TRUST AGREEMENT
Dated as of June 1, 1998
among
ARCADIA RECEIVABLES FINANCE CORP.,
FINANCIAL SECURITY ASSURANCE INC.
and
WILMINGTON TRUST COMPANY
Owner Trustee
ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1998-B
TABLE OF CONTENTS
Page
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INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Usage of Terms . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.3. Section References . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.4. Material Adverse Effect. . . . . . . . . . . . . . . . . . . 4
ARTICLE II - CREATION OF TRUST . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.1. Creation of Trust . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2. Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3. Purposes and Powers . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4. Appointment of Owner Trustee . . . . . . . . . . . . . . . . 5
SECTION 2.5. Initial Capital Contribution of Trust Estate . . . . . . . . 5
SECTION 2.6. Declaration of Trust . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.7. Liability of the Depositor . . . . . . . . . . . . . . . . . 6
SECTION 2.8. Title to Trust Property . . . . . . . . . . . . . . . . . . 6
SECTION 2.9. Situs of Trust . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.10. Representations and Warranties of the Depositor . . . . . . 6
SECTION 2.11. Federal Income Tax Treatment . . . . . . . . . . . . . . . . 7
SECTION 2.12. Covenants of the Depositor . . . . . . . . . . . . . . . . . 8
SECTION 2.13. Ownership of Trust . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.14. Maintenance of Office or Agency . . . . . . . . . . . . . . 9
ARTICLE III - ACTIONS BY OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.1. Action by the Security Insurer with Respect to
Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.2. Rights of Security Insurer . . . . . . . . . . . . . . . . . 10
ARTICLE IV - CERTAIN DUTIES OF TRUST . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.1. Accounting; Reports; Tax Returns . . . . . . . . . . . . . . 10
ARTICLE V - AUTHORITY AND DUTIES OF OWNER TRUSTEE . . . . . . . . . . . . . . . 11
SECTION 5.1. General Authority . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.2. General Duties . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.3. Action upon Instruction . . . . . . . . . . . . . . . . . . 12
SECTION 5.4. No Duties Except as Specified in this Agreement or in
Instructions . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.5. No Action Except under Specified Documents or
Instructions . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.6. Restrictions . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.7. Administration Agreement . . . . . . . . . . . . . . . . . . 14
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ARTICLE VI - CONCERNING THE OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . 14
SECTION 6.1. Acceptance of Trustee and Duties . . . . . . . . . . . . . . 14
SECTION 6.2. Representations and Warranties . . . . . . . . . . . . . . . 16
SECTION 6.3. Reliance; Advice of Counsel . . . . . . . . . . . . . . . . 17
SECTION 6.4. Not Acting in Individual Capacity . . . . . . . . . . . . . 17
SECTION 6.5. Owner Trustee Not Liable for Notes or Receivables . . . . . 17
SECTION 6.6. Owner Trustee May Own Notes . . . . . . . . . . . . . . . . 18
ARTICLE VII - COMPENSATION OF OWNER TRUSTEE . . . . . . . . . . . . . . . . . . 18
SECTION 7.1. Owner Trustee's Fees and Expenses . . . . . . . . . . . . . 18
SECTION 7.2. Indemnification . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.3. Non-recourse Obligations . . . . . . . . . . . . . . . . . . 19
ARTICLE XIII - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8.1. Termination of the Trust . . . . . . . . . . . . . . . . . . 19
SECTION 8.2. Dissolution Events with respect to the Depositor . . . . . . 20
ARTICLE IX - SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES . . . . . . 20
SECTION 9.1. Eligibility Requirements for Owner Trustee . . . . . . . . . 20
SECTION 9.2. Resignation or Removal of Owner Trustee . . . . . . . . . . 21
SECTION 9.3. Successor Owner Trustee . . . . . . . . . . . . . . . . . . 22
SECTION 9.4. Merger or Consolidation of Owner Trustee . . . . . . . . . . 22
SECTION 9.5. Appointment of Co-Trustee or Separate Trustee . . . . . . . 22
ARTICLE X - MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 10.1. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 10.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 10.3. Severability of Provisions . . . . . . . . . . . . . . . . . 25
SECTION 10.4. Third-Party Beneficiaries. . . . . . . . . . . . . . . . . . 25
SECTION 10.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 10.6. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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EXHIBITS
Exhibit A -- Form of Certificate of Trust
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THIS TRUST AGREEMENT, dated as of June 1, 1998, is made among Arcadia
Receivables Finance Corp., a Delaware corporation (the "Seller"), Financial
Security Assurance Inc. ("Financial Security") and Wilmington Trust Company, a
Delaware banking corporation, as Owner Trustee (in such capacity, the "Owner
Trustee").
In consideration of the mutual agreements herein contained, and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. All terms defined in the Spread Account
Agreement or the Sale and Servicing Agreement (each as defined below) shall have
the same meaning in this Agreement. Whenever capitalized and used in this
Agreement, the following words and phrases, unless otherwise specified, shall
have the following meanings:
ADMINISTRATION AGREEMENT: The Administration Agreement, dated as of
June 23, 1998, between the Administrator and the Trust, as the same may be
amended and supplemented from time to time.
ADMINISTRATOR: Wilmington Trust Company, a Delaware banking
corporation, or any successor Administrator under the Administration Agreement.
