Exhibit 4.2
AMENDED AND RESTATED
TRUST AGREEMENT
by and among
CIT FUNDING COMPANY, LLC
as Depositor,
THE BANK OF NEW YORK
as Owner Trustee,
and
THE BANK OF NEW YORK (DELAWARE)
as Delaware Trustee
Dated as of July 1, 2005
CIT EQUIPMENT COLLATERAL 2005-EF1
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS................................................................................1
Section 1.01 Defined Terms Generally...........................................................1
Section 1.02 Specific Defined Terms............................................................1
Section 1.03 Usage of Terms....................................................................4
Section 1.04 Section References................................................................5
Section 1.05 Accounting Terms..................................................................5
ARTICLE II ORGANIZATION AND ESTABLISHMENT OF TRUST....................................................5
Section 2.01 Establishment of Trust; Name......................................................5
Section 2.02 Office............................................................................5
Section 2.03 Purposes and Powers...............................................................5
Section 2.04 Appointment of Owner Trustee and the Delaware Trustee.............................6
Section 2.05 Organizational Expenses...........................................................6
Section 2.06 Declaration of Trust..............................................................6
Section 2.07 No Liability of Equity Certificateholder..........................................6
Section 2.08 Title to Trust Property...........................................................6
Section 2.09 Situs of Trust....................................................................7
Section 2.10 Representations and Warranties of the Depositor...................................7
Section 2.11 Federal Income Tax Treatment......................................................8
ARTICLE III EQUITY CERTIFICATE AND TRANSFERS OF INTERESTS THEREIN......................................8
Section 3.01 Initial Ownership.................................................................8
Section 3.02 The Equity Certificate............................................................9
Section 3.03 Authentication and Delivery of Equity Certificate.................................9
Section 3.04 Registration of Transfer and Exchange of the Equity Certificate...................9
Section 3.05 Mutilated, Destroyed, Lost or Stolen Trust Equity Certificate....................10
Section 3.06 Persons Deemed Equity Certificateholders.........................................10
Section 3.07 Access to Equity Certificateholder's Name and Addresses..........................11
Section 3.08 Maintenance of Office or Agency..................................................11
Section 3.09 Ownership by Depositor of Equity Certificate.....................................11
ARTICLE IV ACTIONS BY OWNER TRUSTEE..................................................................11
Section 4.01 Prior Notice to Equity Certificateholder with Respect to Certain Matters.........11
Section 4.02 Action by Equity Certificateholder with Respect to Certain Matters...............12
Section 4.03 Action by Equity Certificateholder with Respect to Bankruptcy....................12
Section 4.04 Restrictions on Owner's Power....................................................12
ARTICLE V APPLICATION AND DISTRIBUTION OF TRUST FUNDS; CERTAIN DUTIES...............................13
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Section 5.01 Reports..........................................................................13
Section 5.02 Taxes............................................................................13
Section 5.03 Method of Payment................................................................13
Section 5.04 No Segregation of Moneys; No Interest............................................13
Section 5.05 Accounting and Reports to the Equity Certificateholder, the Internal
Revenue Service and Others.......................................................13
Section 5.06 Signature on Returns; Tax Matters Partner........................................14
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE.....................................................14
Section 6.01 General Authority................................................................14
Section 6.02 General Duties...................................................................14
Section 6.03 Action Upon Instruction..........................................................15
Section 6.04 No Duties Except as Specified in This Agreement or in Instructions...............16
Section 6.05 No Action Except Under Specified Documents or Instructions.......................16
Section 6.06 Restrictions.....................................................................16
Section 6.07 Administration Agreement.........................................................16
ARTICLE VII CONCERNING THE OWNER TRUSTEE..............................................................17
Section 7.01 Acceptance of Trusts and Duties..................................................17
Section 7.02 Furnishing of Documents..........................................................19
Section 7.03 Representations and Warranties of the Owner Trustee..............................19
Section 7.04 Representations and Warranties of the Delaware Trustee...........................19
Section 7.05 Reliance; Advice of Counsel......................................................20
Section 7.06 Not Acting in Individual Capacity................................................21
Section 7.07 Owner Trustee and Delaware Trustee Not Liable for Notes,
Equity Certificate or Contracts..................................................21
Section 7.08 Owner Trustee and Delaware Trustee May Own Notes.................................21
Section 7.09 Duties of the Delaware Trustee...................................................21
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE AND THE DELAWARE TRUSTEE....................................22
Section 8.01 Owner Trustee's and Delaware Trustee's Fees and Expenses.........................22
Section 8.02 Indemnification..................................................................22
Section 8.03 Non-recourse Obligations.........................................................23
ARTICLE IX TERMINATION OF TRUST......................................................................23
Section 9.01 Termination of Trust.............................................................23
Section 9.02 Dissolution upon Bankruptcy of Depositor.........................................24
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES....................................25
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Section 10.01 Eligibility Requirements for Owner Trustee and Delaware Trustee..................25
Section 10.02 Resignation or Removal of Owner Trustee or Delaware Trustee......................25
Section 10.03 Successor Owner Trustee or Delaware Trustee......................................26
Section 10.04 Merger or Consolidation of Owner Trustee or Delaware Trustee.....................27
Section 10.05 Appointment of Co-Trustee or Separate Trustee....................................27
ARTICLE XI MISCELLANEOUS.............................................................................28
Section 11.01 Supplements and Amendments.......................................................28
Section 11.02 Limitations on Rights of Others..................................................29
Section 11.03 Notices..........................................................................30
Section 11.04 Severability of Provisions.......................................................31
Section 11.05 Counterparts.....................................................................31
Section 11.06 Successors and Assigns...........................................................31
Section 11.07 No Petition......................................................................31
Section 11.08 No Recourse......................................................................32
Section 11.09 Headings.........................................................................32
Section 11.10 Governing Law....................................................................32
Section 11.11 Certain Servicer Payment Obligations.............................................32
Section 11.12 JURISDICTION.....................................................................32
Section 11.13 WAIVER OF JURY TRIAL.............................................................32
Section 11.14 Tax Characterization.............................................................33
EXHIBITS
Exhibit A - Section 3.01 Certificate...........................................................................A-1
Exhibit B - Form of Equity Certificate.........................................................................B-1
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This AMENDED AND RESTATED TRUST AGREEMENT dated as of July 1, 2005 is made
by and among CIT Funding Company, LLC, a Delaware limited liability company, as
Depositor (the "Depositor"), The Bank of New York, as Owner Trustee (the "Owner
Trustee"), and The Bank of New York (Delaware), as Delaware Trustee (the
"Delaware Trustee").
Whereas, the part ies hereto wish to amend and restate the Trust Agreement
dated as of June 30, 2005 (the "Original Trust Agreement"), by and between the
Depositor and the Delaware Trustee.
Whereas, in connection herewith the Depositor is willing to assume certain
obligations pursuant hereto;
Whereas, in connection herewith the Owner Trustee is willing to assume
certain obligations pursuant hereto; and
Whereas, in connection herewith the Depositor is willing to purchase the
Equity Certificate (as defined herein) to be issued pursuant to this Agreement
and to assume certain obligations pursuant hereto.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
and for other good and valuable consideration, the receipt and adequacy of which
are acknowledged, the parties hereto agree that the Original Trust Agreement
shall be amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms Generally. Capitalized terms used that are
not otherwise specifically defined herein shall have the same meaning given to
such terms when used in the Pooling Agreement (as defined in Section 1.02
below).
Section 1.02 Specific Defined Terms. Whenever used in this Agreement,
the following words and phrases, unless otherwise specified or the context
otherwise
requires, shall have the following meanings:
"Administration Agreement" means the Administration Agreement, dated as of
the date hereof, among the Trust, the Depositor, the Indenture Trustee, and
CITEF as Administrator.
"Administrator" has the meaning given such term in the Administration
Agreement.
"Agreement" means this Amended and Restated Trust Agreement, as the same
may be amended, supplemented or restated from time to time.
"Benefit Plan" means (i) an employee benefit plan (as such term is defined
in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(ii) a plan or other retirement arrangement that is subject to Section 406 of
ERISA or Section 4975 of the Code or any substantially similar law or (iii) any
entity whose underlying assets include plan assets by reason of a plan's
investment in such entity.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banking institutions in the cities of Livingston, New Jersey, Tempe,
Arizona or New York, New York are authorized or obligated by law, executive
order or governmental decree to be closed.
"Certificate of Trust" means the Certificate of Trust filed for the Trust
with the Secretary of State of the State of Delaware on August 11, 2005.
"Certificate Register" and "Certificate Registrar" mean the register
maintained and the registrar (or any successor thereto) appointed pursuant to
Section 3.04.
"CFUSA" means CIT Financial USA, Inc., a Delaware corporation.
"CITEF" means The CIT Group/Equipment Financing, Inc., a Delaware
corporation.
"Closing Date" means August 24, 2005.
"Code" means the Internal Revenue Code of 1986, as amended.
"Delaware Statutory Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code 'SS' 3801 et seq., as the same may be amended
from time to time.
"Delaware Trustee" means The Bank of New York (Delaware), with its
principal place of business in the State of Delaware, not in its individual
capacity but solely as Delaware Trustee under this Agreement, and any successor
Delaware Trustee hereunder.
"Delaware Trustee Corporate Trust Office" means the corporate trust office
of the Delaware Trustee in the State of Delaware, which office initially shall
be located at 502 ▇▇▇▇▇ ▇▇▇▇ Center, ▇▇▇▇▇ ▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Corporate Trust Group, or such other office at
such other address in the State of Delaware as the Delaware Trustee may
designate from time to time by written notice to the Equity Certificateholder,
the Servicer, the Indenture Trustee, the Owner Trustee, and the Depositor
"Depositor" means CIT Funding Company, LLC, in its capacity as Depositor
hereunder and as set forth in the Pooling Agreement, and its successors and
assigns.
"Equity Certificate" means the trust certificate evidencing the beneficial
interest of the Equity Certificateholder in the Trust Assets, substantially in
the form of Exhibit B hereto.
"Equity Certificateholder" means the Person in whose name the Equity
Certificate is registered in the Certificate Register.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expenses" shall have the meaning assigned to such term in Section 8.02.
"Foreign Person" means any Person other than (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity organized in
or under the laws of the United States or any political subdivision thereof,
(iii) an estate, the income of which is subject to U.S. federal income taxation
regardless of its source, or (iv) a trust whose administration is subject to the
primary supervision of a court within the United States and which has one or
more U.S. fiduciaries who have authority to control all substantial decisions of
the Trust.
"Holder" means a Noteholder or the Equity Certificateholder, as applicable.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.02.
"Indenture" means the Indenture, dated as of the date of this Agreement, by
and between the Trust and JPMorgan Chase Bank, National Association, as
Indenture Trustee.
