Exhibit 10.4

EXECUTION COPY

 

 

TAXI MEDALLION LOAN TRUST III

AMENDED AND RESTATED

TRUST AGREEMENT

By and between

MEDALLION FUNDING CORP.,

as Depositor

and

U.S. BANK TRUST, N.A.

as Owner Trustee and in its individual capacity

but only to the limited extent expressly set forth herein

Dated December 12, 2008

 

 

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TABLE OF CONTENTS

 

        

Page

ARTICLE I DEFINITIONS Section 1.01.    Capitalized Terms   1 Section 1.02.   
Other Terms   5 ARTICLE II ORGANIZATION Section 2.01.    Name   5 Section 2.02.
   Office   5 Section 2.03.    Purposes and Powers   5 Section 2.04.   
Management   8 Section 2.05.    Appointment of the Owner Trustee   12 Section
2.06.    Declaration of Trust   13 Section 2.07.    Liabilities of Owners of the
Trust   13 Section 2.08.    Situs of Trust   13 Section 2.09.    Contributions
by Owners   13 ARTICLE III TAX STATUS OR CAPITAL ACCOUNTS AND ALLOCATIONS
Section 3.01.    Tax Status   13 Section 3.02.    Capital Accounts   14 Section
3.03.    Allocation of Net Profits and Net Loss   15 Section 3.04.    Minimum
Gain   15 Section 3.05.    Partner Nonrecourse Deductions   15 Section 3.06.   
Nonrecourse Deductions   15 Section 3.07.    Loss Allocation Limitation   15
Section 3.08.    Federal Taxable Income and Loss   16 Section 3.09.    Qualified
Income Offset   16 Section 3.10.    Curative Allocation   17 Section 3.11.   
Change of Trust Interest   17 ARTICLE IV TRUST CERTIFICATES AND TRANSFER OF
OWNERSHIP INTERESTS Section 4.01.    Initial Issuance of Trust Certificates   17
Section 4.02.    Registration and Transfer of Trust Certificates   17

 

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Section 4.03.    Limitations on Transfer of Trust Certificates   19
Section 4.04.    Lost, Stolen, Mutilated or Destroyed Trust Certificates   19
Section 4.05.    Pledge of Rights to Distributions   20 Section 4.06.   
Section 754 Election   20 ARTICLE V ACTIONS OF THE OWNER TRUSTEE SUBJECT TO
POWER OF THE OWNERS Section 5.01.    Action Upon Instructions   20 Section 5.02.
   Action by Owners with Respect to Certain Matters   22 Section 5.03.   
Majority Consent   22 Section 5.04.    Tax Matters Partner   23 Section 5.05.   
Books and Records; Financial Reports   24 ARTICLE VI INVESTMENT AND APPLICATION
OF TRUST FUNDS Section 6.01.    Investment of Trust Funds   24 Section 6.02.   
Distributions   25 Section 6.03.    Statements   26 Section 6.04.    Method of
Payment   26 Section 6.05.    No Segregation of Moneys; No Interest   26
Section 6.06.    Distributions Upon Termination of Trust   26 ARTICLE VII
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE DEPOSITOR Section 7.01.   
Title to Trust Property   27 Section 7.02.    Binding Effect   27 Section 7.03.
   Trust Certificates   28 Section 7.04.    Investment Company   28
Section 7.05.    Bankruptcy Action   28 Section 7.06.    Taxable as a
Corporation   28 ARTICLE VIII REPRESENTATIONS AND WARRANTIES OF THE BANK
Section 8.01.    Good Standing   28 Section 8.02.    Binding Effect   29

 

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Section 8.03.    Consents and Approvals   29 ARTICLE IX    AUTHORITY AND DUTIES
OF OWNER TRUSTEE   Section 9.01.    General Authority   29 Section 9.02.   
General Duties   30 Section 9.03.    No Duties Except as Specified in this
Agreement or in Instructions   30 Section 9.04.    No Action Except Under
Specified Documents or Instructions   30 ARTICLE X CONCERNING THE OWNER TRUSTEE
Section 10.01.    Acceptance of Trusts and Duties   30 Section 10.02.   
Reliance   31 Section 10.03.    Agents; Advice of Counsel   32 Section 10.04.   
Doing Business   32 Section 10.05.    Not Acting in Individual Capacity   32
Section 10.06.    U.S. Patriot Act   32 ARTICLE XI COMPENSATION OF OWNER TRUSTEE
Section 11.01.    Owner Trustee’s Fees and Expenses   32 Section 11.02.   
Indemnification   33 Section 11.03.    Payments to the Owner Trustee or the Bank
  33 ARTICLE XII TERMINATION OF TRUST AGREEMENT Section 12.01.    Trust
Termination   33 ARTICLE XIII SUCCESSOR OWNER TRUSTEES AND ADDITIONAL TRUSTEES
Section 13.01.    Resignation of Owner Trustee; Appointment of Successor   34
Section 13.02.    Appointment of Additional Trustees   35

 

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ARTICLE XIV MISCELLANEOUS

Section 14.01.

   Amendments and Waivers   37

Section 14.02.

   No Legal Title to Trust Property in Owners   37

Section 14.03.

   Limitations on Rights of Others   37

Section 14.04.

   Notices   37

Section 14.05.

   Counterparts   38

Section 14.06.

   Binding Effect; Assignability   38

Section 14.07.

   Headings   39

Section 14.08.

   Governing Law; Jury Waiver   39

Section 14.09.

   Complete Agreement   39

Section 14.10.

   No Petition   39

Section 14.11.

   No Recourse   40

Section 14.12.

   No Waivers; Remedies   40

Section 14.13.

   Consent to Jurisdiction   40

Exhibits

 

EXHIBITA:    FORM OF TRUST CERTIFICATE EXHIBIT B:    BYLAWS OF THE TRUST
EXHIBIT C    FEE SCHEDULE EXHIBIT D    MANAGER NON-PETITION AGREEMENT EXHIBIT E
   OFFICER NON-PETITION AGREEMENT

 

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AMENDED AND RESTATED TRUST AGREEMENT, dated as of December 12, 2008 (the “Trust
Agreement”), by and between MEDALLION FUNDING CORP., a New York corporation
(“Medallion Funding” or the “Depositor”) and U.S. BANK TRUST, N.A., a national
banking association, in its individual capacity but only to the limited extent
expressly set forth herein and as Owner Trustee of the trust known as TAXI
MEDALLION LOAN TRUST III continued pursuant to Article II hereof (the “Trust”).

A. The Depositor and the Owner Trustee entered into that certain trust agreement
(the “Original Trust Agreement”) dated as of November 13, 2008 and a certificate
of trust was filed with the Office of the Secretary of State of the State of
Delaware for purposes of forming the Trust as a statutory trust under the Act;

B. The Depositor and the Owner Trustee desire to amend and restate in its
entirety the Original Trust Agreement;

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:

ARTICLE I

DEFINITIONS

Section 1.01. Capitalized Terms. Capitalized terms used and not otherwise
defined herein shall have the meanings provided to such terms in the Loan
Agreement. As used in this Agreement and its schedules and exhibits, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

“Act” means the Delaware Statutory Trust Act, 12 Del. C. § 3801, et. seq.

“Agent” means DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Frankfurt am
Main, in its capacity as “agent” under the Loan Agreement and its successors and
assigns.

“Agreement” or “Trust Agreement” means this Amended and Restated Trust
Agreement, as it may be amended, restated, supplemented or otherwise modified
from time to time.

“Bank” means U.S. Bank Trust, N.A., a national banking association, in its
individual capacity and not as Owner Trustee.

“Basic Documents” means the Loan Sale and Contribution Agreement; the Loan
Agreement; the Servicing Agreement, dated as of the date hereof, among the
Trust, Medallion Funding and the Agent; the Custodial Agreement dated as of the
date hereof by and among Wells Fargo Bank, National Association, as Custodian,
the Trust, Medallion Funding and the Agent (the “Custodial Agreement”); the
Collection Account Control Agreement dated as of the date hereof by and among
the Trust, the Agent and Citibank N.A., as Collection Account Bank; the Fee
Letter dated as of the date hereof between the Agent and the Trust; the Shared
Services Agreement dated as of the date hereof between Medallion Funding and the
Trust; the Services

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and Indemnity Agreement dated as of the date hereof among the Trust, Medallion
Financial Corp., Global Securitization Services, LLC, and Kevin P. Burns, as
Independent Manager of the Trust; any bill of sale or other instrument of
conveyance of assets in which the Agent has released all of its right, title and
interest in accordance with the terms of the Loan Agreement; such other sale or
transfer agreements as may be required between the Trust and Medallion Funding
in order to effectuate the orderly disposition of the Trust Property in
connection with the termination of the Loan Agreement and the payment in full of
all outstanding debt of the Trust; and any other “Loan Documents” as defined in
the Loan Agreement.

“Board of Managers” has the meaning ascribed in Section 2.04 hereof.

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banking institutions in the State of Delaware or New York are
authorized or obligated by law to be closed.

“Capital Account” of an Owner has the meaning ascribed in Section 3.02 hereof.

“Code” means the Internal Revenue Code of 1986, as it may be amended from time
to time, any successor statute thereto, and applicable final or temporary
Department of the Treasury regulations issued pursuant thereto.

“Covered Person” has the meaning ascribed in Section 2.4(d)(i) hereof.

“Delaware Code” means the Delaware Code, as amended from time to time.

“Designated Investments” means direct obligations of, or obligations fully and
unconditionally guaranteed as to timely payment of principal and interest by,
the United States or any agency or instrumentality thereof, provided that such
obligations are backed by the full faith and credit of the United States.

“Distribution Date” means (i) the 15th Business Day of each calendar month and
(ii) from and after the occurrence of the Termination Date, each other Business
Day specified by the Agent in a written notice to the Borrower.

“Distribution Date Statement” has the meaning ascribed in Section 6.03 hereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute.

“Fiscal Year” means the taxable year of the Trust for federal income tax
purposes, which shall be each period commencing on January 1 and ending on
December 31, unless the Trust is required to adopt a different taxable year.

“Gross Income” and “Gross Deduction” mean with respect to a Fiscal Year, items
of Trust gross income and gain or gross deduction and loss, respectively, for
such Fiscal Year for federal income tax purposes determined subject to the
adjustments (1), (2) and (3) described in the definition herein of “Net Profits”
and “Net Loss.”

 

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“Independent Manager” means a natural person (a) who, for the five year period
prior to his or her appointment as Independent Manager has not been, and during
the continuation of his or her service as Independent Manager is not: (i) an
employee, director, stockholder, partner or officer of the Trust or any of its
Affiliates (other than his or her service as an Independent Manager of the
Trust); (ii) a customer or supplier of the Trust or any of its Affiliates; or
(iii) any member of the immediate family of a person described in (i) or
(ii) and (b) who (i) has prior experience as an independent director for a
corporation whose charter documents required the unanimous consent of all
independent directors thereof before such corporation could consent to the
institution of bankruptcy or insolvency proceedings against it or could file a
petition seeking relief under any applicable federal or state law relating to
bankruptcy and (ii) has at least three years of employment experience with one
or more entities that provide, in the ordinary course of their respective
businesses, advisory, management or placement services to issuers of
securitization or structured finance instruments, agreements or securities.

“Indemnified Party” has the meaning ascribed in Section 11.02 hereof.

“Loan Agreement” means that certain Loan and Security Agreement dated as of the
date hereof among the Trust, Autobahn Funding Company LLC, as Lender, and the
Agent.

“Loan Sale and Contribution Agreement” means that certain Medallion Loan Sale
and Contribution Agreement, dated as of the date hereof, between Medallion
Funding, as Seller, and the Trust, as purchaser, together with all instruments,
documents and agreements executed in connection therewith, as such Loan Sale and
Contribution Agreement may from time to time be amended, supplemented, restated
or otherwise modified from time to time with the prior written consent for the
Agent.

“Manager” means a member of the Board of Managers.

“Net Profits” and “Net Loss” mean, respectively, for each Fiscal Year, an amount
equal to the Trust’s taxable income or loss, respectively, for federal income
tax purposes for such Fiscal Year (determined without inclusion of Gross Income
or Gross Deductions specially allocated pursuant to Sections 3.04, 3.05, 3.06,
3.08 and 3.09 hereof), determined in accordance with Code Section 703(a) (for
this purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Code Section 703(a)(1) shall be included in taxable
income or loss), with the following adjustments: (1) any income of the Trust
that is exempt from federal income tax and not otherwise taken into account in
computing Net Profits or Net Loss pursuant hereto shall be included in income;
(2) any expenditures of the Trust described in Code Section 705(a)(2)(B) or
treated as Code Section 705(a)(2)(B) expenditures pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in
computing Net Profits or Net Loss pursuant hereto, shall be deducted from
income; and (3) income, gain, loss and deduction of the Trust shall be computed
(i) as if the Trust had purchased any property contributed by an Owner to the
Trust on the date of such contribution at a price equal to its fair market value
at that date, and (ii) as if the Trust had sold any property distributed to an
Owner on the date of such distribution at a price equal to its fair market value
on such date.

“Non-Petition Agreement” means, with respect to any Manager or Officer of the
Trust, an agreement substantially in the form of Exhibit D or Exhibit E hereto,
as applicable.