AFL: Arcadia Financial Ltd., a Minnesota corporation, and its
successors in interest.
AGREEMENT OR "THIS AGREEMENT": This Trust Agreement, all amendments
and supplements thereto and all exhibits and schedules to any of the foregoing.
AUTHENTICATION AGENT: Wilmington Trust Company, or its successor in
interest, and any successor authentication agent appointed as provided in this
Agreement.
BUSINESS TRUST STATUTE: Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as the same may be amended from time to
time.
CERTIFICATE OF TRUST: The Certificate of Trust in the form of Exhibit
A hereto filed for the Trust pursuant to Section 3810(a) of the Business Trust
Statute.
CODE: The Internal Revenue Code of 1986, as amended.
CORPORATE TRUST OFFICE: The principal office of the Owner Trustee at
which at any particular time its corporate trust business shall be administered,
which office at the Closing Date is located at Xxxxxx Square North, 0000 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust
Administration; the telecopy number for such office on the date of the execution
of this Agreement is (000) 000-0000.
DEPOSITOR: The Seller in its capacity as depositor hereunder.
DISSOLUTION EVENT: With respect to the Depositor, means the
termination or dissolution of such Person, or the occurrence of an Insolvency
Event with respect to such Person.
EXPENSES: The meaning assigned to such term in Section 7.2.
INDEMNIFIED PARTIES: The meaning assigned to such term in
Section 7.2.
INDEMNIFIED PARTIES: The meaning assigned to such term in
Section 7.2.
INSTRUCTING PARTY: The meaning assigned to such term in Section
5.3(a).
OWNER TRUSTEE: Wilmington Trust Company, or its successor in
interest, acting not individually but solely as trustee, and any successor
trustee appointed as provided in this Agreement.
RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day immediately preceding such Distribution Date.
RELATED DOCUMENTS: The Sale and Servicing Agreement, the Indenture,
the Notes, the Purchase Agreements, each Subsequent Transfer Agreement, each
Subsequent Purchase Agreement, the Custodian Agreement, the Note Policy, the
Spread Account Agreement, the Stock Pledge Agreement, the Insurance Agreement,
the Administration Agreement, the Lockbox Agreement, the Depository Agreement,
and the Underwriting Agreement between AFL and the Seller and the underwriters
of the Notes. The Related Documents executed by any party are referred to
herein as "such party's Related Documents," "its Related Documents" or by a
similar expression.
SALE AND SERVICING AGREEMENT: The Sale and Servicing Agreement, dated
as of June 1, 1998 among the Trust, the Seller, AFL, in its individual capacity
and as Servicer, and Norwest Bank Minnesota, National Association, as Backup
Servicer, as the same may be amended and supplemented from time to time.
SECRETARY OF STATE: The Secretary of State of the State of Delaware.
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SECURITY INSURER: Financial Security Assurance Inc., or its successor
in interest.
SELLER: Arcadia Receivables Finance Corp., a Delaware corporation, or
its successor in interest.
SPREAD ACCOUNT: The Series 1998-B Spread Account established and
maintained pursuant to the Spread Account Agreement.
SPREAD ACCOUNT AGREEMENT: The Spread Account Agreement, dated as of
March 25, 1993, as thereafter amended and restated, among the Seller, AFL, the
Security Insurer, the Collateral Agent and the Indenture Trustee, as the same
may be amended, supplemented or otherwise modified in accordance with the terms
thereof.
STOCK PLEDGE AGREEMENT: The Second Amended and Restated Stock Pledge
Agreement, dated as of March 25, 1993, as amended and restated as of December 3,
1996, among the Security Insurer, AFL and the Collateral Agent, relating to the
stock of each of Arcadia First GP Inc., Arcadia Second GP Inc. and the Seller,
as the same may be amended from time to time.
TRUST: The trust created by this Agreement, the estate of which
consists of the Trust Property.
TRUST ACCOUNTS: The Collection Account, the Subcollection Account,
the Lockbox Account, the Pre-Funding Account, the Reserve Account and the Note
Distribution Account.
TRUST PROPERTY: The property and proceeds of every description
conveyed pursuant to Section 2.5 hereof and Sections 2.1 and 2.4 of the Sale and
Servicing Agreement, together with the Trust Accounts (including all Eligible
Investments therein and all proceeds therefrom).
SECTION 1.2. USAGE OF TERMS. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography, and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement; references to
Persons include their permitted successors and assigns; and the terms "include"
or "including" mean "include without limitation" or "including without
limitation." To the extent that definitions are contained in this Agreement, or
in any such certificate or other document, such definitions shall control.
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SECTION 1.3. SECTION REFERENCES. All references to Articles,
Sections, paragraphs, subsections, exhibits and schedules shall be to such
portions of this Agreement unless otherwise specified.
SECTION 1.4. MATERIAL ADVERSE EFFECT. Whenever a determination is to
be made under this Agreement as to whether a given event, action, course of
conduct or set of facts or circumstances could or would have a material adverse
effect on the Trust (or any similar or analogous determination), such
determination shall be made without taking into account the insurance provided
by the Note Policy.