"Indenture Trustee Corporate Trust Office" means the office of the
Indenture Trustee at which its corporate trust business shall be administered
which initially shall be ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Worldwide Securities Services / Global Debt (CIT Equipment Collateral
2005-EF1), or such other office at such other address as the Indenture Trustee
may designate from time to time by notice to the Equity Certificateholder, the
Servicer, the Owner Trustee, the Delaware Trustee, and the Depositor.
"Note Depository Agreement" means the Agreement dated as of the Closing
Date among the Trust, the Indenture Trustee, the Administrator and DTC, as the
Clearing Agency, relating to the Notes, as the same may be amended,
supplemented, or restated from time to time.
"Notes" means 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 and the Class D
Notes in each case issued pursuant to the Indenture.
"Noteholders" means each Person in whose name a Note is registered in the
Note Register maintained by the Indenture Trustee.
"Owner Trustee" means The Bank of New York, not in its individual capacity
but solely as owner trustee under this Agreement, and any successor Owner
Trustee hereunder.
"Owner Trustee Corporate Trust Office" means the corporate trust office of
the Owner Trustee in the State of New York, which office initially shall be
located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other office at
such other address in the State of New York as the Owner Trustee may designate
from time to time by notice to the Equity Certificateholder, the Servicer, the
Indenture Trustee, the Delaware Trustee, and the Depositor.
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"Paying Agent" shall have the meaning assigned to such term in the Pooling
Agreement.
"Payment Date" shall have the meaning assigned to such term in the Pooling
Agreement.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, limited liability company, joint stock company, trust
(including any beneficiary thereof) unincorporated organization or government or
any agency or political subdivision thereof.
"Pooling Agreement" means the Pooling and Servicing Agreement, dated as of
July 1, 2005, among the Trust, the Depositor, CFUSA, in its individual capacity,
and CITEF, in its capacity as Servicer thereunder, as the same may be amended,
supplemented or restated from time to time.
"Required Holders" has the meaning given such term in the Pooling
Agreement.
"Related Documents" has the meaning assigned to such term in Section
7.03(a).
"Secretary of State" means the Secretary of State of the State of Delaware.
"Treasury Regulations" means regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" means the trust continued and governed by this Agreement, the
estate of which consists of the Trust Assets.
"Trust Assets" or "Trust Estate" means all right, title and interest of the
Trust in and to the property, proceeds and rights assigned to the Trust pursuant
to Article II of the Pooling Agreement, all funds on deposit from time to time
in the Trust Accounts (including all investments therein and proceeds and income
therefrom), and all other property of the Trust from time to time, including any
rights of the Owner Trustee (except for any rights of the Owner Trustee in its
individual capacity) and the Trust pursuant to the Pooling Agreement and the
Administration Agreement, but not including any of such property which has been
released and reconveyed from the Trust in accordance with and pursuant to the
Pooling Agreement.
Section 1.03 Usage of Terms. With respect to all terms in this Agreement,
the singular includes the plural and the plural the singular; words importing
one gender include the other gender; 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".
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Section 1.04 Section References. All section references, unless otherwise
indicated, shall be to Sections in this Agreement.
Section 1.05 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.
ARTICLE II
ORGANIZATION AND ESTABLISHMENT OF TRUST
Section 2.01 Establishment of Trust; Name. The Trust shall be known as "CIT
Equipment Collateral 2005-EF1", in which name the Owner Trustee may conduct the
activities of the Trust, make and execute contracts and other instruments on
behalf of the Trust and ▇▇▇ and be sued on behalf of the Trust.
Section 2.02 Office. The Delaware office of the Trust shall be, in the case
of the Delaware Trustee, at the Delaware Trustee Corporate Trust Office. The New
York office of the Trust shall be, in the case of the Owner Trustee, at the
Owner Trustee Corporate Office.
Section 2.03 Purposes and Powers.
(a) The sole purpose of the Trust is to manage the Trust Assets, and
collect and disburse the periodic income therefrom for the use and benefit of
the Equity Certificateholder, and in furtherance of such purpose the Trust shall
have the power and authority to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Equity
Certificate pursuant to this Agreement;
(ii) with the proceeds of the sale of the Notes and the Equity
Certificate, to purchase the Contracts and other Trust Assets, and to pay
organizational, start-up and transactional expenses of the Trust (to the extent
not paid by the Depositor, the Servicer, or Administrator); and to pay the
balance to the Equity Certificateholder from time to time pursuant to the
Pooling Agreement;
(iii) to acquire, hold, manage, distribute, dispose of, release
or convey, to or at the direction of the Equity Certificateholder pursuant to
the Pooling Agreement, any portion of the Trust Assets in the manner described
in and pursuant to the Pooling Agreement;
(iv) to enter into, execute, deliver and perform its obligations
under the Note Depositary Agreement and the Transaction Documents to which it is
or becomes a party;
(v) to engage in those activities, including entering into,
executing, delivering, and performing agreements, that are necessary, suitable
or convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and
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(vi) subject to compliance with the Transaction Documents, to
engage in such other activities as may be required in connection with
conservation of the Trust Assets and the making of distributions to the Equity
Certificateholder and the Noteholders.
(b) The Owner Trustee is hereby authorized to engage in the foregoing
activities on behalf of the Trust. The Trust shall not engage in any activities
other than in connection with the foregoing. Nothing contained herein shall be
deemed to authorize the Trust to engage in any business operations or any
activities other than those set forth in this Section 2.03. Specifically, the
Trust shall have no authority to engage in any business operations, or acquire
any assets other than those specifically included in the Trust Assets, or
otherwise vary the assets held by the Trust.
Section 2.04 Appointment of Owner Trustee and the Delaware Trustee.
(a) The Depositor hereby appoints the Owner Trustee as a trustee of
the Trust effective as of the date hereof, and as of the date hereof the Owner
Trustee shall have all the rights, powers and duties set forth herein and in the
Delaware Statutory Trust Act, and the Owner Trustee hereby accepts such
appointment.
(b) The Depositor hereby appoints the Delaware Trustee as a trustee of
the Trust effective as of the date hereof for the sole purpose of satisfying
Section 3807(a) of the Delaware Statutory Trust Act, and the Delaware Trustee
hereby accepts such appointment.
Section 2.05 Organizational Expenses. The Depositor shall pay or provide
for the payment of organizational expenses of the Trust as they may arise or
shall, upon the request of the Owner Trustee, promptly reimburse or provide for
the reimbursement of the Owner Trustee for any such expenses paid by the Owner
Trustee.
Section 2.06 Declaration of Trust. The Owner Trustee hereby declares that
it will hold the Trust Assets in trust upon and subject to the conditions set
forth herein for the sole purpose of conserving the Trust Assets and collecting
and disbursing the periodic income therefrom for the use and benefit of the
Equity Certificateholder, subject to the obligations of the Trust under the
Transaction Documents. It is the intention of the parties hereto that the Trust
constitute a statutory trust under the Delaware Statutory Trust Act and that
this Agreement constitute the governing instrument of such statutory trust.
Effective as of the date hereof, the Owner Trustee shall have all rights, powers
and duties set forth herein and in the Delaware Statutory Trust Act for the sole
purpose and to the extent necessary to accomplish the purposes of this Trust as
set forth in Section 2.03.
Section 2.07 No Liability of Equity Certificateholder. No Equity
Certificateholder shall have any personal liability for any liability or
obligation of the Trust or by reason of any action taken by the parties to this
Agreement pursuant to any provisions of this Agreement or any other Transaction
Document.
Section 2.08 Title to Trust Property. Legal title to the Trust Assets shall
be vested at all times in the Trust as a separate legal entity except where
applicable law in any jurisdiction requires title to any part of the Trust
Assets to be vested in an owner trustee or owner
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trustees, in which case title shall be deemed to be vested in the Owner
Trustee, a co-trustee and/or a separate trustee, as the case may be.
Section 2.09 Situs of Trust. The Trust will be located and administered in
the State of Delaware and in the State of New York. All bank accounts maintained
by the Owner Trustee on behalf of the Trust shall be located in the State of
Delaware or the State of New York. The Trust shall not have any employees in any
state other than Delaware; provided, however, that nothing herein shall restrict
or prohibit the Owner Trustee, the Delaware Trustee, the Servicer, the
Depositor, the Administrator or any agent of the Trust from having employees
within or without the State of Delaware. Payments will be received by the Trust
only in the State of Delaware or the State of New York and payments will be made
by the Trust only from the State of Delaware or the State of New York. The only
offices of the Trust will be at the Delaware Trustee Corporate Trust Office and
the Owner Trustee Corporate Trust Office.
Section 2.10 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Owner Trustee and the
Delaware Trustee, that:
(i) The Depositor is duly organized and validly existing as a
limited liability company organized and existing, and in good standing, under
the laws of the State of Delaware, with power and authority to own its
properties and to conduct its business and had at all relevant times, and has,
power, authority and legal right to acquire, convey and own the assets conveyed
and to be conveyed by it to the Trust from time to time.
(ii) The Depositor is duly qualified to do business as a foreign
limited liability company in good standing and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business requires such qualifications.
(iii) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Depositor has full power
and authority to sell and assign the property to be sold and assigned from time
to time to and deposited with the Owner Trustee on behalf of the Trust as part
of the Trust Assets and has or will have duly authorized such sale and
assignment and deposit with the Owner Trustee on behalf of the Trust by all
necessary entity action; the execution, delivery and performance of this
Agreement have been duly authorized by the Depositor by all necessary entity
action; and this Agreement constitutes the legal, valid and binding obligation
of the Depositor, enforceable against the Depositor in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally, by any
applicable law imposing limitations upon, or otherwise affecting, the
availability or enforcement of rights to indemnification hereunder and by the
availability of equitable remedies.
(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, nor constitute (with or
without notice or lapse of time) a default under, the certificate of formation
or limited liability company agreement of the
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Depositor, or any indenture, agreement or other instrument to which the
Depositor is a party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of the properties of the Depositor pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to the Transaction Documents); nor violate any law or any order, rule
or regulation applicable to the Depositor of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties.
(v) All approvals, authorizations, consents, orders or other
actions of any Person or any governmental entity required in connection with the
execution and delivery of this Agreement and the fulfillment of the terms hereof
have been obtained.
(vi) There are no proceedings or investigations pending, or to
the Depositor's knowledge threatened, before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties: (A) asserting the invalidity of this
Agreement or any of the other Transaction Documents, (B) seeking to prevent the
issuance of the Equity Certificate or the consummation of any of the
transactions contemplated by this Agreement or any other Transaction Documents,
(C) seeking any determination or ruling that might materially and adversely
affect the performance by the Depositor of its obligations under, or the
validity or enforceability of, this Agreement, the Equity Certificate or any
other Transaction Document, or (D) involving the Depositor and which might
adversely affect the federal income tax or other federal, state or local tax
attributes of the Equity Certificate.