 

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“Original Trust Agreement” shall have the meaning set forth in the Recitals
hereto.

“Owner” means the owner of a Trust Certificate.

“Owner Trustee” means U.S. Bank Trust, N.A., a national banking association, not
in its individual capacity but solely as owner trustee under this Agreement, and
any successor owner trustee hereunder.

“Ownership Interest” means the beneficial interest in the Trust held by an Owner
and represented by such Owner’s Trust Certificate.

“Ownership Percentage” means for any Owner, the Ownership Interest in the Trust
held by such Owner, expressed as a percentage of the aggregate Ownership
Interest of all Owners.

“Partner Nonrecourse Debt” means a nonrecourse liability of the Trust with
respect to which an Owner bears the economic risk of loss, as determined in
accordance with Treasury Regulations Section 1.704-2(b)(4).

“Partner Nonrecourse Deductions” means any deductions described in Treasury
Regulations Section 1.704-2(i)(2) and (j)(1)(i) that are attributable to Partner
Nonrecourse Debt.

“Person” means any individual, corporation, company, voluntary association,
partnership, joint venture, limited liability company, trust, unincorporated
association, government (or any agency, instrumentality or political subdivision
thereof) or any other entity of whatever nature.

“Securities Act” means the Securities Act of 1933, as amended, or any successor
statute.

“Service” means the Internal Revenue Service.

“Tax Matters Partner” means the Owner designated as such by the Owners pursuant
to Section 5.04 hereof.

“Transfer” means the sale, transfer or assignment of an Owner’s right, title and
interest in all or any portion of its Ownership Percentage in the Trust;
“Transferee,” “Transferor,” and “Transferred” have meanings correlative thereto.

“Treasury Regulations” means the regulations (including any temporary
regulations) issued under the Code by the Department of the Treasury, as they
may be amended from time to time, or any applicable successor regulations. Any
reference herein to any particular section of the Treasury Regulations shall be
deemed to refer to the corresponding provision of any applicable successor
regulations.

“Trust” shall have the meaning set forth in the introductory paragraph to this
Agreement.

“Trust Certificate” means a certificate evidencing the Ownership Interest of an
Owner substantially in the form of Exhibit A hereto.

 

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“Trust Property” means all right, title and interest of the Trust in and to
(i) the Medallion Loans and Related Assets (as defined in the Loan Sale and
Contribution Agreement); (ii) any other property contributed to the Trust by or
upon the order of the Depositor or the Owners from time to time; (iii) any
property acquired by the Trust at the direction of the Board of Managers;
(iv) funds borrowed under the Loan Agreement as provided in the Basic Documents;
and (v) all distributions, payments or proceeds thereon or therefrom, but does
not include any property that has been sold by the Trust both for Federal income
tax purposes and under generally accepted accounting principles.

Section 1.02. Other Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. All terms used in Article 9 of the
Uniform Commercial Code in the State of New York, as in effect on the date
hereof and not specifically defined herein, are used herein as defined in such
Article 9. Unless otherwise expressly indicated, all references herein to
“Article,” “Section,” “Schedule” or “Exhibit” means articles and sections of,
and schedules and exhibits to, this Agreement. Headings are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof. Any reference to any law, rule or regulation shall be
deemed to be a reference to such law, rule or regulation as the same may be
amended or re-enacted from time to time. Any reference to any Person shall
include its successors and permitted assigns. The terms “include” or “including”
mean “include without limitation” or “including without limitation.”

ARTICLE II

ORGANIZATION

Section 2.01. Name. The Trust continued hereby shall be known as “Taxi Medallion
Loan Trust III” in which name the Owner Trustee or any manager or officer of the
Trust may enter into contracts and other documents and conduct the activities
contemplated hereby.

Section 2.02. Office. The office of the Trust shall be in care of the Owner
Trustee, addressed to U.S. Bank Trust, N.A., 300 Delaware Ave., 9th Floor,
Wilmington, Delaware 19801, Attention: Corporate Trust Administration, or at
such other address within or without the State of Delaware as the Owner Trustee
may designate by written notice to the Owners.

Section 2.03. Purposes and Powers.

(a) The purpose of the Trust is to engage solely in the following activities,
subject to any limitations contained in the Basic Documents:

(i) to receive, acquire, own, hold, administer, service and enter into
agreements for the servicing of, finance, manage, sell, assign, pledge, collect
amounts due on, lease, operate and otherwise deal with the Trust Property;

(ii) to authorize, offer, sell, transfer or deliver, or participate in the
authorization, offering, issuance, sale, transfer or delivery of Trust
Certificates evidencing or secured by interests in the Trust Property;

 

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(iii) to borrow money from one or more lenders and to pledge, assign or
otherwise convey as collateral and security therefore all or any part of the
Trust Property, including without limitation the borrowing and pledging
contemplated under the Loan Agreement and the Custodial Agreement as provided in
the Basic Documents.

(iv) to negotiate, authorize, execute, deliver and perform, or accept by
assignment, any agreement or instrument or document relating to the activities
set forth in paragraphs (i), (ii) and (iii) above, including, but not limited
to, the Basic Documents, and any trust agreement, sale and servicing agreement,
pooling and servicing agreement, indenture, reimbursement agreement, credit
support agreement, purchase agreement, indemnification agreement, placement
agreement, certificate purchase agreement or underwriting agreement and related
agreements, documents and certificates (including uniform commercial code
financing statements); and

(v) to do such other things and carry on any other activities which the Board of
Managers determines to be necessary, convenient or incidental to any of the
foregoing purposes, and have and exercise all of the power and rights conferred
upon statutory trusts formed pursuant to the Act in furtherance of the
foregoing.

(b) Notwithstanding any provision of this Agreement, the Trust shall be subject
to the following restrictions:

(i) other than as contemplated by the Basic Documents and related documentation,
the Trust shall not incur, create or assume any indebtedness;

(ii) the Trust shall not engage in any dissolution, liquidation, consolidation,
merger or, other than as permitted by the Basic Documents and related
documentation, sale of assets;

(iii) the Trust shall not engage in any business activity not permitted
hereunder or in which it is not currently engaged other than as contemplated by
the Basic Documents and related documentation; and

(iv) the Trust shall not form, or cause to be formed, any subsidiaries and shall
not own or acquire any asset other than as contemplated by the Basic Documents
and related documentation.

(c) In furtherance of the foregoing limitations, the Trust shall:

(i) maintain the Trust’s books and records separate from any other Person or
entity;

(ii) maintain the Trust’s bank accounts separate from any other Person or
entity;

(iii) not commingle the Trust’s assets with those of any other person or entity
and maintain its assets and liabilities in such a manner that it is not costly
or difficult to segregate, ascertain or identify such assets and liabilities
from those of any other Person or entity;

 

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(iv) conduct the Trust’s affairs in the name of the Trust;

(v) other than as contemplated by the Basic Documents and related documentation,
pay the Trust’s liabilities and expenses only out of the Trust’s funds as the
same become due and payable;

(vi) observe all formalities required under the Act;

(vii) enter into transactions with Affiliates or the Depositor only if each such
transaction is intrinsically fair, commercially reasonable, and on the same
terms as would be available in an arm’s length transaction with a person or
entity that is not an Affiliate;

(viii) not guarantee or become obligated for the debts of any other Person;

(ix) not hold out the Trust’s credit as being available to satisfy the
obligation of any other person or entity;

(x) not acquire the obligations or securities of the Trust’s Affiliates, Owners
or the Depositor;

(xi) other than as contemplated by the Basic Documents and related
documentation, not make loans to any other person or entity or buy or hold
evidence of indebtedness issued by any other Person or entity;

(xii) other than as contemplated by the Basic Documents and related
documentation, not pledge the Trust’s assets for the benefit of any other Person
or make any loan or advance to any other Person;

(xiii) hold the Trust out as a separate entity (except that the Trust may elect
to be a disregarded entity for tax purposes) and conduct any business only in
its own name;

(xiv) correct any known misunderstanding regarding the Trust’s separate
identity;

(xv) not identify the Trust as a division of any other person or entity;

(xvi) maintain appropriate minutes or other records of appropriate actions and
shall maintain its office separate from the offices of the Depositor, although
it may lease space from the Depositor or any other Affiliate provided that it
shall allocate fairly and reasonably any overhead for shared office space;

(xvii) maintain separate financial statements showing the assets and liabilities
of the Trust separate and apart from those of any other person (except that the
Trust also may be included in consolidated financial statements if such
consolidated financial statements contain a note stating that the Trust is a
separate entity);

 

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(xviii) pay the salaries of its own employees, if any, and maintain a sufficient
number of employees in light of its contemplated business operations;

(xix) use its own stationary, invoices and checks; and

(xx) maintain adequate capital in light of its contemplated business operations.

Section 2.04. Management.

(a) Bylaws. The management of the Trust shall be governed by the Bylaws of the
Trust (the “Bylaws”), a copy of which is attached hereto as Exhibit B.

(b) Board of Managers.

(i) General. The management of the Trust shall be vested in a Board of Managers
(the “Board of Managers”). The total number of members of the Board of Managers
shall initially be five, and hereafter shall be such number as shall be fixed
from time to time by a written instrument signed by at least two-thirds of the
number of Managers; provided, however, that the number of Managers shall in no
event be less than three nor more than twelve. The following shall be the
initial Managers of the Trust until their successors are elected and qualified:

Alvin Murstein

Andrew M. Murstein

Michael J. Kowalsky

Brian O’Leary and

Kevin P. Burns (Independent Manager)

(ii) Independent Manager. At all times, one of the members of the Board of
Managers shall be an Independent Manager. The Owners shall cause the Board of
Managers at all times to have at least one Independent Manager who, except as
aforesaid, will be elected by the Owners pursuant to Article IV, Section 3 of
the Bylaws. To the fullest extent permitted by the Act, the Independent Manager
shall consider only the interests of the Trust, including its respective
creditors, in acting or otherwise voting on the matters involving the Trust.
Notwithstanding anything to the contrary contained herein, no resignation or
removal of an Independent Manager, and no election of a successor Independent
Manager, shall be effective until the successor Independent Manager shall have
accepted his or her election by a written instrument. All right, power and
authority of the Independent Manager shall be limited to the extent necessary to
exercise those rights and perform those duties specifically set forth in the
certificate of trust or this Agreement. No Independent Manager shall at any time
serve as trustee or examiner in the bankruptcy case for any Affiliate of the
Trust.

 

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(iii) Term. Each Manager shall hold office during the continued term of the
Trust until she or he dies, resigns, is declared bankrupt or incompetent by a
court of appropriate jurisdiction, or is removed, or if sooner, until the next
meeting of Owners called for the purpose of electing Managers and until the
election and qualification of her or his successor. In the event that less than
the majority of the Managers holding office have been elected by the Owners, the
Managers then in office shall call an Owners’ meeting for the election of
Managers. The Managers named in Section 2.04(b)(i) hereof shall be deemed to
have been elected by the Owners. Any Manager may resign at any time by written
instrument signed by her or him and delivered to any Officer of the Trust or to
the secretary of any meeting of the Managers. Such resignation shall be
effective upon receipt unless specified to be effective at some other time.
Except to the extent expressly provided in a written agreement with the Trust,
no Manager resigning and no Manager removed shall have any right to any
compensation for any period following her or his resignation or removal, or any
right to damages on account of such removal. The Owners may elect Managers at
any meeting of Owners called by the Managers for that purpose. Any Manager may
be removed at any meeting of Owners by a majority vote of the Owners. Any
Manager may be removed with or without cause at any time by written instrument
signed by at least two-thirds of the number of Managers prior to such removal,
specifying the date when such removal shall become effective.

(iv) Powers. Subject to the limitations set forth in this Agreement, the Owners
hereby grant the Board of Managers and the Officers (as defined herein) the
exclusive authority to act on behalf of the Owners and the Trust in implementing
the following activities: (1) acquiring, owning, holding, and otherwise engaging
in transactions with respect to the Trust Property (including borrowings secured
by Trust Property) with a view toward the maximization of the value of and
disposition of such Trust Property; (2) making such representations and
warranties on behalf of the Trust regarding the Trust Property and entering into
such agreements on behalf of the Trust as are customary for transactions of the
type set forth in clause (1); and (3) performing such activities on behalf of
the Trust that are necessary, suitable or convenient to accomplish the foregoing
or are incidental thereto or connected therewith or that may be required in
connection with the conservation of the assets and distributions to the Owners;
all on such terms and conditions as the Board of Managers deems desirable, and
evidenced by such instruments, agreements, powers of attorney, or other
documents as the Board of Managers may approve, as conclusively evidenced by the
execution thereof; provided, however, that the Managers and Officers may not
take any action(s) or instruct the Owner Trustee to take any action(s) that
would cause the Trust (x) to become subject to registration as a broker or
dealer under Section 15(a) of the Exchange Act, (y) to become subject to
compliance with Section 15(c)(3) of the Exchange Act or (z) to become a “taxable
mortgage pool” within the meaning of Code Section 7701(i). In connection
therewith, the Managers shall not (1) hold the Trust out as being willing to buy
and sell securities on a regular basis; (2) provide market quotes with respect
to securities; (3) furnish advice to third parties regarding the purchase, sale
or value of securities; (4) extend or arrange for the extension of credit in
connection with the purchase by others of securities; (5) maintain a dealer
inventory of securities; or (6) attempt to obtain customers.

