AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF DELL FINANCIAL SERVICES L.P.

 

                                                                    Exhibit 10.2

 

                                                              EXECUTION COPY

 

                              AMENDED AND RESTATED

 

                        AGREEMENT OF LIMITED PARTNERSHIP

 

                                       OF

 

                          DELL FINANCIAL SERVICES L.P.

 

                               SEPTEMBER 8, 2004

 

 

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

                                                                     Exhibit 10.2

 

                                                              EXECUTION COPY

 

                              AMENDED AND RESTATED

 

                        AGREEMENT OF LIMITED PARTNERSHIP

 

                                        OF

 

                          DELL FINANCIAL SERVICES L.P.

 

      THIS AMENDED AND RESTATED AGREEMENT OF LIMITED   PARTNERSHIP   ("Agreement")

is made and entered into on September   8, 2004   ("Effective   Date") by and among

Dell Credit Company L.L.C., a Delaware   limited   liability   company,   as general

partner (the "General   Partner" or "Dell Credit"),   and Dell DFS Corporation,   a

Delaware   Corporation   ("Dell-DFS"),   and CIT DFS Inc.,   a Delaware   corporation

("CIT DFS"), as limited partners   (Dell-DFS and CIT DFS sometimes being referred

to herein   individually as a "Limited   Partner" and collectively as the "Limited

Partners",   and the General   Partner and the Limited   Partners   sometimes   being

referred   to   herein   individually   as   a   "Partner"   and   collectively   as   the

"Partners").

 

                                    RECITALS:

 

      WHEREAS,   pursuant   to   the   Agreement   of   Limited   Partnership   of   Dell

Financial   Services   L.P.,   dated April 14, 1997, by and among the Partners (the

"Original   Limited   Partnership   Agreement"),   the Partners   agreed to form Dell

Financial   Services   L.P.   ("DFS") as a limited   partnership   under the Delaware

Revised Uniform Limited   Partnership Act, Del. Code Ann. tit. 6, ss.17-101,   et.

seq., as amended from time to time (the "Act"); and

 

      WHEREAS,   the Partners   have entered into the 2004   Extension   and Funding

Agreement (as defined below), dated as of the date hereof, pursuant to which the

parties   thereto   agreed to amend and restate the Original   Limited   Partnership

Agreement in the form of this   Agreement,   and the Partners do hereby adopt this

Agreement as the Amended and Restated   Agreement of Limited   Partnership   of DFS

for the purposes described in Section 2.1.

 

      NOW, THEREFORE,   in consideration of the foregoing premises and the mutual

promises,   covenants and agreements set forth below,   the Partners   hereby amend

and restate this Agreement in its entirety as follows:

 

                                    ARTICLE I

 

                                    DEFINITIONS

 

      1.1 Terms Defined Herein.   As used herein,   the following terms shall have

the following meanings:

 

      "Act" has the meaning set forth in the Recital above.

 

      "Adjusted   Reserve   Balance" means the sum of the Reserve Balances and the

FY '05 Q3 Reserve Modifier.

 

 

                                       1

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

*      "Adjusted Existing Portfolio Reserves" means * of the difference,   whether

such result is   numerically   positive   or   negative,   between   (a) the   Adjusted

Reserve Balance;   and (b) the sum of (i) the actual reserve   distributions   less

actual net recoveries less actual   investment   income on the Existing   Portfolio

during   the   Historical    Period   and   (ii)   the   estimated    remaining   reserve

distributions less estimated net recoveries less estimated   investment income on

the Existing   Portfolio   during the   Prospective   Period,   as determined in good

faith consistent with past practice.

 

      "Adjusted Net Late Fees" means * of the difference, whether such result is

numerically   positive or   negative,   between (a) the sum of (i) actual late fees

collected   on the   Existing   Portfolio   during   the   Historical   Period and (ii)

estimated   late   fees to be   collected   on the   Existing   Portfolio   during   the

Prospective   Period,   as determined in good faith consistent with past practice;

and (b) the FY '05 Q3 Late Fee Modifier.

 

      "Adjusted   Valuation Period   Reserves" means the difference,   whether such

result is   numerically   positive or negative,   between the (a) Initial   Reserves

booked on Valuation   Period   Assets;   and (b) the sum of (i) the actual   reserve

distributions   less actual net recoveries less actual   investment income on such

assets during the Historical   Period;   and (ii) the estimated   remaining reserve

distributions less estimated net recoveries less estimated   investment income on

Valuation   Period Assets during the   Prospective   Period,   as determined in good

faith consistent with past practice.

 

      "Advisory Committee" has the meaning set forth in Section 5.4.

 

      "Affected Party" has the meaning set forth in Section 11.11.

 

      "Affiliate"   means,   with   respect to a Person (the "First   Person"),   any

Person who,   directly or   indirectly,   controls,   is   controlled   by or is under

common control with the First Person. For purposes of this definition,   the term

"control"   (including,   with   correlative   meanings,   the   terms   "controlling",

"controlled   by" and "under common control with") of a Person means the power to

direct the   management   or policies   of such   Person,   directly   or   indirectly,

through the ownership of voting Securities, by contract or otherwise.

 

      "Agreement"    means   this   Amended   and   Restated    Agreement   of   Limited

Partnership, as amended, supplemented, restated or replaced in writing from time

to time.

 

      "Ancillary   Agreements"   means the Existing   Agreements   as defined in the

Omnibus   Agreement (as defined   below) and   including the following   agreements,

together   with all   schedules   and   exhibits   attached   thereto   and as amended,

modified, supplemented or restated from time to time):

 

            (a) The Omnibus   Agreement   dated November 1, 2000, by and among (1)

Dell Financial   Services L.P., a Delaware limited   partnership;   (2) Dell Credit

Company   L.L.C.,   a Delaware   limited   liability   company;   (3) DFS-SPV   L.P., a

Delaware limited partnership; (4) DFS-GP, Inc., a Delaware corporation; (5) Dell

Inc., a Delaware   corporation;   (6) Dell Gen. P. Corp., a Delaware   corporation;

(7) Dell DFS Corporation, a Delaware Corporation; (8) The CIT

 

----------

*      This   portion   has been   redacted   pursuant   to a   confidential   treatment

      request.

