Document:

Exhibit 4.2

 

 

CNH EQUIPMENT TRUST 20XX-Y

 

TRUST AGREEMENT

 

between

 

CNH CAPITAL RECEIVABLES LLC

 

and

 

[WILMINGTON TRUST COMPANY], as Trustee

 

 

 

 

Dated as of [Month Day], 20XX

 

 

 

TABLE OF CONTENTS

 

	
ARTICLE I   Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
SECTION 1.1
    	
Definitions
    	
1
    
	
SECTION 1.2
    	
Other   Definitional Provisions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II   Organization
    	
2
    
	
 
    	
 
    	
 
    
	
SECTION 2.1
    	
Name
    	
2
    
	
SECTION 2.2
    	
Office
    	
2
    
	
SECTION 2.3
    	
Purposes   and Powers
    	
2
    
	
SECTION 2.4
    	
Appointment   of Trustee
    	
2
    
	
SECTION 2.5
    	
Initial   Capital Contribution of Trust Estate
    	
2
    
	
SECTION 2.6
    	
Declaration   of Trust
    	
3
    
	
SECTION 2.7
    	
Liability   of the Certificateholders
    	
3
    
	
SECTION 2.8
    	
Title   to Trust Property
    	
3
    
	
SECTION 2.9
    	
Situs   of Trust
    	
4
    
	
SECTION 2.10
    	
Representations   and Warranties of the Depositor
    	
4
    
	
SECTION 2.11
    	
Federal   Income Tax Allocations; Tax Treatment
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE III   Trust Certificates and Transfer of Interests
    	
5
    
	
 
    	
 
    	
 
    
	
SECTION 3.1
    	
Initial   Ownership
    	
5
    
	
SECTION 3.2
    	
The   Trust Certificates
    	
5
    
	
SECTION 3.3
    	
Authentication   of Trust Certificates
    	
5
    
	
SECTION 3.4
    	
Registration   of Transfer and Exchange of Trust Certificates
    	
5
    
	
SECTION 3.5
    	
Mutilated,   Destroyed, Lost or Stolen Trust Certificates
    	
7
    
	
SECTION 3.6
    	
Persons   Deemed Certificateholders
    	
8
    
	
SECTION 3.7
    	
Access   to List of Certificateholders’ Names and Addresses
    	
8
    
	
SECTION 3.8
    	
Maintenance   of Office or Agency
    	
8
    
	
SECTION 3.9
    	
Appointment   of Paying Agent
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   Actions by Trustee
    	
9
    
	
 
    	
 
    	
 
    
	
SECTION 4.1
    	
Prior   Notice to Certificateholders With Respect to Certain Matters
    	
9
    
	
SECTION 4.2
    	
Action   By Certificateholders With Respect to Certain Matters
    	
10
    
	
SECTION 4.3
    	
Action   By Certificateholders With Respect to Bankruptcy
    	
10
    
	
SECTION 4.4
    	
Restrictions   on Certificateholders’ Power
    	
10
    
	
SECTION 4.5
    	
Majority   Control
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE V   Application of Trust Funds; Certain Duties
    	
11
    
	
 
    	
 
    	
 
    
	
SECTION 5.1
    	
Establishment   of Trust Account
    	
11
    
	
SECTION 5.2
    	
Applications   of Trust Funds
    	
11
    
	
SECTION 5.3
    	
Method   of Payment
    	
12
    
	
SECTION 5.4
    	
No   Segregation of Monies; No Interest
    	
12
    

 

 

	
SECTION 5.5
    	
Accounting   and Reports to the Noteholders, Certificateholders, the Internal Revenue   Service and Others
    	
13
    
	
SECTION 5.6
    	
Signature   on Returns; Tax Matters Partner
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE VI   Authority and Duties of Trustee
    	
13
    
	
 
    	
 
    	
 
    
	
SECTION 6.1
    	
General   Authority
    	
13
    
	
SECTION 6.2
    	
General   Duties
    	
14
    
	
SECTION 6.3
    	
Action   upon Instruction
    	
14
    
	
SECTION 6.4
    	
No   Duties Except as Specified in This Agreement or in Instructions
    	
15
    
	
SECTION 6.5
    	
No   Action Except Under Specified Documents or Instructions
    	
15
    
	
SECTION 6.6
    	
Restrictions
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   Concerning the Trustee
    	
16
    
	
 
    	
 
    	
 
    
	
SECTION 7.1
    	
Acceptance   of Trusts and Duties
    	
16
    
	
SECTION 7.2
    	
Furnishing   of Documents
    	
17
    
	
SECTION 7.3
    	
Representations   and Warranties
    	
17
    
	
SECTION 7.4
    	
Information   to be Provided by the Trustee
    	
18
    
	
SECTION 7.5
    	
Reliance;   Advice of Counsel
    	
18
    
	
SECTION 7.6
    	
Not   Acting in Individual Capacity
    	
18
    
	
SECTION 7.7
    	
Trustee   Not Liable For Trust Certificates or Receivables
    	
19
    
	
SECTION 7.8
    	
Trustee   May Not Own Notes
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII   Compensation of Trustee
    	
19
    
	
 
    	
 
    	
 
    
	
SECTION 8.1
    	
Trustee’s   Fees and Expenses
    	
19
    
	
SECTION 8.2
    	
Indemnification
    	
19
    
	
SECTION 8.3
    	
Payments   to the Trustee
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE IX   Termination of Trust Agreement
    	
20
    
	
 
    	
 
    	
 
    
	
SECTION 9.1
    	
Termination   of Trust Agreement
    	
20
    
	
 
    	
 
    	
 
    
	
ARTICLE X   Successor Trustees and Additional Trustees
    	
21
    
	
 
    	
 
    	
 
    
	
SECTION 10.1
    	
Eligibility   Requirements for Trustee
    	
21
    
	
SECTION 10.2
    	
Resignation   or Removal of Trustee
    	
21
    
	
SECTION 10.3
    	
Successor   Trustee
    	
22
    
	
SECTION 10.4
    	
Merger   or Consolidation of Trustee
    	
23
    
	
SECTION 10.5
    	
Appointment   of Co-Trustee or Separate Trustee
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE XI   Miscellaneous
    	
24
    
	
 
    	
 
    	
 
    
	
SECTION 11.1
    	
Supplements   and Amendments
    	
24
    
	
SECTION 11.2
    	
No   Legal Title To Trust Estate in Certificateholders
    	
26
    
	
SECTION 11.3
    	
Limitations   on Rights of Others
    	
26
    
	
SECTION 11.4
    	
Notices
    	
26
    

 

ii

 

	
SECTION 11.5
    	
Severability
    	
26
    
	
SECTION 11.6
    	
Separate   Counterparts
    	
27
    
	
SECTION 11.7
    	
Successors   and Assigns
    	
27
    
	
SECTION 11.8
    	
Covenants   of The Depositor
    	
27
    
	
SECTION 11.9
    	
No   Petition
    	
27
    
	
SECTION 11.10
    	
No   Recourse
    	
27
    
	
SECTION 11.11
    	
Headings
    	
28
    
	
SECTION 11.12
    	
Governing   Law
    	
28
    
	
SECTION 11.13
    	
Administrator
    	
28
    
	
SECTION 11.14
    	
Information   to be Provided by the Trustee
    	
28
    
	
SECTION 11.15
    	
Complete   Information
    	
29
    
	
SECTION 11.16
    	
Indemnification
    	
29
    
	
SECTION 11.17
    	
Paying   Agent Protection
    	
32
    
	
SECTION 11.18
    	
Communications   with Rating Agencies
    	
32
    
	
SECTION 11.19
    	
PATRIOT   Act
    	
32
    
	
SECTION 11.20
    	
Electronic   Signatures
    	
32
    

 

iii

 

EXHIBITS

 

EXHIBIT A                                                              Form of Trust Certificate
 EXHIBIT B                                                               Form of Certificate of Trust

 

iv

 

TRUST AGREEMENT (as amended or supplemented from time to time, this “Agreement”) dated as of [Month Day], 20XX between CNH CAPITAL RECEIVABLES LLC, a Delaware limited liability company, as Depositor, and [WILMINGTON TRUST COMPANY] (“[WTC]”), a [Delaware trust company], as Trustee.

 

ARTICLE I
 Definitions

 

SECTION 1.1                           Definitions.  Capitalized terms used herein and not otherwise defined herein are defined in Appendix A to the Indenture dated as of [Month Day], 20XX between CNH Equipment Trust 20XX-Y and [Citibank, N.A.]

 

SECTION 1.2                           Other Definitional Provisions.

 

(a)                               All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

 

(b)                              As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles in effect on the date hereof.  To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control.

 

(c)                               The words “hereof”, “herein”, “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation”.

 

(d)                             The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

 

(e)                               References to any law or regulation refer to that law or regulation as amended from time to time and include any successor law or regulation.

 

(f)                                References to any agreement refer to that agreement as from time to time amended or supplemented or as the terms of such agreement are waived or modified in accordance with its terms.

 

(g)                              References to any Person include that Person’s successors and assigns.

 

 

ARTICLE II
 Organization

 

SECTION 2.1                           Name.  The Trust created hereby shall be known as “CNH Equipment Trust 20XX-Y”, in which name the Trustee may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued.

 

SECTION 2.2                           Office.  The office of the Trust shall be in care of the Trustee at the Corporate Trust Office or at such other address as the Trustee may designate by written notice to the Certificateholders and the Depositor.

 

SECTION 2.3                           Purposes and Powers.  The purpose of the Trust is, and the Trust shall have the power and authority to, engage in the following activities:

 

(a)                               to issue the Notes pursuant to the Indenture and the Trust Certificates pursuant to this Agreement and to sell the Notes and/or the Trust Certificates in one or more transactions;

 

(b)                              with the proceeds of the sale of the Notes and/or the Trust Certificates, [to fund the Pre-Funding Account and] to purchase the Receivables pursuant to the Sale and Servicing Agreement;

 

(c)                               to assign, Grant, transfer, pledge, mortgage and convey the Trust Estate pursuant to the Indenture and to hold, manage and distribute to the Certificateholders pursuant to the Sale and Servicing Agreement any portion of the Trust Estate released from the Lien of, and remitted to the Trust pursuant to, the Indenture;

 

(d)                             to enter into and perform its obligations under the Basic Documents to which it is to be a party;

 

(e)                               to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; and

 

(f)                                subject to compliance with the Basic Documents, to engage in such other activities as may be required in connection with conservation of the Trust Estate and the making of distributions to the Certificateholders and the Noteholders.

 

The Trust shall not engage in any activity other than in connection with the foregoing or other than as required or authorized by this Agreement or the other Basic Documents.

 

SECTION 2.4                           Appointment of Trustee.  The Depositor hereby appoints [Wilmington Trust Company] as Trustee of the Trust effective as of the date hereof, to have all the rights, powers and duties set forth herein.

 

SECTION 2.5                           Initial Capital Contribution of Trust Estate.  The Depositor hereby contributes to the Trustee, as of the date hereof, the sum of $1.00. The Trustee hereby acknowledges receipt in trust from the Depositor, as of the date hereof, of the foregoing

 

2

 

contribution, which shall constitute the initial Trust Estate and shall be deposited in the Certificate Distribution Account. The Depositor shall pay organizational expenses of the Trust as they may arise or shall, upon the request of the Trustee, promptly reimburse the Trustee for any such expenses paid by the Trustee.  The Depositor may also take steps necessary, including the execution and filing of any necessary filings, to ensure that the Trust is in compliance with any applicable State securities law.

 

SECTION 2.6                           Declaration of Trust.  The Trustee hereby declares that it will hold the Trust Estate in trust upon and subject to the conditions set forth herein for the use and benefit of the Certificateholders, subject to the obligations of the Trust under the Basic Documents. It is the intention of the parties hereto that the Trust constitute a statutory trust under the Trust Statute and that this Agreement constitute the governing instrument of such statutory trust.  It is the intention of the parties hereto that, solely for income and franchise tax purposes, until the Trust Certificates are held by a Person other than the Depositor, the Trust be disregarded as an entity separate from the Depositor and the Notes be treated as debt of the Depositor.  At such time that the Trust Certificates are held by more than one Person, it is the intention of the parties hereto that, solely for income and franchise tax purposes, the Trust be treated as a partnership, with the assets of the partnership being the Receivables and other assets held by the Trust, the partners of the partnership being the Certificateholders (including the Depositor (or its successor in interest) in its capacity as recipient of distributions from the Spread Account), and the Notes being debt of the partnership.  The parties agree that, unless otherwise required by appropriate tax authorities, until the Trust Certificates are held by more than one Person the Trust will not file or cause to be filed annual or other necessary returns, reports and other forms consistent with the characterization of the Trust as an entity separate from the Depositor (or other sole owner of the Trust Certificates). Effective as of the date hereof, the Trustee shall have all rights, powers and duties set forth herein and in the Trust Statute with respect to accomplishing the purposes of the Trust.  The Trustee shall file a Certificate of Trust on behalf of the Trust with the Secretary of State pursuant to Section 3810 of the Trust Statute. As of the date hereof, the Depositor intends to retain the Trust Certificates.  Although there is no present intent to effect any subsequent transfer of the Trust Certificates, in the event that the Depositor did intend to transfer any of the Trust Certificates to a third party, the parties to this Agreement will amend this Agreement as necessary to prevent any application of the Treasury regulations under Section 385 of the Code (including any subsequent or successor provision) that would result in the recharacterization of any of the Notes as equity.  This Section 2.6 shall not apply with respect to the characterization of the Notes as indebtedness for federal income tax purposes to the extent that any of the Notes is required to be treated as other than indebtedness in the hands of an Affiliate pursuant to Section 385 of the Code and the Treasury regulations promulgated thereunder.

 

SECTION 2.7                           Liability of the Certificateholders.  No Certificateholder shall have any personal liability for any liability or obligation of the Trust. The Certificateholders shall be entitled to the same limitation of personal liability extended to stockholders of corporations under the Delaware General Corporation Law.

 

SECTION 2.8                           Title to Trust Property.  Subject to the Lien granted in the Indenture, legal title to all the Trust Estate 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 Estate to be

 

3

 

vested in a trustee or trustees, in which case title shall be deemed to be vested in the Trustee, a co-trustee and/or a separate trustee, as the case may be.

 

SECTION 2.9                           Situs of Trust.  The Trust will be located and administered in the States of [Delaware and Pennsylvania] and/or in any other States to which the Depositor consents in writing.  All bank accounts maintained by the Trustee on behalf of the Trust shall be located in the State of [Delaware or New York] and/or in any other States to which the Depositor consents in writing.  The Trust shall not have any employees.  Payments will be received by the Trust only in [Delaware or New York] and/or in any other States to which the Depositor consents in writing and payments will be made by the Trust only from [Delaware or New York] and/or in any other states to which the Depositor consents in writing.