 

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(v) Actions and Meetings. Any meeting of the Board of Managers or action taken
by the Board of Managers shall be conducted in accordance with the Bylaws.
Unless otherwise provided by this Agreement or the Bylaws, any action required
or permitted to be taken at any meeting of the Board of Managers or of any
committee thereof may be taken without a meeting by unanimous written consent of
the Managers or committee members (or by written consent of a majority of the
Managers if the President of the Trust determines that such exceptional
circumstances exist, and are of such urgency, as to make unanimous written
consent impossible or impractical, which determination shall be conclusive and
binding on all Managers and not otherwise subject to challenge) and the writing
or writings are filed with the minutes of proceedings of the Board of Managers
or committee.

Except as otherwise provided in this Agreement or the Bylaws, all powers to
control and manage the business and affairs of the Trust shall be exclusively
vested in the Board of Managers and the Board of Managers may exercise all
powers of the Trust and do all such lawful acts as are not by statute, the Trust
Certificate or this Agreement directed or required to be exercised or done by
the Owners and in so doing, except as provided otherwise in this Agreement,
shall have the right and authority to take all actions which the Board of
Managers deems necessary, useful or appropriate for the management and conduct
of the business of the Trust.

(c) Officers. Except for the appointment of the initial officers set forth
below, the Trust shall have officers who are appointed by the Board of Managers.
The officers of the Trust shall consist of a President, one or more Vice
Presidents, a Secretary and a Treasurer (the “Officers”). The initial Officers
of the Trust shall be:

 

President:    Andrew M. Murstein Vice President:    Alvin Murstein Treasurer:   
Larry D. Hall Secretary:    Michael J. Kowalsky Vice President:    Brian S.
O’Leary Assistant Treasurer:    Michael J. Kowalsky Assistant Secretary:   
Marie Russo

The powers and duties of each Officer shall be as follows:

(i) The President. The President shall have, subject to the supervision,
direction and control of the Board of Managers, the general powers and duties of
supervision, direction and management of the affairs and business of the Trust
usually vested in the president of a corporation, including, without limitation,
all powers necessary to direct and control the organizational and reporting
relationships within the Trust. The President or any other officer authorized by
the President or the Board of Managers shall execute all contracts or agreements
of the Trust.

 

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(ii) The Vice Presidents. Each Vice President shall have such powers and perform
such duties as may from time to time be assigned to him or her by the Board of
Managers or the President.

(iii) The Secretary. The Secretary shall attend meetings of the Board of
Managers and meetings of the Owners and record all votes and minutes of all such
proceedings in a book kept for such purpose. He or she shall have all such
further powers and duties as generally are incident to the position of a
secretary of a corporation or as may from time to time be assigned to him or her
by the Board of Managers or the President.

(iv) The Treasurer. The Treasurer shall have custody of the Trust’s funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Trust and shall deposit or cause to be
deposited moneys or other valuable effects in the name and to the credit of the
Trust in such depositories as may be designated by the Board of Managers. The
Treasurer shall also maintain adequate records of all assets, liabilities, and
transactions of the Trust and shall see that adequate audits thereof are
currently and regularly made. The Treasurer shall have such other powers and
perform such other duties that generally are incident to the position of a
treasurer of a corporation or as may from time to time be assigned to him or her
by the Board of Managers or the President. The Treasurer shall also have such
powers and perform such other duties as expressly set forth in this Agreement.

(d) Indemnification of the Managers and Officers; Advance Payment of
Indemnifiable Expenses.

(i) The Trust shall indemnify, save harmless, and pay all judgments and claims
against any Manager or Officer relating to any liability or damage incurred by
reason of any act performed or omitted to be performed by any Manager or
Officer, in their capacity as such, in connection with the business of the Trust
(“Covered Person”), including reasonable attorneys’ fees incurred by the Manager
or Officer in connection with the defense of any action based on any such act or
omission, which attorneys’ fees may be paid as incurred. Unless otherwise
provided in the Bylaws or herein, in the event of any action by any Owner
against any Manager or Officer, in their capacity as such, including a
derivative suit, the Trust shall indemnify, save harmless, and pay all expenses
of such Manager or Officer, including reasonable attorneys’ fees incurred in the
defense of such action. Notwithstanding the provisions of the Bylaws or any
provision herein, this Section shall be enforced only to the maximum extent
permitted by law and no Manager or Officer shall be indemnified from any
liability for the fraud, intentional misconduct, gross negligence or a knowing
violation of the law which was material to the cause of action. Each Officer and
each Manager shall upon appointment to such position execute and deliver to the
Trust a Non-Petition Agreement.

(ii) To the maximum extent permitted by the Delaware Act and other applicable
law, the Trust may advance to a Covered Person, in connection with the
preparation and presentation of a defense to any claim, action, suit, or
proceeding, expenses for which the Covered Person would ultimately be entitled
to indemnification;

 

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provided that the Trust has received an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust if it is
ultimately determined that he is not entitled to indemnification for such
expenses, and further provided that (i) such Covered Person shall have provided
appropriate security for such undertaking, (ii) the Trust is insured against
losses arising out of any such advance payments, or (iii) either a majority of
the Managers who are not interested persons of the Trust nor parties to the
matter, or independent legal counsel in a written opinion shall have determined,
based upon a review of readily available facts (as opposed to a full trial-type
inquiry) that there is reason to believe that such Covered Person will not be
disqualified from indemnification for such expenses.

(iii) Notwithstanding anything to the contrary herein or any other documents
governing the formation, management or operation of the Trust to the contrary,
any indemnification shall be fully subordinated to any obligations respecting
the Secured Obligations and shall not constitute a claim against the Trust in
the event that the cash flow of the Trust after payment of all obligations in
accordance with the Loan Agreement is insufficient to pay such obligations.

(e) Rights and Powers of the Owner. The Owner shall not have any right or power
to take part in the management or control of the Trust or its business and
affairs or to act for or bind the Trust in any way. Notwithstanding the
foregoing, the Owner has all the rights and powers specifically set forth in
this Agreement and, to the extent not inconsistent with this Agreement, in the
Act. The Owner has no voting rights except with respect to those matters
specifically set forth in this Agreement and, to the extent not inconsistent
herewith, as required in the Act.

(f) Owner Trustee. The Owner Trustee shall be a trustee under the Act for the
sole and limited purpose of satisfying Section 3807 thereof and shall otherwise
have no right, power or duties in respect of the management of the Trust except
as expressly set forth herein.

(g) Bankruptcy or Similar Proceedings. Notwithstanding any other provision of
this Agreement, for so long as any debt of the Trust remains outstanding, no
action may be taken by the Trust (whether by the Board of Managers, or
otherwise) in connection with any of the following matters:

(i) any Bankruptcy Action;

(ii) the merger of the Trust with any other entity;

(iii) the sale of all or substantially all of the Trust’s assets (other than by
foreclosure on any Trust Property pledged for any authorized borrowing by the
Trust); or the amendment of this Agreement; or

(iv) the termination, revocation, dissolution or liquidation, in whole or in
part, of the Trust.

Section 2.05. Appointment of the Owner Trustee. The Depositor hereby confirms
the appointment under the Original Trust Agreement of the Bank as trustee of the
Trust to have

 

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all the rights, powers and duties set forth herein and in the Act. The Bank
confirms the receipt on the date of the Original Trust Agreement in trust from
the Depositor of $10, constituting the initial Trust Property.

Section 2.06. Declaration of Trust. The Owner Trustee hereby declares that it
will continue to hold the Trust Property in trust upon and subject to the
conditions set forth herein for the use and benefit of the Owners. To the
fullest extent permitted by law, no creditor of the Owner Trustee, in its
individual capacity, shall have any right to obtain possession of, or otherwise
exercise legal or equitable remedies with respect to, the property of the Trust,
except in accordance with the terms of this Trust Agreement.

Section 2.07. Liabilities of Owners of the Trust. The liabilities and
obligations of the Trust shall be limited to the Trust Property; provided,
however, that the Owners shall be jointly and severally liable for all
liabilities and obligations of the Trust to the Owner Trustee and that such
liabilities and obligations shall not be limited to Trust Property and/or to the
amount of distributions each Owner has received in respect of its Trust
Certificate; provided further, however, that in any event an Owner shall be
liable only for obligations of the Trust arising during the period of time in
which such Owner was registered as an Owner in accordance with Section 4.02
hereof. The Owners shall have rights of contribution from each other with
respect to such liabilities and obligations for which the Owners are jointly and
severally liable, in proportion to their respective Ownership Percentages at the
time the liabilities or obligations with respect to which contribution is sought
arose. Such rights of contribution shall survive termination of this Agreement.

Section 2.08. Situs of Trust. It is the intention of the parties hereto that the
Trust constitute a statutory trust under the Act and that this Agreement
constitute the governing instrument of the Trust. The Owner Trustee hereby
confirms having filed on even date with the entering into of the Original Trust
Agreement a certificate of trust relating to the Trust with the Office of the
Secretary of State of the State of Delaware. The Trust’s principal office shall
be 437 Madison Avenue, New York, New York 10022, and any Manager or Officer may
perform his or her duties in or outside of the State of Delaware.

Section 2.09. Contributions by Owners. On even date with the entering into of
the Original Trust Agreement, the Depositor made a contribution to the Trust
consisting of $10.

ARTICLE III

TAX STATUS OR CAPITAL ACCOUNTS AND ALLOCATIONS

Section 3.01. Tax Status. For so long as there is only one Owner (holding 100%
of the Trust Certificates representing the entire beneficial interest of the
Trust), then (i) the Trust shall be disregarded as a separate entity pursuant to
Treasury Regulations Section 301.7701-2I(2), (ii) the Trust shall not have a
separate tax identification number, but rather the tax identification number of
the Owner or a parent of the Owner shall be used with respect to its assets or
transactions, (iii) all items of gross income, deduction, loss or credit for a
Fiscal Year, or applicable portion thereof, shall be allocated to such Owner and
(iv) Sections 3.02 through 3.11, 4.06 and 5.04 hereof shall have no operative
effect.

 

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However, in the event that there is more than one Owner, then (i) the Trust
shall be treated and taxed as a partnership and the Owners treated as partners
in such partnership, for federal, state and local tax purposes (and each Owner
and the Owner Trustee will act strictly in accordance therewith), (ii) the Trust
shall apply for a separate tax identification number and (iii) any Net Profit or
Net Loss for a Fiscal Year or any applicable portion thereof shall be determined
and allocated to the Owners according to Sections 3.02 through 3.11 hereof.

Section 3.02. Capital Accounts. A separate capital account shall be established
and maintained for each Owner (each, a “Capital Account”). The Capital Account
of each Owner: (a) shall be credited with (i) the amount of cash and the agreed
upon fair market value of any property contributed by such Owner to the Trust
(net of liabilities secured by such contributed property that the Trust is
considered to assume or take subject to under Section 752 of the Code),
(ii) such Owner’s allocable share of any Net Profits and Gross Income, and
(iii) such Owner’s share of other items required to be credited thereto under
Treasury Regulations Section 1.704-1(b)(2)(iv); and (b) shall be debited with
(i) the amount of cash and the fair market value of any property distributed to
such Owner (net of liabilities secured by such distributed property that such
Owner is considered to assume or take subject to Section 752 of the Code) under
Section 6.02, (ii) such Owner’s allocable share of any Net Loss, and items of
Gross Deduction, and (iii) such Owner’s share of other items required to be
debited thereto under Treasury Regulations Section 1.704-1(b)(2)(iv). Any
adjustments to the tax basis of Trust Property under Code Sections 732, 734 or
743 will be reflected as adjustments to the Capital Accounts of the Owner only
in the manner and to the extent provided in Treasury Regulations
Section 1.704-1(b)(2)(iv)(m). If any property of the Trust is to be distributed
in kind, such property shall be distributed on the basis of its fair market
value after the Owners’ Capital Accounts have been adjusted to reflect the
manner in which any unrealized gain and loss with respect to such property (that
has not been reflected in the Capital Accounts previously) would be allocated
among the Owners if there were a taxable disposition of the property for its
fair market value in the manner provided in Treasury Regulations
Section 1.704-1(b)(2)(iv)(e).

In the event of (x) an additional capital contribution by an existing or an
additional Owner of more than a de minimis amount which results in a shift in
Ownership Percentages, (y) the distribution by the Trust to an Owner of more
than a de minimis amount of property or cash as consideration for an interest in
the Trust, or (z) the liquidation of the Trust within the meaning of Treasury
Regulations Section 1.704 1(b)(2)(ii)(g), the book basis of the Trust Property
shall be adjusted to fair market value and the Capital Accounts of all the
Owners shall be adjusted simultaneously to reflect the aggregate net adjustment
to book basis as if the Trust recognized gain and loss equal to the amount of
such aggregate net adjustment; provided, however, that adjustments resulting
from clauses (x) and (y) above shall be made only if and to the extent that the
Board of Managers so agree and shall have reasonably determined that such
adjustments are necessary or appropriate to reflect the relative economic
interests of the Owners.