 

 

                                       -2-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

Group, Inc., a Delaware Corporation (as successor to CIT Credit Group Inc.); (9)

CIT Credit Group USA Inc., a Delaware corporation; (10) CIT Financial USA, Inc.,

a Delaware   corporation (f/k/a Newcourt Financial USA Inc.); (11) CIT DCC Inc. a

Delaware   corporation   (f/k/a Newcourt DCC Inc.);   (12) CIT DFS Inc., a Delaware

corporation   (f/k/a   Newcourt   DCC   Inc);   and (13) CIT   Communications   Finance

Corporation,   a Delaware   corporation   (f/k/a   Newcourt   Communications   Finance

Corporation) (the "Omnibus Agreement");

 

            (b) Receivables   Purchase Agreement by and between CIT Financial USA

Inc. and DFS-SPV L.P., dated July 28, 2000;

 

            (c) Receivables   Purchase   Agreement by and between DFS and DFS-SPV,

dated July 28, 2000;

 

            (d)   Amendment,   dated June 7,   2001,   to the   Receivables   Purchase

Agreement by and between DFS-SPV L.P. and CIT Financial USA Inc., dated July 28,

2000;

 

             (e) Closed-End   Loans Sale Agreement for BSDT Program by and between

CIT Online Bank and Dell Financial Services, L.P., dated June 7, 2001;

 

            (f) Sales   Financing   Agreement   for BSDT Program by and between CIT

Online Bank and Dell Financial Services, L.P., dated June 7, 2001;

 

            (g) Dell Preferred Account Origination   Agreement by and between CIT

Bank and Dell Financial Services L.P. dated April 30, 2002;

 

            (h) First Amendment,   dated June 30, 2003, to Dell Preferred Account

Origination Agreement by and between CIT Bank and Dell Financial Services, dated

April 30, 2002;

 

            (i) Dell Preferred   Account   Servicing   Agreement by and between CIT

Financial USA Inc. and DFS-SPV L.P. dated April 30, 2002;

 

            (j) First Amendment,   dated June 30, 2003, to Dell Preferred Account

Servicing   Agreement by and between   DFS-SPV,   L.P. and CIT Financial USA, Inc.,

dated April 30, 2002;

 

            (k) Dell Preferred   Account   Receivables   Purchase   Agreement by and

between CIT Bank and CIT Financial USA Inc. dated April 30, 2002;

 

            (l) Dell   Preferred   Account Sub Servicing   Agreement by and between

Dell Financial Services L.P. and DFS-SPV L.P. dated April 30, 2002;

 

            (m)   Amendment,   dated   August 15,   2002,   to   Receivables   Purchase

Agreement by and between DFS-SPV L.P. and CIT Financial USA Inc.,   dated October

31, 1998;

 

            (n) Agreement by and among Dell Financial   Services L.P., Dell Inc.,

Dell Gen P Corp.,   CIT DCC Inc.,   CIT Group Inc.,   Dell Credit Company LLC, Dell

DFS Corporation and CIT DFS Inc.,   dated February 4, 2003 (the "February 4, 2003

Agreement");

 

 

                                      -3-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

            (o)   Supplemental   Agreement by and between CIT Financial   USA, Inc.

and CIT Bank dated June 30, 2003;

 

            (p)   Letter re   Extended   Terms   Program   for Dell High End   Segment

Customers,   sent to Jeffrey   Simon of The CIT Group and Brian   MacDonald of Dell

Inc. dated July 21, 2003;

 

            (q) Letter re early   payment to Dell Inc.   sent to Jeffrey   Simon of

The CIT Group and Kevin Nater of Dell   Financial   Services   L.P.   dated July 28,

2003;

 

            (r) First Amendment,   dated June 30, 2003, to Dell Preferred Account

Sub-servicing Agreement between DFS-SPV, L.P. and Dell Financial Services, L.P.,

dated April 30, 2002;

 

            (s) First   Amended   and   Restated   Credit   Agreement   by and between

DFS-SPV L.P., as Borrower and CIT DFS Inc., as Lender dated October 31, 2000;

 

            (t) First Amendment, dated October 3, 2001, to the First Amended and

Restated Credit   Agreement by and between   DFS-SPV L.P. and CIT DFS Inc.,   dated

October 31, 2000;

 

            (u) Letter   Agreement   by and between   CIT   Financial   USA Inc.   and

DFS-SPV L.P. dated August 28, 2002 re definition of the Discount Rate to be used

in the CIT Receivable Purchase Agreement (as defined in the Omnibus Agreement);

 

            (v) Letter to Jeffrey Simon, of CIT Group, Inc., and Kevin Nater, of

Dell   Financial   Services,   re Dell Financial   Services L.P.,   dated January 31,

2003;

 

            (w) Letter to Jeffrey Simon, of CIT Group, Inc., and Kevin Nater, of

Dell Financial Services, re Tax Indemnification   Letter Agreement,   dated August

27, 2003;

 

            (x) Letter to Jeffrey Simon, of CIT Group, Inc., and Kevin Nater, of

Dell Financial Services, re lease agreements with AXA Technology Services,   SAS,

dated August 27, 2003;

 

            (y) Letter to Jeffrey Simon, of CIT Group, Inc., and Kevin Nater, of

Dell   Financial   Services,   re provisions   re leasing in amendment   number seven

dated August 1, 2002 to the Master   Purchase   Agreement   between Dell   Marketing

L.P. and EDS for purchase of equipment by EDS, dated April 15, 2003;

 

            (z) Letter to Jeffrey Simon, of CIT Group, Inc., and Kevin Nater, of

Dell   Financial   Services,   re provisions   re leasing in amendment   number seven

dated August 1, 2002 to the Master   Purchase   Agreement   between Dell   Marketing

L.P. and EDS for purchase of equipment by EDS, dated October 22, 2003;

 

            (aa) Letter to Jeffrey Simon of CIT Group,   Inc. and Brian MacDonald

of Dell Inc.   re cash   disbursement   to CIT from   Performance   Fee   Account   and

Amendment to True Up Model and Funding Model in the DPA Servicing   Agreement (as

defined therein), dated October 14, 2003;

 

 

                                      -4-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

            (bb)   Letter   to   Jeffrey    Simon   of   CIT   Group,    Inc.,   re   Dell

Securitization Funding Agreement, dated February 4, 2004;

 

            (cc) The Reserve   Administration   Agreement,   entered into as of the

8th day of   September,   2004,   by and between Dell and CIT and the other parties

thereto (the "Reserve Administration Agreement");

 

            (dd) The 2004   Extension and Funding   Agreement,   entered into as of

the 8th day of September,   2004, by and among: (1) Dell Financial Services L.P.,

a Delaware   limited   partnership;   (2) Dell Credit   Company   L.L.C.,   a Delaware

limited liability company; (3) DFS-SPV L.P., a Delaware limited partnership; (4)

DFS-GP, Inc., a Delaware corporation; (5) Dell Inc., a Delaware corporation; (6)

Dell Gen. P. Corp., a Delaware corporation; (7) Dell DFS Corporation, a Delaware

Corporation;   (8) CIT Group Inc., a Delaware Corporation; (9) CIT Financial USA,

Inc., a Delaware corporation;   (10) CIT DCC Inc., a Delaware   corporation;   (11)

CIT   DFS   Inc.,   a   Delaware   corporation;    (12)   CIT   Communications    Finance

Corporation,   a   Delaware   corporation;   and (13) CIT Credit   Group USA Inc.,   a

Delaware corporation (the "2004 Extension and Funding Agreement").

