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POOLING AND SERVICING AGREEMENT
among
CIT EQUIPMENT COLLATERAL 2000-2
as Issuer,
NCT FUNDING COMPANY, L.L.C.,
as Depositor,
CIT FINANCIAL USA, INC.
in its individual capacity
and
CAPITA CORPORATION,
in its individual capacity and as Servicer
Dated as of September 1, 2000
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS ....................................................................................1
Section 1.01. Definitions.............................................................................1
Section 1.02. Usage of Terms.........................................................................40
Section 1.03. Section References.....................................................................41
Section 1.04. Accounting Terms.......................................................................41
ARTICLE II FUNDINGS OF TRUST; TRANSFERS OF CONTRACTS......................................................41
Section 2.01. Creation and Funding of Trust; Transfer of Transferred Assets to Trust.................41
Section 2.02. Conditions to Transfers................................................................42
Section 2.03. Acceptance by Trust....................................................................45
Section 2.04. Conveyance of Substitute Contracts.....................................................45
Section 2.05. Release of Excluded Amounts............................................................46
ARTICLE III REPRESENTATIONS AND WARRANTIES................................................................47
Section 3.01. Representations and Warranties Regarding the Depositor.................................47
Section 3.02. Representations and Warranties of the Servicer.........................................49
ARTICLE IV PERFECTION OF TRANSFERS AND PROTECTION OF SECURITY INTERESTS...................................51
Section 4.01. Custody of Contracts...................................................................51
Section 4.02. Filings................................................................................52
Section 4.03. Name Change or Relocation..............................................................52
ARTICLE V SERVICING OF CONTRACTS..........................................................................54
Section 5.01. Initial Servicer's Appointment and Acceptance; Responsibility for Contract
Administration......................................................................54
Section 5.02. General Duties.........................................................................54
Section 5.03. Assignment or Replacement..............................................................55
Section 5.04. Disposition Upon Termination of Contract...............................................55
Section 5.05. Subservicers...........................................................................55
Section 5.06. Further Assurance......................................................................55
Section 5.07. Notice to Obligors.....................................................................55
Section 5.08. Collection Efforts; Modification of Contracts..........................................56
Section 5.09. Prepayments of Certain Contracts.......................................................57
Section 5.10. Certain Extensions; Acceleration.......................................................57
Section 5.11. Taxes and Other Amounts................................................................58
Section 5.12. Suits by Servicer......................................................................58
Section 5.13. Remittances............................................................................58
Section 5.14. Servicer Advances......................................................................58
Section 5.15. Realization Upon Defaulted Contract....................................................58
Section 5.16. Maintenance of Insurance Policies......................................................59
Section 5.17. Certain Other Duties With Respect to Trust.............................................59
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Section 5.18. Servicing Compensation.................................................................59
Section 5.19. Payment of Certain Expenses by Servicer................................................59
Section 5.20. Records................................................................................59
Section 5.21. Inspection.............................................................................60
Section 5.22. Trust To Cooperate in Releases.........................................................60
Section 5.23. Separate Entity Existence..............................................................60
Section 5.24. Assignment of Servicing................................................................60
ARTICLE VI COVENANTS OF THE DEPOSITOR.....................................................................61
Section 6.01. LLC Existence..........................................................................61
Section 6.02. Contracts Not to be Evidenced by Promissory Notes......................................61
Section 6.03. Security Interests.....................................................................61
Section 6.04. Delivery of Collections................................................................61
Section 6.05. Regulatory Filings.....................................................................61
Section 6.06. Compliance With Law....................................................................62
Section 6.07. Activities.............................................................................62
Section 6.08. Indebtedness...........................................................................62
Section 6.09. Guarantees.............................................................................62
Section 6.10. Investments............................................................................62
Section 6.11. Merger; Transfers......................................................................62
Section 6.12. Payments...............................................................................62
Section 6.13. Other Agreements.......................................................................63
Section 6.14. Separate Entity Existence..............................................................63
Section 6.15. Location; Records......................................................................64
Section 6.16. Liability of Depositor; Indemnities....................................................64
Section 6.17. Bankruptcy Limitations.................................................................66
Section 6.18. Limitation on Liability of Depositor and Others........................................66
Section 6.19. Chief Executive Office.................................................................66
ARTICLE VII ESTABLISHMENT OF ACCOUNTS; PAYMENTS...........................................................66
Section 7.01. Trust Accounts; Collections............................................................66
Section 7.02. Cash Collateral Account................................................................68
Section 7.03. Trust Account Procedures...............................................................68
Section 7.04. Securityholder Payments................................................................69
Section 7.05. Allocations and Payments...............................................................69
Section 7.06. Repurchases of, or Substitution for, Contracts for Breach of
Representations and Warranties......................................................75
Section 7.07. Reassignment of Repurchased or Substituted Contracts...................................76
Section 7.08. Financial's and Depositor's Repurchase Option..........................................76
ARTICLE VIII SERVICER DEFAULTS; SERVICING TRANSFER........................................................76
Section 8.01. Servicer Default.......................................................................77
Section 8.02. Servicing Transfer.....................................................................78
Section 8.03. Appointment of Successor Servicer; Reconveyance; Successor Servicer to Act.............78
Section 8.04. Notifications to Noteholders and the Equity Certificateholders.........................80
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Section 8.05. Effect of Transfer.....................................................................80
Section 8.06. Database File..........................................................................80
Section 8.07. Successor Servicer Indemnification.....................................................80
Section 8.08. Responsibilities of the Successor Servicer.............................................80
Section 8.09 Servicer Not to Resign..................................................................81
ARTICLE IX SERVICER REPORTING.............................................................................81
Section 9.01. Monthly Reports........................................................................81
Section 9.02. Officer's Certificate..................................................................82
Section 9.03. Other Data.............................................................................82
Section 9.04. Annual Reporting; Evidence as to Compliance............................................82
Section 9.05. Annual Statement of Compliance from Servicer...........................................82
ARTICLE X TERMINATION.................................................................................... 83
Section 10.01. Sale of Trust Assets..................................................................83
ARTICLE XI MISCELLANEOUS..................................................................................83
Section 11.01. Amendments............................................................................83
Section 11.02. Reserved..............................................................................85
Section 11.03. Governing Law.........................................................................85
Section 11.04. Notices...............................................................................85
Section 11.05. Severability of Provisions............................................................87
Section 11.06. Third Party Beneficiaries.............................................................87
Section 11.07. Counterparts..........................................................................87
Section 11.08. Headings..............................................................................87
Section 11.09. No Bankruptcy Petition; Disclaimer and Subordination..................................87
Section 11.10. Jurisdiction..........................................................................88
Section 11.11. Tax Characterization..................................................................88
Section 11.12. Servicer Indemnity....................................................................89
Section 11.13. Limitation of Liability of Owner Trustee..............................................89
Section 11.14. WAIVER OF JURY TRIAL..................................................................89
EXHIBITS
Exhibit A Form of Transfer Agreement ...............................................................A-1
Exhibit B Form of VFC Assignment....................................................................B-1
Exhibit C Initial Schedule of Contracts.............................................................C-1
Exhibit D Form of Servicer's Monthly Report.........................................................D-1
Exhibit E Form of Substitution Transfer Agreement...................................................E-1
Exhibit F [Reserved]................................................................................F-1
Exhibit G Schedule of Representations and Warranties................................................G-1
Exhibit H [Reserved]................................................................................H-1
Exhibit I [Reserved]................................................................................I-1
Exhibit J Minimum Value Filing Exceptions...........................................................J-1
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This POOLING AND SERVICING AGREEMENT, dated as of September 1,
2000, is among CIT Equipment Collateral 2000-2, a Delaware business trust
(together with its successors and assigns, the "Issuer" or the "Trust"), NCT
Funding Company, L.L.C., a Delaware limited liability company (together with its
successors and assigns, the "Depositor"), Capita Corporation, a Delaware
corporation (together with its successors and assigns, "TCC" and, in its
capacity as the Servicer, the "Servicer") and CIT Financial USA, Inc. (together
with its successors and assigns, "Financial").
WHEREAS the Depositor desires to fund the Trust by selling,
conveying and assigning from time to time, pursuant hereto or Substitution
Transfer Agreements hereunder, designated Contracts or pools of Contracts
together with certain related security therefor and other related rights and
property as further described herein, which Contracts were originated by one or
more Financing Originators, or acquired by purchase and assignment by a
Financing Originator from the prior owner thereof, and subsequently conveyed (i)
by certain Financing Originators to Financial, (ii) by Financial to the
Depositor, with respect to Contracts and related assets both originated or
acquired directly by Financial as a Financing Originator, and acquired by
Financial from the other Financing Originators as described in clause (i) above,
(iii) in the case of the VFC Contracts, by the Depositor to the VFC Trust (as
defined herein) and (iv) in the case of the VFC Contracts, by the VFC Trust to
the Depositor; and
WHEREAS the Trust is willing to purchase and accept assignment
of such Contracts and related assets; and
WHEREAS the Servicer is willing to service such Contracts and
related assets for the benefit and account of the Trust and the Holders pursuant
to the terms hereof;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:
"Accounting Date" means, with respect to a Payment Date, the
last day of the preceding calendar month.
"Accrual Period" means, with respect to any Payment Date, with
respect to the Class A-1 Notes, the period from and including the immediately
preceding Payment Date to but excluding such Payment Date, and with respect to
each other Class of Notes, the period from and including the 20th day of the
immediately preceding calendar month to but excluding the 20th day of the
related calendar month, provided, that in each case, the initial Accrual Period
following the Closing Date shall be the period from and including the Closing
Date to but excluding the first Payment Date following the Closing Date.
"Addition Notice" means, with respect to any transfer of
Subsequent Contracts to the Trust pursuant to Section 2.04 (and the Depositor's
corresponding prior purchase of such Contracts from Financial), a notice, which
shall be given at least five days prior to the related Subsequent Transfer Date,
identifying the Subsequent Contracts to be transferred, the Contract Principal
Balance of such Subsequent Contracts and the related Substitution Event (with
respect to an identified Contract or Contracts then in the Contracts Pool) to
which such Subsequent Contract relates, with such notice to be signed both by
the Depositor and Financial.
"Administration Agreement" means the Administration Agreement
dated as of September 1, 2000 by and among the Trust, TCC, the Depositor and the
Indenture Trustee.
"Administrator" shall be the party named as such under the
Administration Agreement.
"Affiliate" of any specified Person means any other Person
controlling or controlled by, or under common control with, such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" or
"controlled" have meanings correlative to the foregoing.
"Aggregate Principal Amount" means, with respect to any group
of Notes, at any date of determination, the sum of the Principal Amounts of such
Notes on such date of determination.
"Agreement" means this Pooling and Servicing Agreement, as
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Allocation Criteria" means, with respect to the allocation of
Insurance Proceeds or Liquidation Proceeds between the Trust (for inclusion as
Pledged Revenues) and the Depositor, as contemplated in the definition of
Available Pledged Revenues, that Insurance Proceeds or Liquidation Proceeds with
respect to the Contracts consisting of Leases are allocable pro rata between
inclusion as Available Pledged Revenues in respect of the Contract Pool, on the
one hand, and directly to the Depositor, on the other, based upon (i) for
allocation to Available Pledged Revenues, the Required Payoff Amount for such
Lease (determined as of the last day of the Collection Period during which such
Lease became a Defaulted Contract), and (ii) for allocation to the Depositor,
the Book Value of the related Equipment; provided, that in the event the
Insurance Proceeds or Liquidation Proceeds in respect of a particular Lease
exceed the sum of such Required Payoff Amount for such Lease plus the Book Value
of the related Equipment, any such excess shall be allocated solely to the
Depositor.
"Amount Available" means, with respect to any Payment Date,
the sum of (i) the Available Pledged Revenues for such Payment Date and (ii)
that portion of the balance in the
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Cash Collateral Account available for withdrawal by the Indenture Trustee in
accordance with Section 7.05(d).
"Applicable Security" means, with respect to a Vendor Loan,
any (i) Secondary Contract securing such Vendor Loan and (ii) Equipment securing
such Vendor Loan or a related Secondary Contract.
"Available Cash Collateral" means, with respect to a Payment
Date, the amount of funds equal to the lesser of (i) the amount on deposit in
the Cash Collateral Account (determined (a) exclusive of any Investment Earnings
thereon and (b) before giving effect to any deposit to be made or withdrawals
from the Cash Collateral Account with respect to such Payment Date), and (ii)
the Required Cash Collateral Amount.
"Available Pledged Revenues" means, as to any Payment Date,
the sum of (i) the Related Collection Period Pledged Revenues for such Payment
Date, (ii) all Purchase Amounts (other than any portion thereof attributable to
the Book Value of the Leased Equipment) and Servicer Advances on deposit in the
Collection Account as of the immediately preceding Deposit Date, (iii) the
amount paid by Financial or the Depositor to purchase the Contracts pursuant to
Section 7.08 of this Agreement on deposit in the Collection Account as of the
immediately preceding Deposit Date, and (iv) to the extent necessary to pay the
Note Interest Distributable Amount for such Payment Date, the Current Collection
Period Pledged Revenues for such Payment Date.
"Book Value" means, with respect to any Equipment subject to a
Lease, the value of such Equipment as shown on the accounting books and records
of the applicable Financing Originator (or the Depositor, in the case of
Equipment relating to Contracts being transferred pursuant to the VFC
Assignment), as of the Cut-Off Date for the related Lease (it being understood
that Book Value constitutes a measure of the lessor's residual interest in the
Equipment as shown on its books and records as of such date, net of the
financial asset shown on such books and records represented by the discounted
Scheduled Payments owing on the Lease).
"Business Day" means any day which is neither a Saturday or a
Sunday, nor another day on which banking institutions in the cities of
Wilmington, Delaware, Livingston, New Jersey, Baltimore, Maryland or New York,
New York are authorized or obligated by law, executive order, or governmental
decree to be closed.
"Business Trust Statute" has the meaning specified in the
Trust Agreement.
"Cash Collateral Account" means the Cash Collateral Account
established and maintained pursuant to Section 7.01 hereof.
"Cash Collateral Account Agreement" means the Loan Agreement
dated as of September 1, 2000, among the Depositor, the Trust, the Indenture
Trustee, the Servicer, the Cash Collateral Account Lenders and the Cash
Collateral Account Lenders' Agent, as the same may be amended, supplemented or
otherwise modified in accordance with the terms thereof.
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"Cash Collateral Account Lenders" means the parties identified
as lenders in the Cash Collateral Account Agreement.
"Cash Collateral Account Lenders' Agent" means the party
identified as agent for the Cash Collateral Account Lenders in the Cash
Collateral Account Agreement.
"Cash Collateral Initial Balance" means $68,772,051.
"Casualty Loss" means, with respect to any item of Equipment,
the loss, theft, damage beyond repair or governmental condemnation or seizure of
such item of Equipment.
"Certificate of Formation" means the limited liability company
Certificate of Formation of the Depositor.
"Certificate of Trust" has the meaning given such term in the
Trust Agreement.
"Certificate Register" has the meaning specified in the Trust
Agreement.
"CIT" means The CIT Group, Inc.
"Class" means any of the group of Notes or the Equity
Certificate identified herein as the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes, the
Class D Notes, or the Equity Certificate, as applicable.
"Class A Notes" means the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes.
"Class A Percentage" means 94.0%.
"Class A Principal Payment Amount" means:
(1) with respect to any Payment Date on or prior
to the Payment Date on which the Principal
Amount of the Class A-1 Notes has been
reduced to zero, the greater of (i) the
excess of (x) the Principal Amount of the
Class A-1 Notes over (y) the Class A-1
Scheduled Principal Balance and (ii) the
excess of (x) the sum of the Principal
Amount of the Class A-1, Class A-2, Class
A-3 and Class A-4 Notes over (y) the Class A
Target Principal Amount; and
(2) with respect to any Payment Date thereafter,
the excess of (x) the sum of the Principal
Amount of the Class A-2, Class A-3 and Class
A-4 Notes over (y) the Class A Target
Principal Amount;
provided, however, that in no event shall the Class A Principal Payment Amount
exceed the Principal Amount of the Class A Notes.
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"Class A Target Principal Amount" means, with respect to any
Payment Date, the product of (i) the Class A Percentage and (ii) the Contract
Pool Principal Balance as of the related Accounting Date.
"Class A-1 Interest Carryover Shortfall" means, with respect
to any Payment Date, the excess, if any, of the Class A-1 Interest Distributable
Amount for the preceding Payment Date over the amount that was actually
distributed in respect of interest on the Class A-1 Notes on such preceding
Payment Date, plus, to the extent permitted by law, an amount equal to the
product of (i) the Class A-1 Interest Rate, (ii) such excess, and (iii) a
fraction equal to the number of days in the related Accrual Period divided by
360.
"Class A-1 Interest Distributable Amount" means, with respect
to any Payment Date, the sum of the Class A-1 Monthly Interest Distributable
Amount and the Class A-1 Interest Carryover Shortfall for such Payment Date.
"Class A-1 Interest Rate" means 6.64% per annum.
"Class A-1 Maturity Date" means June 20, 2001 (or, if such day
is not a Business Day, the next preceding Business Day).
"Class A-1 Monthly Interest Distributable Amount" means, with
respect to any Accrual Period and the related Payment Date, an amount equal to
the product of (i) the Class A-1 Interest Rate, (ii) the Principal Amount of the
Class A-1 Notes on the immediately preceding Payment Date, after giving effect
to all payments of principal to Class A-1 Noteholders on or prior to such
immediately preceding Payment Date (or, in the case of the first Payment Date,
the Initial Class A-1 Principal Amount), and (iii) a fraction equal to the
number of days in such Accrual Period divided by 360.
"Class A-1 Notes" means the $200,000,000 aggregate principal
amount of 6.64% Receivable-Backed Notes, Class A-1, issued pursuant to the
Indenture.
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"Class A-1 Scheduled Principal Balance" means, with respect to
each Payment Date, the balance for such Payment Date as set forth in the
following table.
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Payment Date Class A-1 Scheduled Principal Balance
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October 2000 166,872,402
November 2000 137,771,595
December 2000 111,006,012
January 2001 81,744,124
February 2001 51,622,229
March 2001 24,480,083
April 2001 0
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"Class A-2 Interest Carryover Shortfall" means, with respect
to any Payment Date, the excess, if any, of the Class A-2 Interest Distributable
Amount for the preceding Payment Date over the amount that was actually
distributed in respect of interest on the Class A-2 Notes on such preceding
Payment Date, plus, to the extent permitted by law, an amount equal to the
product of (i) the Class A-2 Interest Rate, (ii) such excess, and (iii) a
fraction equal to one-twelfth.
"Class A-2 Interest Distributable Amount" means, with respect
to any Payment Date, the sum of the Class A-2 Monthly Interest Distributable
Amount and the Class A-2 Interest Carryover Shortfall for such Payment Date.
"Class A-2 Interest Rate" means 6.81% per annum.
"Class A-2 Maturity Date" means December 20, 2002 (or, if such
day is not a Business Day, the next succeeding Business Day thereafter).
"Class A-2 Monthly Interest Distributable Amount" means (a)
with respect to the first Accrual Period and the related Payment Date, an amount
equal to the product of (i) the Class A-2 Interest Rate, (ii) Initial Class A-2
Principal Amount, and (iii) a fraction equal to 22 divided by 360, and (b) with
respect to each subsequent Accrual Period and the related Payment Date, an
amount equal to the product of (i) the Class A-2 Interest Rate, (ii) the
Principal Amount of the Class A-2 Notes on the immediately preceding Payment
Date, after giving effect to all payments of principal to Class A-2 Noteholders
on or prior to such immediately preceding Payment Date, and (iii) a fraction
equal to one-twelfth.
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"Class A-2 Notes" means the $356,000,000 aggregate principal
amount of 6.81% Receivable-Backed Notes, Class A-2, issued pursuant to the
Indenture.
"Class A-3 Interest Carryover Shortfall" means, with respect
to any Payment Date, the excess, if any, of the Class A-3 Interest Distributable
Amount for the preceding Payment Date over the amount that was actually
distributed in respect of interest on the Class A-3 Notes on such preceding
Payment Date, plus, to the extent permitted by law, an amount equal to the
product of (i) the Class A-3 Interest Rate, (ii) such excess, and (iii) a
fraction equal to one-twelfth.
"Class A-3 Interest Distributable Amount" means, with respect
to any Payment Date, the sum of the Class A-3 Monthly Interest Distributable
Amount and the Class A-3 Interest Carryover Shortfall for such Payment Date.
"Class A-3 Interest Rate" means 6.84% per annum.
"Class A-3 Maturity Date" means June 20, 2004 (or, if such day
is not a Business Day, the next succeeding Business Day thereafter).
"Class A-3 Monthly Interest Distributable Amount" means (a)
with respect to the first Accrual Period and the related Payment Date, an amount
equal to the product of (i) the Class A-3 Interest Rate, (ii) the Initial Class
A-3 Principal Amount, and (iii) a fraction equal to 22 divided by 360, and (b)
with respect to each subsequent Accrual Period and the related Payment Date, an
amount equal to the product of (i) the Class A-3 Interest Rate, (ii) the
Principal Amount of the Class A-3 Notes on the immediately preceding Payment
Date, after giving effect to all payments of principal to Class A-3 Noteholders
on or prior to such immediately preceding Payment Date, and (iii) a fraction
equal to one-twelfth.
"Class A-3 Notes" means the $306,000,000 aggregate principal
amount of Receivable-Backed Notes, Class A-3, issued pursuant to the Indenture.
"Class A-4 Interest Carryover Shortfall" means, with respect
to any Payment Date, the excess, if any, of the Class A-4 Interest Distributable
Amount for the preceding Payment Date over the amount that was actually
distributed in respect of interest on the Class A-4 Notes on such preceding
Payment Date, plus, to the extent permitted by law, an amount equal to the
product of (i) the Class A-4 Interest Rate, (ii) such excess, and (iii) a
fraction equal to one-twelfth.
"Class A-4 Interest Distributable Amount" means, with respect
to any Payment Date, the sum of the Class A-4 Monthly Interest Distributable
Amount and the Class A-4 Interest Carryover Shortfall for such Payment Date.
"Class A-4 Interest Rate" means 6.93% per annum.
"Class A-4 Maturity Date" means July 20, 2011 (or, if such day
is not a Business Day, the next succeeding Business Day thereafter).
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"Class A-4 Monthly Interest Distributable Amount" means (a)
with respect to the first Accrual Period and the related Payment Date, an amount
equal to the product of (i) the Class A-4 Interest Rate, (ii) the Initial Class
A-4 Principal Amount, and (iii) a fraction equal to 22 divided by 360, and (b)
with respect to each subsequent Accrual Period and the related Payment Date, an
amount equal to the product of (i) the Class A-4 Interest Rate, (ii) the
Principal Amount of the Class A-4 Notes on the immediately preceding Payment
Date, after giving effect to all payments of principal to Class A-4 Noteholders
on or prior to such immediately preceding Payment Date, and (iii) a fraction
equal to one-twelfth.
"Class A-4 Notes" means the $132,549,665 aggregate principal
amount of 6.93% Receivable-Backed Notes, Class A-4, issued pursuant to the
Indenture.
"Class B Floor" means, with respect to any Payment Date, an
amount equal to (i) 3.0% of the Initial Contract Pool Principal Balance, plus
(ii) the Unfunded Loss Amount, if any, for such Payment Date, minus (iii) the
sum of the Principal Amount of the Class C Notes and the Principal Amount of the
Class D Notes (prior to giving effect to any payments of principal on the Class
C or Class D Notes on such Payment Date) and the amount on deposit in the Cash
Collateral Account (after giving effect to withdrawals to be made on such
Payment Date); provided, however, that in no event will the Class B Floor be
greater than the Principal Amount of the Class B Notes immediately prior to such
Payment Date nor less than zero.
"Class B Interest Carryover Shortfall" means, with respect to
any Payment Date, the excess, if any, of the Class B Interest Distributable
Amount for the preceding Payment Date over the amount that was actually
distributed in respect of interest on the Class B Notes on such preceding
Payment Date, plus, to the extent permitted by law, an amount equal to the
product of (i) the Class B Interest Rate, (ii) such excess, and (iii) a fraction
equal to one-twelfth.
"Class B Interest Distributable Amount" means, with respect to
any Payment Date, the sum of the Class B Monthly Interest Distributable Amount
and the Class B Interest Carryover Shortfall for such Payment Date.
"Class B Interest Rate" means 6.95% per annum.
"Class B Maturity Date" means July 20, 2011 (or, if such day
is not a Business Day, the next succeeding Business Day thereafter).
"Class B Monthly Interest Distributable Amount" means (a) with
respect to the first Accrual Period and the related Payment Date, an amount
equal to the product of (i) the Class B Interest Rate, (ii) the Initial Class B
Principal Amount, and (iii) a fraction equal to 22 divided by 360, and (b) with
respect to each subsequent Accrual Period and the related Payment Date, an
amount equal to the product of (i) the Class B Interest Rate, (ii) the Principal
Amount of the Class B Notes on the immediately preceding Payment Date, after
giving effect to all payments of principal to Class B Noteholders on or prior to
such immediately preceding Payment Date, and (iii) a fraction equal to
one-twelfth.
"Class B Notes" means the $15,870,473 aggregate principal
amount of 6.95% Receivable-Backed Notes, Class B, issued pursuant to the
Indenture.
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"Class B Percentage" means 1.5%.
"Class B Principal Payment Amount" means the lesser of (i) the
excess, if any, of (a) the Total Principal Payment Amount over (b) the Class A
Principal Payment Amount and (ii) the excess, if any, of (a) the Principal
Amount of the Class B Notes over (b) the greater of (1) the Class B Target
Principal Amount and (2) the Class B Floor, if any; provided, however, that in
no event will the Class B Principal Payment Amount exceed the Principal Amount
of the Class B Notes.
"Class B Target Principal Amount" means, with respect to any
Payment Date, the product of (i) the Class B Percentage and (ii) the Contract
Pool Principal Balance as of the related Accounting Date.
"Class C Floor" means, with respect to any Payment Date, (i)
2.2% of the Initial Contract Pool Principal Balance, plus (ii) the Unfunded Loss
Amount, if any, for such Payment Date, minus (iii) the sum of the Principal
Amount of the Class D Notes (prior to giving effect to any payments of principal
on the Class D Notes on such Payment Date) and the amount on deposit in the Cash
Collateral Account (after giving effect to withdrawals to be made on such
Payment Date); provided, however, that in no event will the Class C Floor be
greater than the Principal Amount of the Class C Notes immediately prior to such
Payment Date nor less than zero. Furthermore, if the Principal Amount of the
Class B Notes immediately prior to any Payment Date is less than or equal to the
Class B Floor for such Payment Date, the Class C Floor with respect to such
Payment Date will equal the Principal Amount of the Class C Notes immediately
prior to such Payment Date.
"Class C Interest Carryover Shortfall" means, with respect to
any Payment Date, the excess, if any, of the Class C Interest Distributable
Amount for the preceding Payment Date over the amount that was actually
distributed in respect of interest on the Class C Notes on such preceding
Payment Date, plus, to the extent permitted by law, an amount equal to the
product of (i) the Class C Interest Rate, (ii) such excess, and (iii) a fraction
equal to one-twelfth.
"Class C Interest Distributable Amount" means, with respect to
any Payment Date, the sum of the Class C Monthly Interest Distributable Amount
and the Class C Interest Carryover Shortfall for such Payment Date.
"Class C Interest Rate" means 7.04% per annum.
"Class C Maturity Date" means July 20, 2011 (or, if such day
is not a Business Day, the next succeeding Business Day thereafter).
"Class C Monthly Interest Distributable Amount" means (a) with
respect to the first Accrual Period and the related Payment Date, an amount
equal to the product of (i) the Class C Interest Rate, (ii) the Initial Class C
Principal Amount, and (iii) a fraction equal to 22 divided by 360, and (b) with
respect to each subsequent Accrual Period and the related Payment Date, an
amount equal to the product of (i) the Class C Interest Rate, (ii) the Principal
Amount of the Class C Notes on the immediately preceding Payment Date, after
giving effect to all
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payments of principal to Class C Noteholders on or prior to such immediately
preceding Payment Date, and (iii) a fraction equal to one-twelfth.
"Class C Notes" means the $21,160,631 aggregate principal
amount of 7.04% Receivable-Backed Notes, Class C, issued pursuant to the
Indenture.
"Class C Percentage" means 2.0%.
"Class C Principal Payment Amount" means the lesser of (i) the
excess, if any, of (a) the Total Principal Payment Amount over (b) the sum of
the Class A Principal Payment Amount and the Class B Principal Payment Amount
and (ii) the excess, if any, of (a) the Principal Amount of the Class C Notes
over (b) the greater of (1) the Class C Target Principal Amount and (2) the
Class C Floor, if any; provided, however, that in no event will the Class C
Principal Payment Amount exceed the Principal Amount of the Class C Notes.
"Class C Target Principal Amount" means, with respect to any
Payment Date, the product of (i) the Class C Percentage and (ii) the Contract
Pool Principal Balance as of the related Accounting Date.