ARTICLE II
CREATION OF TRUST
SECTION 2.1. CREATION OF TRUST. There is hereby formed a trust to be
known as "Arcadia Automobile Receivables Trust, 1998-B," in which name the Trust
may conduct business, make and execute contracts and other instruments and xxx
and be sued.
SECTION 2.2. OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Security Insurer 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:
(i) to issue the Notes pursuant to the Indenture and to sell the
Notes;
(ii) with the proceeds of the sale of the Notes, to fund the
Pre-Funding Account and the Reserve Account, to pay the organizational,
start-up and transactional expenses of the Trust and to pay the balance to
the Seller pursuant to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey
the Trust Property to the Indenture Collateral Agent pursuant to the
Indenture for the benefit of the Security Insurer and the Indenture Trustee
on behalf of the Noteholders and to hold, manage and distribute to the
Depositor pursuant to the terms of the Sale and Servicing Agreement any
portion of the Trust Property released from the Lien of, and remitted to
the Trust pursuant to, the Indenture;
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(iv) to enter into and perform its obligations under the Related
Documents to which it is to be a party;
(v) 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
(vi) subject to compliance with the Related Documents, to engage
in such other activities as may be required in connection with conservation
of the Trust Property and the making of distributions to the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or expressly authorized by the terms of this Agreement or
the Related Documents.
SECTION 2.4. APPOINTMENT OF OWNER TRUSTEE. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein, and the
Owner Trustee hereby accepts such appointment.
SECTION 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $10. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Trust Property. The
Depositor shall pay organizational expenses of the Trust as they may arise or
shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.6. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the conditions
set forth herein, subject to the interests and rights in the Trust Property
granted to other Persons by the Related Documents. It is the intention and
agreement of the parties hereto that the Trust constitute a business trust under
the Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. None of the parties hereto shall make the
election provided in Treasury Regulation Section 301.7701-3(c) to have the
Trust classified as an association taxable as a corporation. On the date
hereof, the Owner Trustee shall file the Certificate of Trust required by
Section 3810(a) of the Business Trust Statute in the Office of the Secretary of
State. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and duties set forth herein and in the Business Trust Statute
with respect to accomplishing the purposes of the Trust.
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SECTION 2.7. LIABILITY OF THE DEPOSITOR. The Depositor shall be
liable directly to indemnify each injured party for all losses, claims,
damages, liabilities and expenses of the Trust, to the extent not paid out of
the Trust Property, to the extent provided in, and subject to the terms and
conditions contained in, the Spread Account Agreement; PROVIDED, FURTHER,
that the Depositor shall not be liable to indemnify any injured party if such
party has agreed that its recourse against the Trust for any obligation or
liability of the Trust to such party shall be limited to the assets of the
Trust. In addition, any third party creditors of the Trust (other than in
connection with the obligations described in the provisos to the preceding
sentence for which the Depositor shall not be liable) shall be deemed third
party beneficiaries of this paragraph.
SECTION 2.8. TITLE TO TRUST PROPERTY. Legal title to all the Trust
Property shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust Property to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Owner Trustee, 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 State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware.
The Trust shall not have any employees in any state other than Delaware;
PROVIDED, HOWEVER, that nothing herein shall restrict or prohibit the Owner
Trustee, the Servicer or any agent of the Trust from having employees within or
without the State of Delaware. Payments will be received by the Trust only in
Delaware, and payments will be made by the Trust only from Delaware. The only
office of the Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. By
execution of this Agreement, the Depositor makes the following representations
and warranties with respect to itself on which the Owner Trustee relies in
accepting the Trust Property in trust and upon which the Security Insurer relies
in issuing the Note Policy.
(a) ORGANIZATION AND GOOD STANDING. It has been duly organized and
is validly existing as a corporation 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 as such business is
currently conducted and is proposed to be conducted pursuant to this Agreement
and the Related Documents.
(b) DUE QUALIFICATION. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property, the conduct of its
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business and the performance of its obligations under this Agreement and the
Related Documents requires such qualification.
(c) POWER AND AUTHORITY. It has the power and authority to execute
and deliver this Agreement and its Related Documents and to perform its
obligations pursuant thereto; and the execution, delivery and performance of
this Agreement and its Related Documents have been duly authorized by all
necessary corporate action.
(d) NO CONSENT REQUIRED. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Related Documents,
except for such as have been obtained, effected or made.
(e) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement and its Related Documents and the fulfillment of its
obligations under this Agreement and its Related Documents shall not conflict
with, result in any breach of any of the terms and provisions of or constitute
(with or without notice, lapse of time or both) a default under, its certificate
of incorporation or by-laws, or any indenture, agreement, mortgage, deed of
trust or other instrument to which it 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, mortgage, deed of trust
or other instrument, or violate any law, order, rule or regulation applicable to
it of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over it or any
of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to its knowledge threatened against it before any court, regulatory
body, administrative agency or other tribunal or governmental instrumentality
having jurisdiction over it or its properties (A) asserting the invalidity of
this Agreement or any of the Related Documents, (B) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, or (C) seeking
any determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability of, this
Agreement or any of the Related Documents.