 

      "Available Cash" means the amount, if any, by which (a) the sum of (i) the

aggregate of the Partner's   capital   balances per DFS' financial   statements and

(ii) the   undistributed   Partners' gain or loss per DFS'   financial   statements;

exceeds (b) the Minimum Cash Balance.

 

      "Bankruptcy" means, with respect to a Person, (a) the entry of a decree or

order for relief against the Person by a court of competent   jurisdiction in any

involuntary case brought against the Person under any bankruptcy,   insolvency or

other   similar law   generally   affecting   the rights of creditors   and relief of

debtors now or hereafter in effect (collectively, "Debtor Relief Laws"), (b) the

appointment    of   a   receiver,    liquidator,    assignee,    custodian,    trustee,

sequestrator or other similar agent under applicable Debtor Relief Laws or other

applicable   laws for the   Person or for any   substantial   part of its   assets or

property,   (c) the   ordering of the winding up or   liquidation   of the   Person's

affairs,   (d) the filing of a petition in any such   involuntary   bankruptcy case

against the Person, which petition remains undismissed for a period of 180 days,

(e) the   commencement   by the Person of a   voluntary   case under any   applicable

Debtor Relief Law or (f) the making by the Partner of any general assignment for

the benefit of its creditors.

 

      "Best Buy" means (i) Best Buy Co., Inc., a Minnesota corporation, (ii) any

of its subsidiaries, and (iii) any related companies doing business as Best Buy.

 

      "Breach   Notice" means a written   notice of a breach or default under this

Agreement    which   notice   sets   forth   in   reasonable    detail   the   events   or

circumstances   upon which the nonbreaching   Partner based its determination that

such a material breach or default under this Agreement occurred.

 

      "Business" has the meaning set forth in Section 2.1.

 

      "Business   Day" means any day other than a   Saturday,   Sunday or any other

holiday on which commercial banks are authorized or required to be closed in New

York, New York.

 

 

                                      -5-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

      "Buyout   Price" means the amount   determined   in   accordance   with Section

8.3(b)(ii) and Schedule 2.

 

      "Capital   Account"   means the separate   capital   account   established   and

maintained for each Partner by DFS pursuant to Section 3.2(a).

 

      "Capital   Contribution"   means the total amount of cash and the Fair Value

of Property (net of liabilities   secured by such Property that DFS is considered

to assume or take subject to under IRC ss.752)   contributed by a Partner (or its

predecessor in interest) to the capital of DFS.

 

      "Certificate"   means the   Certificate of Limited   Partnership of DFS filed

with the   Delaware   Secretary   of State,   as amended   and in effect from time to

time.

 

      "Circuit    City"   means   (i)   Circuit   City    Stores,    Inc.,   a   Virginia

corporation, (ii) any of its subsidiaries, and (iii) any related companies doing

business as Circuit City.

 

      "CIT Change of Control" means,   with respect to any of the CIT Parties the

occurrence of any of the following   events:   (a) the consummation of a merger or

consolidation   of any of the CIT Parties with a Controlling   Party   resulting in

holders of the voting Securities of any of the CIT Parties   receiving,   directly

or indirectly,   less than 50% of the voting   Securities of the surviving   entity

(or, if applicable, resulting holding company); (b) the sale, lease, exchange or

transfer of all or   substantially   all of CIT's assets,   or all or substantially

all of the assets of any of the CIT Parties,   to a   Controlling   Party;   (c) the

approval   by the holders of the voting   Securities   of any of the CIT Parties of

any plan or proposal for the   liquidation or dissolution of such party;   (d) the

acquisition by any Controlling Party (other than a holding company more than 50%

of the voting   Securities of which are owned by the stockholders of a CIT Party)

of 49% or more of the outstanding voting power of the Securities of a CIT Party;

or (e) a change in a majority of the directors of CIT in any period of less than

two years,   not   counting   persons   elected or   nominated   by a vote of at least

two-thirds   of the   directors in office at the beginning of such period or whose

election or nomination   was   previously   so approved,   the result of such change

being that a majority of the directors of CIT have been selected or appointed by

a Controlling Party;   provided,   however,   that no transaction with respect to a

CIT Party shall constitute a CIT Change of Control   hereunder if, following such

transaction,   100% of the capital stock or equity interests in such CIT Party is

owned directly or indirectly by CIT.

 

      "CIT" means CIT Group Inc., a Delaware corporation.

 

      "CIT Aggregate   Interest"   means   collectively,   CIT DFS's   Interest,   the

"Interest" (as defined in the Limited Liability Company Agreement) of CIT DCC in

Dell   Credit   and   the   equity   interest   of   CIT   DCC   in   DFS-GP,   a   Delaware

corporation.

 

      "CIT   Credit   Group   USA"   means CIT   Credit   Group USA Inc.,   a   Delaware

corporation and a wholly-owned subsidiary of CIT.

 

      "CIT DCC" means CIT DCC Inc., a Delaware   corporation   and a   wholly-owned

subsidiary of CIT Credit Group USA.

 

 

                                      -6-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

      "CIT DFS" means CIT DFS Inc., a Delaware   corporation   and a   wholly-owned

subsidiary of CIT.

 

      "CIT DFS   Affiliate"   means an Affiliate of CIT DFS other than DFS or Dell

Credit.

 

      "CIT Equity Payments" has the meaning set forth in Section 8.3(b)(iii).

 

      "CIT   Financial   USA"   means   CIT   Financial   USA,   Inc.   (f/k/a   Newcourt

Financial USA Inc.), a Delaware corporation and a wholly-owned subsidiary of CIT

Credit Group USA.

 

      "CIT   Funding   Administration   Fee   Balance"   has the meaning set forth in

Section 8.3(b)(iv).

 

      "CIT   Funding   Payment(s)"   shall have the   meaning   set forth in the 2004

Extension and Funding Agreement.