"Class D Floor" means, with respect to any Payment Date, (i)
1.7% of the Initial Contract Pool Principal Balance, plus (ii) the Unfunded Loss
Amount, if any, for such Payment Date, minus (iii) the amount on deposit in the
Cash Collateral Account (after giving effect to withdrawals to be made on such
Payment Date); provided, however, that in no event will the Class D Floor be
greater than the Class D Principal Balance immediately prior to such Payment
Date nor less than zero. Furthermore, if the Principal Amount of the Class C
Notes immediately prior to any Payment Date is less than or equal to the Class C
Floor for such Payment Date, the Class D Floor with respect to such Payment Date
will equal the Principal Amount of the Class D Notes immediately prior to such
Payment Date.
"Class D Interest Carryover Shortfall" means, with respect to
any Payment Date, the excess, if any, of the Class D Interest Distributable
Amount for the preceding Payment Date over the amount that was actually
distributed in respect of interest on the Class D Notes on such preceding
Payment Date, plus, to the extent permitted by law, an amount equal to the
product of (i) the Class D Interest Rate, (ii) such excess, and (iii) a fraction
equal to one-twelfth.
"Class D Interest Distributable Amount" means, with respect to
any Payment Date, the sum of the Class D Monthly Interest Distributable Amount
and the Class D Interest Carryover Shortfall for such Payment Date.
"Class D Interest Rate" means 7.52% per annum.
"Class D Maturity Date" means July 20, 2011 (or, if such day
is not a Business Day, the next succeeding Business Day thereafter).
"Class D Monthly Interest Distributable Amount" means (a) with
respect to the first Accrual Period and the related Payment Date, an amount
equal to the product of (i) the Class D Interest Rate, (ii) the Initial Class D
Principal Amount, and (iii) a fraction equal to 22 divided
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by 360, and (b) with respect to each subsequent Accrual Period and the related
Payment Date, an amount equal to the product of (i) the Class D Interest Rate,
(ii) the Principal Amount of the Class D Notes on the immediately preceding
Payment Date, after giving effect to all payments of principal to Class D
Noteholders on or prior to such immediately preceding Payment Date, and (iii) a
fraction equal to one-twelfth.
"Class D Notes" means the $26,450,790 aggregate principal
amount of 7.52% Receivable-Backed Notes, Class D, issued pursuant to the
Indenture.
"Class D Percentage" means 2.5%.
"Class D Principal Payment Amount" means the lesser of (i) the
excess, if any, of (a) the Total Principal Payment Amount over (b) the sum of
the Class A Principal Payment Amount, the Class B Principal Payment Amount and
the Class C Principal Payment Amount and (ii) the excess, if any, of (a) the
Principal Amount of the Class D Notes over (b) the greater of (1) the Class D
Target Principal Amount and (2) the Class D Floor, if any; provided, however,
that in no event will the Class D Principal Payment Amount exceed the Principal
Amount of the Class D Notes.
"Class D Target Principal Amount" means, with respect to any
Payment Date, the product of (i) the Class D Percentage and (ii) the Contract
Pool Principal Balance as of the related Accounting Date.
"Closing Date" means September 28, 2000.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collection Account" means the account so designated
established pursuant to Section 7.01.
"Collection Account Property" means the Collection Account,
all amounts and investments held from time to time in the Collection Account
(whether in the form of deposit accounts, physical property, book-entry
securities, uncertificated securities or otherwise), and all proceeds of the
foregoing.
"Collection Period" means a period beginning on the first day
of a calendar month and ending on, but not including, the first day of the next
calendar month, provided that the first Collection Period shall be the period
beginning on the Initial Cut-Off Date and ending on, but not including, the
first day of the calendar month immediately following the calendar month in
which the Closing Date occurs.
"Commission" means the United States Securities and Exchange
Commission.
"Computer Disk" means the computer disk generated by the
Servicer (or applicable Financing Originator acting as subservicer as described
in Section 5.05), which provides information relating to Contracts in the
Contract Pool and which was used by such party in selecting the related
Contracts for conveyance and inclusion in such Contract Pool, and
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includes the master file and the history file as well as servicing information
with respect to such Contracts.
"Contract" means each End-User Contract and each Vendor Loan
listed on any Schedule of Contracts but, unless otherwise specified herein,
shall not refer to any Secondary Contract.
"Contract Assets" means, with respect to any Contracts
(including Substitute Contracts) and related assets conveyed or being conveyed
to the Depositor pursuant to a Substitution Assignment Agreement, the VFC
Assignment or the Non-VFC Purchase Agreement, and concurrently conveyed or being
conveyed by the Depositor to the Trust pursuant to this Pooling Agreement or a
Substitution Transfer Agreement, all right, title and interest of Financial or
the VFC Trust, as the case may be, in, to and under:
(i) such Contracts, and all monies due or to become due
in payment of such Contracts on and after the relevant
Cut-Off Date, and including Scheduled Payments due but not
yet received prior to the relevant Cut-Off Date and all
other Scheduled Payments (including in respect of any
Guaranteed Residual Investment) due or becoming due on or
after the relevant Cut-Off Date, any Prepayments, any
payments in respect of a casualty or early termination, any
Liquidation Proceeds received with respect thereto, but
excluding any Scheduled Payments both due and actually
received prior to the related Cut-Off Date and any Excluded
Amounts;
(ii) the Financed Items related to such Contracts and,
in the case of any Vendor Loan, related Applicable Security,
including all proceeds from any sale or other disposition of
such Financed Items (but subject to the exclusion and
release herein of Excluded Amounts) and any Guaranteed
Residual Investment;
(iii) the related Contract Files;
(iv) all payments made or to be made in the future with
respect to such Contracts or the Obligor thereunder under
any Vendor Agreements with the relevant Financing Originator
and under any guarantee or similar credit enhancement with
respect to such Contracts;
(v) all Insurance Proceeds with respect to each such
Contract; and
(vi) all income from and proceeds of the foregoing.
"Contract File" means, with respect to each Contract, the
fully executed original counterpart (for UCC purposes) of the Contract, the
original certificate of title or other title document with respect to the
related Equipment (if applicable), and otherwise such documents or electronic
entries, if any, that the Servicer (or applicable Financing Originator) keeps on
file in accordance with Customary Policies and Procedures evidencing ownership
of such Equipment (if applicable), and all other documents originally delivered
to the Financing Originator or held by the Servicer (or subservicer under
Section 5.05) with respect to any Contract.
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"Contract File Locations" means, with respect to Newcourt
Communications Finance Corporation, New Jersey, with respect to CIT Technology
Financing Services, Inc., New Jersey, and with respect to Financial, Texas,
Illinois, Georgia, New Jersey, and Connecticut.
"Contract Pool" means, as of any date of determination, the
aggregate of the Contracts which have been conveyed to the Trust and which
constitute as of such date Trust Assets under the terms and provisions hereof.
"Contract Pool Principal Balance" means with respect to any
Payment Date, the sum of the Contract Principal Balances (computed as of the
related Accounting Date) for all Contracts.
"Contract Principal Balance" means as of any Accounting Date,
with respect to any Contract, the present value of the unpaid Scheduled Payments
due on such Contract after such Accounting Date (excluding all Scheduled
Payments due on or prior to, but not received as of, such Accounting Date, as
well as any Scheduled Payments due after, but received as of, such Accounting
Date), after giving effect to any Prepayments received on or prior to such
Accounting Date, discounted monthly at the Discount Rate (assuming, for purposes
of such calculation, that each Scheduled Payment is due on the last day of the
applicable Collection Period); provided that, for purposes of computing the
Total Principal Payment Amount or the Required Cash Collateral Amount for a
given Payment Date (as well as all Payment Dates thereafter), the Contract
Principal Balance of any Contract which became a Defaulted Contract during the
related Collection Period or was required to be purchased by Financial as of the
last day of the related Collection Period in accordance with Section 5.01 of the
Purchase and Sale Agreement, will be deemed to be zero on and after the last day
of such Collection Period.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Servicer or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Corporate Trust Office" means the office of the Owner Trustee
from which its corporate trust business shall be administered, which initially
shall be Chase Manhattan Bank USA, National Association, 0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000 or such other office at such other address in the
State of Delaware as the Owner Trustee may designate from time to time by notice
to the Equity Certificateholder, the Servicer, the Administrator and the
Depositor.
"CPR" means a conditional prepayment rate which assumes that a
fraction of the outstanding Contract Pool is prepaid on each Payment Date and
also assumes that all Contracts have the same initial principal balance and
amortize at the same rate.
"CSA" means each conditional sales agreement, including, as
applicable, schedules, subschedules, supplements and amendments to a master
conditional sales agreement, pursuant to which specified assets were
conditionally sold to an Obligor at specified monthly, quarterly, semi-annual or
annual payments.
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"Current Collection Period Pledged Revenues" means, with
respect to any Payment Date, the amount of Pledged Revenues in the Collection
Account as of the immediately preceding Deposit Date which were received by the
Servicer after the end of the related Collection Period, including all
Liquidation Proceeds so received but excluding any Purchase Amount.
"Customary Policies and Procedures" means, with respect to any
Contract Assets, the customary standards, policies and procedures of the
relevant Financing Originator with respect to such Contract Assets in effect at
the time of the Cut-Off Date with respect thereto, as the same may be changed
from time to time (provided that any such change does not materially impair (i)
the collectibility of the related Contract, or (ii) the Servicer's ability to
perform its obligations under this Agreement with respect thereto).
"Cut-Off Date" means either or both (as the context may
require) the Initial Cut-Off Date and any Substitution Cut-Off Date, as
applicable to the Contract or Contracts in question.
"Date of Processing" means, with respect to any transaction or
Pledged Revenue, the date on which such transaction or Pledged Revenue is first
recorded (and, in the case of a transaction or Pledged Revenue related to a
particular Contract, identified as to such particular Contract) on the related
Financing Originator's or the Servicer's computer master file of Contracts
(without regard to the effective date of such recordation).
"Defaulted Contract" means a Contract in the Contract Pool
with respect to which there has occurred one or more of the following: (i) all
or some portion of any Scheduled Payment under the Contract (constituting at
least ten percent (10%) of such Scheduled Payment due) is more than 180 days
delinquent from its original due date (or, with respect to a Contract for which
there exists available payment recourse to a Vendor to satisfy the amount in
default, and which recourse was not yet available (pursuant to the contractual
terms thereof) or had not yet been paid by the Vendor prior to the end of such
180 day period, then at such time thereafter as the Vendor shall have failed to
pay such defaulted amount in accordance with the provisions of the Program
Agreement, Vendor Assignment or other agreement with the Vendor providing such
recourse), (ii) the Servicer has determined in its sole discretion, in
accordance with Customary Policies and Procedures (and taking into account any
available Vendor recourse), that such Contract is not collectible; or (iii) the
End-User under such Contract (or applicable Vendor, if such Contract is a Vendor
Loan) becomes the subject of an Insolvency Event.
"Delinquent Contract" means any Contract as to which all or a
portion of a Scheduled Payment (constituting at least ten percent (10%) of such
Scheduled Payment due) is more than 60 days delinquent from its original due
date.
"Deposit Date" means the Business Day immediately preceding
each Payment Date.
"Depositor" means the "Depositor" as defined in the preamble
hereto, or any successor entity thereto.
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"Determination Date" means, with respect to any Payment Date,
the second Business Day prior to such Payment Date.
"Discount Rate" means 7.624%.
"Dollar" and "$" means lawful currency of the United States of
America.
"Eligible Contract" means each Contract owned (prior to its
conveyance by a TCC Financing Originator to Financial under the VFC Conveyancing
Agreement or the Non-VFC Conveyancing Agreement, as the case may be, if a TCC
Contract, prior to its conveyance by Financial to the Depositor under the VFC
Purchase Agreement or the Non-VFC Purchase Agreement, as the case may be, if a
Financial Contract, and prior to its conveyance by the VFC Trust to the
Depositor pursuant to the VFC Assignment, if a VFC Contract) by a TCC Financing
Originator, Financial or the VFC Trust, as the case may, and with respect to
which each of the following is true (to the extent applicable to such type of
Contract) at the time of its conveyance to the Trust on the Closing Date (or
Substitution Transfer Date, as applicable):
(a) the information with respect to the Contract, any
Secondary Contract securing the obligations under such
Contract, and the Financed Items related to the Contract,
delivered to the Servicer by or at the direction of
Financial under the Substitute VFC Purchase Agreement or the
Non-VFC Purchase Agreement, as the case may be, or by or at
the direction of the VFC Trust pursuant to the VFC
Assignment is true and correct in all material respects;
(b) immediately prior to the transfer of such Contract
and any related Equipment (or security interest therein) or
Applicable Security to the Depositor (and the Depositor's
concurrent transfer thereof to the Trust), such Contract was
owned by Financial or the VFC Trust (and by the Depositor
following the transfer by Financial or the VFC Trust) free
and clear of any adverse claim, other than Permitted Liens;
and immediately prior to the transfer of such Contract (if a
TCC Contract) and any related Equipment (or security
interest therein) or Applicable Security by the applicable
TCC Financing Originator to Financial, such Contract was
owned by the applicable TCC Financing Originator free and
clear of any adverse claim, other than with respect to
Permitted Liens;
(c) the Contract is neither a Defaulted Contract nor a
Delinquent Contract;
(d) no provision of the Contract has been waived,
altered or modified in any material respect, except as
indicated in the Contract File;
(e) the Contract is a valid and binding payment
obligation of the Obligor and is enforceable in accordance
with its terms (except as may be limited by applicable
Insolvency Laws and the availability of equitable remedies);
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(f) the Contract is not subject to litigation, or to
rights of rescission, setoff, counterclaim or defense and,
to Financial's or the Servicer's knowledge, no such rights
have been asserted or threatened with respect to the
Contract;
(g) the Contract, at the time it was made, had been
originated in compliance (in all material respects) with
applicable law, and did not violate the laws of the United
States or any state in any material respect;
(h) (i) the Contract and any related Financed Item or
interest therein (other than Excluded Residual Investments)
have not been sold, transferred, assigned or pledged by the
relevant Financing Originator, Financial (in respect of TCC
Contracts) or the VFC Trust (in the case of VFC Contracts)
to any other Person (other than (a) the sale of Contracts
and any related financed or interest therein to Financial or
to the Depositor and then the VFC Trust and (b) the financed
sale of Equipment to an End-User effected through an
End-User Contract), and (ii) if such Contract finances
Equipment, either (A) such Contract is secured by a fully
perfected lien or ownership interest in favor of the
relevant Financing Originator or, in the case of Equipment
relating to the VFC Contracts, the Depositor, on or in
respect of the related Equipment (other than as contemplated
by the Minimum Value Filing Exception), or, if the Contract
is a Vendor Loan, the Vendor Loan is secured by a fully
perfected lien or ownership interest in favor of the
relevant Financing Originator or the VFC Trust in the
related Applicable Security, or (B) in the case of such a
Contract secured by a Vehicle, within 90 calendar days of
the origination or acquisition of such Contract by the
relevant Financing Originator all applicable state
registration or recording procedures were initiated, and the
Financing Originator's interest in such Vehicle will be so
noted or recorded within 180 days of such acquisition or
origination, or a certificate of title or similar evidence
of recordation on which the Financing Originator's interest
has been noted has been obtained;
(i) if the Contract constitutes an "instrument" or
"chattel paper" for purposes of the UCC, there is not more
than one "secured party's original" counterpart of the
Contract and such original counterpart is in the Contract
File;
(j) all filings (including filings of UCC financing
statements) necessary (i) in respect of Contracts consisting
of TCC Contracts, to evidence or perfect the conveyance or
transfer of the relevant TCC Financing Originator's
ownership interest in the TCC Contract, and the TCC
Financing Originator's corresponding interest in the related
Equipment or Applicable Security, as applicable, to
Financial, and (ii) in respect of all Contracts to evidence
or perfect the conveyance or transfer of Financial's or the
VFC Trust's ownership interest in the Contract, and
Financial's corresponding interest in the related Equipment
or Applicable Security, as applicable, to the Depositor (as
well as the concurrent conveyance of such property
hereunder, other than ownership interests in Equipment, from
the Depositor to the Trust), have been made or provided for
in all appropriate jurisdictions; provided, that UCC
financing statement filings with respect to Equipment or
Applicable Security which name the Financing
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Originator as secured party have not been amended to
indicate either Financial (with respect to TCC Contracts),
the Depositor or the Trust as an assignee (although separate
UCC filings were made against the relevant Financing
Originator's interest in Applicable Security in each
jurisdiction where a related Vendor is located); and
provided further, that only filings in the State of New
Jersey have been made in favor of the Trust as secured party
against the Depositor as debtor describing as collateral
(among other things) the Depositor's ownership interest in
Equipment, in respect of the security interest in Equipment
owned by the Depositor which has been granted to the Trust
pursuant to Section 2.01 hereof.
(k) the Obligor is not, to Financial's knowledge,
subject to bankruptcy or other insolvency proceedings;
(l) the Obligor's billing address is in the United
States or Puerto Rico, and the Contract is a U.S.
dollar-denominated obligation;
(m) the Contract does not require the prior written
notification to or consent of an Obligor or contain any
other restriction on the transfer or assignment of the
Contract, other than (i) certain Contracts the Contract Pool
Principal Balance of which, in proportion to the Contract
Pool Principal Balance of all Contracts in the Contract Pool
at the time of conveyance, is not material, that require
notifications of the assignment to the Obligor, which
notification will be given by the Servicer not more than 10
days following the Closing Date (or Substitution Transfer
Date in the case of a Substitution Contract) (it being
understood that if such notifications are not so timely
obtained, the affected Contract shall be deemed and treated
for all purposes of this Pooling Agreement and the other
Transaction Documents as not having complied with this
criteria for an Eligible Contract as of the Closing Date or
Substitution Transfer Date, as the case may be), and (ii)
certain Contracts that require the consent of the related
Obligor, which consent shall have been obtained by the
Servicer not later than 10 days following the Closing Date
or Substitution Transfer Date, as the case may be;
(n) either (x) the obligations of the related Obligor
under such Contract are irrevocable and unconditional and
non-cancelable (it being understood that Contracts which are
prepayable in accordance with their terms shall not, by
virtue of that fact alone, be deemed revocable, conditional
or cancelable) or, if not irrevocable and unconditional,
have the benefit of a Vendor Guarantee or (y) with respect
to certain Leases with Lessees that are governmental
entities or municipalities, if such Lease is canceled in
accordance with its terms, either (1) the Vendor that
assigned such Lease to the applicable Financing Originator
is unconditionally obligated to repurchase such lease from
the Financing Originator for a purchase price not less than
the Contract Principal Balance of such Lease (as of the date
of cancellation), or (2) pursuant to the Purchase and Sale
Agreements, Financial has indemnified the Depositor against
such cancellation in an amount at least equal to the
Contract Principal Balance of
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such Lease (as of the date of cancellation), less any
amounts paid by the Vendor pursuant to clause (1);
(o) no selection procedure adverse to the interests of
the Trust or the Equity Certificateholder was used in
selecting the Contract for the Contract Pool;
(p) the Obligor under the Contract is required to
maintain casualty insurance or to self-insure with respect
to the related Equipment in accordance with Customary
Policies and Procedures;
(q) the Contract constitutes chattel paper, an account,
an instrument or a general intangible, in each case as
defined under the UCC;
(r) the Contract is not a "consumer lease" as defined
in Section 2A-103(1)(e) of the UCC;
(s) if such Contract is a Lease, to the best knowledge
of the relevant Financing Originator, the Lessee thereunder
has accepted and has had reasonable opportunity to inspect
the related Equipment;
(t) except as provided in clause (n) above, the
Contract is not subject to any guarantee by the Financing
Originator, nor has the Financing Originator established any
specific credit reserve with respect to the related Obligor;
(u) if such Contract is a Lease, such Lease is a
"triple net lease" under which the Obligor is responsible
for the maintenance, taxes and insurance with respect to the
related Equipment in accordance with general industry
standards applicable to such item of Equipment;
(v) if such Contract is a Vendor Loan, such Vendor Loan
is secured by an Eligible Secondary Contract having an
aggregate Contract Principal Balance for such Eligible
Secondary Contract (determined as of the relevant Cut-Off
Date for such Vendor Loan) not less than the outstanding
principal amount of such Vendor Loan;
(w) such Contract is not an obligation of the United
States of America or an agency, department, or
instrumentality of the United States of America;
(x) such Contract contains provisions customary to
similar financing agreements for Financed Items, which
provisions are sufficient and enforceable (except as may be
limited by applicable Insolvency Laws and the availability
of equitable remedies) to enable the relevant Financing
Originator (or its assignees, including the VFC Trust, the
Depositor and the Trust) to realize against the Financed
Items related thereto (to the extent such Financed Items
secure or support the payment of the Contract);
(y) if the Obligor in respect of such Contract is a
state or local governmental entity or municipality, the
conveyance of such a Contract under and
-18-
pursuant to the Transaction Documents does not violate
applicable state or municipal laws or regulations (if any)
restricting or prohibiting the assignment of claims against
or obligations of such Obligor; and
(z) such Contract was originated or acquired by the
applicable Financing Originator in accordance with its
customary policies and procedures as in effect at the time
of such origination or acquisition.
"Eligible Investments" means any of the following:
(i) direct obligations of, and obligations fully guaranteed
by, the United States of America, the Federal Home Loan Mortgage
Corporation (if then rated Aaa by Moody's), the Federal National
Mortgage Association, or any agency or instrumentality of the
United States of America the obligations of which are backed by
the full faith and credit of the United States of America and
which are non-callable;
(ii) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by, or federal funds sold by any
depository institution or trust company (including the Trustees
or any Affiliate of the Trustees, acting in their commercial
capacity) incorporated under the laws of the United States of
America or any state thereof or the District of Columbia (or any
domestic branch or agency of a foreign bank) and subject to
supervision and examination by federal and/or state authorities,
so long as, at the time of such investment or contractual
commitment providing for such investment, the commercial paper or
other short-term debt obligations of such depository institution
or trust company have been rated at least P-1 or higher from
Moody's and A-1+ from Standard & Poor's; or any other demand or
time deposit or certificate of deposit which is fully insured by
the Federal Deposit Insurance Corporation and which is rated at
least P-1 by Moody's;
(iii) repurchase obligations with respect to any security
described in either clause (i) or (ii) above and entered into
with any institution whose commercial paper is at least rated P-1
from Moody's and at least A-1+ by Standard & Poor's;
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the
United States of America or any State thereof which have a credit
rating of at least A2 or P-1 from Moody's and at least AAA from
Standard & Poor's at the time of such investment;
(v) commercial paper (which may be issued by CIT) having a
rating of at least P-1 from Moody's and at least A-1+ from
Standard & Poor's at the time of such investment;
(vi) money market funds which are rated Aaa by Moody's and
at least AAAm or AAAm-G by Standard & Poor's, including funds
which meet such rating requirements for which the Trustees or an
affiliate of the Trustees serves as an investment advisor,
administrator, shareholder servicing agent and/or custodian or
subcustodian, notwithstanding that (i) such Trustee or an
affiliate of such Trustee charges and collects
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fees and expenses from such funds for services rendered, (ii)
such Trustee charges and collects fees and expenses for services
rendered pursuant to this instrument, and (iii) services
performed for such funds and pursuant to this instrument may
converge at any time. (The Seller and the Servicer specifically
authorize such Trustee or an affiliate of such Trustee to charge
and collect all fees and expenses from such funds for services
rendered to such funds, in addition to any fees and expenses such
Trustee may charge and collect for services rendered pursuant to
this instrument); and
(vii) any other investments approved by the Rating Agencies.
"Eligible Repurchase Obligations" means repurchase obligations
with respect to any security that is a direct obligation of, or fully guaranteed
by, the United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United
States of America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (c)(ii) of the
definition of Eligible Investments.
"Eligible Secondary Contract" shall mean each Secondary Contract
(i) that satisfies all the criteria set forth in the
definition of "Eligible Contract" except clauses (b), (h) (with
respect to ownership by the Financing Originator of the Contract)
and (w) thereof, and except that the term "Obligor" shall mean
"End-User" in all such criteria;
(ii) with respect to which Secondary Contract and the
proceeds thereof the relevant Financing Originator (or, in the
case of VFC Contracts, the VFC Trust, as assignee) has a duly
perfected first priority lien; and
(iii) with respect to which (A) if such Secondary Contract
secures a Vendor Loan constituting a TCC Contract, the transfer
of the TCC Financing Originator's security interest in such
Secondary Contract and the proceeds thereof to Financial, the
transfer of Financial's interest so acquired to the Depositor,
and, if applicable, the Depositor's transfer of its interest
therein to the VFC Trust and the VFC Trust's transfer of such
interest back to the Depositor, is effective to create in favor
of the Depositor a lien therein and such lien has been duly
perfected, or (B) if the Secondary Contract instead secures a
Vendor Loan constituting an Financial Contract, then the transfer
of Financial's security interest in such Secondary Contract and
the proceeds thereof to the Depositor, and if applicable, the
Depositor's transfer of its interest therein to the VFC Trust and
the VFC Trust's transfer of such interest back to the Depositor,
is effective to create in favor of the Depositor a lien therein
and such lien has been duly perfected.
"Eligible Servicer" means TCC, the Trustees or any other Person
qualified to act as Servicer of the Contracts under applicable federal and state
laws and regulations, which Person services not less than $100,000,000 in
outstanding principal amount of equipment financing contracts.
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"End-User" shall mean any party that uses the Financed Items pursuant
to an End-User Contract.
"End-User Contract" shall mean any CSA, Secured Note, Lease, IPA, or
other Financing Agreement covering Financed Items originated or acquired by an
Originator.
"Equipment" means with respect to any Contract, the tangible assets
constituting "goods" within the meaning of the UCC, in each case financed or
leased by an Obligor pursuant to a Contract, or which otherwise provide security
for the payment of amounts payable thereunder.
"Equity Certificate" has the meaning specified in the Trust Agreement.
"Equity Certificateholder" means the Person in whose name the Equity
Certificate is registered in the Certificate Register.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default" has the meaning specified in the Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended or
supplemented from time to time.
"Excluded Amounts" means (i) any collections on deposit in the
Collection Account or otherwise received by the Servicer on or with respect to
the Contract Pool or related Equipment, which collections are attributable to
any taxes, fees or other charges imposed by any Governmental Authority, (ii) any
collections representing reimbursements of insurance premiums or payments for
services that were not financed by the applicable Originator, (iii) collections
relating to security deposits, and (iv) collections representing Late Charges,
documentation fees, administrative charges or extension fees on any Contract, or
maintenance premiums in respect of related Equipment.
"Excluded Residual Investments" means Residual Investments, other than
Guaranteed Residual Investments.
"FDIC" shall mean the Federal Deposit Insurance Corporation, or any
successor thereto.
"Financed Items" means Equipment, Software, Services and other property
and services that are permitted to be financed under Contracts in accordance
with Customary Policies and Procedures of the applicable Financing Originator.
"Financial" means CIT Financial USA, Inc., a Delaware corporation.
"Financial Contract" means a Contract originated or acquired by
Financial (including without limitation any Contract originated or acquired by
Financial and transferred to
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the Depositor and by the Depositor to the VFC Trust prior to the Closing Date)
but which is not a TCC Contract.
"Financial Contract Assets" means Contract Assets relating to Financial
Contracts.
"Financing Agreement" means each financing agreement covering Financed
Items, other than a CSA, a Secured Note, a Lease or an IPA.
"Financing Originator" means any of the following as of the Closing
Date: CIT Technology Financing Services, Inc; Newcourt Communications Finance
Corporation; and Financial.
"Governmental Authority" means the United States of America, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to, government.
"Guaranteed Residual Investment" means each Residual Investment with
respect to which the Financing Originator may look to either the Vendor or to
the related Obligor on an End-User Contract constituting a Lease, and not just
the value of the related Equipment itself, to recover its full Residual
Investment.
"Holder" has the meaning specified in the Indenture.
"Indebtedness" means, with respect to any Person at any date, without
duplication, (a) all indebtedness of such person for borrowed money or for the
deferred purchase price of property or services (other than current liabilities
incurred in the ordinary course of business and payable in accordance with
customary trade practices) or which is evidenced by a note, bond, debenture or
similar instrument, (b) all obligations of such Person under capital leases, (c)
all obligations of such Person in respect of acceptances or letters of credit
issued or created for the account of such Person, (d) all liabilities secured by
any Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof, and (e) obligations
of such Person under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (a) through (d) above.
"Indenture" means the Indenture, dated as of the date hereof, between
the Issuer and the Indenture Trustee, as amended, supplemented or otherwise
modified from time to time.
"Indenture Trustee" means the Person acting as Indenture Trustee under
the Indenture, its successors in interest and any successor trustee under the
Indenture.
"Independent", when used with respect to any specified Person, means
such a Person who (i) is in fact independent of the Issuer, the Depositor or the
Servicer, (ii) is not a director, officer or employee of any Affiliate of the
Issuer, the Depositor or the Servicer, (iii) is not a person related to any
officer or director of the Issuer, the Depositor or the Servicer or any
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of their respective Affiliates, (iv) is not a holder (directly or indirectly) of
more than 10% of any voting securities of the Issuer, the Depositor or the
Servicer or any of their respective Affiliates, and (v) is not connected with
the Issuer, the Depositor or the Servicer as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
"Ineligible Contract" has the meaning specified in Section 7.06.