Section 2.11 Federal Income Tax Treatment. It is the intention of the
Depositor that the Trust be disregarded as a separate entity for federal income
tax purposes pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii) as in
effect for periods after January 1, 1997. The Equity Certificate constitutes the
sole equity interest in the Trust and must at all times be held by either the
Depositor or its transferee as the sole Equity Certificateholder. The Depositor
agrees not to take any action inconsistent with such intended federal income tax
treatment. Because for federal income tax purposes the Trust will be disregarded
as a separate entity, Trust items of income, gain, loss and deduction for any
month as determined for federal income tax purposes shall be allocated entirely
to the Equity Certificateholder; provided, that this sentence shall not limit or
otherwise affect the provisions of the Transaction Documents pertaining to
distributions of Trust Assets or proceeds thereof to Persons other than the
Depositor.
ARTICLE III
EQUITY CERTIFICATE AND TRANSFERS OF INTERESTS THEREIN
Section 3.01 Initial Ownership.
(a) Upon the formation of the Trust and until the issuance of the
Equity Certificate, the Depositor shall be the sole beneficiary of the Trust.
The Equity Certificate must at all times be held by either the Depositor or its
transferee (to the extent permitted under Section 3.01(b)) as sole owner.
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(b) No transfer of the Equity Certificate shall be made unless such
transfer is made in a transaction which does not require registration or
qualification under the Securities Act or qualification under any state
securities or "Blue Sky" laws. Neither the Owner Trustee nor the Certificate
Registrar shall effect the registration of any transfer of the Equity
Certificate unless, prior to such transfer the Owner Trustee shall have received
(i) a Tax Opinion, and (ii) a certificate from the proposed transferee
substantially in the form of Exhibit A hereto, certifying that (A) following
such transfer, there would be no more than one holder of the Equity Certificate
and the holder of the Equity Certificate would not be a Foreign Person, a
partnership, Subchapter S corporation or grantor trust, (B) such transfer
complies with and does not violate any state securities laws, any Blue Sky laws
or the Securities Act, (C) such transferee is not acquiring such Equity
Certificate for, or with the assets of, a Benefit Plan.
Section 3.02 The Equity Certificate. On the Closing Date, the Equity
Certificate shall be issued to the Depositor, substantially in the form of
Exhibit B hereto. Upon receipt of a written order by the Owner Trustee from the
Depositor to execute and authenticate the Equity Certificate, the Equity
Certificate shall be executed by the Owner Trustee on behalf of the Trust by
manual or facsimile signature of an authorized officer of the Owner Trustee and
authenticated pursuant to Section 3.03 and, when so executed and authenticated
shall be deemed to have been validly issued and shall be entitled to the
benefits of this Agreement. The Equity Certificate bearing the manual or
facsimile signature of individuals who were, at the time when such signatures
were affixed, authorized to sign on behalf of the Owner Trustee shall be a valid
and binding obligation of the Trust, notwithstanding that such individuals or
any of them have ceased to be so authorized prior to the authentication and
delivery of such Equity Certificate or did not hold such offices at the date of
the authentication and delivery of the Equity Certificate. The Equity
Certificate shall be dated the date of its authentication.
Section 3.03 Authentication and Delivery of Equity Certificate. The Equity
Certificate shall not entitle its holder to any benefit under this Agreement, or
be valid for any purpose, unless there shall appear on such Equity Certificate a
certificate of authentication substantially in the form set forth in Exhibit B
executed by the Owner Trustee or by the Indenture Trustee as its authenticating
agent, by manual signature; such authentication shall constitute conclusive
evidence that the Equity Certificate shall have been duly authenticated and
delivered hereunder.
Section 3.04 Registration of Transfer and Exchange of the Equity
Certificate.
(a) The Certificate Registrar shall maintain or cause to be
maintained, at the office or agency maintained pursuant to Section 3.08, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, it shall provide for the registration of the Equity Certificate and
of transfers and exchanges of the Equity Certificate as provided in this
Agreement. The Indenture Trustee is hereby initially appointed Certificate
Registrar for the purpose of registering the Equity Certificate and transfers
and exchanges of the Equity Certificate as provided in this Agreement. In the
event that the Indenture Trustee notifies the Servicer that it is unable to act
as Certificate Registrar, the Servicer shall appoint another bank or trust
company agreeing to act in accordance with the provisions of this Agreement
applicable to it, and otherwise acceptable to the Owner Trustee, to act as
successor Certificate Registrar hereunder.
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(b) Upon surrender for registration of transfer of the Equity
Certificate otherwise permitted to be transferred in accordance herewith at the
office or agency maintained pursuant to Section 3.08, the Owner Trustee shall
(subject to Section 3.01(b)) execute, authenticate and deliver (or shall cause
its authenticating agent to authenticate and deliver), in the name of the
designated transferee, one new Equity Certificate.
(c) Every Equity Certificate presented or surrendered for registration
of transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Holder thereof or his attorney duly authorized in writing.
(d) No service charge shall be made for any registration of transfer
or exchange of the Equity Certificate, but the Owner Trustee or Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer of the
Equity Certificate.
(e) All Equity Certificates surrendered for registration of transfer
or exchange shall be canceled and subsequently destroyed by the Owner Trustee or
Certificate Registrar in accordance with its customary practice.
(f) The Indenture Trustee shall be the Paying Agent for the Equity
Certificate.
Section 3.05 Mutilated, Destroyed, Lost or Stolen Trust Equity Certificate.
If (a) any mutilated Equity Certificate is surrendered to the Certificate
Registrar, or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Equity Certificate, and (b) in the case of
any destroyed, lost, or stolen Equity Certificate, there is delivered to the
Certificate Registrar and the Owner Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
that such Equity Certificate has been acquired by a bona fide or protected
purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner
Trustee or its authenticating agent shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Equity
Certificate, a replacement Equity Certificate of like tenor. In connection with
the issuance of any replacement Equity Certificate under this Section, the Owner
Trustee or Certificate Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the reasonable fees and
expenses of the Owner Trustee and the Certificate Registrar) connected
therewith. Any replacement Equity Certificate issued pursuant to this Section
shall constitute conclusive evidence of beneficial ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Equity
Certificate shall be found at any time.
Section 3.06 Persons Deemed Equity Certificateholders. Prior to due
presentation of an Equity Certificate for registration of transfer, the Owner
Trustee, the Certificate Registrar and any of their respective agents may treat
the Person in whose name the Equity Certificate is registered in the Certificate
Register as the owner of the Equity Certificate for all purposes whatsoever, and
none of the Owner Trustee, the Certificate Registrar or any of their respective
agents shall be affected by any notice of the contrary.
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Section 3.07 Access to Equity Certificateholder's Name and Addresses. The
Owner Trustee or Certificate Registrar shall furnish or cause to be furnished to
the Servicer, the Administrator, the Indenture Trustee and the Depositor within
15 days after receipt by the Owner Trustee or Certificate Registrar of a written
request therefor from the Servicer, the Administrator, the Indenture Trustee or
the Depositor, the name and address of the Equity Certificateholder as of the
most recent Record Date in such form as the Servicer, the Administrator, the
Indenture Trustee or the Depositor may reasonably require. The Equity
Certificateholder, by receiving and holding the Equity Certificate, agrees that
neither the Servicer, the Administrator, the Depositor nor the Owner Trustee,
nor any agent thereof, shall be held accountable by reason of the disclosure of
any such information as to the name and address of the Equity Certificateholder
hereunder, regardless of the source from which such information was derived.
Section 3.08 Maintenance of Office or Agency. The Certificate Registrar
shall maintain an office or offices or agency or agencies where an Equity
Certificate may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Certificate Registrar in respect of the
Equity Certificate and any Transaction Documents may be served. The Certificate
Registrar initially designates the Indenture Trustee Corporate Trust Office as
its office for such purposes. The Certificate Registrar shall give prompt
written notice to the Depositor, the Servicer, the Administrator and the Equity
Certificateholder of any change in the location of the Certificate Register or
any such office or agency.
Section 3.09 Ownership by Depositor of Equity Certificate. The Depositor
shall on the Closing Date purchase from the Trust the Equity Certificate.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.01 Prior Notice to Equity Certificateholder with Respect to
Certain Matters. Subject to the provisions and limitations of Section 4.04, with
respect to the following matters, the Owner Trustee shall not take action unless
at least 30 days before the taking of such action, the Owner Trustee shall have
notified the Equity Certificateholder in writing of the proposed action, the
Indenture Trustee (acting at the direction of the Required Holders) shall have
consented to such action in the event any Notes are outstanding, and the Equity
Certificateholder shall not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that such Equity Certificateholder has
withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of Trust Assets) and the
compromise of any action, claim or lawsuit brought by or against the Trust
(except with respect to the aforementioned claims or lawsuits for collection of
Trust Assets);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Delaware
Statutory Trust Act);
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(c) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is not required and
such amendment materially and adversely affects the interest of the Equity
Certificateholder;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any provision
in a manner or add any provision that would not materially and adversely affect
the interest of the Equity Certificateholder; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of a
successor Certificate Registrar, or the consent to the assignment by the Note
Registrar, Paying Agent, Indenture Trustee or Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable.
Section 4.02 Action by Equity Certificateholder with Respect to Certain
Matters. Subject to the provisions and limitations of Section 4.04, the Owner
Trustee shall not have the power, except upon the direction of the Equity
Certificateholder, to (a) remove the Administrator pursuant to Section 8 of the
Administration Agreement, (b) appoint a successor Administrator pursuant to
Section 8 of the Administration Agreement, (c) remove the Servicer pursuant to
Article VIII of the Pooling Agreement, (d) except as otherwise expressly
provided in the relevant Transaction Documents, release or convey from the Trust
any Trust Assets or (e) authorize the merger or consolidation of the Trust with
or into any other statutory trust or entity (other than in accordance with
applicable restrictions or conditions thereon contained in the relevant
Transaction Document). Except to the extent otherwise provided in (d) and (e)
above, the Owner Trustee shall take the actions referred to in the preceding
sentence upon (and only upon) written instructions signed by the Equity
Certificateholder.
Section 4.03 Action by Equity Certificateholder with Respect to Bankruptcy.
Neither the Owner Trustee nor the Delaware Trustee shall have the power to
commence a voluntary proceeding in a bankruptcy relating to the Trust without
the prior approval of the Equity Certificateholder and the delivery to the Owner
Trustee and the Delaware Trustee by such Equity Certificateholder of a
certificate certifying that such Equity Certificateholder reasonably believes
that the Trust is no longer Solvent.
Section 4.04 Restrictions on Owner's Power. Neither the Administrator nor
the Equity Certificateholder shall direct the Owner Trustee to take or to
refrain from taking any action if such action or inaction would be contrary to
any obligation of the Trust or the Owner Trustee under this Agreement or any of
the other Transaction Documents, or would be contrary to the purpose of this
Trust as set forth in Section 2.03, nor shall the Owner Trustee be obligated to
follow any such direction, if given, or to determine whether any such direction
violates this Section 4.04.
