RESERVE ACCOUNT AGREEMENT
Among
CIT EC - EF 2001-A,
as the Trust,
ALLFIRST BANK,
as Indenture Trustee,
NCT FUNDING COMPANY, L.L.C.,
as Trust Depositor,
CIT FINANCIAL USA, INC.,
in its individual capacity,
and
THE CIT GROUP/EQUIPMENT FINANCING, INC.,
as Servicer
Dated as of August 1, 2001
Relating to
CIT EC - EF 2001-A
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Defined Terms..........................................................................1
Section 1.02. Other Definitional Provisions..........................................................5
ARTICLE II AMOUNT AND TERMS RESERVE...............................................................................5
Section 2.01. Reserve Funding........................................................................5
Section 2.02. Reserve Account........................................................................5
Section 2.03. Interest Rate and Payment Date.........................................................6
Section 2.04. Computation of Interest and Fees.......................................................6
Section 2.05. Payments...............................................................................7
Section 2.06. Reserve Account Administration, Direction of Eligible Investments......................7
Section 2.07. Reserved...............................................................................7
Section 2.08. Nonrecourse and Recourse Obligations; Waiver of Setoff,
Obligations Absolute...................................................................7
ARTICLE III REPRESENTATIONS AND WARRANTIES OF DEPOSITOR AND SERVICER..............................................9
Section 3.01. Corporate Existence....................................................................9
Section 3.02. Corporate Authority....................................................................9
Section 3.03. No Consents Required..................................................................10
Section 3.04. No Violation..........................................................................10
Section 3.05. No Proceeding.........................................................................10
Section 3.06. Registration and Prospectus; Other Information........................................11
Section 3.07. Trust Indenture Act; Investment Company Act...........................................11
Section 3.08. No Event of Default or Servicer Termination Event.....................................11
Section 3.09. Representations and Warranties in Transaction Documents and
Regarding Repurchase Event............................................................11
Section 3.10. Withdrawal From the Reserve Account...................................................11
Section 3.11. Adverse Selection.....................................................................12
ARTICLE IV COVENANTS.............................................................................................12
Section 4.01. Performance of Agreements.............................................................12
Section 4.02. Amendments to the Pooling Agreement, Purchase and Sale
Agreements and the Indenture..........................................................12
Section 4.03. Certificates..........................................................................13
Section 4.04. Monthly Status Reports................................................................13
Section 4.05. Default...............................................................................13
Section 4.06. Timely Payments.......................................................................13
Section 4.07. Successor Indenture Trustee...........................................................13
Section 4.08. Periodic Reports of the Accountants...................................................13
Section 4.09. Other Actions.........................................................................14
Section 4.10. Identities............................................................................14
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ARTICLE V REPRESENTATIONS AND WARRANTIES AND AGREEMENTS OF THE HOLDBACK AMOUNT DESIGNEES.........................14
Section 5.01. Representations and Warranties of the Holdback Amount Designees.......................14
ARTICLE VI MISCELLANEOUS.........................................................................................15
Section 6.01. Amendments and Waivers................................................................15
Section 6.02. Reserve Account Withdrawal Statement..................................................15
Section 6.03. Servicing Transfer....................................................................16
Section 6.04. Governing Law.........................................................................16
Section 6.05. No Waiver.............................................................................16
Section 6.06. Severability..........................................................................16
Section 6.07. Termination...........................................................................17
Section 6.08. Successors and Assigns; Assignments...................................................17
Section 6.09. Notices...............................................................................19
Section 6.10. Survival of Representations and Warranties............................................20
Section 6.11. Counterparts..........................................................................20
Section 6.12. Limitation of Remedies................................................................20
Section 6.13. Previous Agreements...................................................................20
Section 6.14. Waiver of Jury Trial..................................................................20
Section 6.15. Headings..............................................................................20
Section 6.16. Jurisdiction, Consent to Service of Process...........................................20
Section 6.17. Bankruptcy............................................................................21
Section 6.18. Nonpetition Agreements; Rights in Trust Property......................................21
Section 6.19. Income Tax Characterization...........................................................21
Section 6.20. Indenture Trustee.....................................................................21
Section 6.21. Limitation of Liability of Owner Trustee..............................................22
EXHIBITS
Exhibit A - Form of Assignment Agreement
Exhibit B - Form of Monthly Status Report
Exhibit C - Form of Confidentiality Agreement
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This RESERVE ACCOUNT AGREEMENT, dated as of August 1, 2001 (this
"Agreement"), among CIT EC - EF 2001-A (the "Trust"), Allfirst Bank, not in its
individual capacity but solely as indenture trustee (the "Indenture Trustee"),
NCT Funding Company, L.L.C., a Delaware limited liability company, as trust
depositor (in its capacity as trust depositor, together with its successors, the
"Trust Depositor"), CIT Financial USA, Inc. ("CFUSA"), and The CIT
Group/Equipment Financing, Inc., in its individual capacity ("CITEF") and as
servicer (in such capacity, together with its successors and assigns, the
"Servicer").
WHEREAS, CFUSA, the Trust Depositor, the Servicer and the Trust have
entered into a Pooling and Servicing Agreement, dated as of August 1, 2001 (as
the same may from time to time be amended, modified or otherwise supplemented,
the "Pooling Agreement"); and
WHEREAS, the Trust proposes to issue and sell a series of
Receivable-Backed Notes (the "Notes") divided into five classes in the manner
designated pursuant to an Indenture, dated as of August 1, 2001, between the
Trust and the Indenture Trustee (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Indenture"); and
WHEREAS, the Trust proposes to issue a certificate (the "Equity
Certificate") pursuant to an Amended and Restated Trust Agreement, dated as of
August 1, 2001 (the "Trust Agreement"), between the Trust Depositor and the
Owner Trustee;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and adequacy
of which are hereby expressly acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms.
(a) Unless otherwise defined herein, all capitalized terms used in this
Agreement shall have the meanings given to them in the Pooling Agreement (as
defined below).
(b) The following terms shall have the following meanings:
"Act" shall mean the Securities Act of 1933, as amended.
"Agreement" shall mean this Reserve Account Agreement as the same may
be further amended, supplemented or otherwise modified from time to time.
"Assignment" has the meaning assigned thereto in Section 6.08(b).
"Assignment Agreement" shall mean an agreement substantially in the
form of Exhibit A hereto.
"Available Funds" shall mean, with respect to each Payment Date, the
sum of (a) the amount distributed by the Servicer or the Indenture Trustee
pursuant to Section 7.05(a)(v)
of the Pooling Agreement to be applied in accordance with this Agreement on such
Payment Date, and (b) Investment Earnings with respect to such Payment Date.
"Commission" shall mean the Securities and Exchange Commission.
"Confidentiality Agreement" shall mean an agreement substantially in
the form of Exhibit C hereto.
"Dollars" and "$" shall mean the lawful currency of the United States
of America.
"Early Termination Date" shall mean the date, if any, on which the
Trust Depositor shall purchase the corpus of the Trust pursuant to Section 7.08
of the Pooling Agreement.
"Eligible Investments" shall mean any investment (including deposits
with, or securities issued by, a Holdback Amount Designee) that is one of the
following types of investments:
(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 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 by
Moody's, A-1+ by Standard & Poor's and, if rated by Fitch, F-1+ by
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 by 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 (or,
with respect to the investment of any amounts on deposit in the
Certificate Distribution Account, such Standard & Poor's rating shall
be at least A);
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(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 Seller 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.
No Eligible Investment may have an "r" or comparable symbol affixed to
its rating.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Holdback Amount" shall have the meaning assigned thereto in Section
2.01.
"Holdback Amount Designee(s)" shall mean, initially, the Trust
Depositor and thereafter any assignee or assignees of any of the rights to
receive payments of interest on, and the balance of, the Holdback Amount
pursuant to this Agreement.
"Holdback Amount Rate" shall mean, with respect to any Holdback
Interest Period, a per annum rate equal to the LIBOR Rate determined for such
Holdback Interest Period plus 130 basis points per annum.
"Holdback Interest Period" shall mean (a) with respect to the initial
Payment Date, the period from and including the Closing Date to but excluding
the initial Payment Date and (b) with respect to each subsequent Payment Date,
the period from and including the Payment Date immediately preceding such
Payment Date to but excluding such subsequent Payment Date.
"Initial Amount" means $17,006,929.
"Investment Earnings" shall mean, with respect to any Payment Date, all
interest and investment earnings (net of losses and investment expenses) on
Eligible Investments made
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with funds on deposit in the Reserve Account and received during the Holdback
Interest Period immediately preceding such Payment Date.