"Initial Class A-1 Principal Amount" means $200,000,000.
"Initial Class A-2 Principal Amount" means $356,000,000.
"Initial Class A-3 Principal Amount" means $306,000,000.
"Initial Class A-4 Principal Amount" means $132,549,665.
"Initial Class B Principal Amount" means $15,870,473.
"Initial Class C Principal Amount" means $21,160,631.
"Initial Class D Principal Amount" means $26,450,790.
"Initial Contract Assets" means those Contract Assets conveyed to the
Trust on the Closing Date.
"Initial Contract Pool Principal Balance" is $1,058,031,559.
"Initial Contracts" means those Contracts conveyed to the Trust on the
Closing Date.
"Initial Cut-Off Date" means September 1, 2000.
"Initial Principal Amount" means, when used in the context of a
reference to an individual Class of Notes, the initial principal amount
applicable to such Class as defined above.
"Insolvency Event" means, with respect to a specified Person, (a) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in an
involuntary case under any applicable Insolvency Law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
or similar official for such Person or for any substantial part of its property,
or ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or (b) the commencement by such Person of a voluntary case
under any applicable Insolvency Law now or hereafter in effect, or the consent
by such Person to the entry of an order for relief in an involuntary case under
such law, taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official for such Person or for any substantial
part of its property; or (c) or the making by such Person of any general
assignment for the benefit of creditors; or (d) the failure by such Person
generally to pay its debts as such debts become due; or (e) the admission by
such Person
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in writing of its inability generally to pay its debts when the same become due;
or (f) the taking of action by such Person in furtherance of any of the
foregoing.
"Insolvency Laws" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments, or similar debtor relief laws from time to time in effect affecting
the rights of creditors generally.
"Insurance Policy" means, with respect to any Contract, an insurance
policy covering physical damage to or loss of the related Equipment.
"Insurance Proceeds" means, depending on the context, any amounts
payable or any payments made, to the Servicer (or applicable Financing
Originator) under any Insurance Policy.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Investment Earnings" means, the investment earnings (net of losses and
investment expenses) on amounts on deposit in the Collection Account, Note
Distribution Account and the Cash Collateral Account.
"IPA" means each installment payment agreement, including as
applicable, schedules, subschedules, supplements and amendments, pursuant to
which the relevant Originator financed the purchase or acquisition of specified
assets by an Obligor for specified monthly, quarterly, semiannual or annual
payments.
"Issuer" is defined in the preamble hereto.
"Late Charges" means any late payment fees paid by Obligors on
Contracts.
"Lease" means each agreement constituting a "lease" within the meaning
of Section 2A-103 of the UCC, and including, as applicable, schedules,
subschedules, supplements and amendments to a master lease, pursuant to which
the Originator, as lessor, leased specified assets to a Lessee at a specified
monthly, quarterly, semiannual or annual rental.
"Lessee" means, with respect to any Lease, the Obligor with respect to
such Lease.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), equity
interest, participation interest, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional transfer or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing.
"Liquidation Expenses" means, with respect to any Defaulted Contract,
the aggregate amount of all out-of-pocket expenses reasonably incurred by the
Servicer (including
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amounts paid to or expenses incurred by any subservicer, other than subservicing
fees, if any) in accordance with Customary Policies and Procedures in connection
with the repossession, refurbishing and disposition of any related Equipment,
and other out-of-pocket costs related to the liquidation of any such Equipment,
including reasonable attorneys fees incurred in the attempted collection of any
amount owing pursuant to such Defaulted Contract, and including amounts
determined by the Servicer in its reasonable discretion as payable in respect of
any sales, use, personal property or other taxes assessed or to be assessed on
repossessed or liquidated Equipment.
"Liquidation Loss" means, with respect to any Defaulted Contract, the
amount, if any, by which (a) the Required Payoff Amount for such Defaulted
Contract as of the date such Contract became a Defaulted Contract exceeds (b)
that portion of the Liquidation Proceeds for such Defaulted Contract allocated
to the Issuer.
"Liquidation Proceeds" means, with respect to a Defaulted Contract,
proceeds from the transfer, lease or re-lease of the related Financed Items,
Insurance Proceeds, and any other recoveries with respect to such Defaulted
Contract and the related Financed Items (including, without limitation, amounts
received pursuant to a Program Agreement), but net of Liquidation Expenses, Late
Charges, amounts payable to a Vendor in respect of (and in amounts not
exceeding) amounts previously paid by such Vendor in respect of such Contract
under Vendor recourse provisions, and amounts, if any, so received that are
required to be refunded to the Obligor on such Contract.
"Material Adverse Effect" means, with respect to any event or
circumstance, a material adverse effect on:
(i) the ability of TCC, Financial any Financing Originator, the VFC
Trust, the Depositor, the Trust or the Servicer to perform in all
material respects its obligations under this Agreement or any other
Transaction Document;
(ii) the validity or enforceability of this Agreement, any other
Transaction Document, or the Contracts, or the collectibility of the
Contracts; or
(iii) the status, existence, perfection, priority or enforceability
of the Trust's interest in the Contracts and the other Trust Assets.
"Material Modification" means a termination or release (including
pursuant to prepayment), or an amendment, modification or waiver, or equivalent
similar undertaking or agreement, by the Servicer with respect to a Contract
which would not otherwise be permitted under the standards and criteria set
forth in Sections 5.08, 5.09 and/or 5.10 hereof.
"Maturity Date" means, as applicable, the Class A-1 Maturity Date,
Class A-2 Maturity Date, Class A-3 Maturity Date, Class A-4 Maturity Date, Class
B Maturity Date, Class C Maturity Date, or Class D Maturity Date.
"Minimum Value Filing Exception" means the variation from the relevant
Financing Originator's normal policies and practices with respect to filing UCC
financing
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statements against an Obligor describing Equipment which is the subject of a
Contract, in each case as set forth in Exhibit J hereto.
"Monthly Report" has the meaning specified in Section 9.01.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
thereto.
"Non-VFC Contract Assets" means the Contract Assets pertaining to the
Non-VFC Contracts.
"Non-VFC Contracts" means Contracts conveyed by Financial to the
Depositor pursuant to the Non-VFC Purchase Agreement, as listed in Schedule A to
the Non-VFC Purchase Agreement.
"Non-VFC Conveyancing Agreement" means the Non-VFC Conveyancing
Agreement, dated as of September 1, 2000, by and among the Financing Originators
and Financial, as the same may be amended, supplemented, restated or otherwise
modified from time to time.
"Non-VFC Purchase Agreement" means the Non-VFC Purchase and Sale
Agreement, dated September 1, 2000, by and among Financial, as the seller, and
the Depositor, as purchaser, as the same may be amended, supplemented, restated
or otherwise modified from time to time.
"Note" means any one of the notes of the Trust of any Class executed
and authenticated in accordance with the Indenture.
"Note Distribution Account" means the account established and
maintained as such pursuant to Section 7.01.
"Note Interest Distributable Amount" means to the extent applicable,
the sum of the Class A-1 Interest Distributable Amount, the Class A-2 Interest
Distributable Amount, the Class A-3 Interest Distributable Amount, the Class A-4
Interest Distributable Amount, the Class B Interest Distributable Amount, the
Class C Interest Distributable Amount and the Class D Interest Distributable
Amount.
"Note Principal Distributable Amount" means with respect to any Payment
Date, the Total Principal Payment Amount, provided, however, that in no event
may the Note Principal Distributable Amount with respect to any Payment Date
exceed the Principal Amount of the Notes immediately prior to such Payment Date.
"Note Register" has the meaning given such term in Section 2.04 of the
Indenture.
"Noteholder" means any registered holder of a Note.
"Obligor" means, with respect to any Contract, the Person or Persons
obligated to make payments with respect to such Contract, including any
guarantor thereof (and including,
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with respect to a Contract consisting of a Vendor Loan, the Vendor obligated in
respect of such Vendor Loan).
"Officer's Certificate" means, with respect to any Person, a
certificate signed by an authorized officer of such Person and delivered to the
party entitled to receipt thereof under any applicable Transaction Document.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel (including internal counsel) for the Depositor or the Servicer and who
shall be reasonably acceptable to the Trust and the Indenture Trustee.
"Originator" means, with respect to each Contract, the party that is
the original lessor or financing party thereunder.
"Outstanding" has the meaning specified in the Indenture.
"Owner Trustee" means Chase Manhattan Bank USA, National Association,
not in its individual capacity, but solely as Owner Trustee under the Trust
Agreement, its successors in interest and any successor owner trustee under the
Trust Agreement.
"Payment Date" shall mean the twentieth (20th) day of each calendar
month or, if such twentieth (20th) day is not a Business Day, the next
succeeding Business Day, with the first such Payment Date hereunder being
October 20, 2000.
"Paying Agent" means any Person described as such in Section 7.04(b).
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Liens" means
(a) with respect to Contracts in the Contract Pool:
(i) Liens for state, municipal or other local taxes if such taxes
shall not at the time be due and payable or if the Depositor shall
currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto;
(ii) Liens in favor of Financial created by a TCC Financing
Originator pursuant to the VFC Conveyancing Agreement or the Non-VFC
Conveyancing Agreement, as the case may be, or Liens in favor of the
Depositor created pursuant to the Purchase and Sale Agreements or Liens
in favor of the VFC Trust created pursuant to the VFC Pooling
Agreement, in each case transferred to the Trust pursuant hereto;
(iii) Liens in favor of the Trust created pursuant to this
Agreement; and
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(iv) Liens in favor of the Indenture Trustee created pursuant to
the Indenture and/or this Agreement; and
(b) with respect to the related Equipment:
(i) materialmen's, warehousemen's, mechanics' and other liens
arising by operation of law in the ordinary course of business for sums
not due;
(ii) Liens for state, municipal or other local taxes if such taxes
shall not at the time be due and payable or if the Depositor shall
currently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate
reserves with respect thereto;
(iii) Liens in favor of Financial created by a TCC Financing
Originator pursuant to the VFC Conveyancing Agreement or the Non-VFC
Conveyancing Agreement, as the case may be, or Liens in favor of the
Depositor created pursuant to the Purchase and Sale Agreements, in each
case transferred to the Trust pursuant hereto or Liens in favor of the
Depositor created pursuant to the VFC Purchase and Sale Agreement;
(iv) Liens in favor of the Trust created pursuant to this
Agreement;
(v) Liens in favor of an Originator which have been transferred to
the applicable Financing Originator and pursuant to the Purchase and
Sale Agreements by such Financing Originator to the Depositor (through
Financial and the VFC Conveyancing Agreement or the Non-VFC
Conveyancing Agreement, as the case may be, in the case of TCC
Financing Originators, and through Financial, the Depositor and the VFC
Trust and the VFC Assignment in the case of the VFC Contracts) and in
each case transferred to the Trust pursuant hereto;
(vi) Liens in favor of the Indenture Trustee crated pursuant to the
Indenture and/or this Agreement;
(vii) (A) interests in favor of Dell Financial Services, L.P.
("DFS") which are subject to the prior payment of all Obligor
obligations in respect of Scheduled Payments on the related Contract
and which have been transferred by DFS along with the related Contract
to its limited purpose affiliate, DFS-SPV, L.P., and (B) interests in
favor of a Vendor which are subject to the prior payment of all Obligor
obligations in respect of Scheduled Payments on the related Contract;
and
(viii) Liens granted by the End-Users which are subordinated to the
interest of the Trust in such Equipment.
"Person" means any individual, corporation, estate, partnership,
limited liability company, joint venture, association, joint stock company,
trust (including any beneficiary
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thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Servicer or any member of the Controlled Group may have any
liability.
"Pledged Revenues" means (i) all Scheduled Payments on the Contracts
received on or after the Cut-Off Date (excluding the Excluded Amounts); (ii) any
Prepayments received on the Contracts on or after the Cut-Off Date (other than
(a) in the case of a Lease, any portion thereof allocated to the Depositor, or
(b) in the case of a Prepaid Contract for which a substitution has been made in
accordance with Section 2.04 of this Agreement, that portion thereof to which
the Depositor is entitled pursuant to Section 2.04); (iii) the Purchase Amount
of any Contracts purchased by Financial in accordance with Section 7.06 of this
Agreement (other than any portion thereof attributable in the case of a Lease to
the Excluded Residual Investment of the related Equipment); (iv) the amount paid
by Financial or the Depositor to purchase the Contracts pursuant to Section 7.08
of this Agreement; (v) that portion of the Liquidation Proceeds received in
respect of any Contracts and the disposition of the related Equipment on or
after the Cut-Off Date and allocated to the Trust; and (vi) any Investment
Earnings on the investment of amounts credited to the Collection Account and the
Note Distribution Account. Pledged Revenues shall not include any amounts
received with respect to any Excluded Residual Investment.
"Pooling Agreement" means this Pooling and Servicing Agreement, as
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Prepaid Contract" means any Contract that has terminated or been
prepaid in full prior to its scheduled expiration date (including because of a
Casualty Loss), other than a Defaulted Contract.
"Prepayment" means with respect to any Collection Period for any
Contract, a partial or full prepayment of amounts due and owing under such
Contract.
"Principal Amount" means, with respect to a Class of Notes, the
aggregate Initial Principal Amount thereof reduced by (i) the aggregate amount
of any payments applied in reduction of such principal amount and (ii) the
aggregate amount of any payments then on deposit in the Note Distribution
Account, if any, for such Class of Notes established in accordance with the
Indenture and to be applied in reduction of such principal amount in accordance
with such Indenture.
"Principal Deficiency Amount" means, with respect to any Payment Date,
the excess, if any, of (i) the Principal Amount of the Notes (after giving
effect to all distributions of principal from the Available Pledged Revenues
(determined without regard to clause (iv) of the definition thereof) on such
Payment Date), over (ii) the Contract Pool Principal Balance as of the related
Accounting Date.
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"Program Agreement" means each vendor finance program agreement
pursuant to which End-User Contracts originated by a Vendor are assigned to the
applicable Financing Originator.
"Prospectus" has the meaning given such term in the Underwriting
Agreement.
"Purchase Amount" means, with respect to Ineligible Contracts, on any
date of determination, the aggregate Required Payoff Amount for such Ineligible
Contracts as of the related Accounting Date.
"Purchase and Sale Agreements" means, collectively, the Non-VFC
Purchase Agreement, the Substitute VFC Purchase Agreement and the VFC Purchase
Agreement.
"Purchase Price" means, with respect to any Contract conveyed on the
Closing Date (or any Subsequent Transfer Date, as applicable), an amount equal
to the Contract Principal Balance of such Contract as of the applicable Cut-Off
Date.
"Qualified Eligible Investments" means Eligible Investments acquired by
the Indenture Trustee in its name and in its capacity as Indenture Trustee,
which are held by the Indenture Trustee in the Trust Accounts and with respect
to which (a) the Indenture Trustee has noted its interest therein on its books
and records, and (b) the Indenture Trustee has purchased such investments for
value without notice of any adverse claim thereto (and, if such investments are
securities or other financial assets or interests therein, within the meaning of
Section 8-102 of the UCC as enacted in the State of New York, without acting in
collusion with a securities intermediary in violating such securities
intermediary's obligations to entitlement holders in such assets, under Section
8-504 of such UCC, to maintain a sufficient quantity of such assets in favor of
such entitlement holders), and (c) either (i) such investments are in the
possession of the Indenture Trustee, or (ii) such investments, (A) if
certificated securities and in bearer form, have been delivered to the Indenture
Trustee, or in registered form, have been delivered to the Indenture Trustee and
either registered by the issuer in the name of the Indenture Trustee or endorsed
by effective endorsement to the Indenture Trustee or in blank; (B) if
uncertificated securities, the ownership of which has been registered to the
Indenture Trustee on the books of the issuer thereof (or another person, other
than a securities intermediary, either becomes the registered owner of the
uncertified security on behalf of the Indenture Trustee or, having previously
become the registered owner, acknowledges that it holds for the Indenture
Trustee); or (C) if securities entitlements (within the meaning of Section 8-102
of the UCC as enacted in the State of New York) representing interests in
securities or other financial assets (or interests therein) held by a securities
intermediary (within the meaning of said Section 8-102), a securities
intermediary indicates by book entry that a security or other financial asset
has been credited to the Indenture Trustee's securities account with such
securities intermediary. Any such Qualified Eligible Investment may be purchased
by or through the Indenture Trustee or any of its Affiliates.
"Qualified Institution" means (a) the corporate trust department of the
Indenture Trustee or (b) a depository institution organized under the laws of
the United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), (i) (A) which has (or the
parent corporation of which has) either (1) a long-term unsecured
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debt rating acceptable to the Rating Agencies or (2) a short-term unsecured debt
rating or certificate of deposit rating acceptable to the Rating Agencies or (B)
which is otherwise acceptable to the Rating Agencies and (ii) whose deposits are
insured by the FDIC.
"Rating Agency" as of any date means each of the nationally recognized
statistical rating organizations requested by the Depositor to provide ratings
on the Notes which is rating the Notes on such date.
"Rating Agency Condition" means, with respect to any action or series
of related actions or proposed transaction or series of related proposed
transactions, that each Rating Agency shall have notified the Depositor and the
Owner Trustee and the Indenture Trustee in writing that such action or series of
related actions or the consummation of such proposed transaction or series of
related transactions will not result in a Ratings Effect.
"Ratings Effect" means, with respect to any action or series of related
actions or proposed transaction or series of related proposed transactions, a
reduction or withdrawal of the rating of any outstanding Class with respect to
which a Rating Agency has previously issued a rating as a result of such action
or series of related actions or the consummation of such proposed transaction or
series of related transactions.
"Reallocated Principal" means, with respect to any Payment Date, an
amount equal to (a) the Total Principal Payment Amount, less (b) the sum of the
Class A Principal Payment Amount, the Class B Principal Payment Amount, the
Class C Principal Payment Amount and the Class D Principal Payment Amount.
"Record Date" means, with respect to any Payment Date, the Business Day
immediately preceding such Payment Date (so long as the Notes are in book-entry
form) or the last day of the prior calendar month (if certificated Notes have
been issued).
"Reference Banks" means four leading banks, selected by the Servicer
and identified to the Indenture Trustee, engaged in transactions in Eurodollar
deposits in the international Eurocurrency market and having an established
place of business in London.
"Related Collection Period Pledged Revenues" means, with respect to any
Payment Date, the amount of Pledged Revenues in the Collection Account as of the
Deposit Date which were received by the Servicer during the related Collection
Period, including all Liquidation Proceeds (other than in respect of Excluded
Residual Investment) so received but excluding any Purchase Amounts.
"Replaced Assets" has the meaning assigned such term in Section 2.04.
"Replaced Contracts" has the meaning assigned such term in Section
2.04.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however,
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that a failure to meet the minimum funding standard of Section 412 of the Code
and of Section 302 of ERISA shall be a Reportable Event regardless of the
issuance of any such waiver of the notice requirement in accordance with either
Section 4043(a) of ERISA or Section 412(d) of the Code.
"Required Cash Collateral Amount" means with respect to any Payment
Date, an amount equal to the greater of (a) the sum of (1) 6.50% of the Contract
Pool Principal Balance as of the related Accounting Date, plus (2) the excess,
if any of (A) the Aggregate Principal Amount of the Notes (after giving effect
to all distributions of principal on such Payment Date) over (B) the sum of
(a)the Contract Pool Principal Balance as of the related Accounting Date and (b)
$13,225,394; provided, that in no event will the Required Cash Collateral Amount
exceed the Aggregate Principal Amount of the Notes as of any date of
determination.
"Required Holders" means (i) prior to the payment in full of the Class
A Notes Outstanding, Class A-1 Noteholders, Class A-2 Noteholders, Class A-3
Noteholders, and/or Class A-4 Noteholders holding Class A-1 Notes, Class A-2
Notes, Class A-3 Notes, and/or Class A-4 Notes evidencing more than 66 2/3% of
the Aggregate Principal Amount of all Class A Notes Outstanding, (ii) from and
after the payment in full of the Class A Notes Outstanding, Holders of Class B
Notes holding Class B Notes evidencing more than 66 2/3% of the Aggregate
Principal Amount of all Class B Notes Outstanding, (iii) from and after the
payment in full of the Class B Notes Outstanding, Holders of Class C Notes
holding Class C Notes evidencing more than 66 2/3% of the Aggregate Principal
Amount of all Class C Notes Outstanding, and (iv) from and after the payment in
full of the Class C Notes Outstanding, Holders of Class D Notes holding Class D
Notes evidencing more than 66 2/3% of the Aggregate Principal Amount of all
Class D Notes Outstanding.
"Required Payoff Amount" means, with respect to any Collection Period
for a Contract, the sum of (i) the Scheduled Payment due in such Collection
Period, together with any Scheduled Payments due in prior Collection Periods but
not yet received, plus (ii) the Contract Principal Balance of such Contract
(after taking into account the Scheduled Payment due in such Collection Period
whether or not actually received).
"Requirements of Law" for any Person means the certificate of
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
order or determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether Federal, state or local (including, without limitation, usury laws, the
Federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
"Residual Investment" means, with respect to certain Leases, any funds
that the Financing Originator shall have advanced against all or any portion of
the anticipated residual value of the leased Equipment upon the expiration of
such Lease in accordance with its terms, and in excess of the discounted present
value of the rental payments due under such Lease.
"Responsible Officer" means, with respect to the Owner Trustee, any
officer in its Corporate Trust Administration Department (or any similar group
of a successor Owner Trustee)
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who has primary responsibility for administering the Trust or the Trust
Agreement, or to whom a corporate trust matter is referred because of knowledge
of, familiarity with, and authority to act with respect to a particular matter.
"Scheduled Payment" means, with respect to any Contract, the monthly or
quarterly or semi-annual or annual rent or financing (whether principal or
principal and interest) payment or other payment scheduled to be made by the
related Obligor under the terms of such Contract (or, if applicable, from a
Vendor or Obligor with respect to any Guaranteed Residual Investment); it being
understood that Scheduled Payments do not include any Excluded Amount or
Excluded Residual Investment, but does include Guaranteed Residual Investment.
"Schedule of Contracts" means the schedule of Contracts which are
conveyed to the Trust pursuant to this Agreement and the Transfer Agreement,
executed and delivered on the Closing Date, which schedule shall identify by any
reasonable means or designation the applicable Financing Originator with respect
to each Contract identified in such Schedule, and which includes the Contracts
listed on Exhibit C hereto. Such Schedule shall be supplemented from time to
time (a) by each subsequent Substitution Schedule of Contracts with respect to
each Substitution Transfer Agreement and related Substitute Contracts, which
Schedules of Contracts shall be deemed incorporated and made a part of the
original Schedule of Contracts on Exhibit C hereto; and (b) by the Servicer from
time to time to reflect the release by and removal from the Trust Assets of (i)
Contracts released in connection with (A) in respect of a Contract becoming a
Prepaid Contract in accordance herewith or having its final Scheduled Payment
paid in full in accordance with the Contract, or (B) in respect of a repurchase
from the Trust through payment of a Purchase Amount, and (ii) Replaced
Contracts. The comprehensive Schedule of Contracts is to be maintained by the
Servicer (with copies thereof, as the same shall be supplemented or amended as
described above, to be provided promptly to the Trust). With respect to the
Transfer Agreement (or Substitution Transfer Agreement, as applicable),
"Schedule of Contracts" shall mean the schedule attached thereto identifying the
Contracts being conveyed thereby.
"Schedule of Representations" means the Schedule of Representations and
Warranties set forth on Exhibit G hereto.
"Secondary Contract" shall mean, with respect to a Vendor Loan, each
End-User Contract securing such Vendor Loan.
"Secured Note" means each promissory note with a related security
interest evidenced by written agreement, pursuant to which the purchase of
specified assets by an Obligor or End-User is financed for specified monthly,
quarterly, semiannual or annual payments.
"Securities" means the Notes and the Certificate, or any of them.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Securityholders" means the Holders of the Notes or the Equity
Certificate.
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"Servicer" means initially TCC, until any Successor Servicer is
appointed pursuant to Article VIII hereof, and thereafter, means the Successor
Servicer so appointed.
"Servicer Advance" means, with respect to any Payment Date, the
amounts, if any, deposited by the Servicer in the Collection Account for such
Payment Date in respect of Scheduled Payments pursuant to Section 5.14 hereof.
"Servicer Default" has the meaning given such term in Section 8.01.
"Servicer Letter of Credit" has the meaning given such term in Section
7.01(b).
"Services" means, in connection with the financing of Software by an
Originator, the support and consulting services related to such Software, the
procurement of which was also financed by such Originator pursuant to a
Contract.
"Servicing Fee" has the meaning specified in Section 5.18 hereof.
"Servicing Fee Percentage" means 0.75%.
"Servicing Officer" means any officer of the Servicer involved in, or
responsible for, the administration and servicing of Contracts.
"Servicing Standard" means, with respect to the servicing and
collection activities of the Servicer concerning the Contract Assets, the
conduct of such activities with reasonable care, using that degree of skill and
attention that the relevant Financing Originator for such Contract Assets
exercises with respect to all comparable contracts and related assets that it
services for itself or others, and in accordance with Customary Policies and
Procedures and applicable law.
"Servicing Transfer" is defined in Section 8.02(b).
"Software" means the computer software programs financed or leased by
an Obligor pursuant to a Contract.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable value of the
Property of such Person in an orderly liquidation of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person is able
to realize upon its Property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in a business or a
transaction, for which such Person's property would constitute unreasonably
small capital.
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"Standard & Poor's" means Standard & Poor's Ratings Service, a division
of The McGraw Hill Companies, or any successor thereto.
"Subsidiary" means with respect to a Person, any corporation or other
entity of which securities or other ownership interests (whether directly or
indirectly in connection with contract rights) having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"Substitute Contract" means any Contract conveyed, assigned and
transferred by the Depositor or Financial to the Trust pursuant to Section 2.04.
"Substitute Contract Assets" means Contract Assets relating to
Substitute Contracts.
"Substitute Contract Qualification Conditions" means, with respect to
any Substitute Contract being transferred to the Trust pursuant to Section 2.04,
each of the following:
(1) the accuracy of each of the following statements as of the
related Cut-Off Date for such Contract:
(a) the Contract Principal Balance of such Substitute Contract
is not less than that of the related Replaced Contract[s];
(b) no adverse selection procedure shall have been employed in
the selection of such Substitute Contract from the Financing
Originator's portfolio;
(c) each such Substitute Contract satisfied the criteria set
forth in the definition of Eligible Contract herein; and
(d) if the Replaced Contract for which such Substitute Contract
is being substituted was a TCC Contract, then such Substitute
Contract is itself a TCC Contract, and if such Replaced Contract is
an Financial Contract, then such Substitute Contract is itself an
Financial Contract; and
(2) with respect to any such Substitute Contract which is replacing
a Replaced Contract of the type described in clause (a) of the
definition of Substitution Event (a "Type"), the condition that after
giving effect to such transfer, the Contract Pool Principal Balance of
all Substitute Contracts transferred to the Trust since the Closing
Date in respect of Replaced Contracts of the same Type shall not exceed
10% of the Contract Pool Principal Balance as of the Initial Cut-Off
Date.
"Substitute Transferred Assets" has the meaning assigned such term in
Section 2.04.
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"Substitute VFC Purchase Agreement" means the Substitute VFC Purchase
and Sale Agreement, dated as of September 1, 2000, among Financial and the
Depositor, as the same may be amended, supplemented, restated or otherwise
modified from time to time.
"Substitution Assignment Agreement" means, with respect to any
Substitute Contracts, the agreement between Financial and the Depositor pursuant
to which Financial transfers the identified Substitute Contracts to the
Depositor pursuant to the Non-VFC Purchase Agreement or the Substitute VFC
Purchase Agreement, as the case may be.
"Substitution Cut-Off Date" means the date specified as such for the
relevant Substitute Contracts, in the related Substitution Transfer Agreement.
"Substitution Event" means, with respect to any transfer of a related
Substitute Contract to the Trust under Section 2.04, the occurrence of any of
the following: (a) one or more Contracts identified in the related Substitution
Notice as being an intended Replaced Contract with respect to such Substitute
Contract, has become a Defaulted Contract, (b) one or more Contracts identified
in the related Substitution Notice as being an intended Replaced Contract with
respect to such Substitute Contract, has been subjected to a Material
Modification, (c) one or more Contracts identified in the related Substitution
Notice as being an intended Replaced Contract with respect to such Substitute
Contract, has become an Ineligible Contract, or (d) one or more Contracts
identified in the related Substitution Notice as being an intended Replaced
Contract with respect to such Substitute Contract, has become a Prepaid Contract
and the Trust has not yet received the related Prepayment.