SECTION 2.11. FEDERAL INCOME TAX TREATMENT. The Depositor, the
Servicer, the Owner Trustee and each Noteholder agree to treat, and to take no
action inconsistent with the treatment of, the Notes as indebtedness for
purposes of federal, state, local and foreign income or franchise taxes and any
other tax imposed on or measured by income. Each Noteholder, by acceptance of
its Note, agrees to be bound by the provisions of this Section 2.11. Each
Noteholder agrees that it will cause any Note Owner acquiring an interest in a
Note through it to comply with this Agreement as to the treatment of the Notes
as indebtedness under applicable tax
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law, as described in this Section 2.11. Furthermore, subject to Section 4.1,
the Depositor and the Trustee shall treat the Trust as a security device
only, and shall not file tax returns or obtain an employer identification
number on behalf of the Trust.
In the event that any class of Notes is deemed for federal income tax
purposes to represent an equity interest in the Trust, the Trust shall be
treated for federal income tax purposes as a partnership among the Holders of
such Notes and the Depositor. In the event such a partnership is deemed to
exist, the net income of the Trust for any month as determined for Federal
income tax purposes (and each item of income, gain, loss and deduction entering
into the computation thereof) shall be allocated:
(a) among the Noteholders as of the first Record Date following the
end of such month, in proportion to their ownership of principal amount of
Notes on such date, an amount of net income up to the sum of
(i) Noteholders' Interest Distributable Amount for such month, (ii) the
portion of the market discount on the Receivables accrued during such month
that is allocable to the excess of the initial aggregate principal amount
of the Notes over their initial aggregate issue price, and (iii) any Note
Prepayment Premium distributable to the Noteholders with respect to such
month; and
(b) next, to the Depositor to the extent of any remaining net income.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make up such shortfall before being allocated as provided in clause (b). Net
losses of the Trust, if any, for any month as determined for Federal income tax
purposes (and each item of income, gain, loss and deduction entering into the
computation thereof) shall be allocated to the Depositor to the extent the
Depositor is reasonably expected to bear the economic burden of such net losses,
then net losses shall be allocated among the Noteholders as of the first Record
Date following the end of such month in proportion to their ownership of
principal amount of the Notes on such Record Date. The Depositor is authorized
to modify the allocation in this paragraph if necessary or appropriate, in its
sole discretion, for the allocations to reflect fairly the economic income, gain
or loss to the Noteholders to comply with the provisions of the Code and the
accompanying Treasury Regulations.
SECTION 2.12. COVENANTS OF THE DEPOSITOR. The Depositor agrees and
covenants for the benefit of the Security Insurer and the Owner Trustee, during
the term of this Agreement, and to the fullest extent permitted by applicable
law, that:
(a) it shall not sell, assign, transfer, give or encumber, by
operation of law or otherwise, in whole or in part, its interest in the
Trust;
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(b) it shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as permitted
by its certificate of incorporation and the Related Documents;
(c) it shall not, for any reason, institute proceedings for the
Trust to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, or
file a petition seeking or consenting to reorganization or relief under any
applicable federal or state law relating to the bankruptcy of the Trust, or
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trust or a substantial part
of the property of the Trust or cause or permit the Trust to make any
assignment for the benefit of creditors, or admit in writing the inability
of the Trust to pay its debts generally as they become due, or declare or
effect a moratorium on the debt of the Trust or take any action in
furtherance of any such action;
(d) it shall obtain from each counterparty to each Related
Document to which it or the Trust is a party and each other agreement
entered into on or after the date hereof to which it or the Trust is a
party, an agreement by each such counterparty that prior to the occurrence
of the event specified in Section 8.1(c) such counterparty shall not
institute against, or join any other Person in instituting against, it or
the Trust, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceedings under the laws of the
United States or any state of the United States;
(e) it shall not, for any reason, withdraw or attempt to
withdraw from this Agreement, dissolve, institute proceedings for it to be
adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against it, or file a petition seeking
or consenting to reorganization or relief under any applicable federal or
state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of it or a substantial part of its property, or make any
assignment for the benefit of creditors, or admit in writing its inability
to pay its debts generally as they become due, or declare or effect a
moratorium on its debt or take any action in furtherance of any such
action.
SECTION 2.13. OWNERSHIP OF TRUST. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.5, the Depositor shall
be the sole beneficiary of the Trust.
SECTION 2.14. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee
shall maintain in Wilmington, Delaware, an office or offices or agency or
agencies where notices and demands to or upon the Owner Trustee in respect of
the Related Documents may be served. The Owner Trustee initially designates
Wilmington
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Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000 as its principal corporate trust office for such purposes.
The Owner Trustee shall give prompt written notice to the Depositor and the
Security Insurer of any change in the location of any such office or agency.
ARTICLE III
ACTIONS BY OWNER TRUSTEE
SECTION 3.1. ACTION BY THE SECURITY INSURER WITH RESPECT TO
BANKRUPTCY. The Owner Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the prior written consent
of the Security Insurer.
SECTION 3.2. RIGHTS OF SECURITY INSURER. Notwithstanding anything to
the contrary in the Related Documents, without the prior written consent of the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing), the Owner Trustee shall not (i) remove the Administrator, the
Servicer or the Backup Servicer, (ii) initiate any claim, suit or proceeding by
the Trust or compromise any claim, suit or proceeding brought by or against the
Trust, (iii) authorize the merger or consolidation of the Trust with or into any
other business trust or other entity (other than in accordance with Section 3.10
of the Indenture) or (iv) amend the Certificate of Trust.
