equity
Certificateholders. (a) Promptly following the occurrence of any Servicer
Default, the Servicer shall give written notice thereof to the Trustees, the
Depositor, the Class A-4 Swap Counterparty and each Rating Agency at the
addresses described in Section 11.04 and to the Noteholders and Equity
Certificateholder at their respective addresses appearing on the Note Register
and the Certificate Register, respectively.
(b) Within ten (10) days following any termination or appointment of a
Successor Servicer pursuant to this Article VIII, the Indenture Trustee shall
give written notice thereof to each Rating Agency and the Depositor at the
addresses described in Section 11.04, and to the Noteholders, at their
respective addresses appearing on the Note Register, and to the Owner Trustee.
Section 8.05 Effect of Transfer. (a) Except as otherwise set forth in this
Agreement, after a Servicing Transfer, the terminated Servicer shall have no
further rights or obligations under this Pooling Agreement, including, without
limitation, with respect to the management, administration, servicing, custody
or collection of the Trust Assets, and the Successor Servicer appointed
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pursuant to Section 8.03 shall have all of such obligations, except that the
terminated Servicer will transmit or cause to be transmitted directly to the
Successor Servicer for its own account, promptly on receipt and in the same form
in which received, any amounts or items (properly endorsed where required for
the Successor Servicer to collect them) received as payments upon or otherwise
in connection with the Contracts in the Contract Pool.
(b) A Servicing Transfer shall not affect the rights and duties of the
parties to this Pooling Agreement (including but not limited to the indemnities
of the departing Servicer) other than those relating to the management,
administration, servicing, custody or collection of the Contracts in the
Contract Pool and related Transferred Assets.
Section 8.06 Database File. The Servicer will provide the Successor
Servicer with a magnetic tape containing the database file for each Contract in
the Contract Pool on and as of the Business Day before the actual commencement
of servicing functions by the Successor Servicer following the occurrence of a
Servicer Default.
Section 8.07 Successor Servicer Indemnification. The departing Servicer
shall defend, indemnify and hold the Successor Servicer and any officers,
directors, employees or agents of the Successor Servicer harmless against any
and all claims, losses, penalties, fines, forfeitures, reasonable legal fees and
related costs, judgments and any other costs, fees, and expenses that the
Successor Servicer may sustain in connection with the claims asserted at any
time by third parties against the Successor Servicer which result from (i) any
willful or grossly negligent act taken or omission by the departing Servicer or
(ii) a breach of any representations of the departing Servicer in Section 3.02.
The indemnification provided by this Section 8.07 shall survive (a) a Servicing
Transfer and/or (b) the termination of this Agreement.
Section 8.08 Responsibilities of the Successor Servicer. The Successor
Servicer will not be responsible for delays attributable to the departing
Servicer's failure to deliver information, defects in the information supplied
by the departing Servicer or other circumstances beyond the control of the
Successor Servicer.
The Successor Servicer will make arrangements with the departing Servicer
for the prompt and safe transfer of, and the departing Servicer shall provide to
the Successor Servicer, all necessary servicing files and records, including (as
deemed necessary by the Successor Servicer at such time): (i) microfiche loan
documentation, (ii) servicing system tapes, (iii) Contract payment history, (iv)
collections history and (v) the trial balances, as of the close of business on
the day immediately preceding conversion to the Successor Servicer, reflecting
all applicable Contract Pool information. The departing Servicer shall be
obligated to pay the costs associated with the transfer of the servicing files
and records to the Successor Servicer.
The Successor Servicer shall have no responsibility and shall not be in
default hereunder nor incur any liability for any failure, error, malfunction or
any delay in carrying out any of its duties under this Pooling Agreement if any
such failure or delay results from the Successor Servicer acting in accordance
with information prepared or supplied by a Person other than the Successor
Servicer or the failure of any such Person to prepare or provide such
information. The Successor Servicer shall have no responsibility, shall not be
in default and shall incur no liability (i) for any act or failure to act by any
third party, including the departing Servicer, the Depositor or the Trustees or
for any inaccuracy or omission in a notice or communication received by the
Successor Servicer from any third party or (ii) which is due to or results from
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the invalidity or unenforceability of any Contract under applicable law or the
breach or the inaccuracy of any representation or warranty made with respect to
any Contract.
Any Successor Servicer which assumes the role of Successor Servicer
hereunder shall be entitled to the benefits of (and subject to the provisions
of) Section 5.05 concerning delegation of duties to subservicers.
