Exhibit 4.2
EXECUTION COPY
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POOLING AND SERVICING AGREEMENT
among
CIT EQUIPMENT COLLATERAL 2004-VT1
as Issuer,
NCT FUNDING COMPANY, L.L.C.,
as Depositor,
CIT FINANCIAL USA, INC.
in its individual capacity and as Servicer
Dated as of February 1, 2004
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................................1
Section 1.01 Definitions................................................................................1
Section 1.02 Usage of Terms............................................................................39
Section 1.03 Section References........................................................................39
Section 1.04 Accounting Terms..........................................................................39
ARTICLE II FUNDINGS OF TRUST; TRANSFERS OF CONTRACTS............................................................39
Section 2.01 Creation and Funding of Trust; Transfer of Transferred Assets to Trust....................39
Section 2.02 Conditions to Transfers...................................................................41
Section 2.03 Acceptance by Trust.......................................................................43
Section 2.04 Conveyance of Substitute Contracts........................................................43
Section 2.05 Release of Excluded Amounts...............................................................45
ARTICLE III REPRESENTATIONS AND WARRANTIES......................................................................45
Section 3.01 Representations and Warranties Regarding the Depositor....................................45
Section 3.02 Representations and Warranties of the Servicer............................................48
ARTICLE IV PERFECTION OF TRANSFERS AND PROTECTION OF SECURITY INTERESTS.........................................50
Section 4.01 Custody of Contracts......................................................................50
Section 4.02 Filings...................................................................................51
Section 4.03 Name Change or Relocation.................................................................51
ARTICLE V SERVICING OF CONTRACTS................................................................................52
Section 5.01 Initial Servicer's Appointment and Acceptance; Responsibility for Contract
Administration.........................................................................52
Section 5.02 General Duties............................................................................52
Section 5.03 Assignment or Replacement.................................................................53
Section 5.04 Disposition Upon Termination of Contract..................................................53
Section 5.05 Subservicers..............................................................................53
Section 5.06 Further Assurance.........................................................................53
Section 5.07 Notice to Obligors........................................................................54
Section 5.08 Collection Efforts; Modification of Contracts.............................................54
Section 5.09 Prepayments of Certain Contracts..........................................................55
Section 5.10 Certain Extensions; Acceleration..........................................................55
Section 5.11 Taxes and Other Amounts...................................................................55
Section 5.12 Suits by Servicer.........................................................................56
Section 5.13 Remittances...............................................................................56
Section 5.14 Servicer Advances.........................................................................56
Section 5.15 Realization Upon Defaulted Contract.......................................................56
Section 5.16 Maintenance of Insurance Policies.........................................................56
Section 5.17 Certain Other Duties With Respect to Trust................................................57
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Section 5.18 Servicing Compensation....................................................................57
Section 5.19 Payment of Certain Expenses by Servicer...................................................57
Section 5.20 Records...................................................................................57
Section 5.21 Inspection................................................................................57
Section 5.22 Trust To Cooperate in Releases............................................................58
Section 5.23 Separate Entity Existence.................................................................58
Section 5.24 Assignment of Servicing...................................................................58
ARTICLE VI COVENANTS OF THE DEPOSITOR...........................................................................59
Section 6.01 LLC Existence.............................................................................59
Section 6.02 Contracts Not to be Evidenced by Promissory Notes.........................................59
Section 6.03 Security Interests........................................................................59
Section 6.04 Delivery of Collections...................................................................59
Section 6.05 Regulatory Filings........................................................................59
Section 6.06 Compliance With Law.......................................................................59
Section 6.07 Activities................................................................................59
Section 6.08 Indebtedness..............................................................................60
Section 6.09 Guarantees................................................................................60
Section 6.10 Investments...............................................................................60
Section 6.11 Merger; Transfers.........................................................................60
Section 6.12 Payments..................................................................................60
Section 6.13 Other Agreements..........................................................................61
Section 6.14 Separate Entity Existence.................................................................61
Section 6.15 Location; Records.........................................................................62
Section 6.16 Liability of Depositor; Indemnities.......................................................62
Section 6.17 Bankruptcy Limitations....................................................................64
Section 6.18 Limitation on Liability of Depositor and Others...........................................64
ARTICLE VII ESTABLISHMENT OF ACCOUNTS; PAYMENTS.................................................................64
Section 7.01 Trust Accounts; Collections...............................................................64
Section 7.02 Cash Collateral Account...................................................................65
Section 7.03 Trust Account Procedures..................................................................66
Section 7.04 Securityholder Payments...................................................................66
Section 7.05 Allocations and Payments..................................................................67
Section 7.06 Repurchases of, or Substitution for, Contracts for Breach of Representations and
Warranties.............................................................................72
Section 7.07 Reassignment of Repurchased or Substituted Contracts......................................73
Section 7.08 The Servicer's Purchase Option............................................................73
ARTICLE VIII SERVICER DEFAULTS; SERVICING TRANSFER..............................................................73
Section 8.01 Servicer Default..........................................................................73
Section 8.02 Servicing Transfer........................................................................74
Section 8.03 Appointment of Successor Servicer; Reconveyance; Successor Servicer to Act................75
Section 8.04 Notifications to Noteholders and the Equity Certificateholders............................76
Section 8.05 Effect of Transfer........................................................................76
Section 8.06 Database File.............................................................................77
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Section 8.07 Successor Servicer Indemnification........................................................77
Section 8.08 Responsibilities of the Successor Servicer................................................77
Section 8.09 Servicer Not to Resign....................................................................78
ARTICLE IX SERVICER REPORTING...................................................................................78
Section 9.01 Monthly Reports...........................................................................78
Section 9.02 Officer's Certificate.....................................................................78
Section 9.03 Other Data................................................................................79
Section 9.04 Annual Reporting; Evidence as to Compliance...............................................79
Section 9.05 Annual Statement of Compliance from Servicer..............................................79
ARTICLE X TERMINATION...........................................................................................79
Section 10.01 Sale of Trust Assets......................................................................79
ARTICLE XI MISCELLANEOUS........................................................................................80
Section 11.01 Amendments................................................................................80
Section 11.02 Reserved..................................................................................81
Section 11.03 Governing Law.............................................................................81
Section 11.04 Notices...................................................................................82
Section 11.05 Severability of Provisions................................................................84
Section 11.06 Third Party Beneficiaries.................................................................84
Section 11.07 Counterparts..............................................................................84
Section 11.08 Headings..................................................................................84
Section 11.09 No Bankruptcy Petition; Disclaimer and Subordination......................................85
Section 11.10 Jurisdiction..............................................................................86
Section 11.11 [Reserved]................................................................................86
Section 11.12 Servicer Indemnity........................................................................86
Section 11.13 Limitation of Liability of Owner Trustee..................................................86
Section 11.14 WAIVER OF JURY TRIAL......................................................................86
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 February 1, 2004, is
among CIT Equipment Collateral 2004-VT1, a Delaware statutory trust (together
with its successors and assigns, the "Issuer" or the "Trust"), NCT Funding
Company, L.L.C., a Delaware limited liability company (together with its
successors and assigns, the "Depositor"), and CIT Financial USA, Inc. (together
with its successors and assigns, "CFUSA" and, in its capacity as the Servicer,
the "Servicer").
WHEREAS the Depositor desires to fund the Trust by selling, conveying
and assigning from time to time, pursuant hereto or pursuant to Substitution
Transfer Agreements hereunder, designated Contracts or pools of Contracts
together with certain related security therefor and other related rights and
property as further described herein, which Contracts were originated by one or
more Financing Originators, or acquired by purchase and assignment by a
Financing Originator from the prior owner thereof, and subsequently conveyed (i)
by certain Financing Originators to CFUSA; (ii) by CFUSA to the Depositor, with
respect to Contracts and related assets both originated or acquired directly by
CFUSA as a Financing Originator, and acquired by CFUSA from the other Financing
Originators as described in clause (i) above; (iii) in the case of the VFC
Contracts, by the Depositor to the VFC Trust (as defined herein); and (iv) in
the case of the VFC Contracts originated by the Financing Originators and
warehoused in the VFC Trust, by the VFC Trust back 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.
"Accountant's Report" has the meaning specified in Section 9.04.
"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 (or, in the case of the initial
Accrual Period, from and including the Closing Date to but excluding the first
Payment Date following the Closing Date), and with respect to each other Class
of Notes, the period from and including the 20th day of the immediately
preceding calendar month to but excluding the 20th day of the related calendar
month, provided, that in each case, the initial Accrual Period following the
Closing Date shall be the period from and including the Closing Date to but
excluding March 20, 2004.
"Addition Notice" means, with respect to any transfer of Subsequent
Contracts to the Trust pursuant to Section 2.04 (and the Depositor's
corresponding prior purchase of such Contracts from CFUSA), a notice, which
shall be given at least five days prior to the related Subsequent Transfer Date,
identifying the Subsequent Contracts to be transferred, the Contract Principal
Balance of such Subsequent Contracts and the related Substitution Event (with
respect to an identified Contract or Contracts then in the Contract Pool) to
which such Subsequent Contract relates, with such notice to be signed both by
the Depositor and CFUSA.
"Administration Agreement" means the Administration Agreement dated as
of February 1, 2004 by and among the Trust, CFUSA, the Depositor and the
Indenture Trustee.
"Administrator" shall be the party named as such under the
Administration Agreement.
"Affiliate" of any specified Person means any other Person controlling
or controlled by, or under common control with, such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative to the foregoing.
"Aggregate Principal Amount" means, with respect to any group of
Notes, at any date of determination, the sum of the Principal Amounts of such
Notes on such date of determination.
"Agreement" means this Pooling and Servicing Agreement, as amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
"Allocation Criteria" means, with respect to the allocation of
Insurance Proceeds or Liquidation Proceeds between the Trust (for inclusion as
Pledged Revenues) and the Depositor, as contemplated in the definition of
Available Pledged Revenues, that Insurance Proceeds or Liquidation Proceeds with
respect to the Contracts consisting of Leases are allocable pro rata between
inclusion as Available Pledged Revenues in respect of the Contract Pool, on the
one hand, and directly to the Depositor, on the other, based upon (i) for
allocation to Available Pledged Revenues, the Required Payoff Amount for such
Lease (determined as of the last day of the Collection Period during which such
Lease became a Defaulted Contract), and (ii) for allocation to the Depositor,
the Book Value of the related Equipment; provided, that in the event the
Insurance Proceeds or Liquidation Proceeds in respect of a particular Lease
exceed the sum of such Required Payoff Amount for such Lease plus the Book Value
of the related Equipment, any such excess shall be allocated solely to the
Depositor.
"Amount Available" means, with respect to any Payment Date, (i) the
sum of the Available Pledged Revenues for such Payment Date and (ii) that
portion of the balance in the Cash Collateral Account available for withdrawal
by the Indenture Trustee in accordance with Section 7.05(d).
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"Applicable Security" means, with respect to a Vendor Loan, any (i)
Secondary Contract securing such Vendor Loan and (ii) Equipment securing such
Vendor Loan or a related Secondary Contract.
"Available Cash Collateral" means, with respect to a Payment Date, the
amount of funds equal to the lesser of (i) the amount on deposit in the Cash
Collateral Account (determined (a) exclusive of any Investment Earnings thereon
and (b) before giving effect to any deposit to be made or withdrawals from the
Cash Collateral Account with respect to such Payment Date), and (ii) the
Required Cash Collateral Amount.
"Available Pledged Revenues" means, as to any Payment Date, the sum of
(i) the Related Collection Period Pledged Revenues for such Payment Date, (ii)
all Purchase Amounts (other than any portion thereof attributable to the Book
Value of the Leased Equipment) and Servicer Advances on deposit in the
Collection Account as of the immediately preceding Deposit Date, (iii) the
amount paid by CFUSA or the Depositor to purchase the Contracts pursuant to
Section 7.08 of this Agreement on deposit in the Collection Account as of the
immediately preceding Deposit Date, and (iv) to the extent necessary to pay the
Note Interest Distributable Amount for such Payment Date, the Current Collection
Period Pledged Revenues for such Payment Date.
"Book Value" means, with respect to any Equipment subject to a Lease,
the value of such Equipment as shown on the accounting books and records of the
applicable Financing Originator (or the Depositor, in the case of Equipment
relating to Contracts being transferred pursuant to the VFC Assignment), as of
the Cut-Off Date for the related Lease (it being understood that Book Value
constitutes a measure of the lessor's residual interest in the Equipment as
shown on its books and records as of such date, net of the financial asset shown
on such books and records represented by the discounted Scheduled Payments owing
on the Lease).
"Business Day" means any day which is neither a Saturday or a Sunday,
nor another day on which banking institutions in the States of New Jersey or New
York are authorized or obligated by law, executive order, or governmental decree
to be closed.
"Cash Collateral Account" means the Cash Collateral Account
established and maintained pursuant to Section 7.01 hereof.
"Cash Collateral Account Agreement" means the Loan Agreement dated as
of February 1, 2004, among the Depositor, the Trust, the Indenture Trustee, the
Servicer, the Cash Collateral Account Lenders and the Cash Collateral Account
Lenders' Agent, as the same may be amended, supplemented or otherwise modified
in accordance with the terms thereof.
"Cash Collateral Account Floor" means $37,423,454.80.
"Cash Collateral Account Lenders" means the parties identified as
lenders in the Cash Collateral Account Agreement.
"Cash Collateral Account Lenders' Agent" means the party identified as
agent for the Cash Collateral Account Lenders in the Cash Collateral Account
Agreement.
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"Cash Collateral Initial Balance" means $72,507,944.
"Casualty Loss" means, with respect to any item of Equipment, the
loss, theft, damage beyond repair or governmental condemnation or seizure of
such item of Equipment.
"Certificate of Formation" means the limited liability company
Certificate of Formation of the Depositor.
"Certificate of Trust" has the meaning given such term in the Trust
Agreement.
"Certificate Register" has the meaning specified in the Trust
Agreement.
"CFUSA" means CIT Financial USA, Inc., a Delaware corporation.
"CFUSA Contract" means a Contract originated or acquired by CFUSA
(including without limitation any Contract originated or acquired by CFUSA and
transferred to the Depositor and by the Depositor to the VFC Trust prior to the
Closing Date) but which is not a TCC Contract.
"CFUSA Contract Assets" means Contract Assets relating to CFUSA
Contracts.
"CIT" means 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 92.25%.
"Class A Principal Payment Amount" means: (1) with respect to any
Payment Date on or prior to the Payment Date on which the Principal Amount of
the Class A-1 Notes has been reduced to zero, the greater of (i) the excess of
(x) the Principal Amount of the Class A-1 Notes over (y) the Class A-1 Scheduled
Principal Balance and (ii) the excess of (x) the sum of the Principal Amount of
the Class A-1, Class A-2, Class A-3 and Class A-4 Notes over (y) the Class A
Target Principal Amount; and (2) with respect to any Payment Date thereafter,
the excess of (x) the sum of the Principal Amount of the Class A-2, Class A-3
and Class A-4 Notes over (y) the Class A Target Principal Amount; provided,
however, that in no event shall the Class A Principal Payment Amount exceed the
Principal Amount of the Class A Notes.
"Class A Target Principal Amount" means, with respect to any Payment
Date, the product of (i) the Class A Percentage and (ii) the Contract Pool
Principal Balance as of the related Accounting Date.
"Class A-1 Interest Carryover Shortfall" means, with respect to any
Payment Date, the excess, if any, of the Class A-1 Interest Distributable Amount
for the preceding
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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 1.12% per annum.
"Class A-1 Maturity Date" means March 21, 2005 (or, if such day is not
a Business Day, the next preceding Business Day).
"Class A-1 Monthly Interest Distributable Amount" means, (a) with
respect to the first Accrual Period and the related Payment Date, an amount
equal to the product of (i) the Class A-1 Interest Rate, (ii) the Initial Class
A-1 Principal Amount, and (iii) a fraction equal to the number of days in such
Accrual Period divided by 360, and (b) with respect to each subsequent Accrual
Period and the related Payment Date, an amount equal to the product of (i) the
Class A-1 Interest Rate, (ii) the Principal Amount of the Class A-1 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-1 Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to the number of days in such Accrual
Period divided by 360.
"Class A-1 Notes" means the $311,000,000 aggregate principal amount of
1.12% Receivable-Backed Notes, Class A-1, issued pursuant to the Indenture.
"Class A-1 Scheduled Principal Balance" means, with respect to each
Payment Date, the balance for such Payment Date as set forth in the following
table.
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Payment Date Class A-1 Scheduled Principal Balance
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March 2004 $283,580,248.46
April 2004 $257,350,537.61
May 2004 $227,153,240.05
June 2004 $200,136,223.30
July 2004 $172,883,497.70
August 2004 $141,387,183.68
September 2004 $113,116,312.42
October 2004 $ 85,524,892.58
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November 2004 $54,510,797.87
December 2004 $26,995,352.53
January 2005 $ 0
"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 1.54% per annum.
"Class A-2 Maturity Date" means February 20, 2006 (or, if such day is
not a Business Day, the next succeeding Business Day thereafter).
"Class A-2 Monthly Interest Distributable Amount" means (a) with
respect to the first Accrual Period and the related Payment Date, an amount
equal to the product of (i) the Class A-2 Interest Rate, (ii) the Initial Class
A-2 Principal Amount, and (iii) a fraction equal to the number of days in such
Accrual Period divided by 360, and (b) with respect to each subsequent Accrual
Period and the related Payment Date, an amount equal to the product of (i) the
Class A-2 Interest Rate, (ii) the Principal Amount of the Class A-2 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-2 Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to one-twelfth.