In the event that Trust Property is subject to Section 704 of the Code or is
revalued on the books of the Trust in accordance with the preceding paragraph
pursuant to Section 1.704-1(b)(2)(iv)(f) of the Treasury Regulations, the
Owners’ Capital Accounts shall be adjusted in accordance with
Section 1.704-1(b)(2)(iv)(g) of the Treasury Regulations for allocations to the
Owners of depreciation, amortization and gain or loss, as computed for book
purposes (and not tax purposes) with respect to such property.

 

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These provisions and other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury Regulations
Section 1.704-1(b), and shall be interpreted and applied in a manner consistent
with such section of the Treasury Regulations. The Transferee of all or a
portion of an Owner’s Ownership Interest in the Trust shall succeed to that
portion of the Owner’s Capital Account which is allocable to the portion of the
Ownership Interest Transferred.

Section 3.03. Allocation of Net Profits and Net Loss. Subject to Sections 3.04,
3.05, 3.06, 3.07, 3.08, 3.09 and 3.10 hereof, Net Profits and Net Loss for a
Fiscal Year shall be determined and allocated to the Owners as follows:

(a) Net Profits. Net Profits for a Fiscal Year shall be allocated among the
Owners in proportion to their respective Ownership Percentages.

(b) Net Loss. Net Loss for a Fiscal Year shall be allocated among the Owners in
proportion to their respective Ownership Percentages.

Section 3.04. Minimum Gain. Notwithstanding anything to the contrary in this
Article III, if during any Fiscal Year of the Trust there is a net decrease in
Trust minimum gain (as such term is defined by Treasury Regulations
Sections 1.704-2(b)(2) and (d) with respect to partnership minimum gain), then
each Owner shall be allocated Gross Income for such Fiscal Year (and, if
necessary, for subsequent Fiscal Years) in the manner provided in Treasury
Regulations Sections 1.704-2(f) and (j). Likewise, if there is a net decrease
during any Fiscal Year in the minimum gain attributable to a Partner Nonrecourse
Debt (as determined under Treasury Regulations Section 1.704-2(i)(3) with
respect to partner nonrecourse debt), then any Owner with a share of the minimum
gain attributable to such debt at the beginning of such Fiscal Year shall be
allocated items of Gross Income for such Fiscal Year (and, if necessary, for
subsequent Fiscal Years) in the manner provided in Treasury Regulations
Section 1.704-2(i)(4). This Section 3.04 is intended to comply with, and shall
be interpreted to be consistent with, the minimum gain chargeback requirements
of Treasury Regulations Section 1.704-2.

Section 3.05. Partner Nonrecourse Deductions. Gross Deductions which are Partner
Nonrecourse Deductions for any Fiscal Year of the Trust shall be allocated to
the Owner that bears the economic risk of loss with respect to the loan to which
such Partner Nonrecourse Deductions are attributable in accordance with Treasury
Regulations Section 1.704-2(i).

Section 3.06. Nonrecourse Deductions. Nonrecourse deductions for a Fiscal Year
(as defined in Treasury Regulations Sections 1.704-2I and (j)(ii)) shall be
allocated among the Owners in proportion to their respective Ownership
Percentages.

Section 3.07. Loss Allocation Limitation. Notwithstanding any other provision in
this Article III, unless otherwise agreed to by such Owner, no Owner shall be
allocated Net Losses or Gross Deductions in any taxable year which would cause
or increase a Capital Account deficit (determined with the adjustments set forth
in the last sentence of Section 3.09 hereof) for such Owner as of the end of
such taxable year and any such Net Losses and Gross Deductions shall instead be
specially allocated to the other Owners in proportion to their respective
Ownership Percentages to the extent such allocation does not cause or increase
such a

 

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deficit for such Owner. All Net Losses and Gross Deductions in excess of the
limitation set forth in the preceding sentence shall be allocated to the Owners
in proportion to their Ownership Percentages. If any Net Losses or Gross
Deductions are specially allocated pursuant to the first sentence of this
Section 3.07, future allocations of Net Profits in the amount of such Net Losses
and Gross Deductions otherwise allocable in accordance with Section 3.03(a)
hereof shall be allocated to the Owners to whom such Net Losses and Gross
Deductions were specially allocated, as provided in Section 3.10 hereof.

Section 3.08. Federal Taxable Income and Loss.

(a) Allocation of Taxable Income. Except as otherwise provided in paragraph (b)
of this Section 3.08, taxable income, gain, loss or deduction of the Trust (as
well as any credits and the basis of property to which such credits apply) as
determined for federal income tax purposes shall be allocated in the same manner
as the corresponding income, gain, loss or deduction is allocated for purposes
of adjusting Capital Accounts under this Article III.

(b) Section 704(c) Allocation. Any item of income, gain, loss and deduction for
federal income tax purposes with respect to any Trust property that has been
contributed by an Owner to the capital of the Trust and which is required to be
allocated for federal income tax purposes under Section 704(c) of the Code so as
to take into account the variation between the adjusted tax basis of such
property and its agreed upon fair market value at the time of its contribution
shall be allocated to the Owners solely for federal income tax purposes in the
manner so required. In the event of the occurrence of any event described in
clause (x), (y) or (z) of the second paragraph of Section 3.02 hereof,
subsequent allocations of income, gain, loss and deduction with respect to such
property shall take account of any variation between the adjusted basis of such
property to the Trust for federal income tax purposes and its fair market value
immediately after the adjustment in the same manner as under Section 704(c) of
the Code and the Treasury Regulations thereunder. Any elections or other
decisions relating to such allocations shall be made by the Board of Managers in
a manner that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section 3.08(b) are solely for income tax purposes
and shall not affect, or in any way be taken into account in computing, for book
purposes, any Owner’s Capital Account pursuant to any provision of this
Agreement.

Section 3.09. Qualified Income Offset. In the event that at any time any Owner
receives any adjustments, allocations, or distributions described in Treasury
Regulations Sections 1.704-1(b)(2)(ii)(d)(5) or (6) that create or increase a
deficit balance in its Capital Account, then the next allocation of Gross Income
that would otherwise have been allocated to the other Owners shall be specially
allocated to such Owner in an amount and in a manner sufficient to eliminate the
deficit balance in such Capital Account created by such adjustments,
allocations, or distributions as quickly as possible. Solely for purposes of
this Section 3.09 (and Section 3.07), in determining whether an Owner has a
deficit Capital Account at any time, such Owner’s Capital Account shall be
(x) increased by that amount that such Owner is treated as being obligated to
restore pursuant to the next to last sentences of Treasury Regulations
Sections 1.704-2(g)(1) and (i)(5) (determined after taking into account
thereunder any changes during such Fiscal Year in any Trust minimum gain and in
minimum gain attributable to any Partner Nonrecourse Debt, as described in
Section 3.04 hereof) and (y) decreased by the items described in Treasury
Regulations Sections 1.704 1(b)(2)(ii) (d), (5) and (6).

 

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Section 3.10. Curative Allocation. Any special allocations pursuant to
Sections 3.07 and 3.09 hereof shall be taken into account in computing
subsequent allocations pursuant to Article III, so that to the extent it is in
accordance with the rules of the Treasury Regulations under Section 704(b), the
net adjustment to the Capital Account of each Owner from allocations of Net
Profits, Net Losses, Gross Income and Gross Deductions allocated to each Owner
pursuant to Article III shall be equal to the net adjustment to such Capital
Account from the allocations of Net Profits and Gross Income and Gross
Deductions that would have been allocated to each Owner pursuant to the
provisions of Article III if the adjustments, allocations, or distributions and
the resulting special allocations pursuant to such Sections had not occurred.

Section 3.11. Change of Trust Interest. Subject to Section 706 of the Code and
to any applicable Treasury Regulations, Net Profits, Gross Income, Net Loss,
Gross Deductions and items of income, gain, loss, deduction and credit for
federal income tax purposes for a Fiscal Year that are attributable to any
Ownership Interest that is Transferred or assigned during such Fiscal Year shall
be allocated between (i) the portion of the Fiscal Year during which the
Ownership Interest in the Trust was held by the Transferor and (ii) the portion
of the Fiscal Year during which the Ownership Interest was held by the
Transferee on the basis of an interim closing of the books method or any other
method chosen by the Board of Managers and permitted under Section 706 of the
Code.

ARTICLE IV

TRUST CERTIFICATES AND TRANSFER OF OWNERSHIP INTERESTS

Section 4.01. Initial Issuance of Trust Certificates. The Trust Certificates
shall be issued substantially in the form set forth in Exhibit A, in minimum
denominations of a one percent interest in the Trust. The Trust Certificates
shall be executed on behalf of the Trust by the Owner Trustee by manual or
facsimile signature of an authorized officer of the Owner Trustee. Trust
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Owner Trustee, shall be validly issued and entitled to the benefit
of this Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the authentication and delivery of such
Trust Certificates or did not hold such offices at the date of authentication
and delivery of such Trust Certificates. The Owner Trustee is hereby authorized
and directed to issue and deliver on behalf of the Trust to Medallion Funding, a
Trust Certificate registered in the name of “Medallion Funding Corp.” evidencing
a 100% Ownership Percentage.

Section 4.02. Registration and Transfer of Trust Certificates.

(a) The Owner Trustee shall maintain at its office referred to in Section 2.02
hereof, or at the office of any agent appointed by it and approved in writing by
the Owners at the time of such appointment, a register showing a record of the
initial issuance of Trust Certificates, a record of each Transfer of Trust
Certificates including the time and date thereof, the names of the Owners of the
Trust Certificates and their respective Ownership Percentages. Prior to due
presentment for registration of Transfer of any Trust Certificate, the Owner
Trustee may treat the person in whose name any Trust Certificate is registered
as the owner of such Trust Certificate

 

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for the purpose of receiving payments on such Trust Certificate pursuant to
Sections 6.02 and 6.06 hereof and for all other purposes whatsoever, whether or
not the Owner Trustee shall have notice to the contrary. (For purposes of this
Agreement, due presentment of a Trust Certificate requires presentation of all
documents and instruments required by this Agreement as a condition to the
registration of the Transfer of the Ownership Percentage evidenced by such Trust
Certificate.)

No service charge shall be made to an Owner for any registration of Transfer of
a Trust Certificate, but the Owner Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of Transfer of a Trust Certificate and any
reasonable expenses of the Owner Trustee (including reasonable fees and expenses
of counsel).

(b) Subject to the provisions of Section 4.03 hereof, the Owner of any Trust
Certificate may Transfer all or any portion of the Ownership Percentage
evidenced by such Trust Certificate upon the surrender of such Trust Certificate
to the Owner Trustee or its agent accompanied by the written consent required
pursuant to Section 4.03 hereof. Promptly upon the receipt of such documents,
(i) the Owner Trustee shall cancel any Trust Certificate surrendered for
Transfer; (ii) if applicable, the Owner Trustee shall issue to the Transferor a
new Trust Certificate representing an Ownership Percentage equal to the
Ownership Percentage retained by the Transferor and dated the date of such
Transfer; (iii) the Owner Trustee shall issue to each Transferee a new Trust
Certificate representing an Ownership Percentage equal to the Ownership
Percentage that was Transferred to such Transferee and dated the date of such
Transfer; and (iv) the Owner Trustee shall register the new Trust Certificates
in the name of the Transferor (if applicable) and each Transferee and record
their respective Ownership Percentages existing after the Transfer in accordance
with Section 4.02(a) hereof. Other than as provided in this paragraph (b), an
Owner shall not have the right to surrender its Trust Certificate in exchange
for two or more Trust Certificates evidencing lesser Ownership Interests.

(c) Upon Transfer of all of an Owner’s Ownership Interest, the Transferor shall
be released from all of the duties, liabilities and obligations of an Owner
under this Agreement arising from and after the time of such Transfer; provided,
however, that the Transferor shall remain obligated with respect to all duties,
liabilities and obligations under this Agreement arising during the period
commencing on the date such Owner became registered as an Owner in accordance
with this Section 4.02 and terminating at the time such Transfer becomes
effective in accordance with this Section 4.02, and the Transferee shall assume
in writing all duties, liabilities and obligations of an Owner under this
Agreement arising from and after the time of such Transfer (subject to any
subsequent Transfers by it in accordance with the terms and conditions hereof).

(d) Upon reasonable notice, each Owner shall have the right to inspect the
register of Trust Certificates during business hours of the Owner Trustee for
the purpose, among other things, of communicating with the other Owners.

 

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Section 4.03. Limitations on Transfer of Trust Certificates.

(a) An Owner may Transfer all or a portion of its Ownership Interest only upon
the approval of the Board of Managers or pursuant to an agreement approved by
the Board of Managers and, in either case, only in conformity with the Loan
Agreement as long as any Secured Obligations remain unpaid under the Basic
Documents.