Section 8.09 Servicer Not to Resign. The Servicer shall not resign from its
obligations and duties under this Agreement except upon determination that the
performance of its duties shall no longer be permissible under applicable law,
compliance with which could not be realized without material adverse impact on
the Servicer's financial condition. No such resignation shall become effective
until the Indenture Trustee or a successor Servicer shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 8.03
hereof.
Article IX
SERVICER REPORTING
Section 9.01 Monthly Reports. With respect to each Payment Date and the
related Collection Period, the Servicer will provide to each Trustee, the Class
A-4 Swap Counterparty and each Rating Agency, on the related Determination Date,
a monthly statement (a "Monthly Report") substantially in the form of Exhibit D
hereto. On each Payment Date, the Indenture Trustee will forward to each
Noteholder a copy of the Monthly Report for the related Collection Period. The
parties hereto acknowledge that the Indenture Trustee has no obligation to
verify the accuracy of the Monthly Report.
Section 9.02 Officer's Certificate. Each Monthly Report delivered pursuant
to Section 9.01 shall be accompanied by a certificate of a Servicing Officer
certifying the accuracy of the Monthly Report.
Section 9.03 Other Data. In addition, the Servicer shall, upon the request
of any Trustees, or any Rating Agency, furnish such Trustee or Rating Agency, as
the case may be, such underlying data used to generate a Monthly Report as may
be reasonably requested.
Section 9.04 Annual Reporting; Evidence as to Compliance. The Servicer
shall cause a firm of nationally recognized independent accountants (the
"Independent Accountants"), who may also render other services to the Servicer
or its Affiliates, to deliver to the Trustees and each Rating agency, on or
before March 31 (or ninety (90) days after the end of the Servicer's fiscal
year, if other than December 31) of each year, beginning on March 31, 2002, with
respect to the twelve months ended the immediately preceding December 31 or
other applicable date), a report addressed to the Board of Directors of the
Servicer and to the Trustees (the "Accountant's Report") to the effect that such
Independent Accountants have, at the request of the Servicers, (i) audited the
financial statements of the Servicer (or, if the Servicer is a wholly-owned
subsidiary of another entity, the financial statements of such parent entity)
and issued an opinion thereon and that such audit was made in accordance with
generally accepted auditing standards as in effect in the jurisdiction of the
entity being audited, which require that such Independent Accountants plan and
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perform the audit to obtain reasonable assurance as to whether the financial
statements of the Servicer (or its parent, as applicable) are free of material
misstatement, and (ii) examined management's assertion that the Servicer
maintained effective control over the servicing of such assets, in accordance
with established or stated criteria, and providing a report thereon, as well as
confirming that such examination was performed in accordance with standards
established by the American Institute of Certified Public Accountants. A copy of
the Accountant's Report may be obtained by any Securityholder by a request in
writing to the Indenture Trustee, in the case of a Noteholder, or in the case of
the Equity Certificateholder, addressed to its Corporate Trust Office.
Section 9.05 Annual Statement of Compliance from Servicer. The Servicer
will deliver to the Trustees, and each of the Rating Agencies, on or before
March 31 of each year commencing March 31, 2002, an Officer's Certificate
stating that (a) a review of the activities of the Servicer during the prior
calendar year and of its performance under the Pooling Agreement was made under
the supervision of the officer signing such certificate and (b) to such
officer's knowledge, based on such review, the Servicer has fully performed or
cause to be performed in all material respects all its obligations under the
Pooling Agreement and no Servicer Default has occurred or is continuing, or, if
there has been a Servicer Default, specifying each such default known to such
officer and the nature and status thereof and the steps being taken or necessary
to be taken to remedy such event.
A copy of such certificate may be obtained by any Noteholder or the Equity
Certificateholder by a request in writing to the Indenture Trustee, with respect
to any Noteholder, or to the Owner Trustee, with respect to the Equity
Certificateholder.
Article X
TERMINATION
Section 10.01 Sale of Trust Assets. (a) Upon any transfer of Trust Assets
pursuant to Section 9.02 of the Trust Agreement, the Servicer shall instruct the
Indenture Trustee in writing to deposit the proceeds from such transfer after
all payments and reserves therefrom have been made (the "Insolvency Proceeds")
into the Collection Account. On the Payment Date on which the Insolvency
Proceeds are deposited in such Collection Account (or, if such proceeds are not
so deposited on a Payment Date, on the Payment Date immediately following such
deposit), the Servicer shall instruct the Indenture Trustee to allocate and
apply the Insolvency Proceeds as if (and in the same order of priority as) the
Insolvency Proceeds were Pledged Revenues being allocated and distributed on
such date pursuant to this Pooling Agreement.