 

SECTION 2.10                   Representations and Warranties of the Depositor.  The Depositor hereby represents and warrants to the Trustee that as of the date hereof:

 

(a)                               The Depositor is duly organized and validly existing as a limited liability company in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted.

 

(b)                              The Depositor is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership of property or the conduct of its business shall require such qualifications.

 

(c)                               The Depositor has the power and authority to execute and deliver this Agreement and to carry out its terms; the Depositor has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Trust and the Depositor has duly authorized such sale and assignment and deposit to the Trust by all necessary limited liability company action; and the execution, delivery and performance of this Agreement have been duly authorized by the Depositor by all necessary limited liability company action.

 

(d)                             The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the certificate of formation, limited liability company agreement or by-laws of the Depositor, or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; or 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 (other than pursuant to the Basic Documents); or 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.

 

(e)                               The Depositor has duly executed and delivered this Agreement, and this Agreement constitutes a legal, valid and binding obligation of the Depositor, enforceable

 

4

 

in accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law).

 

SECTION 2.11                   Federal Income Tax Allocations; Tax Treatment.  If the Trust Certificates and interests in the Spread Account are held by more than one Person, this Agreement shall be amended to include such provisions as are required or appropriate under Subchapter K of the Code in order for the Trust to be treated as a partnership whose partners are the beneficial owners of the Trust Certificates and the Depositor (or other holders of interests in the Spread Account).

 

ARTICLE III
 Trust Certificates and Transfer of Interests

 

SECTION 3.1                           Initial Ownership.  Upon the formation of the Trust by the contribution by the Depositor pursuant to Section 2.5, and until the issuance of the Trust Certificates, the Depositor shall be the sole beneficiary of the Trust; and upon the issuance of the Trust Certificates, the Depositor will no longer be a beneficiary of the Trust, except to the extent that the Depositor is a Certificateholder.

 

SECTION 3.2                           The Trust Certificates.  The Trust Certificates shall be substantially in the form of Exhibit A hereto and shall be executed on behalf of the Trust by manual or facsimile signature of an authorized officer of the 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 Trust, shall be, when authenticated pursuant to Section 3.3, validly issued, fully paid, non-assessable and entitled to the benefits 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.

 

SECTION 3.3                           Authentication of Trust Certificates.  Concurrently with the sale of the Receivables to the Trust pursuant to the Sale and Servicing Agreement, the Trustee shall cause the Trust Certificate evidencing the 100% beneficial interest in the Trust to be executed on behalf of the Trust, authenticated and delivered to or upon the written order of the Depositor, signed by its chairman of the board, its president, any vice president, any secretary, any assistant secretary, any treasurer, or any assistant treasurer, without further action by the Depositor.  No Trust Certificate shall entitle its holder to any benefit under this Agreement, or shall be valid for any purpose, unless there shall appear on such Trust Certificate a certificate of authentication substantially in the form set forth in Exhibit A, executed by the Trustee by the manual signature of one of its authorized signatories; such certificate of authentication shall constitute conclusive evidence, and the only evidence, that such Trust Certificate shall have been duly authenticated and delivered hereunder. All Trust Certificates shall be dated the date of their authentication.  No further Trust Certificates shall be issued except pursuant to Section 3.4 or 3.5.

 

SECTION 3.4                           Registration of Transfer and Exchange of Trust Certificates.  The Trust shall keep or cause to be kept, at the office or agency maintained pursuant to Section 3.8, a register

 

5

 

(the “Certificate Register”) in which, subject to such reasonable regulations as it may prescribe, the Trust shall provide for the registration of Trust Certificates and of transfers and exchanges of Trust Certificates.  The Trustee shall be the “Certificate Registrar” for the purpose of registering Trust Certificates and the transfers of Trust Certificates as herein provided.  Upon any resignation of any Certificate Registrar, the Depositor shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of the Certificate Registrar.  The initial Trust Certificate shall be registered in the name of [“CNH Capital Receivables LLC”] as the initial registered owner thereof.

 

Upon surrender for registration of transfer or exchange of any Trust Certificate at the office or agency maintained pursuant to Section 3.8, the Trustee shall execute, authenticate and deliver, in the name of the designated transferee or transferees, one or more new Trust Certificates evidencing such transferee’s beneficial interest in the Trust, which Trust Certificates will be issued in amounts equal, in the aggregate, to the percentage of beneficial interest in the Trust transferred by such transferor.

 

At the option of a Certificateholder, upon surrender of Trust Certificates to be exchanged at the office or agency maintained pursuant to Section 3.8, a Trust Certificate may be exchanged for a new Trust Certificate evidencing the same percentage of beneficial interest in the Trust as the Trust Certificate so exchanged.  Whenever any Trust Certificates are so surrendered for exchange, the Trustee shall execute, authenticate and deliver the Trust Certificates that the Certificateholder making the exchange is entitled to receive.

 

All Trust Certificates issued upon any registration of transfer or exchange of Trust Certificates shall be entitled to the same benefits under this Agreement as the Trust Certificates surrendered upon such registration of transfer or exchange.

 

Every Trust Certificate presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Trustee and the Certificate Registrar duly executed by, the Certificateholder thereof or his attorney duly authorized in writing. No transfer of a Trust Certificate shall be registered unless the transferee shall have provided (i) if the transferee is not the Seller or an Affiliate of the Seller and the transferor is not the Seller or an Affiliate of the Seller, an opinion of counsel that no registration is required under the Securities Act of 1933, as amended, or applicable State laws, and (ii) if the transferee is the Seller or an Affiliate of the Seller, an Officer’s Certificate as to compliance with Section 6.6 of the Sale and Servicing Agreement.  Each Trust Certificate surrendered for registration of transfer or exchange shall be canceled and subsequently disposed of by the Trustee in accordance with its customary practice.

 

No service charge shall be made to a Certificateholder for any registration of transfer or exchange of Trust Certificates, but the Trustee or the Certificate Registrar 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 or exchange of Trust Certificates.

 

The Trust Certificates and any beneficial interest in such Trust Certificates may not be acquired by: (a) an employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (b) a plan described in Section 4975(e)(1) of the Code or (c)

 

6

 

any entity whose underlying assets include plan assets of any of the foregoing (each a “Benefit Plan”). By accepting and holding a Trust Certificate or an interest therein, the Certificateholder thereof shall be deemed to have represented and warranted that it is not a Benefit Plan. The Trustee shall have no obligation to determine whether or not a Certificateholder of a Trust Certificate is or is not a Benefit Plan.

 

Notwithstanding any other provision of this Agreement, no transfer of a Trust Certificate or beneficial interest therein shall be allowed, and any such purported transfer shall be void ab initio, if such transfer would cause the Trust to have more than 100 partners within the meaning of Treasury Regulation section 1.7704-1(h)(1).  For purposes of determining the number of partners in the Trust under Treasury Regulation section 1.7704-1(h)(1), a Person owning an interest in a partnership, grantor trust, or S corporation (a “flow-through entity”) that owns, directly or through other flow-through entities, an interest in the Trust, will be treated as a partner in the Trust if more than 50 percent of the value of such Person’s interest in the flow-through entity is attributable to the flow-through entity’s interest (direct or indirect) in the Trust.

 

No transfer (or purported transfer) of a Trust Certificate (or any beneficial interest therein), whether to another Certificateholder or to a Person who is not a Certificateholder, shall be effective, and any such transfer (or purported transfer) shall be void ab initio, and no Person shall otherwise become a Certificateholder, and none of the Trust, the Trustee, the Certificate Registrar or any of the Certificateholders will recognize such transfer (or purported transfer), unless the transferee has first represented and warranted in writing to the Trust that:

 

(A)                          it is acquiring the Trust Certificate for its own account and is the sole beneficial owner of such Trust Certificate;

 

(B)                           the transfer is not being effected on or through (x) an “established securities market” within the meaning of Section 7704(a)(1) of the Code, including without limitation, an over-the-counter market or an interdealer quotation system that regularly disseminates firm buy or sell quotations or (y) a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704(a)(2) of the Code and any proposed, temporary or final Treasury Regulations thereunder; and

 

(C)                           such transfer will not cause the Trust to be classified as an association (or publicly traded partnership) taxable as a corporation for U.S. federal income tax purposes, and such purchaser or transferee will not take any action, including any subsequent disposition of such Trust Certificate (or any beneficial interest therein), that would cause the Trust to be treated as an association (or publicly traded partnership) taxable as a corporation for U.S. federal income tax purposes.

 

SECTION 3.5                           Mutilated, Destroyed, Lost or Stolen Trust Certificates.  If:  (a) any mutilated Trust Certificate shall be surrendered to the Certificate Registrar, or if the Certificate Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Trust Certificate (provided, that the Trustee shall not be required to verify the evidence provided to it), and (b) there shall be delivered to the Certificate Registrar and the Trustee such security or indemnity as may be required by them to hold each of them harmless, then, in the absence of notice that such Trust Certificate shall have been acquired by a bona fide purchaser, the Trustee on behalf

 

7

 

of the Trust shall execute, authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Certificate, a replacement Trust Certificate evidencing the same percentage of beneficial interest in the Trust as the Trust Certificate so mutilated, destroyed, lost or stolen.

 

In connection with the issuance of any replacement Trust Certificate under this Section, the Trustee and the Certificate Registrar may require the payment by the Certificateholder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.

 

Any replacement Trust Certificate issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Trust Certificate shall constitute conclusive evidence of ownership in the Trust, as if originally issued, whether or not the mutilated, lost, stolen or destroyed Trust Certificate shall be found at any time, and shall be entitled to all the benefits of this Agreement.

 

SECTION 3.6                           Persons Deemed Certificateholders.  Prior to due presentation of a Trust Certificate for registration of transfer of any Trust Certificate, the Trustee or the Certificate Registrar may treat the Person in whose name any Trust Certificate shall be registered in the Certificate Register (as of the day of determination) as the owner of such Trust Certificate for the purpose of receiving distributions pursuant to Section 5.2 and for all other purposes whatsoever, and neither the Trustee nor the Certificate Registrar shall be bound by any notice to the contrary.

 

SECTION 3.7                           Access to List of Certificateholders’ Names and Addresses.  The Trustee shall furnish or cause to be furnished to the Servicer and the Depositor, within 15 days after receipt by the Trustee of a request therefor from the Servicer or the Depositor in writing, a list, in such form as the Servicer or the Depositor may reasonably require, of the names and addresses of the Certificateholders as of the most recent Record Date. If three or more Certificateholders evidencing in the aggregate not less than 25% of the beneficial interest in the Trust apply in writing to the Trustee, and such application states that the applicants desire to communicate with other Certificateholders with respect to their rights under this Agreement or under the Trust Certificates and such application shall be accompanied by a copy of the communication that such applicants propose to transmit, then the Trustee shall, within five Business Days after the receipt of such application, afford such applicants access during normal business hours to the current list of Certificateholders. Each Certificateholder, by receiving and holding a Trust Certificate, shall be deemed to have agreed not to hold any of the Depositor, the Certificate Registrar or the Trustee accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived.

 

SECTION 3.8                           Maintenance of Office or Agency.  The Trustee shall maintain an office or offices or agency or agencies where Trust Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Trustee in respect of the Trust Certificates and the Basic Documents may be served.  The Trustee shall give prompt written notice to the Certificate Registrar of any surrender, transfer or exchange of the Trust Certificates to the Trustee.  The Trustee initially designates [its Corporate Trust Office] as its principal corporate trust office for such purposes.  The Trustee shall give prompt written notice to the Depositor, to

 

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the Certificate Registrar and to the Certificateholders of any change in the location of the Certificate Register or any such office or agency.

 

SECTION 3.9                           Appointment of Paying Agent.  The Paying Agent (or the Trustee if the Notes have been paid in full) shall make distributions to Certificateholders from the Certificate Distribution Account pursuant to Section 5.2 and the Indenture Trustee as Paying Agent shall report the amounts of such distributions to the Trustee. Any Paying Agent shall have the revocable power to withdraw funds from the Certificate Distribution Account for the purpose of making the distributions referred to above. The Trustee may revoke such power and remove the Paying Agent if the Trustee determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Agreement in any material respect.  The Paying Agent shall initially be the Indenture Trustee, and any co-paying agent chosen by and acceptable to the Trustee.  The Paying Agent shall be permitted to resign as Paying Agent upon 30 days’ written notice to the Trustee. In the event that the Indenture Trustee shall not be the Paying Agent, the Trustee shall appoint a successor to act as Paying Agent (which shall be a bank or trust company).  The Trustee shall cause such successor Paying Agent or any additional Paying Agent appointed by the Trustee to execute and deliver to the Trustee an instrument in which such successor Paying Agent or additional Paying Agent (other than the Indenture Trustee or the Trustee as Paying Agent) shall agree with the Trustee that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Certificateholders in trust for the benefit of the Certificateholders entitled thereto until such sums shall be paid to such Certificateholders.  The Paying Agent shall return all unclaimed funds to the Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Trustee.  The provisions of Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the Indenture Trustee or Trustee to the extent the Indenture Trustee or Trustee is a Paying Agent, for so long as the Indenture Trustee or Trustee, as applicable, shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.

 

ARTICLE IV
 Actions by Trustee

 

SECTION 4.1                           Prior Notice to Certificateholders With Respect to Certain Matters.  With respect to the following matters, the Trustee shall not take action unless, at least 30 days before the taking of such action (or such shorter period as shall be agreed to in writing by all Certificateholders), the Trustee shall have notified the Certificateholders in writing of the proposed action and the Certificateholders shall not have notified the Trustee in writing prior to the 30th day (or such agreed upon shorter period) after such notice is given that such Certificateholders have withheld consent or shall not have provided alternative direction:

 

(a)                               the initiation of any claim or lawsuit by the Trust (except claims or lawsuits brought in connection with the collection of the Receivables) and the compromise of any action, claim or lawsuit brought by or against the Trust (except with respect to the aforementioned claims or lawsuits for collection of Receivables);

 

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(b)                              the amendment of the Indenture in circumstances where the consent of any Noteholder is not required and such amendment materially adversely affects the interest of the Certificateholders;

 

(c)                               the amendment, change or modification of the Administration Agreement, except to cure any ambiguity or to amend or supplement any provision in a manner, or add any provision, that would not materially adversely affect the interests of the Certificateholders; or

 

(d)                             the appointment pursuant to the Indenture of a successor Note Registrar, Paying Agent or Indenture Trustee, or pursuant to this Agreement of a successor Certificate Registrar (other than the Trustee), or the consent to the assignment by the Note Registrar, Paying Agent or Indenture Trustee or Certificate Registrar (other than to the Trustee) of its obligations under the Indenture or this Agreement, as applicable.