 

      "CIT   Parties"   means CIT, CIT Credit Group USA, CIT Financial USA and CIT

DFS (and each individually a "CIT Party").

 

      "CIT Sale Option" has the meaning set forth in Section 8.3.

 

      "CIT Termination Event" has the meaning set forth in Section 8.1(a).

 

      "Claim"   means any claim of any nature   whatsoever,   including any demand,

liability,   obligation,   cause of action,   suit,   proceeding,   judgment,   award,

assessment or reassessment.

 

      "Confidential Information" has the meaning set forth in Section 11.11.

 

      "Controlling   Party"   means a Person   which   either (i) (a)   directly,   or

indirectly   through   an   Affiliate,    provides   Financing   Services   to   a   Dell

Competitor   under   which   the   annual   dollar   amount   of   customer    Financings

originated   (measured as of the end of the most recently completed calendar year

and   without   double-counting   any   customer   Financings)   in the United   States

exceeds   $250   million,   and (b)   within a   reasonable   time of Dell's   request,

declines   to   grant   DFS   exclusivity   on   the   same   terms   that   govern   CIT's

exclusivity   arrangement   under the 2004 Extension and Funding   Agreement,   with

respect to the provision of Financing   Services for PCs in the United States for

the term of this   Agreement;   or (ii) has a credit   rating of "A-" or lower from

S&P or A3 or lower from Moody's.

 

      "Covered   Person"   means (a) any Partner,   (b) any Affiliate of a Partner,

(c) any officer, director,   shareholder,   partner,   employee,   representative or

agent   of a   Partner   or any of its   Affiliates   or (d) any   officer,   director,

shareholder,   partner,   employee,   representative   or agent of DFS or any of its

Affiliates.

 

      "Credits"   means   all tax   credits   allowed   by the IRC   with   respect   to

activities of DFS or the Property.

 

 

                                       -7-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

      "Damages" means any loss   whatsoever,   including   expenses,   debt,   costs,

damages, penalties, fines, charges, liabilities, interest, bonuses and all legal

and other fees and disbursements.

 

      "Debtor   Relief   Laws"   has the   meaning   set forth in the   definition   of

"Bankruptcy".

 

      "Dell" means Dell Inc., a Delaware corporation.

 

      "Dell 2008 Option" has the meaning set forth in Section 8.3.

 

      "Dell 2010 Buyout Obligation" has the meaning set forth in Section 8.3.

 

      "Dell-DFS"   means   Dell DFS   Corporation,   a Delaware   corporation   and an

indirect wholly-owned subsidiary of Dell Inc.

 

      "Dell-DFS   Affiliate"   means an   Affiliate   of Dell other than DFS or Dell

Credit.

 

      "Dell Competitor" means (i) the following   companies   reflected on the "PC

Tracker Report"   published by International   Data Corporation at the time of the

applicable   CIT Change of Control   (or if such   International   Data   Corporation

lists do not   exist at the time,   the   nearest   equivalent   lists,   as   mutually

determined by the Dell and CIT at such time): (a) "Top Ten Vendors, Worldwide PC

Shipments";   and (b) "Top Ten   Vendors,   USA PC   Shipments";   and (ii) Best Buy,

Circuit City, and Wal-Mart.

 

      "Dell   Change of Control"   means the   occurrence   of any of the   following

events:   (a) the   consummation of a merger or   consolidation of Dell or Dell-DFS

resulting   in   holders   of   Dell's or   Dell-DFS'   voting   Securities   receiving,

directly or indirectly,   less than 50% of the voting Securities of the surviving

entity (or, if applicable,   resulting   holding   company);   (b) the sale,   lease,

exchange   or   transfer   of all or   substantially   all of the   assets   of Dell or

Dell-DFS;   (c) the   approval   by the holders of the Dell's or   Dell-DFS'   voting

Securities of any plan or proposal for the liquidation or dissolution of Dell or

Dell-DFS;   (d) the   acquisition by any Person (other than a holding company more

than 50% of the voting Securities of which are owned by the stockholders of Dell

or a subsidiary   thereof,   including Dell-DFS) of 49% or more of the outstanding

voting power of Dell's or Dell-DFS' Securities; or (e) a change in a majority of

the directors of Dell in any period of less than two years, not counting persons

elected or nominated by a vote of at least two-thirds of the directors in office

at the beginning of such period or whose   election or nomination   was previously

so   approved;   provided,   however,   that no   transaction   with respect to a Dell

Affiliate shall constitute a Dell Change of Control hereunder if, following such

transaction,   100% of the   capital   stock   or   equity   interests   in   such   Dell

Affiliate is owned directly or indirectly by Dell.

 

       "Dell   Credit"   means Dell   Credit   Company   L.L.C.,   a   Delaware   limited

liability company.

 

      "Dell Purchase Option" has the meaning set forth in Section 8.3

 

      "Dell Termination Event" has the meaning set forth in Section 8.1(b).

 

 

                                       -8-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

      "DFS" means Dell   Financial   Services L.P., a limited   partnership   formed

under the Act pursuant to the Original Limited Partnership Agreement.

 

      "DFS   Adjusted   Net Income"   means (a) the sum of (i) DFS pre tax GAAP net

income for the   Valuation   Period,   (ii) Bonus   Referral Fees (as defined in the

February 1, 2003 Agreement) expensed during the Valuation Period,   (iii) Funding

Administration   Fees (as   defined is Section   5.5   hereof)   expensed   during the

Valuation Period and (iv) Incremental Reserves.

 

      "DFS Look Back   Income   Calculation"   has the meaning set forth in Section

8.3(b)(ii)(B).

 

      "DFS-SPV" means DFS-SPV L.P., a Delaware limited liability partnership, in

which DFS-GP,   Inc., a Delaware   corporation,   acts as a general partner and DFS

acts as a limited partner.

 

      "Disclosing Party" has the meaning set forth in Section 11.11.

 

      "Distribution   Percentage"   means (a) with respect to the General Partner,

1.0%,   (b) with   respect to   Dell-DFS,   69.5%,   and (c) with respect to CIT DFS,

29.5%.

 

      "Distribution"   means   any   distribution   of   cash   or   Property   (net   of

liabilities secured by such Property) that the distributee Partner is considered

to assume or take subject to under IRC ss.752) by DFS to a Partner.

 

      "DPA or Dell Preferred   Account"   means the Dell   revolving   consumer loan

product.