"LIBOR Business Day" means any day on which commercial banks are open
for business (including dealings in foreign exchange and foreign currency
deposits) in London and New York.
"LIBOR Rate" shall mean (x) with respect to the initial Holdback
Interest Period, 3.50125% and (y) with respect to any Holdback Interest Period
or portion thereof, the rate per annum shown on page 3750 of the Telerate screen
or any successor page as the composite offered rate for London interbank
deposits for a period of one month, as shown under the heading "USD" as of 11:00
a.m. (London Time) two LIBOR Business Days prior to the first day of such
Holdback Interest Period; provided that in the event no such rate is shown, the
LIBOR Rate shall be the rate per annum (rounded upwards, if necessary, to the
nearest 1/16th of one percent) based on the rates at which Dollar deposits for a
period of one month are displayed on page "LIBOR" of the Reuters Monitor Money
Rates Service or such other page as may replace the LIBOR page on that service
for the purpose of displaying London interbank offered rates of major banks as
of 11:00 a.m. (London time) two LIBOR Business Days prior to the first day of
such Holdback Interest Period (it being understood that if at least two such
rates appear on such page, the rate will be the arithmetic mean of such
displayed rates); provided further, that in the event fewer than two such rates
are displayed, the LIBOR Rate shall be the rate per annum equal to the average
of the rates at which deposits in Dollars are offered by the Reference Banks at
approximately 11:00 a.m. (London time) two LIBOR Business Days prior to the
first day of such Holdback Interest Period to prime banks in the London
interbank market for a period of one month, it being understood that if at least
two such quotations are provided, the rate shall be the arithmetic mean of such
provided rates; provided further that if fewer than two such rates are provided,
the rate shall be the arithmetic mean of the rates quoted by major banks in New
York City, selected by the Servicer, approximately 11:00 a.m. (New York City
time) on the first day of such Holdback Interest Period to leading European
banks for Dollar deposits for a period of one month. If the LIBOR Rate cannot be
determined for a Holdback Interest Period in accordance with the foregoing, the
LIBOR Rate for such Holdback Interest Period shall be equal to the LIBOR Rate
for the immediately preceding Holdback Interest Period.
"Officer's Certificate" shall mean a certificate delivered to the Agent
and signed by any authorized officer of the Trust Depositor or CFUSA, as the
case may be.
"Pooling Agreement" shall mean the Pooling and Servicing Agreement,
dated as of August 1, 2001 by and among the Trust Depositor, the Trust, CFUSA
and the Servicer).
"Prospectus" shall mean the prospectus and prospectus supplement as
filed with the Commission under Rule 424(b) of the Act relating to the Notes.
"Reference Banks" shall mean the principal London offices of three
major banks in the London interbank market selected by the Agent.
"Registration Statement" shall mean the registration statement on Form
S-3 (Registration No. 333-53688), as amended from time to time and including
incorporated
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documents and exhibits, filed by the Trust Depositor with the Commission
pursuant to the Act relating to the Notes to be issued by the Trust.
"Required Reserve Amount" shall have the meaning specified in Section
1.01 of the Pooling Agreement.
"Reserve Account Surplus" means, as of any Payment Date, the amount, if
any, by which the amount on deposit in the Reserve Account exceeds the Required
Reserve Amount (after giving effect to any distributions to be made pursuant to
Section 8.02 of the Indenture and Section 2.02 of this Agreement and any
withdrawals pursuant to Section 7.05(d) of the Pooling Agreement, in each case
with respect to such Payment Date).
"Service Transfer" shall mean the occurrence of a Servicer Termination
Event and the appointment of a successor Servicer pursuant to Section 8.03 of
the Pooling Agreement.
"Termination Date" shall mean the earlier of (i) the date on which the
Indenture is terminated in accordance with its terms or (ii) September 20, 2012.
Section 1.02. Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; and Section, subsection,
Schedule, Attachment and Exhibit references are to this Agreement, unless
otherwise specified. The words "including" and "include" shall be deemed to be
followed by the words "without limitation".
ARTICLE II
AMOUNT AND TERMS RESERVE
Section 2.01. Reserve Funding.
The Indenture Trustee shall establish the Reserve Account pursuant to
Section 7.01 of the Pooling Agreement. The Trust will retain the Initial Amount
from the proceeds of the sale of the Notes pursuant to the Indenture and as
described in the Underwriting Agreement, and deposit such amount into the
Reserve Account on the Closing Date (the "Holdback Amount").
Section 2.02. Reserve Account.
(a) On each Payment Date (if such date is not the Termination Date),
the Indenture Trustee at the written direction of the Servicer upon which the
Indenture Trustee may conclusively rely shall distribute Available Funds with
respect to such date to the Holdback Amount Designee (or the account or accounts
designated by the Holdback Amount Designee) (i)
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first, to the extent not previously paid, to pay an amount equal to all interest
(including interest on previously unpaid interest amounts) due on the
outstanding balance of the Holdback Amount, as calculated in accordance with
Sections 2.03 and 2.04, and (ii) second, after giving effect to any payment made
on such Payment Date under Section 2.02(b), to pay an amount equal to the
excess, if any, of (x) the aggregate unpaid balance of the Holdback Amount as of
such date over (y) the amount on deposit in the Reserve Account as of such date
(determined after giving effect to all deposits to and withdrawals from the
Reserve Account with respect to such Payment Date), and (iii) third, to pay to
the Equity Certificateholder any remaining balance after payment of the Holdback
Amount.
(b) On any Payment Date on which there is a Reserve Account Surplus (if
such date is not the Termination Date), the Indenture Trustee, at the written
direction of the Servicer upon which the Indenture Trustee may conclusively
rely, shall pursuant to Section 7.02(b) of the Pooling Agreement and this
Agreement, withdraw from the Reserve Account an amount equal to the Reserve
Account Surplus and pay such amount (i) first, to pay to the Holdback Amount
Designee an amount up to the unpaid balance of the Holdback Amount as a payment
of the Holdback Amount; and (ii) second, to pay to the Equity Certificateholder
any remaining balance after payment of the Holdback Amount.
(c) On the Termination Date (including any Early Termination Date), all
Available Funds and all amounts on deposit in the Reserve Account on such date
(after giving effect to all withdrawals from the Reserve Account required to be
made on such date with respect to the Notes) shall be paid by the Indenture
Trustee, at the written direction of the Servicer upon which the Indenture
Trustee may conclusively rely (i) first, to pay to the Holdback Amount Designee
an amount equal to all unpaid interest owed to the Holdback Amount Designee and
the unpaid balance of the Holdback Amount (assuming for this purpose that any
portion of Available Funds described in clause (a) of the definition thereof is
applied to this clause (i) only after all other Available Funds and all amounts
available in the Reserve Account have been fully utilized); and (ii) second, to
pay the balance, if any, in the Reserve Account to the Equity Certificateholder.
Section 2.03. Interest Rate and Payment Date.
(a) The Holdback Amount shall bear interest during each Holdback
Interest Period at a rate per annum equal to the Holdback Amount Rate.
(b) Interest on the Holdback Amount outstanding from time to time shall
be payable monthly in arrears on each Payment Date, as provided in subsections
2.02(a) and (b) and on the Termination Date as provided in subsection 2.02(c).
Section 2.04. Computation of Interest and Fees.
Interest calculated by reference to the LIBOR Rate shall be calculated
on the basis of a 360-day year for the actual days elapsed. The Servicer shall
calculate each LIBOR Rate (in the event the Servicer is a successor to CITEF)
and shall notify in writing the Indenture Trustee of each determination of the
respective rates applicable from time to time, in each case as soon as
practicable after determination of LIBOR for each Holdback Interest Period;
provided that, if the
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Equity Certificateholder is the Trust Depositor, such notice shall not be
required to be delivered until two Business Days prior to any Payment Date.
Section 2.05. Payments.
All payments to be made hereunder to the Holdback Amount Designees,
whether on account of principal, interest, fees or otherwise, shall be made
without set-off or counterclaim and prior to 1:00 p.m., New York City time, on
the due date thereof in Dollars and in immediately available funds. All payments
to the Holdback Amount Designee shall be made to the accounts specified in
Section 6.09(b) or otherwise in writing to the Indenture Trustee and the
Servicer.
Section 2.06. Reserve Account Administration, Direction of Eligible
Investments.
The Indenture Trustee shall, for the benefit of the Noteholders, the
Holdback Amount Designee and the Trust Depositor, as their interests appear in
the Indenture, the Pooling Agreement and herein, (i) maintain the Reserve
Account in accordance with Sections 7.01 and 7.03 of the Pooling Agreement, (ii)
invest funds on deposit in the Reserve Account in Eligible Investments in
accordance with the written instructions of the Servicer and (iii) otherwise
comply with the provisions of the Indenture and Pooling Agreement as such
provisions relate to the Reserve Account or such Eligible Investments.