"Substitution Notice" means, with respect to any transfer of Substitute
Contracts to the Trust pursuant to Section 2.04 (and the applicable Financing
Originator's corresponding conveyance and assignment of such Substitute
Contracts), a notice, which shall be given at least five days prior to the
related Substitution Transfer Date, identifying the Substitute Contracts to be
transferred, the Contract Principal Balance of such Substitute Contracts and the
related Substitution Event (with respect to an identified Contract or Contracts
then in the Contract Pool, which will upon such substitution become a Replaced
Contract) to which such Substitute Contract relates, with such notice to be
signed both by the Depositor and the applicable Financing Originator[s].
"Substitution Schedule of Contracts" means a schedule or list,
substantially in the form of the initial Schedule of Contracts delivered on the
Closing Date, but listing each Substitute Contract being transferred to the
Trust pursuant to a related Substitution Transfer Agreement, as well as the
related Replaced Contracts being removed from the existing Contract Pool by
virtue of such substitution.
"Substitution Transfer Agreement" means the agreement identified as
such in Section 2.04(b) hereof.
"Substitution Transfer Date" means any date on which Substitute
Contracts are transferred to the Trust.
"Successor Servicer" has the meaning given such term in Section
8.02(b).
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"Tax Opinion" means, with respect to any action, an Opinion of Counsel
to the effect that, for federal income tax purposes, (i) following such action
the Trust will not be deemed to be an association (or publicly traded
partnership) taxable as a corporation, (ii) following such action the Trust will
be disregarded as a separate entity from the Depositor, and (iii) such action
will not affect the tax characterization as debt of Notes of any outstanding
Class issued by the Trust for which an Opinion of Counsel has been provided that
such Notes are debt.
"TCC" has the meaning assigned in the preamble hereto.
"TCC Assignment" has the meaning given such term in the VFC
Conveyancing Agreement.
"TCC Assignment Date" has the meaning given such term in the VFC
Conveyancing Agreement.
"TCC Contract" has the meaning given such term in the VFC Conveyancing
Agreement.
"TCC Contract Assets" has the meaning given such term in the VFC
Conveyancing Agreement.
"TCC Contract File" has the meaning given such term in the VFC
Conveyancing Agreement.
"TCC Financing Originator" means the Financing Originators (other than
Financial) in each case in the capacity of a TCC Financing Originator party to
the VFC Conveyaning Agreement or the Non-VFC Conveying Agreement, as the case
may be, with Financial.
"Total Principal Payment Amount" means, with respect to any Payment
Date, the difference between (a) the aggregate Principal Amount of all Classes
of Notes immediately prior to that Payment Date and (b) the Contract Pool
Principal Balance as of the related Accounting Date; provided, that the amount
referred to in clause (b) shall be deemed to be zero on any Payment Date on
which the Contract Pool Principal Balance is less than $10,000,000.
"Transaction Documents" means this Pooling Agreement, the Transfer
Agreement, any Substitution Transfer Agreement, the VFC Conveyancing Agreement,
the VFC Purchase Agreement, the VFC Assignment, the VFC Pooling Agreement, any
TCC Assignment, the Non-VFC Conveyancing Agreement, the Non-VFC Purchase
Agreement, the Substitution VFC Purchase Agreement, the Trust Agreement, the
Administration Agreement, the Indenture, the Cash Collateral Account Agreement
and the Underwriting Agreement, and any other agreements contemplated herein or
therein.
"Transfer Agreement" means, the Transfer Agreement dated the Closing
Date between the Depositor and the Trust pursuant to which the Depositor conveys
and assigns the Contracts and other related Transferred Assets to the Trust, in
the form attached hereto as Exhibit A.
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"Transferred Assets" means with respect to any Contracts (including
Substitute Contracts) conveyed or being conveyed to the Trust pursuant to this
Agreement, all right and interest of the Depositor in, to and under the
following:
(i) such Contracts and other related Contract Assets (subject to
the proviso below);
(ii) related rights of the Depositor under the Purchase and Sale
Agreements and Substitution Assignment Agreement (if any) and the VFC
Assignment, including, without limitation, in respect of the obligation
of Financial to repurchase or substitute for such Contracts under
certain circumstances as specified therein; and
(iii) rights under the Transfer Agreement and each Substitution
Transfer Agreement; and
(iv) all income from and proceeds of the foregoing;
provided, that Transferred Assets shall not include any title to or ownership
interest in the Equipment related to such Contracts (although security interests
in such Equipment established pursuant to the related Contract, and proceeds
thereof, shall constitute Transferred Assets), and provided further, that the
security interest granted by the Depositor pursuant to Section 2.01 hereof in
related Equipment owned by it, shall constitute part of Transferred Assets.
"Trust" means the trust governed by the Trust Agreement, the assets and
property of which consists of the Trust Assets.
"Trust Accounts" means, collectively, the Collection Account, the Cash
Collateral Account and the Note Distribution Account, or any of them.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form of
deposit accounts, physical property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated
as of September 1, 2000, between the Depositor and the Owner Trustee, as
amended, restated, supplemented or otherwise modified from time to time.
"Trust Assets" has the meaning given to such term in the Trust
Agreement.
"Trust Estate" shall have the meaning specified in the Trust Agreement.
"Trustees" means the Owner Trustee and the Indenture Trustee, or any of
them individually as the context may require.
"UCC" means the Uniform Commercial Code as enacted from time to time in
the State of New York.
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"Uncollectible Advance" means with respect to any Determination Date
and any Contract, the amount, if any, advanced by the Servicer pursuant to
Section 5.14 which the Servicer has as of such Determination Date determined in
good faith will not be ultimately recoverable by the Servicer.
"Underwriting Agreement" means the Underwriting Agreement, dated
September 21, 2000 among Xxxxxxx Xxxxx Xxxxxx Inc. (as an underwriter thereunder
and as representative of the underwriters) and the Depositor.
"Unfunded Loss Amount" means, with respect to any Payment Date, the
excess, if any, of (i) the remainder, if any, of (a) the Aggregate Principal
Amount of all of the Notes (prior to giving effect to the payment of principal
on the Notes on such Payment Date) minus (b) the lesser of (1) the Contract Pool
Principal Balance as of the related Accounting Date for the preceding Payment
Date, minus the Contract Pool Principal Balance as of the related Accounting
Date for such Payment Date, or (2) (A) the Related Collection Period Pledged
Revenue remaining after the payment of amounts owing to the Servicer and the
payment of all interest due on the Notes on such Payment Date, plus (B) the
amount of any withdrawal from the Cash Collateral Account for the payment of
principal in respect of Notes on such Payment Date over (ii) the Contract Pool
Principal Balance as of the related Accounting Date.
"Unreimbursed Servicer Advances" means, at any time, the amount of all
previous Servicer Advances (or portions thereof) as to which the Servicer has
not been reimbursed as of such time pursuant to Section 7.05 and which the
Servicer has determined in its sole discretion are Uncollectible Advances, and
with respect to which the Servicer has given a written certification to such
effect to the Trust (which certification may take the form of an entry on a
Monthly Report identifying Unreimbursed Servicer Advances).
"United States" means the United States of America.
"Vehicle" means any motor vehicle, the transfer of interests in which
is governed by a state certificate of title or registry system.
"Vendor" means, with respect to a Contract, the equipment manufacturer,
dealer or distributor, or software licensor or distributor, or other Person that
provided financing under such Contract in connection with the acquisition or use
by an End-User of such party's Equipment, Software, Services or other products.
"Vendor Agreements" means the collective reference to Vendor
Assignments and Program Agreements.
"Vendor Assignment" means each assignment agreement pursuant to which
an individual End-User Contract originated by a Vendor is assigned by such
Vendor to the Financing Originator.
"Vendor Guarantee" means the irrevocable obligation of a Vendor to pay
to the Financing Originator the aggregate outstanding principal amount of a
Contract which has been canceled by the related Obligor pursuant to the terms of
such Contract.
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"Vendor Loan" means a limited recourse loan agreement payable by a
Vendor and secured by the Vendor's interest in Secondary Contracts and by the
Equipment, if any, related thereto.
"VFC Assignment" means the Release and Assignment instrument dated the
Closing Date, in the form attached hereto as Exhibit B, executed by the VFC
Trust conveying, assigning and releasing the VFC Contract Assets to the
Depositor.
"VFCC" means Variable Funding Capital Corporation.
"VFC Contract Assets" means the Contract Assets pertaining to the VFC
Contracts.
"VFC Contracts" means Contracts conveyed by the VFC Trust to the
Depositor pursuant to the VFC Assignment, as listed in the Schedule of Contracts
attached to the VFC Assignment.
"VFC Conveyancing Agreement" means the Amended and Restated
Conveyancing Agreement dated as of March 2, 1999, as amended and restated as of
June 29, 2000, among the TCC Financing Originators and Financial, as the same
may be amended, supplemented, restated or otherwise modified from time to time.
"VFC Trust" means the CIT Equipment Trust -- VFC Series created and
existing pursuant to the Trust Agreement dated as of February 25, 1999, as
amended by Amendment No. 1 dated as of June 27, 2000, by and between the
Depositor and the Bank of New York (Delaware), as Owner Trustee.
"VFC Pooling Agreement" means the Amended and Restated Pooling and
Servicing Agreement dated as of March 2, 1999, as amended and restated as of
June 29, 2000, by and among the VFC Trust, the Depositor and TCC.
"VFC Purchase Agreement" means the Amended and Restated Sale and
Contribution Agreement dated as of March 2, 1999, as amended and restated as of
June 29, 2000, by and among Financial, TCC and the Depositor.
"Vice President" of any Person means any vice president of such Person,
whether or not designated by a number or words before or after the title "Vice
President," who is a duly elected officer of such Person.
"Voting Power" means, with respect to any outstanding membership
interest of the Depositor, the power (expressed as a percentage) represented by
such membership interest of the aggregate voting power of all outstanding
membership interests of the Depositor having ordinary voting power, including
the power to vote for election of members of the Board of Directors (and, if any
class thereof has power to designate members of the Board of Directors or any
special committee thereof, the power so to designate).
Section 1.02. Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the
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other genders; references to "writing" include printing, typing, lithography and
other means of reproducing words in a visible form; references to agreements and
other contractual instruments include all amendments, modifications and
supplements thereto or any changes therein entered into in accordance with their
respective terms and not prohibited by this Agreement; references to Persons
include their permitted successors and assigns; and the term "including" means
"including without limitation."
Section 1.03. Section References. All section references, unless
otherwise indicated, shall be to Sections in this Agreement.
Section 1.04. Accounting Terms. All accounting terms used but not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States.
ARTICLE II
FUNDINGS OF TRUST; TRANSFERS OF CONTRACTS
Section 2.01. Creation and Funding of Trust; Transfer of Transferred
Assets to Trust. (a) The Trust has been created pursuant to the terms and
conditions of an initial trust agreement, and upon the execution and delivery of
the Trust Agreement and the filing by the Owner Trustee of an appropriately
completed Certificate of Trust under the Business Trust Statute. The Depositor,
as settlor of the Trust, shall fund and convey assets to the Trust pursuant to
the terms and provisions hereof. The Trust shall be administered pursuant to the
provisions of this Agreement, the Administration Agreement and the Trust
Agreement for the benefit of the Noteholders and the Equity Certificateholder.
Each of the Owner Trustee and the Administrator (as defined in the
Administration Agreement) is hereby specifically recognized by the parties
hereto as empowered to conduct business dealings on behalf of the Trust in
accordance with the terms hereof and of the Trust Agreement and Administration
Agreement.
(b) Subject to the terms and conditions set forth herein, on the
Closing Date, the Depositor shall, in consideration of the purchase price of the
Contracts and the related Transferred Assets and the retention of the Equity
Certificate, transfer, assign, set over and otherwise convey to the Trust by
execution of the Transfer Agreement, without recourse (other than as expressly
provided herein), (i) all the right, title and interest of the Depositor in and
to the Contracts and the related Transferred Assets identified in such Transfer
Agreement, and (ii) all income from and proceeds of the foregoing. The "purchase
price" for the Contracts and the related Transferred Assets shall be an amount
equal to $1,056,038,343.10. Such purchase price shall be payable in immediately
available funds on the Closing Date.
(c) The parties hereto hereby agree and acknowledge that title to
or ownership of any related Equipment shall not be transferred to the Trust upon
such conveyance and that the Depositor shall retain its ownership interest (to
the extent the same has been so conveyed to the Depositor pursuant to the VFC
Purchase Agreement, the Non-VFC Purchase Agreement, the Substitute VFC Purchase
Agreement and the VFC Assignment) in such
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Equipment (provided, that the parties agree and intend that any mere security
interest, as opposed to title or ownership interest, in the related Equipment
which secures the Contract pursuant to the terms thereof, is being assigned and
conveyed as part of the Transferred Assets in accordance with the definition
thereof). The Depositor and the Trust further intend and agree that, except as
described in the preceding sentence with respect to ownership interests in
related Equipment, any such transfer is intended to be a conveyance and transfer
of ownership of the Contracts and the related Transferred Assets (or Substitute
Transferred Assets conveyed as described in Section 2.04 below) and that such
Contracts and the related Transferred Assets shall not be part of the
Depositor's estate in the event of the filing of a bankruptcy petition by or
against the Depositor under any bankruptcy law. In the event, however, that
notwithstanding such intent and agreement, a transfer and assignment
contemplated hereby and in the Transfer Agreement (or Substitution Transfer
Agreement, as applicable) is determined not to be a conveyance of ownership, the
Depositor hereby grants to the Trust a first priority perfected security
interest in (i) such Contracts and the related Transferred Assets identified in
such Transfer Agreement, and (ii) all income from and proceeds of the foregoing,
and this Agreement and the Transfer Agreement (or Substitution Transfer
Agreement, as applicable), collectively, shall constitute a security agreement
under applicable law, securing the related obligations of the Trust to the
Noteholder and the Equity Certificateholder, in the order and priorities, and
subject to the other terms and conditions of, this Agreement and the other
Transaction Documents, together with such other obligations or interests as may
arise hereunder and thereunder with respect to such Contracts and the related
Transferred Assets in favor of the parties thereto.
(d) In furtherance of and not in limitation of any of the
foregoing, the Depositor with respect to each item of Equipment owned by it as
described above, by execution and delivery of this Agreement and the Transfer
Agreement (or Substitution Transfer Agreement, as applicable), hereby and
thereby on and as of the Closing Date (or Substitution Transfer Date, as
applicable) grants to the Trust and the Indenture Trustee a first priority
perfected security interest in such item of owned Equipment, securing in each
case an amount payable by the Trust in respect of the Notes corresponding to the
Contract Principal Balance from time to time of the related Contract; it being
understood, however, that (i) recourse to such Equipment in realization of the
benefits of such security interest shall only occur if the related Contract has
become a Defaulted Contract, and (ii) the application of Liquidation Proceeds
realized therefrom shall be governed in accordance with the provisions hereof
generally applicable to such Pledged Revenue and allocation in accordance with
the Allocation Criteria.
Section 2.02. Conditions to Transfers. The Depositor shall transfer to
the Trust the Contracts and other Transferred Assets described in Section 2.01
above only upon the satisfaction of each of the following conditions on or prior
to the Closing Date and shall be deemed to have represented in respect of the
Closing Date that all such conditions are satisfied upon the Depositor's
delivery of the Transfer Agreement:
(a) the Depositor shall have delivered to the Owner Trustee on
behalf of the Trust the duly executed Transfer Agreement, which shall include a
Schedule of Contracts listing the Contracts being transferred on the Closing
Date;
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(b) the VFC Trust shall have delivered to the Depositor and the
Owner Trustee on behalf of the Trust the duly executed VFC Assignment with
respect to the VFC Contracts being conveyed by the VFC Trust on the Closing
Date;
(c) A letter from KPMG LLP, or another nationally recognized
accounting firm, addressed to the Depositor and the Underwriters and stating
that such firm has reviewed a sample of the Initial Contracts and performed
specific procedures for such sample with respect to certain contract terms and
which identifies those Initial Contracts which do not conform;
(d) Copies of resolutions of the Board of Directors of Financial,
the Servicer and the Depositor or of the Executive Committee of the Board of
Directors of Financial, the Servicer and the Depositor approving the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which any of them is a party, as applicable, and the transactions
contemplated hereunder and thereunder, certified in each case by the Secretary
or an Assistant Secretary of Financial, the Servicer and the Depositor;
(e) Officially certified, recent evidence of due incorporation or
formation, as the case may be and good standing of each of Financial and the
Depositor under the laws of Delaware;
(f) (i) Evidence of proper filing or provision for filing with
appropriate offices in the jurisdictions in which a UCC financing statement was
filed naming the Depositor as debtor and the VFC Trust as secured party, with
respect to the VFC Contracts, of a UCC partial release identifying the VFC
Contracts as collateral being released, executed by the VFC Trust; (ii) evidence
of proper filing or provision for filing with appropriate offices in the
applicable Contract File Locations and the state of the chief executive office
of the applicable Financing Originator of UCC financing statements executed by
the applicable Financing Originator, as debtor, and naming Financial as secured
party (and the Depositor as assignee), to perfect the grant of a security
interest from the applicable Financing Originator to Financial and then to the
Depositor pursuant to the applicable Purchase and Sale Agreements; (iii)
evidence of proper filing or provision for filing with appropriate offices in
the Contract File Locations and the state of the chief executive office of
Financial of UCC financing statements executed by Financial, as debtor, and
naming the Depositor as secured party, to perfect the grant of a security
interest from Financial to the Depositor pursuant to the applicable Purchase and
Sale Agreements; (iv) evidence of proper filing or provision for filing with
appropriate offices in the Contract File Locations and the state of the chief
executive office of the Depositor of UCC financing statements executed by the
Depositor, as debtor, and naming the Trust as secured party, to perfect the
grant of a security interest from the Depositor to the Trust pursuant to Article
II hereof; (v) evidence of proper filing or provision for filing with
appropriate offices in the Contract File Locations and the state of the chief
executive office of the Trust of UCC financing statements executed by the Trust,
as debtor, and naming the Indenture Trustee as secured party, to perfect the
grant of a security interest from the Trust to the Indenture Trustee pursuant to
the Indenture;
(g) Evidence of deposit in the Cash Collateral Account of the
initial Required Cash Collateral Amount;
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(h) A fully executed Substitute VFC Purchase Agreement;
(i) a fully executed Non-VFC Conveyancing Agreement;
(j) a fully executed Non-VFC Purchase Agreement;
(k) A fully executed VFC Assignment;
(l) A fully executed Trust Agreement;
(m) A fully executed Administration Agreement;
(n) A fully executed Indenture;
(o) A fully executed Pooling Agreement;
(p) an opinion of Xxxxxxx Xxxx & Xxxxx LLP to the effect that for
federal income tax purposes, the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes, Class B Notes, Class C Notes and Class D Notes will be
characterized as debt and the Trust will not be characterized as an association
(or publicly traded partnership) taxable as a corporation;
(q) each of the representations and warranties made by Financial
pursuant to Article III of the Purchase and Sale Agreements shall be true and
correct as of the Closing Date (including the representation made thereunder as
to compliance with the UCC filing criteria as set forth in clause (j) of the
definition of Eligible Contract), and Financial shall have performed in all
material respects all obligations to be performed by it under the Purchase and
Sale Agreements on or prior to the Closing Date;
(r) each of the representations and warranties made by the
Depositor and the Servicer pursuant to Article III hereof shall be true and
correct as of the Closing Date;
(s) the Depositor shall, at its own expense, on or prior to the
Closing Date indicate in its computer files that the Transferred Assets
identified in the Transfer Agreement have been conveyed to the Trust pursuant to
this Agreement and the Transfer Agreement;
(t) no event has occurred and is continuing, or would result from
the conveyance on the Closing Date that constitutes a Servicer Default; and
(u) the Depositor or the Servicer shall have provided the Owner
Trustee on behalf of the Trust a statement or computer disk listing the Contract
Pool Principal Balance on the Closing Date of the contracts being transferred on
the Closing Date.
The failure to satisfy any of the foregoing conditions to transfer or
to obtain a waiver thereof shall not be deemed to adversely affect the validity
of any such transfer.
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Section 2.03. Acceptance by Trust. On the Closing Date, if all
the conditions specified in Section 2.02 above have been satisfied, the Trust
shall issue, and the Owner Trustee shall authenticate, to, or upon the order of,
the Depositor and in accordance with the Trust Agreement, the Equity Certificate
representing ownership of a beneficial interest in 100% of the Trust and the
Trust shall issue, and the Indenture Trustee shall authenticate, to, or upon the
order of, the Depositor in accordance with the terms of the Indenture the Notes
secured by the Collateral. The Trust hereby acknowledges its acceptance of the
Trust Assets, and declares that it shall maintain such right and interest in the
Trust Assets in accordance with the terms of this Agreement and the Trust
Agreement upon the trust herein and therein set forth.
Section 2.04. Conveyance of Substitute Contracts. (a) Subject
to the limitations set forth in (and the other terms and conditions of) this
Section 2.04, the Depositor may substitute other Contracts and related assets
for Contracts and related Transferred Assets previously conveyed to the Trust
and in the Contract Pool, by conveying such other Contracts and related assets
to the Trust pursuant to the procedures and documentation specified below. Upon
the effectiveness of such substitution, such other Contracts and related
Transferred Assets (such Contracts, "Substitute Contracts", and collectively,
"Substitute Transferred Assets") shall, for all purposes of this Agreement and
the Trust Agreement, constitute and be considered as part of the Trust Assets,
and the Contracts already in the Contract Pool and related Transferred Assets
for which the Substitute Assets have been substituted (such Contracts, "Replaced
Contracts", and collectively, "Replaced Assets") shall no longer constitute
Trust Assets. Upon consummation of such substitution, the Trust shall be deemed
to have assigned to the Depositor all of the Trust's right, title and interest
in and to the Replaced Assets, without recourse, representation or warranty.
In addition, the parties hereto intend and agree that any
conveyance described in this Section 2.04 is made with the intent and effect
described in subsection (c) of Section 2.01 above.
(b) Subject to the conditions set forth in this subsection (b)
below, and pursuant to one or more related Substitution Transfer Agreements, the
Depositor shall transfer, assign, set over and otherwise convey to the Trust,
without recourse (other than as expressly provided herein), (i) all the right
and interest of the Depositor in and to the Substitute Contracts listed on the
related Substitution Schedule of Contracts, and (ii) all other rights and
property interests consisting of Transferred Assets related to such Substitute
Contracts. The Depositor shall effect such transfers only upon the satisfaction
of each of the following conditions on or prior to the related Substitution
Transfer Date (and the delivery of a related Substitution Notice by the
Depositor shall be deemed a representation and warranty by the Depositor that
such conditions have been or will be, as of the related Substitution Transfer
Date, satisfied):
(i) At least five days prior to the related
Substitution Transfer Date, the Depositor shall have provided
the Owner Trustee on behalf of the Trust and the Indenture
Trustee with a Substitution Notice complying with the
definition thereof contained herein;
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(ii) there shall have occurred, with respect to each
such Substitute Contract, a corresponding Substitution Event
with respect to one or more intended Replaced Contracts then
constituting Contracts in the Contract Pool;
(iii) the Substitute Contract(s) being conveyed to
the Trust, satisfy the Substitute Contract Qualification
Conditions;
(iv) the Depositor shall have delivered to the Owner
Trustee on behalf of the Trust a duly executed written
assignment agreement in substantially the form of Exhibit E
hereto (a "Substitution Transfer Agreement"), which shall
include a Substitution Schedule of Contracts identifying the
Substitute Contracts and the related Replaced Contracts;
(v) Financial shall have delivered to the Depositor
and the Owner Trustee on behalf of the Trust a duly executed
Substitution Assignment Agreement with respect to such
conveyance;
(vi) no selection procedures adverse to the interests
of either the Trust, the Noteholders or the Equity
Certificateholder shall have been utilized in selecting the
Substitute Contracts;
(vii) each of the representations and warranties made
by Financial pursuant to Article III of the Substitute VFC
Purchase Agreement or Non-VFC Purchase Agreement, as the case
may be, shall be true and correct as of the related
Substitution Transfer Date (including the representation made
as to compliance with the UCC filing criteria set forth in
clause (j) of the definition of Eligible Contract), and
Financial shall have performed in all material respects all
obligations to be performed by it under the Substitute VFC
Purchase Agreement or Non-VFC Purchase Agreement, as the case
may be, on or prior to such Substitution Transfer Date; and
(viii) the Servicer and Financial and the applicable
Financing Originator shall, at their own expense, on or prior
to the Substitution Transfer Date, have indicated in their
respective computer files that the Substitute Contracts
identified on the Substitution Schedule of Contracts attached
to the related Substitution Transfer Agreement have been
assigned and conveyed to the Trust through the Depositor
pursuant to this Pooling Agreement and the Substitute VFC
Purchase Agreement or Non-VFC Purchase Agreement, as the case
may be.
The failure to satisfy any of the foregoing conditions to
transfer or to obtain a waiver thereof shall not be deemed to adversely affect
the validity of any such transfer.
Section 2.05. Release of Excluded Amounts. The Trust hereby
agrees to release to the Servicer, an amount equal to the Excluded Amounts
immediately upon identification thereof, which release shall be automatic and
shall require no further act by the Trust, provided that the Trust shall execute
and deliver such instruments of release and assignment, or otherwise confirm the
foregoing release, as may reasonably be requested in writing by the Servicer.
Upon
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such release, such Excluded Amounts shall not constitute and shall not be
included in the Trust Assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Financial, under the Purchase and Sale Agreements, has made,
and upon execution of each Substitution Assignment Agreement is deemed to remake
with respect to the relevant Contract Assets conveyed by the VFC Assignment, the
Non-VFC Purchase Agreement, or the Substitution VFC Purchase Agreement, as the
case may be, each of the representations and warranties set forth in the
Schedule of Representations, and has consented to the assignment by the
Depositor to the Trust of the Depositor's rights with respect thereto. Such
representations speak as of the Closing Date in the case of the Initial
Contracts, and as of the applicable Substitution Transfer Date in the case of
the Substitute Contracts, but shall survive the transfer and assignment of the
related Contracts to the Trust. Pursuant to Section 2.01 of this Agreement, the
Depositor has sold, assigned, transferred and conveyed to the Trust as part of
the Transferred Assets its rights under the Purchase and Sale Agreements,
including without limitation, the representations and warranties of Financial
therein as set forth in the Schedule of Representations, together with all
rights of the Depositor with respect to any breach thereof including any right
to require Financial to repurchase or substitute for any Contract in accordance
with the Purchase and Sale Agreements. It is understood and agreed that the
representations and warranties set forth or referred to in this Section shall
survive delivery of the Contract Files to the Trust or any custodian.
The Depositor hereby confirms to the Trust that it has entered
into the Purchase and Sale Agreements with Financial, that Financial has made
the representations and warranties in the Schedule of Representations, that such
representations and warranties run to and are for the benefit of the Trust, and
that pursuant to Section 2.01 of this Agreement the Depositor has transferred
and assigned to the Trust all rights of the Depositor to cause Financial under
the Purchase and Sale Agreements to repurchase or substitute for Contracts
conveyed thereunder in the event of a breach of such representations and
warranties applicable to such Contract.
Section 3.01. Representations and Warranties Regarding the
Depositor. By its execution of this Agreement, and each Substitution Transfer
Agreement, the Depositor represents and warrants to the Trust, the Owner
Trustee, the Indenture Trustee, the Noteholders and the Equity Certificateholder
that, as of the date of the Closing Date and Substitution Transfer Date (and,
with respect to the representation set forth in subsection (k) of this Section
3.01 below, as of the date the certificate, written report or written statement
referred to in such subsection is furnished):
(a) Organization and Good Standing. The Depositor is
a limited liability company duly organized, validly existing and in good
standing under the laws of Delaware and has the requisite power to own its
assets and to transact the business in which it is currently engaged. The
Depositor is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the business transacted by it or
properties owned or leased
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by it requires such qualification and in which the failure so to qualify would
have a material adverse effect on the business, properties, assets, or condition
(financial or other) of the Depositor or the Trust.
(b) Authorization; Valid Transfer; Binding
Obligations. The Depositor has the power and authority to make, execute, deliver
and perform this Agreement and the other Transaction Documents to which it is a
party and all of the transactions contemplated under this Agreement and the
other Transaction Documents to which it is a party, and to create the Trust and
cause it to make, execute, deliver and perform its obligations under this
Agreement and the other Transaction Documents to which it is a party and has
taken all necessary corporate action to authorize the due execution, delivery
and performance of this Agreement and the other Transaction Documents to which
it is a party and to cause the Trust to be created. This Agreement and the
Transfer Agreement and any Substitution Transfer Agreement shall effect a valid
transfer and assignment of the relevant Transferred Assets, enforceable against
the Depositor and creditors of and purchasers from the Depositor. This Agreement
and the other Transaction Documents to which the Depositor is a party have been
duly executed and delivered by the Depositor and constitute the legal, valid and
binding obligation of the Depositor enforceable in accordance with their terms,
except as enforcement of such terms may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies.
(c) No Consent Required. The Depositor is not
required to obtain the consent of any other Person or any consent, license,
approval or authorization from, or registration or declaration with, any
Governmental Authority in connection with the execution, delivery, performance,
validity or enforceability of this Agreement or the other Transaction Documents
to which it is a party.