ARTICLE IV
CERTAIN DUTIES OF TRUST
SECTION 4.1. ACCOUNTING; REPORTS; TAX RETURNS.
(a) The Administrator has agreed pursuant to the Administration
Agreement that the Administrator shall (i) maintain (or cause to be maintained)
the books of the Trust on a calendar year basis on the accrual method of
accounting, and (ii) file or cause to be filed all documents required to be
filed by the Trust with the Securities and Exchange Commission and otherwise
take or cause to be taken all such actions as are notified by the Servicer in
writing to the Administrator as being required for the Trust's compliance with
all applicable provisions of state and federal securities laws.
(b) Consistent with Section 2.11, the Depositor, the Owner Trustee
and the Administrator shall not file any federal income tax returns on behalf of
the Trust; provided, however, that if any class of Notes is treated as an equity
interest in the Trust, the Administrator shall file or cause to be filed such
tax returns relating to the Trust (including a partnership information return,
Form 1065), and direct the
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Owner Trustee to 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
partnership for Federal income tax purposes. If the Trust is treated as a
partnership for federal income tax purposes, the Depositor shall be the "tax
matters partner" of the Trust pursuant to the Code.
(c) The Owner Trustee shall make all elections pursuant to this
Section 4.1 only as directed in writing by the Depositor, with the consent of
the Security Insurer. The Depositor hereby directs the Owner Trustee to elect
under Section 1278 of the Code to include in income currently any market
discount that accrues with respect to the Receivables.
(d) Upon the direction of the Depositor, the Owner Trustee shall sign
on behalf of the Trust the tax returns of the Trust, if any, unless applicable
law requires the Depositor to sign such documents, in which case such documents
shall be signed by the Depositor. In signing any tax return of the Trust, the
Owner Trustee shall rely entirely upon, and shall have no liability for,
information or calculations provided by the Depositor.
(e) None of the parties hereto shall make the election provided
in Treasury Regulation Section 301.7701-3(c) to have the Trust classified as an
association taxable as a corporation.
ARTICLE V
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 5.1. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Related 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 Related Documents to which the Trust is to be a party and
any amendment thereto, and on behalf of the Trust, to direct the Indenture
Trustee to authenticate and deliver the Class A-1 Notes in the aggregate
principal amount of $59,500,000, the Class A-2 Notes in the aggregate principal
amount of $188,000,000, the Class A-3 Notes in the aggregate principal amount of
$141,500,000, the Class A-4 Notes in the aggregate principal amount of
$106,000,000 and the Class A-5 Notes in the aggregate principal amount of
$55,000,000. In addition to the foregoing, the Owner Trustee is authorized, but
shall not be obligated, to take all actions required of the Trust pursuant to
the Related Documents. The Owner Trustee is further authorized, on behalf of
the Trust, to enter into the Administration Agreement, to appoint, with the
consent of the Security Insurer, a successor Administrator and to take from time
to time such action as the Instructing Party recommends with respect to the
Related Documents so long as such actions are consistent with the terms of the
Related Documents.
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SECTION 5.2. GENERAL DUTIES. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged through the Administrator or
such agents as shall be appointed with the consent of the Security Insurer)
all of its responsibilities pursuant to the terms of this Agreement and the
Related Documents subject to the Related Documents and in accordance with the
provisions of this Agreement. Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Related Documents to the extent the Administrator has
agreed in the Administration Agreement to perform any act or to discharge any
duty of the Owner Trustee hereunder or under any Related Document, and the
Owner Trustee shall not be liable for the default or failure of the
Administrator to carry out its obligations under the Administration
Agreement. Notwithstanding anything herein or in any Related Document to the
contrary, the Owner Trustee shall discharge its obligations pursuant to
Section 5.3 and Section 5.4 of the Sale and Servicing Agreement directly and
not through the Administrator or any agent.
SECTION 5.3. ACTION UPON INSTRUCTION.
(a) Subject to Article IV and the terms of the Spread Account
Agreement, the Security Insurer (so long as an Insurer Default shall not have
occurred and be continuing) or the Depositor (if an Insurer Default shall
have occurred and be continuing) (the "Instructing Party") shall have the
exclusive right to direct the actions of the Owner Trustee in the management
of the Trust, so long as such instructions are not inconsistent with the
express terms set forth herein or in any Related Document. The Instructing
Party shall not instruct the Owner Trustee in a manner inconsistent with this
Agreement or the Related Documents.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Related Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such
action is contrary to the terms hereof or of any Related Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Related Document, the Owner Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction received from the Instructing Party, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten 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 Related Documents, and shall have no
liability to any Person for such action or inaction.
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(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Related 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 Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any
such instruction received, the Owner Trustee shall not be liable, on account
of such action or inaction, to any Person. If the Owner 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 Related Documents, as it shall deem to be in the
best interests of the Owners, and shall have no liability to any Person for
such action or inaction.