(b) No Transfer of a Trust Certificate will be made, and the Owner Trustee shall
not be obligated to register any Transfer of a Trust Certificate, unless such
Transfer is made pursuant to an effective registration statement under the
Securities Act and in compliance with each applicable state securities laws or
is exempt from the registration requirements of the Securities Act and such
laws. Each Owner, by purchasing or otherwise acquiring ownership of a Trust
Certificate, is deemed to have acknowledged and agreed that such Transfer
complies with the registration provisions or exemptions from the Securities Act,
applicable state securities laws or the Investment Company Act of 1940, as
amended. By its ownership of a Trust Certificate, and unless otherwise provided
pursuant to an opinion of counsel to the Trust concluding that adverse
consequences under the federal securities laws would not result, each Owner will
be deemed to have represented that it is an institutional Accredited Investor
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
and a Qualified Purchaser within the meaning of Section 2(a)(51) of the
Investment Company Act of 1940, as amended. The Owner Trustee shall not be
responsible for ascertaining whether any Transfer complies with this Agreement,
the registration provisions or exemptions from the Securities Act, applicable
state securities laws or the Investment Company Act of 1940, as amended.

(c) Each Owner by purchase of a Trust Certificate is deemed hereby to have
acknowledged and agreed that such Owner is not an employee benefit plan (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”)) which is subject to the provisions of Title I of ERISA, a
plan (as defined in Section 4975(e)(1) of the Code, other than a governmental or
church plan described in Section 4975(g)(2) or (3) of the Code) which is subject
to Section 4975 of the Code, a no governmental plan subject to any federal,
state or local law, which is, to a material respect, similar to the foregoing
provisions of Title I of ERISA or Section 4975 of the Code (a “Similar Law”),
(each of the foregoing plans a “Plan”) or an entity whose underlying assets
include “plan assets” by reason of a Plan’s investment in the entity. Each
prospective purchaser of a Trust Certificate or any interest therein, by
purchasing a Trust Certificate or any interest therein, represents that it is
not a Plan or an entity whose underlying assets include “plan assets” by reason
of a Plan’s investment in the entity.

The Owner Trustee shall not be required to register any Transfer of a Trust
Certificate within ten Business Days preceding any Distribution Date.

Section 4.04. Lost, Stolen, Mutilated or Destroyed Trust Certificates. If
(i) any mutilated Trust Certificate is surrendered to the Owner Trustee, or
(ii) the Owner Trustee receives evidence to its satisfaction that any Trust
Certificate has been destroyed, lost or stolen, and upon proof of ownership
satisfactory to the Owner Trustee together with such security or indemnity as
may be requested by the Owner Trustee to hold it harmless, the Owner Trustee
shall execute and deliver a new Trust Certificate representing the same
Ownership Percentage as the Trust Certificate so mutilated, destroyed, lost or
stolen, bearing a different certificate number, with such notations, if any, as
the Owner Trustee shall determine.

 

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Any duplicate Trust Certificate issued pursuant to this Section 4.04 shall
constitute complete and indefeasible evidence of ownership of such Trust
Certificate, as if originally issued, whether or not the lost, stolen or
destroyed Trust Certificate shall be found at any time.

Section 4.05. Pledge of Rights to Distributions. Subject to Section 4.03 hereof,
an Owner may pledge, encumber or hypothecate all or any part of its Trust
Certificate and its rights to receive distributions hereunder. Any such pledge,
encumbrance or hypothecation shall not constitute a Transfer of an Ownership
Interest in the Trust. Unless the foreclosure of any such pledge, encumbrance or
hypothecation meets the requirements of Section 4.03 hereof and is registered in
accordance with Section 4.02 hereof, such foreclosure shall not constitute a
Transfer of an Ownership Interest in the Trust and the holder of the related
Trust Certificate following such foreclosure shall not be entitled to any rights
as an Owner under this Agreement, other than the right to receive distributions
under this Agreement as contemplated by the first sentence of this Section.

Section 4.06. Section 754 Election. In the event a Transfer of a Trust
Certificate occurs which satisfies the provisions of Section 743 of the Code,
the Trust shall, if requested to do so by the Transferee, and the Board of
Managers deem doing so advisable, elect, pursuant to Section 754 of the Code, to
adjust the basis of the Trust Property to the extent allowed by such Section 743
and shall cause such adjustments to be made and maintained. Any additional
accounting expenses incurred by the Trust in connection with making or
maintaining such basis adjustment shall be reimbursed to the Trust by the
Transferee of such Trust Certificate who benefits from the making and
maintenance of such basis adjustment.

ARTICLE V

ACTIONS OF THE OWNER TRUSTEE

SUBJECT TO POWER OF THE OWNERS

Section 5.01. Action Upon Instructions.

(a) Subject to the terms of this Agreement and in accordance with the terms of
the Basic Documents, the Board of Managers may by written instruction direct the
Owner Trustee in the discharge of its limited duties specifically set forth
herein or in the Act. Such direction may be exercised at any time by written
instruction given by an Officer pursuant to this Article V. Notwithstanding any
instruction to the contrary by the Owners or the Board of Managers, in no event
shall the Owner Trustee take any action which would have the effect of
discharging the security interest created under the Loan Agreement with respect
to the Collateral as defined therein, except such action taken in accordance
with the Loan Agreement.

(b) The Owner Trustee shall take such action or actions as may be specified in
any written direction delivered in accordance with Section 5.01(a) hereof;
provided, however, that the Owner Trustee shall not be required to take any such
action if the Bank or Owner Trustee shall have reasonably determined, or shall
have been advised by counsel, that such action (A) is

 

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contrary to the terms hereof or of any document contemplated hereby to which the
Owner Trustee is a party or is otherwise contrary to law or (B) is likely to
result in liability on the part of the Bank or Owner Trustee, unless the Owners
shall have provided to the Bank indemnification or security reasonably
satisfactory to the Bank or Owner Trustee against all costs, expenses and
liabilities arising from the Owner Trustee’s taking such action.

(c) Subject to Section 7.05, the Trust is not intended to be a business trust
within the meaning of Section 109(9)(A)(v) of the Bankruptcy Code. None of the
Owner Trustee, the Board of Managers, the Officers, the Depositor or the Owners
shall have the power to (i) commence any case, proceeding or other action on
behalf of the Trust under any existing or future law of any jurisdiction
relating to bankruptcy, insolvency, reorganization or relief of debtors,
(ii) institute proceedings to have the Trust declared or adjudicated a bankrupt
or insolvent, (iii) consent to the institution of bankruptcy or insolvency
proceedings against the Trust, (iv) file a petition or consent to a petition
seeking reorganization or relief on behalf of the Trust under any applicable
federal or state law relating to bankruptcy, (v) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or any similar official)
of the Trust or a substantial portion of the assets of the Trust, (vi) make any
assignment for the benefit of the Trust’s creditors, (vii) cause the Trust to
admit in writing its inability to pay its debts generally as they become due, or
(viii) take any action, or cause the Trust to take any action, in furtherance of
any of the foregoing (each a “Bankruptcy Action”); provided, however, if the
foregoing limitation is finally determined by a court of competent jurisdiction
not to be enforceable under the Bankruptcy Code or applicable state law, then
the Owner Trustee shall not be authorized to take the actions specified in the
preceding clauses (i) through (viii), or any of them, unless the Owner Trustee
receives, at the sole expense of the Owners, (A) the unanimous written consent
thereto of the Board of Managers (including the Independent Manager), who shall
be required at such time to certify to the Owner Trustee that the Trust is then
“insolvent” within the meaning of Section 101(32) of the Bankruptcy Code,
(B) the written confirmation by independent accountants to the Trust as to the
“sum of the Trust’s debts”, (C) the written confirmation by an outside valuation
expert, having reasonable expertise in the valuation of assets, as to the value
of “all of the Trust’s property, at a fair valuation” and (D) a written opinion
by outside counsel to the Trust, having reasonable expertise in practice under
the Bankruptcy Code, as to the validity of any exclusions from such valuation
that are asserted to be applicable pursuant to said Section 101(32) and stating
that the conditions precedent set forth in clauses (A) through (C) above have
been satisfied. The Owner Trustee shall be fully protected in relying upon the
documents referred to in the preceding clauses (A) through (D) and shall have no
duty to verify or investigate the conclusions stated therein.

(d) Action by Owners with Respect to Bankruptcy. Subject to Section 7.05, the
Trust, the Board of Managers and the Owner Trustee shall not have the power to
commence a voluntary Bankruptcy Action relating to the Trust unless the
conditions specified in Section 5.01(c) are satisfied and the Trust is
“insolvent” within the meaning of Section 101(32) of the Bankruptcy Code and the
Owner Trustee, the Board of Managers (including the Independent Manager) and
each Owner unanimously vote in favor of such action. The Owner Trustee, by
entering into this Agreement, hereby covenants and agrees that it will not at
any time institute against the Trust, or join in any institution against the
Trust of, any Bankruptcy Action until the date that is one year and one day
after the later of the date upon which all Secured Obligations of the Trust
under the Loan Agreement have been satisfied.

 

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(e) Restrictions on Owners’ Power. No Owner, Manager or Officer shall direct the
Owner Trustee to take or refrain from taking any action if such action or
inaction would be contrary to any obligation of the Trust or the Owner Trustee
under this Agreement or any of the Basic Documents or would be contrary to
Section 2.03 nor shall the Owner Trustee be obligated to follow any such
direction, if given.

(f) In the event that the Owner Trustee is unsure as to the application of any
provision of this Agreement that specifically calls for the Owner Trustee to
take any action, or such provision is ambiguous as to its application, or is, or
appears to be, in conflict with any other applicable provision, or this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action which the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Board of Managers, requesting instructions as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with written instructions received from the Board of Managers through an
Officer, the Owner Trustee shall not be liable on account of such action to any
Person. If the Owner Trustee shall not have received appropriate instructions
within fifteen days of such notice (or within such shorter period of time as
reasonably may be specified in such notice) it may, but shall be under no duty
to, take or refrain from taking such action, not inconsistent with this
Agreement, as it shall deem to be in the best interests of the Owners, and shall
have no liability to any Person for such action or inaction. Upon reasonable
request of any Owner, the Owner Trustee shall communicate with the other Owners,
if any, concerning any instructions or actions sought by such Owner pursuant to
this Section 5.01.

(g) The Owner Trustee shall, subject to this Section 5.01 and Section 10.01
hereof, and solely in connection with the limited duties that are specifically
set forth herein as duties of the Owner Trustee, act in accordance with the
written instructions given to it by the Board of Managers through an Officer,
and to the extent the Owner Trustee acts in good faith in accordance with such
instructions, the Owner Trustee shall not be liable on account of such action to
any Person.

Section 5.02. Action by Owners with Respect to Certain Matters. In the event
that there is more than one Owner and any adverse determination is made by the
Service or by any court with respect to the classification of the Trust as a
partnership for federal income tax purposes, the Tax Matters Partner shall, by
written notice to the Board of Managers, describe the circumstances and seek
instructions as to the course of action to be followed. The Tax Matters Partner
shall contest such adverse determination if so instructed by the Board of
Managers and, to the extent the Tax Matters Partner acts in accordance with such
instructions, the Tax Matters Partner shall not be liable on account of such
action to any Person. If the Board of Managers instructs the Tax Matters Partner
to contest any such adverse determination, the costs thereof shall be borne by
all Owners, in proportion to their respective Ownership Percentages. If the
Board of Managers decides not to contest any such adverse determination, but an
Owner, acting in its individual capacity, instructs the Tax Matters Partner to
contest any such adverse determination, all costs thereof shall be borne by such
Owner personally.

Section 5.03. Majority Consent. Except where a different percentage or amount is
specified herein, any action which requires the consent of, or permits the
direction by, the Owners under this Agreement, must be approved or directed by a
majority of the ownership percentage of the Owners.

 

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Section 5.04. Tax Matters Partner. The Tax Matters Partner (as defined in
Section 6231 of the Code) of the Trust shall be Medallion Funding or such other
Person as the Board of Managers shall appoint, and notice of any such
appointment shall be given in writing to the Owner Trustee and the Board of
Managers. Each Owner shall give prompt notice to the other Owners upon receipt
of advice that the Service intends to examine or audit any income tax returns of
the Trust. The Tax Matters Partner shall promptly notify the Board of Managers
of the commencement of any administrative or judicial or similar proceedings
involving the tax treatment of items of Trust income, loss, deductions and
credits, and shall further keep the Board of Managers fully informed of all
material developments involved in such proceedings.

Nothing in this Section 5.04 shall limit the ability of the Owners to take any
action in their individual capacity relating to tax audit matters that are left
to the determination of an individual Owner under Sections 6222-6232 of the
Code.

The Tax Matters Partner, at the expense of the Trust, shall cause to be prepared
by a preparer approved by the Board of Managers all Federal, state and local
income tax returns and other returns or statements required of the Trust by
applicable law and upon the approval of such returns or statements by the Board
of Managers, the Tax Matters Partner shall timely file such returns or
statements. The Tax Matters Partner shall not have any liability for acts of any
agent in connection with such returns and statements. The Trust shall, in
accordance with applicable federal or state laws or regulations, claim all
deductions and make such elections for Federal or state income tax purposes
which the Board of Managers reasonably believes will produce the most favorable
tax results for the Owners. In addition, the Tax Matters Partner shall be
responsible for the maintenance of Capital Accounts under Section 3.02.

The Tax Matters Partner shall (i) cause to be prepared and delivered to each
Owner such financial statements of the Trust, and other reports or information,
as are necessary to enable each Owner to prepare such Owner’s state and federal
income tax returns, (ii) until such time as the Tax Matters Partner has received
the written unanimous consent of the Board of Managers concerning any change in
the tax classification of the Trust, file or cause to be filed tax returns as a
partnership for federal, state and local income tax purposes, and (iii) cause to
be mailed to an Owner copies of any or all of such tax returns of the Trust when
requested to do so by such Owner.