 

SECTION 4.2                           Action By Certificateholders With Respect to Certain Matters.  The Trustee shall not have the power, except upon the direction of the Certificateholders, to: (a) remove the Administrator under the Administration Agreement, (b) appoint a successor Administrator, (c) remove the Servicer under the Sale and Servicing Agreement; or (d) except as expressly provided in the Basic Documents, sell the Receivables after the termination of the Indenture. The Trustee shall take the actions referred to in the preceding sentence only upon written instructions signed by the Certificateholders.

 

SECTION 4.3                           Action By Certificateholders With Respect to Bankruptcy.  The Trustee shall not have the power to commence a voluntary proceeding in bankruptcy relating to the Trust (i) until one year and one day after the Outstanding Amount of all the Notes has been reduced to zero and (ii) without the unanimous prior approval of all Certificateholders and (iii) without the delivery to the Trustee by each such Certificateholder of a certificate certifying that such Certificateholder reasonably believes that the Trust is insolvent.

 

SECTION 4.4                           Restrictions on Certificateholders’ Power.  The Certificateholders shall not direct the 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 Trustee under this Agreement or any of the Basic Documents or would be contrary to Section 2.3, nor shall the Trustee be obligated to follow any such direction, if given.

 

SECTION 4.5                           Majority Control.  Except as expressly provided herein, any action that may be taken by the Certificateholders under this Agreement may be taken by the Certificateholders holding in the aggregate more than 50% of the beneficial interest in the Trust at the time of such action. Except as expressly provided herein, any written notice of the Certificateholders delivered pursuant to this Agreement shall be effective if signed by Certificateholders holding in the aggregate more than 50% of the beneficial interest in the Trust at the time of such action.

 

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ARTICLE V
 Application of Trust Funds; Certain Duties

 

SECTION 5.1                           Establishment of Trust Account.  The Trustee or the Paying Agent on the Trust’s behalf, for the benefit of the Certificateholders, shall establish and maintain in the name of the Trust an Eligible Deposit Account (the “Certificate Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Certificateholders.

 

The Trust shall possess all right, title and interest in all funds on deposit from time to time in the Certificate Distribution Account and in all proceeds thereof. Except as otherwise expressly provided herein, the Certificate Distribution Account shall be under the sole dominion and control of the Trustee or the Paying Agent for the benefit of the Certificateholders.  If, at any time, the Certificate Distribution Account ceases to be an Eligible Deposit Account, the Trustee or the Paying Agent on the Trust’s behalf (or the Depositor on behalf of the Trustee, if the Certificate Distribution Account is not then held by the initial Paying Agent or the Trustee or an Affiliate thereof) shall, within 10 Business Days (or such longer period, not to exceed 30 calendar days, as to which the Rating Agency Condition shall be satisfied), establish a new Certificate Distribution Account as an Eligible Deposit Account and shall transfer any cash and/or any investments to such new Certificate Distribution Account.

 

SECTION 5.2                           Applications of Trust Funds.

 

(a)                               On each Payment Date, the Indenture Trustee (if any Notes are Outstanding [or amounts are still due to the Counterparties]) or the Trustee (if the Notes [and all payments to the Counterparties] have been paid in full) will distribute to Certificateholders, on a pro rata basis, amounts deposited in the Certificate Distribution Account pursuant to Section 5.6 of the Sale and Servicing Agreement.

 

(b)                              On each Payment Date, the Indenture Trustee or the Trustee, as applicable, shall make available using its internet website or shall send to each Certificateholder the statement provided to the Indenture Trustee or the Trustee, as applicable, by the Servicer pursuant to Section 5.11 of the Sale and Servicing Agreement.

 

(c)                               In the event that any withholding tax is imposed on the Trust’s payment (or allocations of income) to a Certificateholder, such tax shall reduce the amount otherwise distributable to the Certificateholder in accordance with this Section.  The Indenture Trustee and the Trustee, as applicable, are hereby authorized and directed to retain from amounts otherwise distributable to the Certificateholders sufficient funds for the payment of any tax that is legally owed by the Trust (but such authorization shall not prevent the Indenture Trustee or the Trustee, as applicable, from contesting any such tax in appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings).  The amount of any withholding tax imposed with respect to a Certificateholder shall be treated as cash distributed to such Certificateholder at the time it is withheld by the Trust. If there is a possibility that withholding tax is payable with respect to a distribution (such as a distribution to a non-U.S. Certificateholder), the Indenture Trustee or the Trustee, as applicable, may, in its

 

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sole discretion, withhold such amounts in accordance with this paragraph (c).  Notwithstanding any other provision of this Agreement, the Trust shall withhold and pay over to the Internal Revenue Service, pursuant to Sections 1441, 1442 and 1446 of the Code (or any successor provisions or any other provision as may be enacted into law), at such times as required by such provisions, such amounts as the Trust is required to withhold under such provision on account of any foreign Certificateholder’s distributive share of income of the Trust, as if the entire amount of such foreign Certificateholder’s distributive share of such income is subject to withholding tax pursuant to such provisions.  To the extent that a foreign Certificateholder claims to be entitled to a reduced rate of, or exemption from, U.S. withholding tax pursuant to an applicable income tax treaty, or otherwise, such foreign Certificateholder shall furnish the Depositor and the Trustee with such information and forms as it may require and are necessary to comply with the regulations governing the obligations of withholding tax agents, which the Depositor may forward to the Indenture Trustee.  Each foreign Certificateholder represents and warrants that any such information and form furnished by it shall be true and accurate and agrees to indemnify the Trust and each of the other Certificateholders from any and all damages, costs and expenses resulting from the filing of inaccurate or incomplete information or forms relating to such withholding taxes.  In the event that a Certificateholder wishes to apply for a refund of any such withholding tax, the Indenture Trustee or the Trustee, as applicable, shall reasonably cooperate with such Certificateholder in making such claim so long as such Certificateholder agrees to reimburse the Indenture Trustee or the Trustee, as applicable, for any out-of-pocket expenses incurred.

 

(d)                             Each Certificateholder will furnish the Depositor and the Trustee with the Noteholder Tax Identification Information, and to the extent FATCA Withholding Tax is applicable, Noteholder FATCA Information.  If the Certificateholder fails to provide such information, the Trust shall withhold and pay over to the Internal Revenue Service the FATCA Withholding Tax in such amounts and at such times as required by FATCA on account of the Certificateholder’s distributive share of the income of the Trust.

 

SECTION 5.3                           Method of Payment.  Subject to Section 9.1(c), distributions required to be made to Certificateholders on any Payment Date shall be made to each Certificateholder of record on the preceding Record Date either by wire transfer, in immediately available funds, to the account of such Certificateholder at a bank or other entity having appropriate facilities therefor, if such Certificateholder shall have provided to the Certificate Registrar appropriate written instructions at least five Business Days prior to such Payment Date and such Certificateholder’s Trust Certificates aggregate not less than $1,000,000, or, if not, by check mailed to such Certificateholder at the address of such Certificateholder appearing in the Certificate Register.

 

SECTION 5.4                           No Segregation of Monies; No Interest.  Subject to Sections 5.1 and 5.2, monies received by the Trustee or the Paying Agent hereunder need not be segregated in any manner except to the extent required by law or the Sale and Servicing Agreement and may be deposited under such general conditions as may be prescribed by law, and the Trustee or the Paying Agent, as applicable, shall not be liable for any interest thereon.

 

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SECTION 5.5                           Accounting and Reports to the Noteholders, Certificateholders, the Internal Revenue Service and Others.  The Depositor or, if any Trust Certificates are held by any Person other than the Depositor or its Affiliate, the Trustee, shall: (a) maintain (or cause to be maintained) the books of the Trust on a calendar year basis on the accrual method of accounting, (b) deliver to each Certificateholder, as may be required by the Code and applicable Treasury Regulations, such information as may be required (including Schedule K-1, if applicable) to enable each Certificateholder to prepare its federal, State and local income tax returns, (c) file such tax returns relating to the Trust (including, if applicable, a partnership information return on Internal Revenue Service Form 1065 or its successor), and make such elections as may from time to time be required or appropriate under any applicable State or federal statute or rule or regulation thereunder so as to maintain the Trust’s characterization as a disregarded entity or partnership for federal income tax purposes, as applicable, (d) cause such tax returns to be signed in the manner required by law and (e) collect or cause to be collected any withholding tax as described in and in accordance with Section 5.2(c) with respect to income or distributions to Certificateholders.  The Trustee shall elect under Section 1278 of the Code to include in income currently any market discount that accrues with respect to the Receivables and shall elect under Section 171 of the Code to amortize any bond premium with respect to the Receivables.  The Trustee shall not make the election provided under Section 754 of the Code.

 

SECTION 5.6                           Signature on Returns; Tax Matters Partner.

 

(a)                               The Depositor, or if any Trust Certificates are held by any Person other than the Depositor, the Trustee, shall sign on behalf of the Trust the tax returns of the Trust, unless applicable law requires a Certificateholder to sign such documents, in which case such documents shall be signed by such Certificateholder.

 

(b)                              In the event the Trust is characterized as a partnership, in accordance with Section 2.6, the Depositor shall be designated the “tax matters partner” of the Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury Regulations, except that for taxable years of the partnership to which Section 6223 of the Code as amended by Section 1101(c) of P.L. 114-74 applies, the Depositor will be the “partnership representative”.

 

ARTICLE VI
 Authority and Duties of Trustee

 

 

SECTION 6.1                           General Authority.  The Trustee is authorized and directed to execute and deliver the Basic Documents to which the Trust is to be a party and each certificate or other document attached as an exhibit to or contemplated by the Basic Documents to which the Trust is to be a party, in each case in such form as the Depositor shall approve as evidenced conclusively by the Trustee’s execution thereof, and, on behalf of the Trust, to direct the Indenture Trustee to authenticate and deliver the Notes in the aggregate principal amount specified in a letter of instruction from the Depositor to the Trustee.  In addition to the foregoing, the Trustee is authorized, but shall not be obligated, to take all actions required of the Trust pursuant to the Basic Documents.  The Trustee is further authorized from time to time to take such action as the Administrator recommends with respect to the Basic Documents.

 

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SECTION 6.2                           General Duties.  It shall be the duty of the Trustee to discharge (or cause to be discharged) all of its responsibilities pursuant to this Agreement and the other Basic Documents to which the Trust is a party and to administer the Trust in the interest of the Certificateholders, subject to the Basic Documents and in accordance with this Agreement. Notwithstanding the foregoing, the Trustee shall be deemed to have discharged its duties and responsibilities hereunder and under the other Basic Documents to the extent the Administrator has agreed in the Administration Agreement to perform any act or to discharge any duty of the Trustee hereunder or under any other Basic Document, and the Trustee shall not be held liable for the default or failure of the Administrator to carry out its obligations under the Administration Agreement.

 

SECTION 6.3                           Action upon Instruction.

 

(a)                               Subject to Article IV and in accordance with the Basic Documents, the Certificateholders may by written instruction direct the Trustee in the management of the Trust. Such direction may be exercised at any time by written instruction of the Certificateholders pursuant to Article IV.

 

(b)                              The Trustee shall not be required to take any action hereunder or under any other Basic Document if the Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Trustee or is contrary to the terms hereof or of any other Basic Document or is otherwise contrary to law.

 

(c)                               Whenever the Trustee is unable to decide between alternative courses of action permitted or required by this Agreement or any other Basic Document, the Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Certificateholders requesting instruction as to the course of action to be adopted, and to the extent the Trustee acts in good faith in accordance with any written instruction of the Certificateholders received, the Trustee shall not be liable on account of such action to any Person.  If the Trustee shall not have received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the other Basic Documents, as it shall deem to be in the best interests of the Certificateholders, and shall have no liability to any Person for such action or inaction.

 

(d)                             In the event that the Trustee is unsure as to the application of any provision of this Agreement or any other Basic Document or any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Trustee or is silent or is incomplete as to the course of action that the Trustee is required to take with respect to a particular set of facts, the Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Certificateholders requesting instruction and, to the extent that the Trustee acts or refrains from acting in good faith in accordance with any such instruction received, the Trustee shall not be liable, on account of such action or inaction, to any Person.  If the Trustee shall not have received appropriate instruction within 10

 

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days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the other Basic Documents, as it shall deem to be in the best interests of the Certificateholders, and shall have no liability to any Person for such action or inaction.

 

 

SECTION 6.4                           No Duties Except as Specified in This Agreement or in Instructions.  The Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, dispose of or otherwise deal with the Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Trustee is a party, except as expressly provided by this Agreement or in any document or written instruction received by the Trustee pursuant to Section 6.3; and no implied duties or obligations shall be read into this Agreement or any other Basic Document against the Trustee.  The Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or Lien granted to it hereunder or to prepare or file any Commission filing for the Trust or to record this Agreement or any other Basic Document or to monitor or enforce the satisfaction of any risk retention requirements.  The Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any Liens on any part of the Trust Estate arising by, through or under the Trustee (including in its individual capacity) which are unrelated to the administration or ownership of the Trust Estate.

 

Further, notwithstanding anything to the contrary herein or in any other document, the Trustee shall not be required to execute, deliver or certify on behalf of the Trust, the Servicer, the Depositor or any other Person any filings, certificates, affidavits or other instruments required under Section 302 of the Sarbanes-Oxley Act of 2002.  Notwithstanding any Person’s right to instruct the Trustee, neither the Trustee nor any agent, employee, director or officer of the Trustee shall have any obligation to execute any certificates or other documents required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 or the rules and regulations promulgated thereunder, and the refusal to comply with any such instructions shall not constitute a default or breach under this Agreement or any other document in connection herewith.

 

SECTION 6.5                           No Action Except Under Specified Documents or Instructions.  The Trustee shall not manage, control, use, sell, dispose of or otherwise deal with any part of the Trust Estate except: (i) in accordance with the powers granted to and the authority conferred upon the Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents and (iii) in accordance with any document or instruction delivered to the Trustee pursuant to Section 6.3.

 

SECTION 6.6                           Restrictions.  The Trustee shall not take any action (a) that is inconsistent with the purposes of the Trust set forth in Section 2.3 or (b) that, to the actual knowledge of the Trustee, would result in the Trust’s becoming taxable as a corporation for federal income tax purposes.  The Certificateholders shall not direct the Trustee to take action that would violate this Section.