(b) Notice of any termination of the Trust shall be given by the
Servicer to the Owner Trustee and the Indenture Trustee as soon as practicable
after the Servicer has received notice thereof.
(c) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the Equity
Certificateholder will succeed to the rights of the Noteholders hereunder.
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Article XI
MISCELLANEOUS
Section 11.01 Amendments. (a) This Pooling Agreement may be amended in
writing by CFUSA, the Servicer and the Trust and the Indenture Trustee without
prior notice to or the consent of any of the Holders, and in the case of clauses
(v) and (vi), upon satisfaction of the Rating Agency Condition, (i) to correct
manifest error or cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein,
(iii) to add or amend any provisions as requested by the Rating Agencies in
order to maintain or improve any rating of the Notes (it being understood that,
after the Closing Date, neither the Trust, the Owner Trustee, the Indenture
Trustee, nor CFUSA is obligated to maintain or improve such rating); (iv) to add
to the covenants, restrictions or obligations of CFUSA, the Servicer, the Trust
or the Indenture Trustee or to provide for the delivery of or substitution of a
Servicer Letter of Credit or a Class A-4 Swap Agreement; (v) to evidence and
provide for the acceptance of the appointment of a successor trustee with
respect to the Trust Estate and add to or change any provisions as shall be
necessary to facilitate the administration of the trusts under the Trust
Agreement by more than one trustee pursuant to Article X of the Trust Agreement;
(vi) to add, change or amend any provision to maintain the trust as an entity
not subject to federal income tax; or (vii) to add, change or eliminate any
other provisions, provided that an amendment pursuant to this clause (vii),
shall not, as evidenced by an Opinion of Counsel for the Servicer or CFUSA,
adversely affect in any material respect the interests of the Trust, any
Noteholder or the Equity Certificateholder.
(b) This Pooling Agreement may also be amended from time to time by
the parties signatory hereto, with the consent of the Required Holders, for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions thereof or of modifying in any manner the rights of the
Noteholders or the Equity Certificateholder; provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, Pledged Revenues, payments on the Trust
Assets or payments that shall be required to be made on any Note or the Equity
Certificate (including by way of amendment of related definitions); (ii) change
the manner in which the Cash Collateral Account is applied; or (iii) change in
any manner (including through amendment of related definitions), the Noteholders
and the Equity Certificateholder which are required to consent to any such
amendment; or (iv) make any Note or the Equity Certificate payable in money
other than Dollars, without the consent of the Noteholders and the Equity
Certificateholders of all Notes of the relevant affected Class then outstanding
and the Equity Certificateholder, if affected; or (v) change in any manner the
duties of the Indenture Trustee under this Agreement without its written
consent, (in any such case) or (vi) adversely affect the rights and obligations
of the Class A-4 Swap Counterparty under the Class A-4 Swap Agreement
(including, without limitation, the priority of payments owed to the Class A-4
Swap Counterparty under the Class A-4 Swap Agreement) without the written
consent of the Class A-4 Swap Counterparty.
(c) Prior to the execution of any such amendment or consent, the
Indenture Trustee shall furnish written notification of the substance of such
amendment or consent, together with a copy thereof, to each Rating Agency.
Promptly after the execution of any such amendment or consent, the Indenture
82
Trustee shall furnish a copy of such amendment or consent to the Class A-4 Swap
Counterparty.
(d) Promptly after the execution of any such amendment or consent, the
Indenture Trustee shall furnish written notification of the substance of such
amendment or consent to each Noteholder and the Equity Certificateholder,
respectively. It shall not be necessary for the consent of Noteholders and the
Equity Certificateholder pursuant to Section 11.01(b) to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents and of evidencing the authorization by Noteholders and the Equity
Certificateholder of the execution thereof shall be subject to such reasonable
requirements as the Indenture Trustee may prescribe.
(e) Each Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such amendment on behalf of the Trust
is authorized or permitted by this Pooling Agreement, and that all conditions
precedent to such execution as set forth herein have been satisfied. A Trustee
may, but shall not be obligated to, enter into any such amendment which affects
such Trustee's own rights, duties or immunities under this Pooling Agreement or
otherwise.
(f) Notwithstanding anything to the contrary in the foregoing
provisions of this Section 11.01, (a) the Depositor or the Servicer, acting on
behalf of the Depositor, may request each rating agency to approve a formula for
determining the Required Cash Collateral Amount that is different from the
formula or result determined from the current definition thereof contained
herein so as to result in a decrease in the amount of the Required Cash
Collateral amount or the manner by which such Cash Collateral Account is funded.