 

      "DPA Implicit   Interest   Adjustment"   means * of the implicit   interest on

DPA, currently   estimated by DFS to be in the range of between $* million and $*

million,   as such number shall be updated for DFS third quarter fiscal year 2005

activity in the ordinary course consistent with past practice.

 

      "Effective Date" has the meaning   specified in the introductory   paragraph

of this Agreement.

 

      "Events of Termination" has the meaning set forth in Section 8.1.

 

      "Exercise   Notice"   means a written   notice   delivered by one Party to the

other notifying the other party that the notifying party intends to exercise the

Dell   2008   Option,   the   Dell   Purchase   Option   or the   CIT   Sale   Option,   as

applicable.

 

      "Existing   Portfolio"   means the consumer   and   commercial   portfolios   of

Gain-Generated   Funding   that are   outstanding   and as they exist on October 29,

2004.

 

      "Fair Value" of an asset means its fair market value, as determined by the

General Partner or, if applicable, the Liquidator.

 

----------

*      This   portion   has been   redacted   pursuant   to a   confidential   treatment

      request.

 

 

                                      -9-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

      "Fee   Eligible    Transaction"    means   a   Transaction   other   than   a   SAC

Transaction   that is repaid in full prior to the   expiration   of the   applicable

Grace Period.

 

      "Finance   Contract"   means   a   lease,   loan,   conditional   sale   contract,

promissory   note or other financing   contract   entered into with a customer from

time to time with respect to a Financing and any and all amendments,   riders and

other documents which pertain thereto.

 

      "Financing"   or   "Financing   Services"   means the offering or providing of

such   financings of the sale or furnishing of products to customers,   including,

without   limitation,   by means   of   leases,   installment   sales   contracts,   and

conditional sales contracts and loans (whether secured or unsecured).

 

      "Fiscal   Month",   "Fiscal   Quarter" and "Fiscal Year" have the   respective

meanings set forth in Section 6.5.

 

      "Funding Administration Fee" has the meaning set forth in Section 5.5.

 

      "Funding   Fee   Administration   Percentages"   has the   meaning set forth in

Section 5.5.

 

      "Funding   Termination Option" shall have the meaning set forth in the 2004

Extension and Funding Agreement.

 

      "FY '05 Q3 Late Fee Modifier" means (a) $* million (which is the sum of $*

million of estimated late fee income,   and $* million of accrued late fees),   as

such numbers shall be updated for DFS third quarter fiscal year 2005 activity in

the ordinary   course   consistent   with past practice   minus (b) the DPA Implicit

Interest Adjustment.

 

      "FY '05 Q3 Reserve   Modifier"   means $* million,   as such number   shall be

updated for DFS third quarter   fiscal year 2005 activity in the ordinary   course

consistent with past practice.

 

      "GAAP" means generally accepted   accounting   principles   applicable in the

United States and in effect from time to time.

 

      "Gain-Generated   Funding" has the meaning set forth in the 2004   Extension

and Funding Agreement.

 

      "General   Partner"   means   Dell   Credit   or any   Substitute   Partner   that

succeeds such entity as general partner of DFS.

 

      "Grace Period" means the time in which the customer may pay off the entire

principal balance of the SAC Transaction without incurring finance charges,   for

example, 60 Days Same As Cash or 90 Days Same As Cash.

 

      "Historical   Period"   means the period   beginning   on October 29, 2004 and

ending on June 20, 2007 or the prior   Fiscal   Month end (for which ever end date

the relevant data is more readily available).

 

 

----------

*      This portion has been redacted pursuant to a confidential treatment

      request.

 

 

                                      -10-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

      "IDC" means International Data Corporation, or its successor entity.

 

      "Income"   and "Loss"   mean,   respectively,   for each   Fiscal Year or other

period,   an amount equal to DFS's taxable income or loss for such Fiscal Year or

period,   determined   in   accordance   with IRC   ss.703(a),   except   that for this

purpose   (a) all   items   of   income,   gain,   deduction   or loss   required   to be

separately   stated by IRC   ss.703(a)(1)   shall be included in taxable   income or

loss,   (b) tax exempt income shall be added to taxable   income or loss,   (c) any

expenditures described in IRC ss.705(a)(2)(B) (or treated as IRC ss.705(a)(2)(B)

expenditures   pursuant to Treasury Regulation   ss.l.704-l(b)(2)(iv)(i))   and not

otherwise   taken   into   account   in   computing   taxable   income or loss shall be

subtracted   and (d) taxable income or loss shall be adjusted to reflect any item

of income or loss specifically allocated in Article IV.

 

      "Incremental Reserves" means any reserve activity,   excluding that related

to Initial Reserves and the FY '05 Q3 Reserve Modifier,   that is included in DFS

pre tax GAAP net income   during   the   Valuation   Period.   For   purposes   of this

definition,   reserve   activity   that   results in an   increase   to balance   sheet

reserves shall be deemed a positive value,   and reserve activity that results in

a decrease to balance sheet reserves shall be deemed a negative value.

 

      "Independent Firm" has the meaning set forth in Section 8.3(b)(ii)(C).

 

      "Initial    Calculation    Date"   has   the   meaning   set   forth   in   Section

8.3(b)(ii)(A)

 

      "Initial   Capital   Account   Balance"   has the meaning set forth in Section

3.1.

 

      "Initial    Reserves"   means   the   estimated    required   lifetime   reserves

established in accordance with the Reserve Administration Agreement on Valuation

Period Assets at the time of funding of each   Valuation   Period Asset through an

RPU.

 

      "Interest"   means all of a Partner's   rights and   interests   in DFS in its

capacity as a Partner,   as provided in the   Certificate,   this   Agreement or the

Act.

 

      "IRC" means the   Internal   Revenue   Code of 1986,   as amended from time to

time, or corresponding provisions of future laws.

 

      "Limited   Liability   Company   Agreement"   has the meaning set forth in the

Omnibus Agreement, as such Limited Liability Company Agreement has been amended.

 

      "Limited   Partner" means   Dell-DFS,   CIT DFS or any Transferee of all or a

part   of the   Interest   of a   Limited   Partner   if   such   Transferee   becomes   a

Substitute Partner pursuant to Section 7.2.

 

      "Liquidation"    has   the   meaning    set   forth   in    Treasury    Regulation

ss.l.704-1(b)(2)(ii)(g) and any amendatory or successor section of such Treasury

Regulation.

 

      "Liquidation Proceeds" means the proceeds from the sale of all Property at

the   time of   Liquidation   of DFS,   including   the   receipt   of a note or   other

instrument   providing   for   installment   payments,   and the   Fair   Value   of any

Property distributed in kind as a part of the Liquidation of DFS.