 

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ARTICLE VII
 Concerning the Trustee

 

SECTION 7.1                           Acceptance of Trusts and Duties.  The Trustee accepts the trusts hereby created and agrees to perform its duties hereunder with respect to such trusts but only upon the terms of this Agreement. The Trustee also agrees to disburse all monies actually received by it constituting part of the Trust Estate upon the terms of the Basic Documents. The Trustee shall not be answerable or accountable hereunder or under any Basic Document under any circumstances, except: (i) for its own willful misconduct or negligence or (ii) in the case of the inaccuracy of any representation or warranty contained in Section 7.3 expressly made by the Trustee. In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence):

 

(a)                               the Trustee shall not be liable for any error of judgment made in good faith by a responsible officer of the Trustee unless it is proved that the Trustee was negligent in ascertaining the pertinent facts;

 

(b)                              the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the instructions of the Administrator, the Servicer or any Certificateholder;

 

(c)                               no provision of this Agreement or any other Basic Document shall require the Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any Basic Document, if the Trustee 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)                             under no circumstances shall the Trustee be liable for indebtedness evidenced by or arising under any of the Basic Documents, including the principal of and interest on the Notes;

 

(e)                               the Trustee shall not be responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Depositor or for the form, character, genuineness, sufficiency, value or validity of any of the Trust Estate or for or in respect of the validity or sufficiency of the Basic Documents, other than the certificate of authentication on the Trust Certificates, and the Trustee shall in no event assume or incur any liability, duty or obligation to any Noteholder or to any Certificateholder, other than as expressly provided for herein and in the Basic Documents;

 

(f)                                the Trustee shall not be liable for the default or misconduct of the Administrator, the Depositor, the Indenture Trustee or the Servicer under any of the Basic Documents or otherwise and the Trustee shall have no obligation or liability to perform the obligations of the Trust under this Agreement or the other Basic Documents that are required to be performed by the Administrator under the Administration Agreement, the Indenture Trustee under the Indenture or the Servicer under the Sale and Servicing Agreement; and

 

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(g)                              the 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 or any other Basic Document, at the request, order or direction of any of the Certificateholders unless such Certificateholders have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Trustee therein or thereby.  The right of the Trustee to perform any discretionary act enumerated in this Agreement or in any other Basic Document shall not be construed as a duty, and the Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of any such act.

 

SECTION 7.2                           Furnishing of Documents.  The Trustee shall furnish to the Certificateholders promptly upon receipt of a written request therefor, and at the expense of the Certificateholders, duplicates or copies of all reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Trustee under the Basic Documents, including any requests from Noteholders to communicate under Section 7.6 of the Indenture and any Review Reports received from the Asset Representations Reviewer.

 

SECTION 7.3                           Representations and Warranties.  The Trustee hereby represents and warrants to the Depositor, for the benefit of the Certificateholders, that as of the date hereof (other than with respect to Section 7.3(e), which is as of the dates specified therein):

 

(a)                               it is a [trust company] duly organized and validly existing in good standing under the laws of the State of [Delaware], with the requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement,

 

(b)                              it has taken all corporate action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf,

 

(c)                               the execution and delivery of this Agreement, the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the [certificate of incorporation or by-laws] of the Trustee, or to the best of its knowledge without independent investigation any indenture, agreement or other instrument to which the Trustee is a party or by which it is bound; or violate any federal or State law governing the banking or trust powers of the Trustee; or, to the best of the Trustee’s knowledge, violate any order, rule or regulation applicable to the Trustee of any court or of any federal or State regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Trustee or its properties,

 

(d)                             this Agreement, assuming due authorization, execution and delivery by the Depositor, constitutes a valid, legal and binding obligation of the Trustee, enforceable against it in accordance with the terms hereof subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of

 

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creditors’ rights generally and to general principles of equity, regardless of whether such enforcement is considered in a proceeding in equity or at law, and

 

(e)                               as of the date of the Underwriting Agreement, the Preliminary Prospectus Date, the Prospectus Date and the Closing Date, to its knowledge without independent investigation, there are no legal proceedings pending against the Trustee, or of which any property of the Trustee is subject, that are material to the Noteholders, and to the knowledge of the Trustee no such legal proceedings are contemplated by any governmental authority.

 

SECTION 7.4                           Information to be Provided by the Trustee.  The Trustee shall notify the Depositor promptly after the Trustee becomes aware of (a) the initiation of any legal proceedings against the Trustee, or of which any property of the Trustee is subject, that are material to the Noteholders, (b) any developments in any such proceedings that are material to the Noteholders and (c) any such proceedings that are contemplated by any governmental authority.

 

SECTION 7.5                           Reliance; Advice of Counsel.  (a) Except to the extent otherwise provided in Section 7.1, the 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 (whether in its original or facsimile form) believed by it to be genuine and believed by it to be signed by the proper party or parties. The Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or matter the method of the determination of which is not specifically prescribed herein, the Trustee may for all purposes hereof rely on a certificate, signed by the president, any vice president, any treasurer, any assistant treasurer, any secretary, any assistant secretary or other authorized officers of the relevant party as to such fact or matter, and such certificate shall constitute full protection to the Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.

 

(b)                              In the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement or the other Basic Documents, the Trustee: (i) may act directly or through its agents or attorneys pursuant to agreements entered into with any of them, and the Trustee shall not be liable for the conduct or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Trustee with reasonable care, and (ii) may consult with counsel, accountants and other skilled Persons to be selected with reasonable care and employed by it.  The Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the written opinion or advice of any such counsel, accountants or other such Persons and which opinion or advice states that such action is not contrary to this Agreement or any other Basic Document.

 

SECTION 7.6                           Not Acting in Individual Capacity.  Except as provided in this Article VII, in accepting the trusts hereby created [Wilmington Trust Company] acts solely as Trustee hereunder and not in its individual capacity and all Persons having any claim against the Trustee by reason of the transactions contemplated by this Agreement or any other Basic Document shall look only to the Trust Estate for payment or satisfaction thereof.

 

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SECTION 7.7                           Trustee Not Liable For Trust Certificates or Receivables.  The recitals contained herein and in the Trust Certificates (other than the signature and counter-signature of the Trustee on the Trust Certificates) shall be taken as the statements of the Depositor, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representations as to the validity or sufficiency of this Agreement, of any other Basic Document, of the Trust Certificates (other than the signature and countersignature, if any, of the Trustee on the Trust Certificates) or of the Notes, or of any Receivable or related documents.  The Trustee shall at no time have any responsibility or liability for or with respect to the legality, validity and enforceability of any Receivable, or the perfection and priority of any security interest created by any Receivable in any of the Financed Equipment or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Trust Estate or its ability to generate the payments to be distributed to Certificateholders under this Agreement or the Noteholders under the Indenture, including: (a) the existence, condition and ownership of any Financed Equipment, (b) the existence and enforceability of any insurance thereon, (c) the existence and contents of any Receivable on any computer or other record thereof, (d) the validity of the assignment of any Receivable to the Trust or of any intervening assignment, (e) the completeness of any Receivable, (f) the performance or enforcement of any Receivable, and (g) the compliance by the Depositor or the Servicer with any warranty or representation made under any Basic Document or in any related document or the accuracy of any such warranty or representation or any action of the Administrator, the Indenture Trustee or the Servicer or any subservicer taken in the name of the Trustee.

 

SECTION 7.8                           Trustee May Not Own Notes.  The Trustee shall not, in its individual capacity, but may in a fiduciary capacity, become the owner or pledgee of Notes or otherwise extend credit to the Issuing Entity.  The Trustee may otherwise deal with the Depositor, the Administrator, the Indenture Trustee and the Servicer with the same rights as it would have if it were not the Trustee.

 

ARTICLE VIII
 Compensation of Trustee

 

SECTION 8.1                           Trustee’s Fees and Expenses.  The Trustee shall receive as compensation for its services hereunder such fees as have been separately agreed upon before the date hereof between the Depositor and the Trustee, and the Trustee shall be entitled to be reimbursed by the Depositor for its other reasonable expenses hereunder, including the reasonable compensation, expenses and disbursements of such agents, representatives, experts and counsel as the Trustee may employ in connection with the exercise and performance of its rights and its duties hereunder.

 

SECTION 8.2                           Indemnification.  The Depositor shall be liable as primary obligor for, and shall indemnify the Trustee and its successors, assigns, agents and servants (collectively, the “Indemnified Parties”) from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever (collectively, “Expenses”), which may at any time be imposed on, incurred by or asserted against the Trustee or any other Indemnified Party in any way relating to or arising out of this Agreement, the Basic Documents, the Trust Estate, the administration of the Trust Estate or the action or inaction of the Trustee

 

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hereunder, except only that the Depositor shall not be liable for or required to indemnify an Indemnified Party from and against Expenses arising or resulting from: (a) such Indemnified Party’s willful misconduct or negligence, (b) with respect to the Trustee, the inaccuracy of any representation or warranty contained in Section 7.3 expressly made by the Trustee or (c) any tax imposed on an Indemnified Party based on, measured by or with respect to the net or gross income, capital or net worth, gross or net receipts, franchise, excess profits or conduct of business by such Indemnified Party (including, but not limited to, taxes imposed on, measured by, or with respect to any fees or compensation received by the Trustee hereunder).  The indemnities contained in this Section shall survive the resignation or termination of the Trustee or the termination of this Agreement. In any event of any claim, action or proceeding for which indemnity will be sought pursuant to this Section, the Trustee’s choice of legal counsel shall be subject to the approval of the Depositor, which approval shall not be unreasonably withheld.

 

SECTION 8.3                           Payments to the Trustee.  Any amounts paid to the Trustee pursuant to this Article VIII shall be deemed not to be a part of the Trust Estate immediately after such payment.  The Trustee shall also be entitled to interest on all fees and expenses that are due and unpaid for more than sixty (60) days after they have been billed to the party responsible for the payment of such amounts at a rate equal to the rate publicly announced by [Wilmington Trust Company] as its prime rate from time to time.

 

ARTICLE IX
 Termination of Trust Agreement

 

SECTION 9.1                           Termination of Trust Agreement.  (a) The Trust shall dissolve upon the final distribution by the Trustee of all monies or other property or proceeds of the Trust Estate in accordance with the Indenture, the Sale and Servicing Agreement and Article V.  The bankruptcy, liquidation, dissolution, death or incapacity of any Certificateholder shall not: (x) operate to dissolve or terminate this Agreement or the Trust, (y) entitle such Certificateholder’s legal 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 or (z) otherwise affect the rights, obligations and liabilities of the parties hereto.

 

(b)                              Except as provided in Section 9.1(a), neither the Depositor nor any Certificateholder shall be entitled to dissolve, revoke or terminate the Trust; provided however, for the sake of clarity, no action is necessary by the Depositor, the Certificateholder or any other Person as a prerequisite for a dissolution under Section 9.1(a) to occur.

 

(c)                               Notice of any anticipated dissolution of the Trust, specifying the Payment Date upon which the Certificateholders shall surrender their Trust Certificates to the Paying Agent for payment of the final distribution and cancellation, shall be given promptly by the Trustee by letter to Certificateholders mailed within five Business Days of receipt of notice of such anticipated dissolution from the Servicer given pursuant to Section 9.1(c) of the Sale and Servicing Agreement, and such notice from the Trustee shall state: (i) the Payment Date upon which final payment of the Trust Certificates shall be made upon presentation and surrender of the Trust Certificates at the office of the Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that

 

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the Record Date otherwise applicable to such Payment Date is not applicable, payments being made only upon presentation and surrender of the Trust Certificates at the office of the Paying Agent therein specified.  The Trustee shall give such notice to the Certificate Registrar (if other than the Trustee) and the Paying Agent at the time such notice is given to Certificateholders. Upon presentation and surrender of the Trust Certificates, the Paying Agent shall cause to be distributed to Certificateholders amounts distributable on such Payment Date pursuant to Section 5.2.

 

In the event that all of the Certificateholders shall not surrender their Trust Certificates for cancellation within six months after the date specified in the above mentioned written notice, the Trustee shall give a second written notice to the remaining Certificateholders to surrender their Trust Certificates for cancellation and to receive the final distribution with respect thereto.  If within one year after the second notice all the Trust Certificates shall not have been surrendered for cancellation, the Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining Certificateholders concerning surrender of their Trust Certificates, and the cost thereof shall be paid out of the funds and other assets that shall remain subject to this Agreement.  Any funds remaining in the Trust after exhaustion of such remedies shall be distributed by the Trustee to the Depositor.

 

(d)                             Upon the dissolution of the Trust and the payment of all liabilities of the Trust in accordance with applicable law, the Trustee shall cause the Certificate of Trust to be canceled by filing a certificate of cancellation with the Secretary of State in accordance with the provisions of Section 3810 (or successor section) of the Trust Statute, at which time the Trust and this Agreement (other than Article VIII) shall terminate.

 

ARTICLE X
 Successor Trustees and Additional Trustees

 

SECTION 10.1                   Eligibility Requirements for Trustee.  The Trustee shall at all times:  (a) be a corporation satisfying the provisions of Section 26(a)(1) of the Investment Company Act of 1940, as amended, (b) be authorized to exercise corporate trust powers, (c) have a combined capital and surplus of at least $50,000,000 and be subject to supervision or examination by federal or State authorities, and (d) have (or have a parent that has) a rating of at least “Baa3” by [    ].  If such corporation shall publish reports of condition at least annually, pursuant to law or 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. At all times, at least one Trustee of the Trust shall satisfy the requirements of Section 3807(a) of the Trust Statute. In case at any time the Trustee shall cease to be eligible in accordance with this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 10.2.

 

SECTION 10.2                   Resignation or Removal of Trustee.

 

(a)                               The Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Administrator.  Upon receiving such notice of resignation, the Administrator shall promptly appoint a successor Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the

 

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resigning Trustee and one copy to the successor Trustee.  Other than such instrument, and as provided in Sections 10.2(b) and 10.3, no other documentation or action shall be required, and notwithstanding anything to the contrary herein or in the Basic Documents, no consent shall be required of any Person with respect to such appointment or entering into any such agreement, and the amendment provisions hereof will not apply to such instrument.  If no successor Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Trustee may petition at the expense of the Administrator any court of competent jurisdiction for the appointment of a successor Trustee.

 

If at any time the Trustee shall cease to be eligible in accordance with Section 10.1 and shall fail to resign after written request therefor by the Administrator, or if at any time the Trustee shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Administrator may remove the Trustee.  If the Administrator shall remove the Trustee under the authority of the preceding sentence, the Administrator shall promptly appoint a successor Trustee by written instrument, in duplicate, one copy of which instrument shall be delivered to the outgoing Trustee so removed and one copy to the successor Trustee, and pay all fees owed to the outgoing Trustee.  Other than such instrument, and as provided in Sections 10.2(b) and 10.3, no other documentation or action shall be required, and notwithstanding anything herein or in the Basic Documents to the contrary, no consent shall be required of any Person with respect to such appointment or entering into any such agreement, and the amendment provisions hereof will not apply to such instrument.