If each Rating Agency delivers to the Indenture Trustee and Owner Trustee a
written notice or letter satisfying the Rating Agency condition in connection
with such change, then the Required Cash Collateral amount will be theretofore
determined in accordance with such changed formula or manner of funding, and an
amendment to this Agreement effecting such change may be executed without the
consent of any Noteholder and the Equity Certificateholder.
Section 11.02 Reserved.
Section 11.03 Governing Law. This Pooling Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights,
and remedies of the parties under this Pooling Agreement shall be determined in
accordance with such laws, except that the duties of the Owner Trustee shall be
governed by the laws of the State of Delaware.
Section 11.04 Notices. All notices, demands, certificates, requests and
communications hereunder ("notices") shall be in writing and shall be effective
(a) upon receipt when sent through the U.S. mails, registered or certified mail,
return receipt requested, postage prepaid, with such receipt to be effective the
date of delivery indicated on the return receipt, or (b) one (1) Business Day
after delivery to an overnight courier, or (c) on the date personally delivered
83
to an authorized officer of the party to which sent, or (d) on the date
transmitted by legible telefax transmission with a confirmation of receipt, in
all cases addressed to the recipient as follows:
(i) If to the Servicer:
CIT Financial USA, Inc.
650 CIT Drive
Livingston, NJ 07039
Attn: Treasury - Securitization
Fax No.: (973) 535-5900
Telephone No.: (973) 740-5058
with a copy to:
The CIT Group, Inc.
650 CIT Drive
Livingston, NJ 07039
Attn: Treasury - Securitization
Fax No.: (973) 535-5900
Telephone No.: (973) 740-5058
(ii) If to the Depositor:
NCT Funding Company, L.L.C.
c/o The CIT Group, Inc.
650 CIT Drive
Livingston, NJ 07039
Attn: Treasury - Securitization
Fax No.: (973) 535-5900
Telephone No.: (973) 740-5058
(iii) If to the Indenture Trustee:
The Chase Manhattan Bank
450 West 33rd Street, 14th Floor
New York, New York 10001-2697
Attn: Institutional Trust Services,
CIT 2001 -1
Fax No.: (212) 946-3916/8302
Telephone No.: (212) 946-3200
84
(iv) If to a Financing Originator:
At the address, telephone and fax information
set forth for such Financing Originator in the
VFC Conveyancing Agreement (for TCC Financing
Originators)
(v) If to CFUSA:
CIT Financial USA, Inc.
650 CIT Drive
Livingston, NJ 07039
Attn: Treasury - Securitization
Fax No.: (973) 535-5900
Telephone No.: (973) 740-5058
(vi) If to the Trust or the Owner Trustee:
Allfirst Financial Center National Association
499 Mitchell Road
Mail Code 101-591
Millsboro, DE 19966
Attn: Corporate Trust Department, CIT 2001-1
Fax No.: (410) 244-4236
Telephone No. (410) 244-4626
(vii) If to Standard and Poor's:
Standard & Poor's Ratings Services
55 Water Street
New York, NY 10041
Fax No.: (212) 438-2489
Telephone No.: (212) 438-2649
85
(viii) If to Moody's:
Moody's Investors Service, Inc.
99 Church Street
New York, NY 10007
Fax No: (212) 553-7820
Telephone No.: (212) 553-3661
(ix) If to Fitch:
Fitch, Inc.
55 East Monroe
Suite 3500
Chicago, IL 60603
Attention: ABS Surveillance
Fax No.: (312) 368-2069
Telephone No.: (312) 606-2361
Each party hereto may, by notice given in accordance herewith to each of
the other parties hereto, designate any further or different address to which
subsequent notices shall be sent.
Section 11.05 Severability of Provisions. If one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Notes or the
Equity Certificateholders or the rights of the holders thereof.
Section 11.06 Third Party Beneficiaries. Except as otherwise specifically
provided herein, the parties hereto hereby manifest their intent that no third
party shall be deemed a third party beneficiary of this Agreement, and
specifically that Obligors are not third party beneficiaries of this Agreement;
provided, that (i) the Owner Trustee shall be a third party beneficiary of this
Agreement for purposes of Sections 3.01 and 3.02 and 11.13, and the fee and
indemnification provisions hereof, (ii) the Indenture Trustee shall be a third
party beneficiary of this Agreement for purposes of Sections 3.01 and 3.02 and
the fee and indemnification provisions hereof, and (iii) the Swap Counterparty
shall be a third party beneficiary of this Agreement for purposes of Section
7.05 hereof.