SECTION 5.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner 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 Property, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Trust is a party, except as expressly provided by the terms of this
Agreement (including as provided in Section 5.2) or in any written instruction
received by the Owner Trustee pursuant to Section 5.3; and no implied duties or
obligations shall be read into this Agreement or any Related Document against
the Owner Trustee. The Owner Trustee shall have no responsibility for
preparing, monitoring or filing any financing or continuation statements in any
public office at any time or otherwise to perfect or maintain the perfection of
any security interest or lien granted to it hereunder or to record this
Agreement or any Related Document; however, the Owner Trustee will from time to
time execute and deliver such financing or continuation statements as are
prepared by the Servicer and delivered to the Owner Trustee for its execution on
behalf of the Trust for the purpose of perfecting or maintaining the perfection
of such a security interest or lien or effecting such a recording. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense (and not
at the expense of the Trust), promptly take all action as may be necessary to
discharge any liens on any part of the Trust Property that are attributable to
claims against the Owner Trustee in its individual capacity that are not related
to the ownership or the administration of the Trust Property.
SECTION 5.5. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of, the Trust Property except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Related
Documents and (iii) in
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accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 5.3.
SECTION 5.6. RESTRICTIONS. The Owner 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 Owner Trustee, would
result in the Trust's becoming taxable as a corporation for Federal income tax
purposes.
SECTION 5.7. ADMINISTRATION AGREEMENT.
(a) The Administrator is authorized to execute on behalf of the Trust
all documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust to prepare, file or deliver pursuant to the
Related Documents. Upon written request, the Owner 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.
(b) If the Administrator shall resign or be removed pursuant to the
terms of the Administration Agreement, the Owner Trustee may, and is hereby
authorized and empowered to, subject to obtaining the prior written consent of
the Security Insurer, appoint or consent to the appointment of a successor
Administrator pursuant to the Administration Agreement.
(c) If the Administration Agreement is terminated, the Owner Trustee
may, and is hereby authorized and empowered to, subject to obtaining the prior
written consent of the Security Insurer, appoint or consent to the appointment
of a Person to perform substantially the same duties as are assigned to the
Administrator in the Administration Agreement pursuant to an agreement
containing substantially the same provisions as are contained in the
Administration Agreement.
(d) The Owner Trustee shall promptly notify the Security Insurer of
any default by or misconduct of the Administrator under the Administration
Agreement of which the Owner Trustee has received written notice or of which a
Responsible Officer has actual knowledge.
ARTICLE VI
CONCERNING THE OWNER TRUSTEE
SECTION 6.1. ACCEPTANCE OF TRUSTEE AND DUTIES. The Owner 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
Owner Trustee also agrees to disburse all monies actually received by it
constituting part of
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the Trust Property upon the terms of the Related Documents and this
Agreement. The Owner Trustee shall not be answerable or accountable
hereunder or under any Related Document under any circumstances, except (i)
for its own willful misconduct or gross negligence, (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 6.2, (iii)
for liabilities arising from the failure of the Owner Trustee to perform
obligations expressly undertaken by it in the last sentence of Section 5.4
hereof, (iv) for any investments issued by the Owner Trustee or any branch or
affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the instructions of the Instructing Party;
(c) no provision of this Agreement or any Related Document shall
require the Owner 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 Related Document if the Owner 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 Owner Trustee be liable for
indebtedness evidenced by or arising under this Agreement or any of the
Related Documents, including the principal of and interest on the Notes;
(e) the Owner 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 the Security Insurer or for the form, character,
genuineness, sufficiency, value or validity of any of the Trust Property or
for or in respect of the validity or sufficiency of the Related Documents
and the Owner Trustee shall in no event assume or incur any liability,
duty, or obligation to the Security Insurer, the Custodian, the Indenture
Trustee or to any Noteholder, other than as expressly provided for herein
and in the Related Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Security Insurer, the Custodian, the
Indenture Trustee or the Servicer under any of the Related Documents or
otherwise and the Owner Trustee shall have no obligation or liability to
perform the obligations of the Trust under this Agreement or the Related
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Documents that are required to be performed by the Administrator under the
Administration Agreement, the Security Insurer under the Note Policy, the
Custodian under the Custodian Agreement, the Indenture Trustee under the
Indenture or the Servicer under the Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any Related Document, at the
request, order or direction of the Instructing Party, unless such
Instructing Party has offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Agreement or in
any Related Document shall not be construed as a duty, and the Owner
Trustee shall not be answerable for other than its gross negligence or
willful misconduct in the performance of any such act.
SECTION 6.2. REPRESENTATIONS AND WARRANTIES. The Owner Trustee
hereby represents and warrants to the Depositor and the Security Insurer (which
shall have relied on such representations and warranties in issuing the Note
Policy) that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware. It has
all requisite corporate power and authority and all franchises, grants,
authorizations, consents, orders and approvals from all governmental
authorities necessary to execute, deliver and perform its obligations under
this Agreement and each Related Document to which the Trust is a party.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and each Related Document to
which the Trust is a party, and this Agreement and each Related Document
will be executed and delivered by one of its officers who is duly
authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof will
contravene any Federal or Delaware law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment
or order binding on it, or constitute any default under its charter
documents or by-laws or any indenture, mortgage, contract, agreement or
instrument to which it is a party or by which any of its properties may be
bound or result in the creation or imposition of any lien, charge or
encumbrance on the Trust Property resulting from actions by or claims
against the Owner Trustee
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individually which are unrelated to this Agreement or the Related
Documents.
SECTION 6.3. RELIANCE; ADVICE OF COUNSEL.