(d) No Violations. The execution, delivery and
performance of this Agreement and the other Transaction Documents to which it is
a party by the Depositor, and the consummation of the transactions contemplated
hereby and thereby, will not violate any Requirements of Law applicable to the
Depositor, or constitute a material breach of any mortgage, indenture, contract
or other agreement to which the Depositor is a party or by which the Depositor
or any of the Depositor's properties may be bound, or result in the creation or
imposition of any security interest, lien, charge, pledge, preference, equity or
encumbrance of any kind upon any of its properties pursuant to the terms of any
such mortgage, indenture, contract or other agreement, other than as
contemplated by the Transaction Documents.
(e) Litigation. No litigation or administrative
proceeding of or before any court, tribunal or governmental body is currently
pending, or to the knowledge of the Depositor threatened, against the Depositor
or any of its properties or with respect to this Agreement or the other
Transaction Documents to which it is a party (1) which, if adversely determined,
would in the reasonable judgment of the Depositor have a material adverse effect
on the business, properties, assets or condition (financial or otherwise) of the
Depositor or the Trust or the transactions contemplated by this Agreement or the
other Transaction Documents to which the Depositor is a party or (2) seeking to
adversely affect the federal income tax or other federal, state or local tax
attributes of the Notes.
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(f) Taxes. The Depositor has filed or caused to be
filed all material tax returns which, to its knowledge, are required to be filed
and has paid all taxes shown to be due and payable on such returns or on any
material assessments made against it or any of its property and all other
material taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any amount of tax due, the validity of
which is currently being contested in good faith by appropriate proceedings and
with respect to which reserves in accordance with generally accepted accounting
principles have been provided on the books of the Depositor); no tax lien has
been filed and, to the Depositor's knowledge, no claim is being asserted, with
respect to any such tax, fee or other charge.
(g) Schedule of Representations. The representations
and warranties set forth on the Schedule of Representations are true and correct
as of the Closing Date (or Substitution Transfer Date, as applicable) with
respect to the Transferred Assets being conveyed to the Trust on such date.
(h) Solvency. The Depositor, at the time of and after
giving effect to each conveyance made hereunder, is Solvent on and as of the
date thereof.
(i) Place of Business; Name Changes. The location of
the Depositor's sole place of business or chief executive office (within the
meaning of Article 9 of the UCC) is as set forth in Section 11.04 below, and
such location has not been changed within the four months preceding any Transfer
Date (or if so changed, all necessary actions in connection with such change
have been or are being timely taken in accordance with Section 4.03 hereof). The
Depositor has not changed its name, whether by amendment of its certificate of
formation, by reorganization or otherwise, within the four months preceding any
Transfer Date (or if so changed, all necessary actions in connection with such
change have been or are being timely taken in accordance with Section 4.03
hereof).
(j) Not an Investment Company. The Depositor is not
an "investment company" (and does not control, and is not under the control of,
an investment company) within the meaning of the Investment Company Act of 1940,
as amended (or the Depositor is exempt from all provisions of such Act).
(k) Accuracy of Information. No certificate, written
report or written statement furnished by the Depositor to the Servicer, the
Trust, the Owner Trustee, any Securityholder or the Administrator in connection
with this Pooling Agreement or any other Transaction Document was inaccurate in
any material respect as of the date it was dated or (except as otherwise
disclosed to the Servicer, the Trust, the Owner Trustee, such Securityholder or
the Administrator, as the case may be, at such time) as of the date so
furnished.
Such representations (except to the extent expressly stated by their terms to
speak as of a different date or time) speak as of the Closing Date and each
Transfer Date and Substitution Transfer Date, if any, but shall survive the
transfer and assignment of the Contracts to the Trust.
Section 3.02. Representations and Warranties of the Servicer.
The Servicer represents and warrants to the Trust, the Owner Trustee, the
Indenture Trustee, the Noteholders
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and the Equity Certificateholder that, as of the date of the execution and
delivery of this Agreement and as of the Closing Date and each Substitution
Transfer Date:
(a) Organization and Good Standing. The Servicer is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has the corporate power to own
its assets and to transact the business in which it is currently engaged. The
Servicer is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the character of the business
transacted by it or properties owned or leased by it requires such
qualification and in which the failure so to qualify would have a material
adverse effect on the business, properties, assets, or condition (financial or
otherwise) of the Servicer or the Trust. The Servicer (or any permitted
subservicer hereunder with respect to affected Contracts, if the Servicer is
not so licensed) is properly licensed in each jurisdiction to the extent
required by the laws of such jurisdiction to service the Contracts in
accordance with the terms hereof.
(b) Authorization; Binding Obligations. The Servicer
has the power and authority to make, execute, deliver and perform this Agreement
and the other Transaction Documents to which the Servicer is a party and all of
the transactions contemplated under this Agreement and the other Transaction
Documents to which the Servicer is a party, and has taken all necessary
corporate action to authorize the due execution, delivery and performance of
this Agreement and the other Transaction Documents to which the Servicer is a
party. This Agreement and the other Transaction Documents to which the Servicer
is a party have been duly executed and delivered by the Servicer and constitute
the legal, valid and binding obligation of the Servicer enforceable in
accordance with their terms, except as enforcement of such terms may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable remedies.
(c) No Consent Required. The Servicer is not required
to obtain the consent of any other Person or any consent, license, approval or
authorization from, or registration or declaration with, any Governmental
Authority in connection with the execution, delivery, performance, validity or
enforceability of this Agreement and the other Transaction Documents to which
the Servicer is a party.
(d) No Violations. The execution, delivery and
performance of this Agreement and the other Transaction Documents to which the
Servicer is a party by the Servicer will not violate any Requirements of Law
applicable to the Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Servicer is a party or by
which the Servicer or any of the Servicer's properties may be bound, or result
in the creation of or imposition of any security interest, lien, pledge,
preference, equity or encumbrance of any kind upon any of its properties
pursuant to the terms of any such mortgage, indenture, contract or other
agreement, other than as contemplated by the Transaction Documents.
(e) Litigation. No litigation or administrative
proceeding of or before any court, tribunal or governmental body is currently
pending, or to the knowledge of the Servicer threatened, against the Servicer or
any of its properties or with respect to this Agreement, or any other
Transaction Document to which the Servicer is a party which, if adversely
determined, would in the reasonable judgment of the Servicer have a material
adverse
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effect on the business, properties, assets or condition (financial or otherwise)
of the Servicer or the Trust or the transactions contemplated by this Agreement
or any other Transaction Document to which the Servicer is a party.
(f) Accuracy of Information. No certificate, written
report or written statement, furnished by the Servicer to the Trust Depositor,
the Trust, the Owner Trustee, any Securityholder or the Administrator in
connection with this Pooling Agreement or any other Transaction Document was
inaccurate in any material respect as of the date it was dated or (except as
otherwise disclosed to the Trust Depositor, the Trust, the Owner Trustee, such
Securityholder or the Administrator, as the case may be, at such time) as of the
date so furnished. Each financial statement furnished pursuant to clause (i) of
Section 9.04 is complete and correct in all material respects and fairly
presents the financial condition of the Servicer (or its parent entity, if the
Servicer is a wholly-owned subsidiary of another entity), as of the reporting
date specified therein, and the results of operations of the Servicer (or such
parent entity, as applicable) for the period then ended, all in accordance with
generally accepted accounting principles as in effect in the jurisdiction of the
entity for which such financial statement is furnished.
(g) No Servicer Default. No event has occurred and is
continuing and no condition exists which constitutes a Servicer Default.
ARTICLE IV
PERFECTION OF TRANSFERS AND PROTECTION OF SECURITY INTERESTS
Section 4.01. Custody of Contracts. (a) Subject to the terms
and conditions of this Section 4.01, the contents of each Contract File shall be
held in the custody of the Servicer (including through any subservicer
contemplated under Section 5.05), for the benefit of, and as agent for, the
Noteholders, the Equity Certificateholder, the Indenture Trustee and the Issuer,
as the owner thereof.
(b) The Servicer agrees to maintain the Contract
Files at its offices where they are currently maintained, or at such other
offices of the Servicer (or a subservicer contemplated under Section 5.05) as
shall from time to time be established by the Servicer or such subservicer (or
in certain instances at offsite storage facilities in the same general
geographic area as an office of the Servicer or subservicer, pursuant to
contractual agreement between the Servicer or subservicer and the Person owning
or maintaining such offsite facility). The Servicer may temporarily move
individual Contract Files or any portion thereof without notice or other such
compliance, as necessary to conduct collection and other servicing activities in
accordance with the Servicing Standard; provided, however, that the Servicer
will take all action necessary to maintain the perfection of the Trust's
interest in the Trust Assets and the proceeds thereof. It is intended that by
the Servicer's agreement pursuant to Section 4.01(a) above and this Section
4.01(b), the Trust and the Owner Trustee for the benefit of the Trust shall be
deemed to have possession of the Contract Files for purposes of Section 9-305 of
the Uniform Commercial Code of the State in which the Contract Files are
located.
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(c) As custodian, the Servicer shall have and perform
the following powers and duties:
(i) hold the Contract Files on behalf of the
Noteholders and the Equity Certificateholder and the
Trust; maintain accurate records pertaining to each
Contract to enable it to comply with the terms and
conditions of this Agreement; and maintain a current
inventory thereof;
(ii) maintain and comply with Customary
Policies and Procedures with respect to Persons
authorized to have access to the Contract Files;
(iii) attend to all details in connection
with maintaining custody of the Contract Files on
behalf of the Noteholder and the Equity
Certificateholder and the Trust; and
(iv) indicate in the appropriate computer
records that the Contracts as of the Closing Date (or
Substitution Transfer Date, as the case may be) have
been conveyed to the Trust.
(d) In performing its duties under this Section 4.01,
the Servicer agrees to act in accordance with the applicable Servicing Standard.
In acting as custodian of the Contract Files, the Servicer further agrees not to
assert any legal or beneficial ownership interest in the Contracts or the
Contract Files, except as provided in Section 5.02.
(e) The Servicer agrees to indemnify the Noteholders
and the Equity Certificateholder, the Owner Trustee, the Indenture Trustee and
the Trust for any and all liabilities, obligations, losses, damages, payments,
costs, or expenses of any kind whatsoever which may be imposed on, incurred by
or asserted against any of such parties as the result of any act or omission by
the Servicer relating to the maintenance and custody of the Contract Files or
any other breach or noncompliance of the Servicer in the performance of its
duties and obligations as Servicer hereunder; provided, however, that the
Servicer will not be liable to any such party for any portion of any such amount
resulting from the gross negligence or willful misconduct of such party.
Section 4.02. Filings. On or prior to the Closing Date, the
Servicer shall cause UCC financing statement(s) to be filed or provided for, and
from time to time the Servicer shall take and cause to be taken such other
actions and execute such other documents as are necessary to perfect or further
perfect and protect the Trust's first priority interest in the Trust Assets
against all other Persons. Such additional actions may include without
limitation, the filing of financing statements, amendments thereto and
continuation statements, the execution of transfer instruments and the making of
notations on or taking possession of records or documents of title.
Section 4.03. Name Change or Relocation. (a) During the term
of this Agreement, neither the Servicer nor the Depositor shall change, nor
shall the Servicer permit any Financing Originator to change, its name, identity
or structure or relocate its chief executive
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office without first giving at least 30 days' prior written notice to the
Servicer, the Owner Trustee, and the Indenture Trustee.
(b) If any change in either the Servicer's, a
Financing Originator's or the Depositor's name, identity or structure or other
action would make any financing or continuation statement or notice of lien
seriously misleading within the meaning of applicable provisions of the UCC or
any title statute, the Servicer, no later than four months after the effective
date of such change, shall file such amendments as may be required to preserve
and protect the Trust's interests in the Trust Assets and the proceeds thereof.
In addition, neither any Financing Originator, the Servicer nor the Depositor
shall change its place of business (within the meaning of Article 9 of the UCC),
from the locations specified in Section 11.04 hereof unless it has first taken
such action as is necessary to preserve and protect the Trust's interest in the
Trust Assets.
Promptly after taking any of the foregoing actions (but not
later than 20 calendar days), the Servicer shall deliver to the Owner Trustee,
the Indenture Trustee and the Rating Agencies an Opinion of Counsel reasonably
acceptable to the Owner Trustee, the Indenture Trustee and the Rating Agencies
stating that, in the opinion of such counsel, all financing statements or
amendments necessary to preserve and protect the interests of the Trust and
Indenture Trustee in the Trust Assets have been filed, and reciting the details
of such filing.
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ARTICLE V
SERVICING OF CONTRACTS
Section 5.01. Initial Servicer's Appointment and Acceptance;
Responsibility for Contract Administration. TCC shall be and is hereby appointed
as the Servicer and custodian (as contemplated in Article IV hereof) pursuant to
this Agreement with respect to the Contract Assets in the Contract Pool. TCC
accepts the appointment and agrees to act as the Servicer and custodian pursuant
to this Agreement.
Except to the extent otherwise specified herein or as
contemplated in Section 5.05, the Servicer will have the sole obligation to
manage, administer, service and make collections on the Contracts and perform or
cause to be performed all contractual and customary undertakings of the
Originator of the Contracts to the Obligor. The Trust, at the written request of
a Servicing Officer, shall furnish the Servicer with any powers of attorney or
other documents necessary or appropriate in the opinion of the Servicer to
enable the Servicer to carry out its servicing and administrative duties
hereunder. The Servicer is hereby appointed the Servicer hereunder until such
time as any Servicing Transfer may be effected pursuant to Article VIII hereof.
Section 5.02. General Duties. The Servicer will service,
administer and enforce the Contracts in the Contract Pool on behalf of the Trust
and will have full power and authority to do any and all things in connection
with such servicing and administration which it deems necessary or desirable and
as shall not contravene the provisions of this Agreement or any other
Transaction Document. The Servicer will manage, service, administer, and make
collections on the Contracts in the Contract Pool in accordance with the
Servicing Standard. The Servicer's duties will include collection and posting of
all payments, responding to inquiries of Obligors regarding the Contracts in the
Contract Pool, investigating delinquencies, accounting for collections,
furnishing reports with respect to collections and payments as contemplated in
Article IX hereof, making Servicer Advances in accordance with Section 5.14
hereof, and using its best efforts to maintain the perfected first priority
interest of the Trust in the Trust Assets. The Servicer will have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration, and collection that it deems necessary or
desirable. If the Servicer commences a legal proceeding to enforce a Defaulted
Contract pursuant to Section 5.15 or commences or participates in a legal
proceeding (including a bankruptcy proceeding) relating to or involving a
Contract in the Contract Pool, the Trust will be deemed to have automatically
assigned such Contract to the Servicer solely for purposes of, and to the extent
necessary for, commencing or participating in any such proceeding as a party or
claimant (but in all cases subject to the continuing interest of the Trust and
its assignees in the proceeds and recoveries from such proceedings, as and to
the extent provided in the Transaction Documents), and the Servicer is
authorized and empowered by the Trust, pursuant to this Section 5.02, to execute
and deliver, on behalf of itself and the Trust, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other notices, demands, claims, complaints, responses, affidavits or other
documents or instruments in connection with any such proceedings. If in any
enforcement suit or legal proceeding it is held that the Servicer may not
enforce a Contract on the ground that it is not a real party in interest or a
holder entitled
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to enforce the Contract, then the Owner Trustee will, at the Servicer's expense
and written direction, take steps on behalf of the Trust to enforce the
Contract, including bringing suit in the Trust's name.
Section 5.03. Assignment or Replacement. At the request of an
Obligor, the Servicer may in its sole discretion consent to the assignment by
such Obligor of its rights under a Contract in the Contract Pool or the sublease
of a unit of the Equipment relating to such a Contract, so long as such Obligor
remains liable for all of its obligations under such Contract; provided, that
the Servicer may release such Obligor from its obligations if the Obligor's
assignee is determined by the Servicer to be of at least equivalent credit risk,
all in accordance with Customary Policies and Procedures. Upon the request of
any Obligor, the Servicer may, in its sole discretion, provide for the
substitution or replacement of any unit of Equipment for a substantially similar
unit of Equipment, so long as such Obligor remains liable for all of its
obligations under such Contract.
Section 5.04. Disposition Upon Termination of Contract. Upon
the termination of a Contract included in the Contract Pool as a result of a
default by the Obligor thereunder, and upon any such Contract becoming a
Defaulted Contract, the Servicer will use commercially reasonable efforts to
dispose of any related Equipment. Without limiting the generality of the
foregoing, if the Servicer disposes of any such Equipment by purchasing such
Equipment or by selling such Equipment to any of its Affiliates, such
disposition shall be for a purchase price equal to the fair market value thereof
(as determined by the Servicer in its reasonable discretion). The Servicer will
deposit any Prepayments and any Liquidation Proceeds derived from any such
disposition in accordance with Article VII hereof.
Section 5.05. Subservicers. The Servicer may enter into
servicing agreements with one or more subservicers (including the Financing
Originators or any other Affiliate of the Servicer) to perform all or a portion
of the servicing functions on behalf of the Servicer; provided that the Servicer
shall remain obligated and be liable to the Trust for servicing and
administering the Contracts in the Contract Pool in accordance with the
provisions of this Agreement without diminution of such obligation and liability
by virtue of the appointment of such subservicer, to the same extent and under
the same terms and conditions as if the Servicer alone were servicing and
administering such Contracts. The fees and expenses of the subservicer (if any)
will be as agreed between the Servicer and its subservicer and neither the Owner
Trustee, the Trust, the Indenture Trustee nor any Noteholder or Equity
Certificateholder will have any responsibility therefor. All actions of a
subservicer taken pursuant to such a subservicing agreement will be taken as an
agent of the Servicer with the same force and effect as though performed by the
Servicer.
Section 5.06. Further Assurance. The Trust will execute and
deliver to the Servicer, and the Servicer will prepare and furnish any
subservicer with, any powers of attorney and other documents necessary or
appropriate to enable the Servicer or a subservicer, as applicable, to carry out
its servicing and administrative duties under this Agreement and the other
Transaction Documents.
Section 5.07. Notice to Obligors. Except as contemplated in
clause (m) of the definition of Eligible Contract, the Servicer will not be
required to notify any Obligor that such
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Obligor's Contract or related Equipment, or any security interest in such
Contract or such Equipment, has been transferred, assigned, and conveyed
pursuant to the VFC Conveyancing Agreement, the Non-VFC Conveyancing Agreement,
the Purchase and Sale Agreements, the VFC Pooling Agreement, the VFC Assignment
or pursuant to this Agreement; provided that, in the event that the Servicer
resigns or is replaced, then if the place for payment pursuant to any Contract
is changed, the Successor Servicer must give each related Obligor prompt written
notice of the appointment of the Successor Servicer and the place to which such
Obligor should make payments pursuant to each such Contract.
Section 5.08. Collection Efforts; Modification of Contracts.
(a) The Servicer will make reasonable efforts to collect all payments called for
under the terms and provisions of the Contracts in the Contract Pool as and when
the same become due, in accordance with the Servicing Standard. The Servicer is
authorized in its discretion to waive any Late Charges, or other administrative
fees, expenses and charges collectible in respect of a Contract in the Contract
Pool, including late payment interest, documentation fees, insurance
administration charges, and extension fees.
(b) The Servicer also may, subject to Sections 5.09
and 5.10, at the request of an Obligor and at the Servicer's option, waive,
amend, modify or otherwise vary any other provision of a Contract in accordance
with Customary Policies and Procedures (it being understood that any
modification or amendment of a Contract resulting from an Insolvency Event with
respect to the related Obligor will not be deemed to have been granted by the
Servicer hereunder), including without limitation:
(i) in order to (A) change the Obligor's
regular due date to a date within the Collection
Period in which such due date occurs, or (B)
re-amortize (over the remainder of the original
Contract term) the Scheduled Payments on a Contract
following a partial Prepayment (provided, that the
sum of such partial Prepayment and the Contract
Principal Balance of the affected Contract after
re-amortization is at least equal to the Contract
Principal Balance for such Contract prior to giving
effect to the partial Prepayment), or
(ii) for any other purpose; provided, that
no such modification or amendment shall:
(A) change the amount or the due
date of any Scheduled Payment (except as
provided in clauses (i)(A) and (B) above,
Section 5.09 and Section 5.10 below);
(B) release the related Equipment
from the Contract, unless (1) the release
complies with Section 5.03 above, or (2) the
release is pursuant to a partial Prepayment
(which, in the case of a partial Prepayment
on a Lease, meets the requirements of
Section 5.09 below) and the ratio of the
fair market value (determined by the
Servicer in its reasonable discretion) of
the related Equipment to the Contract
Principal Balance of the affected Contract
after
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giving effect to such Prepayment and
release, is at least equal to such ratio
existing prior to such event;
(C) except as provided in clause
(ii)(A) above, result in the Contract
Principal Balance of the Contract being less
than it would have been absent such
modification or amendment; or
(D) if such modification or
amendment had been in effect on the relevant
Transfer Date with respect to the Contract,
cause or have caused the Contract not to
constitute an Eligible Contract.
Section 5.09. Prepayments of Certain Contracts. The Servicer
may, at its option and in accordance with Customary Policies and Procedures,
agree to permit a Contract in the Contract Pool that is not otherwise
contractually prepayable by its terms and is not a Defaulted Contract, to become
a Prepaid Contract through a voluntary Prepayment by the Obligor (which shall
not be deemed to include prepayment due to a Casualty Loss); provided, that the
Servicer will not permit the voluntary full or partial Prepayment of such a
Contract unless the amount of such Prepayment (or, in the case of a partial
Prepayment, the sum of such Prepayment and the remaining Contract Principal
Balance of the Contract after application of such Prepayment), together with
such additional amounts as are (i) otherwise available to or supplied by the
Servicer for the purpose of prepaying such Contract, and (ii) deposited in the
Collection Account contemporaneously with the deposit therein of such
Prepayment, is at least equal to the Required Payoff Amount for such Contract
determined as of the beginning of the current Collection Period.
Section 5.10. Certain Extensions; Acceleration. (a) The
Servicer may (subject to subsection (b) below) grant payment extensions on a
Contract in the Contract Pool, consistent with Customary Policies and Procedures
(it being understood that any extensions on a Contract resulting from an
Insolvency Event with respect to the related Obligor will not be deemed to have
been granted by the Servicer hereunder) if the Servicer believes in good faith
that such extension is necessary to avoid a termination and liquidation of such
Contract and will maximize the amount to be received by the Trust with respect
to such Contract; provided, however, that the aggregate period of all extensions
granted on a Contract shall not exceed six months. Nothing in this Section 5.10
shall be deemed to prevent the Servicer from extending or renewing, or otherwise
accepting the continued performance by the Obligor under, a Contract after
expiration of its stated term.
(b) The Servicer also, consistent with Customary
Policies and Procedures, may accelerate (or elect not to accelerate) the
maturity of all or any Scheduled Payments under any Contract in the Contract
Pool under which a default under the terms thereof has occurred and is
continuing (after the lapse of any applicable grace period); provided that the
Servicer is required to accelerate the Scheduled Payments due under any Contract
in the Contract Pool (and take other action in accordance with applicable
Customary Policies and Procedures, including repossessing or otherwise
converting the related Equipment, to realize upon the value of such Contract and
the related Equipment) to the fullest extent permitted by the terms of such
Contract, promptly after such Contract becomes a Defaulted Contract.
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Section 5.11. Taxes and Other Amounts. To the extent provided
for in any Contract in the Contract Pool, the Servicer will make reasonable
efforts consistent with the Servicing Standard to collect (or cause to be
collected) all payments with respect to amounts due for taxes, assessments and
insurance premiums relating to such Contract or the related Equipment and remit
such amounts to the appropriate Governmental Authority or insurer on or prior to
the date such payments are due.
Section 5.12. Suits by Servicer. Notwithstanding anything
herein to the contrary, the Servicer does not have any obligation pursuant to
this Agreement to appear in, prosecute or defend any legal action which is not
incidental to its servicing duties under this Agreement.
Section 5.13. Remittances. The Servicer will remit and service
all Collections in accordance with Article VII hereof.
Section 5.14. Servicer Advances. For any Collection Period, if
the Servicer determines that any Scheduled Payment (or portion thereof) which
was due and payable pursuant to a Contract in the Contract Pool during such
Collection Period was not received prior to the end of such Collection Period,
the Servicer shall make a Servicer Advance in an amount up to the amount of such
delinquent Scheduled Payment (or portion thereof), to the extent that in its
sole discretion it determines that it can recover such amount from subsequent
Collections under the related Contract; provided, however, if a Person other
than an affiliate of The CIT Group, Inc. becomes the Servicer hereunder, such
Person shall not be required to make a Servicer Advance. The Servicer will
deposit any Servicer Advances into the Collection Account on or prior to 11:00
a.m. (New York time) on the Deposit Date, in immediately available funds. The
Servicer will be entitled to be reimbursed for Servicer Advances pursuant to
Article VII hereof.
Section 5.15. Realization Upon Defaulted Contract. The
Servicer will use its best efforts consistent with the Servicing Standard to
repossess or otherwise comparably convert the ownership of any Equipment
relating to a Defaulted Contract and will act as transfer and processing agent
for Equipment or Applicable Security which it repossesses. The Servicer will
follow such other practices and procedures, consistent with the Servicing
Standard, in order to realize upon such Equipment or Applicable Security, which
practices and procedures may include reasonable efforts to enforce all
obligations of Obligors and repossessing and selling such Equipment or
Applicable Security at public or private sale in circumstances other than those
described in the preceding sentence. Without limiting the generality of the
foregoing, the Servicer may sell any such Equipment or Applicable Security to
the Servicer or its Affiliates for a purchase price equal to the then fair
market value thereof (determined by the Servicer in its reasonable discretion).
In any case in which any such Equipment or Applicable Security has suffered
damage, the Servicer will not expend funds in connection with any repair or
toward the repossession of such Equipment or Applicable Security unless it
determines in its discretion that such repair and/or repossession will increase
the Liquidation Proceeds by an amount greater than the amount of such expenses.
The Servicer will remit to the Collection Account the Liquidation Proceeds
received in connection with the transfer or disposition of Equipment or
Applicable Security relating to a Defaulted Contract in accordance with Article
VII hereof.
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Section 5.16. Maintenance of Insurance Policies. The Servicer
will use reasonable efforts, consistent with the Servicing Standard, to ensure
that each Obligor complies with applicable insurance requirements set forth in
the related Contract; provided that the Servicer, in accordance with Customary
Policies and Procedures, may allow Obligors to self-insure. If an Obligor fails
to maintain property damage insurance to the extent required under its Contract,
the Servicer may, consistent with Customary Policies and Procedures, purchase
and maintain such insurance on behalf of, and at the expense of (if the
applicable Contract so provides), the Obligor. In connection with its activities
as Servicer of Contracts in the Contract Pool, the Servicer agrees to present,
on behalf of itself, the Trust and the Noteholders or Equity Certificateholders,
claims to the insurer under each Insurance Policy and any such liability policy,
and to settle, adjust and compromise such claims, in each case, consistent with
the terms of each Contract.
Section 5.17. Certain Other Duties With Respect to Trust. The
Servicer shall, and hereby agrees that it will, monitor the Trust's compliance
with all applicable provisions of state and federal securities laws, notify the
Trust and the Administrator of any actions to be taken by the Trust necessary
for compliance with such laws and prepare on behalf of the Trust and the
Administrator all notices, filings or other documents or instruments required to
be filed under such laws.
Section 5.18. Servicing Compensation. As compensation for its
servicing activities with respect to the Contract Pool, and also in
consideration of its expenses as set forth in Section 5.19, the Servicer shall
be entitled to receive a servicing fee in respect of any Collection Period (or
portion thereof) (with respect to each Collection Period, the "Servicing Fee"),
equal to the sum of (i) one-twelfth of the product of (A) the Servicing Fee
Percentage and (B) the Contract Pool Principal Balance as of the first day of
such Collection Period and (ii) any amount described in the clause (iv) of the
definition of "Excluded Amounts."
Section 5.19. Payment of Certain Expenses by Servicer. The
Servicer will be required to pay all expenses incurred by it in connection with
its activities under this Agreement, including fees and disbursements of
independent accountants, counsel, the Owner Trustee, the Indenture Trustee,
taxes imposed on the Servicer, expenses incurred in connection with payments and
reports pursuant to this Agreement, and all other fees and expenses not
expressly stated under this Agreement (including ongoing fees and expenses of
the Owner Trustees) to be for the account of the Trust or the Depositor, but
excluding Liquidation Expenses incurred as a result of activities contemplated
by Section 5.15 (which may be netted from Liquidation Proceeds). The Servicer
will be required to pay all reasonable fees and expenses owing to the Owner
Trustee or the Indenture Trustee in connection with the maintenance of the
Collection Account. The Servicer shall be required to pay such expenses for its
own account and shall not be entitled to any payment or reimbursement therefor
other than the Servicing Fee, payable from Collections as provided herein.
Section 5.20. Records. The Servicer shall, during the period
it is Servicer hereunder, maintain such books of account and other records as
will enable the Trust or the Administrative Agent to determine the status of
each Contract in the Contract Pool.