"Class A-2 Notes" means the $150,000,000 aggregate principal amount of
1.54% 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 2.20% per annum.
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"Class A-3 Maturity Date" means March 20, 2008 (or, if such day is not
a Business Day, the next succeeding Business Day thereafter).
"Class A-3 Monthly Interest Distributable Amount" means (a) with
respect to the first Accrual Period and the related Payment Date, an amount
equal to the product of (i) the Class A-3 Interest Rate, (ii) the Initial Class
A-3 Principal Amount, and (iii) a fraction equal to the number of days in such
Accrual Period divided by 360, and (b) with respect to each subsequent Accrual
Period and the related Payment Date, an amount equal to the product of (i) the
Class A-3 Interest Rate, (ii) the Principal Amount of the Class A-3 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-3 Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to one-twelfth.
"Class A-3 Notes" means the $345,000,000 aggregate principal amount of
2.20% 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 2.70% per annum.
"Class A-4 Maturity Date" means December 20, 2011 (or, if such day is
not a Business Day, the next succeeding Business Day thereafter).
"Class A-4 Monthly Interest Distributable Amount" means (a) with
respect to the first Accrual Period and the related Payment Date, an amount
equal to the product of (i) the Class A-4 Interest Rate, (ii) the Initial Class
A-4 Principal Amount, and (iii) a fraction equal to the number of days in such
Accrual Period divided by 360, and (b) with respect to each subsequent Accrual
Period and the related Payment Date, an amount equal to the product of (i) the
Class A-4 Interest Rate, (ii) the Principal Amount of the Class A-4 Notes on the
immediately preceding Payment Date, after giving effect to all payments of
principal to Class A-4 Noteholders on or prior to such immediately preceding
Payment Date, and (iii) a fraction equal to one-twelfth.
"Class A-4 Notes" means the $57,080,000 aggregate principal amount of
2.70% 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) 4.4625% 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
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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
and releases 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 1.96% per annum.
"Class B Maturity Date" means December 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 the number of days in such Accrual Period
divided by 360, and (b) with respect to each subsequent Accrual Period and the
related Payment Date, an amount equal to the product of (i) the Class B Interest
Rate, (ii) the Principal Amount of the Class B Notes on the immediately
preceding Payment Date, after giving effect to all payments of principal to
Class B Noteholders on or prior to such immediately preceding Payment Date, and
(iii) a fraction equal to one-twelfth.
"Class B Notes" means the $25,730,000 aggregate principal amount of
1.96% Receivable-Backed Notes, Class B, issued pursuant to the Indenture.
"Class B Percentage" means 2.75%.
"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) 4.50% of
the Initial Contract Pool Principal Balance, plus (ii) the Unfunded Loss Amount,
if any, for such Payment
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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 and releases 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 2.10% per annum.
"Class C Maturity Date" means December 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 the number of days in such Accrual Period
divided by 360, and (b) with respect to each subsequent Accrual Period and the
related Payment Date, an amount equal to the product of (i) the Class C Interest
Rate, (ii) the Principal Amount of the Class C Notes on the immediately
preceding Payment Date, after giving effect to all payments of principal to
Class C Noteholders on or prior to such immediately preceding Payment Date, and
(iii) a fraction equal to one-twelfth.
"Class C Notes" means the $14,030,000 aggregate principal amount of
2.10% Receivable-Backed Notes, Class C, issued pursuant to the Indenture.
"Class C Percentage" means 1.50%.
"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.
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"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) 4.650% 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 and releases 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 2.83% per annum.
"Class D Maturity Date" means December 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 the number of days in such Accrual Period
divided by 360, and (b) with respect to each subsequent Accrual Period and the
related Payment Date, an amount equal to the product of (i) the Class D Interest
Rate, (ii) the Principal Amount of the Class D Notes on the immediately
preceding Payment Date, after giving effect to all payments of principal to
Class D Noteholders on or prior to such immediately preceding Payment Date, and
(iii) a fraction equal to one-twelfth.
"Class D Notes" means the $32,746,370 aggregate principal amount of
2.83% Receivable-Backed Notes, Class D, issued pursuant to the Indenture.
"Class D Percentage" means 3.50%.
"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,
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that in no event will the Class D Principal Payment Amount exceed the Principal
Amount of the Class D Notes.
"Class D Target Principal Amount" means, with respect to any Payment
Date, the product of (i) the Class D Percentage and (ii) the Contract Pool
Principal Balance as of the related Accounting Date.
"Closing Date" means March 11, 2004.
"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 in which the initial Payment 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 includes the master file and the
history file as well as servicing information with respect to such Contracts.
"Contract" means each End-User Contract and each Vendor Loan listed on
any Schedule of Contracts but, unless otherwise specified herein, shall not
refer to any Secondary Contract.
"Contract Assets" means, with respect to any Contracts (including
Substitute Contracts) and related assets conveyed or being conveyed to the
Depositor pursuant to a Substitution Assignment Agreement, the VFC Assignment or
the Non-VFC Purchase Agreement, and concurrently conveyed or being conveyed by
the Depositor to the Trust pursuant to this Pooling Agreement or a Substitution
Transfer Agreement, all right, title and interest of CFUSA or the VFC Trust, as
the case may be, in, to and under:
(i) such Contracts, and all monies due or to become due in
payment of such Contracts on and after the relevant Cut-Off Date, and including
Scheduled Payments due but not yet received prior to the relevant Cut-Off Date
and all other Scheduled Payments (including in respect of any Guaranteed
Residual Investment) due or becoming due on
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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 and
processed 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.
"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
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during the related Collection Period or was required to be purchased by CFUSA as
of the last day of the related Collection Period in accordance with Section 5.01
of the Purchase and Sale Agreement, will be deemed to be zero on and after the
last day of such Collection Period.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Servicer or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Corporate Trust Office" means the corporate trust office of the Owner
Trustee in the State of New York, which office initially shall be located at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attn: Corporate Trust Administrator, or such
other office at such other address in the State of New York as the Owner Trustee
may designate from time to time by notice to the Equity Certificateholder, the
Servicer, the 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.
"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 as an Amount Available) on
the related Financing Originator's or the Servicer's computer master file of
Contracts (without regard to the effective date of such recordation).
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"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 180 days or more 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.
"Delaware Trustee" means The Bank of New York (Delaware), not in its
individual capacity, but solely as Delaware Trustee under the Trust Agreement,
its successors in interest and any successor trustee under the Trust Agreement.
"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.
"Determination Date" means, with respect to any Payment Date, the
second Business Day prior to such Payment Date.
"Discount Rate" means 2.838%.
"Dollar" and "$" means lawful currency of the United States of
America.
"Eligible Contract" means each Contract owned (prior to its conveyance
by a TCC Financing Originator to CFUSA under the VFC Conveyancing Agreement or
the Non-VFC Conveyancing Agreement, as the case may be, if a TCC Contract, prior
to its conveyance by CFUSA to the Depositor under the VFC Purchase Agreement or
the Non-VFC Purchase Agreement, as the case may be, if a CFUSA Contract, and
prior to its conveyance by the VFC Trust to the Depositor pursuant to the VFC
Assignment, if a VFC Contract) by a TCC Financing Originator, CFUSA or the VFC
Trust, as the case may be, and with respect to which each of the following is
true (to the extent applicable to such type of Contract) at the time of its
conveyance to the Trust on the Closing Date (or Substitution Transfer Date, as
applicable):
(a) the information with respect to the Contract, any Secondary
Contract securing the obligations under such Contract, and the Financed Items
related to the Contract, delivered to the Servicer by or at the direction of
CFUSA under the Substitute VFC Purchase
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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), CFUSA
or the VFC Trust owned and had good and marketable title to (and following the
transfer by CFUSA or the VFC Trust, the Depositor owned and had good and
marketable title to) the Contracts free and clear of any Liens, other than
Permitted Liens; and immediately prior to the transfer of such Contract (if a
TCC Contract) and any related Equipment (or security interest therein) or
Applicable Security by the applicable TCC Financing Originator to CFUSA, such
Contract was owned by the applicable TCC Financing Originator free and clear of
any Liens, 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);
(f) the Contract is not subject to litigation, or to rights of
rescission, setoff, counterclaim or defense and, to CFUSA's or the Servicer's
knowledge, no such rights have been asserted or threatened with respect to the
Contract;
(g) the Contract, at the time it was made, had been originated
in compliance (in all material respects) with applicable law, and did not
violate the laws of the United States or any state in any material respect;
(h) (i) the Contract and any related Financed Item or interest
therein (other than Excluded Residual Investments) have not been sold,
transferred, assigned or pledged by the relevant Financing Originator, CFUSA (in
respect of TCC Contracts) or the VFC Trust (in the case of VFC Contracts) to any
other Person (other than (a) the sale of Contracts and any related financed or
interest therein to CFUSA or to the Depositor and then the VFC Trust and (b) the
financed sale of Equipment to an End-User effected through an End-User
Contract), and (ii) if such Contract finances Equipment, either (A) such
Contract is secured by a fully perfected lien or ownership interest in favor of
the relevant Financing Originator or, in the case of Equipment relating to the
VFC Contracts, the Depositor, on or in respect of the related Equipment (other
than as contemplated by the Minimum Value Filing Exception), or, if the Contract
is a Vendor Loan, the Vendor Loan is secured by a fully perfected lien or
ownership interest in favor of the relevant Financing Originator or the VFC
Trust in the related Applicable Security, or (B) in the case of such a Contract
secured by a Vehicle, within 90 calendar days of the origination or acquisition
of such Contract by the relevant Financing Originator all applicable state
registration or recording procedures were initiated, and the Financing
Originator's interest in such Vehicle will be so noted or recorded within 180
days of such acquisition or origination, or a certificate of
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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 "tangible
chattel paper" for purposes of the UCC, there is not more than one "secured
party's original" counterpart of the Contract and such original counterpart is
in the Contract File;
(j) all filings (including filings of UCC financing statements)
necessary (i) in respect of Contracts consisting of TCC Contracts, to evidence
or perfect the conveyance or transfer of the relevant TCC Financing Originator's
ownership interest in the TCC Contract, and the TCC Financing Originator's
corresponding interest in the related Equipment or Applicable Security, as
applicable, to CFUSA, and (ii) in respect of all Contracts to evidence or
perfect the conveyance or transfer of CFUSA's or the VFC Trust's ownership
interest in the Contract, and CFUSA's corresponding interest in the related
Equipment or Applicable Security, as applicable, to the Depositor (as well as
the concurrent conveyance of such property hereunder, other than ownership
interests in Equipment, from the Depositor to the Trust), have been made or
provided for in all appropriate jurisdictions; provided, that UCC financing
statement filings with respect to Equipment or Applicable Security which name
the Financing Originator as secured party have not been amended to indicate
either CFUSA (with respect to TCC Contracts), the Depositor or the Trust as an
assignee (although 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 Delaware have been made in favor of the Trust as secured party against the
Depositor as debtor describing as collateral (among other things) the
Depositor's ownership interest in Equipment, in respect of the security interest
in Equipment owned by the Depositor which has been granted to the Trust pursuant
to Section 2.01 hereof.
(k) the Obligor is not, to CFUSA's knowledge, subject to
bankruptcy or other insolvency proceedings;
(l) the Obligor's billing address is in the United States or
Puerto Rico, and the Contract is a U.S. dollar-denominated obligation;
(m) if the Contract is not an "instrument" for purposes of the
UCC, 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 or, if the Contract Constitutes an "instrument" for purposes of the
UCC, all consents and approvals required by the terms of the Contract for the
sale of the Contract hereunder have been received;
(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
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than the Contract Principal Balance of such Lease (as of the date of
cancellation), or (2) pursuant to the Purchase and Sale Agreements, CFUSA has
indemnified the Depositor against such cancellation in an amount at least equal
to the Contract Principal Balance of such Lease (as of the date of
cancellation), less any amounts paid by the Vendor pursuant to clause (1);
(o) no selection procedure adverse to the interests of the Trust
or the Equity Certificateholder was used in selecting the Contract for the
Contract Pool;
(p) the Obligor under the Contract is required to maintain
casualty insurance or to self-insure with respect to the related Equipment in
accordance with Customary Policies and Procedures;
(q) the Contract constitutes tangible 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 pursuant to
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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, A-1+ from Standard & Poor's and, if rated by Fitch, F-1+ from Fitch; or
any other demand or time deposit or certificate of deposit which is fully
insured by the Federal Deposit Insurance Corporation and which is rated at least
P-1 by Moody's;
(iii) repurchase obligations with respect to any security
described in either clause (i) or (ii) above and entered into with any
institution whose commercial paper is at least rated P-1 from Moody's, at least
A-1+ by Standard & Poor's and, if rated by Fitch, at least F-1+ by Fitch;
(iv) securities bearing interest or sold at a discount
issued by any corporation incorporated under the laws of the United States of
America or any State thereof which have a credit rating of at least A2 or P-1
from Moody's, at least AAA from Standard & Poor's and, if rated by Fitch, at
least AAA from Fitch, at the time of such investment;
(v) commercial paper (which may be issued by CIT) having a
rating of at least P-1 from Moody's, at least A-1+ from Standard & Poor's and,
if rated by Fitch, at least F-1+ from Fitch, at the time of such investment;
(vi) money market funds which are rated Aaa by Moody's, at
least AAAm or AAAm-G by Standard & Poor's and, if rated by Fitch, at least AAA
by Fitch, including funds which meet such rating requirements for which the
Trustees or an affiliate of the Trustees serves as an investment advisor,
administrator, shareholder servicing agent and/or custodian or subcustodian,
notwithstanding that (i) such Trustee or an affiliate of such Trustee charges
and collects fees and expenses from such funds for services rendered, (ii) such
Trustee
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charges and collects fees and expenses for services rendered pursuant to this
instrument, and (iii) services performed for such funds and pursuant to this
instrument may converge at any time. (The Depositor and the Servicer
specifically authorize such Trustee or an affiliate of such Trustee to charge
and collect all fees and expenses from such funds for services rendered to such
funds, in addition to any fees and expenses such Trustee may charge and collect
for services rendered pursuant to this instrument); and
(vii) any other investments approved by the Rating Agencies.
"Eligible Repurchase Obligations" means repurchase obligations with
respect to any security that is a direct obligation of, or fully guaranteed by,
the United States of America or any agency or instrumentality thereof the
obligations of which are backed by the full faith and credit of the United
States of America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (c)(ii) of the
definition of Eligible Investments.
"Eligible Secondary Contract" shall mean each Secondary Contract
(i) that satisfies all the criteria set forth in the
definition of "Eligible Contract" except clauses (b), (h) (with respect to
ownership by the Financing Originator of the Contract) and (w) thereof, and
except that the term "Obligor" shall mean "End-User" in all such criteria;
(ii) with respect to which Secondary Contract and the
proceeds thereof the relevant Financing Originator (or, in the case of VFC
Contracts, the VFC Trust, as assignee) has a duly perfected first priority lien;
and
(iii) with respect to which (A) if such Secondary Contract
secures a Vendor Loan constituting a TCC Contract, the transfer of the TCC
Financing Originator's security interest in such Secondary Contract and the
proceeds thereof to CFUSA, the transfer of CFUSA's interest so acquired to the
Depositor, and, if applicable, the Depositor's transfer of its interest therein
to the VFC Trust and the VFC Trust's transfer of such interest back to the
Depositor, is effective to create in favor of the Depositor a lien therein and
such lien has been duly perfected, or (B) if the Secondary Contract instead
secures a Vendor Loan constituting a CFUSA Contract, then the transfer of
CFUSA's security interest in such Secondary Contract and the proceeds thereof to
the Depositor, and if applicable, the Depositor's transfer of its interest
therein to the VFC Trust and the VFC Trust's transfer of such interest back to
the Depositor, is effective to create in favor of the Depositor a lien therein
and such lien has been duly perfected.
"Eligible Servicer" means CFUSA, the Trustees or any other Person
qualified to act as Servicer of the Contracts under applicable federal and state
laws and regulations, which Person services not less than $100,000,000 in
outstanding principal amount of equipment financing contracts.
"End-User" shall mean any party that uses the Financed Items pursuant
to an End-User Contract.
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"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.
"Financing Agreement" means each financing agreement covering Financed
Items, other than a CSA, a Secured Note, a Lease or an IPA.
"Financing Originator" means any of the following as of the Closing
Date: CIT Technology Financing Services, Inc; CIT Communications Finance
Corporation; and CFUSA.
"Fitch" means Fitch, Inc., or any successor thereto.
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"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 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.
"Independent Accountant" has the meaning specified in Section 9.04.
"Ineligible Contract" has the meaning specified in Section 7.06.
"Initial Class A-1 Principal Amount" means $311,000,000.
"Initial Class A-2 Principal Amount" means $150,000,000.
"Initial Class A-3 Principal Amount" means $345,000,000
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"Initial Class A-4 Principal Amount" means $57,080,000.
"Initial Class B Principal Amount" means $25,730,000.
"Initial Class C Principal Amount" means $14,030,000.
"Initial Class D Principal Amount" means $32,746,370.
"Initial Contract Assets" means those Contract Assets conveyed to the
Trust on the Closing Date.
"Initial Contract Pool Principal Balance" is $935,586,370.
"Initial Contracts" means those Contracts conveyed to the Trust on the
Closing Date.
"Initial Cut-Off Date" means February 1, 2004.
"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 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.