Section 11.07 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall together
constitute but one and the same instrument.
86
Section 11.08 Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 11.09 No Bankruptcy Petition; Disclaimer and Subordination.
(a) Each of the Servicer, the Owner Trustee and each Noteholder and
the Equity Certificateholder (by acceptance of the applicable Notes or the
Equity Certificate) covenants and agrees that it will not institute against the
Depositor, or the Trust, or solicit or join in or cooperate with or encourage
any other Person in instituting against the Depositor or the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceedings under the laws of the United States or any state of
the United States.
(b) Consistent with the provisions in Section 2.07 of the Trust
Agreement and Section 6.17 hereof, the Trust, as well as each Noteholder and the
Equity Certificateholder by accepting a Note or the Equity Certificate,
acknowledges and agrees that such Note or the Equity Certificate represents a
debt instrument secured by, or a beneficial interest in the Trust and Trust
Assets only and does not represent an interest in any assets (other than the
Trust Assets) of the Depositor (including by virtue of any deficiency claim in
respect of obligations not paid or otherwise satisfied from the Trust Assets and
proceeds thereof). In furtherance of and not in derogation of the foregoing, to
the extent the Depositor enters into other securitization transactions as
contemplated in Section 6.07, the Trust as well as each Noteholder and the
Equity Certificateholder by accepting a Note or Certificate acknowledges and
agrees that it shall have no right, title or interest in or to any assets (or
interests therein) (other than Trust Assets) conveyed or purported to be
conveyed by the Depositor to another securitization trust (i.e., other than the
Issuer) or other Person or Persons in connection therewith (whether by way of a
sale, capital contribution or by virtue of the granting of a Lien) ("Other
Assets"). To the extent that, notwithstanding the agreements and provisions
contained in the preceding sentences of this subsection, the Trust, or any
Noteholder and the Equity Certificateholder, either (i) asserts an interest in
or claim to, or benefit from, Other Assets, whether asserted against or through
the Depositor or any other Person owned by the Depositor, or (ii) is deemed to
have any such interest, claim or benefit in or from Other Assets, whether by
operation of law, legal process, pursuant to applicable provisions of Insolvency
Laws or otherwise (including without limitation by virtue of Section 1111(b) of
the federal Bankruptcy Code or any successor provision having similar effect
under the Bankruptcy Code), and whether deemed asserted against or through the
Depositor or any other Person owned by the Depositor, then the Trust and each
Noteholder and the Equity Certificateholder by accepting a Note or the Equity
Certificate further acknowledges and agrees that any such interest, claim or
benefit in or from Other Assets is and shall be expressly subordinated to the
indefeasible payment in full of all obligations and liabilities of the Depositor
which, under the terms of the relevant documents relating to the securitization
of such Other Assets, are entitled to be paid from, entitled to the benefits of,
or otherwise secured by such Other Assets (whether or not any such entitlement
or security interest is legally perfected or otherwise entitled to a priority of
payment or application under applicable law, including Insolvency Laws, and
whether asserted against the Depositor or any other Person owned by the
Depositor), including, without limitation, the payment of post-petition interest
on such other obligations and liabilities. This subordination agreement shall be
deemed a subordination agreement within the meaning of Section 510(a) of the
Bankruptcy Code. Each Noteholder and the Equity Certificateholder further
87
acknowledges and agrees that no adequate remedy at law exists for a breach of
this Section 11.09 and that the terms and provisions of this Section 11.09 may
be enforced by an action for specific performance.
(c) The provisions of this Section 11.09 shall be for the third party
benefit of those entitled to rely thereon and shall survive the termination of
this Agreement.
Section 11.10 Jurisdiction. Any legal action or proceeding with respect to
this Agreement may be brought in the courts of the United States for the
Southern District of New York, and by execution and delivery of this Agreement,
each party hereto consents, for itself and in respect of its property, to the
non-exclusive jurisdiction of those courts. Each such party irrevocably waives
any objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, which it may now or hereafter have to the
bringing of any action or proceeding in such jurisdiction in respect of this
Agreement or any document related hereto.
Section 11.11 Tax Characterization. Notwithstanding the provisions of
Section 2.01 hereof, the Depositor and Owner Trustee agree that pursuant to
Treasury Regulations Section 301.7701-3(b)(1)(ii), the Trust is to be
disregarded as a separate entity from the Depositor for federal income tax
purposes.