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Section 5.21. Inspection. (a) The Servicer shall afford the
Owner Trustee and the Indenture Trustee and their respective authorized agents
not more frequently than once during each calendar year at the Servicer's
expense, not to exceed $1,000 in expenses and upon reasonable prior written
request, reasonable access during normal business hours to the Servicer's
records relating to the Contracts in the Contract Pool, and will cause its
personnel to assist in any examination of such records by any such Person, and
allow copies of the same to be made. The examination referred to in this Section
will be conducted in a manner which does not unreasonably interfere with the
Servicer's normal operations or customer or employee relations. Without
otherwise limiting the scope of the examination, such examining party may, using
generally accepted audit procedures, verify the status of each such Contract and
review the Computer Disk and records relating thereto for conformity to reports
prepared by the Servicer pursuant to Article IX hereof, and compliance with the
standards represented to exist as to each such Contract in this Agreement and
the other Transaction Documents.
(b) At all times during the term hereof, the Servicer
shall keep available a copy of the Schedule of Contracts at its principal
executive office for inspection by any such party referred to in subsection (a)
of this Section 5.21.
Section 5.22. Trust To Cooperate in Releases. At the same time
as (i) any Lease in the Contract Pool terminates and the Equipment related to
such Lease is sold, (ii) any Contract in the Contract Pool becomes a Prepaid
Contract and in connection therewith the Equipment related to such Prepaid
Contract is sold, (iii) the final Scheduled Payment is made in full on a
Contract in the Contract Pool, (iv) a Contract previously in the Contract Pool
becomes a Replaced Contract in accordance with Section 2.04, or is repurchased
by deposit of a Purchase Amount as provided herein, or (v) the Servicer
substitutes or replaces any unit of Equipment as contemplated in Section 5.03,
the Trust shall to the extent requested by the Servicer release the Trust's
interest in the Equipment relating to such affected Contract or such substituted
or replaced Equipment, as the case may be; provided that such release will not
constitute a release of the Trust's interest in the proceeds of Equipment the
subject of a Contract still in the Contract Pool (other than with respect to
Equipment that is replaced pursuant to Section 5.03). In connection with any
transfer of such Equipment, the Trust and the Indenture Trustee shall execute
and deliver to the Servicer any assignments, bills of sale, termination
statements and any other releases and instruments as the Servicer may request
and prepare at its expense in order to effect such release and transfer;
provided that neither the Trust nor the Indenture Trustee shall be deemed to
make any representation or warranty, express or implied, with respect to any
such Equipment in connection with such transfer and assignment. Nothing in this
Section 5.22 shall diminish the Servicer's obligations pursuant to Article VII
with respect to the proceeds of any such transfer.
Section 5.23. Separate Entity Existence. The Servicer agrees
to take or refrain from taking or engaging in with respect to the Depositor, as
applicable, each of the actions or activities specified in the "substantive
nonconsolidation" opinion of Xxxxxxx Xxxx & Xxxxx LLP (or in any related
Certificate of Financial) delivered on the Closing Date, upon which the
conclusions expressed therein are based.
Section 5.24. Assignment of Servicing. The Servicer may sell,
transfer, assign or convey its rights as Servicer to any Eligible Servicer, upon
written notice to the Trustees and
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the Rating Agencies, without the consent of the Securityholders or the Trustees,
provided that the Rating Agency Condition is satisfied. No such sale, transfer,
assignment or conveyance shall become effective until such Eligible Servicer
shall have assumed all of the responsibilities and obligations of the Servicer
under the Transaction Documents.
ARTICLE VI
COVENANTS OF THE DEPOSITOR
Section 6.01. LLC Existence. During the term of this
Agreement, the Depositor will keep in full force and effect its existence,
rights and franchises as a limited liability company under the laws of the
jurisdiction of its formation and will obtain and preserve its qualification to
do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Agreement, the
other Transaction Documents and each other instrument or agreement necessary or
appropriate to the proper administration of this Agreement and the transactions
contemplated hereby. In addition, all transactions and dealings between the
Depositor and its Affiliates will be conducted on an arm's-length basis.
Section 6.02. Contracts Not to be Evidenced by Promissory
Notes. The Depositor will take no action to cause any Contract not originally
consisting of or evidenced by an instrument (except to the extent part of
chattel paper) (as such terms are defined in the UCC), to be evidenced by an
instrument, except in connection with the enforcement or collection of such
Contract.
Section 6.03. Security Interests. The Depositor will not sell,
pledge, assign or transfer to any other Person, or grant, create, incur, assume
or suffer to exist any Lien on any Contract in the Contract Pool or on any other
Trust Asset or on any related Equipment, whether now existing or hereafter
transferred to the Trust, or any interest therein (except for Permitted Liens).
The Depositor will immediately notify the Trust and the Indenture Trustee of the
existence of any Lien (other than Permitted Liens) on any Contract in the
Contract Pool or on any other Trust Assets or on any related Equipment; and the
Depositor shall defend the right and interest of the Trust in, to and under the
Contracts in the Contract Pool and the related Equipment, against all claims of
third parties; provided, however, that nothing in this Section 6.03 shall
prevent or be deemed to prohibit (i) the Depositor from suffering to exist
Permitted Liens upon any of the Contracts in the Contract Pool or any related
Equipment, or (ii) repurchases or substitutions by Financial pursuant to the
Purchase and Sale Agreements.
Section 6.04. Delivery of Collections. The Depositor agrees to
pay to the Servicer promptly any misdirected Collections received by the
Depositor in respect of the Contracts in the Contract Pool, for application in
accordance with Article VII.
Section 6.05. Regulatory Filings. The Depositor shall make any
filings, reports, notices, applications and registrations with, and seek any
consents or authorizations from, the United States Securities and Exchange
Commission and any state securities authority on behalf of the Trust as may be
necessary or that the Depositor deems advisable to comply with any federal or
state securities or reporting requirements or laws.
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Section 6.06. Compliance With Law. Depositor hereby agrees to
comply in all material respects with all Requirements of Law applicable to the
Depositor.
Section 6.07. Activities. The Depositor shall not engage in
any business or activity of any kind, or enter into any transaction or
indenture, mortgage, instrument, agreement, contract, lease or other
undertaking, which is not directly related to the transactions contemplated and
authorized by this Agreement or the other Transaction Documents; provided,
however, that the Depositor may purchase and sell (or grant Liens in respect of)
contracts and/or other related assets similar to the Contracts to other Persons
in securitization or other non-recourse financing transactions involving TCC,
Financial or any of their Affiliates on terms and conditions (with respect to
the liabilities imposed upon the Depositor by virtue of such transactions, as
well as in respect of agreements or restrictions concerning activities of the
Depositor and its relations or interactions with TCC or a Financing Originator
or other applicable Affiliate relevant to "bankruptcy remoteness" or
"substantive consolidation" analysis), in each case substantially similar to
such terms and conditions applicable to the Depositor hereunder and under the
other Transaction Documents.
Section 6.08. Indebtedness. The Depositor shall not create,
incur, assume or suffer to exist any Indebtedness or other liability whatsoever,
except (i) obligations incurred under this Agreement or other Transaction
Documents, or incidental thereto, or (ii) liabilities incident to the
maintenance of its corporate existence in good standing, or (iii) obligations in
connection with transactions described in the proviso to Section 6.07, as
limited thereby.
Section 6.09. Guarantees. The Depositor shall not become or
remain liable, directly or contingently, in connection with any Indebtedness or
other liability of any other Person, whether by guarantee, endorsement (other
than endorsements of negotiable instruments for deposit or collection in the
ordinary course of business), agreement to purchase or repurchase, agreement to
supply or advance funds, or otherwise, except as contemplated hereby and in
connection with transactions described in Section 6.07, as limited thereby.
Section 6.10. Investments. The Depositor shall not make or
suffer to exist any loans or advances to, or extend any credit to, or make any
investments (by way of transfer of property, contributions to capital, purchase
of stock or securities or evidences of indebtedness, acquisition of the business
or assets, or otherwise) in, any Person except (i) for purchases or other
acquisitions of Contracts and related Contract Assets pursuant to the Purchase
and Sale Agreements or purchases or other acquisitions of similar contracts and
related assets permitted by Section 6.07, or (ii) the holding of ownership
interests in Equipment contemplated herein or in transactions permitted by
Section 6.07, or (iii) for investments in Eligible Investments in accordance
with the terms of this Agreement.
Section 6.11. Merger; Transfers. The Depositor shall not enter
into any transaction of merger or consolidation, or liquidate or dissolve itself
(or suffer any liquidation or dissolution) or acquire or be acquired by any
Person, or convey, sell, lease or otherwise dispose of all or substantially all
of its property or business, except as provided for in this Agreement.
Section 6.12. Payments. The Depositor shall not declare or
pay, directly or indirectly, any dividend or make any other payment (whether in
cash or other property) with
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respect to the profits, assets or capital of the Depositor or any Person's
interest therein, or purchase, redeem or otherwise acquire for value any of its
equity ownership interests now or hereafter outstanding, except that the
Depositor may effect payments of its earnings in respect of Trust Assets to its
members in each case so long as it would continue to be Solvent after giving
effect thereto, and otherwise in accordance with the Transaction Documents.
Section 6.13. Other Agreements. The Depositor shall not become
a party to, or permit any of its properties to be bound by, any indenture,
mortgage, instrument, contract, agreement, lease or other undertaking, except
this Agreement and the other Transaction Documents to which it is a party and
any agreement relating to another securitization transaction permitted by
Section 6.07; nor shall it amend or modify the provisions of its Certificate of
Formation or Limited Liability Company Agreement except in accordance with the
Transaction Documents and with the consent of the Required Holders, or issue any
power of attorney except to the Owner Trustee, the Indenture Trustee or the
Servicer pursuant to the Transaction Documents (or other similar powers of
attorney in connection with transactions permitted by the proviso to Section
6.07).
Section 6.14. Separate Entity Existence. The Depositor shall:
(i) Maintain its own deposit account or accounts,
separate from those of any Affiliate, with commercial banking
institutions. The funds of the Depositor will not be diverted
to any other Person or for other than authorized uses of the
Depositor.
(ii) Ensure that, to the extent that it shares the
same officers or other employees as any of its members or
Affiliates, the salaries of and the expenses related to
providing benefits to such officers and other employees shall
be fairly allocated among such entities, and each such entity
shall bear its fair share of the salary and benefit costs
associated with all such common officers and employees.
(iii) Ensure that, to the extent that it jointly
contracts with any of its members or Affiliates to do business
with vendors or service providers or to share overhead
expenses, the costs incurred in so doing shall be allocated
fairly among such entities, and each such entity shall bear
its fair share of such costs. To the extent that the Depositor
contracts or does business with vendors or service providers
when the goods and services provided are partially for the
benefit of any other Person, the costs incurred in so doing
shall be fairly allocated to or among such entities for whose
benefit the goods and services are provided, and each such
entity shall bear its fair share of such costs. All material
transactions between Depositor and any of its Affiliates shall
be only on an arm's length basis.
(iv) To the extent that the Depositor and any of its
members or Affiliates have offices in the same location, there
shall be a fair and appropriate allocation of overhead costs
among them, and each such entity shall bear its fair share of
such expenses.
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(v) Conduct its affairs strictly in accordance with
its Limited Liability Company Agreement and its Certificate of
Formation, and observe all necessary, appropriate and
customary limited liability company formalities, including,
but not limited to, holding all regular and special members'
and manager/directors' meetings appropriate to authorize all
entity action, keeping separate and accurate records of such
meetings and its actions, passing all resolutions or consents
necessary to authorize actions taken or to be taken, and
maintaining accurate and separate books, records and accounts,
including, but not limited to, payroll and intercompany
transaction accounts.
(vi) Take or refrain from taking or engaging in, as
applicable, each of the actions or activities specified in the
"true sale" and "substantive nonconsolidation" opinions of
Xxxxxxx Xxxx & Xxxxx LLP delivered on the Closing Date (or in
any related certificate delivered in connection therewith),
upon which the conclusions expressed therein are based.
Section 6.15. Location; Records. The Depositor shall not move
outside the State of New Jersey, the location of its chief executive office,
without thirty (30) days' prior written notice to the Trust, the Indenture
Trustee and the Servicer, and will promptly take all actions required
(including, but not limited to, all filings and other acts necessary or
advisable under the UCC of each relevant jurisdiction) in order to continue the
first priority perfected security interest of the Indenture Trustee in Trust
Assets. The Depositor will give the Indenture Trustee, the Trust and the
Servicer prompt notice of a change within the State of New Jersey of the
location of its chief executive office.
Section 6.16. Liability of Depositor; Indemnities. The
Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Depositor under this Agreement.
The Depositor shall indemnify, defend and hold harmless the
Trust, the Owner Trustee (including in its individual capacity), the Indenture
Trustee (including in its individual capacity) and the Servicer (and any of
their respective officers, directors, employees or agents) from and against any
taxes that may at any time be asserted against any such Person with respect to
the transactions contemplated herein and in the other Transaction Documents,
including any sales, gross receipts, general corporation, tangible personal
property, personal property replacement privilege or license taxes (but, in the
case of the Trust, not including any taxes asserted with respect to, and as of
the date of, the transfer of Contracts to the Trust or the issuance and original
sale of the Notes, or asserted with respect to ownership of Contract Assets, or
federal or other income taxes arising out of payments from Collections on the
Trust Assets) and costs and expenses in defending against the same.
The Depositor shall indemnify, defend and hold harmless the
Trust, the Owner Trustee (including in its individual capacity), the Indenture
Trustee (including in its individual capacity) and the Servicer (and any of
their respective officers, directors, employees or agents) and the
Securityholders from and against any loss, liability or expense incurred by
reason of the Depositor's willful misfeasance, bad faith or negligence (other
than errors in judgment) in the
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performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement.
The Depositor shall indemnify, defend and hold harmless the
Trust, the Owner Trustee (including in its individual capacity), the Indenture
Trustee (including in its individual capacity) and the Servicer (and any of
their respective officers, directors, employees or agents) and any Noteholders
from and against all costs, expenses, losses, claims, damages and liabilities
arising out of or incurred in connection with the acceptance or performance (or
failure of performance) of the trusts and duties herein and, in the case of the
Owner Trustee, in the Trust Agreement and, in the case of the Indenture Trustee,
in the Indenture, except to the extent that such cost, expense, loss, claim,
damage or liability in the case of (i) the Owner Trustee shall be due to the
willful misfeasance, bad faith or negligence of the Owner Trustee, or shall
arise from the breach by the Owner Trustee of any of its representations or
warranties set forth in Section 7.03 of the Trust Agreement, or (ii) the
Indenture Trustee shall be due to the willful misfeasance, bad faith or
negligence of the Indenture Trustee.
The Depositor shall be liable directly to and will indemnify
any injured party or any other creditor of the Trust for all losses, claims,
damages, liabilities and expenses of the Trust to the extent that the Depositor
would be liable if the Trust were a partnership under the Delaware Revised
Uniform Limited Partnership Act in which the Depositor were a general partner;
provided, however, that the Depositor shall not be liable for any losses
incurred by the Equity Certificateholder in the capacity of an investor in the
Equity Certificate or a Noteholder in the capacity of an investor in the Notes.
In addition, any third party creditors of the Trust (other than in connection
with the obligations described in the immediately preceding sentence for which
the Depositor shall not be liable) shall be deemed third party beneficiaries of
this paragraph. The obligation of the Depositor under this paragraph shall be
evidenced by the Equity Certificate.
The Depositor shall indemnify, defend and hold harmless the
Owner Trustee (including in its individual capacity) and the Indenture Trustee
(including in its individual capacity) from and against any loss, liability or
expense incurred by reason of the Depositor's or Trust's violation of federal or
state securities laws in connection with the offering and sale of the Notes and
the Certificate.
Indemnification under this Section shall include, without
limitation, reasonable fees and expenses of counsel and expenses of litigation;
provided, however, that the indemnification under this Section, notwithstanding
anything to the contrary, is limited to the assets of the Depositor (including
its rights under Article VI of the Substitute VFC Purchase Agreement; Article VI
of the Non-VFC Purchase Agreement or Article VI of the VFC Purchase Agreement);
provided, further, any indemnity payments to be made pursuant to this Section
shall not be made from the Trust Assets (except to the extent any of the same
have been distributed to the Depositor free and clear of any interest of the
Trust therein and except to the extent Financial as co-obligor is obligated to
make such payment pursuant to Article VI of the Substitute VFC Purchase
Agreement; Article VI of the Non-VFC Purchase Agreement or Article VI of the VFC
Purchase Agreement), and such indemnity payments, if unpaid, shall not
constitute a claim against the Trust or the Trust Assets (except in respect of
rights against Financial in respect of the aforementioned Articles of the
Purchase and Sale Agreements). If the Depositor (or
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Financial pursuant to the aforementioned Articles of the Purchase and Sale
Agreements) shall have made any indemnity payments pursuant to this Section and
the Person to or on behalf of whom such payments are made thereafter shall
collect any of such amounts from others, such Person shall promptly repay such
amounts to the Depositor (or Financial, as applicable), without interest.
Indemnification under this Section shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee, as the
case may be, and the termination of this Agreement.
Section 6.17. Bankruptcy Limitations. The Depositor shall not,
without the affirmative vote of each of the manager/directors of the Depositor
(which must include the affirmative vote of at least one duly appointed
Independent Director as defined in the Certificate of Formation and the Limited
Liability Company Agreement of the Depositor) (A) dissolve or liquidate, in
whole or in part, or institute proceedings to be adjudicated bankrupt or
insolvent, (B) consent to the institution of bankruptcy or insolvency
proceedings against it, (C) file a petition seeking or consent to reorganization
or relief under any applicable federal or state law relating to bankruptcy, (D)
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Depositor or a substantial part
of its property, (E) make a general assignment for the benefit of creditors, (F)
admit in writing its inability to pay its debts generally as they become due, or
(G) take any entity action in furtherance of the actions set forth in clauses
(A) through (F) above; provided, however, that no manager/director may be
required by any member of the Depositor to consent to the institution of
bankruptcy or insolvency proceedings against the Depositor so long as it is
Solvent.
Section 6.18. Limitation on Liability of Depositor and Others.
The Depositor and any director or officer or employee or agent of the Depositor
may rely in good faith on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor shall not be under any obligation to appear in, prosecute or
defend any legal action that shall not be incidental to its obligations under
this Agreement, and that in its opinion may involve it in any expense or
liability.
Section 6.19. Chief Executive Office. During the term of this
Agreement, the Depositor will maintain its chief executive office in one of the
States of the United States, except Louisiana, Tennessee, Colorado, Kansas, New
Mexico, Oklahoma, Utah or Wyoming.
ARTICLE VII
ESTABLISHMENT OF ACCOUNTS; PAYMENTS
Section 7.01. Trust Accounts; Collections. (a) On or before
the Closing Date, the Depositor (or the Servicer on its behalf) shall cause the
Indenture Trustee to establish the Collection Account, the Note Distribution
Account and the Cash Collateral Account, each in the name of the Indenture
Trustee for the benefit of the Noteholders and the Equity Certificateholder. The
Servicer is hereby required to ensure that each of the Trust Accounts is
established and maintained as a segregated corporate trust account with a
Qualified Institution. If any institution with which any of the accounts
established pursuant to this Section 7.01(a)
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ceases to be a Qualified Institution, the Servicer shall within 30 days after
notice of such event establish a replacement account at a Qualified Institution,
and effect (or cause to be effected) a concurrent transfer of all amounts in the
current non-qualifying account to the replacement account.
(b) (i) Subject to subsection 7.01(b)(ii) hereof, the
Servicer shall deposit or cause to be deposited, without deposit into any
intervening account, into the Collection Account as promptly as practical after
the Date of Processing (but in any case not later than the second Business Day
following the Date of Processing thereof), all Pledged Revenues on deposit with
the Servicer in the form of available funds, and all Pledged Revenues otherwise
received by the Servicer (and all Investment Earnings from investments of the
Collection Account).
(ii) Notwithstanding anything in this
Agreement to the contrary, for so long as, and only so long as,
(A) the Servicer or the direct or
indirect parent of the Servicer shall have
and maintain a short-term debt rating of at
least A-1 by Standard & Poor's and either a
short-term debt rating of P-1 or a long-term
debt rating of at least A2 by Xxxxx'x, or
(B) the Servicer obtains a letter of
credit, surety bond or insurance policy (the
"Servicer Letter of Credit") under which
demands for payment may be made to secure
timely remittance of monthly collections to
the Collection Account and the Trustees are
provided with a letter from each Rating
Agency to the effect that the utilization of
such alternative remittance schedule and any
amendment required to be made to this
Agreement in connection therewith will not
result in a qualification, reduction or
withdrawal of its then-current rating of the
Notes,
the Servicer may make the deposits to the Collection Account specified in
subsection 7.01(b)(i) hereof on a monthly basis, but not later than the Deposit
Date following the last day of the Collection Period within which such payments
were processed by the Servicer, in an amount equal to the net amount of such
deposits and payments which would have been made to the Collection Account
during such Collection Period but for the provisions of this subsection
7.01(b)(ii). In the event that the Servicer is permitted to make remittances of
collections to the Collection Account pursuant to Section 7.01(b)(ii)(B) hereof,
this Agreement may be modified, to the extent necessary to provide for the
Servicer Letter of Credit, without the consent of any Securityholder. The
Servicer shall notify the Trustees if the Servicer no longer complies with the
requirements set forth in clause (A) or (B) above.
(c) Subject to Section 7.01(b)(ii), the Servicer
shall deposit or cause to be deposited, on the Closing Date and on each
Substitution Transfer Date, in immediately available funds into the Collection
Account, all Pledged Revenues received after the applicable Cut-Off Date and
through and including the date which is two Business Days preceding the
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Closing Date or Substitution Transfer Date, as the case may be, in respect of
Contracts being transferred to the Trust on such date.
(d) Notwithstanding Sections 7.01(b) and (c), if (i)
the Servicer makes a deposit into the Collection Account in respect of Pledged
Revenues of a Contract in the Contract Pool and such Pledged Revenues were
received by the Servicer in the form of a check which is not honored for any
reason, or (ii) the Servicer makes a mistake with respect to the amount of any
Pledged Revenues and deposits an amount that is less than or more than the
actual amount of such Collection, the Servicer shall appropriately adjust the
amount subsequently deposited into the Pledged Revenues Account to reflect such
dishonored check or mistake. Any Scheduled Payment in respect of which a
dishonored check is received shall be deemed not to have been paid.
Section 7.02. Cash Collateral Account. (a) On the Closing
Date, the Depositor shall deposit the sum of $50,256,499 into the Cash
Collateral Account from the net proceeds of the sale of the Notes and the
Indenture Trustee shall deposit into the Cash Collateral Account proceeds
received by the Indenture Trustee of loans made by the Cash Collateral Account
Lenders equal to $18,515,552.
(b) If on any Payment Date, the amounts on deposit in
the Cash Collateral Account (after giving effect to all deposits thereto or
withdrawals therefrom on such Payment Date) is greater than the Required Cash
Collateral Amount, the Indenture Trustee upon receipt of written instructions
from the Servicer shall distribute the excess of the amount on deposit in the
Cash Collateral Account over the Required Cash Collateral Amount as provided in
the Cash Collateral Account Agreement. Amounts properly distributed pursuant to
the prior sentence shall be deemed released from the Trust Estate and the
security interest herein granted to the Indenture Trustee, and the Trust shall
in no event be required to refund such distributed amounts.
Section 7.03. Trust Account Procedures. If the Servicer so
directs, in writing (with a copy to the Owner Trustee and the Indenture
Trustee), the Qualified Institution maintaining any Trust Account, shall invest
the amounts therein in Eligible Investments of the type specified in such
written direction that mature not later than one Business Day prior to the next
succeeding Payment Date (or that mature on such earlier Business Day as the
Rating Agencies shall approve, with a copy of such approval provided to the
Indenture Trustee). Once such funds of any Trust Account are invested, the
Servicer shall not change or permit a change in the investment of such funds.
Subject to the other provisions hereof, the Indenture Trustee shall have sole
control over each such investment and the income thereon, and any certificate or
other instrument evidencing any such investment, if any, shall be delivered
directly to the Indenture Trustee or its agent, together with each document of
transfer, if any, necessary to transfer title to such investment to the
Indenture Trustee in a manner which complies with this Section 7.03. All
Investment Earnings on investments of funds in the Collection Account and Note
Distribution Account shall be deposited in or maintained within the Collection
Account pursuant to Section 7.01 and distributed on the next Payment Date
pursuant to Section 7.05. All Investment Earnings in the Cash Collateral Account
shall be distributed in accordance with the Cash Collateral Account Agreement.
The Servicer, the Depositor and the Trust agree and acknowledge that the
Indenture Trustee is to have "control" (within the meaning of Section 8-
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102 of the UCC as enacted in New York) of collateral consisting of "Investment
Property" (within the meaning of Section 9-115 of the UCC as enacted in New
York) for all purposes of this Agreement. In the absence of timely written
direction from the Servicer, the Indenture Trustee shall invest or cause to be
invested amounts in the Trust Accounts in Eligible Investments of the type
specified in clause (vi) of the definition of Eligible Investments herein. The
Indenture Trustee shall not be liable for investment losses in Eligible
Investments as directed by the Servicer.
Section 7.04. Securityholder Payments. (a) On each Payment
Date, each Noteholder and the Equity Certificateholder as of the related Record
Date shall be paid amounts payable on such date pursuant to Section 7.05 below
by check mailed to such Noteholder or the Equity Certificateholder at the
address for such Noteholder or the Equity Certificateholder appearing on the
Note Register or the Certificate Register, or by wire transfer if such
Noteholder or the Equity Certificateholder has provided written instructions for
such payment method to the Indenture Trustee and Owner Trustee, respectively, at
least ten days prior to such Payment Date.
(b) The Indenture Trustee shall serve as the Paying
Agent hereunder and shall make the payments to the Noteholders and the Equity
Certificateholder required hereunder. The Indenture Trustee hereby agrees that
all amounts held by it for payment hereunder will be held in trust for the
benefit of the Noteholders and the Equity Certificateholder, as their interests
may appear.
Section 7.05. Allocations and Payments.
(a) Distributions from Collection Account. On each
Payment Date, the Indenture Trustee shall (based solely on the information
contained in the Servicer's Monthly Report delivered on the related
Determination Date, upon which the Indenture Trustee may conclusively rely)
distribute the following amounts and in the order of priority specified below.
Within each order of priority, amounts shall be deemed withdrawn first from
Available Pledged Revenues, and second (but only as to amounts described in
clauses (ii) and (iii) below) from amounts deposited in the Collection Account
pursuant to Section 7.02 and 7.05(d).
(i) first, from the Available Pledged
Revenues then on deposit in the Collection Account,
to the Servicer, the Servicing Fee and the
reimbursement for Servicer Advances for the related
Collection Period and any amounts specified in
Section 2.05 hereof, to the extent the Servicer has
not reimbursed itself in respect of such amounts;
(ii) second, from the Amount Available then
remaining on deposit in the Collection Account, to
the Note Distribution Account an amount equal to the
Note Interest Distributable Amount for such Payment
Date;
(iii) third, from the Amount Available then
remaining on deposit in the Collection Account, to
the Note Distribution Account, an amount equal to the
Note Principal Distributable Amount for such Payment
Date;
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(iv) fourth, from the Amount Available then
remaining on deposit in the Collection Account, to
the Cash Collateral Account, the amount, if any,
necessary to increase the balance therein to the
Required Cash Collateral Amount;
(v) fifth, from the Amount Available then
remaining on deposit in the Collection Account, to
the parties entitled thereto in accordance with the
Cash Collateral Account Agreement, any amounts due
and unpaid thereunder; and
(vi) sixth, any remaining Amount Available
to the Indenture Trustee for distribution to the
Equity Certificateholder.
In the event the Servicer's Monthly Report shows that, as of any Determination
Date, there are amounts on deposit in the Collection Account which do not
constitute Pledged Revenues due to clause (ii)(b) of the definition thereof and
to which the Depositor is entitled pursuant to Section 2.04 hereof, the
Indenture Trustee shall forthwith pay such amount to or upon the written order
of the Depositor.