The Tax Matters Partner shall not be required to take any action or incur any
expenses for the prosecution of any administrative or judicial remedies in its
capacity as Tax Matters Partner unless the Tax Matters Partner is satisfied that
the Trust will bear any and all such expenses. As long as the Tax Matters
Partner is not grossly negligent or does not act in bad faith, or if the Tax
Matters Partner acts pursuant to instructions of or approved by the Board of
Managers, the Trust shall indemnify and hold harmless the Tax Matters Partner
from and against any and all liabilities incurred by the Tax Matters Partner in
connection with any activities or undertakings taken by it in its capacity as
Tax Matters Partner. Any Owner that enters into a settlement or closing
agreement with the Service or state or local tax authority in respect of any
Trust item shall notify the Tax Matters Partner of such agreement and its terms
within ten days of the execution of such agreement.

 

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With respect to the making of distributions and other tax and accounting
matters, the Owner Trustee shall be entitled to rely upon, and shall have no
liability for relying upon, the instructions of or information supplied by the
Tax Matters Partner without any obligation to verify the information in such
instructions.

Section 5.05. Books and Records; Financial Reports.

(a) At all times during the existence of the Trust, the Treasurer shall
maintain, or cause to be maintained, full and true books of account, which shall
reflect all Trust transactions and be appropriate and adequate for the Trust’s
business. Such books of account shall be maintained at the principal place of
business of the Treasurer.

(b) The Treasurer shall be entitled to full reimbursement for all reasonable
costs and expenses, including, but not limited to, out-of-pocket expenses
associated with maintenance of the books of account of the Trust. The amount of
costs and expenses to be reimbursed pursuant to the preceding sentence shall be
estimated each year by the Treasurer and communicated by the Treasurer to the
Board of Managers prior to the incurrence of such costs and expenses. So long as
the Treasurer is not grossly negligent or does not act in bad faith, or if the
Treasurer acts pursuant to instructions of the Board of Managers, the Trust
shall indemnify and hold harmless the Treasurer from and against any and all
liabilities incurred by the Treasurer in connection with any activities or
undertakings taken by it in its capacity as Treasurer.

(c) The Treasurer shall deliver to Board of Managers, by the fifteenth day of
the month immediately succeeding the month being reported upon, a balance sheet
as of the end of each month and related financial statements for the month then
ended, all of which shall be prepared in accordance with such accounting
principles as the Treasurer shall determine are appropriately reflective of the
transactions contemplated by this Agreement. If the Board of Managers so
determines, the balance sheet as of the end of the Fiscal Year and related
financial statements for the year then ended, shall be examined and reported
upon, with an opinion expressed by, an independent public accountant engaged by
the Trust and approved by the Board of Managers. The Treasurer shall not have
any liability for acts of the independent public accountant appointed in
accordance herewith in connection with such examination and report.

ARTICLE VI

INVESTMENT AND APPLICATION OF TRUST FUNDS

Section 6.01. Investment of Trust Funds. Unless otherwise directed in writing by
the Board of Managers, proceeds of the Trust Property received by the Trust more
than one day prior to a Distribution Date may be invested by the Treasurer at
the written direction of the Board of Managers in investments purchased through
and held by the Trust as instructed by the Board of Managers, maturing not later
than such Distribution Date. In the event that the Treasurer does not receive
such direction by the close of business on the day preceding the day on which
such proceeds are received by the Treasurer, the Treasurer may invest such
proceeds in Designated Investments purchased through and held by the Trust as
instructed by the Board of Managers, maturing not later than the next succeeding
Distribution Date.

 

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Section 6.02. Distributions.

(a) Any portion of the Trust Property shall, subject to the terms and provisions
of the Basic Documents, be distributed by the Treasurer as follows:

(i) first, on each Distribution Date to pay reasonable and necessary operating
expenses of the Trust, including the payment of any amounts owing to the Owner
Trustee under this Agreement; and

(ii) second, in such amounts, from time to time, as shall be determined by the
Board of Managers on each Distribution Date or any other date selected by the
Board of Managers, to the Owners based on their respective Ownership Percentages
as reflected in the register maintained by the Owner Trustee pursuant to
Section 4.02 hereof as of the close of business on the Business Day immediately
preceding the Distribution Date or such other date; provided, however, if the
Board of Managers through an Officer has instructed the Treasurer to retain such
funds, then the retained funds shall thereafter be applied according to the
further written instructions of the Board of Managers. The Bank shall not be
liable for any amounts payable pursuant to this Section 6.02 and, except as
specifically provided in Section 6.05 hereof and the third sentence of
Section 10.01 hereof, is not subject to any liability under this Agreement.

(b) In the event that any withholding tax is imposed on the Trust’s payment (or
allocations of income) to an Owner, such tax shall reduce the amount otherwise
distributable to the Owner in accordance with this Section 6.02. The Treasurer
is hereby authorized and directed to retain from amounts otherwise distributable
to the Owners sufficient funds for the payment of any tax that is legally owed
by the Trust (but such authorization shall not prevent the Treasurer, at the
direction of the Board of Managers, or the Tax Matters Partner from contesting
any such tax in appropriate proceedings, and shall not prevent the Treasurer
from withholding payment of such tax, if permitted by law, pending the outcome
of such proceedings). The amount of any withholding tax imposed with respect to
an Owner shall be treated as cash distributed to such Owner at the time it is
withheld by the Trust and remitted to the appropriate taxing authority. If there
is a possibility that withholding tax is payable with respect to a distribution
(such as a distribution to a non-U.S. Owner), the Treasurer may in its sole
discretion withhold such amounts in accordance with this paragraph (b). In the
event that an Owner wishes to apply for a refund of any such withholding tax,
the Treasurer shall reasonably cooperate with such Owner in making such claim so
long as such Owner agrees to reimburse the Treasurer for any out-of-pocket
expenses incurred. In the event that the Treasurer or the Trust is liable for
any failure to withhold in respect of a distribution to an Owner, then such
Owner shall indemnify the Treasurer or the Trust for any amount (including
penalties and interest) paid by the Treasurer or the Trust in respect of such
liability.

(c) Any Owner which is organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date such Owner becomes an Owner, (i) so
notify the Treasurer and (ii) either (A) provide the Treasurer with Internal
Revenue Service Form 1001, 4224 or W-8, as appropriate, or (B) notify the
Treasurer that it is not entitled to an exemption from United States withholding
tax or a reduction in the rate thereof on payments of interest.

 

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Section 6.03. Statements.

(a) Distribution Date Statements. With each distribution to an Owner pursuant to
Section 6.02 hereof, Treasurer shall deliver a statement to an Officer (a
“Distribution Date Statement”) setting forth, for the period since the preceding
Distribution Date (or since the execution and delivery of this Agreement in the
case of the first Distribution Date):

(i) the amounts received by the Trust with respect to the Trust Property;

(ii) the amount of fees and expenses paid to the Owner Trustee since the
preceding Distribution Date; and

(iii) the amounts paid to Owners.

(b) Officer Reports. An Officer shall deliver copies of all remittance reports
to the Owners and, if requested by an Owner, shall provide analysis and
consolidation of such reports in such form as such Owner may request.

Section 6.04. Method of Payment. All amounts payable to an Owner pursuant to
this Agreement shall be paid by the Treasurer to such Owner, as the Owner elects
(and so instructs the Treasurer) from time to time, by check payable to such
Owner in next day funds, mailed first class to the address of such Owner
appearing on the register maintained pursuant to Section 4.02(a) hereof, or by
credit in immediately available funds to an account maintained by such Owner
with the Treasurer or by wire transfer in immediately available funds to a
banking institution with bank wire transfer facilities for the account of such
Owner. The Treasurer may require an Owner to pay any wire transfer fees incurred
in connection with any wire transfer made to such Owner and may collect such
fees by deducting them from the amount so transferred.

Section 6.05. No Segregation of Moneys; No Interest. Moneys received by the
Treasurer hereunder need not be segregated in any manner except to the extent
required by law or as otherwise provided herein and may be deposited under such
general conditions as may be prescribed by law, and neither the Owner Trustee
nor the Bank shall be liable for any interest thereon (unless such funds are
invested in interest-bearing investments of the Bank).

Section 6.06. Distributions Upon Termination of Trust. Upon the dissolution,
winding up and termination of the Trust, the Trust Property or the cash proceeds
therefrom shall be distributed by the Treasurer in the following order of
priority:

(a) First, to creditors, including the Agent and Owner Trustee, to the extent
otherwise permitted by law, in satisfaction of liabilities of the Trust (whether
by payment or by making of reasonable provision for payment) in accordance with
the Basic Documents other than liabilities for distributions to Owners on
account of their respective interests in the Trust, and in the setting up of
such reserves as the Board of Managers may reasonably deem necessary or
appropriate for any contingent, conditional or unmatured liabilities or
obligations of the Trust, and when all such liabilities are satisfied, the
balance of such reserves, if any, shall be distributed as hereinafter provided;

 

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(b) Second, to any Owners who are creditors; and

(c) Third, to the Owners in accordance with and to the extent of their
respective Capital Account balances after taking into account the allocation of
all Net Profits, Net Loss, Gross Income and Gross Deduction pursuant to this
Agreement for the Fiscal Year in which the Trust is terminated; provided,
however, that if at the time of termination there shall be one Owner, then any
amount remaining after Section 6.06(a) shall be distributed to such Owner.

(d) If, after giving effect to the allocations of Net Profits, Net Loss, Gross
Income, Gross Deduction or credit under Article III and all contributions and
distributions for all taxable years, any Owner shall have a deficit balance in
such Owner’s Capital Account, such Owner shall have no obligation to restore
such deficit balance, or to make any contribution to the capital of the Trust by
reason thereof, and such deficit balance shall under no circumstances be
considered a liability owed to the Trust.

ARTICLE VII

REPRESENTATIONS, WARRANTIES

AND COVENANTS OF THE DEPOSITOR

Section 7.01. Title to Trust Property.

(a) The Depositor hereby represents and warrants to the Owner Trustee on behalf
of the Trust that upon the transfer of the Trust Property conveyed by such
Depositor to the Trust, such Depositor will have conveyed to the Trust good
title to such Trust Property, free and clear of any lien, encumbrance or defect
created by and relating to the Depositor, except as may be disclosed in the Loan
Sale and Contribution Agreement.

(b) Subject to the Loan Agreement and the Custodial Agreement, legal title to
all the Trust Property shall be vested at all times in the Trust as a separate
legal entity except where applicable law in any jurisdiction requires title to
any part of the Trust Property to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee and/or a separate
trustee, as the case may be.

(c) The Owners shall not have legal title to any part of the Trust Property. No
transfer by operation of law or otherwise of any interest of the Owners shall
operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of any part of the Trust
Property.

Section 7.02. Binding Effect. The Depositor hereby represents and warrants to
the Owner Trustee and the Bank that (i) the Depositor is a company organized
under the laws of the State of New York, validly existing and in good standing
under the laws of the State of New York, (ii) this Agreement has been duly and
validly authorized, executed and delivered by, and constitutes a valid and
legally binding agreement of, such Depositor and is enforceable in accordance
with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization

 

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and other laws of general applicability relating to or affecting creditors’
rights and to general equity principles and (iii) the consummation of the
transactions contemplated by this Agreement and the fulfillment of the terms
hereof do not (a) conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or both) a
default under, the limited liability company agreement of the Depositor, or any
indenture, agreement or other instrument to which the Depositor is a party or by
which it is bound, (b) result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement or
other instrument or (c) violate any law or, to the best of the Depositor’s
knowledge, any order, rule or regulation applicable to the Depositor of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or its
properties resulting in a Material Adverse Effect on the Depositor; and
(iv) there are no proceedings or investigations pending or, to the Depositor’s
best knowledge, threatened before any court, regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Depositor or its properties (a) asserting the invalidity of this Agreement.

Section 7.03. Trust Certificates. The Depositor hereby represents and warrants
to the Owner Trustee that such Depositor is acquiring its Trust Certificate
under this Agreement for its own account as principal and not with a view to the
distribution thereof in whole or in part.

Section 7.04. Investment Company. The Depositor hereby represents and warrants
to the Owner Trustee that the Trust will not be an “investment company” within
the meaning of the Investment Company Act of 1940, as amended.

Section 7.05. Bankruptcy Action. Each of the Depositor, the Board of Managers,
the Owners and the Owner Trustee hereby covenants that for so long as any
Secured Obligations remain outstanding and the lien of the Loan Agreement has
not been released, it shall not instruct or authorize the Trust to take any
Bankruptcy Action with respect to the Trust or to take any action that might
cause the Trust to become insolvent.

Section 7.06. Taxable as a Corporation. Each of the Depositor, the Board of
Managers, the Owners, an Officer and the Owner Trustee hereby covenants that for
so long as any Secured Obligations remain outstanding and the lien of the Loan
Agreement has not been released, it shall not take any action that would result
in the Trust becoming taxable as a corporation for federal income tax purposes.
In no event will the Trust elect to be treated as an association taxable as a
corporation.