"Insolvency Proceeds" has the meaning specified in Section 10.01.
"Insurance Policy" means, with respect to any Contract, an insurance
policy covering physical damage to or loss of the related Equipment.
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"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 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
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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 and Scheduled Payments received on such
Defaulted Contracts), but net of Liquidation Expenses, Late Charges, amounts
payable to a Vendor in respect of (and in amounts not exceeding) amounts
previously paid by such Vendor in respect of such Contract under Vendor recourse
provisions, and amounts, if any, so received that are required to be refunded to
the Obligor on such Contract.
"Material Adverse Effect" means, with respect to any event or
circumstance, a material adverse effect on:
(i) the ability of CFUSA, any Financing Originator, the VFC
Trust, the Depositor, the Trust or the Servicer to perform in all material
respects its obligations under this Agreement or any other Transaction Document;
(ii) the validity or enforceability of this Agreement, any
other Transaction Document, or the Contracts, or the collectibility of the
Contracts; or
(iii) the status, existence, perfection, priority or
enforceability of the Trust's interest in the Contracts and the other Trust
Assets.
"Material Modification" means a termination or release (including
pursuant to prepayment), or an amendment, modification or waiver, or equivalent
similar undertaking or agreement, by the Servicer with respect to a Contract
which would not otherwise be permitted under the standards and criteria set
forth in Sections 5.08, 5.09 and/or 5.10 hereof.
"Maturity Date" means, as applicable, the Class A-1 Maturity Date,
Class A-2 Maturity Date, Class A-3 Maturity Date, Class A-4 Maturity Date, Class
B Maturity Date, Class C Maturity Date, or Class D Maturity Date.
"Minimum Value Filing Exception" means the variation from the relevant
Financing Originator's normal policies and practices with respect to filing UCC
financing statements against an Obligor describing Equipment which is the
subject of a Contract, in each case as set forth in Exhibit J hereto.
"Monthly Report" has the meaning specified in Section 9.01.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
thereto.
"Nonrecoverable 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.
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"Non-VFC Contract Assets" means the Contract Assets pertaining to the
Non-VFC Contracts.
"Non-VFC Contracts" means Contracts conveyed by CFUSA to the Depositor
pursuant to the Non-VFC Purchase Agreement, as listed in Schedule A to the
Non-VFC Purchase Agreement.
"Non-VFC Conveyancing Agreement" means the Non-VFC Conveyancing
Agreement, dated as of February 1, 2004, by and among the Financing Originators
as the same may be amended, supplemented, restated or otherwise modified from
time to time.
"Non-VFC Purchase Agreement" means the Non-VFC Purchase and Sale
Agreement, dated February 1, 2004, by and among CFUSA, as the seller, and the
Depositor, as purchaser, as the same may be amended, supplemented, restated or
otherwise modified from time to time.
"Note" means any one of the notes of the Trust of any Class executed
and authenticated in accordance with the Indenture.
"Note Distribution Account" means the account established and
maintained as such pursuant to Section 7.01.
"Note Interest Distributable Amount" means to the extent applicable,
the sum of the Class A-1 Interest Distributable Amount, the Class A-2 Interest
Distributable Amount, the Class A-3 Interest Distributable Amount, the Class A-4
Interest Distributable Amount, the Class B Interest Distributable Amount, the
Class C Interest Distributable Amount and the Class D Interest Distributable
Amount.
"Note Principal Distributable Amount" means with respect to any
Payment Date, the Total Principal Payment Amount, provided, however, that in no
event may the Note Principal Distributable Amount with respect to any Payment
Date exceed the Principal Amount of the Notes immediately prior to such Payment
Date.
"Note Register" has the meaning given such term in Section 2.04 of the
Indenture.
"Noteholder" means any registered holder of a Note.
"Obligor" means, with respect to any Contract, the Person or Persons
obligated to make payments with respect to such Contract, including any
guarantor thereof (and including, with respect to a Contract consisting of a
Vendor Loan, the Vendor obligated in respect of such Vendor Loan).
"Officer's Certificate" means, with respect to any Person, a
certificate signed by an authorized officer of such Person and delivered to the
party entitled to receipt thereof under any applicable Transaction Document.
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"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.
"Other Assets" has the meaning specified in Section 11.09.
"Outstanding" has the meaning specified in the Indenture.
"Owner Trustee" means The Bank of New York, not in its individual
capacity, but solely as Owner Trustee under the Trust Agreement, its successors
in interest and any successor owner trustee under the Trust Agreement.
"Payment Date" shall mean the twentieth (20th) day of each calendar
month or, if such twentieth (20th) day is not a Business Day, the next
succeeding Business Day, with the first such Payment Date hereunder being March
22, 2004.
"Paying Agent" means any Person described as such in Section 7.04(b).
"Permitted Liens" means
(a) with respect to Contracts in the Contract Pool:
(i) Liens for state, municipal or other local taxes if such
taxes shall not at the time be due and payable or if the Depositor shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto;
(ii) Liens in favor of CFUSA created by a TCC Financing
Originator pursuant to the VFC Conveyancing Agreement or the Non-VFC
Conveyancing Agreement, as the case may be, or Liens in favor of the Depositor
created pursuant to the Purchase and Sale Agreements or Liens in favor of the
VFC Trust created pursuant to the VFC Pooling Agreement, in each case
transferred to the Trust pursuant hereto;
(iii) Liens created pursuant to this Agreement in favor of
the Trust; and
(iv) Liens in favor of the Indenture Trustee created
pursuant to the Indenture and/or this Agreement; and
(b) with respect to the related Equipment:
(i) materialmen's, warehousemen's, mechanics' and other
liens arising by operation of law in the ordinary course of business for sums
not due;
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(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 CFUSA created by a TCC Financing
Originator pursuant to the VFC Conveyancing Agreement or the Non-VFC
Conveyancing Agreement, as the case may be, or Liens in favor of the Depositor
created pursuant to the Purchase and Sale Agreements, in each case transferred
to the Trust pursuant hereto or Liens in favor of the Depositor created pursuant
to the VFC Purchase and Sale Agreement;
(iv) Liens created pursuant to this Agreement in favor of
the Trust;
(v) Liens in favor of an Originator which have been
transferred to the applicable Financing Originator and pursuant to the Purchase
and Sale Agreements by such Financing Originator to the Depositor (through CFUSA
and the VFC Conveyancing Agreement or the Non-VFC Conveyancing Agreement, as the
case may be, in the case of TCC Financing Originators, and through CFUSA, the
Depositor and the VFC Trust and the VFC Assignment in the case of the VFC
Contracts) and in each case transferred to the Trust pursuant hereto;
(vi) Liens in favor of the Indenture Trustee created
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 to the Financing
Originators in such Equipment.
"Person" means any individual, corporation, estate, partnership,
limited liability company, joint venture, association, joint stock company,
trust (including any beneficiary thereof), unincorporated organization or
government or any agency or political subdivision thereof.
"Pledged Revenues" means (i) all Scheduled Payments on the Contracts
received on or after the Cut-Off Date (excluding the Excluded Amounts); (ii) any
Prepayments received on the Contracts on or after the Cut-Off Date (other than
(a) in the case of a Lease, any portion thereof allocated to the Depositor, or
(b) in the case of a Prepaid Contract for which a substitution has been made in
accordance with Section 2.04 of this Agreement, that portion thereof to which
the Depositor is entitled pursuant to Section 2.04); (iii) the Purchase Amount
of any Contracts purchased by CFUSA in accordance with Section 7.06 of this
Agreement (other than any portion thereof attributable in the case of a Lease to
the Excluded Residual Investment
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of the related Equipment); (iv) the amount paid by CFUSA or the Depositor to
purchase the Contracts pursuant to Section 7.08 of this Agreement; (v) that
portion of the Liquidation Proceeds received in respect of any Contracts and the
disposition of the related Equipment on or after the Cut-Off Date and allocated
to the Trust; and (vi) any Investment Earnings on the investment of amounts
credited to the Collection Account and the Note Distribution Account. Pledged
Revenues shall not include any amounts received with respect to any Excluded
Residual Investment.
"Pooling Agreement" means this Pooling and Servicing Agreement, as
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Prepaid Contract" means any Contract that has terminated or been
prepaid in full prior to its scheduled expiration date (including because of a
Casualty Loss), other than a Defaulted Contract.
"Prepayment" means with respect to any Collection Period for any
Contract, a partial or full prepayment of amounts due and owing under such
Contract.
"Principal Amount" means, with respect to a Class of Notes, the
aggregate Initial Principal Amount thereof reduced by (i) the aggregate amount
of any payments applied in reduction of such principal amount and (ii) the
aggregate amount of any payments then on deposit in the Note Distribution
Account, if any, for such Class of Notes established in accordance with the
Indenture and to be applied in reduction of such principal amount in accordance
with such Indenture.
"Principal Deficiency Amount" means, with respect to any Payment Date,
the excess, if any, of (i) the Principal Amount of the Notes (after giving
effect to all distributions of principal from the Available Pledged Revenues
(determined without regard to clause (iv) of the definition thereof) on such
Payment Date), over (ii) the Contract Pool Principal Balance as of the related
Accounting Date.
"Program Agreement" means each vendor finance program agreement
pursuant to which End-User Contracts originated by a Vendor are assigned to the
applicable Financing Originator.
"Prospectus" has the meaning given such term in the Underwriting
Agreement.
"Purchase Amount" means, with respect to Ineligible Contracts, on any
date of determination, the aggregate Required Payoff Amount for such Ineligible
Contracts as of the related Accounting Date.
"Purchase and Sale Agreements" means, collectively, the Non-VFC
Purchase Agreement, the Substitute VFC Purchase Agreement and the VFC Purchase
Agreement.
"Purchase Price" means, with respect to any Contract conveyed on the
Closing Date (or any Subsequent Transfer Date, as applicable), an amount equal
to the Contract Principal Balance of such Contract as of the applicable Cut-Off
Date.
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"Qualified Eligible Investments" means Eligible Investments acquired
by the Indenture Trustee in its name and in its capacity as Indenture Trustee,
which are held by the Indenture Trustee in the Trust Accounts and with respect
to which (a) the Indenture Trustee has noted its interest therein on its books
and records, and (b) the Indenture Trustee has purchased such investments for
value without notice of any adverse claim thereto (and, if such investments are
securities or other financial assets or interests therein, within the meaning of
Section 8-102 of the UCC as enacted in the State of New York, without acting in
collusion with a securities intermediary in violating such securities
intermediary's obligations to entitlement holders in such assets, under Section
8-504 of such UCC, to maintain a sufficient quantity of such assets in favor of
such entitlement holders), and (c) either (i) such investments are in the
possession of the Indenture Trustee, or (ii) such investments, (A) if
certificated securities and in bearer form, have been delivered to the Indenture
Trustee, or in registered form, have been delivered to the Indenture Trustee and
either registered by the issuer in the name of the Indenture Trustee or endorsed
by effective endorsement to the Indenture Trustee or in blank; (B) if
uncertificated securities, the ownership of which has been registered to the
Indenture Trustee on the books of the issuer thereof (or another person, other
than a securities intermediary, either becomes the registered owner of the
uncertified security on behalf of the Indenture Trustee or, having previously
become the registered owner, acknowledges that it holds for the Indenture
Trustee); or (C) if securities entitlements (within the meaning of Section 8-102
of the UCC as enacted in the State of New York) representing interests in
securities or other financial assets (or interests therein) held by a securities
intermediary (within the meaning of said Section 8-102), a securities
intermediary indicates by book entry that a security or other financial asset
has been credited to the Indenture Trustee's securities account with such
securities intermediary. Any such Qualified Eligible Investment may be purchased
by or through the Indenture Trustee or any of its Affiliates.
"Qualified Institution" means (a) the corporate trust department of
the Indenture Trustee or (b) a depository institution organized under the laws
of the United States of America or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank), (i) (A) which has (or
the parent corporation of which has) either (1) a long-term unsecured debt
rating acceptable to the Rating Agencies or (2) a short-term unsecured debt
rating or certificate of deposit rating acceptable to the Rating Agencies or (B)
which is otherwise acceptable to the Rating Agencies and (ii) whose deposits are
insured by the FDIC.
"Rating Agency" as of any date means each of the nationally recognized
statistical rating organizations requested by the Depositor to provide ratings
on the Notes which is rating the Notes on such date.
"Rating Agency Condition" means, with respect to any action or series
of related actions or proposed transaction or series of related proposed
transactions, that each Rating Agency shall have notified the Depositor, 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
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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).
"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.
"Required Cash Collateral Amount" means with respect to any Payment
Date, an amount equal to the greater of (a) the sum of (1) 8.25% of the Contract
Pool Principal Balance as of the related Accounting Date, plus (2) the excess,
if any of (A) the Aggregate Principal Amount of the Notes (after giving effect
to all distributions of principal on such Payment Date) over (B) the Contract
Pool Principal Balance as of the related Accounting Date and (b) the Cash
Collateral Account Floor; 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, 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, 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, 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, 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).
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"Requirements of Law" for any Person means the certificate of
incorporation or articles of association and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation, or
order or determination of an arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or to which such Person is subject,
whether Federal, state or local (including, without limitation, usury laws, the
Federal Truth in Lending Act and Regulation Z and Regulation B of the Board of
Governors of the Federal Reserve System).
"Residual Investment" means, with respect to certain Leases, any funds
that the Financing Originator shall have advanced against all or any portion of
the anticipated residual value of the leased Equipment upon the expiration of
such Lease in accordance with its terms, and in excess of the discounted present
value of the rental payments due under such Lease.
"Responsible Officer" means, with respect to the Owner Trustee, any
officer in its Corporate Trust Administration Department (or any similar group
of a successor Owner Trustee) who has primary responsibility for administering
the Trust or the Trust Agreement, or to whom a corporate trust matter is
referred because of knowledge of, familiarity with, and authority to act with
respect to a particular matter.
"Scheduled Payment" means, with respect to any Contract, the monthly
or quarterly or semi-annual or annual rent or financing (whether principal or
principal and interest) payment or other payment scheduled to be made by the
related Obligor under the terms of such Contract (or, if applicable, from a
Vendor or Obligor with respect to any Guaranteed Residual Investment); it being
understood that Scheduled Payments do not include any Excluded Amount or
Excluded Residual Investment, but does include Guaranteed Residual Investment.
"Schedule of Contracts" means the schedule of Contracts which are
conveyed to the Trust pursuant to this Agreement and the Transfer Agreement,
executed and delivered on the Closing Date, which schedule shall identify by any
reasonable means or designation the applicable Financing Originator with respect
to each Contract identified in such Schedule, and which includes the Contracts
listed on Exhibit C hereto. Such Schedule shall be supplemented from time to
time (a) by each subsequent Substitution Schedule of Contracts with respect to
each Substitution Transfer Agreement and related Substitute Contracts, which
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.
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"Secondary Contract" shall mean, with respect to a Vendor Loan, each
End-User Contract securing such Vendor Loan.
"Secured Note" means each promissory note with a related security
interest evidenced by written agreement, pursuant to which the purchase of
specified assets by an Obligor or End-User is financed for specified monthly,
quarterly, semiannual or annual payments.
"Securities" means the Notes and the Certificate, or any of them.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Securityholders" means the Holders of the Notes or the Equity
Certificate.
"Servicer" means initially CFUSA, until any Successor Servicer is
appointed pursuant to Article VIII hereof, and thereafter, means the Successor
Servicer so appointed.
"Servicer Advance" means, with respect to any Payment Date, the
amounts, if any, deposited by the Servicer in the Collection Account for such
Payment Date in respect of Scheduled Payments pursuant to Section 5.14 hereof.
"Servicer Default" has the meaning given such term in Section 8.01.
"Servicer Letter of Credit" has the meaning given such term in Section
7.01(b).
"Services" means, in connection with the financing of Software by an
Originator, the support and consulting services related to such Software, the
procurement of which was also financed by such Originator pursuant to a
Contract.
"Servicing Fee" has the meaning specified in Section 5.18 hereof.
"Servicing Fee Percentage" means 0.75%.
"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 telephone switching or networking systems
operating software financed or leased by an Obligor pursuant to a Contract.
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"Solvent" means, as to any Person at any time, that (a) the fair value
of the Property of such Person is greater than the amount of such Person's
liabilities (including disputed, contingent and unliquidated liabilities) as
such value is established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable value of the
Property of such Person in an orderly liquidation of such Person is not less
than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person is able
to realize upon its Property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in a business or a
transaction, for which such Person's property would constitute unreasonably
small capital.
"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw Hill Companies, or any successor thereto.
"Statutory Trust Statute" has the meaning specified in the Trust
Agreement.
"Subsidiary" means with respect to a Person, any corporation or other
entity of which securities or other ownership interests (whether directly or
indirectly in connection with contract rights) having ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by such Person.
"Substitute Contract" means any Contract conveyed, assigned and
transferred by the Depositor or CFUSA to the Trust pursuant to Section 2.04.
"Substitute Contract Assets" means Contract Assets relating to
Substitute Contracts.
"Substitute Contract Qualification Conditions" means, with respect to
any Substitute Contract being transferred to the Trust pursuant to Section 2.04,
each of the following:
(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
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(d) if the Replaced Contract for which such Substitute Contract
is being substituted was a TCC Contract, then such Substitute Contract is itself
a TCC Contract, and if such Replaced Contract is an CFUSA Contract, then such
Substitute Contract is itself an CFUSA Contract; and
(2) with respect to any such Substitute Contract which is replacing a
Replaced Contract of the type described in clause (a) of the definition of
Substitution Event (a "Type"), the condition that after giving effect to such
transfer, the Contract Pool Principal Balance of all Substitute Contracts
transferred to the Trust since the Closing Date in respect of Replaced Contracts
of the same Type shall not exceed 10% of the Contract Pool Principal Balance as
of the Initial Cut-Off Date.