(b) Allocations and Payments Prior to an Event of
Default. On each Determination Date prior to an Event of Default, the Servicer,
pursuant to written monthly payment instructions and notification, shall
instruct the Indenture Trustee to withdraw and transfer, and on the succeeding
Payment Date the Indenture Trustee acting in accordance with such written
instructions shall withdraw and transfer, the amounts required to be withdrawn
from the Note Distribution Account in order to make the following payments or
allocations from the Amount Available for the related Payment Date (in each
case, such payment or transfer to be made only to the extent funds remain
available therefor after all prior payments and transfers for such Payment Date
have been made), in the following order of priority:
(i) pay to the Indenture Trustee on behalf
of the Class A-1 Noteholders, Class A-2 Noteholders,
Class A-3 Noteholders, and the Class A-4 Noteholders,
an amount equal to interest accrued in respect of the
related Class A-1 Notes at the Class A-1 Interest
Rate, Class A-2 Notes at the Class A-2 Interest Rate,
Class A-3 Notes at the Class A-3 Interest Rate, and
Class A-4 Notes at the Class A-4 Interest Rate for
the Accrual Period immediately preceding such Payment
Date, together with any such amounts that accrued in
respect of prior accrual periods for which no
allocation was previously made; provided that if the
Amount Available remaining to be allocated pursuant
to this clause is less than the full amount required
to be so allocated, such remaining Amount Available
shall be allocable to the Holders of the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes and the Class
A-4 Notes pro rata based upon the then-outstanding
Principal Amount thereof;
(ii) pay to the Indenture Trustee on behalf
of the Class B Noteholders an amount equal to the
Class B Interest Distributable Amount; provided, that
if the Amount Available remaining to be allocated
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pursuant to this clause is less than the full amount
required to be so paid, such remaining Amount
Available shall be paid to the Holders of Class B
Notes pro rata based on their respective entitlement
pursuant to this clause;
(iii) pay to the Indenture Trustee on behalf
of the Class C Noteholders, an amount equal to the
Class C Interest Distributable Amount; provided, that
if the Amount Available remaining to be allocated
pursuant to this clause is less than the full amount
required to be so paid, such remaining Amount
Available shall be paid to the Holders of Class C
Notes pro rata based on their respective entitlement
pursuant to this clause;
(iv) pay to the Indenture Trustee on behalf
of the Class D Noteholders an amount equal to the
Class D Interest Distributable Amount; provided, that
if the Amount Available remaining to be allocated
pursuant to this clause is less than the full amount
required to be so paid, such remaining Amount
Available shall be paid to the Holders of Class D
Notes pro rata based on their respective entitlement
pursuant to this clause;
(v) prior to the Payment Date on which the
Principal Amount of the Class A-1 Notes has been
reduced to zero, pay to the Indenture Trustee, on
behalf of the Class A-1 Noteholders, the Class A
Principal Payment Amount;
(vi) on the Payment Date on which the
Principal Amount of the Class A-1 Notes shall be
reduced to zero, pay to the Indenture Trustee, on
behalf of the Class A Noteholders, the Class A
Principal Payment Amount, allocated as follows:
(1) to the Class A-1
Noteholders, the remaining
Principal Amount of the
Class A-1 Notes; and
(2) the remaining Class A
Principal Payment Amount,
if any, to the Class A-2
Noteholders until the
Principal Amount of the
Class A-2 Notes has been
reduced to zero, then to
the Class A-3 Noteholders
until the Principal Amount
of the Class A-3 Notes has
been reduced to zero, then
to the Class A-4
Noteholders until the
Principal Amount of the
Class A-4 Notes has been
reduced to zero;
(vii) after the Payment Date on which the
Class A-1 Principal Balance has been reduced to zero,
pay to the Indenture Trustee, on behalf of the Class
A Noteholders, the Class A Principal Payment Amount,
to the Class A-2 Noteholders until the Principal
Amount of the Class A-2 Notes
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has been reduced to zero, then to the Class
A-3 Noteholders until the Principal Amount of the
Class A-3 Notes has been reduced to zero, then to the
Class A-3 Noteholders until the Principal Amount of
the Class A-3 Notes has been reduced to zero, then to
the Class A-4 Noteholders until the Principal Amount
of the Class A-4 Notes has been reduced to zero;
(viii) pay to the Indenture Trustee on
behalf of the Class B Noteholders, the Class B
Principal Payment Amount;
(ix) pay to the Indenture Trustee on behalf
of the Class C Noteholders, the Class C Principal
Payment Amount;
(x) pay to the Indenture Trustee on behalf
of the Class D Noteholders, the Class D Principal
Payment Amount; and
(xi) the Reallocated Principal, if any, to
the Indenture Trustee for the benefit, sequentially,
of the Class X-0, Xxxxx X-0, Class A-3, Class A-4,
Class B, Class C, and Class D Noteholders.
(c) Allocations and Payments after an Event of
Default. On each Determination Date after the occurrence of an Event of Default,
the Servicer, pursuant to monthly payment instructions and notification, shall
instruct the Indenture Trustee to withdraw and transfer, and on the succeeding
Payment Date the Indenture Trustee acting in accordance with such instructions
shall withdraw and transfer, the amounts required to be withdrawn from the Note
Distribution Account in order to make the following payments or allocations from
the Amount Available for the related Payment Date (in each case, such payment or
transfer to be made only to the extent funds remain available therefor after all
prior payments and transfers for such Payment Date have been made), in the
following order of priority:
(i) pay to the Indenture Trustee on behalf
of the Class A-1 Noteholders, Class A-2 Noteholders,
Class A-3 Noteholders, and the Class A-4 Noteholders,
an amount equal to interest accrued in respect of the
related Class A-1 Notes at the Class A-1 Interest
Rate, Class A-2 Notes at the Class A-2 Interest Rate,
Class A-3 Notes at the Class A-3 Interest Rate, and
Class A-4 Notes at the Class A-4 Interest Rate for
the Accrual Period immediately preceding such Payment
Date, together with any such amounts that accrued in
respect of prior Accrual Periods for which no
allocation was previously made; provided that if the
Amount Available remaining to be allocated pursuant
to this clause is less than the full amount required
to be so allocated, such remaining Amount Available
shall be allocable to the Holders of the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes and Class A-4
Notes pro rata based upon the then-outstanding
Principal Amount thereof;
(ii) pay to the Indenture Trustee on behalf
of the Class B Noteholders an amount equal to the
interest accrued thereon at the Class B Interest Rate
for the Accrual Period immediately preceding such
Payment
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Date, together with any amounts that accrued in
respect of prior Accrual Periods for which no
allocation was previously made; provided, that if the
Amount Available remaining to be allocated pursuant
to this clause is less than the full amount required
to be so paid, such remaining Amount Available shall
be paid to the Holder of each Class B Note pro rata
based on the outstanding Principal Amount thereof;
(iii) pay to the Indenture Trustee on behalf
of the Class C Noteholders, an amount equal to the
interest accrued thereon at the Class C Interest Rate
for the Accrual Period immediately preceding such
Payment Date, together with any such amounts that
accrued in respect of prior Accrual Periods for which
no allocation was previously made; provided, that if
the Amount Available remaining to be allocated
pursuant to this clause is less than the full amount
required to be so paid, such remaining Amount
Available shall be paid to the Holder of each Class C
Note pro rata based on the outstanding Principal
Amount thereof;
(iv) pay to the Indenture Trustee on behalf
of the Class D Noteholders, an amount equal to the
interest accrued thereon at the Class D Interest Rate
for the Accrual Period immediately preceding such
Payment Date, together with any such amounts that
accrued in respect of prior Accrual Periods for which
no allocation was previously made; provided, that if
the Amount Available remaining to be allocated
pursuant to this clause is less than the full amount
required to be so paid, such remaining Amount
Available shall be paid to the Holder of each Class D
Note pro rata based on the outstanding Principal
Amount thereof;
(v) pay to the Indenture Trustee, on behalf
of the Class A-1 Noteholders, the Total Principal
Payment Amount for such Payment Date; provided (i)
that if the Amount Available remaining to be
allocated pursuant to this clause is less than the
full amount required to be so paid, such remaining
Amount Available shall be allocated to each Class A-1
Note pro rata based on the outstanding Principal
Amount thereof and (ii) if the amount to be allocated
pursuant to this clause exceeds the amount needed to
repay the outstanding Principal Amount of the Class
A-1 Notes in full, then such excess shall be applied
in repayment of principal on the Class A-2, Class A-3
and Class A-4 Notes, pro rata;
(vi) [reserved];
(vii) [reserved];
(viii) pay to the Indenture Trustee, on
behalf of the Class A-2, Class A-3 and Class A-4
Noteholders, pro rata, the Total Principal Payment
Amount for such Payment Date; provided (i) that if
the Amount Available remaining to be allocated
pursuant to this clause is less than the full amount
required to be so paid, such remaining Amount
Available shall
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be allocated to each Class A-2, Class A-3 and Class
A-4 Note, pro rata, based on the outstanding
Principal Amount thereof and (ii) if the amount to be
allocated pursuant to this clause exceeds the amount
needed to repay the outstanding Principal Amount of
the Class A-2 Notes, Class A-3 Notes and the Class
A-4 Notes in full, then such excess shall be applied
in repayment on the Class B Notes;
(ix) pay to the Indenture Trustee, on behalf
of the Class B Noteholders, the Total Principal
Payment Amount for such Payment Date; provided (i)
that if the Amount Available remaining to be
allocated pursuant to this clause is less than the
full amount required to be so paid, such remaining
Amount Available shall be allocated to each Class B
Note pro rata based on the outstanding Principal
Amount thereof, and (ii) if the amount to be
allocated pursuant to this clause exceeds the amount
needed to repay the outstanding Principal Amount of
the Class B Notes in full, then such excess shall be
applied in repayment of principal on the Class C
Notes;
(x) pay to the Indenture Trustee, on behalf
of the Class C Noteholders, the Total Principal
Payment Amount for such Payment Date; provided (i)
that if the Amount Available remaining to be
allocated pursuant to this clause is less than the
full amount required to be so paid, such remaining
Amount Available shall be allocated to each Class C
Note pro rata based on the outstanding Principal
Amount thereof, and (ii) if the amount to be
allocated pursuant to this clause exceeds the amount
needed to repay the outstanding Principal Amount of
the Class C Notes in full, then such excess shall be
applied in repayment of principal on the Class D
Notes;
(xi) pay to the Indenture Trustee, on behalf
of the Class D Noteholders, the Total Principal
Payment Amount for such Payment Date; provided that
if the Amount Available remaining to be allocated
pursuant to this clause is less than the full amount
required to be so paid, such remaining Amount
Available shall be allocated to each Class D Note pro
rata based on the outstanding Principal Amount
thereof; and
(xii) the Reallocated Principal, if any, to
the Indenture Trustee for the benefit, sequentially,
of the Class X-0, Xxxxx X-0, Class A-3, Class A-4,
Class B, Class C and Class D Noteholders.
(d) On the Business Day preceding each Payment Date,
the Indenture Trustee shall, in accordance with written directions from the
Servicer, withdraw from amounts on deposit in the Cash Collateral Account, and
deposit into the Collection Account, an amount equal to the lesser of the
Available Cash Collateral Amount for such Payment Date and the sum of the
following amounts, if any:
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(i) the amount, if any, by which the
Available Pledged Revenues with respect to such
Payment Date, is less than the amount specified in
clauses (b)(i)-(iv) of this Section 7.05 (or in the
case of a payment after an Event of Default, in
clauses (c) (i) - (iv) of this Section 7.05); plus
(ii) the Principal Deficiency Amount, if
any, for such Payment Date, plus
(iii) with respect to the Maturity Date for
any Class of Notes or on the first Payment Date on
which the Contract Pool Principal Balance is less
than $10,000,000, the amount, if any, by which the
Available Pledged Revenues, after payment of all
amounts specified in clauses (b)(i) through (b)(iv)
(or in the event of a payment after an Event of
Default clauses (c) (i) through (c)(iv)) of Section
7.05, is less than (A) in the case of the Maturity
Date for a Class of Notes, the remaining Principal
Amount of such Class of Notes, and (B) in the case of
the first Payment Date on which the Contract Pool
Principal Balance is less than $10,000,000 the
Principal Amount of all outstanding Notes.
In the event that the Available Pledged Revenues for any Payment Date are less
than the total amount, if any, specified above for such Payment Date, the amount
actually withdrawn by the Indenture Trustee shall be applied in the order of
priority specified above, and, within each clause specified above, in the order
of priority specified in Section 7.05(b) or (c), as the case may be. The
Servicer shall give the Indenture Trustee and the Cash Collateral Account
Lenders' Agent notice, at least two Business Days prior to each Payment Date, of
the amounts, if any, specified in clauses (i) through (iii) above for such
Payment Date.
Section 7.06. Repurchases of, or Substitution for, Contracts
for Breach of Representations and Warranties. Upon a discovery by the Servicer
of an inaccuracy or breach of a representation or warranty set forth in the
Schedule of Representations which has been made or deemed made with respect to a
Contract in the Contract Pool, which inaccuracy or breach materially adversely
affects the Trust's or any Noteholder's or the Equity Certificateholder's
interest in such Contract (without regard to the benefits of the Cash Collateral
Account, any reserve fund, over collateralization or other similar enhancement)
or the collectibility thereof (an "Ineligible Contract"), the Servicer shall
promptly notify Financial thereof. As provided in the Substitute VFC Purchase
Agreement and the Non-VFC Purchase Agreement and in accordance with this Section
7.06, Financial is obligated to repurchase each such Ineligible Contract, at a
repurchase price equal to the Purchase Amount (determined as of the date such
repurchase is to be funded), not later than the second Deposit Date following
the date the Servicer becomes aware of any such breach or inaccuracy and which
breach or inaccuracy has not otherwise been cured; provided, however, that if
Financial is able to effect a substitution for any such Ineligible Contract in
compliance with Section 2.04, Financial may, in lieu of repurchasing such
Ineligible Contract, effect a substitution for such Ineligible Contract with a
Substitute Contract not later than the date a repurchase of such Ineligible
Contract would be required hereunder; and provided further, that with respect to
a breach or inaccuracy of any such representations or warranties relating to the
Contract Pool (or all Contracts conveyed on the Closing Date or Substitution
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Transfer Date, as the case may be) in the aggregate and not to any particular
Contract, Financial (or the Servicer acting on its behalf) may select Contracts
(without adverse selection) to repurchase (or substitute for) such that had such
Contracts not been included as part of the related Transferred Assets (and, in
the case of a substitution, had such Substitute Contract been included as part
of the related Transferred Assets instead of the selected Ineligible Contract)
there would have been no breach or inaccuracy of such representation or
warranty. Notwithstanding any other provision of this Agreement, the obligation
of Financial under the Purchase and Sale Agreements and described in this
Section 7.06 shall not terminate or be deemed released by any party hereto upon
a Servicing Transfer pursuant to Article VIII. The right to enforce the
repurchase or substitution obligation described in this Section shall constitute
the sole remedy of the Trust, the Indenture Trustee, the Depositor, the
Noteholders and the Equity Certificateholder with respect to the inaccuracy or
breach related to such Ineligible Contract. The Purchase Amount shall be
allocated in accordance with the Allocation Criteria.
Section 7.07. Reassignment of Repurchased or Substituted
Contracts. Upon deposit into the Collection Account of the Purchase Amount with
respect to an Ineligible Contract as described in Section 7.06 (or upon the
Substitution Transfer Date related to a Substitute Contract described in Section
7.06), or of the repurchase price set forth in Section 7.08, the Indenture
Trustee shall release and reassign to Financial all of the Trust's right and
interest in the repurchased or substituted Contract and related Transferred
Assets upon receipt of written instruction from the Servicer without recourse,
representation or warranty, and such reassigned Contract shall no longer
thereafter be included in any calculations of Contract Principal Balances
required to be made hereunder or otherwise be deemed a part of the Trust Assets.
Section 7.08. Financial's and Depositor's Repurchase Option.
As provided in the Substitute VFC Purchase Agreement and the Non-VFC Purchase
Agreement, as the case may be, on written notice to the Indenture Trustee at
least twenty (20) days prior to a Payment Date, and provided that the aggregate
Principal Amount of Notes outstanding on such Payment Date is less than 10% of
the Initial Contract Pool Principal Balance, Financial, through the Depositor,
may (but is not required to) repurchase from the Trust on that Payment Date all
outstanding Contracts in the Contract Pool at a price equal to the sum of (a)
the aggregate outstanding Principal Amount of the Notes plus accrued unpaid
interest thereon as of such Payment Date, and (b) the amount of unreimbursed
Servicer Advances (if any) as well as accrued and unpaid monthly Servicing Fees
to the date of such repurchase plus (c) any other amounts that would otherwise
be payable from Available Pledged Revenues on such Payment Date (assuming
sufficient Pledged Revenues were available to effect such payments) pursuant to
Article VII, minus (d) Pledged Revenues and other Available Pledged Revenues on
deposit in the Collection Account and available to make such payments on such
Payment Date. Such price is to be deposited in the Collection Account not later
than the Deposit Date preceding such Payment Date, against the Indenture
Trustee's and Depositor's release of the Contract Assets and the related
Contract Files to Financial.
ARTICLE VIII
SERVICER DEFAULTS; SERVICING TRANSFER
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Section 8.01. Servicer Default. "Servicer Default" means the
occurrence of any of the following:
(a) any failure by the Servicer to make any payment, transfer
or deposit or to give instructions or notice to the Owner Trustee or the
Indenture Trustee to make any payment, transfer or deposit, or to deliver the
Monthly Report pursuant to this Agreement, which failure continues unremedied
for a period of five (5) Business Days after the first to occur of (i) written
notice from the Owner Trustee (with a copy to the Indenture Trustee) or the
Indenture Trustee (with a copy to the Owner Trustee) of such failure shall have
been given to the Servicer, or (ii) the date the Servicer becomes aware thereof;
or
(b) failure on the part of the Servicer duly to observe or
perform any other covenants or agreements of the Servicer set forth in this
Agreement which has a material adverse effect on the Noteholders or the Equity
Certificateholder, which continues unremedied for a period of thirty (30) days
after the first to occur of (i) the date on which written notice of such failure
requiring the same to be remedied shall have been given to the Servicer by the
Indenture Trustee or to the Servicer and the Indenture Trustee by the
Noteholders or the Equity Certificateholder or the Indenture Trustee on behalf
of such Noteholders of Notes aggregating not less than 25% of the Principal
Amount of any Class adversely affected thereby, and (ii) the date on which the
Servicer becomes aware thereof, and such failure continues to materially
adversely affect the Noteholders or the Equity Certificateholders for such
period; or
(c) any representation, warranty or certification made by the
Servicer in this Agreement or in any certificate delivered pursuant hereto shall
prove to have been incorrect when made, which has a material adverse effect on
the Noteholders or Equity Certificateholder and which continues to be incorrect
in any material respect for a period of thirty (30) days after the first to
occur of (i) the date on which written notice of such incorrectness requiring
the same to be remedied shall have been given to the Servicer and the Owner
Trustee by the Indenture Trustee, or to the Servicer, the Owner Trustee and the
Indenture Trustee by Noteholders or the Equity Certificateholders or by the
Indenture Trustee on behalf of Noteholders of Notes aggregating not less than
25% of the Principal Amount of any Class adversely affected thereby, and (ii)
the date on which the Servicer becomes aware thereof, and such incorrectness
continues to materially adversely affect the Noteholders or Equity
Certificateholders for such period; or
(d) an Insolvency Event shall occur with respect to the
Servicer.
Notwithstanding the foregoing, a delay in or failure of
performance referred to under clause (a) above for a period of five (5) Business
Days or referred to under clause (b) or (c) for a period of sixty (60) days (in
addition to any period provided in (a), (b) or (c)) shall not constitute a
Servicer Default until the expiration of such additional five (5) Business Days
or sixty (60) days, respectively, if such delay or failure could not be
prevented by the exercise of reasonable diligence by the Servicer and such delay
or failure was caused by an act of God or other similar occurrences. Upon the
occurrence of any such event the Servicer shall not be relieved from using its
best efforts to perform its obligations in a timely manner in accordance with
the terms of this Pooling Agreement and the Servicer shall provide the Owner
Trustee, the Indenture Trustee and the Depositor prompt notice of such failure
or delay by it, together with a
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description of its efforts to so perform its obligations. The Servicer shall
promptly notify the Indenture Trustee in writing of any Servicer Default.
Section 8.02. Servicing Transfer. (a) If a Servicer Default
has occurred and is continuing, the Required Holders or the Indenture Trustee
(subject to the right of the Indenture Trustee to indemnification pursuant to
Section 6.07 of the Indenture) may, by written notice (a "Termination Notice")
delivered to the parties hereto, terminate all (but not less than all) of the
Servicer's rights and obligations under this Pooling Agreement with respect to
the Trust Assets.
(b) Upon delivery of the Termination Notice (or, if later, on
a date designated therein), and on the date that a successor Servicer shall have
been appointed pursuant to Section 8.03 (such appointment being herein called a
"Servicing Transfer"), all rights, benefits, fees, indemnities, authority and
power of the Servicer under this Pooling Agreement, whether with respect to the
Contracts in the Contract Pool, the Contract Files or otherwise, shall pass to
and be vested in such successor (the "Successor Servicer") pursuant to and under
this Section 8.02; and, without limitation, the Successor Servicer is authorized
and empowered to execute and deliver on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do any and all acts or things necessary or appropriate to effect the purposes
of such notice of termination. The Servicer agrees to cooperate with the
Successor Servicer in effecting the termination of the responsibilities and
rights of the Servicer under this Pooling Agreement, including, without
limitation, the transfer to the Successor Servicer for administration by it of
all cash amounts which shall at the time be held by the Servicer for deposit, or
have been deposited by the Servicer, in the Collection Account, or for its own
account in connection with its services hereafter or thereafter received with
respect to the Contracts in the Contract Pool. The Servicer shall transfer to
the Successor Servicer (i) all records held by the Servicer relating to such
Contracts in such electronic form as the Successor Servicer may reasonably
request and (ii) any related Contract Files in the Servicer's possession. In
addition, the Servicer shall permit access to its premises and employees
(including all computer records and programs) to the Successor Servicer or its
designee, and shall pay the reasonable transition expenses of the Successor
Servicer. Upon a Servicing Transfer, the Successor Servicer shall also be
entitled to receive the Servicing Fee for performing the obligations of the
Servicer.
Section 8.03. Appointment of Successor Servicer; Reconveyance;
Successor Servicer to Act. Upon delivery of the Termination Notice (or, if
later, on a date designated therein), the Servicer shall continue to perform all
servicing functions under this Pooling Agreement until the date specified in the
Termination Notice or, if no such date is specified, until a date mutually
agreed by the Servicer and the Indenture Trustee. The Indenture Trustee shall as
promptly as possible after the giving of or receipt of a Termination Notice,
appoint a Successor Servicer, and such Successor Servicer shall accept its
appointment by a written assumption and by delivery of an opinion of counsel
(which shall not be at the expense of the Indenture Trustee) to the Successor
Servicer relating to corporate matters and enforceability, in each case in a
form acceptable to the Indenture Trustee and the Owner Trustee. Any Successor
Servicer shall be a financial institution having a net worth of at least
$50,000,000 and whose regular business includes the servicing of contracts
similar to the Contracts in the Contract Pool.
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In the event that a Successor Servicer has not been appointed
and has not accepted its appointment within 60 days of the delivery of a
Termination Notice, then the Indenture Trustee shall offer the Depositor, and
the Depositor shall offer Financial, the right to accept retransfer of all the
Trust Assets, and such party may accept retransfer of such Trust Assets in
consideration of the Depositor's delivery to the Collection Account on or prior
to the next upcoming Payment Date of a sum equal to the Aggregate Principal
Amount of all Notes then outstanding, together with accrued and unpaid interest
thereon through such date of deposit; provided, that the Indenture Trustee, if
so directed by, the Required Holders, need not accept and effect such
reconveyance in the absence of evidence (which may include valuations of an
investment bank or similar entity, which shall not be at the expense of the
Indenture Trustee) reasonably acceptable to such Indenture Trustee or Required
Holders that such retransfer would not constitute a fraudulent conveyance of the
Depositor or Financial; provided, further, Financial may not accept such
retransfer unless it shall have delivered to each Rating Agency, with a copy to
the Indenture Trustee, an Opinion of Counsel that such retransfer would not
constitute a fraudulent conveyance of the Depositor or the Seller or that such
retransfer would not constitute a preferential payment by the Depositor or
Financial.
In the event that a Successor Servicer has not been appointed
and has not accepted its appointment at the time when the then Servicer has
ceased to act as Servicer, the Indenture Trustee without further action shall
automatically be appointed the Successor Servicer. Notwithstanding the
foregoing, if the Indenture Trustee is legally unable or prohibited from so
acting or is unwilling to so act, it shall petition a court of competent
jurisdiction to appoint any established financial institution having a net worth
of at least $50,000,000 and whose regular business includes the servicing of
contracts similar to the Contracts in the Contract Pool as the Successor
Servicer hereunder. On or after a Servicing Transfer, the Successor Servicer
shall be the successor in all respects to the Servicer in its capacity as
servicer under this Pooling Agreement, and the transactions set forth or
provided for in this Pooling Agreement, and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof, and the terminated Servicer shall be
relieved of such responsibilities, duties and liabilities arising after such
Servicing Transfer; provided, however, that the Successor Servicer shall not be
liable for any acts or omissions of the departing Servicer occurring prior to
such Servicing Transfer or for any breach by the departing Servicer of any of
its representations and warranties contained in this Pooling Agreement or in any
related Transaction Document or other agreement. As compensation therefor, the
Successor Servicer shall be entitled to receive the Servicing Fee. The Trust,
the Noteholders and the Equity Certificateholders, the Indenture Trustee and
such successor shall take such action, consistent with this Pooling Agreement,
as shall be necessary to effectuate any such succession. To the extent the
terminated Servicer has made Servicer Advances, it shall be entitled to
reimbursement of the same notwithstanding its termination hereunder, to the same
extent as if it had continued to service the Trust Assets hereunder. In
addition, it is understood and agreed that if an Event of Default has occurred
and a Servicer Transfer is being effected by action of the Indenture Trustee
hereunder, any documented expenses reasonably incurred by the Indenture Trustee
in connection with effecting such Servicer Transfer shall be deemed expenses
reimbursable from Available Pledged Revenues after an Event of Default pursuant
to Section 7.05(a)(i) hereof.
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Section 8.04. Notifications to Noteholders and the Equity
Certificateholders. (a) Promptly following the occurrence of any Servicer
Default, the Servicer shall give written notice thereof to the Trustees, the
Depositor and each Rating Agency at the addresses described in Section 11.04 and
to the Noteholders and Equity Certificateholder at their respective addresses
appearing on the Note Register and the Certificate Register, respectively.
(b) Within ten (10) days following any termination or
appointment of a Successor Servicer pursuant to this Article VIII, the Indenture
Trustee shall give written notice thereof to each Rating Agency and the
Depositor at the addresses described in Section 11.04, and to the Noteholders,
at their respective addresses appearing on the Note Register, and the Owner
Trustee.
Section 8.05. Effect of Transfer. (a) After a Servicing
Transfer, the terminated Servicer shall have no further rights or obligations
under this Pooling Agreement, including, without limitation, with respect to the
management, administration, servicing, custody or collection of the Trust
Assets, and the Successor Servicer appointed pursuant to Section 8.03 shall have
all of such obligations, except that the terminated Servicer will transmit or
cause to be transmitted directly to the Successor Servicer for its own account,
promptly on receipt and in the same form in which received, any amounts or items
(properly endorsed where required for the Successor Servicer to collect them)
received as payments upon or otherwise in connection with the Contracts in the
Contract Pool.
(b) A Servicing Transfer shall not affect the rights and
duties of the parties to this Pooling Agreement (including but not limited to
the indemnities of the departing Servicer) other than those relating to the
management, administration, servicing, custody or collection of the Contracts in
the Contract Pool and related Transferred Assets.
Section 8.06. Database File. The Servicer will provide the
Successor Servicer with a magnetic tape containing the database file for each
Contract in the Contract Pool on and as of the Business Day before the actual
commencement of servicing functions by the Successor Servicer following the
occurrence of a Servicer Default.
Section 8.07. Successor Servicer Indemnification. The
departing Servicer shall defend, indemnify and hold the Successor Servicer and
any officers, directors, employees or agents of the Successor Servicer harmless
against any and all claims, losses, penalties, fines, forfeitures, reasonable
legal fees and related costs, judgments and any other costs, fees, and expenses
that the Successor Servicer may sustain in connection with the claims asserted
at any time by third parties against the Successor Servicer which result from
(i) any willful or grossly negligent act taken or omission by the departing
Servicer or (ii) a breach of any representations of the departing Servicer in
Section 3.02. The indemnification provided by this Section 8.07 shall survive
(a) a Servicing Transfer and/or (b) the termination of this Agreement.
Section 8.08. Responsibilities of the Successor Servicer. The
Successor Servicer will not be responsible for delays attributable to the
departing Servicer's failure to deliver information, defects in the information
supplied by the departing Servicer or other circumstances beyond the control of
the Successor Servicer.
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The Successor Servicer will make arrangements with the
departing Servicer for the prompt and safe transfer of, and the departing
Servicer shall provide to the Successor Servicer, all necessary servicing files
and records, including (as deemed necessary by the Successor Servicer at such
time): (i) microfiche loan documentation, (ii) servicing system tapes, (iii)
Contract payment history, (iv) collections history and (v) the trial balances,
as of the close of business on the day immediately preceding conversion to the
Successor Servicer, reflecting all applicable Contract Pool information. The
departing Servicer shall be obligated to pay the costs associated with the
transfer of the servicing files and records to the Successor Servicer.