(a) The Owner Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond, or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the determination
of which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer or other authorized officers of the relevant
party, as to such fact or matter, and such certificate shall constitute full
protection to the Owner Trustee for any action taken or omitted to be taken by
it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Related Documents, the Owner Trustee (i) may act directly or through its agents
or attorneys pursuant to agreements entered into with any of them, and the Owner
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 Owner
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 Owner 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 not contrary to this Agreement or
any Related Document.
SECTION 6.4. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided
in this Article VI, in accepting the trusts hereby created Wilmington Trust
Company acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Related Document shall
look only to the Trust Property for payment or satisfaction thereof.
SECTION 6.5. OWNER TRUSTEE NOT LIABLE FOR NOTES OR RECEIVABLES. The
recitals contained herein shall be taken as the statements of the Depositor
(other than the signature or counter-signature of the Owner Trustee on the
Notes), and the Owner Trustee assumes no responsibility for the correctness
thereof. The Owner Trustee makes no representations as to the validity or
sufficiency of this Agreement or of any Related Document or the Notes (other
than the signature or counter-signature of the Owner Trustee on the Notes), or
of any Receivable or related documents. The Owner Trustee shall at no time have
any responsibility or liability
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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 Financed Vehicle or the maintenance of any such
perfection and priority of any security interest created by any Receivable in
any Financed Vehicle or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Trust Property or its
ability to generate the payments to be distributed to the Noteholders under
the Indenture, including, without limitation: the existence, condition and
ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable or any
computer or other record thereof; the validity of the assignment of any
Receivable to the Trust or of any intervening assignment; the validity or
sufficiency of the Note Policy; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Seller or
the Servicer with any warranty or representation made under any Related
Document or in any related document or the accuracy of any such warranty or
representation or any action of the Indenture Trustee, the Custodian or the
Servicer taken in the name of the Owner Trustee.
SECTION 6.6. OWNER TRUSTEE MAY OWN NOTES. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may deal with the Depositor, the Seller, the Indenture Trustee and the Servicer
in banking or other transactions with the same rights as it would have if it
were not Owner Trustee.
ARTICLE VII
COMPENSATION OF OWNER TRUSTEE
SECTION 7.1. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between AFL and the Owner Trustee,
and the Owner Trustee shall be entitled to be reimbursed by AFL for its other
reasonable expenses hereunder, including the reasonable compensation, expenses
and disbursements of such agents, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of its
rights and its duties hereunder; PROVIDED, HOWEVER, that the Owner Trustee shall
only be entitled to reimbursement for expenses hereunder to the extent such
expenses (i) are fees of outside counsel engaged by the Owner Trustee in respect
of the performance of its obligations hereunder or (ii) relate to the
performance of its obligations pursuant to Section 4.1 hereof.
SECTION 7.2. INDEMNIFICATION. AFL shall be liable as primary obligor
for, and shall indemnify the Owner Trustee in its individual capacity and its
successors, assigns, agents and servants, and any co-trustee (including Xxxxxxx
X. Xxxx) (collectively, the "Indemnified Parties") from and against, any and all
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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 Owner Trustee or any Indemnified Party in any way
relating to or arising out of this Agreement, the Related Documents, the
Trust Property, the administration of the Trust Property or the action or
inaction of the Owner Trustee hereunder, except only that AFL shall not be
liable for or required to indemnify the Owner Trustee from and against
Expenses arising or resulting from any of the matters described in the third
sentence of Section 6.1. The indemnities contained in this Section shall
survive the resignation or termination of the Owner Trustee or the
termination of this Agreement.
SECTION 7.3. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in
this Agreement or any Related Document, the Owner Trustee agrees in its
individual capacity and in its capacity as Owner Trustee for the Trust that all
obligations of the Trust to the Owner Trustee individually or as Owner Trustee
for the Trust shall be recourse to the Trust Property only.
ARTICLE XIII
TERMINATION
SECTION 8.1. TERMINATION OF THE TRUST.
(a) The respective obligations and responsibilities of the Depositor
and the Owner Trustee created by this Agreement and the Trust created by this
Agreement shall terminate upon the latest of (i) the maturity or other
liquidation of the last Receivable (including the purchase as of any Accounting
Date by the Seller or the Servicer at its option of the corpus of the Trust as
described in Section 9.1 of the Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the
Related Documents, (ii) the payment to the Security Insurer of all amounts
payable or reimbursable to it pursuant to the Sale and Servicing Agreement or
(iii) at the time provided in Section 8.2. In any case, there shall be
delivered to the Owner Trustee, the Indenture Trustee and the Rating Agencies an
Opinion of Counsel that all applicable preference periods under federal, state
and local bankruptcy, insolvency and similar laws have expired with respect to
the payments pursuant to clause (ii); PROVIDED, HOWEVER, that in no event shall
the trust created by this Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants living on the date of
this Agreement of Xxxx Xxxxxxx of the Commonwealth of Massachusetts; and
PROVIDED, FURTHER, that the rights to indemnification under Section 7.2 shall
survive the termination of the Trust. The Servicer shall promptly notify the
Owner Trustee and the Security Insurer of any prospective termination pursuant
to this Section 8.1.
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(b) Except as provided in Section 8.1(a), the Depositor shall not be
entitled to revoke or terminate the Trust.