Section 2.07. Reserved.
Section 2.08. Nonrecourse and Recourse Obligations; Waiver of Setoff,
Obligations Absolute.
(a) Notwithstanding any provision in any other Section of this
Agreement to the contrary, but subject to Section 2.08(b) below, the obligation
to pay the Holdback Amount shall be without recourse to the Trust Depositor,
CFUSA or the Servicer (or CITEF in its individual capacity), any Person acting
on behalf of either the Trust Depositor, CFUSA, the Servicer (or CITEF in its
individual capacity), the Trust, the Owner Trustee, the Indenture Trustee, any
Noteholder, any Equity Certificateholder or any affiliate, officer or director
of any of them, and the obligation to pay the Holdback Amount shall be limited
solely to the application of Investment Earnings, Available Funds, Reserve
Account Surplus, and other amounts payable in respect thereof required to be
distributed to the Holdback Amount Designee, as described in Section 2.02
hereof, and in the Indenture, and all other amounts on deposit or to be
deposited from time to time in the Reserve Account to the extent that such
amounts are available for distribution to the Holdback Amount Designee.
(b) (i) The representations and warranties of the Trust Depositor,
CFUSA and the Servicer made herein or in the Pooling Agreement, the breach of
which has a material adverse effect on any Holdback Amount Designee, (ii) the
noncompliance by the Trust Depositor, CFUSA or the Servicer with the terms and
provisions of this Agreement, the Pooling Agreement or the Indenture, which
noncompliance has a material adverse effect on any Holdback Amount Designee, and
(iii) the amounts of any withdrawals from the Reserve Account, to the extent
such amounts represent amounts which the Trust Depositor or the Servicer were
required to but failed
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to deposit in the Collection Account in accordance with the Pooling Agreement or
the Indenture, shall be with recourse to the Servicer, the Trust Depositor or
CFUSA, as the case may be, but not to any successor to the Servicer; provided,
however, that the sole remedy against the Trust Depositor or CFUSA for a breach
of the representations and warranties in the Schedule of Representations, in the
Purchase and Sale Agreements or in Section 3.09 hereof (to the extent relating
to such Schedule of Representations) shall be limited to the right to have CFUSA
purchase (or provide substitutes for) the applicable Contracts pursuant to, and
make the deposits to the Collection Account, if any, required by, Section 7.06
of the Pooling Agreement. Neither the Trust Depositor nor the Servicer shall be
liable for the representations or warranties made by, or the acts or omissions
of, any successor to the Trust Depositor or a successor Servicer, except as
provided herein and except that a Trust Depositor that is also the Servicer or a
successor Servicer may be liable in its other capacity.
(c) Subject to and without limiting the foregoing provisions of this
Section 2.08, the obligations of the Trust, the Indenture Trustee, the Trust
Depositor, the Servicer and the Holdback Amount Designees under this Agreement
shall be absolute, unconditional and irrevocable and shall be performed strictly
in accordance with the terms of this Agreement, irrespective of any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement,
any Purchase and Sale Agreement, the VFC Assignment, the Pooling
Agreement, the Equity Certificate, the Notes, the Indenture or any
other Transaction Documents;
(ii) any amendment to or waiver of, or consent to departure
from, this Agreement, any Purchase and Sale Agreement, the VFC
Assignment, the Pooling Agreement, the Equity Certificate, the Notes,
the Indenture or any other Transaction Documents unless agreed to by
the Holdback Amount Designees pursuant to Section 6.01;
(iii) the existence of any claim, setoff, defense or other
right which the Trust Depositor, the Servicer, the Indenture Trustee,
CFUSA, the Owner Trustee or the Trust may have at any time against each
other, any beneficiary or any transferee of the Reserve Account (or any
Person for whom the Trust Depositor, the Servicer, the Indenture
Trustee, the Owner Trustee, any such beneficiary or any such transferee
may be acting), any Holding Amount Designee (except in the case of a
Holding Amount Designee, any claim, setoff, defense or other right
arising from the negligence, bad faith or willful misconduct of such
Holding Amount Designee), or any other Person, whether in connection
with this Agreement, the Indenture, any Purchase and Sale Agreement,
the Pooling Agreement, the Equity Certificate, the Notes, any other
Transaction Documents any Eligible Investment or any unrelated
transactions;
(iv) the bankruptcy, insolvency, receivership or
conservatorship of the Trust Depositor, the Servicer, the Indenture
Trustee, the Owner Trustee, the Trust, CFUSA, any Originator, any
Noteholder, any Equity Certificateholder or any Holdback Amount
Designee;
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(v) any defense based on the failure of the Trust Depositor or
the Trust to receive all or any part of the proceeds of the sale of the
Notes or Equity Certificate; or the nonapplication or misapplication of
amounts at any time on deposit in the Reserve Account (other than, in
the case of a Holdback Amount Designee, a nonapplication or
misapplication by such Holdback Amount Designee);
(vi) any statement or any other document presented in
connection with the Reserve Account proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever; or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing; provided, that in the case of a
Holding Amount Designee, the same shall not have constituted
negligence, bad faith or willful misconduct on the part of such Holding
Amount Designee.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF DEPOSITOR AND SERVICER
Each of (A) the Trust Depositor and the Servicer, (B) with respect to
Sections 3.06, 3.09 and 3.11, CFUSA in its individual capacity, and (C) with
respect to subsection (b) of Section 3.06, CITEF in its individual capacity,
represents and warrants to the Holding Amount Designee as follows:
Section 3.01. Corporate Existence.
The Trust Depositor is a limited liability company and the Servicer is
a corporation, each of which is validly existing and in good standing under the
laws of the State of Delaware, with full corporate power and authority under
such laws to own its properties and conduct its business as such properties are
presently owned and such business is presently conducted and to execute, deliver
and perform its obligations under this Agreement, the Pooling Agreement, the
Purchase and Sale Agreements, the Underwriting Agreement, the Indenture and the
other Transaction Documents to which it is a party.
Section 3.02. Corporate Authority.
It has the corporate power, authority and right to make, execute,
deliver and perform this Agreement, the Pooling Agreement, the Purchase and Sale
Agreements, the Underwriting Agreement, the Indenture, the other Transaction
Documents to which it is a party and all the transactions contemplated hereby
and thereby and has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement, the Pooling Agreement,
the Purchase and Sale Agreements, the Underwriting Agreement, the Indenture and
the other Transaction Documents to which it is a party. Each of this Agreement,
the Pooling Agreement, the Purchase and Sale Agreements, the Underwriting
Agreement, the Indenture and the other Transaction Documents to which it is a
party constitutes its legal, valid and binding obligation, enforceable in
accordance with its terms, subject to applicable bankruptcy, reorganization,
insolvency, moratorium, fraudulent transfer, receivership, conservatorship and
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other laws of general applicability relating to or affecting creditors' rights
in general. The enforceability of its obligations under such agreements is also
subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
Section 3.03. No Consents Required.
No consent, license, approval or authorization of, or registration
with, any Governmental Authority is required to be obtained in connection with
its execution, delivery or performance of each of this Agreement, the Pooling
Agreement, the Purchase and Sale Agreements, the Underwriting Agreement, the
Indenture and any other Transaction Documents to which it is a party that has
not been duly obtained and which is not and will not be in full force and effect
on the Closing Date, except such that may be required by the blue sky laws of
any state or consents, licenses, approvals or authorizations of, or
registrations with, any Governmental Authority that, individually or in the
aggregate, would not have a material adverse effect on the Trust Depositor's or
the Servicer's, as applicable, ability to perform its obligations under, or the
validity or enforceability of, this Agreement, the Pooling Agreement, the
Purchase and Sale Agreements, the Underwriting Agreement, the Indenture or any
other Transaction Documents to which it is a party.
Section 3.04. No Violation.
The execution, delivery and performance of each of this Agreement, the
Pooling Agreement, the Purchase and Sale Agreements, the Underwriting Agreement,
the Indenture and any other Transaction Documents to which it is a party do not
violate any provision of any existing law or regulation applicable to it, any
order or decree of any court or other judicial authority to which it is subject,
its articles of association or by-laws or any mortgage, indenture, contract or
other to which it is a party or by which it or any significant portion of its
properties is bound (other than violations of such laws, regulations, orders,
decrees, mortgages, indentures, contracts and other agreements that,
individually or in the aggregate, would not have a material adverse effect on
the Trust Depositor's or the Servicer's, as applicable, ability to perform its
obligations under, or the validity or enforceability of, this Agreement, the
Pooling Agreement, the Purchase and Sale Agreements, the Underwriting Agreement,
the Indenture or any other Transaction Documents to which it is a party).