The Successor Servicer shall have no responsibility and shall
not be in default hereunder nor incur any liability for any failure, error,
malfunction or any delay in carrying out any of its duties under this Pooling
Agreement if any such failure or delay results from the Successor Servicer
acting in accordance with information prepared or supplied by a Person other
than the Successor Servicer or the failure of any such Person to prepare or
provide such information. The Successor Servicer shall have no responsibility,
shall not be in default and shall incur no liability (i) for any act or failure
to act by any third party, including the departing Servicer, the Depositor or
the Trustees or for any inaccuracy or omission in a notice or communication
received by the Successor Servicer from any third party or (ii) which is due to
or results from the invalidity or unenforceability of any Contract under
applicable law or the breach or the inaccuracy of any representation or warranty
made with respect to any Contract.
Any Successor Servicer which assumes the role of Successor
Servicer hereunder shall be entitled to the benefits of (and subject to the
provisions of) Section 5.05 concerning delegation of duties to subservicers.
Section 8.09 Servicer Not to Resign. The Servicer shall not
resign from its obligations and duties under this Agreement except upon
determination that the performance of its duties shall no longer be permissible
under applicable law, compliance with which could not be realized without
material adverse impact on the Servicer's financial condition. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall have assumed the responsibilities and obligations of the Servicer
in accordance with Section 8.03 hereof.
ARTICLE IX
SERVICER REPORTING
Section 9.01. Monthly Reports. With respect to each Payment
Date and the related Collection Period, the Servicer will provide to each
Trustee and each Rating Agency, on the related Determination Date, a monthly
statement (a "Monthly Report") substantially in the form of Exhibit D hereto. On
each Payment Date, the Indenture Trustee will forward to each Noteholder a copy
of the Monthly Report for the related Collection Period. The parties hereto
acknowledge that the Indenture Trustee has no obligation to verify the accuracy
of the Monthly Report.
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Section 9.02. Officer's Certificate. Each Monthly Report
delivered pursuant to Section 9.01 shall be accompanied by a certificate of a
Servicing Officer certifying the accuracy of the Monthly Report.
Section 9.03. Other Data. In addition, the Servicer shall,
upon the request of any Trustees, or any Rating Agency, furnish such Trustee or
Rating Agency, as the case may be, such underlying data used to generate a
Monthly Report as may be reasonably requested.
Section 9.04. Annual Reporting; Evidence as to Compliance. The
Servicer shall cause a firm of nationally recognized independent accountants
(the "Independent Accountants"), who may also render other services to the
Servicer or its Affiliates, to deliver to the Trustees and each Rating agency,
on or before March 31 (or ninety (90) days after the end of the Servicer's
fiscal year, if other than December 31) of each year, beginning on March 31,
2001, with respect to the twelve months ended the immediately preceding December
31 or other applicable date), a report addressed to the Board of Directors of
the Servicer and to the Trustees (the "Accountant's Report") to the effect that
such Independent Accountants have, at the request of the Servicers, (i) audited
the financial statements of the Servicer (or, if the Servicer is a wholly-owned
subsidiary of another entity, the financial statements of such parent entity)
and issued an opinion thereon and that such audit was made in accordance with
generally accepted auditing standards as in effect in the jurisdiction of the
entity being audited, which require that such Independent Accountants plan and
perform the audit to obtain reasonable assurance as to whether the financial
statements of the Servicer (or its parent, as applicable) are free of material
misstatement, and (ii) examined management's assertion that the Servicer
maintained effective control over the servicing of such assets, in accordance
with established or stated criteria, and providing a report thereon, as well as
confirming that such examination was performed in accordance with standards
established by the American Institute of Certified Public Accountants. A copy of
the Accountant's Report may be obtained by any Securityholder by a request in
writing to the Indenture Trustee, in the case of a Noteholder, or in the case of
the Equity Certificateholder, addressed to its Corporate Trust Office.
Section 9.05. Annual Statement of Compliance from Servicer.
The Servicer will deliver to the Trustees, and each of the Rating Agencies, on
or before March 31 of each year commencing March 31, 2001, an Officer's
Certificate stating that (a) a review of the activities of the Servicer during
the prior calendar year and of its performance under the Pooling Agreement was
made under the supervision of the officer signing such certificate and (b) to
such officer's knowledge, based on such review, the Servicer has fully performed
or cause to be performed in all material respects all its obligations under the
Pooling Agreement and no Servicer Default has occurred or is continuing, or, if
there has been a Servicer Default, specifying each such default known to such
officer and the nature and status thereof and the steps being taken or necessary
to be taken to remedy such event.
A copy of such certificate may be obtained by any Noteholder
or the Equity Certificateholder by a request in writing to the Indenture
Trustee, with respect to any Noteholder, or the Owner Trustee, with respect to
the Equity Certificateholder.
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ARTICLE X
TERMINATION
Section 10.01. Sale of Trust Assets. (a) Upon any transfer of
Trust Assets pursuant to Section 9.02 of the Trust Agreement, the Servicer shall
instruct the Indenture Trustee in writing to deposit the proceeds from such
transfer after all payments and reserves therefrom have been made (the
"Insolvency Proceeds") into the Collection Account. On the Payment Date on which
the Insolvency Proceeds are deposited in such Collection Account (or, if such
proceeds are not so deposited on a Payment Date, on the Payment Date immediately
following such deposit), the Servicer shall instruct the Indenture Trustee to
allocate and apply the Insolvency Proceeds as if (and in the same order of
priority as) the Insolvency Proceeds were Pledged Revenues being allocated and
distributed on such date pursuant to this Pooling Agreement.
(b) Notice of any termination of the Trust shall be given by
the Servicer to the Owner Trustee and the Indenture Trustee as soon as
practicable after the Servicer has received notice thereof.
(c) Following the satisfaction and discharge of the Indenture
and the payment in full of the principal of and interest on the Notes, the
Equity Certificateholder will succeed to the rights of the Noteholders
hereunder.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Amendments. (a) This Pooling Agreement may be
amended in writing by Financial, the Servicer and the Trust and the Indenture
Trustee without prior notice to or the consent of any of the Holders, and in the
case of clauses (v) and (vi), upon satisfaction of the Rating Agency Condition,
(i) to correct manifest error or cure any ambiguity, (ii) to correct or
supplement any provisions herein which may be inconsistent with any other
provisions herein, (iii) to add or amend any provisions as requested by the
Rating Agencies in order to maintain or improve any rating of the Notes (it
being understood that, after the Closing Date, neither the Trust, the Owner
Trustee, the Indenture Trustee, Financial nor TCC is obligated to maintain or
improve such rating); (iv) to add to the covenants, restrictions or obligations
of Financial, the Servicer, the Trust or the Indenture Trustee or to provide for
the delivery of or substitution of a Servicer Letter of Credit; (v) to evidence
and provide for the acceptance of the appointment of a successor trustee with
respect to the Trust Estate and add to or change any provisions as shall be
necessary to facilitate the administration of the trusts under the Trust
Agreement by more than one trustee pursuant to Article X of the Trust Agreement;
(vi) to add, change or amend any provision to maintain the trust as an entity
not subject to federal income tax; or (vii) to add, change or eliminate any
other provisions, provided that an amendment pursuant to this clause (vii),
shall not, as evidenced by an Opinion of Counsel for the Servicer or Financial,
adversely affect in any material respect the interests of the Trust, any
Noteholder or the Equity Certificateholder.
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(b) This Pooling Agreement may also be amended from time to
time by the parties signatory hereto, with the consent of the Required Holders,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions thereof or of modifying in any manner the
rights of the Noteholders or the Equity Certificateholder; provided, however,
that no such amendment shall (i) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, Pledged Revenues, payments on the Trust
Assets or payments that shall be required to be made on any Note or the Equity
Certificate (including by way of amendment of related definitions); (ii) change
the manner in which the Cash Collateral Account is applied; or (iii) change in
any manner (including through amendment of related definitions), the Noteholders
and the Equity Certificateholder which are required to consent to any such
amendment; or (iv) make any Note or the Equity Certificate payable in money
other than Dollars, without the consent of the Noteholders and the Equity
Certificateholders of all Notes of the relevant affected Class then outstanding
and the Equity Certificateholder, if affected; or (v) change in any manner the
duties of the Indenture Trustee under this Agreement without its written
consent, (in any such case).
(c) Prior to the execution of any such amendment or consent,
the Indenture Trustee shall furnish written notification of the substance of
such amendment or consent, together with a copy thereof, to each Rating Agency.
(d) Promptly after the execution of any such amendment or
consent, the Indenture Trustee shall furnish written notification of the
substance of such amendment or consent to each Noteholder and the Equity
Certificateholder, respectively. It shall not be necessary for the consent of
Noteholders and the Equity Certificateholder pursuant to Section 11.01(b) to
approve the particular form of any proposed amendment or consent, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents and of evidencing the authorization by Noteholders and
the Equity Certificateholder of the execution thereof shall be subject to such
reasonable requirements as the Indenture Trustee may prescribe.
(e) Each Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment on behalf of the
Trust is authorized or permitted by this Pooling Agreement, and that all
conditions precedent to such execution as set forth herein have been satisfied.
A Trustee may, but shall not be obligated to, enter into any such amendment
which affects such Trustee's own rights, duties or immunities under this Pooling
Agreement or otherwise.
(f) Notwithstanding anything to the contrary in the foregoing
provisions of this Section 11.01, (a) the Depositor or the Servicer, acting on
behalf of the Depositor, may request each rating agency to approve a formula for
determining the Required Cash Collateral Amount that is different from the
formula or result determined from the current definition thereof contained
herein so as to result in a decrease in the amount of the Required Cash
Collateral amount or the manner by which such Cash Collateral Account is funded.
If each Rating Agency delivers to the Indenture Trustee and Owner Trustee a
written notice or letter satisfying the Rating Agency condition in connection
with such change, then the Required Cash Collateral amount will be theretofore
determined in accordance with such changed formula or
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manner of funding, and an amendment to this Agreement effecting such change may
be executed without the consent of any Noteholder and the Equity
Certificateholder.
Section 11.02. Reserved.
Section 11.03. Governing Law. This Pooling Agreement shall be
construed in accordance with the laws of the State of New York and the
obligations, rights, and remedies of the parties under this Pooling Agreement
shall be determined in accordance with such laws, except that the duties of the
Owner Trustee shall be governed by the laws of the State of Delaware.
Section 11.04. Notices. All notices, demands, certificates,
requests and communications hereunder ("notices") shall be in writing and shall
be effective (a) upon receipt when sent through the U.S. mails, registered or
certified mail, return receipt requested, postage prepaid, with such receipt to
be effective the date of delivery indicated on the return receipt, or (b) one
(1) Business Day after delivery to an overnight courier, or (c) on the date
personally delivered to an authorized officer of the party to which sent, or (d)
on the date transmitted by legible telefax transmission with a confirmation of
receipt, in all cases addressed to the recipient as follows:
(i) If to the Servicer:
Capita Corporation
000 XXX Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Treasury - Securitization
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
The CIT Group, Inc.
000 XXX Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Treasury - Securitization
Fax No.: (000) 000-0000
-85-
Telephone No.: (000) 000-0000
(ii) If to the Depositor:
NCT Funding Company, L.L.C.
c/o The CIT Group, Inc.
000 XXX Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Treasury - Securitization
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
(iii) If to the Indenture Trustee:
Allfirst Bank
MC 101-591
00 X. Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Corporate Trust Department
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
(iv) If to a Financing Originator:
At the address, telephone and fax information
set forth for such Financing Originator in the
VFC Conveyancing Agreement (for TCC Financing
Originators)
(v) If to Financial:
CIT Financial USA, Inc.
000 XXX Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Treasury - Securitization
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
(vi) If to the Owner Trustee:
Chase Manhattan Bank USA, National Association
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Trust Department
-86-
Fax No.: (000) 000-0000
Telephone No. (000) 000-0000
Each party hereto may, by notice given in accordance herewith
to each of the other parties hereto, designate any further or different address
to which subsequent notices shall be sent.
Section 11.05. Severability of Provisions. If one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Notes or the
Equity Certificateholders or the rights of the holders thereof.
Section 11.06. Third Party Beneficiaries. Except as otherwise
specifically provided herein, the parties hereto hereby manifest their intent
that no third party shall be deemed a third party beneficiary of this Agreement,
and specifically that Obligors are not third party beneficiaries of this
Agreement; provided, that the Owner Trustee shall be a third party beneficiary
of this Agreement for purposes of Sections 3.01 and 3.02 and 11.13, and the fee
and indemnification provisions hereof.
Section 11.07. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
together constitute but one and the same instrument.
Section 11.08. Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
Section 11.09. No Bankruptcy Petition; Disclaimer and
Subordination.
(a) Each of the Servicer, the Owner Trustee and each
Noteholder and the Equity Certificateholder (by acceptance of the applicable
Notes or the Equity Certificate) covenants and agrees that it will not institute
against the Depositor, or the Trust, or solicit or join in or cooperate with or
encourage any other Person in instituting against the Depositor or the Trust,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceedings under the laws of the United States or
any state of the United States.
(b) Consistent with the provisions in Section 2.07 of the
Trust Agreement and Section 6.17 hereof, the Trust, as well as each Noteholder
and the Equity Certificateholder by accepting a Note or the Equity Certificate,
acknowledges and agrees that such Note or the Equity Certificate represents a
debt instrument secured by, or a beneficial interest in the Trust and Trust
Assets only and does not represent an interest in any assets (other than the
Trust Assets) of the Depositor (including by virtue of any deficiency claim in
respect of obligations not paid or otherwise satisfied from the Trust Assets and
proceeds thereof). In furtherance of and not in derogation of the foregoing, to
the extent the Depositor enters into other securitization transactions as
contemplated in Section 6.07, the Trust as well as each Noteholder and the
Equity
-87-
Certificateholder by accepting a Note or Certificate acknowledges and agrees
that it shall have no right, title or interest in or to any assets (or interests
therein) (other than Trust Assets) conveyed or purported to be conveyed by the
Depositor to another securitization trust (i.e., other than the Issuer) or other
Person or Persons in connection therewith (whether by way of a sale, capital
contribution or by virtue of the granting of a Lien) ("Other Assets"). To the
extent that, notwithstanding the agreements and provisions contained in the
preceding sentences of this subsection, the Trust, or any Noteholder and the
Equity Certificateholder, either (i) asserts an interest in or claim to, or
benefit from, Other Assets, whether asserted against or through the Depositor or
any other Person owned by the Depositor, or (ii) is deemed to have any such
interest, claim or benefit in or from Other Assets, whether by operation of law,
legal process, pursuant to applicable provisions of Insolvency Laws or otherwise
(including without limitation by virtue of Section 1111(b) of the federal
Bankruptcy Code or any successor provision having similar effect under the
Bankruptcy Code), and whether deemed asserted against or through the Depositor
or any other Person owned by the Depositor, then the Trust and each Noteholder
and the Equity Certificateholder by accepting a Note or the Equity Certificate
further acknowledges and agrees that any such interest, claim or benefit in or
from Other Assets is and shall be expressly subordinated to the indefeasible
payment in full of all obligations and liabilities of the Depositor which, under
the terms of the relevant documents relating to the securitization of such Other
Assets, are entitled to be paid from, entitled to the benefits of, or otherwise
secured by such Other Assets (whether or not any such entitlement or security
interest is legally perfected or otherwise entitled to a priority of payment or
application under applicable law, including Insolvency Laws, and whether
asserted against the Depositor or any other Person owned by the Depositor),
including, without limitation, the payment of post-petition interest on such
other obligations and liabilities. This subordination agreement shall be deemed
a subordination agreement within the meaning of Section 510(a) of the Bankruptcy
Code. Each Noteholder and the Equity Certificateholder further acknowledges and
agrees that no adequate remedy at law exists for a breach of this Section 11.09
and that the terms and provisions of this Section 11.09 may be enforced by an
action for specific performance.
(c) The provisions of this Section 11.09 shall be for the
third party benefit of those entitled to rely thereon and shall survive the
termination of this Agreement.
Section 11.10. Jurisdiction. Any legal action or proceeding
with respect to this Agreement may be brought in the courts of the United States
for the Southern District of New York, and by execution and delivery of this
Agreement, each party hereto consents, for itself and in respect of its
property, to the non-exclusive jurisdiction of those courts. Each such party
irrevocably waives any objection, including any objection to the laying of venue
or based on the grounds of forum non conveniens, which it may now or hereafter
have to the bringing of any action or proceeding in such jurisdiction in respect
of this Agreement or any document related hereto.
Section 11.11. Tax Characterization. Notwithstanding the
provisions of Section 2.01 hereof, the Depositor and Owner Trustee agree that
pursuant to Treasury Regulations Section 301.7701-3(b)(1)(ii), the Trust is to
be disregarded as a separate entity from the Depositor for federal income tax
purposes.
-88-
Section 11.12. Servicer Indemnity. The Servicer will indemnify
the Depositor, the Trust, the Noteholders, the Equity Certificateholder and the
Trustees, and any of their officers, directors, employees or agents (each an
"Indemnified Party") from and against any and all claims, losses, penalties,
fines, forfeitures, legal fees and related costs, judgments and any other costs,
fees and expenses that any Indemnified Party may sustain in connection with
claims asserted by third parties against such Indemnified Party which result
from any act or omission on the part of the Servicer with respect to the Trust
Assets or its duties and obligations under this Pooling Agreement, except where
such claims arise out of any willful misconduct, gross negligence or bad faith
on the part of such Indemnified Party. Indemnification under this Section shall
survive the resignation or removal of the Owner Trustee or Indenture Trustee, as
the case may be, and the termination of the Trust Agreement or this Pooling
Agreement.
Section 11.13. Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary,
this Agreement has been executed on behalf of the Issuer by Chase Manhattan Bank
USA, National Association, not in its individual capacity but solely in its
capacity as Owner Trustee of the Issuer and in no event shall Chase Manhattan
Bank USA, National Association in its individual capacity or any beneficial
owner of the Issuer have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder, as to all of
which recourse shall be had solely to the assets of the Issuer. For all purposes
of this Agreement, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
Section 11.14. WAIVER OF JURY TRIAL. EACH PARTY TO THIS
AGREEMENT WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER
TRANSACTION DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE. THE PARTIES HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF
ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE
FOREGOING, EACH OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT
TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE
THE VALIDITY OF THIS AGREEMENT OR A TRANSACTION DOCUMENT OR ANY PROVISION HEREOF
OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, AMENDMENTS AND
RESTATEMENTS, OR MODIFICATIONS TO THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT.
[signature page follows]
-89-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers as of the day and
year first above written.
CIT EQUIPMENT COLLATERAL 2000-2
By: CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Owner Trustee on behalf of the Trust
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
-----------------------------
Title: Vice President
----------------------------
NCT FUNDING COMPANY, L.L.C., as Depositor
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-----------------------------
Title: Vice President
----------------------------
CIT FINANCIAL USA, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-----------------------------
Title: Vice President
----------------------------
CAPITA CORPORATION, in its individual
capacity and as Servicer
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-----------------------------
Title: Vice President
----------------------------
-90-
EXHIBIT A
Form of Transfer Agreement
TRANSFER AGREEMENT
This TRANSFER AGREEMENT, dated September 28, 2000 is by and
between NCT Funding Company, L.L.C., as Depositor and transferor, and CIT
Equipment Collateral 2000-2, as transferee with respect to the conveyances
evidenced hereby.
WHEREAS, the parties named above are each parties to the
Pooling and Servicing Agreement dated as of September 1, 2000 (as from time to
time amended, supplemented or otherwise modified, the "PSA"); and
WHEREAS, pursuant to the PSA, the Depositor wishes to effect
conveyances of Transferred Assets (including the Contracts identified on the
Schedule of Contracts attached hereto), in each case in the manner and to the
effect described in Article II of the PSA;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein and in the PSA, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. All terms defined in the PSA (whether directly
or by reference to other documents) shall have such defined meanings when used
herein, unless such terms are otherwise defined herein.
2. Specification of Cut-Off Date. The "Cut-Off Date"
applicable to the Contracts conveyed hereby is September 1, 2000.
3. Conveyances. Subject to the terms and conditions provided
for in the PSA, the Depositor hereby make the assignments and conveyances
specified in Article II of the PSA as being effected by execution and delivery
of this Transfer Agreement, in each case (i) with respect to the Transferred
Assets related to and consisting in part of the Contracts and related Contract
Assets identified on the Schedule of Contracts attached hereto, and (ii) in the
manner and to the effect described in Article II of the PSA.
4. Incorporation of PSA. This Transfer Agreement is made
pursuant to and upon the representations, warranties and agreements on the part
of the parties hereto contained in the PSA and shall be governed in all respects
by the PSA.
5. Ratification of PSA. As supplemented by this Transfer
Agreement, the PSA is in all respects ratified and confirmed by the parties
hereto.
6. Counterparts. This Transfer Agreement may be executed in
two or more counterparts including by telefax transmission thereof (and by
different parties on separate counterparts), each of which shall be an original,
but all of which together shall constitute one and the same instrument.
A-1
7. Governing Law. This Transfer Agreement shall be governed
by, and construed and enforced in accordance with, the internal laws of the
State of New York.
8. Reaffirmation. As provided in Section 2.02 of the PSA, by
delivery of this Transfer Agreement the Depositor confirms that the conditions
to transfer set forth in Section 2.02 have been satisfied or otherwise waived as
described therein.
[signatures follow]
A-2
IN WITNESS WHEREOF, the parties hereto have caused this
Transfer Agreement to be executed by their respective officers thereunto duly
authorized as of the date first written above.
NCT FUNDING COMPANY, L.L.C., CIT EQUIPMENT COLLATERAL
as Depositor 2000-2
By: CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Owner Trustee on behalf of the Trust
By: By:
------------------------------- ---------------------------------------
A-3
EXHIBIT B
Form of VFC Assignment
B-1
EXHIBIT C
Initial Schedule of Contracts
C-1
EXHIBIT D
Form of Servicer's Monthly Report
D-1
EXHIBIT E
Form of Substitution Transfer Agreement
SUBSTITUTION TRANSFER AGREEMENT
This SUBSTITUTION TRANSFER AGREEMENT, dated _____________ ___,
_______, is by and between NCT Funding Company, L.L.C., as Depositor and
transferor, and CIT Equipment Collateral 2000-2, as transferee with respect to
the conveyances evidenced hereby.
WHEREAS, the parties named above are each parties to the
Pooling and Servicing Agreement dated as of September 1, 2000 (as from time to
time amended, supplemented or otherwise modified, the "PSA"); and
WHEREAS, pursuant to the PSA, the Depositor wishes to effect
conveyances of the Substitute Contracts (together with related Substitute
Transferred Assets), identified on the Substitution Schedule of Contracts
attached hereto, in each case in the manner and to the effect described in
Article II of the PSA; and
WHEREAS, the Servicer has delivered or caused to be delivered
a Substitution Notice with respect to such conveyance as required in the Pooling
Agreement referred to in Section 2 below;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein and in the PSA, and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto agree as follows:
1. Definitions. All terms defined in the PSA (whether directly
or by reference to other documents) shall have such defined meanings when used
herein, unless such terms are otherwise defined herein.
2. Specification of Cut-Off Date. The "Substitution Cut-Off
Date" applicable to the Substitute Contracts conveyed hereby is ____________
___, _______.
3. Conveyances. Subject to the terms and conditions provided
for in the PSA, the Depositor hereby makes the assignments and conveyances
specified in Article II of the PSA as being effected by execution and delivery
of this Substitution Transfer Agreement, in each case (i) with respect to the
Substitute Contracts (together with related Substitute Transferred Assets)
identified on the Substitution Schedule of Contracts attached hereto, and (ii)
in the manner and to the effect described in Article II of the PSA.
4. Incorporation of PSA. This Substitution Transfer Agreement
is made pursuant to and upon the representations, warranties and agreements on
the part of the parties hereto contained in the PSA and shall be governed in all
respects by the PSA.
E-1
5. Ratification of PSA. As supplemented by this Substitution
Transfer Agreement, the PSA is in all respects ratified and confirmed by the
parties hereto.
6. Counterparts. This Substitution Transfer Agreement may be
executed in two or more counterparts including by telefax transmission thereof
(and by different parties on separate counterparts), each of which shall be an
original, but all of which together shall constitute one and the same
instrument.
7. Governing Law. This Substitution Transfer Agreement shall
be governed by, and construed and enforced in accordance with, the internal laws
of the State of New York.
8. Reaffirmation. As provided in Section 2.04(b) of the PSA,
by delivery of this Substitution Transfer Agreement the Depositor confirms that
the conditions to transfer set forth in Section 2.02 have been satisfied or
otherwise waived as described therein.
[signatures follow]
E-2
IN WITNESS WHEREOF, the parties hereto have caused this
Substitution Transfer Agreement to be executed by their respective officers
thereunto duly authorized as of the date first written above.
NCT FUNDING COMPANY, L.L.C., CIT EQUIPMENT COLLATERAL
as Depositor 2000-2
By: CHASE MANHATTAN BANK USA,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Owner Trustee on behalf of the Trust
By: By:
---------------------------- --------------------------------------
E-3
EXHIBIT F
[RESERVED]
F-1
EXHIBIT G
Schedule of Representations and Warranties
(a) List of Contracts. The information set forth in the
Schedule of Contracts (as the same may be amended or deemed amended in respect
of a conveyance of Substitute Contracts on a Substitution Transfer Date) is
true, complete and correct as of the Closing Date (or Substitution Transfer
Date, as applicable).
(b) Eligible Contract. As of its applicable Cut-Off Date, each
Contract satisfied the criteria for the definition of Eligible Contract set
forth in the Pooling Agreement, and each Secondary Contract securing a Vendor
Loan constituting a Contract satisfied, as of its applicable Cut-Off Date, the
definition of Eligible Secondary Contract set forth in the Pooling Agreement.
(c) Contracts Secured by Vehicles. None of the Contracts
relating to Equipment constituting Vehicles are "true leases."
(d) Contract Files. As of the Closing Date (or as of the
Substitution Transfer Date, with respect to Substitute Contracts), (i)
immediately prior to such date, Financial (or the applicable Financing
Originator as custodian for Financial, with respect to TCC Contracts) had
possession of each original Contract and the related complete Contract File, and
there were no other custodial agreements relating to the same in effect (other
than offsite storage arrangements described in Section 4.01(b)); (ii) each of
such documents which is required to be signed by the Obligor has been signed by
the Obligor in the appropriate spaces; and (iii) the complete Contract File for
each Contract is in the possession of the Servicer.
(e) No Material Obligation. No Financing Originator has a
material performance obligation in respect of any Contract in favor of an
Obligor or End-User (it being understood that covenants of quiet enjoyment,
purchase options, obligations to accept return of the property at end of lease
term, and like obligations of a lessor typical of a "triple net" lease, shall
not be deemed "material performance obligations" for purposes of this
representation).
(f) Instruments. Not more than 0.75% of the Contract Pool
Principal Balance as of the Closing Date are "Instruments" (within the meaning
of Article 9 of the UCC), which evidence or relate to any Contract conveyed to
the Trust on the Closing Date.
(g) Vendor Agreements. The Receivables Purchase Agreement.
dated as of October 31, 1998, by and between DFS-SPV L.P., a Delaware limited
partnership ("DFS-SPV"), and Financial, as amended by the Partial Waiver of
Repurchase Option and Amendment to Receivables Purchase Agreement, dated as of
August 20, 1999, is in full force and effect and has not been amended since
August 20, 1999. The Purchase Agreement, dated as of October 31, 1998, by and
between Dell Financial Services L.P., a Delaware limited partnership, and
DFS-SPV, as amended by the Partial Waiver of Repurchase Option and Amendment to
Receivables Purchase Agreement, dated as of August 20, 1999, is in full force
and effect and has not been amended since the August 20, 1999. The Financial
Services Agreement, dated as of March 9,
G-1
1998, between Lucent Technologies Inc., a Delaware corporation, and Newcourt
Credit Group Inc., an Ontario corporation, is in full force and effect and has
not been amended since the date thereof. Any Contracts in which the Vendor is
XXX Xxxxxxxxxxx was purchased pursuant to the NCR Operating Agreement, dated as
of May 6, 1996, between XXX Xxxxxxxxxxx, a Maryland corporation, and AT&T
Capital Corporation (which agreement has since been terminated). Any Contracts
in which the Vendor is Snap-on Tools was purchased pursuant to the Funding
Agreement between New Creditcorp SPC, LLC and CIT Financial USA, Inc., dated
January 4, 1999 and the Pooling and Servicing Agreement between New Creditcorp
SPC, LLC and Snap-on Credit LLC dated January 4, 1999 and neither such Funding
Agreement or such Pooling and Servicing Agreement have been amended since the
date thereof.
G-2
EXHIBIT H
[Reserved]
H-1
EXHIBIT I
[Reserved]
I-1
EXHIBIT J
Minimum Value Filing Exceptions
No financing statements are filed against an Obligor located
in a particular State describing Equipment which is the subject of a particular
Contract of any Financing Originator, unless the fair market value of the
Equipment (determined in accordance with Customary Policies and Procedures)
related to such particular Contract is at least $25,000 (or, in the alternative,
at least $50,000 if such Contract is a Lease with a "fair market value" purchase
option).
J-1