Section 11.12 Servicer Indemnity. The Servicer will indemnify the
Depositor, the Trust, the Noteholders, the Equity Certificateholder and the
Trustees (including in their respective individual capacities), and any of their
officers, directors, employees or agents (each an "Indemnified Party") from and
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, fees and expenses that any
Indemnified Party may sustain in connection with claims asserted by third
parties against such Indemnified Party which result from any act or omission on
the part of the Servicer with respect to the Trust Assets or its duties and
obligations under this Pooling Agreement, except where such claims arise out of
any willful misconduct, gross negligence or bad faith on the part of such
Indemnified Party. Indemnification under this Section shall survive the
resignation or removal of the Owner Trustee or Indenture Trustee, as the case
may be, and the termination of the Trust Agreement or this Pooling Agreement.
Section 11.13 Limitation of Liability of Owner Trustee. Notwithstanding
anything contained herein to the contrary, this Agreement has been executed on
behalf of the Issuer by Allfirst Financial Center National Association, not in
its individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall Allfirst Financial Center National Association in
its individual capacity or any beneficial owner of the Issuer have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Issuer hereunder, as to all of which recourse shall be had solely to the
assets of the Issuer. For all purposes of this Agreement, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
88
Section 11.14 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE
PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF THE
PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY IS
WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OF THIS
AGREEMENT OR A TRANSACTION DOCUMENT OR ANY PROVISION HEREOF OR THEREOF. THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, AMENDMENTS AND RESTATEMENTS, OR
MODIFICATIONS TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT.
[signature page follows]
89
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
CIT EQUIPMENT COLLATERAL 2001-1
By: ALLFIRST FINANCIAL CENTER
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Owner Trustee on behalf of the
Trust
By: /s/ Robert D. Brown
-----------------------------
Name: Robert D. Brown
Title: Vice President
NCT FUNDING COMPANY, L.L.C., as Depositor
By: /s/ Barbara Callahan
----------------------------
Name: Barbara Callahan
Title: Vice President
CIT FINANCIAL USA, INC., in its
individual capacity and as Servicer
By: /s/ Barbara Callahan
---------------------------------
Name: Barbara Callahan
Title: Vice President
90
Exhibit A
Form of Transfer Agreement
TRANSFER AGREEMENT
This TRANSFER AGREEMENT, dated [ , 200_] is by and between NCT Funding
Company, L.L.C., as Depositor and transferor, and CIT Equipment Collateral
2001-1, as transferee with respect to the conveyances evidenced hereby.
WHEREAS, the parties named above are each parties to the Pooling and
Servicing Agreement dated as of [ , 200_] (as from time to time amended,
supplemented or otherwise modified, the "PSA"); and
WHEREAS, pursuant to the PSA, the Depositor wishes to effect conveyances of
Transferred Assets (including the Contracts identified on the Schedule of
Contracts attached hereto), in each case in the manner and to the effect
described in Article II of the PSA;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein and in the PSA, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto agree as
follows:
1 Definitions. All terms defined in the PSA (whether directly or by
reference to other documents) shall have such defined meanings when used herein,
unless such terms are otherwise defined herein.
2 Specification of Cut-Off Date. The "Cut-Off Date" applicable to the
Contracts conveyed hereby is [ , 200_].
3 Conveyances. Subject to the terms and conditions provided for in the
PSA, the Depositor hereby make the assignments and conveyances specified in
Article II of the PSA as being effected by execution and delivery of this
Transfer Agreement, in each case (i) with respect to the Transferred Assets
related to and consisting in part of the Contracts and related Contract Assets
identified on the Schedule of Contracts attached hereto, and (ii) in the manner
and to the effect described in Article II of the PSA.
4 Incorporation of PSA. This Transfer Agreement is made pursuant to and
upon the representations, warranties and agreements on the part of the parties
hereto contained in the PSA and shall be governed in all respects by the PSA.
5 Ratification of PSA. As supplemented by this Transfer Agreement, the
PSA is in all respects ratified and confirmed by the parties hereto.
6 Counterparts. This Transfer Agreement may be executed in two or more
counterparts including by telefax transmission thereof (and by different parties
on separate counterparts), each of which shall be an original, but all of which
together shall constitute one and the same instrument.
A-1
7 Governing Law. This Transfer Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of New
York.