 

 

                                      -11-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

      "Liquidator"   means the General   Partner or any other   Person   required or

authorized by law to wind up DFS's affairs.

 

      "Look Back   Income"   means the sum of (a) DFS   Adjusted   Net   Income;   (b)

Adjusted   Existing   Portfolio   Reserve;   (c)   Adjusted   Net Late   Fees;   and (d)

Adjusted Valuation Period Reserves.   Notwithstanding   the foregoing or any other

provision   of this   Agreement,   Look   Back   Income   shall be deemed to be (i) $*

million if the Look Back Income   calculation   described in this sentence is less

than $*   million;   and (ii) $* million if such Look Back Income   calculation   is

greater than $* million.

 

      "Minimum   Cash   Balance"   means an amount   which   shall   initially   be $15

million,   but which shall be reviewed   annually;   provided that the Minimum Cash

Balance shall only be revised by a Supermajority Vote (as defined in the Limited

Liability Company Agreement).

 

      "Moody's" means Moody's Investor Service.

 

      "Notice Party" has the meaning set forth in Section 11.7.

 

      "Original Limited Partnership   Agreement" has the meaning set forth in the

recitals to this Agreement.

 

      "Operating   and   Purchase   Agreement"   has the   meaning   set   forth in the

Omnibus   Agreement,   as such   Operating and Purchase   Agreement has been amended

from time to time.

 

      "Partner" means the General Partner or a Limited Partner.

 

      "Partner Loan" has the meaning set forth in Section 3.5.

 

      "Partner   Nonrecourse   Debt   Minimum   Gain" has the   meaning   set forth in

Section 4.1(b)(iv).

 

      "Partnership    Minimum    Gain"   has   the   meaning   set   forth   in   Section

4.1(b)(ii).

 

      "Partnership   Nonrecourse   Deduction" has the meaning set forth in Section

4.1(b)(v).

 

      "PCs" means desktops, notebooks, ultra portables, and X86 servers.

 

      "Person"   means   any   individual,    partnership,   joint   venture,   limited

liability   company,   limited liability   partnership,   corporation,   cooperative,

trust or other entity,   including any governmental   entity,   agency or political

subdivision.

 

      "Products" means all of the computer hardware, software, parts, equipment,

accessories   and other   products   that Dell (or its   subsidiaries),   in its sole

discretion,   may from time to time offer for purchase or license to customers in

the ordinary   course of its business,   whether   manufactured   by Dell,   any Dell

Affiliate or any other Person, all as revised by Dell (or its subsidiaries) from

time to time in its sole discretion.

 

----------

*      This   portion   has been   redacted   pursuant   to a   confidential   treatment

      request.

 

 

                                       -12-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

      "Prospective   Period"   means the period   beginning on June 20, 2007 or the

prior Fiscal Month end   immediately   preceding   June 20, 2007 (on whichever date

the relevant data is more readily   available)   through the   estimated   remaining

life of the Existing Portfolio and the Valuation Period Assets.

 

      "Property" means all tangible and intangible   property in which DFS has an

interest or that DFS owns from time to time.

 

      "Purchase Closing" has the meaning set forth in Section 8.3(c)(i).

 

      "Purchase Closing Date" has the meaning set forth in Section 8.3(c)(i).

 

      "Purchase Price" has the meaning set forth in Section 8.3(b)(i).

 

      "Regulatory   Allocations"   means   the   allocations   described   in   Section

4.1(b).

 

      "Reserve Balances" means Credit Loss, Fraud, Prepay and Servicing Reserves

(each as defined in the Reserve Administration   Agreement) that are owned and/or

managed by DFS-SPV relative to the Existing Portfolio on October 29, 2004.

 

      "Revaluation"   means the occurrence of any event   described in clause (i),

(ii) or (iii) of Section   3.2(c) in which the book basis of Property is adjusted

to its Fair Value.

 

      "SAC Transaction"   means a Transaction   pursuant to a promotional   program

offered to customers   by or through DFS whereby Dell agrees to defer   receipt of

payment of the amount due under the   Operating   and Purchase   Agreement   for the

applicable Grace Period (defined below).

 

      "Securities" means any stock,   shares,   voting trust certificates,   bonds,

debentures,   notes or other   evidences of   indebtedness,   secured or   unsecured,

convertible,   subordinated or otherwise,   or in general any instruments commonly

known as "securities"   under applicable   federal or state securities laws or any

certificates   of   interest,   shares or   participations   in   temporary or interim

certificates   for the   purchase or   acquisition   of or any right to subscribe to

purchase or acquire any of the foregoing.

 

      "S&P" means the Standard & Poor's Rating Services.

 

      "Substitute   Partner" means a Transferee of an Interest admitted to DFS as

such pursuant to Section 7.2.

 

      "Term" has the meaning set forth in Section 2.5.

 

       "Transaction" means a Lease or Conditional Sale Arrangement (as defined in

the Operating and Purchase   Agreement) or a revolving credit facility offered to

customers by a third party funding   source,   such as the Dell Preferred   Account

currently offered by CIT Bank through a program with DFS.

 

      "Transfer" means (a) when used as a verb, to give, sell, exchange, assign,

pledge,   hypothecate,   bequeath, devise or otherwise dispose of or encumber, and

(b) when used as a noun,

 

 

                                       -13-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

the   nouns    corresponding    to   such   verbs,   in   either   case   voluntarily   or

involuntarily,   by operation of law or otherwise and the term   "Transferee"   and

"Transferor" shall have correlative meanings.

 

      "Treasury    Regulations"    means   the   final   and   temporary    regulations

promulgated   by the United States   Treasury   Department   pursuant to the IRC, as

such regulations are amended and in effect from time to time.

 

      "U.S. Rating Agency" means any of the following:   (a) S&P, (b) Moody's, or

(c) Fitch Investors Service, L.P.

 

      "Valuation   Period"   means the 12-month   fiscal   period ended   October 29,

2005.

 

      "Valuation Period Assets" means all Gain Generated Fundings (as defined in

the 2004 Extension and Funding Agreement) during the Valuation Period.

 

      "Wal-Mart" means (i) Wal-Mart Stores, Inc., a Delaware   corporation,   (ii)

any of its   subsidiaries,   including   Sam's Clubs,   and (iii) any other   related

companies doing business as Wal-Mart or Sam's Clubs.

 

      "Wind-Down Period" has the meaning set forth in Section 8.2.