"Substitute Transferred Assets" has the meaning assigned such term in
Section 2.04.
"Substitute VFC Purchase Agreement" means the Substitute VFC Purchase
and Sale Agreement, dated as of February 1, 2004, among CFUSA and the Depositor,
as the same may be amended, supplemented, restated or otherwise modified from
time to time.
"Substitution Assignment Agreement" means, with respect to any
Substitute Contracts, the agreement between CFUSA and the Depositor pursuant to
which CFUSA transfers the identified Substitute Contracts to the Depositor
pursuant to the Non-VFC Purchase Agreement or the Substitute VFC Purchase
Agreement, as the case may be.
"Substitution Cut-Off Date" means the date specified as such for the
relevant Substitute Contracts, in the related Substitution Transfer Agreement.
"Substitution Event" means, with respect to any transfer of a related
Substitute Contract to the Trust under Section 2.04, the occurrence of any of
the following: (a) one or more Contracts identified in the related Substitution
Notice as being an intended Replaced Contract with respect to such Substitute
Contract, has become a Defaulted Contract, (b) one or more Contracts identified
in the related Substitution Notice as being an intended Replaced Contract with
respect to such Substitute Contract, has been subjected to a Material
Modification, (c) one or more Contracts identified in the related Substitution
Notice as being an intended Replaced Contract with respect to such Substitute
Contract, has become an Ineligible Contract, or (d) one or more Contracts
identified in the related Substitution Notice as being an intended Replaced
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
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Contract relates, with such notice to be signed both by the Depositor and the
applicable Financing Originator[s].
"Substitution Schedule of Contracts" means a schedule or list,
substantially in the form of the initial Schedule of Contracts delivered on the
Closing Date, but listing each Substitute Contract being transferred to the
Trust pursuant to a related Substitution Transfer Agreement, as well as the
related Replaced Contracts being removed from the existing Contract Pool by
virtue of such substitution.
"Substitution Transfer Agreement" means the agreement identified as
such in Section 2.04(b) hereof.
"Substitution Transfer Date" means any date on which Substitute
Contracts are transferred to the Trust.
"Successor Servicer" has the meaning given such term in Section
8.02(b).
"Tax Opinion" means, with respect to any action, an Opinion of Counsel
to the effect that, for federal income tax purposes, (i) following such action
the Trust will not be deemed to be an association (or publicly traded
partnership) taxable as a corporation, (ii) following such action the Trust will
be disregarded as a separate entity from the Depositor, and (iii) such action
will not affect the tax characterization as debt of Notes of any outstanding
Class issued by the Trust for which an Opinion of Counsel has been provided that
such Notes are debt.
"TCC" means Capita Corporation, a Delaware corporation.
"TCC Assignment" has the meaning given such term in the VFC
Conveyancing Agreement.
"TCC Assignment Date" has the meaning given such term in the VFC
Conveyancing Agreement.
"TCC Contract" has the meaning given such term in the VFC Conveyancing
Agreement.
"TCC Contract Assets" has the meaning given such term in the VFC
Conveyancing Agreement.
"TCC Contract File" has the meaning given such term in the VFC
Conveyancing Agreement.
"TCC Financing Originator" means the Financing Originators (other than
CFUSA) in each case in the capacity of a TCC Financing Originator party to the
VFC Conveyancing Agreement or the Non-VFC Conveyancing Agreement, as the case
may be, with CFUSA.
"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
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to that Payment Date and (b) the Contract Pool Principal Balance as of the
related Accounting Date; provided, that the amount referred to in clause (b)
shall be deemed to be zero on any Payment Date on which the Contract Pool
Principal Balance is less than $10,000,000.
"Transaction Documents" means this Pooling Agreement, the Transfer
Agreement, any Substitution Transfer Agreement, the VFC Conveyancing Agreement,
the VFC Purchase Agreement, the VFC Assignment, the VFC Pooling Agreement, any
TCC Assignment, the Non-VFC Conveyancing Agreement, the Non-VFC Purchase
Agreement, the Substitute VFC Purchase Agreement, the Trust Agreement, the
Administration Agreement, the Indenture, the Cash Collateral Account Agreement
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.
"Transferred Assets" means with respect to any Contracts (including
Substitute Contracts) conveyed or being conveyed to the Trust pursuant to this
Agreement, all right and interest of the Depositor in, to and under the
following:
(i) such Contracts and other related Contract Assets
(subject to the proviso below);
(ii) related rights of the Depositor under the Purchase and
Sale Agreements and Substitution Assignment Agreement (if any) and the VFC
Assignment, including, without limitation, in respect of the obligation of CFUSA
to repurchase or substitute for such Contracts under certain circumstances as
specified therein;
(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
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property, book-entry securities, uncertificated securities or otherwise), and
all proceeds of the foregoing.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of February 1, 2004, among the Depositor, the Delaware Trustee 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 Delaware Trustee, 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.
"Underwriting Agreement" means the Underwriting Agreement, dated March
3, 2004 among Deutsche Bank Securities Inc. and Banc of America Securities LLC
(each as an underwriter thereunder and as representatives 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 Nonrecoverable 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.
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"Vendor Agreements" means the collective reference to Vendor
Assignments and Program Agreements.
"Vendor Assignment" means each assignment agreement pursuant to which
an individual End-User Contract originated by a Vendor is assigned by such
Vendor to the Financing Originator.
"Vendor Guarantee" means the irrevocable obligation of a Vendor to pay
to the Financing Originator the aggregate outstanding principal amount of a
Contract which has been canceled by the related Obligor pursuant to the terms of
such Contract.
"Vendor Loan" means a limited recourse loan agreement payable by a
Vendor and secured by the Vendor's interest in Secondary Contracts and by the
Equipment, if any, related thereto.
"VFC Assignment" means the Release and Assignment instrument dated the
Closing Date, in the form attached hereto as Exhibit B, executed by the VFC
Trust conveying, assigning and releasing the VFC Contract Assets to the
Depositor.
"VFCC" means Variable Funding Capital Corporation.
"VFC Contract Assets" means the Contract Assets pertaining to the VFC
Contracts.
"VFC Contracts" means Contracts conveyed by the VFC Trust to the
Depositor pursuant to the VFC Assignment, as listed in the Schedule of Contracts
attached to the VFC Assignment.
"VFC Conveyancing Agreement" means the Amended and Restated
Conveyancing Agreement dated as of March 2, 1999, as amended and restated as of
June 29, 2000, among the TCC Financing Originators and CFUSA, as the same has
been or may be amended, supplemented, restated or otherwise modified from time
to time.
"VFC Trust" means the CIT Equipment Trust -- VFC Series created and
existing pursuant to the Trust Agreement dated as of February 25, 1999, as
amended by Amendment No. 1 dated as of June 27, 2000, by and between the
Depositor and the Bank of New York (Delaware), as owner trustee, as the same has
been or may be amended, supplemented, restated or otherwise modified from time
to time.
"VFC Pooling Agreement" means the Amended and Restated Pooling and
Servicing Agreement dated as of March 2, 1999, as amended and restated as of
June 29, 2000, by and among the VFC Trust, the Depositor and TCC, as the same
has been or may be amended, supplemented, restated or otherwise modified from
time to time.
"VFC Purchase Agreement" means the Amended and Restated Sale and
Contribution Agreement dated as of March 2, 1999, as amended and restated as of
June 29, 2000, by and among CFUSA, TCC and the Depositor, as the same has been
or may be amended, supplemented, restated or otherwise modified from time to
time.
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"Vice President" of any Person means any vice president of such
Person, whether or not designated by a number or words before or after the title
"Vice President," who is a duly elected officer of such Person.
"Voting Power" means, with respect to any outstanding membership
interest of the Depositor, the power (expressed as a percentage) represented by
such membership interest of the aggregate voting power of all outstanding
membership interests of the Depositor having ordinary voting power, including
the power to vote for election of members of the Board of Directors (and, if any
class thereof has power to designate members of the Board of Directors or any
special committee thereof, the power so to designate).
Section 1.02 Usage of Terms. With respect to all terms in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
amendments, modifications and supplements thereto or any changes therein entered
into in accordance with their respective terms and not prohibited by this
Agreement; references to Persons include their permitted successors and assigns;
and the term "including" means "including without limitation."
Section 1.03 Section References. All section references, unless
otherwise indicated, shall be to Sections in this Agreement.
Section 1.04 Accounting Terms. All accounting terms used but not
specifically defined herein shall be construed in accordance
with generally accepted accounting principles in the United States.
ARTICLE II
FUNDINGS OF TRUST; TRANSFERS OF CONTRACTS
Section 2.01 Creation and Funding of Trust; Transfer of Transferred
Assets to Trust. (a) The Trust has been created (i) pursuant to the terms and
conditions of an initial trust agreement, (ii) upon the execution and delivery
of the Trust Agreement and (iii) by the filing by the Owner Trustee of an
appropriately completed Certificate of Trust under the Statutory 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
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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 $933,907,072.59. Such purchase price shall be
payable in immediately available funds on the Closing Date.
(c) The parties hereto hereby agree and acknowledge that title to
or ownership of any related Equipment shall not be transferred to the Trust upon
such conveyance and that the Depositor shall retain its ownership interest (to
the extent the same has been so conveyed to the Depositor pursuant to the VFC
Purchase Agreement, the Non-VFC Purchase Agreement, the Substitute VFC Purchase
Agreement and the VFC Assignment) in such Equipment (provided, that the parties
agree and intend that any mere security interest, as opposed to title or
ownership interest, in the related Equipment which secures the Contract pursuant
to the terms thereof, is being assigned and conveyed as part of the Transferred
Assets in accordance with the definition thereof). The Depositor and the Trust
further intend and agree that, except as described in the preceding sentence
with respect to ownership interests in related Equipment, any such transfer is
intended to be a conveyance and transfer of ownership of the Contracts and the
related Transferred Assets (or Substitute Transferred Assets conveyed as
described in Section 2.04 below) and that such Contracts and the related
Transferred Assets shall not be part of the Depositor's estate in the event of
the filing of a bankruptcy petition by or against the Depositor under any
bankruptcy law. In the event, however, that notwithstanding such intent and
agreement, a transfer and assignment contemplated hereby and in the Transfer
Agreement (or Substitution Transfer Agreement, as applicable) is determined not
to be a conveyance of ownership, the Depositor hereby grants to the Trust a
first priority perfected security interest in (i) such Contracts and the related
Transferred Assets identified in such Transfer Agreement (or Substitution
Transfer Agreement, as applicable), 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.
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(e) The Depositor, by execution and delivery of this Agreement
and the Transfer Agreement (or Substitution Transfer Agreement, as applicable)
authorizes the Trust to file UCC financing statements naming the Depositor as
debtor, the Trust as secured party and the Indenture Trustee as assignee in each
jurisdiction that the Depositor deems necessary in order to protect the security
interest in the Contracts and the Equipment.
Section 2.02 Conditions to Transfers. The Depositor shall transfer to
the Trust the Contracts and other Transferred Assets described in Section 2.01
above only upon the satisfaction of each of the following conditions on or prior
to the Closing Date and shall be deemed to have represented in respect of the
Closing Date that all such conditions are satisfied upon the Depositor's
delivery of the Transfer Agreement:
(a) the Depositor shall have delivered to the Owner Trustee on
behalf of the Trust the duly executed Transfer Agreement, which shall include a
Schedule of Contracts listing the Contracts being transferred on the Closing
Date;
(b) the VFC Trust shall have delivered to the Depositor and the
Owner Trustee on behalf of the Trust the duly executed VFC Assignment with
respect to the VFC Contracts being conveyed by the VFC Trust on the Closing
Date;
(c) A letter from PricewaterhouseCoopers LLP, or another
nationally recognized accounting firm, addressed to the Depositor and the
Underwriters and stating that such firm has reviewed a sample of the Initial
Contracts and performed specific procedures for such sample with respect to
certain contract terms and which identifies those Initial Contracts which do not
conform;
(d) Copies of resolutions of the Board of Directors of CFUSA, the
Servicer and the Depositor or of the Executive Committee of the Board of
Directors of CFUSA, the Servicer and the Depositor approving the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which any of them is a party, as applicable, and the transactions
contemplated hereunder and thereunder, certified in each case by the Secretary
or an Assistant Secretary of CFUSA, the Servicer and the Depositor;
(e) Officially certified, recent evidence of due incorporation or
formation, as the case may be and good standing of each of CFUSA and the
Depositor under the laws of Delaware;
(f) (i) Evidence of proper filing or provision for filing with
appropriate offices in the jurisdictions in which a UCC financing statement was
filed naming the Depositor as debtor and the VFC Trust as secured party, with
respect to the VFC Contracts, of a UCC assignment identifying the VFC Contracts
as collateral being assigned back to the Depositor, executed by the VFC Trust;
(ii) evidence of proper filing or provision for filing with appropriate offices
in the applicable state of organization of the applicable Financing Originator
of UCC financing statements naming the applicable Financing Originator as
debtor, and naming CFUSA as secured party (and the Depositor as assignee), to
perfect the grant of a security interest from the applicable Financing
Originator to CFUSA and then to the Depositor pursuant to the applicable
Purchase and Sale Agreements; (iii) evidence of proper filing or provision for
filing
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with appropriate offices in the state of organization of CFUSA of UCC financing
statements naming CFUSA as debtor, and naming the Depositor as secured party, to
perfect the grant of a security interest from CFUSA to the Depositor pursuant to
the applicable Purchase and Sale Agreements; (iv) evidence of proper filing or
provision for filing with appropriate offices in the state of organization of
the Depositor of UCC financing statements naming 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 state of
organization of the Trust of UCC financing statements naming the Trust as
debtor, and naming the Indenture Trustee as secured party, to perfect the grant
of a security interest from the Trust to the Indenture Trustee pursuant to the
Indenture;
(g) Evidence of deposit in the Cash Collateral Account of the
initial Required Cash Collateral Amount;
(h) A fully executed Substitute VFC Purchase Agreement;
(i) A fully executed Non-VFC Conveyancing Agreement;
(j) A fully executed Non-VFC Purchase Agreement;
(k) A fully executed VFC Assignment;
(l) A fully executed Trust Agreement;
(m) A fully executed Administration Agreement;
(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 CFUSA
pursuant to Article III of the Purchase and Sale Agreements shall be true and
correct as of the Closing Date (including the representation made thereunder as
to compliance with the UCC filing criteria as set forth in clause (j) of the
definition of Eligible Contract), and CFUSA shall have performed in all material
respects all obligations to be performed by it under the Purchase and Sale
Agreements on or prior to the Closing Date;
(r) Each of the representations and warranties made by the
Depositor and the Servicer pursuant to Article III hereof shall be true and
correct as of the Closing Date;
(s) The Depositor shall, at its own expense, on or prior to the
Closing Date indicate in its computer files that the Transferred Assets
identified in the Transfer
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Agreement have been conveyed to the Trust pursuant to this Agreement and the
Transfer Agreement;
(t) No event has occurred and is continuing, or would result from
the conveyance on the Closing Date that constitutes a Servicer Default; and
(u) The Depositor or the Servicer shall have provided the Owner
Trustee on behalf of the Trust a statement or computer disk listing the Contract
Pool Principal Balance on the Closing Date of the contracts being transferred on
the Closing Date.
The failure to satisfy any of the foregoing conditions to transfer or
to obtain a waiver thereof shall not be deemed to adversely affect the validity
of any such transfer.
Section 2.03 Acceptance by Trust. On the Closing Date, if all the
conditions specified in Section 2.02 above have been satisfied (as evidenced by
the Depositor's delivery of the Transfer Agreement), the Trust shall issue, and
the Owner Trustee, or the Indenture Trustee as its authenticating agent under
the Trust Agreement, shall authenticate, to, or upon the order of, the Depositor
and in accordance with the Trust Agreement, the Equity Certificate representing
ownership of a beneficial interest in 100% of the Trust and the Trust shall
issue, and the Indenture Trustee shall authenticate, to, or upon the order of,
the Depositor in accordance with the terms of the Indenture, the Notes secured
by the Collateral. The Trust hereby acknowledges its acceptance of the Trust
Assets, and declares that it shall maintain such right and interest in the Trust
Assets in accordance with the terms of this Agreement and the Trust Agreement
upon the trust herein and therein set forth.