8 Reaffirmation. As provided in Section 2.02 of the PSA, by delivery of
this Transfer Agreement the Depositor confirms that the conditions to transfer
set forth in Section 2.02 have been satisfied or otherwise waived as described
therein.
[signatures follow]
A-2
IN WITNESS WHEREOF, the parties hereto have caused this Transfer Agreement
to be executed by their respective officers thereunto duly authorized as of the
date first written above.
NCT FUNDING COMPANY, L.L.C., CIT EQUIPMENT COLLATERAL
as Depositor 2001-1
By: ALLFIRST FINANCIAL CENTER, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Owner Trustee
on behalf of the Trust
By: By:
------------------------- ----------------------------------------
A-3
Exhibit B
Form of VFC Assignment
B-1
Exhibit C
Initial Schedule of Contracts
C-1
Exhibit D
Form of Servicer's Monthly Report
D-1
Exhibit E
Form of Substitution Transfer Agreement
SUBSTITUTION TRANSFER AGREEMENT
This SUBSTITUTION TRANSFER AGREEMENT, dated _____________ ___, _______, is
by and between NCT Funding Company, L.L.C., as Depositor and transferor, and CIT
Equipment Collateral 2001-1, as transferee with respect to the conveyances
evidenced hereby.
WHEREAS, the parties named above are each parties to the Pooling and
Servicing Agreement dated as of [ , 200_] (as from time to time amended,
supplemented or otherwise modified, the "PSA"); and
WHEREAS, pursuant to the PSA, the Depositor wishes to effect conveyances of
the Substitute Contracts (together with related Substitute Transferred Assets),
identified on the Substitution Schedule of Contracts attached hereto, in each
case in the manner and to the effect described in Article II of the PSA; and
WHEREAS, the Servicer has delivered or caused to be delivered a
Substitution Notice with respect to such conveyance as required in the Pooling
Agreement referred to in Section 2 below;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
set forth herein and in the PSA, and for other good and valuable consideration,
the receipt of which is hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. All terms defined in the PSA (whether directly or by
reference to other documents) shall have such defined meanings when used herein,
unless such terms are otherwise defined herein.
2. Specification of Cut-Off Date. The "Substitution Cut-Off Date"
applicable to the Substitute Contracts conveyed hereby is ____________ ___,
_______.
3. Conveyances. Subject to the terms and conditions provided for in the
PSA, the Depositor hereby makes the assignments and conveyances specified in
Article II of the PSA as being effected by execution and delivery of this
Substitution Transfer Agreement, in each case (i) with respect to the Substitute
Contracts (together with related Substitute Transferred Assets) identified on
the Substitution Schedule of Contracts attached hereto, and (ii) in the manner
and to the effect described in Article II of the PSA.
4. Incorporation of PSA. This Substitution Transfer Agreement is made
pursuant to and upon the representations, warranties and agreements on the part
of the parties hereto contained in the PSA and shall be governed in all respects
by the PSA.
5. Ratification of PSA. As supplemented by this Substitution Transfer
Agreement, the PSA is in all respects ratified and confirmed by the parties
hereto.
E-1
6. Counterparts. This Substitution Transfer Agreement may be executed in
two or more counterparts including by telefax transmission thereof (and by
different parties on separate counterparts), each of which shall be an original,
but all of which together shall constitute one and the same instrument.
7. Governing Law. This Substitution Transfer Agreement shall be governed
by, and construed and enforced in accordance with, the internal laws of the
State of New York.
8. Reaffirmation. As provided in Section 2.04(b) of the PSA, by delivery of
this Substitution Transfer Agreement the Depositor confirms that the conditions
to transfer set forth in Section 2.02 have been satisfied or otherwise waived as
described therein.
[signatures follow]
E-2
IN WITNESS WHEREOF, the parties hereto have caused this Substitution
Transfer Agreement to be executed by their respective officers thereunto duly
authorized as of the date first written above.
NCT FUNDING COMPANY, L.L.C., CIT EQUIPMENT COLLATERAL
as Depositor 2001-1
By: ALLFIRST FINANCIAL CENTER NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Owner Trustee on
behalf of the Trust
By: By:
------------------------- ------------------------------------------
E-3
Exhibit F
[RESERVED]
F-1
Exhibit G
Schedule of Representations and Warranties
(a) List of Contracts. The information set forth in the Schedule of
Contracts (as the same may be amended or deemed amended in respect of a
conveyance of Substitute Contracts on a Substitution Transfer Date) is true,
complete and correct as of the Closing Date (or Substitution Transfer Date, as
applicable).