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ARTICLE V
APPLICATION AND DISTRIBUTION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.01 Reports. On each Payment Date, the Owner Trustee shall send or
cause to be sent to the Equity Certificateholder the statement or statements
received by the Owner Trustee from the Servicer pursuant to Section 9.01 of the
Pooling Agreement with respect to such Payment Date.
Section 5.02 Taxes. In the event that any withholding tax is imposed on the
Trust's payment (or allocation of income) to the Equity Certificateholder, such
tax shall reduce the amount otherwise distributable to the Equity
Certificateholder in accordance with this Section. The Paying Agent is hereby
authorized and directed to retain from amounts otherwise distributable to the
Equity Certificateholder sufficient funds for the payment of any tax that is
legally owed by the Equity Certificateholder of which the Paying Agent has
actual knowledge (but such authorization shall not prevent the Paying Agent from
contesting any such tax in appropriate proceedings, and withholding payment of
such tax, if permitted by law, pending the outcome of such proceedings). The
amount of any withholding tax imposed with respect to the Equity
Certificateholder shall be treated as cash distributed to such Equity
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution the Paying Agent may in its sole
discretion withhold such amounts in accordance with this Section. In the event
that the Equity Certificateholder wishes to apply for a refund of any such
withholding tax, the Paying Agent shall reasonably cooperate with the Equity
Certificateholder in making such claim so long as the Equity Certificateholder
agrees to reimburse the Paying Agent for any reasonable out-of-pocket expenses
incurred.
Section 5.03 Method of Payment. Subject to Section 9.01(c), distributions
required to be made to the Equity Certificateholder on any Payment Date shall be
made to the Equity Certificateholder of record on the preceding Record Date by
wire transfer, in immediately available funds, to the account of the Equity
Certificateholder at a bank or other entity having appropriate facilities
therefor, which the Equity Certificateholder shall have designated to the
Certificate Registrar, with appropriate written wire transfer instructions, at
least three Business Days prior to such Payment Date. In the absence of such
designation, such distributions shall be made by check mailed to the Equity
Certificateholder at the address of such Holder appearing in the Certificate
Register.
Section 5.04 No Segregation of Moneys; No Interest. Moneys received by the
Owner Trustee hereunder need not be segregated in any manner except to the
extent required by law, and may be deposited under such general conditions as
may be prescribed by law, and the Owner Trustee shall not be liable for any
interest thereon.
Section 5.05 Accounting and Reports to the Equity Certificateholder, the
Internal Revenue Service and Others. The Administrator shall (a) maintain (or
cause to be maintained) the books of the Trust on a calendar year basis and the
accrual method of accounting, (b) deliver or cause to be delivered to the Equity
Certificateholder, as may be required by the Code and applicable Treasury
Regulations, such information as may be required
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(including Form 1099 or Schedule K-1) to enable the Equity
Certificateholder to prepare its federal and state income tax returns, (c) file
or cause to be filed such tax returns relating to the Trust and make such
elections as from time to time may be required or appropriate under any
applicable state or federal statute or any rule or regulation thereunder so as
to maintain the federal income tax treatment for the Trust as set forth in
Section 2.11, (d) cause such tax returns to be signed in the manner required by
law and (e) collect or cause to be collected any withholding tax as described in
and in accordance with Section 5.02 with respect to income or distributions to
the Equity Certificateholder. The Trust shall elect under Section 1278 of the
Code to include in income currently any market discount that accrues with
respect to Contracts becoming part of the Contract Pool. If applicable, the
Trust shall not make the election provided under Section 754 or Section 761 of
the Code.
Section 5.06 Signature on Returns; Tax Matters Partner.
(a) The Equity Certificateholder shall sign on behalf of the Trust the
tax returns of the Trust, if any.
(b) If Subchapter K of the Code should be applicable to the Trust, the
Equity Certificateholder shall be designated the "tax matters partner" of the
Trust pursuant to Section 6231 (a)(7)(A) of the Code and applicable Treasury
Regulations.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01 General Authority. Subject to the provisions and limitations
of Sections 2.03 and 2.06, the Owner Trustee is authorized and directed to
execute and deliver on behalf of the Trust from time to time the Transaction
Documents to which the Trust is or becomes a party and each certificate and
other document attached as an exhibit to or contemplated by such Transaction
Documents and any amendment or other agreement relating thereto (in each case,
in such form as is furnished to the Owner Trustee from time to time by or on
behalf of the Depositor or Equity Certificateholder or their respective
counsel). In addition to the foregoing, the Owner Trustee is authorized, but
shall not be obligated, to take all actions required of the Trust pursuant to
the Transaction Documents. The Owner Trustee is further authorized from time to
time to take such action as the Administrator or Equity Certificateholder
directs or recommends in writing with respect to the Transaction Documents.
Section 6.02 General Duties. It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged through the Administrator or such other
agents as shall be appointed) all of its responsibilities pursuant to the terms
of this Agreement and the Transaction Documents to which the Trust is a party
and to administer the Trust in the interest of the Equity Certificateholder,
subject to the Transaction Documents and in accordance with the provisions of
this Agreement. Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the other
Transaction Documents to the extent the Administrator has agreed in the
Administration Agreement to perform any act or to discharge any duty of the
Owner Trustee or the Trust hereunder or under any such Transaction
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Document, and the Owner Trustee shall not be held liable for the default or
failure of the Administrator to carry out its obligations under the
Administration Agreement.
Section 6.03 Action Upon Instruction.
(a) Subject to Article IV, and in all events subject to the terms of
the applicable Transaction Documents, the Equity Certificateholder may by
written instruction direct the Owner Trustee in the management of the Trust.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any other Transaction Document if the Owner Trustee shall
have reasonably determined, or shall have been advised by counsel, that such
action is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any other applicable Transaction Document or
is otherwise contrary to law. The Owner Trustee shall not be liable for the
failure to take any action pursuant to this paragraph (b).
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or under
any other Transaction Document, the Owner Trustee shall promptly give notice (in
such form as it deems appropriate under the circumstances) to the Equity
Certificateholder requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction received from the Equity Certificateholder, the
Owner Trustee shall not be liable on account of such action to any Person. Until
the Owner Trustee shall have received the requested instruction it may, but
shall be under no duty to, take or refrain from taking such action, as it shall
deem to be in the best interests of the Equity Certificateholder, and shall have
no liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
applicability of any provision of this Agreement or any other Transaction
Document or believes any such provision is ambiguous as to its application, or
is, or appears to be, in conflict with any other applicable provision, or in the
event that this Agreement permits any determination by the Owner Trustee or is
silent or incomplete as to the course of action that the Owner Trustee is
required to take with respect to a particular set of facts, the Owner Trustee
may give notice (in such form as it deems appropriate under the circumstances)
to the Equity Certificateholder requesting instruction and, to the extent that
the Owner Trustee acts or refrains from acting in good faith in accordance with
any such instruction received from the Equity Certificateholder, the Owner
Trustee shall not be liable, on account of such action or inaction, to any
Person. Until the Owner Trustee shall have received the requested instruction it
may, but shall be under no duty to, take or refrain from taking such action, as
it shall deem to be in the best interests of the Equity Certificateholder, and
shall have no liability to any Person for such action or inaction.
(e) Notwithstanding anything contained herein to the contrary, the
Owner Trustee shall not be required to take any action in any jurisdiction other
than in the State of Delaware if the taking of such action will (i) require the
registration with, licensing by or the taking of any other similar action in
respect of, any state or other governmental authority or
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agency of any jurisdiction other than the State of Delaware by or with
respect to the Owner Trustee; (ii) result in any fee, tax or other governmental
charge under the laws of any jurisdiction or any political subdivisions thereof
in existence on the date hereof other than the State of Delaware being payable
by the Owner Trustee; or (iii) subject the Owner Trustee to personal
jurisdiction in any jurisdiction other than the State of Delaware for causes of
action arising from acts unrelated to the consummation of the transactions by
the Owner Trustee contemplated in this Agreement. In the event that the Owner
Trustee has determined that any action will result in the consequences set forth
in clauses (i)-(iii), the Administrator and the Owner Trustee shall appoint one
or more Persons to act as co-trustee pursuant to Section 10.05.
Section 6.04 No Duties Except as Specified in This Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of or
otherwise deal with the Trust Assets, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement (including Section 6.02) or any document or written
instruction received by the Owner Trustee pursuant to Article IV, the last
sentence of Section 6.01 or Section 6.03; and no implied duties or obligations
shall be read into this Agreement or any other Transaction Document against the
Owner Trustee. The Owner Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare, execute or file any securities law filing
(including any filings required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002) for the Trust
or to record this Agreement or any other Transaction Document. The Owner Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take all
action as may be necessary to discharge any liens on any part of the Trust
Assets that result from actions by, or claims against, the Owner Trustee, in its
individual capacity, that are not related to the ownership or the administration
of the Trust Assets or the transactions contemplated by the Transaction
Documents.
Section 6.05 No Action Except Under Specified Documents or Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Trust Assets except (i) in accordance with the powers
granted to and the authority conferred upon the Owner Trustee pursuant to this
Agreement, (ii) in accordance with the Transaction Documents, or (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Article IV, the last sentence of Section 6.01 or Section 6.03.
Section 6.06 Restrictions. The Owner Trustee shall not take any action (i)
that is inconsistent with the purposes of the Trust set forth in Section 2.03 or
(ii) that, to the actual knowledge of a Responsible Officer of the Owner
Trustee, would result in the Trust's becoming taxable as a corporation for
federal or state income tax purposes. Neither the Administrator nor the Equity
Certificateholder shall direct the Owner Trustee to take actions that would
violate the provisions of this Section 6.06 or any Transaction Document.
Section 6.07 Administration Agreement.
(a) The Administrator, as agent of the Trust pursuant to Section
3806(b)(7) of the Delaware Statutory Trust Act, is authorized to execute on
behalf of the Trust
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all documents, reports, filings, instruments and opinions as it shall be
the duty of the Trust to prepare, file or deliver pursuant to the Transaction
Documents. Pursuant to the Administration Agreement, the Owner Trustee shall
execute and deliver to the Administrator a power of attorney appointing the
Administrator as agent and attorney-in-fact of the Trust and the Owner Trustee
to execute all such documents, reports, filings, instruments and opinions on
behalf of the Trust and the Owner Trustee.
(b) If the Administrator shall resign or be removed pursuant to the
terms of the Administration Agreement, the Owner Trustee may, at the written
direction of the Equity Certificateholder, appoint or consent to the appointment
of a successor Administrator pursuant to the Administration Agreement.
(c) If the Administration Agreement is terminated, the Owner Trustee
may, and is hereby authorized and empowered to, at the written direction of the
Equity Certificateholder, appoint or consent to the appointment of a Person to
perform substantially the same duties as are assigned to the Administrator in
the Administration Agreement pursuant to an agreement containing substantially
the same provisions as are contained in the Administration Agreement.