 

(b)                              Any resignation or removal of the Trustee and appointment of a successor Trustee pursuant to this Section shall not become effective until acceptance of appointment by the successor Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to the outgoing Trustee.  The Administrator shall provide notice of such resignation or removal of the Trustee to each of the Rating Agencies [and the Counterparties].

 

SECTION 10.3                   Successor Trustee.  Any successor Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the Administrator and to its predecessor Trustee an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties, and obligations of its predecessor under this Agreement, with like effect as if originally named as the Trustee.  Such instrument shall identify the situs of the Trust, locations where payments will be made and/or received, and where bank accounts will be maintained for purposes of Section 2.9, if such locations are to change following such appointment.  As of the effective date of such instrument, Section 2.9 shall be read to include such locations identified in such instrument. The predecessor Trustee shall upon payment of its fees and expenses deliver to the successor Trustee all documents and statements and monies held by it under this Agreement; and the Administrator and the predecessor Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Trustee all such rights, powers, duties and obligations.

 

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No successor Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Trustee shall be eligible pursuant to Section 10.1.

 

Upon acceptance of appointment by a successor Trustee pursuant to this Section, the Administrator shall mail notice of such appointment to all Certificateholders, the Indenture Trustee, [the Counterparties,] the Noteholders and the Rating Agencies.  If the Administrator shall fail to mail such notice within 10 days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the Administrator. Any successor Trustee shall file an amendment to the Certificate of Trust as required by the Statutory Trust Act.

 

SECTION 10.4                   Merger or Consolidation of Trustee.  Any corporation or other entity into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder; provided, such corporation shall be eligible pursuant to Section 10.1, without the execution or filing of any instrument or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; and provided further, that the Trustee shall mail notice of such merger or consolidation to [the Counterparties and] the Rating Agencies subject to Section 11.18.

 

SECTION 10.5                   Appointment of Co-Trustee or Separate Trustee.  Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust or any Financed Equipment may at the time be located, the Administrator and the Trustee acting jointly shall have the power and may execute and deliver all instruments to appoint one or more Person(s) approved by the Trustee to act as co-trustee(s), jointly with the Trustee, or separate trustee(s), of all or any part of the Trust Estate, and to vest in such Person(s), in such capacity and for the benefit of the Certificateholders, such title to the Trust Estate, or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Administrator and the Trustee may consider necessary or desirable.  If the Administrator shall not have joined in such appointment within 15 days after the receipt by it of a request so to do, the Trustee alone shall have the power to make such appointment.  No co-trustee or separate trustee under this Agreement shall be required to meet the terms of eligibility as a successor trustee pursuant to Section 10.1 and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 10.3.

 

Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

 

(i)                                  all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act(s) are to be performed, the Trustee shall be incompetent or unqualified to perform such act(s), in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof

 

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in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Trustee;

 

(ii)                              no trustee under this Agreement shall be personally liable by reason of any act or omission of any other trustee under this Agreement; and

 

(iii)                          the Administrator and the Trustee acting jointly may at any time accept the resignation of or remove any separate trustee or co-trustee.

 

Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Trustee. Each such instrument shall be filed with the Trustee and a copy thereof given to the Administrator.

 

Any separate trustee or co-trustee may at any time appoint the Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name.  If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

 

The Trustee shall have no obligation to determine whether a co-trustee or separate trustee is legally required in any jurisdiction in which any part of the Trust Estate may be located.

 

ARTICLE XI
 Miscellaneous

 

SECTION 11.1                   Supplements and Amendments.  Any term or provision of this Agreement may be amended by the Depositor and the Trustee without the consent of the Indenture Trustee, any Noteholder, the Issuing Entity or any other Person subject to the satisfaction of one of the following conditions:

 

(i)                                  the Depositor delivers an Opinion of Counsel to the Indenture Trustee to the effect that such amendment will not materially and adversely affect the interests of the Noteholders or the Certificateholders; or

 

(ii)                              the Depositor delivers an Officer’s Certificate of the Depositor to the Indenture Trustee to the effect that such amendment will not materially and adversely affect the interests of the Noteholders or the Certificateholders.

 

An amendment shall be deemed not to adversely affect in any material respect the interests of any Noteholders of a Class of Notes if the Rating Agency Condition has been satisfied with respect to such amendment for such Class of Notes.

 

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This Agreement may also be amended from time to time by the Depositor and the Trustee, with prior written notice to [the Counterparties and] the Rating Agencies (which notice shall be given pursuant to Section 11.18), with the written consent of (x) Noteholders holding Notes evidencing not less than a majority of the Note Balance and (y) the Certificateholders holding in the aggregate more than 50% of the beneficial interest in the Trust at the time of such action, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that no such amendment shall: (a) reduce the interest or principal of any Note or Certificate or delay the Final Scheduled Maturity Date of any Note or (b) reduce the aforesaid percentage of the Outstanding Amount and the beneficial interest in the Trust required to consent to any such amendment, without the consent of the holders of all the outstanding Notes and Trust Certificates.

 

Notwithstanding the above, the permitted activities of the Trust set forth in Section 2.3 may not be significantly amended without the consent of Noteholders, other than the Seller and its Affiliates as Noteholders, evidencing not less than a majority of the Outstanding Amount of the Notes held by parties exclusive of the Seller and its Affiliates.

 

Promptly after the execution of any such amendment or consent (or, in the case of [the Counterparties and] the Rating Agencies, prior thereto), the Trustee shall furnish written notification of the substance of such amendment or consent to each Certificateholder, the Indenture Trustee[, the Counterparties] and, subject to Section 11.18, to each of the Rating Agencies.

 

It shall not be necessary for the consent of Certificateholders, the Noteholders or the Indenture Trustee pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents (and any other consents of Certificateholders provided for in this Agreement or in any other Basic Document) and of evidencing the authorization of the execution thereof by Certificateholders shall be subject to such reasonable requirements as the Trustee may prescribe.

 

Promptly after the execution of any amendment to the Certificate of Trust, the Trustee shall cause the filing of such amendment with the Secretary of State.

 

Prior to the execution of any amendment to this Agreement or the Certificate of Trust, the Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent to the execution and delivery of such amendment has been satisfied.  The Trustee may, but shall not be obligated to, enter into any such amendment that affects the Trustee’s own rights, duties or immunities under this Agreement or otherwise.

 

Notwithstanding anything herein to the contrary [(other than as provided in the paragraph below)], any term or provision of this Agreement may be amended by the Depositor and the Trustee without the consent of the Noteholders, Certificateholders or any other Person to add, modify or eliminate any provisions as may be necessary or advisable in order to comply with or obtain more favorable treatment for the Depositor or its Affiliate or the Trust under or with respect to any law or regulation or any accounting rule or principle (whether now or in the future in effect);

 

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it being a condition to any such amendment that the Rating Agency Condition shall have been satisfied.

 

[With respect to any amendment pursuant to this Section 11.1, if any amendment or supplement would either: (a) materially and adversely affect any of the Counterparties’ rights or obligations under an Interest Rate Swap Agreement or any other Basic Document; or (b) materially and adversely modify the obligations of, or materially and adversely impact the ability of, the Trust to fully perform any of the Trust’s obligations under an Interest Rate Swap Agreement, the Trust and the Indenture Trustee shall be required to first obtain the written consent of the applicable Counterparties to the affected Interest Rate Swap Agreements before entering into any such amendment or supplement (which consent shall not be unreasonably withheld).]

 

SECTION 11.2                   No Legal Title To Trust Estate in Certificateholders.  The Certificateholders shall not have legal title to any part of the Trust Estate. The Certificateholders shall be entitled to receive distributions with respect to their undivided ownership interest therein only in accordance with Articles V and IX. No transfer, by operation of law or otherwise, of any right, title or interest of the Certificateholders in, to and under their ownership interest in the Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Trust Estate.

 

SECTION 11.3                   Limitations on Rights of Others.  The provisions of this Agreement are solely for the benefit of the Trustee, the Depositor, the Certificateholders, the Administrator and, to the extent expressly provided herein, the Indenture Trustee[, the Counterparties] and the Noteholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

 

SECTION 11.4                   Notices.  (a) Unless otherwise expressly specified or permitted by the terms hereof, all notices shall be in writing, personally delivered, by facsimile or mailed by certified mail, postage prepaid and return receipt requested, and shall be deemed to have been duly given upon receipt: (i) if to the Trustee, Indenture Trustee or the Paying Agent, addressed to the applicable Corporate Trust Office[, and] (ii) if to the Depositor, addressed to CNH Capital Receivables LLC, [6900 Veterans Boulevard, Burr Ridge, Illinois 60527, Attention: Assistant Treasurer, (telephone: (630) 887-2095) (facsimile: (630) 887-5448)][, and (iii) if to the Counterparties, addressed to the addresses set forth in Section 11.4 of the Indenture]; or, as to each party, at such other address or facsimile number as shall be designated by such party in a written notice to the other party.

 

(b)                              Any notice required or permitted to be given to a Certificateholder shall be given by first-class mail, postage prepaid, at the address of such Certificateholder as shown in the Certificate Register.  Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice.

 

SECTION 11.5                   Severability.  Any provision of this Agreement or the Trust Certificates that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions

 

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hereof or of the Trust Certificates, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

SECTION 11.6                   Separate 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.

 

SECTION 11.7                   Successors and Assigns.  All covenants and agreements contained herein shall be binding upon, and inure to the benefit of, the Depositor and its successors, the Trustee and its successors and each Certificateholder and its successors and permitted assigns, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by a Certificateholder shall bind the successors and assigns of such Certificateholder.

 

SECTION 11.8                   Covenants of The Depositor.  If any litigation with claims in excess of $1,000,000 to which the Depositor is a party that shall be reasonably likely to result in a material judgment against the Depositor that the Depositor will not be able to satisfy shall be commenced by a Certificateholder during the period beginning nine months following the commencement of such litigation and continuing until such litigation is dismissed or otherwise terminated (and, if such litigation has resulted in a final judgment against the Depositor, such judgment has been satisfied), the Depositor shall not pay any dividend to CNHICA, or make any distribution on or in respect of its capital stock to CNHICA, or repay the principal amount of any indebtedness of the Depositor held by CNHICA, unless (i) after giving effect to such payment, distribution or repayment, the Depositor’s liquid assets shall not be less than the amount of actual damages claimed in such litigation or (ii) the Rating Agency Condition shall have been satisfied with respect to any such payment, distribution or repayment.  The Depositor will not at any time institute against the Trust any bankruptcy proceedings under any United States federal or State bankruptcy or similar law in connection with any obligations relating to the Trust Certificates, the Notes, the Trust Agreement or any of the Basic Documents.

 

SECTION 11.9                   No Petition.  The Trustee on behalf of the Trust, by entering into this Agreement, each Certificateholder, by accepting a Trust Certificate, the Trustee, and the Indenture Trustee and each Noteholder, by accepting the benefits of this Agreement, hereby covenant and agree that they will not at any time institute against the Depositor or the Trust, or join in any institution against the Depositor or the Trust of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any federal or State bankruptcy or similar law in connection with any obligations relating to the Trust Certificates, the Notes, this Agreement or any of the Basic Documents.

 

SECTION 11.10           No Recourse.  Each Certificateholder by accepting a Trust Certificate acknowledges that such Certificateholder’s Trust Certificates represent beneficial interests in the Trust only and do not represent interests in or obligations of the Depositor, the Servicer, the Administrator, the Trustee, the Indenture Trustee or any Affiliate thereof and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Trust Certificates or the Basic Documents.

 

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SECTION 11.11           Headings.  The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

 

SECTION 11.12           Governing Law.  This Agreement shall be construed in accordance with the laws of the State of Delaware, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

 

SECTION 11.13           Administrator.  The Administrator is authorized to execute on behalf of the Trust all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Trust to prepare, file or deliver pursuant to this Agreement and the other Basic Documents.  Upon written request, the Trustee shall execute and deliver to the Administrator a power of attorney appointing the Administrator its agent and attorney-in-fact to execute all such documents, reports, filings, instruments, certificates and opinions.

 

SECTION 11.14           Information to be Provided by the Trustee.  For so long as the Depositor is required to report under Regulation AB and the Exchange Act, the Trustee shall, as promptly as practicable, but in any case no later than each Payment Date, notify the Depositor, in writing, of: (i) the commencement of or, if applicable, the termination of, any and all legal proceedings pending against the Trustee or any and all proceedings of which any property of the Trustee is the subject, that is material to the Noteholders; and (ii) the commencement of or, if applicable, the termination of, any and all such proceedings known to be contemplated by governmental authorities against the Trustee or any and all proceedings of which any property of the Trustee is the subject, that is material to the Noteholders.  The Trustee shall also notify the Depositor, in writing, as promptly as practicable, but in any case no later than each Payment Date, following notice to or discovery by a Responsible Officer of the Trustee of any material changes to proceedings described in the preceding sentence.  In addition, the Trustee will furnish to the Depositor, in writing, the necessary disclosure regarding the Trustee describing such proceedings required to be disclosed under Regulation AB, including Item 1117 of Regulation AB, for inclusion in reports filed by or on behalf of the Depositor pursuant to the Exchange Act.

 

For so long as the Notes are outstanding and the Depositor is required to report under Regulation AB and the Exchange Act, the Trustee shall (i) on or before the fifth Business Day of each January, April, July and October provide to the Depositor, in writing, such information regarding or relating to the Trustee as is required for the purpose of compliance by the Depositor with Regulation AB, including Items 1109(a), 1109(b), 1119(a) and 1119(b) of Regulation AB; and (ii) as promptly as practicable following notice to or discovery by a Responsible Officer of the Trustee of any changes to such information (but in any case no later than the next March 15 following such change), provide to the Depositor, in writing, such updated information.  Such information shall include, at a minimum:

 

(A)                          the Trustee’s name and form of organization;

 

(B)                           a description of the extent to which the Trustee has had prior experience serving as a trustee for asset-backed securities transactions involving equipment receivables; and

 

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(C)                           a description of any affiliation between the Trustee and any of the following parties (the “Affiliation Parties”), as such parties are identified by legal name to the Trustee by the Depositor on the Closing Date:

 

(1)                              the sponsor;

(2)                              any depositor;

(3)                              the issuing entity;

(4)                              any servicer;

(5)                              any other trustee;

(6)                              any originator;

(7)                              any significant obligor;

(8)                              any enhancement or support provider;

(9)                              any asset representations reviewer; and

(10)                      any other material party related to the transaction.