Section 3.05. No Proceeding.
There is no litigation or administrative proceeding before any court,
tribunal or governmental body presently pending or, to the knowledge of the
Trust Depositor or the Servicer, threatened against the Trust Depositor or the
Servicer, as the case may be, with respect to this Agreement, the Pooling
Agreement, the Purchase and Sale Agreements, the Underwriting Agreement, the
Indenture, any other Transaction Documents to which it is a party, the
transactions contemplated hereby or thereby or the issuance of the Notes or
Equity Certificate that would have a material adverse effect on the transactions
contemplated by, or its ability to perform its obligations under, this
Agreement, the Pooling Agreement, the Purchase and Sale Agreements, the
Underwriting Agreement, the Indenture or any other Transaction Documents to
which it is a party.
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Section 3.06. Registration and Prospectus; Other Information.
(a) Neither the Registration Statement at the time it was declared
effective, the Prospectus as of its date, nor any post-effective amendment or
supplement to the Registration Statement or the Prospectus at the time it is
filed with the Commission and at the Closing Date: (i) contained or will contain
any untrue statement of a material fact or omitted or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, it being understood
that the Registration Statement and Prospectus were prepared only in connection
with the offering of the Notes; or (ii) disclosed or will disclose the identity
of the Holding Amount Designee except at the request of any regulatory body, or
by the order of any court or administrative agency.
(b) All financial and other written information provided by or on
behalf of CITEF is true and correct, as of their respective dates, in all
material respects when read in conjunction with the Prospectus.
Section 3.07. Trust Indenture Act; Investment Company Act.
The Pooling Agreement is not required to be qualified under the Trust
Indenture Act of 1939 (as amended), the Trust is not required to be registered
under the Investment Company Act of 1940 (as amended) and the Indenture has been
properly qualified under the Trust Indenture Act of 1939, as amended.
Section 3.08. No Event of Default or Servicer Termination Event.
No Event of Default with respect to the Notes or Servicer Termination
Event has occurred and is continuing, and no event, act or omission has occurred
and is continuing which, with the lapse of time, the giving of notice, or both,
would constitute such a Event of Default or Servicer Termination Event.
Section 3.09. Representations and Warranties in Transaction Documents
and Regarding Repurchase Event.
Its representations and warranties (i) in Section 3.01 of the Pooling
Agreement and Section 2 of the Underwriting Agreement, (in the case of the Trust
Depositor), and (ii) in Section 3.02 of the Pooling Agreement (in the case of
the Servicer) and (iii) in Section 2 of the Underwriting Agreement (in the case
of CFUSA), are true and correct in all material respects as of the dates they
were made (unless they specifically refer to an earlier date in which case such
representations and warranties were true and correct in all material respects as
of such earlier date); and as of the date hereof and as of the Closing Date, no
event exists with respect to Contracts which obligated CFUSA to repurchase such
Contracts pursuant to Section 7.06 of the Pooling Agreement; provided, however,
that the sole remedy for a breach of the representations and warranties made in
this Section 3.09 shall be limited to the right to have CFUSA purchase the
applicable Contracts and make the deposits to the Collection Account to the
extent required in the Pooling Agreement.
Section 3.10. Withdrawal From the Reserve Account.
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The only events which may give rise to a withdrawal from the Reserve
Account are the circumstances described in the Pooling Agreement and in this
Agreement.
Section 3.11. Adverse Selection.
No selection procedures adverse to the Noteholders have been or will be
used in selecting the Contracts from among the lease and loan contracts owned
and available for transfer by (i) CFUSA, at the time of sale to the Trust
Depositor to the Trust, or (ii) the Trust Depositor on August 1, 2001 and on the
Closing Date.
ARTICLE IV
COVENANTS
Each of the Trust Depositor and the Servicer (and, in the case of
Sections 4.01, 4.02 and 4.07, each of the Trust Depositor, the Servicer, and the
Indenture Trustee) covenants and agrees that, so long as the Holdback Amount
shall be outstanding or any monetary obligation arising hereunder is owing and
shall remain unpaid, unless Holdback Amount Designees beneficially owning a
majority of the Holdback Amount shall otherwise consent in writing, the Trust
Depositor or the Servicer (or, in the case of Sections 4.01, 4.02 and 4.07, the
Indenture Trustee), as applicable, will:
Section 4.01. Performance of Agreements.
For the benefit of the Holdback Amount Designees, perform on a timely
basis each of their respective agreements, warranties and indemnities under, and
comply in all material respects with each of the respective terms and provisions
applicable to it in, the Pooling Agreement, the Purchase and Sale Agreements,
the Underwriting Agreements, the Indenture and the other Transaction Documents.
Section 4.02. Amendments to the Pooling Agreement, Purchase and Sale
Agreements and the Indenture.
Not terminate (except in accordance with the terms thereof or otherwise
only if at the time of such termination, no amount payable to the Holdback
Amount Designees hereunder or under the Indenture is unpaid), amend, waive or
otherwise modify the Pooling Agreement, the Purchase and Sale Agreements, the
Indenture and the other Transaction Documents without the prior written consent
of Holdback Amount Designees beneficially owning a majority of the Holdback
Amount unless (a) such amendment, waiver or modification shall not, as evidenced
by an Officer Certificate delivered to the Holdback Amount Designees, adversely
affect in any material respect the interests of the Holdback Amount Designees
under this Agreement and (b) prior to the effectiveness of any such amendment,
waiver or modification the Rating Agencies shall confirm in writing that the
rating of the Notes will not be lowered or withdrawn as a result of such
amendment, waiver or modification.
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Section 4.03. Certificates.
Furnish to the Holdback Amount Designees a copy of each certificate,
report, statement, notice or other communication (in addition to those referred
to in Section 4.08) furnished by or on behalf of the Trust Depositor or the
Servicer to the Noteholders, the Owner Trustee, the Indenture Trustee or any
Rating Agency concurrently therewith and furnish to the Holdback Amount
Designees promptly after receipt thereof a copy of each notice, demand or other
communication received by or on behalf of the Trust Depositor or the Servicer
with respect to the Notes, this Agreement, the Pooling Agreement, the Purchase
and Sale Agreements, the Indenture and the other Transaction Documents.
Section 4.04. Monthly Status Reports.
Furnish to the Holdback Amount Designees, on a monthly basis on each
Payment Date, a monthly report in the form of Exhibit B hereto (which report
shall have attached thereto a copy of the Servicer's Certificate delivered
pursuant to the Pooling Agreement for the related Collection Period) and such
other information with respect to the Trust's property as the Agent may
reasonably request (including a copy of the monthly statements with respect to
the Cash Collateral Account furnished by the holder thereof (if other than the
Trust Depositor, the Servicer or an Affiliate thereof) and information relating
to the source and amount of any prepayment of the Holdback Amount pursuant to
Section 2.02(a) or (b)).
Section 4.05. Default.
Furnish to the Holdback Amount Designees, promptly after the occurrence
of any Servicer Termination Event or Event of Default, a certificate of an
appropriate officer of the Servicer setting forth the circumstances of such
Servicer Termination Event or Event of Default, and any action taken or proposed
to be taken with respect thereto.
Section 4.06. Timely Payments.
Timely make all payments, deposits or transfers, and give all
instructions to transfer, required to be made by it under the Indenture and the
Pooling Agreement.
Section 4.07. Successor Indenture Trustee.
Not appoint (or cause to be appointed) a successor Indenture Trustee
without the prior written consent of the Agent (which consent shall not be
unreasonably withheld) except as permitted hereunder and by the Indenture.
Section 4.08. Periodic Reports of the Accountants.
Furnish to the Holdback Amount Designees, upon request, (a) a copy of
each annual servicing report of independent public accountants received by the
Indenture Trustee from the Servicer pursuant to Section 9.04 of the Pooling
Agreement, (b) a copy of any other data furnished to the Indenture Trustee
pursuant to Section 9.03 of the Pooling Agreement.
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Section 4.09. Other Actions.
Execute and deliver to the Holdback Amount Designees all such documents
and instruments and do all such other acts and things as may be necessary or
reasonably required by the Holdback Amount Designees, the Trust or the Indenture
Trustee to enable the Indenture Trustee, the Trust, the Holdback Amount
Designees to exercise and enforce their respective rights under this Agreement,
the Pooling Agreement, the Purchase and Sale Agreements, the Indenture, and
other Transaction Documents and to realize thereon, and the Trust Depositor at
the expense of the Holdback Amount Designees shall record and file and re-record
and refile all such documents and instruments, at such time or times, in such
manner and at such place or places, as may be necessary or reasonably required
by the Indenture Trustee, the Trust or the Agent to validate, preserve, perfect
and protect the position of the Indenture Trustee, the Trust or the Holdback
Amount Designees under this Agreement, the Pooling Agreements, the Purchase and
Sale Agreements, the Indenture, and other Transaction Documents and the Trust
Depositor and the Servicer shall maintain each of such agreements as part of its
official records.