ARTICLE VIII

REPRESENTATIONS AND WARRANTIES OF THE BANK

Section 8.01. Good Standing. The Bank represents and warrants to the Depositor,
for the benefit of the Owners, that the Bank is a national banking association
organized under the National Bank Act, as amended (12 U.S.C. § 21 et. seq.),
validly existing and in good standing under the laws of all jurisdictions in
which it conducts business and has all powers and all material governmental
licenses, authorizations, consents and approvals required under the National
Bank Act and the laws of the jurisdictions in which it conducts its business, to
carry on its trust business as now conducted.

 

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Section 8.02. Binding Effect. The Bank represents and warrants to the Depositor,
for the benefit of the Owners, that the execution, delivery and performance by
the Bank of this Agreement and the issuance of the Trust Certificates by the
Owner Trustee on behalf of the Trust pursuant to this Agreement are within the
power of the Bank and have been duly authorized by all necessary action on the
part of the Bank (no action by its shareholders being required), and this
Agreement constitutes the valid and legally binding agreement of the Bank,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors’ rights and to general equity principles; and
such actions do not and will not (i) violate or contravene any judgment,
injunction, order or decree binding on the Bank, (ii) violate, contravene or
constitute a default under any provision of the articles of association or
by-laws of the Bank or of any material agreement or instrument binding on the
Bank, or (iii) result in the creation or imposition of any lien attributable to
the Bank on the Trust Property except as contemplated by this Agreement.

Section 8.03. Consents and Approvals. The Bank represents and warrants to the
Depositor, for the benefit of the Owners, that no consent, approval,
authorization, or order of, or filing with, any court or regulatory, supervisory
or governmental agency or body is required under Delaware law or federal law
governing the banking and trust powers of the Bank in connection with the
execution, delivery and performance by the Bank, in its individual capacity, of
this Agreement other than the filing of the certificate of trust under the Act,
which was previously filed on even date with the entering into of the Original
Trust Agreement.

ARTICLE IX

AUTHORITY AND DUTIES OF OWNER TRUSTEE

Section 9.01. General Authority.

(a) The Owner Trustee is authorized to take all actions required to be taken by
it pursuant to the terms of this Agreement. The Owner Trustee is further
authorized to take such further actions as are permitted but not required under
this Agreement as the Owners or the Board of Managers may direct in writing
pursuant to Article V hereof.

(b) The Owner Trustee is authorized and directed to execute and deliver and is
authorized to perform on behalf of the Trust such agreements to which the Trust
is a party as shall be specified in writing by the Board of Managers through an
Officer; provided, however, the Owner Trustee shall not be responsible or liable
for monitoring or ensuring the compliance of the Trust with its obligations,
representations, warranties or agreements under the foregoing documents. In
connection with the execution and delivery of such specified documents, the
Owner Trustee is authorized to grant, upon the written request of the Board of
Managers through an Officer, a power of attorney to one or more individuals
designated by the Board of Managers for such purpose.

 

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Section 9.02. General Duties. Subject to Section 5.01 hereof, it shall be the
duty of the Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement, strictly in accordance
with the provisions of this Agreement.

Section 9.03. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any liability, duty or obligation
to manage, inspect, insure, make any payment with respect to, register, record,
sell, dispose of, create, maintain or perfect title or a security interest in,
or otherwise deal with the Trust Property, prepare, file or record any document
or to otherwise take or refrain from taking any action under, or in connection
with, any document contemplated hereby to which the Trust is a party, except as
expressly provided by the terms of this Agreement or in any written instruction
received by the Owner Trustee pursuant to Article V hereof; and no implied
powers, duties or obligations shall be read into this Agreement against the
Owner Trustee. The Bank nevertheless agrees that it will, at its own cost and
expense, promptly take all such action as may be necessary to discharge any
liens on any part of the Trust Property which result from actions by, or claims
against, the Bank that are not related to the ownership of the Trust Property or
the transactions contemplated hereby.

Section 9.04. No Action Except Under Specified Documents or Instructions. The
Owner Trustee shall not manage, control, use, sell, dispose of or otherwise deal
with any part of the Trust Property except (i) in accordance with the powers
granted to and the authority conferred upon the Owner Trustee pursuant to this
Agreement, and (ii) in accordance with the express terms hereof or with any
written instruction delivered to the Owner Trustee pursuant to Article V hereof.

ARTICLE X

CONCERNING THE OWNER TRUSTEE

Section 10.01. Acceptance of Trusts and Duties. The Owner Trustee accepts the
trust hereby created and continued and agrees to perform its duties hereunder
with respect to the same but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Trust Property upon written direction of the Board of Managers. The
Bank shall not be answerable or accountable under any circumstances, except
(i) for its own willful misconduct or gross negligence, (ii) in the case of the
inaccuracy of any representation or warranty contained in Article VIII hereof
expressly made by the Bank, (iii) for liabilities arising from the failure by
the Bank to perform obligations expressly undertaken by it pursuant to the last
sentence of Section 9.03 hereof, or (iv) for taxes, fees or other charges based
on or measured by any fees, commissions or compensation received by the Owner
Trustee in connection with any of the transactions contemplated by this
Agreement. In particular, but not by way of limitation:

(a) The Bank shall not be liable for any judgment made in good faith by a
responsible officer of the Owner Trustee;

(b) The Bank shall not be liable with respect to any action taken or omitted to
be taken by the Owner Trustee in good faith in accordance with the written
instructions of the Owners, the Board of Managers or Officers rendered pursuant
to this Agreement;

 

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(c) No provision of this Agreement shall require the Bank to expend or risk
funds or otherwise incur any financial liability in the performance of any of
its or the Owner Trustee’s rights or powers hereunder, if the Bank shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or provided
to it;

(d) The Bank shall not be responsible for or in respect of the sufficiency of
this Agreement or for the due execution hereof by the Depositor or for the form,
character, genuineness, sufficiency, value or validity of any Trust Property,
and the Bank shall in no event assume or incur any liability, duty or obligation
to the Depositor or to any Owner, other than as expressly provided for herein;
and

(e) The Bank shall not be liable for any representation, warranty, debt,
agreement or other obligation of the Trust.

(f) The Owner Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Agreement, or to institute, conduct or defend any
litigation under this Agreement or otherwise or in relation to this Agreement,
at the request, order or direction of the Depositor, any Owner, the Board of
Managers or any Officer, unless the Owner Trustee has been offered security or
indemnity reasonably satisfactory to it against the cost, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement shall not be construed as a duty, and the Owner Trustee shall not be
personally liable or accountable for the performance of any such act except as
specifically provided in this Article X.

(g) The Owner Trustee shall incur no liability if, by reason of any provision of
any present or future law or regulation thereunder, or by any force majeure
event, including but not limited to natural disaster, war (declared or
undeclared) or other circumstances beyond its reasonable control, the Owner
Trustee shall be prevented or forbidden from doing or performing any act or
thing which the terms of this Agreement provide shall or may be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Agreement.

Section 10.02. Reliance. The Owner Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper reasonably
believed by it to be genuine and reasonably believed by it to be signed by the
proper party or parties. The Owner Trustee may accept a certified copy of a
resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
manner of ascertainment of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president and by the treasurer or an assistant treasurer
or the secretary or an assistant secretary of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.

 

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Section 10.03. Agents; Advice of Counsel. In the exercise of its duties
hereunder, the Owner Trustee (i) may act directly or, at the reasonable expense
of the Trust, through agents or attorneys pursuant to agreements entered into
with any of them, and the Owner Trustee shall not be liable for the default or
misconduct of such agents or attorneys if such agents or attorneys shall have
been selected by the Owner Trustee with reasonable care; and (ii) may, at the
reasonable expense of the Trust, consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it, and the
Owner Trustee shall not be liable for anything done, suffered or omitted in good
faith by it in accordance with the advice or opinion of any such counsel,
accountants or other skilled persons.

Section 10.04. Doing Business. Notwithstanding anything contained herein to the
contrary, neither the Bank nor the Owner Trustee shall be required to take any
action in any jurisdiction other than in the State of Delaware if the taking of
such action will (i) require the consent or approval or authorization or order
of or the giving of notice to, or the registration with or taking of any action
in respect of, any state or other governmental authority or agency of any
jurisdiction other than the State of Delaware; (ii) result in any fee, tax or
other governmental charge under the laws of any jurisdiction or any political
subdivisions thereof in existence as of the date hereof other than the State of
Delaware becoming payable by the Bank; or (iii) subject the Bank to personal
jurisdiction in any jurisdiction other than the State of Delaware for causes of
action arising from acts unrelated to the consummation of the transactions by
the Bank or the Owner Trustee, as the case may be, contemplated hereby.

Section 10.05. Not Acting in Individual Capacity. Except as provided in this
Article X, in accepting the trust hereby created the Bank acts solely as Owner
Trustee hereunder and not in its individual capacity and all Persons having any
claim against the Owner Trustee by reason of the transactions contemplated by
this Agreement shall look only to the Trust for payment or satisfaction thereof.

Section 10.06. U.S. Patriot Act. In order to comply with the laws, rules,
regulations and executive orders in effect from time to time applicable to
banking institutions, including those relating to the funding of terrorist
activities and money laundering (collectively, “Applicable Regulations”), the
Owner Trustee is required to obtain, verify and record certain information
relating to individuals and entities which maintain a business relationship with
the Owner Trustee. Accordingly, each of the parties agrees to provide to the
Owner Trustee, upon its request from time to time, such identifying information
and documentation as may be necessary in order to enable the Owner Trustee to
comply with such Applicable Regulations. It is expressly agreed that the Owner
Trustee shall have no duty to perform any services hereunder for, on behalf of
or for the benefit of, any party not having furnished such information as the
Owner Trustee, in its sole discretion, determines to be necessary to comply with
the Applicable Regulations.

ARTICLE XI

COMPENSATION OF OWNER TRUSTEE

Section 11.01. Owner Trustee’s Fees and Expenses. The Owner Trustee shall
receive as compensation for its services hereunder the fees set forth on the Fee
Schedule attached

 

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hereto as Exhibit C, and the Owner Trustee shall be entitled to be reimbursed
for its reasonable expenses hereunder, including, without limitation, the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and duties hereunder.
Such fees shall be paid by the Owners or in accordance with Section 6.02(a)
hereof.

Section 11.02. Indemnification.

(a) The Owners shall indemnify, protect, save and hold the Owner Trustee its
officers, directors, shareholders and employees (each, an “Indemnified Person”)
harmless against, any and all loss, liability, obligation, damage, claim,
penalty, tax (excluding any taxes on the Owner Trustee on, or measured by, any
compensation received by the Owner Trustee) or expense of any kind or nature
whatsoever arising out of or in connection with the creation, acceptance,
operation or administration of this Trust, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its rights, powers or duties hereunder (each of the
foregoing, a “Claim”); provided, however, the Owner shall not be required to
indemnify, protect, save and hold any Indemnified Person harmless from any Claim
(or portion thereof) resulting from gross negligence or bad faith on its part.
Upon the Owner Trustee becoming aware of the occurrence of an event that results
in any loss, liability or expense to an Indemnified Person, the Owner Trustee
shall promptly send written notice thereof to the Managers. The indemnity
contained in this Section 11.02 shall survive the termination of this Trust
Agreement.

(b) The indemnities set forth in this Section 11.02 shall be in addition to any
other rights the Owner Trustee may have. The indemnities and obligations
contained herein shall survive the termination of the Trust, any disposition by
the Owner Trustee of its interests in the Trust Property or any other event.

Section 11.03. Payments to the Owner Trustee or the Bank. Any amounts paid to
the Owner Trustee or the Bank pursuant to this Article XI shall be deemed not to
be a part of the Trust Property immediately after such payment.

ARTICLE XII

TERMINATION OF TRUST AGREEMENT

Section 12.01. Trust Termination.

(a) The Trust shall wind up and dissolve and the Trust Property shall be
distributed to the Owners in accordance with Section 6.06 hereof upon the sale
or other final disposition of the Trust Property pursuant to the written
instruction of the Board of Managers and the final distribution of all moneys or
other property or proceeds of the Trust. Upon the dissolution of the Trust and
the completion of the winding up of the Trust’s affairs, the Owner Trustee upon
written instruction of the Board of Managers shall file a certificate of
cancellation pursuant to Section 3810 of the Act.

(b) The bankruptcy, liquidation, dissolution, death or incapacity of any Owner
shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle
such Owner’s legal

 

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representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Trust or Trust Estate nor (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.

(c) Notwithstanding anything to the contrary in this Agreement, this Agreement
shall not terminate and cannot be revoked and the trust created hereby shall not
wind up, dissolve, liquidate or terminate for so long as any Secured Obligations
remain outstanding under the Loan Agreement and the lien of the Loan Agreement
has not been released.

(d) None of the Depositor or any Owner shall be entitled to revoke or terminate
the Trust.

ARTICLE XIII

SUCCESSOR OWNER TRUSTEES AND ADDITIONAL TRUSTEES

Section 13.01. Resignation of Owner Trustee; Appointment of Successor.