 

In addition, the Trustee shall provide a description of whether there is, and if so the general character of, any business relationship, agreement, arrangement, transaction or understanding between the Trustee and any above-listed party that is entered into outside the ordinary course of business or is on terms other than would be obtained in an arm’s length transaction with an unrelated third party, apart from this transaction, that currently exists or that existed during the past two years and that is material to an investor’s understanding of the Notes.

 

For so long as the Notes are outstanding and the Depositor is required to report under the Exchange Act, to the extent that there is a change in any of the Affiliation Parties, the Depositor will notify the Trustee in writing of a change or addition to any such Affiliation Parties, to the extent that an Authorized Officer of the Depositor has actual knowledge of such change or addition.

 

SECTION 11.15           Complete Information.  The Disclosure Information (as defined in Section 11.16) provided by [WTC] for inclusion in the Prospectus and the Preliminary Prospectus is true and accurate in all material respects.  As of the Preliminary Prospectus Date and the Prospectus Date (a) there are no legal proceedings pending or known to be contemplated by governmental authorities against [WTC] or against any property of [WTC], that would be material to the Noteholders, (b) [WTC] is not affiliated with any of the Affiliation Parties, and (c) there is no business relationship, agreement, arrangement, transaction or understanding between the Trustee and any of the Affiliation Parties that is entered into outside the ordinary course of business or is on terms other than would be obtained in an arm’s length transaction with an unrelated third party, apart from this transaction, that currently exists or that existed during the past two years and that is material to an investor’s understanding of the Notes.

 

SECTION 11.16           Indemnification.

 

(a)                               [WTC] agrees to pay, and to protect, indemnify and save harmless Depositor and CNHICA from and against, any and all claims, losses, liabilities (including penalties), actions, suits, judgments, demands, damages, costs or expenses (including reasonable fees and expenses of attorneys or, as necessary consultants and auditors and

 

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reasonable costs of investigations) (collectively, “Losses”) of any nature to the extent such Losses result from:

 

(i)                                  any untrue statement of a material fact contained in (x) the information provided by the Trustee pursuant to Section 11.14 (“Periodic Information”) or (y) the language set forth in Section 11.16(b) that was furnished by [WTC] for use under the heading “The Trustee” in the Prospectus and the Preliminary Prospectus (the “Disclosure Information”, and together with the Periodic Information and the 11.15 Information, the “Trustee Information”) or (z) Section 11.15 (the “11.15 Information”), or

 

(ii)                              the omission to state in the Trustee Information a material fact required to be stated in the Trustee Information, or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading,

 

(b)                              The Disclosure Information for purposes of Section 11.16(a)(ii) is as follows:

 

[“Wilmington Trust Company (“WTC”)  is the trustee under the trust agreement and is a Delaware non-depository trust company originally incorporated in 1901.  On July 1, 2011, Wilmington Trust Company filed an amended charter which changed its status from a Delaware banking corporation to a Delaware non-depository trust company.  WTC’s principal place of business is located at 1100 North Market Street, Wilmington, Delaware 19890.  WTC is an affiliate of Wilmington Trust, National Association (“WTNA”) and both WTC and WTNA are subsidiaries of M&T Bank Corporation. Since 1998, WTC has served as owner trustee in numerous asset-backed securities transactions involving equipment retail installment loans and retail installment sale contracts.  Wilmington Trust Company has served as trustee for trusts involving securitizations of retail installment sale contracts and/or retail installment loans by the depositor since 2007.

 

Wilmington Trust Company is subject to various legal proceedings that arise from time to time in the ordinary course of business.  Wilmington Trust Company does not believe that the ultimate resolution of any of these proceedings will have a materially adverse effect on its services as trustee or on the noteholders.

 

Wilmington Trust Company has provided the above information for purposes of complying with Regulation AB.  Other than the above three paragraphs, Wilmington Trust Company has not participated in the preparation of, and is not responsible for, any other information contained in this prospectus.”]

 

(c)                               With respect to the indemnification provided in Section 11.16(a), in no event will [WTC] be liable for special, indirect or consequential damages relating to such indemnification.  In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant thereto, such person (the “indemnified party”) shall promptly notify [WTC] in writing.  In any such proceeding, any indemnified party shall have the right to retain its own counsel,

 

30

 

but the reasonable fees and expenses of such counsel shall be at the expense of such indemnified party.  [WTC] may, at its option, at any time upon written notice to the indemnified party, assume the defense of any proceeding relating to such indemnity and may designate counsel reasonably satisfactory to the indemnified party in connection therewith provided that the counsel so designated would have no actual or potential conflict of interest in connection with such representation.  Unless it shall assume the defense of any proceeding [WTC] shall not be liable for any settlement of any proceeding effected without its written consent.  If [WTC] assumes the defense of any proceeding, it shall be entitled to settle such proceeding with the consent of the indemnified party or, if such settlement provides for release of the indemnified party in connection with all matters relating to the proceeding which have been asserted against the indemnified party in such proceeding by the other parties to such settlement, without the consent of the indemnified party.

 

(d)                             Depositor agrees to pay, and to protect, indemnify and save harmless [WTC], and its respective officers, directors, shareholders, employees, agents and each Person, if any, who controls [WTC], within the meaning of either Section 15 of the Securities Act of 1933, as amended, or Section 20 of the Exchange Act, from and against, any and all claims, losses, liabilities (including penalties), actions, suits, judgments, demands, damages, costs or expenses (including reasonable fees and expenses of attorneys or, as necessary, consultants and auditors and reasonable costs of investigations) (collectively, “[WTC] Losses”) of any nature to the extent such [WTC] Losses result from any untrue statement of a material fact contained under the heading “Depositor” in the Preliminary Prospectus and the Prospectus, any omission to state under the heading “Depositor” in the Preliminary Prospectus and the Prospectus a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstance under which they were made, not misleading, or any untrue information with respect to Affiliation Parties provided by the Depositor pursuant to the last paragraph of Section 11.14 (unless [WTC] has actual knowledge that such Affiliation Party information is incorrect).

 

(e)                               With respect to the indemnification provided in Section 11.16(d), in no event will Depositor be liable for special, indirect or consequential damages relating to such indemnification.  In case any proceeding (including any governmental investigation) shall be instituted involving any Person in respect of which indemnity may be sought pursuant thereto, such Person (the “indemnified party”) shall promptly notify Depositor in writing.  In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the reasonable fees and expenses of such counsel shall be at the expense of such indemnified party.  Depositor may, at its option, at any time upon written notice to the indemnified party, assume the defense of any proceeding relating to such indemnity and may designate counsel reasonably satisfactory to the indemnified party in connection therewith provided that the counsel so designated would have no actual or potential conflict of interest in connection with such representation.  Unless it shall assume the defense of any proceeding Depositor shall not be liable for any settlement of any proceeding effected without its written consent.  If Depositor assumes the defense of any proceeding, it shall be entitled to settle such proceeding with the consent of the indemnified party or, if such settlement provides for release of the indemnified party in connection with all matters relating to the proceeding which have been asserted against the indemnified party in such

 

31

 

proceeding by the other parties to such settlement, without the consent of the indemnified party.

 

SECTION 11.17           Paying Agent Protection.  The Paying Agent shall be entitled to all the same rights, protections, immunities and indemnities as the Indenture Trustee under the Indenture as if specifically set forth herein.

 

SECTION 11.18           Communications with Rating Agencies.  The parties hereto (other than the Seller and its Affiliates but excluding the Issuing Entity) agree that any notices or requests to, or any other written communications with, any of the Rating Agencies, or any of their respective officers, directors or employees, to be given or provided to such Rating Agencies pursuant to, in connection with or related, directly or indirectly, to the Basic Documents, the Collateral or the Notes, shall be in each case either (i) furnished to the Seller who shall forward such communication to the Rating Agencies pursuant to Section 10.18 of the Sale and Servicing Agreement; or (ii) furnished directly to the Rating Agencies with a prior copy to the Seller.  In either case, the parties hereto (other than the Seller and its Affiliates but excluding the Issuing Entity) further agree to provide such notices, requests and communications or copies thereof, as applicable, to the Seller at least one Business Day prior to the date when such notices, requests and communications are required to be delivered (or are in fact delivered, whichever is earlier) to the Rating Agencies pursuant to the Basic Documents.  So long as any Notes are Outstanding, each party hereto (other than the Seller and its Affiliates but excluding the Issuing Entity) agrees that neither it nor any party on its behalf shall engage in any oral communications with respect to the transactions contemplated hereby, under the Basic Documents or in any way relating to the Notes with any Rating Agency or any of their respective officers, directors or employees, without the participation of the Seller.

 

SECTION 11.19           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, without limitation, those relating to the funding of terrorist activities and money laundering, including Section 326 of the USA PATRIOT Act of the United States (“Applicable Law”), the Indenture Trustee is required to obtain, verify, record and update certain information relating to individuals and entities which maintain a business relationship with the Indenture Trustee. Accordingly, each of the parties hereto agrees to provide to the Indenture Trustee, upon its request from time to time such identifying information and documentation as may be available to such party in order to enable the Indenture Trustee to comply with Applicable Law.

 

SECTION 11.20           Electronic Signatures.  Any signature (including any electronic symbol or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record) hereto or to any other certificate, agreement or document related to this transaction, and any contract formation or record-keeping through electronic means shall have the same legal validity and enforceability as a manually executed signature or use of a paper-based recordkeeping system to the fullest extent permitted by applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any similar State law based on the Uniform Electronic Transactions Act, and the parties hereby waive any objection to the contrary.

 

*   *   *   *   *

 

32

 

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

 

	
 
    	
[Wilmington Trust   Company],
    
	
 
    	
  in   its individual capacity and
    
	
 
    	
  as   Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CNH Capital Receivables   LLC,
    
	
 
    	
  as   Depositor
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

 

	
ACKNOWLEDGED AND   ACCEPTED:
    	
 
    
	
 
    	
 
    
	
[Citibank, N.A.],
    	
 
    
	
as Indenture Trustee   and as Paying Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    
			

 

 

EXHIBIT A

 

 

FORM OF TRUST CERTIFICATE

 

REGISTERED

 

	
NUMBER R-[  ]
    	
[100% Beneficial   Interest][$[  ](1)]
    

 

THIS CERTIFICATE MAY NOT BE ACQUIRED BY OR FOR THE ACCOUNT OF A BENEFIT PLAN (AS DEFINED BELOW).

 

CNH EQUIPMENT TRUST 20XX-Y

 

[TRUST][[  ]% ASSET-BACKED] CERTIFICATE

 

evidencing a fractional undivided beneficial interest in the Trust (as defined below), the property of which includes a pool of retail installment sale contracts and retail installment loans secured by new and used agricultural, construction and/or other equipment and sold to the Trust by CNH Capital Receivables LLC.

 

(This Trust Certificate does not represent an interest in or obligation of CNH Capital Receivables LLC, CNH Industrial Capital America LLC, New Holland Credit Company, LLC, CNH Industrial N.V. or CNH Industrial America LLC, or any of their respective Affiliates, except to the extent described below.)

 

THIS CERTIFIES THAT [          ] is the registered owner of a [[     ] DOLLARS ($[     ])] nonassessable, fully-paid, fractional undivided interest in CNH Equipment Trust 20XX-Y (the “Trust”) formed by CNH Capital Receivables LLC, a Delaware limited liability company (the “Depositor”).

 

The Trust was created pursuant to a Trust Agreement dated as of [Month Day], 20XX (the “Trust Agreement”) between the Depositor and [Wilmington Trust Company], as trustee (the “Trustee”).  To the extent not otherwise defined herein, the capitalized terms used herein have the meanings assigned to them in the Trust Agreement or the Sale and Servicing Agreement (the “Sale and Servicing Agreement”) dated as of [Month Day], 20XX among the Trust, the Depositor and New Holland Credit Company, LLC, as servicer (the “Servicer”), as applicable.  This Trust Certificate is one of the duly authorized Trust Certificates [designated as “Asset-Backed Certificates”] (herein called the “Trust Certificates”) issued under and subject to the terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the holder of this Trust Certificate by virtue of the acceptance hereof assents and by which holder is bound.  The provisions and conditions of the Trust Agreement are hereby incorporated by reference as though set forth in their entirety herein.

 

 

 

 

 

(1)  [Denominations of $1,000 and in greater whole dollar denominations in excess thereof.]

 

A-1

 

Issued under the Indenture dated as of [Month Day], 20XX between the Trust and [Citibank, N.A.], as Indenture Trustee, are notes designated as “[      ]% Class A-1 Asset Backed Notes,” “[      ]% Class A-2[a] Asset Backed Notes,”  [“Floating Rate Class A-2b Asset Backed Notes,”] “[      ]% Class A-3 Asset Backed Notes,” “[      ]% Class A-4 Asset Backed Notes,” and “[      ]% Class B Asset Backed Notes”.  [The][Each] holder of this Trust Certificate acknowledges and agrees that its rights to receive distributions in respect of this Trust Certificate are subordinated to the rights of the Noteholders as described in the Sale and Servicing Agreement and the Indenture.

 

It is the intent of the Depositor, Servicer and [the holder of this Trust Certificate][Certificateholders] that, for purposes of federal income, State and local income and franchise and any other income taxes measured in whole or in part by income, until the Trust Certificates are held by a Person other than the Depositor, the Trust be disregarded as an entity separate from the Depositor.  At such time that the Trust Certificates are held by more than one Person, it is the intent of the Depositor, Servicer and the Certificateholders that, for purposes of federal income, State and local income and franchise and any other income taxes measured in whole or in part by income, the Trust be treated as a partnership, the assets of which are the assets held by the Trust, and the Certificateholders (including the Depositor (and its transferees and assigns) in its capacity as recipient of distributions from the Spread Account) will be treated as partners in that partnership.  The Depositor and the [holder of this Trust Certificate][other Certificateholders], by acceptance of this Trust Certificate, agree to treat, and to take no action inconsistent with the treatment of, the Trust Certificates as such for tax purposes.

 

[The][Each] Certificateholder, by its acceptance of [this][a] Trust Certificate, covenants and agrees that such Certificateholder will not at any time institute against the Depositor or the Trust, or join in any institution against the Depositor or the Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or State bankruptcy or similar law in connection with any obligations relating to [this Trust Certificate][the Trust Certificates], the Notes, the Trust Agreement or any of the other Basic Documents.