(d) The Owner Trustee shall promptly notify the Equity
Certificateholder of any default by or misconduct of the Administrator under the
Administration Agreement of which the Owner Trustee has received written notice
or of which a Responsible Officer of the Owner Trustee has actual knowledge.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.01 Acceptance of Trusts and Duties. Each of the Owner Trustee and
the Delaware Trustee accepts the trust hereby created and agrees to perform its
duties hereunder with respect to such trust but only upon the terms of this
Agreement. Each of the Owner Trustee and the Delaware Trustee also agrees to
disburse all moneys actually received by it constituting part of the Trust
Assets upon the terms of the Transaction Documents and this Agreement. Neither
the Owner Trustee nor the Delaware Trustee shall be answerable or accountable
hereunder or under any other Transaction Document under any circumstances,
except that the foregoing limitation shall not limit the liability, if any, that
the Owner Trustee or the Delaware Trustee may have to the Equity
Certificateholder (i) for the Owner Trustee's or the Delaware Trustee's own
willful misconduct, bad faith, or negligence, (ii) in the case of the inaccuracy
of any representation or warranty contained in Section 7.03 expressly made by
the Owner Trustee or the Delaware Trustee in its individual capacity, (iii) for
liabilities arising from the failure of the Owner Trustee to perform obligations
expressly undertaken by it in the last sentence of Section 6.04 hereof, (iv) for
any investments issued by the Owner Trustee or any branch or affiliate thereof
in its commercial capacity, or (v) for taxes, fees or other charges on, based on
or measured by, any fees, commissions or compensation received by the Owner
Trustee or the Delaware Trustee in connection with any of the transactions
contemplated by this Agreement or any other Transaction Document. In particular,
but not by way of limitation (and subject to the exceptions set forth in the
preceding sentence):
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(a) neither the Owner Trustee nor the Delaware Trustee shall be liable
for any error of judgment made in good faith by a Responsible Officer of the
Owner Trustee or the Delaware Trustee, as applicable, which did not result from
willful misconduct or negligence on the part of such Responsible Officer;
(b) neither the Owner Trustee nor the Delaware Trustee shall be liable
with respect to any action taken or omitted to be taken by it in accordance with
the instructions of the Administrator, the Required Holders or the Equity
Certificateholder;
(c) no provision of this Agreement or any other Transaction Document
shall require the Owner Trustee or the Delaware Trustee to expend or risk funds
or otherwise incur any financial liability in the performance of any of its
rights or powers hereunder or under any other Transaction Document if the Owner
Trustee or the Delaware Trustee have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee or the Delaware
Trustee be liable for indebtedness evidenced by or arising under any of the
Transaction Documents, including the principal of and interest on the Notes;
(e) neither the Owner Trustee nor the Delaware Trustee shall be
responsible for or in respect of the validity or sufficiency of this Agreement
or for the due execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Trust Assets, or for
or in respect of the validity or sufficiency of any Transaction Documents, other
than its signature on behalf of the Trust on, and the certificate of
authentication on, the Equity Certificate, and the Owner Trustee and the
Delaware Trustee shall in no event assume or incur any liability, duty, or
obligation to any Noteholder or, other than as expressly provided for herein, to
the Equity Certificateholder;
(f) neither the Owner Trustee nor the Delaware Trustee shall be liable
for the default or misconduct of the Administrator, the Depositor, the Indenture
Trustee or the Servicer under any of the Transaction Documents or otherwise and
the Owner Trustee shall have no obligation or liability to perform or monitor
the performance of the obligations of the Trust under this Agreement or the
other Transaction Documents that are required to be performed by the
Administrator under this Agreement or the Administration Agreement, by the
Indenture Trustee under this Agreement or the Indenture or by the Servicer or
the Depositor under any Transaction Document; and
(g) neither the Owner Trustee nor the Delaware Trustee shall be under
any obligation to exercise any of the rights or powers vested in it by this
Agreement, or to institute, conduct or defend any litigation under this
Agreement or otherwise or in relation to this Agreement or any other Transaction
Document, at the request, order or direction of the Equity Certificateholder,
unless the Equity Certificateholder has offered to the Owner Trustee and/or the
Owner Trustee, as applicable, security or indemnity satisfactory to it against
the costs, expenses and liabilities that may be incurred by the Owner Trustee
therein or thereby. The right of the Owner Trustee and the Delaware Trustee to
perform any discretionary act enumerated in this Agreement or in any other
Transaction Document shall not be construed as a duty, and, except as
- 18 -
otherwise provided in the third sentence of Section 7.01, neither the Owner
Trustee nor the Delaware Trustee shall be answerable for the performance of any
such act.
Section 7.02 Furnishing of Documents. The Owner Trustee shall furnish to
the Equity Certificateholder promptly upon receipt of a written request therefor
from an Equity Certificateholder, duplicates or copies of all reports, notices,
requests, demands, financial statements and any other instruments furnished to
the Owner Trustee under the Transaction Documents.
Section 7.03 Representations and Warranties of the Owner Trustee. The Owner
Trustee hereby represents and warrants to the Depositor and the Equity
Certificateholder that:
(a) It is a New York banking corporation duly organized and validly
existing in good standing under the laws of the State of New York. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and to execute and deliver on behalf of the
Trust each other Transaction Document to which the Trust is a party ("Related
Documents").
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and, on behalf of the Trust, the
Related Documents, and this Agreement and each Related Document will be executed
and delivered by one of its officers who is duly authorized to execute and
deliver the same on its behalf, and upon such execution and delivery of this
Agreement, this Agreement shall constitute the legal, valid and binding
obligation of the Owner Trustee, enforceable against the Owner Trustee in
accordance with its terms, except as the enforcement thereof may be subject to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether enforcement is sought in equity or at law).
(c) Neither the execution nor the delivery by it of this Agreement or,
on behalf of the Trust, any Related Document, nor the consummation by it of the
transactions contemplated hereby nor compliance by it with any of the terms or
provisions hereof will contravene any federal or State law, governmental rule or
regulation governing the trust powers of the Owner Trustee or any judgment or
order binding on it, or constitute any default under its charter documents or
bylaws or any indenture, mortgage, contract, agreement or instrument to which it
is a party or by which any of its properties may be bound or result in the
creation or imposition of any lien, charge or encumbrance on the Trust Assets
resulting from actions by or claims against the Owner Trustee individually which
are unrelated to this Agreement or the other Transaction Documents.
Section 7.04 Representations and Warranties of the Delaware Trustee. The
Delaware Trustee hereby represents and warrants to the Depositor and the Equity
Certificateholder that:
(a) It is a Delaware banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Related Documents.
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(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and, on behalf of the Trust, the
Related Documents, and this Agreement and each Related Document will be executed
and delivered by one of its officers who is duly authorized to execute and
deliver the same on its behalf, and upon such execution and delivery of this
Agreement, this Agreement shall constitute the legal, valid and binding
obligation of the Delaware Trustee, enforceable against the Delaware Trustee in
accordance with its terms, except as the enforcement thereof may be subject to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and general principles of
equity (regardless of whether enforcement is sought in equity or at law).
(c) Neither the execution nor the delivery by it of this Agreement or,
on behalf of the Trust, any Related Document, nor the consummation by it of the
transactions contemplated hereby nor compliance by it with any of the terms or
provisions hereof will contravene any federal or State law, governmental rule or
regulation governing the trust powers of the Delaware Trustee or any judgment or
order binding on it, or constitute any default under its charter documents or
bylaws or any indenture, mortgage, contract, agreement or instrument to which
it is a party or by which any of its properties may be bound or result in the
creation or imposition of any lien, charge or encumbrance on the Trust Assets
resulting from actions by or claims against the Delaware Trustee individually
which are unrelated to this Agreement or the other Transaction Documents.
Section 7.05 Reliance; Advice of Counsel.
(a) The Owner Trustee and the Delaware Trustee shall incur no
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper reasonably believed by it to be genuine and believed by it to
be signed by the proper party or parties. The Owner Trustee and the Delaware
Trustee may accept a certified copy of a resolution of the board of directors or
other governing body of any party as conclusive evidence that such resolution
has been duly adopted by such body and that the same is in full force and
effect. As to any fact or matter the method of determination of which is not
specifically prescribed herein, the Owner Trustee and the Delaware Trustee may
for all purposes hereof rely on a certificate, signed by the president or any
vice president or by the treasurer or any other authorized officer of the
relevant party, as to such fact or matter and such certificate shall constitute
full protection to the Owner Trustee and the Delaware Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of their duties and obligations under this Agreement or the
other Transaction Documents, the Owner Trustee and the Delaware Trustee, as
applicable, (i) may act directly or through its agents or attorneys pursuant
to agreements entered into by any of them, and the Owner Trustee and the
Delaware Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys as shall have been selected by the Owner Trustee and the
Delaware Trustee, respectively, with reasonable care, and (ii) may consult
with counsel, accountants and other skilled persons to be selected with
reasonable care and employed by it. The Owner Trustee and the Delaware Trustee
shall not be liable for anything done, suffered or omitted in good faith by it
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in accordance with the written opinion or advice of any such counsel,
accountants or other such persons, provided that such actions do not violate the
express terms of the Transaction Documents.
Section 7.06 Not Acting in Individual Capacity. Except as otherwise
expressly provided in this Article VII, in accepting the trusts hereby created,
The Bank of New York and The Bank of New York (Delaware), respectively, act
solely as Owner Trustee and Delaware Trustee, respectively, hereunder and not in
their individual capacity, and all Persons having any claim against the Owner
Trustee and/or the Delaware Trustee by reason of the transactions contemplated
by this Agreement or any other Transaction Document shall look only to the Trust
Assets for payment or satisfaction thereof.
Section 7.07 Owner Trustee and Delaware Trustee Not Liable for Notes,
Equity Certificate or Contracts. The recitals contained herein and in the Equity
Certificate (other than the signature of the Owner Trustee and the certificate
of authentication on, the Equity Certificate) shall be taken as the statements
of the Depositor, and the Owner Trustee and the Delaware Trustee assume no
responsibility for the correctness thereof. The Owner Trustee and the Delaware
Trustee make no representations as to the validity or sufficiency of this
Agreement, any other Transaction Document or the Equity Certificate (other than
the signature of the Owner Trustee and the certificate of authentication on the
Equity Certificates), or of any Contract or related documents or assets. The
Owner Trustee and the Delaware Trustee shall at no time have any responsibility
or liability for or with respect to the legality, validity and enforceability of
any Contract, or the perfection and priority of any security interest created by
any Contract in any related Equipment or the maintenance of any such perfection
and priority, or for or with respect to the sufficiency of the Trust Assets or
the ability of such Trust Assets to generate the payments to be distributed to
the Equity Certificateholder under this Agreement or the Noteholders under the
Indenture, including, without limitation, the existence, condition and ownership
of any Equipment; the existence and enforceability of any insurance thereon; the
existence and contents of any Contract or any computer or other record thereof;
the validity of the assignment of any Contract to the Trust or of any
intervening assignment; the completeness of any Contract; the performance or
enforcement of any Contract; the compliance by the Depositor, CFUSA, the
Financing Originator or the Servicer with any warranty or representation made
under any Transaction Document or in any related document or the accuracy of any
such warranty or representation; or any action of the Administrator, the
Indenture Trustee or the Servicer or any subservicer taken in the name of the
Owner Trustee or the Trust.