 

      1.2 Other Definitional Provisions

 

            (a) As used in this Agreement,   accounting terms not defined in this

Agreement shall have the respective meanings given to them under GAAP.

 

            (b) Words of any   gender   (whether   masculine,   feminine   or neuter)

shall be deemed to include all other genders. Words of the singular number shall

be deemed to include the plural number, and vice versa, where applicable.

 

            (c) When used herein, the word "including" means "including, without

limitation".

 

            (d) Unless   otherwise   specified,   references   herein to Articles or

Sections   shall   be   deemed   to   be   references   to   Articles   or   Sections,   as

applicable,   of this Agreement. When used in this Agreement, the words "hereof",

"herein"   and   "hereunder"   and   words of   similar   import   shall   refer to this

Agreement as a whole and not to any particular provision of this Agreement.

 

                                   ARTICLE II

 

                           BUSINESS PURPOSES, OFFICES,

                        BUSINESS QUALIFICATIONS AND TERM

 

      2.1 Business Purpose.   The business purposes of DFS (the "Business") shall

be to (a) purchase Products from Dell Affiliates, (b) design, provide and manage

lease and other financing   programs in connection with the sale or lease of such

Products to customers of DFS or Dell and (c) own, operate and conduct such other

businesses   and activities as may from time to time be determined by the General

Partner; provided, however, that DFS may conduct Business outside

 

 

                                      -14-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

the United   States of America   only if and to the extent that both   Dell-DFS and

CIT DFS consent thereto.

 

      2.2 Principal   Place of Business.   The principal   place of business of DFS

shall be located at One Dell Way, Round Rock,   Texas 78682.   The General Partner

may change the location of DFS's   principal   place of business and may establish

additional    places   of   business   for   DFS   at   such    locations   and   in   such

jurisdictions as may be determined, from time to time, by the General Partner.

 

      2.3 Registered   Office and Registered   Agent. The registered office of DFS

in Delaware   shall be located at Corporation   Trust Center,   1209 Orange Street,

Wilmington, Delaware 19801. The registered agent for DFS at such office shall be

The   Corporation   Trust Company.   The General Partner may change the location of

DFS's registered   office in Delaware or the registered agent for DFS at any time

and from time to time,   provided   that the   appropriate   form of notice is filed

with the Delaware Secretary of State.

 

      2.4 Other Business Qualifications. DFS may qualify to transact business in

such   other   states   and   under   such   assumed   business   names   (for   which all

applicable   assumed business name   certificates or filings shall be made) as the

General Partner shall determine. Each Partner shall execute, acknowledge,   swear

to and deliver all   certificates or other documents   necessary or appropriate to

qualify,   continue and terminate DFS as a foreign   limited   partnership   in such

jurisdictions in which DFS may conduct business.

 

      2.5 Term.   The term of DFS commenced on April 14, 1997 and shall   continue

until January 29, 2010 (the "Term"),   unless DFS is dissolved prior to such date

pursuant to the   provisions   of Article VIII or the Partners   mutually   agree to

extend the Term.

 

                                  ARTICLE III

 

                     CAPITAL CONTRIBUTIONS AND PARTNER LOANS

 

      3.1 Capital Account Balances. As of the last Fiscal Month end prior to the

Effective   Date, each Partner has the Capital Account balance set forth opposite

such   Partner's   name on the books   and   records   of DFS.   No   Partner   shall be

required   to make any   Capital   Contributions   from and   after   the date   hereof

without the approval of all of the Partners.

 

      3.2 Capital Accounts.

 

            (a) A separate Capital Account shall be maintained for each Partner.

Each   Partner's   Capital   Account   initially   shall be   equal to such   Partner's

Initial   Capital Account   Balance.   Thereafter,   each Partner's   Capital Account

shall be (a)   increased   by (i) any   other   Capital   Contributions   made by such

Partner,   (ii) the amount of Income (or items thereof) allocated to such Partner

pursuant   to Article IV and (iii) the amount of any DFS   liabilities   assumed by

the Partner or which are secured by any Property   distributed   to such   Partner;

and (b) decreased by (i) the Distributions made by DFS to such Partner, (ii) the

amount of Loss (or items thereof)   allocated to such Partner pursuant to Article

IV and (iii) the amount of any liabilities of

 

 

                                      -15-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

the Partner   assumed by DFS or which are secured by any Property   contributed by

such Partner to DFS.

 

            (b) If any Interest is Transferred   in accordance   with the terms of

this   Agreement,   the   Transferee   shall   succeed to the Capital   Account of the

Transferor as provided in the last Sentence of Section 7.3.

 

            (c) In the event of (i) an additional   Capital   Contribution   by any

Partner of more than a de minimis amount of Property which results in a shift in

Interests,   (ii) a   Distribution   by DFS to a Partner   of more than a de minimis

amount of Property in   redemption of all or part of such   Partner's   Interest or

(iii) the   Liquidation   of DFS, the book basis of the Property shall be adjusted

to Fair   Value   as of the date of such   Capital   Contribution,   Distribution   or

Liquidation,   and the   Capital   Accounts of all the   Partners   shall be adjusted

simultaneously   to reflect the aggregate net   adjustment to book basis as if DFS

recognized   Income or Loss equal to the amount of such aggregate net adjustment;

provided,   however, that the adjustments resulting from clause (i) or (ii) above

shall be made only if the General Partner   determines that such   adjustments are

necessary   or   appropriate   to reflect the   relative   economic   interests of the

Partners.

 

            (d) If any   Property is subject to IRC   ss.704(c)   or is revalued on

the   books   of DFS in   accordance   with   Section   3.2(c)   pursuant   to   Treasury

Regulation   ss.1.704-1(b)(2)(iv)(f),   the Partners'   Capital   Accounts   shall be

adjusted in accordance   with   Treasury   Regulation   ss.1.704-1(b)(2)(iv)(g)   for

allocations to the Partners of   depreciation,   amortization and gain or loss, as

computed for book purposes (and not tax purposes) with respect to such Property.

 

            (e) The   foregoing   provisions   of this   Section   3.2 and the   other

provisions of this Agreement relating to the maintenance of Capital Accounts are

intended to comply with Treasury   Regulation   ss.1.704-1(b)   and   ss.1.704-2 and

shall be   interpreted   and   applied in a manner   consistent   with such   Treasury

Regulations.   If the General Partner   determines that it is prudent or advisable

to   modify   the   manner in which   the   Capital   Accounts,   or any   increases   or

decreases   thereto,    are   computed   in   order   to   comply   with   such   Treasury

Regulations,   the   General   Partner   may   cause   such   modification   to be made,

provided that it is not likely to have a material   effect on the Buyout Price or

on amounts distributable to any Partner upon Liquidation of DFS.