 

[The][Each] Certificateholder, by its acceptance of [this][a] Trust Certificate, represents and warrants in writing that: (a) it is acquiring [this][a] Trust Certificate for its own account and is the sole beneficial owner of such Trust Certificate; (b) the transfer is not being effected on or through (x) an “established securities market” within the meaning of Section 7704(a)(1) of the Code, including without limitation, an over-the-counter market or an interdealer quotation system that regularly disseminates firm buy or sell quotations or (y) a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704(a)(2) of the Code and any proposed, temporary or final Treasury regulations thereunder; and (c) such transfer will not cause the Trust to be classified as an association (or publicly traded partnership) taxable as a corporation for U.S. federal income tax purposes, and such purchaser or transferee will not take any action, including any subsequent disposition of such Trust Certificate (or any beneficial interest therein), that would cause the Trust to be treated as an association (or publicly traded partnership) taxable as a corporation for U.S. federal income tax purposes.

 

[This Trust Certificate][The Trust Certificates] may not be acquired by or for the account of: (i) an employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income

 

A-2

 

Security Act of 1974, as amended (“ERISA”)), that is subject to the provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, or (iii) any entity whose underlying assets include plan assets of any of the foregoing (a “Benefit Plan”). By accepting and holding this Certificate, the Certificateholder shall be deemed to have represented and warranted that it is not a Benefit Plan.

 

[This Trust Certificate does][The Trust Certificates do] not represent an obligation of, or an interest in, the Depositor, the Servicer, CNH Industrial Capital America LLC, New Holland Credit Company, LLC, CNH Industrial America LLC, CNH Industrial N.V., the Trustee or any Affiliates of any of them and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated herein or in the Trust Agreement or the other Basic Documents.

 

Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Trustee, by manual signature, this Trust Certificate shall not entitle the holder hereof to any benefit under the Trust Agreement, the Sale and Servicing Agreement or any of the other Basic Documents or be valid for any purpose.

 

This Trust Certificate shall be construed in accordance with the laws of the state of Delaware, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws.

 

A-3

 

IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its individual capacity has caused this Trust Certificate to be duly executed.

 

	
 
    	
CNH Equipment Trust   20XX-Y,
    
	
 
    	
 
    
	
 
    	
By: [Wilmington Trust   Company],
    
	
 
    	
    not   in its individual capacity, but
    
	
 
    	
    solely   as Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

A-4

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Trust Certificates referred to in the within-mentioned Trust Agreement.

 

	
 
    	
[Wilmington Trust   Company],
    
	
 
    	
   as   Trustee
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Authorized Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:  [Month   Day], 20XX
    	
 
    

 

A-5

 

ASSIGNMENT

 

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

 

 

(Please print or type name and address, including postal zip code, of assignee) the within Trust Certificate, and all rights thereunder, hereby irrevocably constituting and appointing Attorney to transfer said Trust Certificate on the books of the Certificate Registrar, with full power of substitution in the premises.

 

	
Dated:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Signature Guaranteed:
    	
 
    

 

 

 

 

*NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Trust Certificate in every particular, without alteration, enlargement or any change whatever. Such signature must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company.

 

A-6

 

EXHIBIT B

 

 

 

CERTIFICATE OF TRUST

 

OF

 

CNH EQUIPMENT TRUST 20XX-Y

 

THIS CERTIFICATE OF TRUST of CNH EQUIPMENT TRUST 20XX-Y (the “Trust”), is being duly executed and filed by [Wilmington Trust Company], a [Delaware trust company], as trustee, to form a statutory trust under the Delaware Statutory Trust Act (12 Del. C. §3801, et seq. (the “Act”).

 

Name.  The name of the statutory trust being formed hereby is CNH Equipment Trust 20XX-Y.

 

Delaware Trustee.  The name and business address of the trustee of the Trust in the State of Delaware are [Wilmington Trust Company], [1100 North Market Street, Wilmington, Delaware 19890-0001.  Attention: Corporate Trust Administration].

 

Effective Date.  This Certificate of Trust shall be effective as of its filing.

 

B-1

 

IN WITNESS WHEREOF, the undersigned, being the trustee of the Trust, has executed this Certificate of Trust in accordance with Section 3811(a)(1) of the Act.

 

	
 
    	
[Wilmington Trust   Company],
    
	
 
    	
not   in its individual capacity, but solely as
    
	
 
    	
Trustee   under a Trust Agreement dated as
    
	
 
    	
of   [Month Day], 20XX
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

B-2Document

AMBAC FINANCIAL GROUP, INC.
SEVERANCE PAY PLAN
(Applicable to terminations occurring on or after December 16, 2021)

TABLE OF CONTENTS
Page
ARTICLE I — INTRODUCTION    1
ARTICLE II — DEFINITIONS AND INTERPRETATIONS    1
ARTICLE III — ELIGIBILITY FOR SEVERANCE    4
ARTICLE IV — CONDITIONS ON RECEIVING SEVERANCE BENEFITS    4
ARTICLE V — SEVERANCE BENEFITS    4
ARTICLE VI — MISCELLANEOUS PROVISIONS    6
ARTICLE VII — OTHER INFORMATION A PARTICIPANT NEEDS TO KNOW ABOUT THE PLAN    7

ARTICLE I — INTRODUCTION
Ambac Financial Group, Inc. (the “Company”) established this Severance Pay Plan (the “Plan”), effective as of December 16 , 2021, to provide temporary and short-term unemployment type benefits to certain employees of the Company and its participating affiliates who suffer a loss of employment on or after December 16, 2021 in the circumstances set forth in the Plan.  The Plan amends and supersedes in its entirety the Ambac Assurance Corporation Severance Pay Plan effective as of December 14 , 2010 (the “Prior Plan”)  From and after the Effective Date (as defined below), the Prior Plan shall be terminated and shall have no further force and effect.  The Plan is intended to fall within the definition of an “employee welfare benefit plan” under Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended.
This document contains the official text of the Plan and also serves as the summary plan description for the Plan.
ARTICLE II — DEFINITIONS AND INTERPRETATIONS
The following definitions and interpretations of important terms apply to the Plan.
1.Company.  Ambac Financial Group, Inc., a Delaware corporation, and its successors.
2.Effective Date.  The Effective Date of this Plan is December 16, 2021.
3.Employee.  Any active employee of an Employer other than an Excluded Individual. 
4.Employer.  The Company, Ambac Assurance Corporation, Everspan Holdings, LLC and its subsidiaries, and any other subsidiary or affiliate of the Company from time to time designated as an “Employer” by the Compensation Committee of the Board of Directors of the Company.
5.ERISA.  The Employee Retirement Income Security Act of 1974, as amended.
6.Excluded Individual. (i) An employee who is a party to an employment agreement with an Employer; (ii) any employee who is characterized as a temporary, occasional or seasonal employee; (iii) any employee who is designated by an Employer or the Company at the time of hire as not eligible to participate in severance benefits under the Plan.  Excluded Individual shall also mean any individual who is treated or designated by an Employer or the Company as an independent contractor, leased employee or consultant (regardless of whether such treatment or designation is subsequently upheld by a court, judicial or arbitral authority or any other governmental agency).  Excluded Individuals are not eligible to participate in or receive benefits under the Plan.
7.Executive Officer.  An employee who is appointed by the Company’s Chief Executive Officer and formally designated by resolution of the Company’s Board of Directors as an Executive Officer of the Company.
8.Just Cause.  Any one of the following reasons for the discharge or other separation of an Employee from employment with an Employer:
A.any act or omission by the Employee resulting or intended to result in personal gain at the expense of any Employer or affiliate thereof;
B.the improper disclosure by the Employee of proprietary or confidential information or trade secrets of any Employer or affiliate thereof, including, without limitation, client lists; or
C.misconduct by the Employee, including, but not limited to, convictions, pleas of nolo contendere or no contest, or commission of felonies, fraud, or crimes involving moral 
1

turpitude; violation of the rules and procedures of an Employer or affiliate thereof (including a violation of an Employer's or the Company’s code of business conduct); theft, violent acts or threats of violence; or possession of controlled substances on the property of an Employer or affiliate thereof.
The determination of whether a discharge or other separation from employment is for Just Cause shall be made by the Plan Administrative Committee, in its sole and absolute discretion, and such determination shall be conclusive and binding on the affected Employee.
9.Participant.  An Employee who meets the requirements for eligibility under the Plan, as set forth in Article III of the Plan and Section 16 of this Article II.
10.Plan.  This Ambac Financial Group, Inc. Severance Pay Plan, as now in effect or as hereinafter amended.
11.Plan Administrative Committee.  The committee comprised of the Company’s Chief Financial Officer,  General Counsel and Chief of Staff or as otherwise constituted from time to time by the Compensation Committee of the Board of Directors of the Company to make such determinations and take such other actions as are assigned to the Plan Administrative Committee under the Plan.
12.Plan Administrator.  The head of Human Resources at the Company or such other person or committee appointed from time to time by the Plan Administrative Committee to administer the Plan.  
13.Section 409A. Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder.
14.Termination of Employment.
A.The termination by an Employer of an Employee’s employment relationship with an Employer as the result of (i) a job elimination, job discontinuation, office closing, reduction in force, business restructuring, redundancy, or such other circumstances as the Employer or the Company deems appropriate for the payment of severance or (ii) a “Termination by Mutual Agreement”.
The determination as to whether such an event has occurred shall be made by the Plan Administrator, in their sole and absolute discretion.
B.A “Termination of Employment” shall not include any discharge or other separation of employment under any of the following circumstances:
i.for Just Cause;
ii.an Employee’s voluntary resignation or job abandonment;
iii.an Employee’s retirement;
iv.death or disability of an Employee;
v.an Employee is offered, but refuses, employment with an Employer, its businesses or its affiliated companies (or a joint venture owned by any such entity) in a position that provides the Employee with substantially equivalent base pay and job responsibilities, as determined by the Plan Administrative Committee, in its sole and absolute discretion;
vi.an Employee works in a business (or the portion of such business) of an Employer (i) which is sold in whole or in part to another corporation or company, whether by sale 
2

of stock or assets, (ii) which is merged or consolidated with another corporation or company or is part of a similar corporate transaction, or (iii) which is outsourced to another corporation or company, and the Employee is offered employment with the purchaser or surviving business or the corporation or company to which the business is outsourced (whether or not he or she accepts any such position with the purchaser, surviving business or other company) in a position that provides such Employee with substantially equivalent base pay and job responsibilities, as determined by the Plan Administrative Committee, in its sole and absolute discretion; 
vii.an Employee ceases employment prior to the termination date established by the Employer;
viii.an Employee fails to return to active employment after a cessation of disability or following a termination of a leave of absence; or 
ix.a “Performance-Related Termination.”
An indefinite or temporary layoff or reduction in force does not constitute a Termination of Employment unless the layoff or reduction in force becomes permanent.  The determination as to whether a layoff or reduction in force is permanent shall be made by the Plan Administrative Committee, in its sole and absolute discretion, and such determination shall be final and binding on all affected Employees.  An Employee’s Termination of Employment shall occur on the last day of his or her employment with an Employer.
C.For purposes of the Plan, a “Performance-Related Termination” is a Termination of Employment as the result of the performance by the Employee of his or her employment duties in a manner deemed by an Employer, in its sole and absolute discretion, to be in any way unsatisfactory.
D.For purposes of the Plan, a “Termination by Mutual Agreement” is a Termination of Employment as the result of a mutual agreement between the Employee and an Employer that the Employee’s job skills no longer meet such Employer’s business needs, although the Employee is otherwise willing and able to continue performing services.
E.All Terminations of Employment that give rise to an entitlement to
severance under the Plan (including Termination by Mutual Agreement) are intended to qualify as an “involuntary separation from service” for purposes of Section 409A.
15.Week of Base Pay.  The Employee’s weekly base salary at the time of his or her Termination of Employment, as reflected on the Employer’s (or its affiliate’s) payroll records, and does not include bonuses, overtime pay, commissions, incentive or deferred compensation or other additional compensation.  For purposes hereof, an Employee’s salary shall include any salary reduction contributions made on his or her behalf to any plan of the Employer under Section 125 or 401(k) of the Internal Revenue Code of 1986, as amended.
16.Years of Service.  The number of consecutive full twelve (12) month periods since the Employee’s last date of hire by the Employer in which the Employee is paid by the Employer for the performance of full-time services in a capacity which qualifies such person as an Employee.  Years of Service shall be measured in full years and a partial period of service of at least six (6) full months will be rounded up to the next full 12-month period.  Notwithstanding the foregoing, and subject to applicable law, a break in service of less than six months shall not result in periods of employment before and after such break being deemed to be non-consecutive and the resumption of employment after such break shall not be considered a new date of hire for purposes of this Section.  With respect to an Employee whose employment was transferred from an Employer to another Employer or to a shared services company established by the Company (“Service Co”), service with the then-current Employer or Service Co shall be considered to include all service time continuously rendered for any Employer or, in the case of an Employee 
3

transferred to a Service Co, all service time continuously rendered for an Employer or Service Co. Employees of Service Co who were not transferred to Service Co from an Employer shall not be considered as Participants in the Plan.
ARTICLE III — ELIGIBILITY FOR SEVERANCE
An Employee becomes eligible for severance under the Plan (i.e., becomes a “Participant”) if such Employee experiences a Termination of Employment and satisfies the conditions of Article IV.
ARTICLE IV — CONDITIONS ON RECEIVING SEVERANCE BENEFITS
Notwithstanding anything herein to the contrary, severance shall be paid under the Plan in consideration of the Employee executing a severance agreement in such form acceptable to AFG, in its sole discretion, under which, among other things, the Employee releases and discharges the Employer and each of its parent, subsidiaries and affiliates, from all claims and liabilities relating to the Employee’s employment with the Employer and/or the termination of the Employee’s employment, and contains non-disparagement, confidentiality and other provisions for the protection of the Company.  An Employee shall become a Participant and payment of severance under the Plan will be paid only after the severance agreement has been signed and the time for the Employee to revoke the agreement and general release, if any, has expired. If the severance agreement is not signed and irrevocable within 60 days, the Employee shall not become a Participant and severance shall not be paid.
ARTICLE V — SEVERANCE BENEFITS
If the Plan Administrator determines that a Participant has met the conditions for payment of severance benefits under this Plan on or after December 16, 2021, the Employer will provide the Participant with the following benefits.
1.Severance Pay
A.A Participant will be paid severance under the Plan according to the following schedule:
•Executive Officers
Fifty-two (52) Weeks of Base Pay.
•All other Participants
Three (3) Weeks of Base Pay for each Year of Service, with a minimum severance of twelve (12) Weeks of Base Pay and a maximum severance of fifty-two (52) Weeks of Base Pay.
B.The Plan Administrative Committee, in its sole and absolute discretion and based on such criteria as the Plan Administrative Committee deems relevant, may provide severance to a Participant in addition to the severance provided pursuant to the foregoing schedule.
C.If a Participant receives severance under the Plan, such Participant shall not be entitled to receive any other severance, separation, notice or termination payments on account of his or her employment with an Employer under any other plan, policy, program or agreement.  If, for any reason, a Participant becomes entitled to or receives any other severance, separation, notice or termination payments on account of his or her employment or Termination of Employment with an Employer, including, for example, any payments required to be paid to a Participant under any Federal, State or local law or pursuant to any agreement (except unemployment benefits payable in accordance with state law and payment for accrued but unused vacation), his or her severance under the 
4