Section 7.08 Owner Trustee and Delaware Trustee May Own Notes. The Owner
Trustee and the Delaware Trustee in their individual or any other capacity may
become the owner or pledgee of Notes or the Equity Certificate and may deal with
the Depositor, the Administrator, the Indenture Trustee, Servicer and Affiliates
thereof in banking transactions with the same rights as it would have if it were
not Owner Trustee or the Delaware Trustee, respectively.
Section 7.09 Duties of the Delaware Trustee. The Delaware Trustee is
appointed to serve as the trustee of the Trust in the State of Delaware for the
sole purpose of satisfying the requirement of Section 3807(a) of the Delaware
Statutory Trust Act that the Trust have at least one trustee with a principal
place of business in the State of Delaware. The duties
- 21 -
of the Delaware Trustee shall be limited to (i) accepting legal process
served on the Trust in the State of Delaware and (ii) the execution of any
certificates required to be filed with the Delaware Secretary of State which the
Delaware Trustee is required to execute under Section 3811 of the Delaware
Statutory Trust Act. To the extent that, at law or in equity, the Delaware
Trustee has duties (including fiduciary duties) and liabilities relating thereto
to the Trust, the Depositor or the Equity Certificateholder, it is hereby
understood and agreed by the other parties hereto that such duties and
liabilities are replaced by the duties and liabilities of the Delaware Trustee
expressly set forth in this Agreement. The Delaware Trustee shall have no
liability for the acts or omissions of any other trustee, including the Owner
Trustee.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE AND THE DELAWARE TRUSTEE
Section 8.01 Owner Trustee's and Delaware Trustee's Fees and Expenses. The
Owner Trustee and the Delaware Trustee shall receive as compensation for their
services hereunder, as applicable, such fees as have been separately agreed upon
between the Owner Trustee and the Servicer, on the one hand, and the Delaware
Trustee and the Servicer, on the other hand, which shall be paid consistent
with Section 5.19 of the Pooling Agreement. Additionally, the Owner Trustee
and the Delaware Trustee shall be entitled to be reimbursed by the Depositor
or Servicer for their other reasonable expenses hereunder, as applicable,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Owner Trustee and the
Delaware Trustee may employ in connection with the exercise and performance of
their rights and their duties hereunder; provided, however, that the Owner
Trustee and the Delaware Trustee shall only be entitled to reimbursement for
expenses hereunder to the extent such expenses (i) are fees and expenses of
outside counsel engaged by the Owner Trustee and/or the Delaware Trustee in
respect of the performance of their obligations hereunder, or (ii) relate to
the performance of their obligations hereunder.
Section 8.02 Indemnification. The Depositor shall be liable as primary
obligor for, and hereby indemnifies and holds harmless the Owner Trustee and the
Delaware Trustee (including in its individual capacity) and its successors,
assigns and servants (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by or
asserted against the Owner Trustee, the Delaware Trustee, or any other
Indemnified Party in any way relating to or arising out of this Agreement, any
other Transaction Document, the Trust Assets, the administration of the Trust
Assets or the action or inaction of the Owner Trustee or the Delaware Trustee
hereunder; provided, however, the Depositor shall not be liable for or required
to indemnify an Indemnified Party from and against Expenses arising or resulting
from any of the matters described in the third sentence of Section 7.01;
provided, further, that the liability of the Depositor under this Section shall
be limited to the assets of the Depositor and any indemnity payments to be made
pursuant to this Section shall not be made from the Trust Assets and such
indemnity payments, if unpaid, do not constitute a general recourse claim
against the Trust. The indemnities contained in this Section shall survive the
resignation, removal or termination of the Owner Trustee or the Delaware Trustee
or the termination of this Agreement or the Trust. In the
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event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's and the Delaware Trustee's choice
of legal counsel shall be subject to the approval of the Depositor, which
approval shall not be unreasonably withheld. The indemnities contained in this
Section shall be in addition to the indemnities provided by the Servicer
pursuant to the Pooling Agreement and the Administrator pursuant to the
Administration Agreement. The Depositor hereby agrees to advance the Expenses
(including reasonable fees and expenses of counsel) to each Indemnified Party,
in defending any claim, demand, action, suit or proceeding prior to the final
disposition of such claim, demand, action, suit or proceeding upon receipt by
the Depositor of an undertaking reasonably satisfactory to it, by or on behalf
of such Indemnified Party, to repay such amount if it shall be determined that
such Indemnified Party is not entitled to be indemnified therefor under this
Section 8.02. Notwithstanding any provision in this Agreement or any other
Transaction Document to the contrary, the obligations of the Depositor under
this Section 8.02 shall survive the resignation or removal of any trustee of the
Trust, shall survive the termination of this Agreement and the termination of
the Trust.
Section 8.03 Non-recourse Obligations. Notwithstanding anything in this
Agreement or any other Transaction Document, but without limiting the rights of
the Owner Trustee, the Delaware Trustee, or any other Indemnified Party under
Section 8.02, the Owner Trustee and the Delaware Trustee each agrees in its
individual capacity and in its capacity as Owner Trustee and Delaware Trustee,
respectively, for the Trust that all obligations of the Trust to the Owner
Trustee individually or to the Delaware Trustee individually or as Owner Trustee
or Delaware Trustee, respectively, for the Trust shall be recourse to the Trust
Assets only and specifically shall not be recourse to the assets of the Equity
Certificateholder.
ARTICLE IX
TERMINATION OF TRUST
Section 9.01 Termination of Trust.
(a) The Trust created by this Agreement shall dissolve upon the
earliest of (i) the maturity or other liquidation of the last Contract and
related Transferred Assets, and the subsequent distribution of amounts in
respect of such Transferred Assets as provided in the Transaction Documents, or
(ii) the payment to the Noteholders and any other party entitled thereto of the
entire outstanding principal balance of the Notes, together with accrued and
unpaid interest thereon to the date of repayment, and all other amounts required
to be paid to such parties or to which such parties are entitled pursuant to
this Agreement, the Pooling Agreement and the other Transaction Documents, or
(iii) at the time provided in Section 9.02 below; provided that the rights to
indemnification under Section 8.02 shall survive the dissolution and termination
of the Trust. The Servicer shall promptly notify the Owner Trustee and the
Administrative Agent of any prospective dissolution pursuant to this Section
9.01. Except as provided in Section 9.02, the bankruptcy, liquidation,
dissolution, termination, resignation, expulsion, withdrawal, death or
incapacity of the Equity Certificateholder, shall not (x) operate to terminate
this Agreement or the Trust, nor (y) entitle such Equity Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court
- 23 -
for a partition or winding up of all or any part of the Trust or Trust Assets,
nor (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Except as provided in Section 9.01(a), neither the Depositor nor
the Equity Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Promptly upon receipt of notice of final distribution on the
Equity Certificate from the Servicer given pursuant to Section 10.01 of the
Pooling Agreement, the Paying Agent shall mail written notice to the Equity
Certificateholder specifying (i) the Payment Date upon which final payment of
the Equity Certificate shall be made upon presentation and surrender of Equity
Certificate at the office of the Paying Agent as therein specified, (ii) the
amount of any such final payment, and (iii) that the Record Date otherwise
applicable to such Payment Date is not applicable, payments being made only upon
presentation and surrender of the Equity Certificate at the office of the Paying
Agent therein specified. The Paying Agent shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) at the time such notice
is given to Equity Certificateholder. Upon presentation and surrender of the
Equity Certificate to the Certificate Registrar, the Paying Agent shall direct
the Indenture Trustee to distribute to the Equity Certificateholder amounts
distributable on such Payment Date.
(d) In the event that the Equity Certificateholder shall not surrender
the Equity Certificate for cancellation within six months after the date
specified in the abovementioned written notice, the Paying Agent shall give a
second written notice to the Equity Certificateholder to surrender the Equity
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice the Equity Certificate shall
not have been surrendered for cancellation, the Paying Agent may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the Equity Certificateholder concerning surrender of the Equity Certificate, and
the cost thereof shall be paid out of the funds and other assets that remain
subject to this Agreement. Any funds which are payable to the Equity
Certificateholder remaining in the Trust after exhaustion of such remedies shall
be distributed by the Owner Trustee to the Depositor.
(e) Upon the completion of winding up of the Trust in accordance with
the Delaware Statutory Trust Act following its dissolution, the Owner Trustee
and the Delaware Trustee shall cause the Certificate of Trust to be canceled by
filing a certificate of cancellation with the Secretary of State in accordance
with the provisions of Section 3810 of the Delaware Statutory Trust Act, and
upon the effectiveness thereof, this Agreement and the Trust shall be
terminated.
Section 9.02 Dissolution upon Bankruptcy of Depositor. In the event that an
Insolvency Event shall occur with respect to the Depositor, then the Trust shall
be dissolved in accordance with Section 9.01 ninety days after the date of such
event, unless within such ninety day period, the Owner Trustee shall have
received written instructions from the Required Holders not to dissolve or
terminate the Trust. Promptly after the occurrence of an Insolvency Event with
respect to the Depositor, (i) the Depositor shall give the Indenture Trustee and
Owner Trustee written notice thereof, and (ii) the Indenture Trustee shall give
prompt written notice to the Noteholders thereof. Upon a dissolution pursuant to
this Section, the Issuer shall request the Administrator promptly to sell the
Trust Assets in a commercially reasonable manner and on
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commercially reasonable terms. The proceeds of such a sale shall be
treated, allocated and distributed as Available Funds in accordance with the
Pooling Agreement.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.01 Eligibility Requirements for Owner Trustee and Delaware
Trustee.
(a) The Owner Trustee shall at all times be a Person (i) authorized to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities; (ii) having (or having a parent which has) a
combined capital and surplus of at least $50,000,000; (iii) having (or having a
parent which has) a rating of at least Baa3 by ▇▇▇▇▇'▇ and BBB by Standard &
Poor's; (iv) which is not an Affiliate of the Trust, the Depositor, or the
Financing Originator, and (v) does not offer or provide credit or credit
enhancement to the Issuer or the Depositor. If such corporation shall publish
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Owner Trustee shall
cease to be eligible in accordance with the provisions of Section 10.01(a), the
Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.02.
(b) The Delaware Trustee shall at all times be a corporation
satisfying the provisions of Section 3807(a) of the Delaware Statutory Trust
Act. In case at any time the Delaware Trustee shall cease to be eligible in
accordance with the provisions of this Section 10.01(b), the Delaware Trustee
shall resign immediately in the manner and with the effect specified in Section
10.02.
Section 10.02 Resignation or Removal of Owner Trustee or Delaware Trustee.