Section 2.04 Conveyance of Substitute Contracts. (a) Subject to the
limitations set forth in (and the other terms and conditions of) this Section
2.04, the Depositor may substitute other Contracts and related assets for
Contracts and related Transferred Assets previously conveyed to the Trust and in
the Contract Pool, by conveying such other Contracts and related assets to the
Trust pursuant to the procedures and documentation specified below. Upon the
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
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provided herein), (i) all the right and interest of the Depositor in and to the
Substitute Contracts listed on the related Substitution Schedule of Contracts,
and (ii) all other rights and property interests consisting of Transferred
Assets related to such Substitute Contracts. The Depositor shall effect such
transfers only upon the satisfaction of each of the following conditions on or
prior to the related Substitution Transfer Date (and the delivery of a related
Substitution Notice by the Depositor shall be deemed a representation and
warranty by the Depositor that such conditions have been or will be, as of the
related Substitution Transfer Date, satisfied):
(i) At least five days prior to the related Substitution
Transfer Date, the Depositor shall have provided the Owner Trustee on behalf of
the Trust and the Indenture Trustee with a Substitution Notice complying with
the definition thereof contained herein;
(ii) there shall have occurred, with respect to each such
Substitute Contract, a corresponding Substitution Event with respect to one or
more intended Replaced Contracts then constituting Contracts in the Contract
Pool;
(iii) the Substitute Contract(s) being conveyed to the
Trust, satisfy the Substitute Contract Qualification Conditions;
(iv) the Depositor shall have delivered to the Owner Trustee
on behalf of the Trust a duly executed written assignment agreement in
substantially the form of Exhibit E hereto (a "Substitution Transfer
Agreement"), which shall include a Substitution Schedule of Contracts
identifying the Substitute Contracts and the related Replaced Contracts;
(v) CFUSA shall have delivered to the Depositor and the
Owner Trustee on behalf of the Trust a duly executed Substitution Assignment
Agreement with respect to such conveyance;
(vi) no selection procedures adverse to the interests of
either the Trust, the Noteholders or the Equity Certificateholder shall have
been utilized in selecting the Substitute Contracts;
(vii) each of the representations and warranties made by
CFUSA pursuant to Article III of the Substitute VFC Purchase Agreement or
Non-VFC Purchase Agreement, as the case may be, shall be true and correct as of
the related Substitution Transfer Date (including the representation made as to
compliance with the UCC filing criteria set forth in clause (j) of the
definition of Eligible Contract), and CFUSA shall have performed in all material
respects all obligations to be performed by it under the Substitute VFC Purchase
Agreement or Non-VFC Purchase Agreement, as the case may be, on or prior to such
Substitution Transfer Date; and
(viii) the Servicer and CFUSA and the applicable Financing
Originator shall, at their own expense, on or prior to the Substitution Transfer
Date, have indicated in their respective computer files that the Substitute
Contracts identified on the Substitution Schedule of Contracts attached to the
related Substitution Transfer Agreement have been assigned and conveyed to the
Trust through the Depositor pursuant to this Pooling
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Agreement and the Substitute VFC Purchase Agreement or Non-VFC Purchase
Agreement, as the case may be.
The failure to satisfy any of the foregoing conditions to transfer or
to obtain a waiver thereof shall not be deemed to adversely affect the validity
of any such transfer.
Section 2.05 Release of Excluded Amounts. The Trust hereby agrees to
release to the Servicer, an amount equal to the Excluded Amounts immediately
upon identification thereof, which release shall be automatic and shall require
no further act by the Trust, provided that the Trust shall execute and deliver
such instruments of release and assignment, or otherwise confirm the foregoing
release, as may reasonably be requested in writing by the Servicer. Upon such
release, such Excluded Amounts shall not constitute and shall not be included in
the Trust Assets.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
CFUSA, under the Purchase and Sale Agreements, has made, and upon
execution of each Substitution Assignment Agreement is deemed to remake with
respect to the relevant Contract Assets conveyed by the VFC Assignment, the
Non-VFC Purchase Agreement, or the Substitution VFC Purchase Agreement, as the
case may be, each of the representations and warranties set forth in the
Schedule of Representations, and has consented to the assignment by the
Depositor to the Trust of the Depositor's rights with respect thereto. Such
representations speak as of the Closing Date in the case of the Initial
Contracts, and as of the applicable Substitution Transfer Date in the case of
the Substitute Contracts, but shall survive the transfer and assignment of the
related Contracts to the Trust. Pursuant to Section 2.01 of this Agreement, the
Depositor has sold, assigned, transferred and conveyed to the Trust as part of
the Transferred Assets its rights under the Purchase and Sale Agreements,
including, without limitation, the representations and warranties of CFUSA
therein as set forth in the Schedule of Representations, together with all
rights of the Depositor with respect to any breach thereof including any right
to require CFUSA to repurchase or substitute for any Contract in accordance with
the Purchase and Sale Agreements. It is understood and agreed that the
representations and warranties set forth or referred to in this Section shall
survive delivery of the Contract Files to the Trust or any custodian.
The Depositor hereby confirms to the Trust that it has entered into
the Purchase and Sale Agreements with CFUSA, that CFUSA has made the
representations and warranties in the Schedule of Representations, that such
representations and warranties run to and are for the benefit of the Trust, and
that pursuant to Section 2.01 of this Agreement the Depositor has transferred
and assigned to the Trust all rights of the Depositor to cause CFUSA under the
Purchase and Sale Agreements to repurchase or substitute for Contracts conveyed
thereunder in the event of a breach of such representations and warranties
applicable to such Contract.
Section 3.01 Representations and Warranties Regarding the Depositor.
By its execution of this Agreement, and each Substitution Transfer Agreement,
the Depositor represents and warrants to the Trust, the Owner Trustee, the
Indenture Trustee, the Noteholders
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and the Equity Certificateholder that, as of the date of the Closing Date and
Substitution Transfer Date (and, with respect to the representation set forth in
subsection (k) of this Section 3.01 below, as of the date the certificate,
written report or written statement referred to in such subsection is
furnished):
(a) Organization and Good Standing. The Depositor is a limited
liability company duly organized, validly existing and in good standing under
the laws of Delaware and has the requisite power to own its assets and to
transact the business in which it is currently engaged. The Depositor is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the business transacted by it or properties owned or leased by
it requires such qualification and in which the failure so to qualify would have
a material adverse effect on the business, properties, assets, or condition
(financial or other) of the Depositor or the Trust.
(b) Authorization; Valid Transfer; Binding Obligations. The
Depositor has the power and authority to make, execute, deliver and perform this
Agreement and the other Transaction Documents to which it is a party and all of
the transactions contemplated under this Agreement and the other Transaction
Documents to which it is a party, and to create the Trust and cause it to make,
execute, deliver and perform its obligations under this Agreement and the other
Transaction Documents to which it is a party and has taken all necessary
corporate action to authorize the due execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a party and to
cause the Trust to be created. This Agreement and the Transfer Agreement and any
Substitution Transfer Agreement shall effect a valid transfer and assignment of
the relevant Transferred Assets, enforceable against the Depositor and creditors
of and purchasers from the Depositor. This Agreement and the other Transaction
Documents to which the Depositor is a party have been duly executed and
delivered by the Depositor and constitute the legal, valid and binding
obligation of the Depositor enforceable in accordance with their terms, except
as enforcement of such terms may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and by the
availability of equitable remedies. The Depositor is selling the Transferred
Assets to the Trust with the intention of removing the Transferred Assets from
the estate of the Depositor pursuant to the applicable provisions of the
Bankruptcy Code as it may be amended from time to time including, without
limitation, section 541(b)(8) of the Bankruptcy Code as amended pursuant to
section 912 of Senate Xxxx X.220 (107th Cong. 1st Sess.) or any successor
thereto if and when such xxxx is enacted into law.
(c) No Consent Required. The Depositor is not required to obtain
the consent of any other Person or any consent, license, approval or
authorization from, or registration or declaration with, any Governmental
Authority in connection with the execution, delivery, performance, validity or
enforceability of this Agreement or the other Transaction Documents to which it
is a party.
(d) No Violations. The execution, delivery and performance of
this Agreement and the other Transaction Documents to which it is a party by the
Depositor, and the consummation of the transactions contemplated hereby and
thereby, will not violate any Requirements of Law applicable to the Depositor,
or constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Depositor is a party or by which
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the Depositor or any of the Depositor's properties may be bound, or result in
the creation or imposition of any security interest, lien, charge, pledge,
preference, equity or encumbrance of any kind upon any of its properties
pursuant to the terms of any such mortgage, indenture, contract or other
agreement, other than as contemplated by the Transaction Documents.
(e) Litigation. No litigation or administrative proceeding of or
before any court, tribunal or governmental body is currently pending, or to the
knowledge of the Depositor threatened, against the Depositor or any of its
properties or with respect to this Agreement or the other Transaction Documents
to which it is a party (1) which, if adversely determined, would in the
reasonable judgment of the Depositor have a material adverse effect on the
business, properties, assets or condition (financial or otherwise) of the
Depositor or the Trust or the transactions contemplated by this Agreement or the
other Transaction Documents to which the Depositor is a party or (2) seeking to
adversely affect the federal income tax or other federal, state or local tax
attributes of the Notes.
(f) Taxes. The Depositor has filed or caused to be filed all
material tax returns which, to its knowledge, are required to be filed and has
paid all taxes shown to be due and payable on such returns or on any material
assessments made against it or any of its property and all other material taxes,
fees or other charges imposed on it or any of its property by any Governmental
Authority (other than any amount of tax due, the validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in accordance with generally accepted accounting principles have
been provided on the books of the Depositor); no tax lien has been filed and, to
the Depositor's knowledge, no claim is being asserted, with respect to any such
tax, fee or other charge.
(g) Schedule of Representations. The representations and
warranties set forth on the Schedule of Representations are true and correct as
of the Closing Date (or Substitution Transfer Date, as applicable) with respect
to the Transferred Assets being conveyed to the Trust on such date.
(h) Solvency. The Depositor, at the time of and after giving
effect to each conveyance made hereunder, is Solvent on and as of the date
thereof.
(i) Domicile; Name Changes. The Depositor's state of organization
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).
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(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.
(l) Security Interest. This Agreement creates a valid and
continuing security interest (as defined in the UCC) in the Contracts in favor
of the Trust, which security interest is prior to all other Liens (other than
Permitted Liens), and is enforceable as such as against creditors of and
purchasers from the Depositor. The Depositor has caused, or will have caused
within ten days after the date hereof, the filing of all appropriate UCC
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law in order to perfect the security interest in
the Contracts granted to the Trust hereunder. All UCC financing statements filed
or to be filed against the Depositor in favor of the Trust in connection
herewith describing the Contracts contain a statement to the effect that a
purchase of or security interest in any Contracts described in such financing
statement will violate the rights of the Trust.
(m) Priority. Other than the security interest granted to the
Trust pursuant to this Agreement, the Depositor has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Contracts
(other than to the VFC Trust, which Contracts were reconveyed to the Depositor
pursuant to the VFC Assignment). The Depositor has not authorized the filing of
and is not aware of any financing statements against the Depositor that include
a description of collateral covering the Contracts other than any financing
statement relating to the security interest granted to the Trust hereunder or
that has been terminated (other than to the VFC Trust, which security interests
were reconveyed to the Depositor pursuant to UCC-3 Assignments). The Depositor
is not aware of any judgment or tax lien filings against it.
Such representations (except to the extent expressly stated by their terms to
speak as of a different date or time) speak as of the Closing Date and each
Transfer Date and Substitution Transfer Date, if any, but shall survive the
transfer and assignment of the Contracts to the Trust.
Section 3.02 Representations and Warranties of the Servicer. The
Servicer represents and warrants to the Trust, the Owner Trustee, the Indenture
Trustee, the Noteholders and the Equity Certificateholder that, as of the date
of the execution and delivery of this Agreement and as of the Closing Date and
each Substitution Transfer Date:
(a) Organization and Good Standing. The Servicer is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the corporate power to own its assets and
to transact the business in which it is currently engaged. The Servicer is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which the character of the business transacted by it or
properties owned or leased by it requires such qualification and in which the
failure so to qualify would have a material adverse effect on the business,
properties, assets, or condition (financial or otherwise) of the Servicer or the
Trust. The Servicer (or any permitted subservicer hereunder with respect to
affected Contracts, if the Servicer is not so licensed) is properly licensed in
each
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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 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 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 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
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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 9-313 (c) of the Uniform Commercial
Code of the State in which the Contract Files are located.
(c) As custodian, the Servicer shall have and perform the
following powers and duties:
(i) hold the Contract Files on behalf of the Noteholders and
the Equity Certificateholder and the Trust; maintain accurate records pertaining
to each Contract to enable it to comply with the terms and conditions of this
Agreement; and maintain a current inventory thereof;
(ii) maintain and comply with Customary Policies and
Procedures with respect to Persons authorized to have access to the Contract
Files;
(iii) attend to all details in connection with maintaining
custody of the Contract Files on behalf of the Noteholder and the Equity
Certificateholder and the Trust; and
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(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 state of organization,
name, identity or structure 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 state of organization 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
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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.
ARTICLE V
SERVICING OF CONTRACTS
Section 5.01 Initial Servicer's Appointment and Acceptance;
Responsibility for Contract Administration. CFUSA shall be and is hereby
appointed as the Servicer and custodian (as contemplated in Article IV hereof)
pursuant to this Agreement with respect to the Contract Assets in the Contract
Pool. CFUSA accepts the appointment and agrees to act as the Servicer and
custodian pursuant to this Agreement.
Except to the extent otherwise specified herein or as contemplated in
Section 5.05, the Servicer will have the sole obligation to manage, administer,
service and make collections on the Contracts and perform or cause to be
performed all contractual and customary undertakings of the Originator of the
Contracts to the Obligor. The Trust, at the written request of a Servicing
Officer, shall furnish the Servicer with any powers of attorney or other
documents necessary or appropriate in the opinion of the Servicer to enable the
Servicer to carry out its servicing and administrative duties hereunder. The
Servicer is hereby appointed the Servicer hereunder until such time as any
Servicing Transfer may be effected pursuant to Article VIII hereof.
Section 5.02 General Duties. The Servicer will service, administer and
enforce the Contracts in the Contract Pool on behalf of the Trust and will have
full power and authority to do any and all things in connection with such
servicing and administration which it deems necessary or desirable and as shall
not contravene the provisions of this Agreement or any other Transaction
Document. The Servicer will manage, service, administer, and make collections on
the Contracts in the Contract Pool in accordance with the Servicing Standard.
The Servicer's duties will include collection and posting of all payments,
responding to inquiries of Obligors regarding the Contracts in the Contract
Pool, investigating delinquencies, accounting for collections, furnishing
reports with respect to collections and payments as contemplated in Article IX
hereof, making Servicer Advances in accordance with Section 5.14 hereof, and
using its best efforts to maintain the perfected first priority interest of the
Trust in the Trust Assets. The Servicer will have full power and authority,
acting alone, to do any and all things in connection with such managing,
servicing, administration, and collection that it deems necessary or desirable.
If the Servicer commences a legal proceeding to enforce a Defaulted Contract
pursuant to Section 5.15 or commences or participates in a legal proceeding
(including a bankruptcy proceeding) relating to or involving a Contract in the
Contract Pool, the Trust will be deemed to have automatically assigned such
Contract to the Servicer solely for purposes of, and to the extent necessary
for, commencing or participating in any such proceeding as a party or claimant
(but in all cases subject to the continuing interest of the Trust and its
assignees in the proceeds and recoveries from such proceedings, as and to the
extent provided in the Transaction Documents), and the Servicer is authorized
and empowered by the Trust, pursuant to this Section 5.02, to execute and
deliver, on behalf of itself and the Trust, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other notices, demands, claims, complaints, responses, affidavits or other
documents or instruments in connection with
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any such proceedings. If in any enforcement suit or legal proceeding it is held
that the Servicer may not enforce a Contract on the grounds that it is not a
real party in interest or a holder entitled to enforce the Contract, then the
Owner Trustee will, at the Servicer's expense and written direction, take steps
on behalf of the Trust to enforce the Contract, including bringing suit in the
Trust's name.
Section 5.03 Assignment or Replacement. At the request of an Obligor,
the Servicer may in its sole discretion consent to the assignment by such
Obligor of its rights under a Contract in the Contract Pool or the sublease of a
unit of the Equipment relating to such a Contract, so long as such Obligor
remains liable for all of its obligations under such Contract; provided, that
the Servicer may release such Obligor from its obligations if the Obligor's
assignee is determined by the Servicer to be of at least equivalent credit risk,
all in accordance with Customary Policies and Procedures. Upon the request of
any Obligor, the Servicer may, in its sole discretion, provide for the
substitution or replacement of any unit of Equipment for a substantially similar
unit of Equipment, so long as such Obligor remains liable for all of its
obligations under such Contract.
Section 5.04 Disposition Upon Termination of Contract. Upon the
termination of a Contract included in the Contract Pool as a result of a default
by the Obligor thereunder, and upon any such Contract becoming a Defaulted
Contract, the Servicer will use commercially reasonable efforts to dispose of
any related Equipment. Without limiting the generality of the foregoing, if the
Servicer disposes of any such Equipment by purchasing such Equipment or by
selling such Equipment to any of its Affiliates, such disposition shall be for a
purchase price equal to the fair market value thereof (as determined by the
Servicer in its reasonable discretion). The Servicer will deposit any
Prepayments and any Liquidation Proceeds derived from any such disposition in
accordance with Article VII hereof.
Section 5.05 Subservicers. The Servicer may enter into servicing
agreements with one or more subservicers (including any 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.
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Section 5.07 Notice to Obligors. Except as contemplated in clause (m)
of the definition of Eligible Contract, the Servicer will not be required to
notify any Obligor that such Obligor's Contract or related Equipment, or any
security interest in such Contract or such Equipment, has been transferred,
assigned, and conveyed pursuant to the VFC Conveyancing Agreement, the Non-VFC
Conveyancing Agreement, the Purchase and Sale Agreements, the VFC Pooling
Agreement, the VFC Assignment or pursuant to this Agreement; provided that, in
the event that the Servicer resigns or is replaced, then if the place for
payment pursuant to any Contract is changed, the Successor Servicer must give
each related Obligor prompt written notice of the appointment of the Successor
Servicer and the place to which such Obligor should make payments pursuant to
each such Contract.