Plan will be deemed to include such payments or be reduced by the amount of such other payments paid or payable.  A Participant must notify the Plan Administrator if he or she receives or is claiming to be entitled to receive any such payment(s).
D.Subject to the following sentence, severance under the Plan shall be paid to a Participant in the form of a single lump sum payment to be paid as soon as practicable, but in any event within sixty (60) days, following the Participant’s Termination.  Notwithstanding the foregoing, the Plan Administrator, in their sole and absolute discretion, may cause severance to be paid to a Participant in periodic installments beginning on the regular payroll date immediately following the date he or she becomes a Participant; provided, however, that to the extent that severance under the Plan, plus any other amount or benefit that is payable to a Participant upon his or her Termination under any other plan or arrangement of the Company and is aggregated with severance under this Plan for purposes of Section 409A, exceeds two times the maximum amount that can be taken into account under a tax-qualified retirement plan pursuant to Section 401(a)(17) of the Internal Revenue Code for the year in which the Participant’s Termination occurs, such excess shall be paid to the Participant in the form of a single lump sum payment paid as provided in the preceding sentence.  Periodic payments shall be made consistent with the Employer’s normal payroll practices applicable to a Participant immediately prior to his or her Termination of Employment (or as such payroll practices may be revised by the Employer from time to time) and shall continue for the number of weeks for which such Participant is entitled to severance under Article V.
2.Continued Health Coverage 
If the Participant elects to continue coverage under the Company’s group health plan in accordance with the COBRA continuation coverage requirements (where applicable), the Company or an affiliate will reimburse the Participant for a portion of the premiums for COBRA coverage paid by the Participant during the following period:
•Executive Officers
The first twelve (12) months of COBRA coverage following his or her Termination of Employment.  
•All other Participants
The three (3) months of COBRA coverage following his or her Termination of Employment.  
The portion of the premiums to be paid by the Company or affiliate will be the same as the amount paid by the Company or affiliate for the same group health insurance coverage for active employees.  In order to receive this reimbursement, the Company must receive proof of payment for the monthly COBRA premiums within 30 days from the date the COBRA premium payment is due.
3.Outplacement 
The Employer will provide each Participant with outplacement services at a level, in a manner and for a period determined by the Employer.
ARTICLE VI — MISCELLANEOUS PROVISIONS
1.Amendment and Termination.  The Company reserves the right, in its sole and absolute discretion, to terminate, amend or modify the Plan, in whole or in part, at any time and for any reason, by a written resolution of the Compensation Committee of the Board of Directors of the Company.  If the Plan is terminated, amended or modified, a Participant’s right to participate in, 
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or to receive benefits under, the Plan may be changed; provided, however, that severance payable (or which becomes payable) to a Participant who has incurred a Termination of Employment prior to such termination, amendment or modification of the Plan, shall not be reduced by the termination, amendment or modification.
2.No Additional Rights Created.  Neither the establishment of this Plan, nor any modification thereof, nor the payment of any benefits hereunder, shall be construed as giving to any Participant, Employee (or any beneficiary of either), or other person any legal or equitable right against any Employer or any affiliate, officer, director or employee thereof; and in no event shall the terms and conditions of employment by an Employer of any Employee be modified or in any way affected by this Plan.
3.Records.  The records of an Employer with respect to Years of Service, employment history, base pay, absences, and all other relevant matters shall be conclusive for all purposes of this Plan.
4.Construction.  The respective terms and provisions of the Plan shall be construed, whenever possible, to be in conformity with the requirements of ERISA, or any subsequent laws or amendments thereto.  To the extent not in conflict with the preceding sentence or another provision in the Plan, the construction and administration of the Plan shall be in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York (without reference to its conflicts of law provisions).
5.Severability.  Should any provisions of the Plan be deemed or held to be unlawful or invalid for any reason, such fact shall not adversely affect the other provisions of the Plan unless such determination shall render impossible or impracticable the functioning of the Plan, and in such case, an appropriate provision or provisions shall be adopted so that the Plan may continue to function properly.
6.Incompetency.  In the event that the Plan Administrator finds that a Participant (or designated beneficiary) is unable to care for his or her affairs because of illness or accident, then benefits payable hereunder, unless claim has been made therefor by a duly appointed guardian, committee, or other legal representative, may be paid in such manner as the Plan Administrator shall determine, and the application thereof shall be a complete discharge of all liability for any payments or benefits to which such Participant (or designated beneficiary) was or would have been otherwise entitled under this Plan.
7.Payments to a Minor.  Any payments to a minor from this Plan may be paid by the Plan Administrator in their sole and absolute discretion (a) directly to such minor; (b) to the legal or natural guardian of such minor; or (c) to any other person, whether or not appointed guardian of the minor, who shall have the care and custody of such minor.  The receipt by such individual shall be a complete discharge of all liability under the Plan therefor.
8.Plan Not a Contract of Employment.  This Plan does not form part of any Employee’s terms and conditions of employment, and is not intended to have contractual effect.  Nothing contained in this Plan shall be held or construed to create any liability upon an Employer to retain any Employee in its service.  All Employees shall remain subject to discharge or discipline to the same extent as if the Plan had not been put into effect.  An individual who is receiving severance under this Plan shall not be considered an Employee immediately following his or her Termination of Employment.
9.Financing.  The benefits payable under this Plan shall be paid out of the general assets of an Employer.  No Participant or any other person shall have any interest whatsoever in any specific asset of any Employer.  To the extent that any person acquires a right to receive payments under this Plan, such right shall not be secured by any assets of any Employer.
10.Nontransferability.  In no event shall the Company (or any other Employer) make any payment under this Plan to any assignee or creditor of a Participant, except as otherwise required by law.  Prior to the time of a payment hereunder, a Participant shall have no rights by way of anticipation 
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or otherwise to assign or otherwise dispose of any interest under this Plan, nor shall rights be assigned or transferred by operation of law.
ARTICLE VII — OTHER INFORMATION A PARTICIPANT NEEDS TO KNOW ABOUT THE PLAN
1.Claims Procedure.
A Participant, or his or her beneficiary (if applicable), may file a written claim with the Plan Administrator with respect to any benefit under the Plan no more than 60 days from the Termination Date.  Such Participant will be informed of the decision of the Plan Administrative Committee with respect to the claim within 90 days after it is received by the Plan Administrator.  Under special circumstances, the Plan Administrative Committee may require an additional period of not more than 90 days to review a claim.  If this occurs, such Participant will be notified in writing prior to the expiration of the 90-day period.  The notice will set forth the extension and the reasons for the extension.  If the extension is required due to the Participant’s failure to submit information necessary to decide the claim, the period for making the determination will be tolled from the date on which the extension notice is sent to the Participant until the date on which the Participant responds to the Plan Administrator's request for information.
If his or her claim is denied in whole or in part, or any adverse benefit determination is made with respect to the claim, the Participant will be provided with a written notice setting forth the reason for the determination, along with specific references to Plan provisions on which the determination is based.  This notice also will explain what additional information is needed to evaluate the claim (and why such information is necessary), together with an explanation of the Plan’s claims review procedure and the time limits applicable to such procedure, as well as a statement of the Participant’s right to bring a civil action under Section 502(a) of ERISA following an adverse benefit determination on review.  If the Participant is not notified (of the denial or an extension) within ninety (90) days from the date the Participant notifies the Plan Administrator, the Participant may request a review of his or her application as if the claim had been denied.
If a Participant’s claim has been denied, he or she may request that the Plan Administrative Committee review the denial.  The Participant’s request must be in writing and must be made within sixty (60) days after written notification of denial.  In connection with this request, the Participant (or his or her duly authorized representative) may:
•Be provided, upon written request and free of charge, with reasonable access to (and copies of) all documents, records, and other information relevant to the claim;
•Submit to the Plan Administrative Committee written comments, documents, records, and other information related to the claim; and
•Request in his or her timely application for review a conference with the Plan Administrative Committee to be held at the offices of the Company at a mutually agreeable date and time (but not later than 60 days after receipt of the request for review).
The review by the Plan Administrative Committee will take into account all comments, documents, records, and other information the Participant submits relating to the claim.  The Plan Administrative Committee will make a final written decision on a claim review, in most cases within sixty (60) days after receipt of a request for a review.  In some cases, the Participant’s claim may take more time to review, and an additional processing period of up to sixty (60) days may be required.  If that happens, the Participant will receive a written notice of that fact, which will also indicate the special circumstances requiring the extension of time and the date by which the Plan Administrative Committee expects to make a determination with respect to the claim.  If 
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the extension is required due to the Participant’s failure to submit information necessary to decide the claim, the period for making the determination will be tolled from the date on which the extension notice is sent to the Participant until the date on which the Participant responds to the Plan's request for information.
The Plan Administrative Committee’s decision on the Participant’s claim for review will be communicated to the Participant in writing.  If an adverse benefit determination is made with respect to the Participant’s claim, the notice will include (i) the specific reason(s) for any adverse benefit determination, with references to the specific Plan provisions on which the determination is based; (ii) a statement that the Participant is entitled to receive, upon request and free of charge, reasonable access to (and copies of) all documents, records and other information relevant to the claim; and (iii) a statement of the Participant’s right to bring a civil action under Section 5 02(a) of ERISA.
The decision of the Plan Administrative Committee (or its designee) is final and binding on all parties.
These procedures must be exhausted before a Participant may bring a legal action seeking payment of benefits.  A Participant’s beneficiary may file a claim for benefits under the Plan by following the claims procedure described above.
2.Plan Interpretation and Benefit Determination.
The Plan is administered and operated by the Plan Administrator and the Plan Administrative Committee, each of which has complete authority, with respect to matters within its jurisdiction, in its sole and absolute discretion, to construe the terms of the Plan (and any related or underlying documents or policies), and to determine the eligibility for, and amount of, benefits due under this Plan to Participants and their beneficiaries. All such interpretations and determinations of the Plan Administrator or the Plan Administrative Committee shall be final and binding upon all parties and persons affected thereby.  The Plan Administrator or Plan Administrative Committee may appoint one or more individuals and delegate such of its powers and duties as it deems desirable to any such individual(s), in which case every reference herein made to the Plan Administrator or Plan Administrative Committee, as the case may be, shall be deemed to mean or include the appointed individual(s) as to matters within their jurisdiction.
3.Participants’ Rights Under ERISA.
Any Participant in the Plan may be entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  ERISA provides (where applicable) that all Plan participants shall be entitled to:
Receive Information About Your Plan and Benefits
•Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing the Plan, including insurance contracts, and a copy of the latest annual report (Form 5500 Series), if any, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Pension and Welfare Benefit Administration.
•Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan, including insurance contracts, and copies of the latest annual report (Form 5500 Series), if any, and updated summary plan description.  The Plan Administrator may make a reasonable charge for the copies.
•Receive a summary of the Plan's annual financial report (if any).  The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.
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Prudent Actions by Plan Fiduciaries
In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan.  The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of all Plan Participants and beneficiaries.  No one, including a Participant’s employer or any other person, may fire a Participant or otherwise discriminate against a Participant in any way to prevent a Participant from obtaining a welfare benefit or exercising his or her rights under ERISA.
Enforce Your Rights
If a Participant’s claim for a welfare benefit under ERISA is denied or ignored, in whole or in part, the Participant has a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.
Under ERISA, there are steps a Participant can take to enforce the above rights.  For instance, if a Participant requests a copy of Plan documents or the latest annual report from the Plan and does not receive them within 30 days, the Participant may file suit in a Federal court.  In such a case, the court may require the Plan Administrator to provide materials and pay the Participant up to $110 a day until the Participant receives the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.  If a Participant has a claim for benefits which is denied or ignored, in whole or in part, the Participant may file suit in a state or Federal court.  If the Participant is discriminated against for asserting his or her rights, the Participant may seek assistance from the U.S. Department of Labor, or the Participant may file suit in a Federal court.  The court will decide who should pay court costs and legal fees.  If the Participant is successful, the court may order the person he or she has sued to pay these costs and fees.  If the Participant loses, the court may order the Participant to pay these costs and fees, for example, if it finds the Participant’s claim is frivolous.
Assistance with Your Questions
If a Participant has any questions about the Plan, he or she should contact the Plan Administrator.  If a Participant has any questions about this statement or about his or her rights under ERISA, or if the Participant needs assistance in obtaining documents from the Plan Administrator, the Participant should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in his or her telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. A Participant may also obtain certain publications about his or her rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.
4.Plan Document.
This document shall constitute both the Plan document and summary plan description and shall be distributed to all Employees in this form.
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5.Other Important Facts.
						
	Plan Sponsor:	Ambac Financial Group, Inc.
One World Trade Center, 41st Floor
New York, New York 10007 
212-668-0340

	Employer Identification Number (EIN):	

13-3621676

	Plan Name:	Ambac Financial Group, Inc. Severance Pay Plan

	Type of Plan:	Welfare benefit plan - severance pay
	Plan Year:	Calendar year
	Plan Number:	504
	Plan Administrator:	Head of Human Resources
Ambac Financial Group, Inc. 
One World Trade Center, 41st Floor
New York, New York 10007 
212-668-0340

	Agent for Service of Legal Process:	General Counsel
Ambac Financial Group, Inc.
One World Trade Center, 41st Floor
New York, New York 10007 
212-668-0340

The Plan Administrator keeps records of the Plan and is responsible for the administration of the Plan.  The Plan Administrator will also answer any questions any Participant or beneficiary may have about the Plan.
Service of legal process may also be made upon the Plan Administrator.
No individual may, in any case, become entitled to additional benefits or other rights under this Plan after the Plan is terminated.  Under no circumstances, will any benefit under this Plan ever vest or become nonforfeitable, except as provided in Section 1 of Article VII.
Severance pay is subject to Federal and state income and Social Security tax withholdings and any other withholdings mandated by law.
Payments and benefits under the Plan are intended to be either exempt from Section 409A, and the Plan shall be interpreted and administered to that end. The interpretation of Section 409A and its application to the terms of the Plan is uncertain and may be subject to change as additional guidance and interpretations become available. In no event whatsoever shall the Company or any affiliate thereof be liable for any tax, interest or penalties that may be imposed on any Participant by Section 409A or any damages for failing to comply with Section 409A.

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