(a) The Owner Trustee may resign at any time by giving at least 60 days’ prior
written notice to the Board of Managers, such resignation to be effective on the
acceptance of appointment by a successor Owner Trustee under Section 13.01(b)
hereof approved by the Board of Managers. In addition, the Board of Managers may
at any time remove the Owner Trustee without cause by an instrument in writing
delivered to the Owner Trustee, such removal to be effective upon the acceptance
of appointment by a successor Owner Trustee under Section 13.01(b) hereof
approved by the Board of Managers. In case of the resignation or removal of the
Owner Trustee, the Board of Managers shall use its best efforts promptly to
appoint a successor Owner Trustee by an instrument signed by the Board of
Managers. If no successor Owner Trustee shall have been appointed within 60 days
after the giving of written notice of such resignation or the delivery of the
written instrument with respect to such removal, the Owner Trustee may, at the
expense of the Owner(s), petition a court of competent jurisdiction for the
appointment of a successor Owner Trustee.

(b) Any successor Owner Trustee, however appointed, shall execute and deliver to
the predecessor Owner Trustee and Board of Managers an instrument accepting such
appointment, and thereupon such successor Owner Trustee, without further act,
shall become vested with all the estates, properties, rights, powers, duties and
trusts of the predecessor Owner Trustee in the trusts hereunder with like effect
as if originally named the Owner Trustee herein; but nevertheless, upon the
written request of such successor Owner Trustee, such predecessor Owner Trustee
shall execute and deliver an instrument transferring to such successor Owner
Trustee, upon the trusts herein expressed, all the estates, properties, rights,
powers, duties and trusts of such predecessor Owner Trustee, and such
predecessor Owner Trustee shall duly assign, transfer, deliver and pay over to
such successor Owner Trustee all moneys or other property then held or
subsequently received by such predecessor Owner Trustee upon the trusts herein
expressed.

(c) Notwithstanding anything herein to the contrary, the Owner Trustee shall at
all times meet the requirements of Section 3807(a) of the Act. The Owner Trustee
shall at all times

 

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(i) be authorized to exercise corporate trust powers and (ii) have (or shall
have a parent that has) a combined capital and surplus of at least $50,000,000
and shall be subject to supervision or examination by federal or state
authorities. If such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Owner Trustee shall resign immediately in
the manner and with the effect specified in Section 13.01(a); provided, however,
that the Owner Trustee will not be required to resign of the written consent of
the Agent is obtained.

(d) Any entity into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
entity to which substantially all the corporate trust business of the Owner
Trustee may be transferred shall, subject to the terms of Section 13.01(c)
hereof, be the Owner Trustee under this Agreement without further action.

Section 13.02. Appointment of Additional Trustees.

(a) At any time or times for the purpose of meeting any legal requirements of
any jurisdiction in which any of the Trust Property may at the time be located,
or if the Owner Trustee otherwise deems such appointment necessary for its own
protection, the Board of Managers and the Owner Trustee shall have the power to
appoint one or more individuals or corporations either to act as co-trustee, or
co-trustees, jointly with the Owner Trustee of all or any part of the Trust
Property or to act as separate trustee or separate trustees of all or any part
of the Trust Property and to vest in such Person or Persons, in such capacity,
such title to the Trust Property or any part thereof, and such rights, powers,
duties, trusts or obligations as the Owner Trustee may consider necessary or
desirable, subject to the other provisions of this Section 13.02.

(b) Unless otherwise provided in the instrument appointing such co-trustee or
separate trustee, every co-trustee or separate trustee shall, to the extent
permitted by law, be appointed subject to the following terms, namely:

(i) All rights, powers, trusts, duties and obligations by this Agreement
conferred upon the Owner Trustee in respect of the custody, control or
management of moneys, papers, securities and other personal property, shall be
exercised solely by the Owner Trustee;

(ii) All rights, powers, trusts, duties and obligations conferred or imposed
upon the trustees shall be conferred or imposed upon and exercised or performed
by the Owner Trustee, or by the Owner Trustee and such co-trustee or
co-trustees, or separate trustee or separate trustees jointly, except to the
extent that, under the law of any jurisdiction in which any particular act or
acts are to be performed, the Owner Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such act or acts shall be performed
by such co-trustee or co-trustees or separate trustee or separate trustees;

 

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(iii) Any request in writing by the Owner Trustee to any co-trustee or separate
trustee to take or to refrain from taking any action hereunder shall be
sufficient warrant for the taking, or the refraining from taking, of such action
by such co-trustee or separate trustee;

(iv) Any co-trustee or separate trustee to the extent permitted by law may
delegate to the Owner Trustee the exercise of any right, power, trust, duty or
obligation, discretionary or otherwise;

(v) The Owner Trustee at any time, by an instrument in writing and at the
written direction of the Board of Managers, may accept the resignation of, or
remove, any co-trustee or separate trustee appointed under this Section 13.02. A
successor to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section 13.02;

(vi) No trustee hereunder shall be personally liable by reason of any act or
omission of any other trustee hereunder;

(vii) Any demand, request, direction, appointment, removal, notice, consent,
waiver or other action in writing executed by the Board of Managers and
delivered to the Owner Trustee shall be deemed to have been delivered to each
such co-trustee or separate trustee; and

(viii) Any moneys, papers, securities or other items of personal property
received by any such co-trustee or separate trustee hereunder shall forthwith,
so far as may be permitted by law, be turned over to the Owner Trustee to be
held pursuant to the terms hereof.

(c) Upon the acceptance in writing of such appointment by any such co-trustee or
separate trustee, it or he shall be vested with the estate, right, title and
interest in the Trust Property, or portion thereof, and with such rights,
powers, duties, trusts or obligations, jointly or separately with the Owner
Trustee, all as shall be specified in the instrument of appointment, subject to
all the terms hereof. A copy of every such written acceptance shall be filed
with the Owner Trustee.

(d) In case any co-trustee or separate trustee shall die, become incapable of
acting, resign or be removed, the estate, right, title and interest in the Trust
Property and all rights, powers, trusts, duties and obligations of said
co-trustee or separate trustee shall, so far as permitted by law, vest in and be
exercised by the Owner Trustee unless and until a successor co-trustee or
separate trustee shall be appointed pursuant to this Section 13.02.

 

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ARTICLE XIV

MISCELLANEOUS

Section 14.01. Amendments and Waivers. (a) This Agreement may be amended, and
compliance with any provisions of this Agreement may be waived, only by a
written instrument signed by the Owner Trustee at the time of such amendment;
provided, however, that if any such amendment or waiver would have a material
adverse effect on any Owner, such amendment or waiver will require the consent
of any Owner so affected. Furthermore, if in the reasonable opinion of the Owner
Trustee any instrument required to be executed adversely affects any right, duty
or liability of, or immunity or indemnity in favor of, the Owner Trustee under
this Agreement or any of the documents contemplated hereby to which the Owner
Trustee is a party, or would cause or result in any conflict with or breach of
any terms, conditions or provisions of, or default under, the charter documents
or by laws of the Owner Trustee or any document contemplated hereby to which the
Owner Trustee is a party, the Owner Trustee may in its sole discretion decline
to execute such instrument.

(b) Notwithstanding anything to the contrary in this Agreement, until the Final
Payout Date, no waiver, amendment or modification of any provision of this
Agreement shall be effective without the written concurrence of the Agent. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

Section 14.02. No Legal Title to Trust Property in Owners. The Owners shall not
have legal title to any part of the Trust Property and shall only be entitled to
receive distributions with respect to their Ownership Interest therein pursuant
to Sections 6.02 and 6.06 hereof. No transfer, by operation of law or otherwise
(other than as set forth in Article XII hereof), of any right, title and
interest of any Owner in and to its Ownership Interest in the Trust Property
hereunder shall operate to terminate this Agreement or the Trust or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Property.

Section 14.03. Limitations on Rights of Others. Nothing in this Agreement,
whether express or implied, shall be construed to give to any Person other than
the Bank, the Owner Trustee, the Depositor, the Owners and the Agent any legal
or equitable right, remedy or claim in the Trust Property or under or in respect
of this Agreement or any covenants, conditions or provisions contained herein.

Section 14.04. Notices. All demands, notices and communications relating to this
Agreement shall be in writing and shall be deemed to have been duly given, by
United States mail, facsimile transmission (followed by mail or overnight
courier delivery) or by overnight courier, or, if by other means, when received
by the other party or parties at the address shown below, or such other address
as may hereafter be furnished to the other party or parties by like notice. Any
such demand, notice and communication shall be effective, upon receipt, or in
the case of (x) notice by mail, five days after being deposited in the United
States mails, first-class postage prepaid, (y) notice by facsimile copy, when
verbal communication of receipt is obtained or (z) in the case of personal
delivery or overnight mail, when delivered.

 

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If to the Owner Trustee:

U.S. Bank Trust, N.A.

300 Delaware Ave., 9th Floor

Wilmington, Delaware 19801

Attention: Corporate Trust Administration

Facsimile No.: (302) 576-3717]

with a copy to (which shall not constitute notice):

Potter Anderson & Corroon

1313 N. Market Street

P.O. Box 951

Wilmington, DE 19899-0951

Telephone No.: (302) 984-6114

Facsimile No.: (302) 778-6114

Email address: swaxman@potteranderson.com

If to an Owner, addressed to such Owner at the address set forth for such Owner
in the register maintained by the Owner Trustee.

If to Medallion Funding Corp.:

Medallion Funding Corp.

437 Madison Avenue

New York, New York 10022

Attention: President

Telephone No.: (212) 328-2100

Facsimile: (212) 328-2121

Section 14.05. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument. Delivery of an executed counterpart of this
Agreement by facsimile or portable document format (PDF) shall be effective as
delivery of a manually executed counterpart of this Agreement. In case any
provision in or obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

Section 14.06. Binding Effect; Assignability. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the Owner
Trustee, the Bank, the Depositor and each Owner and their respective successors
and permitted assigns, and no other person except the Agent shall acquire or
have any right under or by virtue of this Agreement, all as herein provided. No
party to this Agreement may assign its rights or delegate its obligations under
this Agreement without the express written consent of the other parties hereto.
Any request, notice, direction, consent, waiver or other instrument or action by
an Owner shall bind the successors and assigns of such Owner.

 

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Section 14.07. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.

Section 14.08. Governing Law; Jury Waiver.

(a) THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE (EXCLUDING CONFLICT OF LAW
RULES), INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE;
PROVIDED, HOWEVER, THAT THERE SHALL NOT BE APPLICABLE TO THE PARTIES HEREUNDER
OR THIS AGREEMENT ANY PROVISION OF THE LAWS (COMMON OR STATUTORY) OF THE STATE
OF DELAWARE PERTAINING TO TRUSTS THAT RELATE TO OR REGULATE, IN A MANNER
INCONSISTENT WITH THE TERMS HEREOF, (A) THE FILING WITH ANY COURT OR
GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND
CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER
GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL
OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS,
AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES
TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE
NATURE, AMOUNT OR CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO
THE TITLING, STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR
(G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR
LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE
LIMITATIONS OR AUTHORITIES AND POWERS OF THE OWNER TRUSTEE HEREUNDER AS SET
FORTH OR REFERENCED IN THIS AGREEMENT. SECTION 3540 OF TITLE 12 OF THE DELAWARE
CODE SHALL NOT APPLY TO THE TRUST.

(b) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING
DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREUNDER.

Section 14.09. Complete Agreement. This Agreement completely amends and restates
the Original Trust Agreement in its entirety and constitutes the complete
agreement between the parties with respect to the subject matter hereof and may
not be modified except as provided herein.

Section 14.10. No Petition. The Owner Trustee, by entering into this Agreement,
each Owner, by having previously accepted or, after the date hereof, by
accepting a Trust Certificate and the Depositor by accepting the benefits of
this Agreement, hereby covenant and agree that they will not at any time
institute against the Trust, or join in any institution against the Trust of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or law.

 

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Section 14.11. No Recourse. Notwithstanding any provision hereof, at all times
prior to the Final Payoff Date all obligations of the Trust and any claims
arising from this Agreement or any transactions contemplated by this Agreement
shall be limited solely to the assets of the Trust and payable in accordance
with the Basic Documents. If payments on any such claims from the assets of the
Trust are insufficient, following liquidation of all the assets, any claims of
any Person arising from this Agreement and the obligations of the Trust to pay
such deficiencies shall be extinguished and shall not thereafter revive.

Section 14.12. No Waivers; Remedies. No failure on the part of any party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.

Section 14.13. Consent to Jurisdiction. EACH PARTY HERETO (I) IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY DELAWARE STATE COURT OR FEDERAL
COURT SITTING IN WILMINGTON, DELAWARE IN ANY ACTION ARISING OUT OF THIS
AGREEMENT AND (II) WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL, AND
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS AFTER THE SAME SHALL
HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY PARTY’S RIGHT TO BRING ANY
ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.

[SIGNATURES COMMENCE ON THE FOLLOWING PAGE]

 

40

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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Trust Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.

 

U.S. BANK TRUST, N.A., in its individual capacity but only to the limited extent
expressly set forth herein and as Owner Trustee By:  

/s/ Toby Robillard

Name:   Toby Robillard Title:   Vice President MEDALLION FUNDING CORP. By:  

/s/ Brian S. O’Leary

Name:   Brian S. O’Leary Title:   Chief Operating Officer By:  

/s/ Michael Kowalsky

Name:   Michael Kowalsky Title:   President