Section 4.10. Identities.
Maintain as confidential and not disclose to any Person (other than any
officer, employee or representative of a party hereto, any underwriter under the
Underwriting Agreement or a Rating Agency, or in connection with any filing
under the applicable UCC which lists any Holdback Amount Designee (or the Owner
Trustee or the Indenture Trustee on their behalf) as secured parties) the
identity of any Holdback Amount Designee as enhancement provider under this
Agreement, except as such Holdback Amount Designee may have consented to in
writing prior to any proposed disclosure or except as the Trust Depositor and/or
the Servicer may have been advised by counsel is (i) required by law or (ii)
reasonably necessary or desirable in connection with any lawsuit or governmental
investigation or proceeding.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
AND AGREEMENTS OF THE HOLDBACK AMOUNT DESIGNEES
Section 5.01. Representations and Warranties of the Holdback Amount
Designees.
Each Holdback Amount Designee represents and warrants to the Indenture
Trustee, the Owner Trustee, the Trust Depositor and the Servicer, that:
(a) such Holdback Amount Designee is duly authorized to enter into and
perform this Agreement and has duly executed and delivered this Agreement;
(b) this Agreement constitutes the legal, valid and binding obligation
of such Holdback Amount Designee, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership and other laws now or hereafter in effect relating to, or affecting
generally, the enforcement of creditors' rights and remedies as the same may be
applied in the event of the bankruptcy, insolvency, reorganization,
conservatorship, receivership or liquidation or a similar event of such Holdback
Amount
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Designee or a moratorium applicable to the Holdback Amount Designee and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity);
(c) no consent or approval of or other action by any Governmental
Authority having jurisdiction over the Holdback Amount Designee is required in
connection with the execution, delivery or performance by such Holdback Amount
Designee of this Agreement;
(d) either (i) it is properly classified as, and will remain classified
as, a "corporation" as described in Code Section 7701(a)(3) and is not, and will
not become, an "S corporation" under Code Section 1361, or (ii) neither (x)
substantially all of the value of any beneficial owner's interest in the
Holdback Amount Designee is attributable to its interest in the Holdback Amount
nor (y) its acquisition of the interest in the Holdback Amount is for the
purpose of permitting the Trust to avoid the 100-partner limitation of Treasury
Regulation Section 1.7704-1(h)(3)(ii) in the event the Trust is characterized as
a partnership for federal income tax purposes; and
(e) the execution, delivery and performance of each of this Agreement
and any other Transaction Documents to which it is a party do not violate any
provision of any existing law or regulation applicable to it, any order or
decree of any court or other judicial authority to which it is subject, its
articles of association or by-laws or any mortgage, indenture, contract or other
to which it is a party or by which it or any significant portion of its
properties is bound (other than violations of such laws, regulations, orders,
decrees, mortgages, indentures, contracts and other agreements that,
individually or in the aggregate, would not have a material adverse effect on
such Holdback Amount Designee, ability to perform its obligations under, or the
validity or enforceability of, this Agreement or any other Transaction Documents
to which it is a party).
ARTICLE VI
MISCELLANEOUS
Section 6.01. Amendments and Waivers.
This Agreement shall not be amended, waived or modified without the
written consent of the Trust Depositor, the Servicer, the Trust, the Indenture
Trustee and the Holdback Amount Designees. The Servicer shall provide to each of
the Rating Agencies a copy of any amendment prior to the effectiveness thereof.
Section 6.02. Reserve Account Withdrawal Statement.
If the Termination Date shall have occurred and the Holdback Amount has
not been repaid in full, the Trust Depositor or the Servicer shall provide the
Holdback Amount Designees with a description of the events giving rise to each
withdrawal from the Reserve Account (in the case of the Servicer, only while
acting in such capacity) in such detail as the Holdback Amount Designees may
reasonably request and with such additional background information and data with
respect thereto as the Holdback Amount Designees may reasonably request and the
Trust Depositor or the Servicer can reasonably supply.
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Section 6.03. Servicing Transfer.
(a) If a Servicing Transfer occurs under the Pooling Agreement, from
and after the effective date of such Servicing Transfer, the successor Servicer
appointed pursuant to the Pooling Agreement, and not the replaced Servicer,
shall be responsible for the performance of all servicing functions to be
performed from and after such date. Such Servicing Transfer shall not affect any
rights or obligations of the replaced Servicer under this Agreement that arose
prior to the effective date of the Servicing Transfer or the rights or
obligations of the replaced Servicer under this Agreement, including under
Sections 2.02(a), (b) and (c), Section 2.06 and Article IV (in the case of
Sections 4.03, 4.04 or 4.08 under Article IV, excluding any documents received
by any successor Servicer other than the Trust Depositor and also excluding any
documents received by the Trust Depositor from the successor Servicer), this
Section 6.03 or Section 6.04 whether arising before or after such date. At the
time of any transfer of the servicing functions to a successor Servicer, such
successor Servicer shall furnish to the Agent copies of its annual financial
statements (which financial statements shall be audited, if available) or, if
such successor Servicer is a national banking association, copies of its call
reports for each of the last three fiscal years.
(b) Subject to Section 6.03(a), any successor Servicer, by accepting
its appointment pursuant to the Pooling Agreement, (i) shall agree to be bound
by the terms, covenants and conditions contained herein applicable to the
Servicer and to be subject to the duties and obligations of the Servicer
hereunder, (ii) as of the date of its acceptance, shall be deemed to have made
with respect to itself the representations and warranties made by the Servicer
in Sections 3.01 through 3.05 hereof (in the case of Section 3.01 with
appropriate factual changes) and (iii) shall agree on a recourse basis to
indemnify and hold harmless any Indemnitee from and against any and all claims,
damages, losses, liabilities, costs or expenses (including the fees and expenses
of counsel) whatsoever that such Indemnitee may incur (or which may be claimed
against such Indemnitee) by reason of the negligence or willful misconduct of
such successor Servicer in exercising its powers and carrying out its
obligations under the Pooling Agreement, the Indenture or this Agreement.
Section 6.04. Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAW
PROVISIONS.
Section 6.05. No Waiver.
Except as specifically provided herein, neither any failure nor any
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise or the exercise of any
other right, power or privilege.
Section 6.06. Severability.
In case any one or more of the provisions contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the
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remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
Section 6.07. Termination.
This Agreement shall remain in full force and effect until the later of
(a) the payment of the Holdback Amount and (b) the Termination Date. The
provisions of Sections 2.07, 2.08, 6.04, 6.10, 6.14 and 6.16 shall survive the
termination of this Agreement.
Section 6.08. Successors and Assigns; Assignments.
(a) This Agreement shall be binding upon, and inure to the benefit of,
the Holdback Amount Designees, the Trust, the Indenture Trustee, the Trust
Depositor, the Servicer and their respective successors and permitted assigns
(other than Participants); provided that neither the Servicer nor the Trust
Depositor may assign any of its rights or obligations hereunder (by operation of
law or otherwise) without the prior written consent of the Holdback Amount
Designees except as otherwise provided herein or in the Pooling Agreement and,
if the Holdback Amount or Reserve Account is rated by S&P, upon confirmation by
S&P that such assignment will not result in a withdrawal or reduction of the
rating of the Holdback Amount or Reserve Account, as the case may be; and
provided further, that no assignment permitted hereunder shall relieve the Trust
Depositor or the Servicer, as applicable, from any of their respective
obligations arising hereunder prior to such assignment (including obligations
with respect to breaches of representations and warranties made herein).