The Owner Trustee or the Delaware Trustee may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Depositor and the Servicer at least 30 days before the date specified in
such instrument. Upon receiving such notice of resignation, the Administrator
shall promptly appoint a successor Owner Trustee or Delaware Trustee, as
applicable, meeting the qualifications set forth in Section 10.01(a) or in
Section 10.01(b), as applicable, by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Owner Trustee or
resigning Delaware Trustee, as applicable, and one copy to the successor Owner
Trustee or successor Delaware Trustee, as applicable. If no successor Owner
Trustee or Delaware Trustee, as applicable, shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or Delaware Trustee, as applicable, may
petition any court of competent jurisdiction for the appointment of a successor
Owner Trustee or Delaware Trustee, as applicable.
If at any time the Owner Trustee or the Delaware Trustee, as applicable,
shall cease to be eligible in accordance with the provisions of Section 10.01(a)
or Section 10.01(b), as applicable, and shall fail to resign after written
request therefor by the Administrator or if at any time the Owner Trustee or the
Delaware Trustee, as applicable, shall be legally unable to act as
- 25 -
such, or shall be adjudged bankrupt or insolvent, or a receiver of the
Owner Trustee or the Delaware Trustee, as applicable, or of its property shall
be appointed, or any public officer shall take charge or control of the Owner
Trustee or the Delaware Trustee, as applicable, or of its property or affairs
for the purpose of rehabilitation, conservation or liquidation, then the
Administrator may remove the Owner Trustee or the Delaware Trustee, as
applicable. If the Administrator shall remove the Owner Trustee or the Delaware
Trustee, as applicable, under the authority of the immediately preceding
sentence, the Depositor shall promptly appoint a successor Owner Trustee or
Delaware Trustee, as applicable, meeting the qualification requirements of
Section 10.01(a) or Section 10.01(b), as applicable, by written instrument, in
duplicate, one copy of which instrument shall be delivered to the outgoing Owner
Trustee or Delaware Trustee, as applicable, so removed and one copy to the
successor Owner Trustee or Delaware Trustee, as applicable, together with
payment of all fees owed to the outgoing Owner Trustee or Delaware Trustee.
Any resignation or removal of the Owner Trustee or the Delaware Trustee, as
applicable, and appointment of a successor Owner Trustee or Delaware Trustee, as
applicable, pursuant to any of the provisions of this Section shall not become
effective until all fees and expenses, including any indemnity payments, due to
the outgoing Owner Trustee or Delaware Trustee, as applicable, have been paid
and until acceptance of appointment by the successor Owner Trustee or Delaware
Trustee, as applicable, pursuant to Section 10.03.
Section 10.03 Successor Owner Trustee or Delaware Trustee. Any successor
Owner Trustee or Delaware Trustee, as applicable, appointed pursuant to Section
10.02 shall execute, acknowledge and deliver to the Depositor and to its
predecessor Owner Trustee or Delaware Trustee, as applicable, an instrument
accepting such appointment under this Agreement, and thereupon the resignation
or removal of the predecessor Owner Trustee or Delaware Trustee, as applicable,
shall become effective and such successor Owner Trustee or Delaware Trustee, as
applicable, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties, and obligations of its predecessor
under this Agreement, with like effect as if originally named as Owner Trustee
or Delaware Trustee, as applicable. The predecessor Owner Trustee or Delaware
Trustee, as applicable, shall, upon receipt of fees, expenses and indemnity due
and owing to the Owner Trustee or Delaware Trustee, as applicable, deliver to
the successor Owner Trustee or Delaware Trustee, as applicable, all documents
and statements and monies held by it under this Agreement; and the Depositor and
the predecessor Owner Trustee or Delaware Trustee, as applicable, shall execute
and deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor Owner
Trustee or Delaware Trustee, as applicable, all such rights, powers, duties, and
obligations.
No successor Owner Trustee or Delaware Trustee, as applicable, shall accept
appointment as provided in this Section unless at the time of such acceptance
such successor Owner Trustee or Delaware Trustee, as applicable, shall be
eligible pursuant to Section 10.01(a) or Section 10.01(b), as applicable.
Upon acceptance of appointment by a successor Owner Trustee or Delaware
Trustee, as applicable, pursuant to this Section, the Administrator shall mail
notice thereof to the Equity Certificateholder, the Indenture Trustee, the
Noteholders and each Rating Agency. If the
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Administrator shall fail to mail such notice within 10 days after
acceptance of appointment by the successor Owner Trustee or Delaware Trustee, as
applicable, the successor Owner Trustee or Delaware Trustee, as applicable,
shall cause such notice to be mailed at the expense of the Depositor.
Any successor Delaware Trustee appointed pursuant to this Section 10.03
shall file an amendment to the Certificate of Trust with the Delaware Secretary
of State identifying the name and principal place of business of such successor
in the State of Delaware.
Section 10.04 Merger or Consolidation of Owner Trustee or Delaware Trustee.
Any Person into which the Owner Trustee or Delaware Trustee, as applicable, may
be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Owner
Trustee or Delaware Trustee, as applicable, shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee or Delaware Trustee, as applicable, shall be the successor of the
Owner Trustee or Delaware Trustee, as applicable, hereunder, provided such
Person shall be eligible pursuant to Section 10.01(a) or Section 10.01(b), as
applicable, without the execution or filing of any instrument or any further act
on the part of any of the parties hereto. Notwithstanding anything contained
herein to the contrary, the successor Delaware Trustee, under this Section 10.04
shall file an amendment to the Certificate of Trust with the Delaware Secretary
of State identifying the name and principal place of business of such successor
in the State of Delaware.
Section 10.05 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Assets may at the time be located, the Owner Trustee shall have the
power and, at the request of the Depositor, shall execute and deliver all
instruments to appoint one or more Persons approved by the Owner Trustee to act
as co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Assets, and to vest in such Person, in
such capacity, such title to the Trust Assets, or any part thereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Owner Trustee may consider necessary or desirable. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to Section 10.01 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.01.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(a) all rights, powers, duties, and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed the Owner Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties, and obligations
(including the holding of title to the Trust Assets or any portion thereof in
any such jurisdiction) shall be exercised and
- 27 -
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(b) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(c) the Owner Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Supplements and Amendments.
(a) This Agreement may be amended by the Depositor, the Delaware
Trustee, and the Owner Trustee, without the consent of any of the Noteholders or
the Equity Certificateholder, to cure any ambiguity, to correct or supplement
any provisions in this Agreement or to add any other provisions with respect to
matters or questions arising under this Agreement that shall not be inconsistent
with the provisions of this Agreement; provided, however, that any such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interest of any Noteholder or the Equity Certificateholder.
(b) This Agreement may also be amended from time to time by the
Depositor, the Delaware Trustee, and the Owner Trustee, with the consent of the
Required Holders and the Equity Certificateholder, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement, or of modifying in any manner the rights of the Noteholders or
the Equity Certificateholder; provided, however, that no such amendment shall
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, (i) collections of payments on Contracts or distributions that shall
be required to be made for the benefit of the Noteholders or the Equity
Certificateholder, or (ii)
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change in any manner the Noteholder or Equity Certificateholder consent
required for any such amendment, without the consent of the Holders of all
outstanding Notes and the Equity Certificate.
(c) Prior to the execution of any such amendment or consent, the
Depositor shall furnish written notification of the substance of such amendment
or consent, together with a copy thereof, to the Indenture Trustee and the
Administrator.
(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to the Equity Certificateholder and the Rating Agencies. It
shall not be necessary for the consent of the Equity Certificateholder,
Noteholders or the Indenture Trustee pursuant to this Section 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 any other consents of the Equity Certificateholder provided
for in this Agreement or in any other Transaction Document) and of evidencing
the authorization of the execution thereof by the Equity Certificateholder, the
Note holders, or the Indenture Trustee shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
(e) Promptly after the execution of any amendment to the Certificate
of Trust, the Delaware Trustee shall cause the filing of such amendment with the
Secretary of State.
(f) Prior to the execution of any amendment or supplement to this
Agreement or the Certificate of Trust, the Owner Trustee and the Delaware
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment is authorized or permitted by this
Agreement and the other Transaction Documents, and that all conditions precedent
to the execution and delivery of such amendment as set forth in the applicable
Transaction Documents have been satisfied. The Owner Trustee and the Delaware
Trustee may, but shall not be obligated to, enter into any such amendment that
affects the Owner Trustee's or the Delaware Trustee's own rights, duties or
immunities under this Agreement or otherwise.
Section 11.02 Limitations on Rights of Others. Except for Section 2.07,
the provisions of this Agreement are solely for the benefit of the Owner Trustee
(individually and in its capacity as such), the Delaware Trustee (individually
and in its capacity as such), the Depositor, the Equity Certificateholder, the
Administrator and, to the extent expressly provided herein, the Indenture
Trustee and the Noteholders and nothing in this Agreement (other than Section
2.07), whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Trust Assets or
under or in respect of this Agreement or any covenants, conditions or provisions
contained herein.
Notwithstanding anything contained herein to the contrary, with respect to
the Noteholders, the Owner Trustee and the Delaware Trustee undertake to perform
or observe only such of the covenants and obligations of the Owner Trustee and
the Delaware Trustee as are expressly set forth in this Agreement, and no
implied covenants or obligations with respect to the Noteholders shall be read
into this Agreement against the Owner Trustee or the Delaware Trustee. Neither
the Owner Trustee nor the Delaware Trustee shall be deemed to owe any
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fiduciary duty to the Noteholders, and shall not be liable to any such
person other than as expressly set forth in the third sentence of Section 7.01.
Section 11.03 Notices. All notices, demands, 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 Business Day after
delivery to an overnight courier (specifying one (1) Business Day's delivery),
or (c) on the date personally delivered 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 initial Servicer/Administrator:
The CIT Group/Equipment Financing, Inc.
▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasury - Securitization
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Depositor:
CIT Funding Company, LLC
c/o CIT Group Inc.
▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasury - Securitization
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to the Owner Trustee:
The Bank of New York
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(iv) If to the Delaware Trustee
The Bank of New York (Delaware)
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Corporate Trust Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ 273 ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone (▇▇▇) ▇▇▇-▇▇▇▇
(v) If to the Indenture Trustee:
JPMorgan Chase Bank, National Association
▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Worldwide Securities Services / Global Debt (CIT Equipment
Collateral 2005-EF1)
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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 11.04 Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid or unenforceable, 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 the Equity Certificate or the rights of the Equity Certificateholder in
respect thereof.
Section 11.05 Counterparts. This Agreement may be executed in several
counterparts including by telefax transmission thereof (and by different parties
on separate counterparts), each of which shall be an original and all of which
shall constitute but one and the same instrument.
Section 11.06 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of the
Depositor, the Owner Trustee, and the Delaware Trustee and their respective
successors and permitted assigns and the Equity Certificateholder and its
successors and permitted assigns, all as herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by the Equity
Certificateholder shall bind the successors and assigns of such Equity
Certificateholder.
Section 11.07 No Petition.