(b) Eligible Contract. As of its applicable Cut-Off Date, each Contract
satisfied the criteria for the definition of Eligible Contract set forth in the
Pooling Agreement, and each Secondary Contract securing a Vendor Loan
constituting a Contract satisfied, as of its applicable Cut-Off Date, the
definition of Eligible Secondary Contract set forth in the Pooling Agreement.
(c) Contracts Secured by Vehicles. None of the Contracts relating to
Equipment constituting Vehicles are "true leases."
(d) Contract Files. As of the Closing Date (or as of the Substitution
Transfer Date, with respect to Substitute Contracts), (i) immediately prior to
such date, CFUSA (or the applicable Financing Originator as custodian for CFUSA,
with respect to TCC Contracts) had possession of each original Contract and the
related complete Contract File, and there were no other custodial agreements
relating to the same in effect (other than offsite storage arrangements
described in Section 4.01(b)); (ii) each of such documents which is required to
be signed by the Obligor has been signed by the Obligor in the appropriate
spaces; and (iii) the complete Contract File for each Contract is in the
possession of the Servicer.
(e) No Material Obligation. No Financing Originator has a material
performance obligation in respect of any Contract in favor of an Obligor or
End-User (it being understood that covenants of quiet enjoyment, purchase
options, obligations to accept return of the property at end of lease term, and
like obligations of a lessor typical of a "triple net" lease, shall not be
deemed "material performance obligations" for purposes of this representation).
(f) Instruments. Not more than 0.75% of the Contract Pool Principal Balance
as of the Closing Date are "Instruments" (within the meaning of Article 9 of the
UCC), which evidence or relate to any Contract conveyed to the Trust on the
Closing Date.
(g) Vendor Agreements. The Receivables Purchase Agreement, dated as of
October 31, 1998, by and between DFS-SPV L.P., a Delaware limited partnership
("DFS-SPV"), and CFUSA, as amended by the Partial Waiver of Repurchase Option
and Amendment to Receivables Purchase Agreement, dated as of August 20, 1999, is
in full force and effect and has not been amended since August 20, 1999 except
as set forth in that certain Omnibus Agreement dated as of November 1, 2000. The
Purchase Agreement, dated as of October 31, 1998, by and between Dell Financial
Services L.P., a Delaware limited partnership, and DFS-SPV, as amended by the
Partial Waiver of Repurchase Option and Amendment to Receivables Purchase
Agreement, dated as of August 20, 1999, is in full force and effect and has not
G-1
been amended since the August 20, 1999 except as set forth in that certain
Omnibus Agreement dated as of November 1, 2000. The Financial Services
Agreement, dated as of March 9, 1998, between Lucent Technologies Inc., a
Delaware corporation, and The CIT Group, Inc., a Delaware corporation (as
assignee of Newcourt Credit Group Inc.), is in full force and effect and has not
been amended since the date thereof except that such agreement was assigned by
Lucent Technologies, Inc. to Avaya, Inc. pursuant to a certain Assignment
Agreement, dated as of September 28, 2000. Any Contracts in which the Vendor is
Snap-on Tools was purchased pursuant to the Funding Agreement between New
Creditcorp SPC, LLC and CIT Financial USA, Inc., dated January 4, 1999 and the
Pooling and Servicing Agreement between New Creditcorp SPC, LLC and Snap-on
Credit LLC dated January 4, 1999 and neither such Funding Agreement or such
Pooling and Servicing Agreement have been amended since the date thereof.
(h) Intent to Transfer. CFUSA is selling the Contracts, and on each
Substitute Transfer Date is conveying the Subsititute Contracts, to the
Depositor with the intention of removing the Contracts, or the Substitute
Contracts as the case may be, from the estate of CFUSA pursuant to the
applicable provisions of the Bankruptcy Code as it may be amended from time to
time including, without limitation, section 541(b)(8) of the Bankruptcy Code as
amended pursuant to section 912 of Senate Bill S.220 (107th Cong. 1st Sess.) or
any successor thereto if and when such bill is enacted into law.
G-2
Exhibit H
[Reserved]
H-1
Exhibit I
[Reserved]
I-1
Exhibit J
Minimum Value Filing Exceptions
No financing statements are filed against an Obligor located in a
particular State describing Equipment which is the subject of a particular
Contract of any Financing Originator, unless the fair market value of the
Equipment (determined in accordance with Customary Policies and Procedures)
related to such particular Contract is at least $25,000 (or, in the alternative,
at least $50,000 if such Contract is a Lease with a "fair market value" purchase
option).
J-1