(b) Subject to the other provisions of this Agreement, each Holdback
Amount Designee may at any time sell, assign or otherwise transfer (each, an
"Assignment") to any assignee (upon such assignment, a "Holdback Amount
Designee") all or part of the obligations due to it in respect the Holdback
Amount and its rights and obligations under this Agreement; provided that (i) if
a partial assignment of the assignor Holdback Amount Designee 's interest in the
Holdback Amount, the minimum amount of such assignment of the Holdback Amount
shall be $1,000,000, (ii) such assignee Holdback Amount Designee shall have
entered into an Assignment Agreement in the form of Exhibit A, pursuant to which
such assignee Holdback Amount Designee has agreed in writing to assume the
rights and obligations of the assignor Holdback Amount Designee (to the extent
of such Assignment), (iii) such assignee Holdback Amount Designee shall, upon
the request of the Trust Depositor, provide the Indenture Trustee, the Servicer
and the Trust Depositor (prior to the effective date of its Assignment
Agreement) with an opinion of counsel reasonably satisfactory to the Indenture
Trustee and the Trust Depositor, as to the enforceability of this Agreement and
the Assignment Agreement with respect to such assignee Holdback Amount Designee,
(iv) such assignee Holdback Amount Designee shall comply with Section 6.08(c)
and shall have delivered to the Indenture Trustee, prior to the effectiveness of
such Assignment, an executed copy of an agreement under which such assignee
Holdback Amount Designee has made the representations, warranties and covenants
required to be made pursuant to such Section, and (v) such assignee Holdback
Amount Designee shall have entered into a Confidentiality Agreement
substantially in the form of Exhibit C.
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(c) Each Holdback Amount Designee agrees with the Trust Depositor that:
(a) such Holdback Amount Designee will deliver to the Trust Depositor on or
before the effective date of any Assignment a letter in the form attached hereto
as Exhibit A, executed by such Holdback Amount Designee and (b) all of the
statements made by such Holdback Amount Designee in such letter shall be true
and correct as of the date made.
(d) In connection with any assignment of an interest in the Holdback
Amount (the "Transaction"), the Trust Depositor and CFUSA recognize that a
purchaser will need certain confidential information relating to the Trust
Depositor, CFUSA and their affiliates (such information, including information
obtained through inspection of NCT Funding, CFUSA or their affiliates pursuant
to this Agreement, "Information") including Information relating to equipment
lease programs that has not been disclosed to the public. Because the use or
disclosure of such Information would be damaging to the Trust Depositor, CFUSA
and their affiliates, each of NCT Funding and CFUSA are willing to supply such
Information to a prospective purchaser of an interest in the Holdback Amount
only if the prospective purchaser of agrees to the conditions set forth below.
The term "Information" shall not include, and the following conditions shall not
apply to, information that (i) is published or part of the public knowledge
prior to its receipt by such prospective purchaser, (ii) becomes published or
part of the public knowledge after its receipt by such prospective purchaser,
(iii) was known to such prospective purchaser prior to its receipt of the
interest in the Holdback Amount, or (iv) is acquired by such prospective
purchaser from someone other than the Trust Depositor, CFUSA or their
affiliates, or a representative thereof, provided that such representative has a
right to convey the information without restriction.
Accordingly, in consideration of the foregoing, any prospective
purchaser of an interest in the Holdback Amount agrees (on behalf of itself and
each of its affiliates, directors, officers, employees and representatives) that
(A) the Information will not be used by such prospective purchaser except in
connection with the proposed Transaction mentioned above and (B) such
prospective purchaser shall use reasonable precautions, in accordance with its
respective customary procedures for handling confidential information and in
accordance with safe and sound banking practices, to keep the Information
confidential, provided that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to such prospective purchaser's counsel, (iii) to bank
examiners, auditors or accountants, (iv) pursuant to legal process; provided,
further, that, such prospective purchaser agrees, prior to disclosure of any of
the Information, to notify the Trust Depositor of any request for disclosure of
any such information, (x) by any governmental agency or representative thereof
(other than any such request in connection with an examination of your financial
condition by such governmental agency) or (y) pursuant to legal process.
(e) Any Holdback Amount Designee may at any time grant to any person a
participation in all or part (but not less than $1,000,000) of its interest in
the Holdback Amount, and its rights under this Agreement (each such Person, a
"Participant"); provided, however, that such participation shall be void, unless
such Participant shall comply with the applicable provisions of Section 6.08(c)
and such Holdback Amount Designee shall have delivered to the Indenture Trustee,
the Servicer and the Trust Depositor prior to the effectiveness of its
participation, a copy of an agreement under which such Participant has made the
representations, warranties and covenants required to be made pursuant to such
Section substantially in the form
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attached hereto as Exhibit A. Each Holdback Amount Designee hereby acknowledges
and agrees that any such disposition will not alter or affect in any way
whatsoever such Holdback Amount Designee's direct obligations hereunder and that
neither the Indenture Trustee, the Owner Trustee, the Trust Depositor, the
Servicer nor CFUSA shall have any obligation to, have any communication or
relationship whatsoever with, or liability whatsoever to, any Participant of
such Holdback Amount Designee in connection with this Agreement. Each Holdback
Amount Designee shall promptly notify CFUSA (which shall promptly notify the
Trust Depositor) in writing of the identity and interest of each Participant
upon any such disposition. In granting any participation, the Holdback Amount
Designee certifies, represents and warrants that (i) such Participant is
entitled to (x) receive payments with respect to its participation without
deduction or withholding of any United States federal income taxes and (y) an
exemption from United States backup withholding tax, (ii) such Participant shall
have entered into a Confidentiality Agreement substantially in the form of
Exhibit C, and (iii) such Holding Amount Designee similarly will provide
subsequent forms as described in the Assignment with respect to such
Participant.
Section 6.09. Notices.
(a) All notices and other communications provided for hereunder shall
be in writing and, if to the Trust Depositor, the Servicer, the Owner Trustee,
or the Indenture Trustee either mailed or delivered to it, or sent by facsimile
transmission, addressed to it or sent as set forth in the Pooling Agreement or
the Indenture, or if to the Holdback Amount Designees, mailed or delivered to
it, or sent by facsimile transmission, to it at 650 CIT Drive, Livingston, New
Jersey 07039, Attention: General Counsel (with a copy to the attention of the
Treasurer), (telecopy no. (973) 740-5000), or, if to any other party, as such
party may direct in a written notice to the other parties. All such notices and
other communications shall be effective if personally delivered, upon delivery
to the aforesaid address, if mailed, five days after the date of mailing,
addressed as aforesaid or, if sent by facsimile transmission, when sent (receipt
confirmed). Any party hereto may change the address to which notices to it are
to be sent by notice given to the other parties hereto.
(b) Written notice of payments to the Holdback Amount Designees under
this Agreement shall be given to the Holdback Amount Designees by facsimile
transmission stating that a transfer of immediately available funds has been
made to the Holdback Amount Designees, identifying the amount paid and stating
the Federal wire transfer confirmation number of such wire transfer. Unless
otherwise directed by the Holdback Amount Designees, all payments to the
Holdback Amount Designees shall be made to it directly in federal funds as
follows:
Pay To: NCT Funding Company, L.L.C.
Account: The CIT Group, Inc.
Account No.: 026-036503
Chase Manhattan Bank
Routing: 021-000-021
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Section 6.10. Survival of Representations and Warranties.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement.
Section 6.11. Counterparts.
This Agreement may be executed in any number of copies, and by the
different parties hereto on the same or separate counterparts, each of which
shall be deemed to be an original instrument.
Section 6.12. Limitation of Remedies.
The Holdback Amount Designees shall not have the right to cause the
Holdback Amount or any portion thereof to become due and payable prior to the
Termination Date.
Section 6.13. Previous Agreements.
Any previous agreement among the parties with respect to the subject
matter hereof is superseded by this Agreement.
Section 6.14. Waiver of Jury Trial.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT. Each party hereto (a) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waivers
and certifications in this Section 6.14.
Section 6.15. Headings.
Article and Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
Section 6.16. Jurisdiction, Consent to Service of Process.
To the fullest extent permitted by applicable law, each of the Trust
Depositor, the Servicer, the Holdback Amount Designees, the Trust and the
Indenture Trustee (a) hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement, or for recognition or enforcement of any judgment
and (b)
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agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that a party may otherwise have to bring any action or proceeding relating
to this Agreement against any other party or its respective properties in the
court of any jurisdiction.
Section 6.17. Bankruptcy.
To the extent that the Indenture Trustee, the Servicer or the Trust
Depositor makes a payment to the Holdback Amount Designees or the Holdback
Amount Designees receive any payment or proceeds with respect to the Holdback
Amount or any other amount payable in connection with this Agreement, which
payment or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent such payment or proceeds
are set aside, the Holdback Amount or any other amount payable in connection
with this Agreement or part or parts thereof intended to be satisfied shall be
revived and continue in full force and effect, as if such payment or proceeds
had not been received by the Holdback Amount Designees.
Section 6.18. Nonpetition Agreements; Rights in Trust Property.