Section 5.08 Collection Efforts; Modification of Contracts. (a) The
Servicer will make reasonable efforts to collect all payments called for under
the terms and provisions of the Contracts in the Contract Pool as and when the
same become due, in accordance with the Servicing Standard. The Servicer is
authorized in its discretion to waive any Late Charges, or other administrative
fees, expenses and charges collectible in respect of a Contract in the Contract
Pool, including late payment interest, documentation fees, insurance
administration charges, and extension fees.
(b) The Servicer also may, subject to Sections 5.09 and 5.10, at
the request of an Obligor and at the Servicer's option, waive, amend, modify or
otherwise vary any other provision of a Contract in accordance with Customary
Policies and Procedures (it being understood that any modification or amendment
of a Contract resulting from an Insolvency Event with respect to the related
Obligor will not be deemed to have been granted by the Servicer hereunder),
including without limitation:
(i) in order to (A) change the Obligor's regular due date to
a date within the Collection Period in which such due date occurs, or (B)
re-amortize (over the remainder of the original Contract term) the Scheduled
Payments on a Contract following a partial Prepayment (provided, that the sum of
such partial Prepayment and the Contract Principal Balance of the affected
Contract after re-amortization is at least equal to the Contract Principal
Balance for such Contract prior to giving effect to the partial Prepayment), or
(ii) for any other purpose; provided, that no such
modification or amendment shall:
(A) change the amount or the due date of any Scheduled
Payment (except as provided in clauses (i)(A) and (B) above, Section 5.09 and
Section 5.10 below);
(B) release the related Equipment from the Contract,
unless (1) the release complies with Section 5.03 above, or (2) the release is
pursuant to a partial Prepayment (which, in the case of a partial Prepayment on
a Lease, meets the requirements of Section 5.09 below) and the ratio of the fair
market value (determined by the Servicer in its reasonable discretion) of the
related Equipment to the Contract Principal Balance of the affected Contract
after giving effect to such Prepayment and release, is at least equal to such
ratio existing prior to such event;
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(C) except as provided in clause (ii)(A) above, result
in the Contract Principal Balance of the Contract being less than it would have
been absent such modification or amendment; or
(D) if such modification or amendment had been in
effect on the relevant Transfer Date with respect to the Contract, cause or have
caused the Contract not to constitute an Eligible Contract.
Section 5.09 Prepayments of Certain Contracts. The Servicer may, at
its option and in accordance with Customary Policies and Procedures, agree to
permit a Contract in the Contract Pool that is not otherwise contractually
prepayable by its terms and is not a Defaulted Contract, to become a Prepaid
Contract through a voluntary Prepayment by the Obligor (which shall not be
deemed to include prepayment due to a Casualty Loss); provided, that the
Servicer will not permit the voluntary full or partial Prepayment of such a
Contract unless the amount of such Prepayment (or, in the case of a partial
Prepayment, the sum of such Prepayment and the remaining Contract Principal
Balance of the Contract after application of such Prepayment), together with
such additional amounts as are (i) otherwise available to or supplied by the
Servicer for the purpose of prepaying such Contract, and (ii) deposited in the
Collection Account contemporaneously with the deposit therein of such
Prepayment, is at least equal to the Required Payoff Amount for such Contract
determined as of the beginning of the current Collection Period.
Section 5.10 Certain Extensions; Acceleration. (a) The Servicer may
(subject to subsection (b) below) grant payment extensions on a Contract in the
Contract Pool, consistent with Customary Policies and Procedures (it being
understood that any extensions on a Contract resulting from an Insolvency Event
with respect to the related Obligor will not be deemed to have been granted by
the Servicer hereunder) if the Servicer believes in good faith that such
extension is necessary to avoid a termination and liquidation of such Contract
and will maximize the amount to be received by the Trust with respect to such
Contract; provided, however, that the aggregate period of all extensions granted
on a Contract shall not exceed six months. Nothing in this Section 5.10 shall be
deemed to prevent the Servicer from extending or renewing, or otherwise
accepting the continued performance by the Obligor under, a Contract after
expiration of its stated term.
(b) The Servicer also, consistent with Customary Policies and
Procedures, may accelerate (or elect not to accelerate) the maturity of all or
any Scheduled Payments under any Contract in the Contract Pool under which a
default under the terms thereof has occurred and is continuing (after the lapse
of any applicable grace period); provided that the Servicer may accelerate the
Scheduled Payments due under any Contract in the Contract Pool (and take other
action in accordance with applicable Customary Policies and Procedures,
including repossessing or otherwise converting the related Equipment, to realize
upon the value of such Contract and the related Equipment) to the fullest extent
permitted by the terms of such Contract, promptly after such Contract becomes a
Defaulted Contract.
Section 5.11 Taxes and Other Amounts. To the extent provided for in
any Contract in the Contract Pool, the Servicer will make reasonable efforts
consistent with the Servicing Standard to collect (or cause to be collected) all
payments with respect to amounts due
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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 CIT becomes the Servicer hereunder, such Person shall not
be required to make a Servicer Advance. The Servicer will deposit any Servicer
Advances into the Collection Account on or prior to 11:00 a.m. (New York time)
on the Deposit Date, in immediately available funds. The Servicer will be
entitled to be reimbursed for Servicer Advances pursuant to Article VII hereof.
Section 5.15 Realization Upon Defaulted Contract. The Servicer will
use its best efforts consistent with the Servicing Standard to repossess or
otherwise comparably convert the ownership of any Equipment relating to a
Defaulted Contract and will act as transfer and processing agent for Equipment
or Applicable Security which it repossesses. The Servicer will follow such other
practices and procedures, consistent with the Servicing Standard, in order to
realize upon such Equipment or Applicable Security, which practices and
procedures may include reasonable efforts to enforce all obligations of Obligors
and repossessing and selling such Equipment or Applicable Security at public or
private sale in circumstances other than those described in the preceding
sentence. In any case in which any such Equipment or Applicable Security has
suffered damage, the Servicer will not expend funds in connection with any
repair or toward the repossession of such Equipment or Applicable Security
unless it determines in its discretion that such repair and/or repossession will
increase the Liquidation Proceeds by an amount greater than the amount of such
expenses. The Servicer will remit to the Collection Account the Liquidation
Proceeds received in connection with the transfer or disposition of Equipment or
Applicable Security relating to a Defaulted Contract in accordance with Article
VII hereof.
Section 5.16 Maintenance of Insurance Policies. The Servicer will use
reasonable efforts, consistent with the Servicing Standard, to ensure that each
Obligor complies with applicable insurance requirements set forth in the related
Contract; provided that the Servicer, in accordance with Customary Policies and
Procedures, may allow Obligors to self-insure. If an Obligor fails to maintain
property damage insurance to the extent required under its Contract, the
Servicer may, consistent with Customary Policies and Procedures, purchase and
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maintain such insurance on behalf of, and at the expense of (if the applicable
Contract so provides), the Obligor. In connection with its activities as
Servicer of Contracts in the Contract Pool, the Servicer agrees to present, on
behalf of itself, the Trust and the Noteholders or Equity Certificateholders,
claims to the insurer under each Insurance Policy and any such liability policy,
and to settle, adjust and compromise such claims, in each case, consistent with
the terms of each Contract.
Section 5.17 Certain Other Duties With Respect to Trust. The Servicer
shall, and hereby agrees that it will, monitor the Trust's compliance with all
applicable provisions of state and federal securities laws, notify the Trust and
the Administrator of any actions to be taken by the Trust necessary for
compliance with such laws and prepare on behalf of the Trust and the
Administrator all notices, filings or other documents or instruments required to
be filed under such laws.
Section 5.18 Servicing Compensation. As compensation for its servicing
activities with respect to the Contract Pool, and also in consideration of its
expenses as set forth in Section 5.19, the Servicer shall be entitled to receive
a servicing fee in respect of any Collection Period (or portion thereof) (with
respect to each Collection Period, the "Servicing Fee"), equal to the sum of (i)
one-twelfth of the product of (A) the Servicing Fee Percentage and (B) the
Contract Pool Principal Balance as of the first day of such Collection Period
and (ii) any amount described in the clause (iv) of the definition of "Excluded
Amounts".
Section 5.19 Payment of Certain Expenses by Servicer. The Servicer
will be required to pay all expenses incurred by it in connection with its
activities under this Agreement, including fees and disbursements of independent
accountants, counsel, the Owner Trustee, the Indenture Trustee, taxes imposed on
the Servicer, expenses incurred in connection with payments and reports pursuant
to this Agreement, and all other fees and expenses not expressly stated under
this Agreement (including ongoing fees and expenses of the Owner Trustee and the
Delaware Trustee) to be for the account of the Trust or the Depositor, but
excluding Liquidation Expenses incurred as a result of activities contemplated
by Section 5.15 (which may be netted from Liquidation Proceeds). The Servicer
will be required to pay all reasonable fees and expenses owing to the Owner
Trustee, the Delaware Trustee or the Indenture Trustee in connection with the
maintenance of the Collection Account. The Servicer shall be required to pay
such expenses for its own account and shall not be entitled to any payment or
reimbursement therefor other than the Servicing Fee, payable from Collections as
provided herein.
Section 5.20 Records. The Servicer shall, during the period it is
Servicer hereunder, maintain such books of account and other records as will
enable the Trust or the Administrative Agent to determine the status of each
Contract in the Contract Pool.
Section 5.21 Inspection. (a) The Servicer shall afford the Owner
Trustee and the Indenture Trustee and their respective authorized agents not
more frequently than once during each calendar year at the Servicer's expense,
not to exceed $1,000 in expenses and upon reasonable prior written request,
reasonable access during normal business hours to the Servicer's records
relating to the Contracts in the Contract Pool, and will cause its personnel to
assist in any 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
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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, authorizations to file 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 the Rating Agencies, without the consent of the
Securityholders or the Trustees, provided that the Rating Agency Condition is
satisfied. No such sale, transfer, assignment or conveyance shall become
effective until such Eligible Servicer shall have assumed all of the
responsibilities and obligations of the Servicer under the Transaction
Documents.
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ARTICLE VI
COVENANTS OF THE DEPOSITOR
Section 6.01 LLC Existence. During the term of this Agreement, the
Depositor will keep in full force and effect its existence, rights and
franchises as a limited liability company under the laws of the jurisdiction of
its formation and will obtain and preserve its qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the other Transaction
Documents and each other instrument or agreement necessary or appropriate to the
proper administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between the Depositor and its
Affiliates will be conducted on an arm's-length basis.
Section 6.02 Contracts Not to be Evidenced by Promissory Notes. The
Depositor will take no action to cause any Contract not originally consisting of
or evidenced by an instrument (except to the extent part of tangible chattel
paper) (as such terms are defined in the UCC), to be evidenced by an instrument,
except in connection with the enforcement or collection of such Contract.
Section 6.03 Security Interests. The Depositor will not sell, pledge,
assign or transfer to any other Person, or grant, create, incur, assume or
suffer to exist any Lien on any Contract in the Contract Pool or on any other
Trust Asset or on any related Equipment, whether now existing or hereafter
transferred to the Trust, or any interest therein (except for Permitted Liens).
The Depositor will immediately notify the Trust and the Indenture Trustee of the
existence of any Lien (other than Permitted Liens) on any Contract in the
Contract Pool or on any other Trust Assets or on any related Equipment; and the
Depositor shall defend the right and interest of the Trust in, to and under the
Contracts in the Contract Pool and the related Equipment, against all claims of
third parties; provided, however, that nothing in this Section 6.03 shall
prevent or be deemed to prohibit (i) the Depositor from suffering to exist
Permitted Liens upon any of the Contracts in the Contract Pool or any related
Equipment, or (ii) repurchases or substitutions by CFUSA pursuant to the
Purchase and Sale Agreements.
Section 6.04 Delivery of Collections. The Depositor agrees to pay to
the Servicer promptly any misdirected Collections received by the Depositor in
respect of the Contracts in the Contract Pool, for application in accordance
with Article VII.
Section 6.05 Regulatory Filings. The Depositor shall make any filings,
reports, notices, applications and registrations with, and seek any consents or
authorizations from, the United States Securities and Exchange Commission and
any state securities authority on behalf of the Trust as may be necessary or
that the Depositor deems advisable to comply with any federal or state
securities or reporting requirements or laws.
Section 6.06 Compliance With Law. Depositor hereby agrees to comply in
all material respects with all Requirements of Law applicable to the Depositor.
Section 6.07 Activities. The Depositor shall not engage in any
business or activity of any kind, or enter into any transaction or indenture,
mortgage, instrument, agreement,
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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 CFUSA or any of its Affiliates on
terms and conditions (with respect to the liabilities imposed upon the Depositor
by virtue of such transactions, as well as in respect of agreements or
restrictions concerning activities of the Depositor and its relations or
interactions with CFUSA or a Financing Originator or other applicable Affiliate
relevant to "bankruptcy remoteness" or "substantive consolidation" analysis), in
each case substantially similar to such terms and conditions applicable to the
Depositor hereunder and under the other Transaction Documents.
Section 6.08 Indebtedness. The Depositor shall not create, incur,
assume or suffer to exist any Indebtedness or other liability whatsoever, except
(i) obligations incurred under this Agreement or other Transaction Documents, or
incidental thereto, or (ii) liabilities incidental to the maintenance of its
corporate existence in good standing, or (iii) obligations in connection with
transactions described in the proviso to Section 6.07, as limited thereby.
Section 6.09 Guarantees. The Depositor shall not become or remain
liable, directly or contingently, in connection with any Indebtedness or other
liability of any other Person, whether by guarantee, endorsement (other than
endorsements of negotiable instruments for deposit or collection in the ordinary
course of business), agreement to purchase or repurchase, agreement to supply or
advance funds, or otherwise, except as contemplated hereby and in connection
with transactions described in Section 6.07, as limited thereby.
Section 6.10 Investments. The Depositor shall not make or suffer to
exist any loans or advances to, or extend any credit to, or make any investments
(by way of transfer of property, contributions to capital, purchase of stock or
securities or evidences of indebtedness, acquisition of the business or assets,
or otherwise) in, any Person except (i) for purchases or other acquisitions of
Contracts and related Contract Assets pursuant to the Purchase and Sale
Agreements or purchases or other acquisitions of similar contracts and related
assets permitted by Section 6.07, or (ii) the holding of ownership interests in
Equipment contemplated herein or in transactions permitted by Section 6.07, or
(iii) for investments in Eligible Investments in accordance with the terms of
this Agreement.
Section 6.11 Merger; Transfers. The Depositor shall not enter into any
transaction of merger or consolidation, or liquidate or dissolve itself (or
suffer any liquidation or dissolution) or acquire or be acquired by any Person,
or convey, sell, lease or otherwise dispose of all or substantially all of its
property or business, except as provided for in this Agreement.
Section 6.12 Payments. The Depositor shall not declare or pay,
directly or indirectly, any dividend or make any other payment (whether in cash
or other property) with respect to the profits, assets or capital of the
Depositor or any Person's interest therein, or purchase, redeem or otherwise
acquire for value any of its equity ownership interests now or hereafter
outstanding, except that the Depositor may effect payments of its earnings in
respect of Trust Assets to its members in each case so long as it would continue
to be Solvent after giving effect thereto, and otherwise in accordance with the
Transaction Documents.
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Section 6.13 Other Agreements. The Depositor shall not become a party
to, or permit any of its properties to be bound by, any indenture, mortgage,
instrument, contract, agreement, lease or other undertaking, except this
Agreement and the other Transaction Documents to which it is a party and any
agreement relating to another securitization transaction permitted by Section
6.07; nor shall it amend or modify the provisions of its Certificate of
Formation or Limited Liability Company Agreement except in accordance with the
Transaction Documents and with the consent of the Required Holders, or issue any
power of attorney except to the Owner Trustee, the Indenture Trustee or the
Servicer pursuant to the Transaction Documents (or other similar powers of
attorney in connection with transactions permitted by the proviso to Section
6.07).
Section 6.14 Separate Entity Existence. The Depositor shall:
(i) Maintain its own deposit account or accounts, separate
from those of any Affiliate, with commercial banking institutions. The funds of
the Depositor will not be diverted to any other Person or for other than
authorized uses of the Depositor.
(ii) Ensure that, to the extent that it shares the same
officers or other employees as any of its members or Affiliates, the salaries of
and the expenses related to providing benefits to such officers and other
employees shall be fairly allocated among such entities, and each such entity
shall bear its fair share of the salary and benefit costs associated with all
such common officers and employees.
(iii) Ensure that, to the extent that it jointly contracts
with any of its members or Affiliates to do business with vendors or service
providers or to share overhead expenses, the costs incurred in so doing shall be
allocated fairly among such entities, and each such entity shall bear its fair
share of such costs. To the extent that the Depositor contracts or does business
with vendors or service providers when the goods and services provided are
partially for the benefit of any other Person, the costs incurred in so doing
shall be fairly allocated to or among such entities for whose benefit the goods
and services are provided, and each such entity shall bear its fair share of
such costs. All material transactions between Depositor and any of its
Affiliates shall be only on an arm's length basis.
(iv) To the extent that the Depositor and any of its members
or Affiliates have offices in the same location, there shall be a fair and
appropriate allocation of overhead costs among them, and each such entity shall
bear its fair share of such expenses.