(a) The Depositor will not at any time institute against (or solicit
or cooperate with or encourage any Person to institute against) the Trust, or
join in any institution against the Trust of, any bankruptcy proceedings under
any United States federal or state bankruptcy or similar law.
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(b) The Owner Trustee and the Delaware Trustee, by entering into this
Agreement, and the Equity Certificateholder, by accepting the Equity
Certificate, and the Indenture Trustee and each Noteholder, by accepting the
benefits of this Agreement, hereby covenant and agree that they will not at any
time institute against (or solicit or cooperate with or encourage any Person to
institute against) the Depositor or the Trust, or join in any institution
against the Depositor or the Trust of, any bankruptcy proceedings under any
United States federal or state bankruptcy or similar law.
Section 11.08 No Recourse. The Equity Certificateholder by accepting the
Equity Certificate acknowledges that the Equity Certificateholder's Equity
Certificate represents beneficial interests in the Trust only and does not
represent interests in or obligations of the Depositor, the Servicer, the
Financing Originator, the Administrator, the Owner Trustee, the Delaware
Trustee, the Indenture Trustee or any of their respective Affiliates and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated in this Agreement, the Equity Certificate or
the other applicable Transaction Documents.
Section 11.09 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 11.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 11.11 Certain Servicer Payment Obligations. It is understood that
the Servicer shall be responsible for payment of the Administrator's
compensation pursuant to Section 3 of the Administration Agreement and shall
reimburse the Administrator for all expenses and liabilities of the
Administrator incurred thereunder, consistent with the provisions of Section
5.19 of the Pooling Agreement. The parties hereto agree that any such payments,
if unpaid, do not constitute a general recourse claim against the Trust or the
Trust Assets.
Section 11.12 JURISDICTION. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
AGREES TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO
REVIEW THE JUDGMENTS THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION
BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS.
Section 11.13 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
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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 ANY 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.
Section 11.14 Tax Characterization. Notwithstanding the provisions of
Section 2.01 of the Pooling Agreement, the Depositor and the 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.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers hereunto duly authorized, as of the
day and year first above written.
CIT FUNDING COMPANY, LLC
as Depositor
By: ____________________________________
Name:
Title:
THE BANK OF NEW YORK, as Owner Trustee
By: ____________________________________
Name:
Title:
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: ____________________________________
Name:
Title:
Acknowledged and Agreed:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
As Paying Agent and Certificate Registrar
By:__________________________________
Name:
Title:
EXHIBIT A
Section 3.01 Certificate
The undersigned, a duly authorized officer of [ ],
hereby certifies, in connection with its purchase of the Equity Certificate,
that:
(A) following such transfer, there would be no more than one holder of the
Equity Certificate and the holder of the Equity Certificate would not be a
Foreign Person, a partnership, Subchapter S corporation or grantor trust,
(B) such transfer complies with and does not violate any state securities
laws, any Blue Sky laws or the Securities Act, and
(C) such transferee is not acquiring such Equity Certificate for, or with
the assets of, a Benefit Plan.
[Transferee]
By:
-------------------------------------------
Name:
Title:
A-1
EXHIBIT B
Form of Equity Certificate
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO NOTES TO THE EXTENT
DESCRIBED IN THE POOLING AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR AN INTEREST IN CIT
FUNDING COMPANY, LLC, CIT GROUP INC., CIT FINANCIAL USA, INC., THE CIT
GROUP/EQUIPMENT FINANCING, INC., OR ANY AFFILIATE THEREOF, OTHER THAN CIT
EQUIPMENT COLLATERAL 2005-EF1. THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT (AS DEFINED BELOW) OR ANY STATE SECURITIES LAWS AND MAY NOT
BE SOLD, TRANSFERRED OR PLEDGED UNLESS THE CONDITIONS SET FORTH IN SECTION 3.01
AND SECTION 3.04 OF THE TRUST AGREEMENT HAVE BEEN COMPLIED WITH.
THIS CERTIFICATE IS TRANSFERABLE ONLY IN WHOLE AND NOT IN PART.
THIS CERTIFICATE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS CERTIFICATE MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM.
CIT EQUIPMENT COLLATERAL 2005-EF1
EQUITY CERTIFICATE
NO. 1 Equity Certificate
THIS CERTIFIES THAT CIT Funding Company, LLC is the registered owner of a
beneficial interest in the assets of CIT Equipment Collateral 2005-EF1 trust
(the "Trust") formed by CIT Funding Company, LLC, a Delaware limited liability
company (the "Depositor").
The Trust is governed by an Amended and Restated Trust Agreement dated as
of July 1, 2005 (as amended, restated, supplemented and/or otherwise modified
from time to time, the "Trust Agreement"), among CIT Funding Company, LLC, as
Depositor (the "Depositor"), The Bank of New York, as Owner Trustee (the "Owner
Trustee"), and The Bank of New York (Delaware), as Delaware Trustee (the
"Delaware Trustee"), a summary of certain of the pertinent provisions of which
is set forth below. In the event of any conflict or inconsistency between this
Certificate and the Trust Agreement (or the Pooling Agreement, as the case may
be), the Trust Agreement (or the Pooling Agreement, as the case may be) shall
govern. To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings which would be given to them if used in the Trust
Agreement.
This Certificate is the duly authorized Equity Certificate issued under and
is subject to the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Holder of this Certificate by virtue of its acceptance
hereof assents and by which
B-1
such Holder is bound. The Trust has also issued Notes in right of payment
to which this Equity Certificate is subordinate. The property of the Trust
includes, among other things, all the right, title and interest of the Depositor
in and to the Transferred Assets identified in one or more related Transfer
Agreements delivered from time to time on related Transfer Dates.
The amount to be distributed to the Holder of this Certificate on each
Payment Date will be determined pursuant to the Pooling Agreement.
The Holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate are subordinated to the
rights of Noteholders to the extent described in the Trust Agreement and the
Pooling Agreement.
It is the intent of the Financing Originator, the Servicer, the
Administrator, the Depositor, the Owner Trustee, and the Equity
Certificateholder that, for purposes of federal income, state and local income
and single business tax and any other income taxes, the Trust will be
disregarded as a separate entity for federal income tax purposes pursuant to
Treasury Regulations Section 301.7701-3(b)(1)(ii) and that all items of income,
deduction, gain, loss or credit of the Trust will be treated as such items of
the Equity Certificateholder. The Depositor and the Equity Certificateholder, by
acceptance of this Certificate, agrees to treat, and to take no action
inconsistent with such treatment of, the Trust for federal income tax purposes.
The Equity Certificateholder, by its acceptance of this Certificate or a
beneficial interest in the Trust evidenced by this Certificate, covenants and
agrees that such Equity Certificateholder will not at any time institute against
(or solicit or cooperate with or encourage any Person to institute against) the
Trust or the Depositor, or join in any institution against the Trust or the
Depositor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law.
Distributions on this Certificate from or in respect of Trust Assets will
be made as provided in the Trust Agreement and the Pooling Agreement, by the
Indenture Trustee or its agent, as Paying Agent, by wire transfer or check
mailed to the Equity Certificateholder of record in the Certificate Register
without the presentation or surrender of this Certificate or the making of any
notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the office or
agency maintained for that purpose by the Paying Agent.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth herein.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Owner Trustee or by the Indenture Trustee as its
authenticating agent, by manual signature, this Certificate shall not entitle
the holder hereof to any benefit under the Trust Agreement or any other
Transaction Document or be valid for any purpose.
B-2
This Certificate may only be transferred in accordance with the
requirements of Article III of the Trust Agreement. Any transferee of the
Certificate must certify, among other things, that it is not acquiring the
Certificate for, or with the assets of, a Benefit Plan.
THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
B-3
This Certificate does not represent an obligation of, or an interest in,
the Depositor, CIT Group Inc., CIT Financial USA, Inc., The CIT Group/Equipment
Financing, Inc., the Delaware Trustee, the Owner Trustee, or any of their
respective Affiliates (other than the Trust) and no recourse may be had against
such parties or their assets, except as expressly set forth or contemplated
herein or in the Trust Agreement or the other Transaction Documents. In
addition, this Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections and
recoveries with respect to the Trust Assets and certain other amounts, in each
case as more specifically set forth in the Trust Agreement and in the Pooling
Agreement. A copy of each of the Pooling Agreement and the Trust Agreement may
be examined by any Equity Certificateholder upon written request during normal
business hours at the principal office of the Depositor and at such other
places, if any, designated by the Depositor.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Equity Certificateholder under the Trust
Agreement at any time by the Depositor, the Delaware Trustee, and the Owner
Trustee, with the consent of the parties described therein. Any such consent
shall be conclusive and binding on the Equity Certificateholder and on all
future Holders of this Certificate and of any Certificate issued upon the
registration of transfer hereof or in exchange therefor or in lieu hereof,
whether or not notation of such consent is made upon this Certificate.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar, accompanied by
a written instrument of transfer in form satisfactory to the Owner Trustee and
the Certificate Registrar executed by the Equity Certificateholder hereof or
such Equity Certificateholder's attorney duly authorized in writing, and
thereupon a new Certificate evidencing the same beneficial interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is the Indenture Trustee.
Except as provided in the Trust Agreement, this Certificate is issuable
only as a registered Equity Certificate without coupons. No service charge will
be made for any registration of transfer of this Certificate, but the Owner
Trustee or the Certificate Registrar may require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any of their respective
agents may treat the Person in whose name this Certificate is registered in the
Certificate Register as the owner hereof for all purposes, and none of the Owner
Trustee, the Certificate Registrar or any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and the
Trust created thereby shall terminate upon the payment to the Equity
Certificateholder of all amounts required to be paid to such Equity
Certificateholder pursuant to the Trust Agreement and the
B-4
Pooling Agreement and the disposition in accordance with any applicable
Transaction Document of all property held as part of the Trust Assets.
This Certificate may not be acquired by a Benefit Plan. By accepting and
holding this Certificate, the Holder hereof shall be deemed to have represented
and warranted that it is not a Benefit Plan and is not acquiring this
Certificate for the account of such an entity.
IN WITNESS WHEREOF, the Trust has caused this Certificate to be duly
executed.
Dated: [ ], 2005 CIT EQUIPMENT COLLATERAL 2005-EF1
----------------
By: The Bank of New York, not
in its individual capacity
but solely as Owner Trustee
By:
---------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is the Equity Certificate referred to in the within-mentioned Trust
Agreement.
JPMorgan Chase Bank, National
Association as authenticating agent
By:
---------------------------------
Authorized Signatory
B-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of assignee)
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the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
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to transfer said Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
-----------------
Signature Guaranteed:
--------------------------------------- ---------------------------------------
NOTICE: Signature(s) must be NOTICE: The signature to this
guaranteed by an eligible assignment must correspond with the
guarantor institution. name of the registered owner as it
appears on the face of the within
Certificate in every particular,
without alteration or enlargement or
any change whatever.
B-6