 

      3.3 Negative Capital   Accounts.   No Partner shall be obligated to restore,

and neither DFS,   any other   Partner nor any third party shall have any right to

compel any Partner to restore,   any negative   balance in such Partner's   Capital

Account;   provided,   however,   that nothing in this Section 3.3 shall   relieve a

Partner of any liability it may otherwise have,   either pursuant to the terms of

this   Agreement   or pursuant to the terms of any   agreement to which DFS or such

Partner may be a party.

 

      3.4 Capital Withdrawal Rights, Interest and Priority.   Except as expressly

provided in this   Agreement,   no Partner   shall be entitled to (a)   withdraw its

Capital   Contributions or reduce the balance in such Partner's   Capital Account,

(b) receive any   Distributions   from DFS or (c) demand or receive Property other

than cash in return for its Capital Contributions.   No Partner shall be entitled

to receive or be credited with any interest on such Partner's Capital Account at

any time.   No Partner   shall have any priority   over any other Partner as to the

return of such Partner's Capital Interest.

 

 

                                      -16-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

      3.5 Loans by Partners. Any Partner may make a loan to DFS ("Partner Loan")

in such amounts,   at such times,   on such terms and conditions and at such rates

of interest as may be approved by the General Partner;   provided,   however, that

nothing   in   this   Section   3.5   shall   require   approval   of any   Partner   Loan

contemplated   and authorized by the terms and provisions of any of the Ancillary

Agreements. Partner Loans shall not be considered Capital Contributions.

 

                                   ARTICLE IV

 

                          ALLOCATIONS AND DISTRIBUTIONS

 

      4.1 Allocations.

 

            (a) General. After giving effect to the Regulatory Allocations,   all

Income, Loss and Credits of DFS (including those resulting from a Liquidation of

DFS)   shall be   allocated   to the   Partners   pro rata in   accordance   with their

Distribution Percentages.

 

            (b) Regulatory Allocations.

 

 

                  (i) Qualified Income Offset.   Notwithstanding   the allocations

      provided   in   Section   4.1(a)   and except as   otherwise   provided   in this

      Section 4.1(b),   if any Partner receives an unexpected   allocation of Loss

      or   deduction   or an   unexpected   distribution   as   described   in Treasury

      Regulation   ss.l.704-1(b)(2)(ii)(d)(4),   (5) or   (6)   which   results   in a

      negative   balance in such   Partner's   Capital   Account   (after taking into

      account   reductions   for   the   items   set   forth   in   Treasury   Regulation

      ss.1.704-1(b)(2)(ii)(d)(4),   (5), or (6)) in excess of (A) the amount,   if

      any, of such negative Capital Account such Partner is obligated to restore

      pursuant   to the   terms   of this   Agreement   and (B)   the   amount   of such

      negative Capital Account such Partner is deemed to be obligated to restore

      pursuant    to    the    penultimate    sentences    of    Treasury    Regulation

      ss.1.704-2(g)(1)   and   ss.1.704-2(i)(5),   such   Partner   shall   receive an

      allocation   of gross   income or gain in the amount   necessary to eliminate

      such excess as quickly as possible.   This provision is intended to satisfy

      the   definition   of   "qualified   income   offset",   as defined in   Treasury

      Regulation ss.1.704-1(b)(2)(ii)(d).

 

                  (ii) Minimum Gain. Notwithstanding the allocations provided in

      Section 4.1(a) and except as otherwise provided in this Section 4.1(b), if

      there is a net   decrease   in   "Partnership   Minimum   Gain" (as   defined in

      Treasury   Regulation   ss.1.704-2(d))   during any Fiscal Year, each Partner

      with a negative   Capital   Account   balance at the end of such   Fiscal Year

      (decreased by the amount,   if any, of such negative   Capital   Account such

      Partner is   obligated to restore   pursuant to the terms of this   Agreement

      and the amount of such negative   Capital Account such Partner is deemed to

      be obligated to restore pursuant to the penultimate   sentences of Treasury

      Regulation   ss.1.704-2(g)(1) and ss.1.704-(2)(i)(5),   and increased by the

      items set forth in Treasury Regulation ss.1.704-1(b)(2)(ii)(d)(4),   (5) or

      (6)) shall be   allocated   items of gross   income and gain for such   Fiscal

      Year and, if necessary, for subsequent Fiscal Years, in an amount equal to

      such Partner's share of the net decrease in such Partnership Minimum Gain,

      determined in

 

 

                                       -17-

 

 

CONFIDENTIAL TREATMENT REQUESTED BY CIT GROUP INC.

 

<PAGE>

 

      accordance with Treasury Regulation ss.1.704-(2)(g)(2).   This provision is

      intended to satisfy   the   definition   of a "minimum   gain   chargeback"   as

      defined in Treasury Regulation ss.1.704-2(f).

 

                  (iii) Gross Income Allocation. Notwithstanding the allocations

      provided   in   Section   4.1(a)   and except as   otherwise   provided   in this

      Section 4.1(b), if any Partner has a negative Capital Account at the close

      of any   Fiscal   Year which is in excess of the sum of (A) the   amount,   if

      any, of such negative Capital Account such Partner is obligated to restore

      pursuant to any   provision   of this   Agreement   and (B) the amount of such

      negative Capital Account such Partner is deemed to be obligated to restore

      pursuant    to    the    penultimate    sentences    of    Treasury    Regulation

      ss.1.704-2(g)(1)   and   ss.1.704-2(i)(5),   such Partner   shall be specially

      allocated   items of gross   income and gain in the amount of such excess as

      quickly as possible,   provided that an allocation pursuant to this Section

      4.1(b)(iii)   shall be made only if and to the   extent   that   such   Partner

      would   have a   negative   Capital   Account   in excess of such sum after all

      other   allocations   provided   for in this Section 4.1 have been made as if

      Section 4.l(b)(i) and this Section 4.1(b)(iii) were not in this Agreement.

 

                  (iv) Partner   Nonrecourse   Deductions and Partner   Nonrecourse

      Debt Minimum Gain. Notwithstanding the allocations provided for in Section

      4.1(a)   and except as   otherwise   provided   in this   Section   4.1(b),   any

      "Partner   Nonrecourse    Deduction"   (as   defined   in   Treasury   Regulation

      ss.1.704-2(i)(2))   for any Fiscal Year shall be   allocated   to the Partner

      who bears the economic