(v) Conduct its affairs strictly in accordance with its
Limited Liability Company Agreement and its Certificate of Formation, and
observe all necessary, appropriate and customary limited liability company
formalities, including, but not limited to, holding all regular and special
members' and manager/directors' meetings appropriate to authorize all entity
action, keeping separate and accurate records of such meetings and its actions,
passing all resolutions or consents necessary to authorize actions taken or to
be taken, and maintaining accurate and separate books, records and accounts,
including, but not limited to, payroll and intercompany transaction accounts.
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(vi) Take or refrain from taking or engaging in, as
applicable, each of the actions or activities specified in the "true sale" and
"substantive nonconsolidation" opinions of 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 change its
state of organization nor 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
Delaware Trustee (including in its individual capacity), 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
Delaware Trustee (including in its individual capacity), the Owner Trustee
(including in its individual capacity), the Indenture Trustee (including in its
individual capacity) and the Servicer (and any of their respective officers,
directors, employees or agents) and the Securityholders from and against any
loss, liability or expense incurred by reason of the Depositor's willful
misfeasance, bad faith or negligence (other than errors in judgment) in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement.
The Depositor shall indemnify, defend and hold harmless the Trust, the
Delaware Trustee (including in its individual capacity), 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 Delaware Trustee and the Owner
Trustee, in the Trust
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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 Delaware Trustee and the Owner Trustee shall be due to the willful
misfeasance, bad faith or negligence of the Delaware Trustee and the Owner
Trustee, respectively, 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 Delaware
Trustee, the Owner Trustee (including in its individual capacity) and the
Indenture Trustee (including in its individual capacity) from and against any
loss, liability or expense incurred by reason of the Depositor's or Trust's
violation of federal or state securities laws in connection with the offering
and sale of the Notes and the Certificate.
Indemnification under this Section shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation; provided,
however, that the indemnification under this Section, notwithstanding anything
to the contrary, is limited to the assets of the Depositor (including its rights
under Article VI of the Substitute VFC Purchase Agreement; Article VI of the
Non-VFC Purchase Agreement or Article VI of the VFC Purchase Agreement);
provided, further, any indemnity payments to be made pursuant to this Section
shall not be made from the Trust Assets (except to the extent any of the same
have been distributed to the Depositor free and clear of any interest of the
Trust therein and except to the extent CFUSA as co-obligor is obligated to make
such payment pursuant to Article VI of the Substitute VFC Purchase Agreement;
Article VI of the Non-VFC Purchase Agreement or Article VI of the VFC Purchase
Agreement), and such indemnity payments, if unpaid, shall not constitute a claim
against the Trust or the Trust Assets (except in respect of rights against CFUSA
in respect of the aforementioned Articles of the Purchase and Sale Agreements).
If the Depositor (or CFUSA pursuant to the aforementioned Articles of the
Purchase and Sale Agreements) shall have made any indemnity payments pursuant to
this Section and the Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others, such Person shall
promptly repay such amounts to the Depositor (or CFUSA, as applicable), without
interest.
Indemnification under this Section shall survive the resignation or
removal of the Delaware Trustee, the Owner Trustee or the Indenture Trustee, as
the case may be, and the termination of the Trust Agreement or this Agreement.
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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.
ARTICLE VII
ESTABLISHMENT OF ACCOUNTS; PAYMENTS
Section 7.01 Trust Accounts; Collections. (a) On or before the Closing
Date, the Depositor (or the Servicer on its behalf) shall cause the Indenture
Trustee to establish the Collection Account, the Note Distribution Account and
the Cash Collateral Account, each in the name of the Indenture Trustee for the
benefit of the Noteholders and the Equity Certificateholder. The Servicer is
hereby required to ensure that each of the Trust Accounts is established and
maintained as a segregated corporate trust account with a Qualified Institution.
If any institution with which any of the accounts established pursuant to this
Section 7.01(a) ceases to be a Qualified Institution, the Servicer shall within
30 days after notice of such event establish a replacement account at a
Qualified Institution, and effect (or cause to be effected) a concurrent
transfer of all amounts in the current non-qualifying account to the replacement
account.
(b) (i) Subject to subsection 7.01(b)(ii) hereof, the Servicer
shall deposit or cause to be deposited, without deposit into any intervening
account, into the Collection Account as promptly as practical after the Date of
Processing (but in any case not later than the second Business Day following the
Date of Processing thereof), all Pledged Revenues on deposit with the Servicer
in the form of available funds, and all Pledged Revenues otherwise received by
the Servicer (and all Investment Earnings from investments of the Collection
Account).
(ii) Notwithstanding anything in this Agreement to the
contrary, for so long as, and only so long as,
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(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 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 $42,101,386.97 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
$30,406,557.03.
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(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, if any, on investments
of funds in the Collection Account and Note Distribution Account shall be
deposited in or maintained within the Collection Account pursuant to Section
7.01 and distributed on the next Payment Date pursuant to Section 7.05. All
Investment Earnings in the Cash Collateral Account shall be distributed in
accordance with the Cash Collateral Account Agreement. The Servicer, the
Depositor and the Trust agree and acknowledge that the Indenture Trustee is to
have "control" (within the meaning of Section 8-102 of the UCC as enacted in New
York) of collateral consisting of "Investment Property" (within the meaning of
Section 9-106 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
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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;
(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
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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 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 aggregate amount of interest due to each
Class.
(ii) pay to the Class B Noteholders an amount equal to the
Class B Interest Distributable Amount; provided, that if the Amount Available
remaining to be allocated pursuant to this clause is less than the full amount
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 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 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 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 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
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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-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 Class A Noteholders, the
Class A Principal Payment Amount, to the Class A-2 Noteholders until the
Principal Amount of the Class A-2 Notes has been reduced to zero, then to the
Class A-3 Noteholders until the Principal Amount of the Class A-3 Notes has been
reduced to zero, then to the Class A-4 Noteholders until the Principal Amount of
the Class A-4 Notes has been reduced to zero;
(viii) pay to the Class B Noteholders, the Class B Principal
Payment Amount;
(ix) pay to the Class C Noteholders, the Class C Principal
Payment Amount;
(x) pay to the Class D Noteholders, the Class D Principal
Payment Amount; and
(xi) pay the Reallocated Principal, if any, sequentially, to
the Class X-0, Xxxxx X-0, Class A-3, Class A-4, Class B and Class C 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 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 aggregate amount of interest due to each
Class.
(ii) pay to 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 Date, together with any such amounts that
accrued in respect of prior
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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 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 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 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 Class A-2, Class A-3 and Class A-4
Noteholders, pro rata, the Total Principal Payment Amount for such Payment Date;
provided (i) that if the Amount Available remaining to be allocated pursuant to
this clause is less than the full amount required to be so paid, such remaining
Amount Available shall be allocated to each Class A-2, Class A-3 and Class A-4
Note, pro rata, based on the outstanding Principal Amount thereof and (ii) if
the amount to be allocated pursuant to this clause exceeds the amount needed to
repay the outstanding Principal Amount of the Class A-2 Notes, Class A-3 Notes
and the Class A-4 Notes in full, then such excess shall be applied in repayment
on the Class B Notes;
(ix) pay to the 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
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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 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 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;
(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 and Class C Noteholders;
(xiii) after the Principal Amount (including any unpaid
accrued interest thereon) of the Class A Notes, the Class B Notes, the Class C
Notes and the Class D Notes has been reduced to zero, such remaining Amount
Available shall be applied to pay any unpaid fees, expenses and indemnities of
the Indenture Trustee; and
(xiv) any remaining Amount Available shall be paid to the
Equity Certificateholder.
(d) On the Business Day preceding each Payment Date, the
Indenture Trustee shall, in accordance with written directions from the
Servicer, withdraw from amounts on deposit in the Cash Collateral Account, and
deposit into the Collection Account, an amount equal to the lesser of the
Available Cash Collateral Amount for such Payment Date and the sum of the
following amounts, if any:
(i) the amount, if any, by which the Available Pledged
Revenues with respect to such Payment Date, is less than the amount specified in
clauses (b)(i)-(iv) of this Section 7.05 (or in the case of a payment after an
Event of Default, in clauses (c) (i) - (iv) of this Section 7.05); 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
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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.
(e) All instructions required to be provided by the Servicer are
deemed given if included in the Monthly Report or in a separate writing.
Section 7.06 Repurchases of, or Substitution for, Contracts for Breach
of Representations and Warranties. Upon a discovery by the Servicer of an
inaccuracy or breach of a representation or warranty set forth in the Schedule
of Representations which has been made or deemed made with respect to a Contract
in the Contract Pool, which inaccuracy or breach materially adversely affects
the Trust's or any Noteholder's or the Equity Certificateholder's interest in
such Contract (without regard to the benefits of the Cash Collateral Account,
any reserve fund, over collateralization or other similar enhancement) or the
collectibility thereof (an "Ineligible Contract"), the Servicer shall promptly
notify CFUSA thereof. As provided in the Substitute VFC Purchase Agreement and
the Non-VFC Purchase Agreement and in accordance with this Section 7.06, CFUSA
is obligated to repurchase each such Ineligible Contract, at a repurchase price
equal to the Purchase Amount (determined as of the date such repurchase is to be
funded), not later than the second Deposit Date following the date the Servicer
becomes aware of any such breach or inaccuracy and which breach or inaccuracy
has not otherwise been cured; provided, however, that if CFUSA is able to effect
a substitution for any such Ineligible Contract in compliance with Section 2.04,
CFUSA may, in lieu of repurchasing such Ineligible Contract, effect a
substitution for such Ineligible Contract with a Substitute Contract not later
than the date a repurchase of such Ineligible Contract would be required
hereunder; and provided further, that with respect to a breach or inaccuracy of
any such representations or warranties relating to the Contract Pool (or all
Contracts conveyed on the Closing Date or Substitution Transfer Date, as the
case may be) in the aggregate and not to any particular Contract, CFUSA (or the
Servicer acting on its behalf) may select Contracts (without adverse selection)
to repurchase (or substitute for) such that had such Contracts not been included
as part of the related Transferred Assets (and, in the case of a substitution,
had such Substitute Contract been included as part of the related Transferred
Assets instead of the selected Ineligible Contract) there would have been no
breach or inaccuracy of such representation or warranty. Notwithstanding any
other provision of this Agreement, the obligation of CFUSA under the Purchase
and Sale Agreements and described in this Section 7.06 shall not terminate or be
deemed released by any party hereto upon a Servicing Transfer pursuant to
Article VIII. The right to enforce the repurchase or substitution obligation
described in this Section shall constitute the sole remedy of the Trust, the
Indenture Trustee, the Depositor, the Noteholders and the
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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 CFUSA all of the Trust's right and interest in the
repurchased or substituted Contract and related Transferred Assets upon receipt
of written instruction from the Servicer without recourse, representation or
warranty, and such reassigned Contract shall no longer thereafter be included in
any calculations of Contract Principal Balances required to be made hereunder or
otherwise be deemed a part of the Trust Assets.
Section 7.08 The Servicer's Purchase Option. 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,
the Servicer, 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 the Servicer.
ARTICLE VIII
SERVICER DEFAULTS; SERVICING TRANSFER
Section 8.01 Servicer Default. "Servicer Default" means the occurrence
of any of the following:
(a) any failure by the Servicer to make any payment, transfer or
deposit or to give instructions or notice to the Owner Trustee or the Indenture
Trustee to make any payment, transfer or deposit, or to deliver the Monthly
Report pursuant to this Agreement, which failure continues unremedied for a
period of five (5) Business Days after the first to occur of (i) written notice
from the Owner Trustee (with a copy to the Indenture Trustee) or the Indenture
Trustee (with a copy to the Owner Trustee) of such failure shall have been given
to the Servicer, or (ii) the date the Servicer becomes aware thereof; or
(b) failure on the part of the Servicer duly to observe or
perform any other covenants or agreements of the Servicer set forth in this
Agreement which has a material adverse
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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 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
Sections 6.02(g) or 6.07 of the Indenture) may and shall at the direction of the
Required Holders, by written notice (a "Termination Notice") delivered to the
parties hereto, terminate all (but not less than all) of the Servicer's rights
and obligations under this Pooling Agreement with respect to the Trust Assets.
(b) Upon delivery of the Termination Notice (or, if later, on a
date designated therein), and on the date that a successor Servicer shall have
been appointed pursuant to Section 8.03 (such appointment being herein called a
"Servicing Transfer"), all rights, benefits, fees, indemnities, authority and
power of the Servicer under this Pooling Agreement,
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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.
In the event that a Successor Servicer has not been appointed and
has not accepted its appointment within 60 days of the delivery of a Termination
Notice, then the Indenture Trustee shall offer the Depositor, and the Depositor
shall offer CFUSA, the right to accept retransfer of all the Trust Assets, and
such party may accept retransfer of such Trust Assets in consideration of the
Depositor's delivery to the Collection Account on or prior to the next upcoming
Payment Date of a sum equal to the Aggregate Principal Amount of all Notes then
outstanding, together with accrued and unpaid interest thereon through such date
of deposit; provided, that the Indenture Trustee, if so directed by, the
Required Holders, need not accept and effect such reconveyance in the absence of
evidence (which may include valuations of an investment bank or similar entity,
which shall not be at the expense of the Indenture Trustee) reasonably
acceptable to such Indenture Trustee or Required Holders that such retransfer
would not constitute a fraudulent conveyance of the Depositor or CFUSA;
provided, further, CFUSA may not accept such retransfer unless it shall have
delivered to each Rating Agency, with a copy to the Indenture Trustee, an
Opinion of Counsel (which shall not be an employee of the Issuer)
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that such retransfer would not constitute a fraudulent conveyance of the
Depositor or CFUSA or that such retransfer would not constitute a preferential
payment by the Depositor or CFUSA.
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. The Indenture Trustee shall
be entitled to receive the Servicing Fee while assuming such duties and shall be
entitled to all rights and benefits of the Servicer (or Successor Servicer)
including the indemnity rights under Section 8.07 hereof. Notwithstanding the
foregoing, if the Indenture Trustee is legally unable or prohibited from so
acting or is unwilling to so act, it shall petition a court of competent
jurisdiction to appoint any established financial institution having a net worth
of at least $50,000,000 and whose regular business includes the servicing of
contracts similar to the Contracts in the Contract Pool as the Successor
Servicer hereunder. On or after a Servicing Transfer, the Successor Servicer
shall be the successor in all respects to the Servicer in its capacity as
servicer under this Pooling Agreement, and the transactions set forth or
provided for in this Pooling Agreement, and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof, and the terminated Servicer shall be
relieved of such responsibilities, duties and liabilities arising after such
Servicing Transfer; provided, however, that the Successor Servicer shall not be
liable for any acts or omissions of the departing Servicer occurring prior to
such Servicing Transfer or for any breach by the departing Servicer of any of
its representations and warranties contained in this Pooling Agreement or in any
related Transaction Document or other agreement. As compensation therefor, the
Successor Servicer shall be entitled to receive the Servicing Fee. The Trust,
the Noteholders and the Equity Certificateholders, the Indenture Trustee and
such successor shall take such action, consistent with this Pooling Agreement,
as shall be necessary to effectuate any such succession. To the extent the
terminated Servicer has made Servicer Advances, it shall be entitled to
reimbursement of the same notwithstanding its termination hereunder, to the same
extent as if it had continued to service the Trust Assets hereunder. In
addition, it is understood and agreed that if an Event of Default has occurred
and a Servicer Transfer is being effected by action of the Indenture Trustee
hereunder, any documented expenses reasonably incurred by the Indenture Trustee
in connection with effecting such Servicer Transfer shall be deemed expenses
reimbursable from Available Pledged Revenues.
Section 8.04 Notifications to Noteholders and the Equity
Certificateholders. (a) Promptly following the occurrence of any Servicer
Default, the Servicer shall give written notice thereof to the Trustees, the
Depositor and each Rating Agency at the addresses described in Section 11.04 and
to the Noteholders and Equity Certificateholder at their respective addresses
appearing on the Note Register and the Certificate Register, respectively.
(b) Within ten (10) days following any termination or appointment
of a Successor Servicer pursuant to this Article VIII, the Indenture Trustee
shall give written notice thereof to each Rating Agency and the Depositor at the
addresses described in Section 11.04, and to the Noteholders, at their
respective addresses appearing on the Note Register, and to the Owner Trustee.
Section 8.05 Effect of Transfer. (a) Except as otherwise set forth in
this Agreement, after a Servicing Transfer, the terminated Servicer shall have
no further rights or
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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.
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
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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.
None of the provisions contained in this Pooling Agreement shall in
any event require the Indenture Trustee to perform, or be responsible for the
manner of performance of, any of the obligations of the Servicer under this
Pooling Agreement except during such time, if any, as the Indenture Trustee
shall be the successor to, and be vested with the rights, duties, powers and
privileges of, the Servicer in accordance with the terms of this Pooling
Agreement.
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. The Indenture
Trustee will make such statement (and, at its option, any additional files
containing the same information in an alternative format) available each month
to Certificateholders and the Rating Agencies via xxxx://xxx.xxxxxxxx.xxx/xxx.
Parties that are unable to use xxxx://xxx.xxxxxxxx.xxx/xxx are entitled to have
a paper copy mailed to them via first class mail by calling the Indenture
Trustee at 000-000-0000 and indicating such. The Indenture Trustee shall have
the right to change the way such statements are distributed in order to make
such distribution more convenient and/or more accessible to the above parties
and the Indenture Trustee shall provide timely and adequate notification to all
above parties regarding any such changes. The parties hereto acknowledge that
the Indenture Trustee has no obligation to verify the accuracy of the Monthly
Report. The Servicer will file the Monthly Reports with the Commission to the
extent required by the Exchange Act.