(a) Notwithstanding any prior termination of this Agreement no Holdback
Amount Designee shall acquiesce, petition or otherwise invoke or cause the Trust
or the Trust Depositor to invoke the process of any Governmental Authority for
the purpose of commencing or sustaining a case against the Trust or the Trust
Depositor under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Trust or the Trust Depositor or any substantial
part of their respective property or ordering the winding up or liquidation of
the affairs of the Trust or the Trust Depositor. The Holdback Amount Designees
acknowledge that the Trust Depositor and the Trust are each legal entities
separate from any other entity and that the Noteholders have relied on such
separateness, and the Holdback Amount Designees agree, which agreement shall be
enforceable by the Noteholders at law or through an action for specific
performance, not to seek or support the substantive consolidation of the Trust
Depositor or the Trust with any other entity as long as the Notes remain
outstanding.
(b) Notwithstanding anything contained in this Agreement to the
contrary, the Holdback Amount Designees agree that regardless of any termination
of this Agreement or other provision of this Agreement, no Holdback Amount
Designee shall have any rights in or to the amounts on deposit in the Reserve
Account or any other Trust Assets or the Trust Estate except as expressly
provided in the Indenture.
Section 6.19. Income Tax Characterization.
Each of the Trust Depositor, the Servicer, the Trust and the Indenture
Trustee agree to treat the Holdback Amount as equity of the Trust for purposes
of federal income, state and local income and franchise and any other income
taxes.
Section 6.20. Indenture Trustee.
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The Indenture Trustee shall be afforded all of the rights, powers,
immunities and indemnities set forth in the Indenture in the performance of its
duties hereunder as if such rights, powers, immunities and indemnities were
specifically set forth herein.
Section 6.21. Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary, this
Agreement has been executed on behalf of the Trust by Chase Manhattan Bank USA
National Association, not in its individual capacity but solely in its capacity
as Owner Trustee of the Trust and in no event shall Chase Manhattan Bank USA
National Association in its individual capacity have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Trust hereunder, as to all of which recourse shall be had solely to the assets
of the Trust. For all purposes of this Agreement, in the performance of any
duties or obligations of the Trust 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Reserve Account
Agreement to be duly executed by their respective officers as of the day and
year first above written.
NCT FUNDING COMPANY, L.L.C., as Trust
Depositor
By: /s/ Barbara A. Callahan
-----------------------------------------------
Name: Barbara A. Callahan
--------------------------------------
Title: Vice President
--------------------------------------
CIT FINANCIAL USA, INC., in its individual capacity
By: /s/ Barbara A. Callahan
-----------------------------------------------
Name: Barbara A. Callahan
--------------------------------------
Title: Vice President
--------------------------------------
THE CIT GROUP/EQUIPMENT FINANCING, INC., as Servicer
By: /s/ Barbara A. Callahan
-----------------------------------------------
Name: Barbara A. Callahan
--------------------------------------
Title: Vice President
--------------------------------------
CIT EC - EF 2001-A
By: Chase Manhattan Bank USA, National Association,
not in its individual capacity but solely as
Owner Trustee
By: /s/ Denis Kelly
-----------------------------------------------
Name: Denis Kelly
--------------------------------------
Title: Assistant Vice President
--------------------------------------
ALLFIRST BANK, not in its individual capacity but
solely as Indenture Trustee
By: /s/ Robert D. Brown
-----------------------------------------------
Name: Robert D. Brown
--------------------------------------
Title: Vice President
--------------------------------------
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EXHIBIT A
FORM OF
[ASSIGNMENT AGREEMENT]
[PARTICIPATION AGREEMENT]
(EC - EF 2001-A)
dated as of __________
Reference is made to the Reserve Account Agreement, dated as of August
1, 2001 (as amended from time to time, the "Reserve Account Agreement") among
CIT EC - EF 2001-A (the "Trust"), ALLFIRST BANK, as indenture trustee (the
"Indenture Trustee"), NCT FUNDING COMPANY, L.L.C., as Trust Depositor, CIT
FINANCIAL USA, INC., in its individual capacity, and THE CIT GROUP/EQUIPMENT
FINANCING, INC, as Servicer (the "Servicer"). Terms defined in the Reserve
Account Agreement are used herein as defined therein. __________ ("Assignor")
and __________ [("Assignee")] [("Participant")] hereby agree as follows:
1. The Assignor hereby sells and assigns to the [Assignee]
[Participant] without recourse and without representation or warranty (other
than as expressly provided herein), and the [Assignee] [Participant] hereby
purchases and assumes from the Assignor, that interest in and to all of the
Assignor's rights and obligations under the Reserve Account Agreement as of the
effective date hereof which represents those and only the interests in the
Reserve Account Agreement which are set forth on Schedule I hereto (the
"Assigned Interests"), in the amount for each Assigned Interest as set forth on
such Schedule I hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor; (ii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Reserve Account Agreement, the Pooling Agreement, the Indenture or any other
Transaction Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Reserve Account Agreement, any
Transaction Document or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any party to the
Reserve Account Agreement or any Transaction Document or the performance or
observance by any party to the Reserve Account Agreement or any Transaction
Document or of any of their respective obligations under the Reserve Account
Agreement, any Transaction Document or any other instrument or document
furnished pursuant thereto.
3. The [Assignee] [Participant] (i) confirms that it has received a
copy of the Reserve Account Agreement, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this [Assignment and Assumption] [Participation] Agreement; (ii) agrees
that it will independently and without reliance upon the Agent, the Assignor or
any other Holdback Amount Designee and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action
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under the Reserve Account Agreement or the Transaction Documents; (iii) agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Reserve Account Agreement are required to be performed by it
as a Holdback Amount Designee and agrees not to unreasonably withhold its
consent to actions permitted to be taken under the Reserve Account Agreement
with the consent of Holdback Amount designees representing a majority of the
Holdback Amount; and (iv) has supplied the information requested in the
administrative questionnaire attached hereto as Schedule II.
4. Following the execution of this [Assignment and Assumption]
[Participation] Agreement by the Assignor and the [Assignee] [Participant], an
executed original hereof (together with all attachments) will be delivered to
CFUSA (with a copy to the Servicer and the Trust Depositor). The effective date
of this [Assignment and Assumption] [Participation] Agreement shall be the later
of the effective date set forth in Schedule I and the date of execution hereof
by the Assignor and the [Assignee] [Participant].
[5. Upon delivery of a fully executed original hereof (including, if
required pursuant to Section 6.08 of the Reserve Account Agreement, the signed
consent of the Trust Depositor) to CFUSA, as of the effective date, (i) the
Assignee shall be a party to the Reserve Account Agreement and, to the extent
provided in this Assignment and Assumption Agreement, have the rights and
obligations of a Holdback Amount Designee thereunder and (ii) the Assignor
shall, to the extent provided in this Assignment and Assumption Agreement and
except as provided in Section 6.08 of the Reserve Account Agreement, relinquish
its rights and be released from its obligations under the Reserve Account
Agreement.]
[6. It is agreed that the Assignee shall be entitled to all interest
and fees in respect of the Assigned Interests which accrues on and after the
effective date hereof, such interest and fees to be paid directly to the
Assignee. It is further agreed that all payments of the balance of the Holdback
Amount which occur on and after the effective date hereof will be paid directly
to the Assignee. Upon the execution of this Assignment Agreement, the Assignee
shall pay to the Assignor an amount specified by the Assignor in writing which
represents the portion of the Holdback Amount beneficially owned by the Assignor
pursuant to the Reserve Account Agreement outstanding on the effective date
hereof which constitute Assigned Interests. The Assignor and the Assignee shall
make all appropriate adjustments in payment under the Reserve Account Agreement
for periods prior to the effective date hereof directly between themselves on or
prior to the effective date hereof.]
7. The [Assignee] [Participant] represents, warrants and covenants that
it has not acquired, and shall not sell, trade or transfer any interest in its
[Assigned Interests] [Participation], nor cause any interest in its [Assigned
Interests][Participation] to be marketed on or through either (i) an
"established securities market" within the meaning of Section 7704(b)(1) of the
Internal Revenue Code of 1986 (the "Code") (including an interdealer quotation
system that regularly disseminates firm buy or sell quotations by identified
brokers or dealers by electronic means or otherwise) or (ii) a "secondary
market" within the meaning of Code Section 7704(b)(2) (including a market
wherein interests in the Holdback Amount or Participations therein are regularly
quoted by any person making a market in such interests and a market wherein any
person regularly makes available bid or offer quotes with respect to interests
in the
A-2
Holdback Amount or Participations therein and stands ready to effect buy or sell
transactions at the quoted prices for itself or on behalf of others).
8. Unless the Trust Depositor consents otherwise (which consent shall
be based on an Opinion of Counsel generally to the effect that the action taken
pursuant to the consent will not cause the Trust to become a publicly traded
partnership treated as a corporation), the [Assignee] __Participant] represents,
warrants and covenants that either (i) it is properly classified as, and will
remain classified as, a "corporation" as described in Code Section 7701(a)(3)
and is not, and will not become, an "S corporation" under Code Section 1361, or
(ii) neither (x) substantially all of the value of any beneficial owner's
interest in the [Assignee] [Participant] is attributable to the [Assignee's]
[Participant's] [interest in the Holdback Amount] [Participation] nor (y) its
acquisition of the [Assigned Interest] [Participation] is for the purpose of
permitting the Trust to avoid the 100-partner limitation of Treasury Regulation
Section 1.7704-1(h)(3)(ii) in the event the Trust is characterized as a
partnership for federal income tax purposes (an entity meeting the requirements
of either (i) or (ii) being a "Permitted Entity"). The [Assignee] [Participant]
represents, warrants and covenants that it shall (i) cause each of its assignees
and Participants otherwise permitted under the Reserve Account Agreement to make
representations, warranties and covenants as required by Section 6.08(c) of the
Reserve Account Agreement for the benefit of the Trust Depositor and the Trust
at the time such assignee or Participant became an assignee or Participant and
(ii) forward a copy of such representations, warranties and covenants to the
Indenture Trustee. In the event of any breach of the representation, warranty
and covenant of the [Assignee] [Participant] or its Participant that the
[Assignee] [Participant] and its Participants shall remain a Permitted Entity,
the [Assignee] [Participant] shall notify the Agent and the Trust Depositor
promptly upon the [Assignee] [Participant]'s becoming aware of such breach, and
thereupon CFUSA and the [Assignee] [Participant] hereby agree to use reasonable
efforts to procure a replacement investor not so affected which is a Permitted
Assignee reasonably acceptable to the Agent or is otherwise reasonably
acceptable to the Trust Depositor and the Agent to replace the [Assignee]
[Participant]. In any such event, Trust Depositor shall also have the right to
procure a replacement investor, provided that such proposed replacement investor
is a Permitted Assignee or is otherwise reasonably acceptable to the Agent. The
[Assignee] [Participant] hereby agrees to take all actions necessary to permit a
replacement investor to succeed to its rights and obligations hereunder. [If the
[Assignee] [Participant] has a Participant which has breached its
representation, warranty and covenant that it shall remain a Permitted Entity,
the [Assignee] [Participant] hereby agrees (without limiting the right of Trust
Depositor to procure a replacement investor for the [Assignee] [Participant] as
provided above in this paragraph) to notify the Trust Depositor and CFUSA of
such breach promptly upon the [Assignee] [Participant]'s becoming aware thereof
and to use reasonable efforts to procure a replacement Participant, as
applicable, not so affected which is a Permitted Assignee or is otherwise
acceptable to the Trust Depositor and CFUSA to replace any such Participant.]
[if [Assignee] [Participant] is organized under the laws of any
jurisdiction outside the United States:
9. The [Assignee] [Participant] represents and warrants that, under
applicable law no taxes will be required to be withheld by the Trust, the
Indenture Trustee, the Trust Depositor, the Servicer or any Holdback Amount
Designee with respect to any payments to be
A-3
made to the [Assignee] [Participant] in respect of an interest in its [Assigned
Interest][Participation].
10. The [Assignee] [Participant] agrees (for the benefit of CFUSA, the
Trust, the Owner Trustee, the Indenture Trustee, the Trust Depositor, the
Servicer and the Holdback Amount Designees) (i) to provide the forms, at the
time and in the manner described therein, required to be provided by all
applicable U.S. laws and regulations with regard to the related withholding tax
exemptions and (ii) to comply with, all applicable U.S. laws and regulations
with regard to the related withholding tax exemptions.
11. THIS ASSIGNMENT [PARTICIPATION] AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[signature page follows]
A-4
IN WITNESS WHEREOF, the parties hereto have caused this
[Assignment][Participation] Agreement to be duly executed as of the day and year
first above written on Schedule I hereto.
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By:__________________ By:__________________
Title:_______________ Title:_______________
The undersigned acknowledges receipt from the Assignor and the Assignee
of a copy of the foregoing [Assignment and Assumption][Participation] Agreement.
NCT FUNDING COMPANY, L.L.C.
as Trust Depositor
By:________________________
Title:_____________________
A-5
Schedule I to the [Assignment]
[Participation] Agreement
Legal Name of Assignor:
Legal Name of Assignee:
Effective Date of Assignment: __________, 20__
Amount Assigned
Total Interest of
Assignee in Holdback Amount after Assignment: $________
Holdback Amount of
Assignee after Assignment: $________
A-6
Schedule II to the [Assignment]
[Participation] Agreement
Administrative Details Reply Form
1. OFFICE:
------
Name of Holdback Amount Designee:
Address:
Telex No:
Fax No:
2. CONTACTS - CREDIT MATTERS
-------------------------
Name of Person:
Address:
Telephone:
Fax No:
3. CONTACTS - OPERATIONS/ADMINISTRATION
------------------------------------
Name of Person:
Address:
Telephone:
Telex No:
Fax No:
4. PAYMENT INSTRUCTIONS
--------------------
Pay To:
Address:
ABA Number:
Acct. Number:
Acct. Name:
Reference:
A-7
EXHIBIT B
FORM OF MONTHLY STATUS REPORT
(attached)
B-1
EXHIBIT C
FORM OF CONFIDENTIALITY AGREEMENT
[DATE]
CONFIDENTIALITY AGREEMENT
[Insert Name and
Address of Prospective
Assignee or Participant]
Re: Reserve Account Agreement, dated as of August 1, 2001 (as
amended from time to time, the "Reserve Account Agreement")
among CIT EC - EF 2001-A (the "Trust"), Allfirst Bank, as
indenture trustee (the "Indenture Trustee"), NCT FUNDING
COMPANY, L.L.C. ("NCT Funding"), as Trust Depositor, CIT
FINANCIAL USA, INC. ("CFUSA"), in its individual capacity, and
The CIT Group/Equipment Financing, Inc., as Servicer (the
'Servicer").
Ladies and Gentlemen:
In connection with your consideration of a purchase of an interest or a
participation related to the above-referenced Reserve Account Agreement (the
"Transaction"), we and each of NCT Funding and CFUSA recognize that you will
need certain confidential information furnished to us by NCT Funding, CFUSA and
their affiliates or by such parties directly to you (such information, including
information obtained through inspection of NCT Funding or CFUSA pursuant to
Section 6.08 of the Reserve Account Agreement, "Information") about NCT Funding,
CFUSA and their affiliates, and certain equipment lease programs that has not
been disclosed to the public. Because the use or disclosure of such Information
would be damaging to NCT Funding, CFUSA and their affiliates, each of NCT
Funding and CFUSA are willing to supply, or to permit us to supply, you with
such Information only if you agree to the conditions set forth below. The term
"Information" shall not include, and the following conditions shall not apply
to, information that (i) is published or part of the public knowledge prior to
its receipt by you from us, NCT Funding or CFUSA, (ii) becomes published or part
of the public knowledge after its receipt by you from us, NCT Funding or CFUSA,
(iii) was known to you prior to its receipt by you from us, NCT Funding or
CFUSA, or (iv) is acquired by you from someone other than us, NCT Funding or
CFUSA or a representative thereof, provided that such representative has a right
to convey the information without restriction.
Accordingly, in consideration of the foregoing, you agree (on behalf of
yourself and each of your affiliates, directors, officers, employees and
representatives) that (A) the Information will not be used by you except in
connection with the proposed Transaction mentioned above and (B) you shall use
reasonable precautions, in accordance with your customary procedures for
handling confidential information and in accordance with safe and sound banking
practices, to keep the Information confidential, provided that nothing herein
shall limit the disclosure of any such information (i) to the extent required by
statute, rule, regulation or judicial process, (ii) to your counsel, (iii) to
bank examiners, auditors or accountants, and (iv) pursuant to legal process;
provided, further, that, unless specifically prohibited by applicable law
or court order, you agree, prior to disclosure of any of the Information, to
notify the Trust Depositor of any request for disclosure of any such
Information, (x) by any governmental agency or representative thereof (other
than any such request in connection with an examination of your financial
condition by such governmental agency) or (y) pursuant to legal process.
Would you please indicate your agreement to the foregoing by signing at
the place provided below the enclosed copy of this Confidentiality Agreement.
Very truly yours,
[Insert Name of Holdback Amount Designee]
By:_______________________________
Name:__________________________
Title:_________________________
The foregoing is agreed to as
of the date of this letter
[Insert name of prospective
assignee or participant]
By:_______________________________
Name:__________________________
Title:_________________________
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