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.
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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 of each year, beginning on March 31, 2005, 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 Servicer, (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 provided a report thereon, as well as confirmed 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, 2005, an Officer's Certificate
stating that (a) a review of the activities of the Servicer during the prior
calendar year and of its performance under the Pooling Agreement was made under
the supervision of the officer signing such certificate and (b) to such
officer's knowledge, based on such review, the Servicer has fully performed or
cause to be performed in all material respects all its obligations under the
Pooling Agreement and no Servicer Default has occurred or is continuing, or, if
there has been a Servicer Default, specifying each such default known to such
officer and the nature and status thereof and the steps being taken or necessary
to be taken to remedy such event.
A copy of such certificate may be obtained by any Noteholder or the
Equity Certificateholder by a request in writing to the Indenture Trustee, with
respect to any Noteholder, or to the Owner Trustee, with respect to the Equity
Certificateholder.
ARTICLE X
TERMINATION
Section 10.01 Sale of Trust Assets. (a) Upon any transfer of Trust
Assets pursuant to Section 9.02 of the Trust Agreement, the Servicer shall
instruct the Indenture Trustee in writing to deposit the proceeds from such
transfer after all payments and reserves therefrom
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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 CFUSA, the Servicer and the Trust and the Indenture Trustee without
prior notice to or the consent of any of the Holders, and in the case of clauses
(v) and (vi), upon satisfaction of the Rating Agency Condition, (i) to correct
manifest error or cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be inconsistent with any other provisions herein,
(iii) to add or amend any provisions as requested by the Rating Agencies in
order to maintain or improve any rating of the Notes (it being understood that,
after the Closing Date, neither the Trust, the Owner Trustee, the Indenture
Trustee, nor CFUSA is obligated to maintain or improve such rating); (iv) to add
to the covenants, restrictions or obligations of CFUSA, the Servicer, the Trust
or the Indenture Trustee or to provide for the delivery of or substitution of a
Servicer Letter of Credit; (v) to evidence and provide for the acceptance of the
appointment of a successor trustee with respect to the Trust Estate and add to
or change any provisions as shall be necessary to facilitate the administration
of the trusts under the Trust Agreement by more than one trustee pursuant to
Article X of the Trust Agreement; (vi) to add, change or amend any provision to
maintain the trust as an entity not subject to federal income tax; or (vii) to
add, change or eliminate any other provisions, provided that an amendment
pursuant to this clause (vii), shall not, as evidenced by an Opinion of Counsel
for the Servicer or CFUSA, adversely affect in any material respect the
interests of the Trust, any Noteholder or the Equity Certificateholder.
(b) This Pooling Agreement may also be amended from time to time
by the parties signatory hereto, with the consent of the Required Holders, for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions thereof or of modifying in any manner the rights of the
Noteholders or the Equity Certificateholder; provided, however, that no such
amendment shall (i) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, Pledged Revenues, payments on the Trust
Assets or payments that shall be required to be made on any Note or the Equity
Certificate (including by way of amendment of related definitions); (ii) change
the manner in which the Cash Collateral Account is applied; or (iii) change in
any manner (including through amendment of related definitions),
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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; (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 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.
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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:
CIT Financial USA, Inc.
0 XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Treasury - Securitization
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
with a copy to:
CIT Group Inc.
0 XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Treasury - Securitization
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
(ii) If to the Depositor:
NCT Funding Company, L.L.C.
0 XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Treasury - Securitization
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
(iii) If to the Indenture Trustee:
JPMorgan Chase Bank
0 Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Institutional Trust Services / Global Debt -
-82-
CIT Equipment Collateral 2004-VT1
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 CFUSA:
CIT Financial USA, Inc.
0 XXX Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Treasury - Securitization
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
(vi) If to the Trust or the Owner Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0X
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Administration, CIT Equipment
Collateral 2004-VT1
Fax No.: (000) 000-0000
Telephone No. (000) 000-0000
(vii) if to Standard and Poor's:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
-83-
(viii) if to Moody's:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No: (000) 000-0000
Telephone No.: (000) 000-0000
(ix) if to Fitch:
Fitch, Inc.
00 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: ABS Surveillance
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 (i) the Owner Trustee and the Delaware Trustee each
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, and
(ii) the Indenture Trustee shall be a third party beneficiary of this Agreement
for purposes of Sections 3.01, 3.02 and 8.03 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.
-84-
Section 11.09 No Bankruptcy Petition; Disclaimer and Subordination.
(a) Each of the Servicer, the Owner Trustee and each Noteholder
and the Equity Certificateholder (by acceptance of the applicable Notes or the
Equity Certificate) covenants and agrees that it will not institute against the
Depositor, or the Trust, or solicit or join in or cooperate with or encourage
any other Person in instituting against the Depositor or the Trust, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or other similar proceedings under the laws of the United States or any state of
the United States.
(b) Consistent with the provisions in Section 2.07 of the Trust
Agreement and Section 6.17 hereof, the Trust, as well as each Noteholder and the
Equity Certificateholder by accepting a Note or the Equity Certificate,
acknowledges and agrees that such Note or the Equity Certificate represents a
debt instrument secured by, or a beneficial interest in the Trust and Trust
Assets only and does not represent an interest in any assets (other than the
Trust Assets) of the Depositor (including by virtue of any deficiency claim in
respect of obligations not paid or otherwise satisfied from the Trust Assets and
proceeds thereof). In furtherance of and not in derogation of the foregoing, to
the extent the Depositor enters into other securitization transactions as
contemplated in Section 6.07, the Trust as well as each Noteholder and the
Equity Certificateholder by accepting a Note or Certificate acknowledges and
agrees that it shall have no right, title or interest in or to any assets (or
interests therein) (other than Trust Assets) conveyed or purported to be
conveyed by the Depositor to another securitization trust (i.e., other than the
Issuer) or other Person or Persons in connection therewith (whether by way of a
sale, capital contribution or by virtue of the granting of a Lien) ("Other
Assets"). To the extent that, notwithstanding the agreements and provisions
contained in the preceding sentences of this subsection, the Trust, or any
Noteholder and the Equity Certificateholder, either (i) asserts an interest in
or claim to, or benefit from, Other Assets, whether asserted against or through
the Depositor or any other Person owned by the Depositor, or (ii) is deemed to
have any such interest, claim or benefit in or from Other Assets, whether by
operation of law, legal process, pursuant to applicable provisions of Insolvency
Laws or otherwise (including, without limitation, by virtue of Section 1111(b)
of the federal Bankruptcy Code or any successor provision having similar effect
under the Bankruptcy Code), and whether deemed asserted against or through the
Depositor or any other Person owned by the Depositor, then the Trust and each
Noteholder and the Equity Certificateholder by accepting a Note or the Equity
Certificate further acknowledges and agrees that any such interest, claim or
benefit in or from Other Assets is and shall be expressly subordinated to the
indefeasible payment in full of all obligations and liabilities of the Depositor
which, under the terms of the relevant documents relating to the securitization
of such Other Assets, are entitled to be paid from, entitled to the benefits of,
or otherwise secured by such Other Assets (whether or not any such entitlement
or security interest is legally perfected or otherwise entitled to a priority of
payment or application under applicable law, including Insolvency Laws, and
whether asserted against the Depositor or any other Person owned by the
Depositor), including, without limitation, the payment of post-petition interest
on such other obligations and liabilities. This subordination agreement shall be
deemed a subordination agreement within the meaning of Section 510(a) of the
Bankruptcy Code. Each Noteholder and the Equity Certificateholder further
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.
-85-
(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 [Reserved].
Section 11.12 Servicer Indemnity. The Servicer will indemnify the
Depositor, the Trust, the Noteholders, the Equity Certificateholder and the
Trustees (including in their respective individual capacities), and any of their
officers, directors, employees or agents (each an "Indemnified Party") from and
against any and all claims, losses, penalties, fines, forfeitures, legal fees
and related costs, judgments and any other costs, fees and expenses that any
Indemnified Party may sustain in connection with claims asserted by third
parties against such Indemnified Party which result from any act or omission on
the part of the Servicer with respect to the Trust Assets or its duties and
obligations under this Pooling Agreement, except where such claims arise out of
any willful misconduct, gross negligence or bad faith on the part of such
Indemnified Party. Indemnification under this Section shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee, as the
case may be, or any of them, 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 The Bank of New York, not
in its individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall The Bank of New York 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
-86-
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]
-87-
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 2004-VT1
By: THE BANK OF NEW YORK, not in its
individual capacity but solely as
Owner Trustee on behalf of the
Trust
By:
---------------------------------
Name:
Title:
NCT FUNDING COMPANY, L.L.C., as Depositor
By:
-------------------------------------
Name:
Title:
CIT FINANCIAL USA, INC., in its
individual capacity and as Servicer
By:
-------------------------------------
Name:
Title:
-88-
Exhibit A
Form of Transfer Agreement
TRANSFER AGREEMENT
This TRANSFER AGREEMENT, dated [_____ , 200_] is by and between NCT
Funding Company, L.L.C., as Depositor and transferor, and CIT Equipment
Collateral 2004-VT1, 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 February 1, 2004 (as from time to time amended,
supplemented or otherwise modified, the "PSA"); and
WHEREAS, pursuant to the PSA, the Depositor wishes to effect
conveyances of Transferred Assets (including the Contracts identified on the
Schedule of Contracts attached hereto), in each case in the manner and to the
effect described in Article II of the PSA;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein and in the PSA, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. All terms defined in the PSA (whether directly or by
reference to other documents) shall have such defined meanings when used herein,
unless such terms are otherwise defined herein.
2. Specification of Cut-Off Date. The "Cut-Off Date" applicable to the
Contracts conveyed hereby is [_____ , 200_].
3. Conveyances. Subject to the terms and conditions provided for in
the PSA, the Depositor hereby make the assignments and conveyances specified in
Article II of the PSA as being effected by execution and delivery of this
Transfer Agreement, in each case (i) with respect to the Transferred Assets
related to and consisting in part of the Contracts and related Contract Assets
identified on the Schedule of Contracts attached hereto, and (ii) in the manner
and to the effect described in Article II of the PSA.
4. Incorporation of PSA. This Transfer Agreement is made pursuant to
and upon the representations, warranties and agreements on the part of the
parties hereto contained in the PSA and shall be governed in all respects by the
PSA.
5. Ratification of PSA. As supplemented by this Transfer Agreement,
the PSA is in all respects ratified and confirmed by the parties hereto.
6. Counterparts. This Transfer Agreement may be executed in two or
more counterparts including by telefax transmission thereof (and by different
parties on separate counterparts), each of which shall be an original, but all
of which together shall constitute one and the same instrument.
A-1
7. Governing Law. This Transfer Agreement shall be governed by, and
construed and enforced in accordance with, the internal laws of the State of New
York.
8. Reaffirmation. As provided in Section 2.02 of the PSA, by delivery
of this Transfer Agreement the Depositor confirms that the conditions to
transfer set forth in Section 2.02 have been satisfied or otherwise waived as
described therein.
[signatures follow]
A-2
IN WITNESS WHEREOF, the parties hereto have caused this Transfer
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first written above.
NCT FUNDING COMPANY, L.L.C., CIT EQUIPMENT COLLATERAL 2004-VT1
as Depositor
By: THE BANK OF NEW YORK, not in its
individual capacity but solely as
Owner Trustee on behalf of the
Trust
By: By:
----------------------------------- ----------------------------------
Name: Name:
Title: Title:
A-3
SCHEDULE OF CONTRACTS
A-4
Exhibit B
Form of VFC Assignment
B-1
Exhibit C
Initial Schedule of Contracts
On File at SR&Z and CIT
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 2004-VT1, 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 February 1, 2004 (as from time to time amended,
supplemented or otherwise modified, the "PSA"); and
WHEREAS, pursuant to the PSA, the Depositor wishes to effect
conveyances of the Substitute Contracts (together with related Substitute
Transferred Assets), identified on the Substitution Schedule of Contracts
attached hereto, in each case in the manner and to the effect described in
Article II of the PSA; and
WHEREAS, the Servicer has delivered or caused to be delivered a
Substitution Notice with respect to such conveyance as required in the Pooling
Agreement referred to in Section 2 below;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein and in the PSA, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. All terms defined in the PSA (whether directly or by
reference to other documents) shall have such defined meanings when used herein,
unless such terms are otherwise defined herein.
2. Specification of Cut-Off Date. The "Substitution Cut-Off Date"
applicable to the Substitute Contracts conveyed hereby is ____________ ___,
_______.
3. Conveyances. Subject to the terms and conditions provided for in
the PSA, the Depositor hereby makes the assignments and conveyances specified in
Article II of the PSA as being effected by execution and delivery of this
Substitution Transfer Agreement, in each case (i) with respect to the Substitute
Contracts (together with related Substitute Transferred Assets) identified on
the Substitution Schedule of Contracts attached hereto, and (ii) in the manner
and to the effect described in Article II of the PSA.
4. Incorporation of PSA. This Substitution Transfer Agreement is made
pursuant to and upon the representations, warranties and agreements on the part
of the parties hereto contained in the PSA and shall be governed in all respects
by the PSA.
5. Ratification of PSA. As supplemented by this Substitution Transfer
Agreement, the PSA is in all respects ratified and confirmed by the parties
hereto.
E-1
6. Counterparts. This Substitution Transfer Agreement may be executed
in two or more counterparts including by telefax transmission thereof (and by
different parties on separate counterparts), each of which shall be an original,
but all of which together shall constitute one and the same instrument.
7. Governing Law. This Substitution Transfer Agreement shall be
governed by, and construed and enforced in accordance with, the internal laws of
the State of New York.
8. Reaffirmation. As provided in Section 2.04(b) of the PSA, by
delivery of this Substitution Transfer Agreement the Depositor confirms that the
conditions to transfer set forth in Section 2.02 have been satisfied or
otherwise waived as described therein.
[signatures follow]
E-2
IN WITNESS WHEREOF, the parties hereto have caused this Substitution
Transfer Agreement to be executed by their respective officers thereunto duly
authorized as of the date first written above.
NCT FUNDING COMPANY, L.L.C., CIT EQUIPMENT COLLATERAL 2004-VT1
as Depositor
By: THE BANK OF NEW YORK, 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) Contract Files. As of the Closing Date (or as of the Substitution
Transfer Date, with respect to Substitute Contracts), (i) immediately prior to
such date, CFUSA (or the applicable Financing Originator as custodian for CFUSA,
with respect to TCC Contracts) had possession of each original Contract and the
related complete Contract File, and there were no other custodial agreements
relating to the same in effect (other than offsite storage arrangements
described in Section 4.01(b)); (ii) each of such documents which is required to
be signed by the Obligor has been signed by the Obligor in the appropriate
spaces; and (iii) the complete Contract File for each Contract is in the
possession of the Servicer. If the Contract is "tangible chattel paper" as
defined in the UCC, the End User Contract that constitutes or evidences the
Contract does not have any marks or notations indicating that it has been
pledged, assigned or otherwise conveyed to any other Person besides CFUSA (prior
to its conveyance to the Depositor under the Non VFC Purchase Agreement), the
VFC Trust (prior to its conveyance to the Depositor under the VFC Assignment)
and the Depositor.
(d) 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).
(e) 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.
(f) Vendor Agreements. The Receivables Purchase Agreement, dated as of
October 31, 1998, by and between DFS-SPV L.P., a Delaware limited partnership
("DFS-SPV"), and CFUSA, as amended by the Amendment to Receivables Purchase
Agreement, dated as of October 31, 1998, and further amended by the Partial
Waiver of Repurchase Option and Amendment to Receivables Purchase Agreement,
dated as of August 20, 1999, is in full force and effect and has not been
amended since August 20, 1999 except as set forth in that certain Omnibus
Agreement dated as of November 1, 2000. The Purchase Agreement, dated as of
October 31, 1998, by and between Dell Financial Services L.P., a Delaware
limited partnership,
G-1
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 August 20, 1999 except as set forth in
that certain Omnibus Agreement dated as of November 1, 2000. The Financial
Services Agreement, dated as of March 9, 1998, between Lucent Technologies Inc.,
a Delaware corporation, and The CIT Group, Inc., a Delaware corporation (as
assignee of Newcourt Credit Group Inc.), as amended by the Amendment No. 1 to
Financial Services Agreement, dated as of September 30, 1999, is in full force
and effect and has not been amended since September 30, 1999 except that such
agreement was assigned by Lucent Technologies, Inc. to Avaya, Inc. pursuant to a
certain Assignment Agreement, dated as of September 28, 2000. Any Contracts in
which the Vendor is Snap-on Tools were purchased pursuant to the Funding
Agreement (Regarding Lease and Dealer Loan Agreements) between New Creditcorp
SPC, LLC and CIT Financial USA, Inc., dated January 4, 1999 and the Pooling and
Servicing Agreement (Regarding Lease and Dealer Loan Agreements) 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) Intent to Transfer. CFUSA is selling the Contracts, and on each
Substitute Transfer Date is conveying the Substitute Contracts, to the Depositor
with the intention of removing the Contracts, or the Substitute Contracts as the
case may be, from the estate of CFUSA pursuant to the applicable provisions of
the Bankruptcy Code as it may be amended from time to time including, without
limitation, section 541(a)(1) of the Bankruptcy Code (11 U.S.C. 'SS' 'SS' 101 et
seq.), as the same may be amended from time to time.
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