(c) Upon the winding up of the Trust and its termination, the Owner
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 of the Business Trust Statute.
SECTION 8.2. DISSOLUTION EVENTS WITH RESPECT TO THE DEPOSITOR. In
the event that a Dissolution Event shall occur with respect to the Depositor,
the Owner Trustee promptly upon obtaining knowledge of such occurrence shall
request an opinion of counsel from counsel acceptable to the Security Insurer to
the effect that a failure to terminate the Trust upon the occurrence of such
Dissolution Event (and the transfer, if any, of the interest in the Trust held
by the Depositor) will not cause the Trust to be treated as an association (or
publicly traded partnership) taxable as a corporation for federal income tax
purposes. In the event that the Owner Trustee is unable to obtain such an
opinion the Trust will terminate within 90 days after the occurrence of the
Dissolution Event with respect to the Depositor. Promptly after the occurrence
of the event referred to above, (i) the Depositor shall give the Indenture
Trustee, the Owner Trustee and the Security Insurer written notice of the
occurrence of such event, (ii) the Owner Trustee shall, upon the receipt of such
written notice, give prompt written notice to the Indenture Trustee of the
occurrence of such event and (iii) the Indenture Trustee shall, upon receipt of
written notice of the occurrence of such event from the Owner Trustee or the
Seller, give prompt written notice to the Noteholders of the occurrence of such
event; PROVIDED, HOWEVER, that any failure to give a notice required by this
sentence shall not prevent or delay, in any manner, a termination of the Trust
pursuant to the first sentence of this Section 8.2. Upon a termination pursuant
to this Section, the Owner Trustee shall direct the Indenture Trustee to sell
the assets of the Trust (other than the Trust Accounts) at one or more private
or public sales conducted in any manner permitted by law. The proceeds of such
a sale of the assets of the Trust shall be distributed as provided in Section
9.1(b) of the Sale and Servicing Agreement.
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 9.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; (iv) having (or having a parent which has) a rating of at least
Baa3 by Moody's or A-1 by Standard & Poor's; and (v) acceptable to the Security
Insurer in its sole discretion, so long as an Insurer Default shall not have
occurred and be continuing. If such corporation shall
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publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for
the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Owner Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Owner Trustee shall resign immediately in the
manner and with the effect specified in Section 9.2.
SECTION 9.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Depositor, the Security Insurer and the
Servicer at least 30 days before the date specified in such instrument. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor Owner Trustee meeting the qualifications set forth in Section 9.1 by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee, provided that the Depositor shall have received written confirmation
from each of the Rating Agencies that the proposed appointment will not result
in an increased capital charge to the Security Insurer by either of the Rating
Agencies. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Security Insurer may petition
any court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 9.1 and shall fail to resign after
written request therefor by the Depositor or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor, with the consent of the Security Insurer (so
long as an Insurer Default shall not have occurred and be continuing) may remove
the Owner Trustee. If the Depositor shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Depositor shall promptly
appoint a successor Owner Trustee meeting the qualification requirements of
Section 9.1 by written instrument, in triplicate, one copy of which instrument
shall be delivered to the outgoing Owner Trustee so removed, one copy to the
Security Insurer and one copy to the successor Owner Trustee and payment of all
fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until all fees and expenses, including any indemnity
payments, due to the outgoing Owner Trustee have been paid and until acceptance
of appointment by the successor Owner Trustee pursuant to Section 9.3. The
Depositor
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shall provide notice of such resignation or removal of the Owner Trustee to
each of the Rating Agencies.
SECTION 9.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 9.2 shall execute, acknowledge and deliver to
the Depositor, the Security Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become
effective and such successor Owner 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 Owner Trustee. The predecessor Owner Trustee shall
deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement; and the Depositor and the predecessor
Owner 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 Owner Trustee all such rights, powers, duties,
and obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner
Trustee shall be eligible pursuant to Section 9.1.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section, the Depositor shall mail notice of the successor of
such Owner Trustee to the Indenture Trustee, the Noteholders and the Rating
Agencies. If the Depositor shall fail to mail such notice within 10 days
after acceptance of appointment by the successor Owner Trustee, the successor
Owner Trustee shall cause such notice to be mailed at the expense of the
Depositor.
SECTION 9.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any
corporation into which the Owner 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 Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 9.1,
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 Owner Trustee shall mail
notice of such merger or consolidation to the Rating Agencies.
SECTION 9.5. 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 Property or any Financed Vehicle may at the time be
located, the Administrator and the Owner Trustee acting jointly shall have
the power and shall
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execute and deliver all instruments to appoint one or more Persons approved
by the Owner Trustee and the Security Insurer to act as co-trustee, jointly
with the Owner Trustee, or separate trustee or separate trustees, of all or
any part of the Trust Property, and to vest in such Person, in such capacity,
such title to the Trust, 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 Owner 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 Owner
Trustee, subject to the approval of the Security Insurer, 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 9.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 9.2.
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 Owner Trustee shall be conferred upon and exercised or
performed by the Owner 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 Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties, and obligations (including the holding of title to
the Trust Property or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Owner 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 Owner 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 Owner 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 Owner Trustee or separately, as may be provided therein, subject to all
the provisions of this Agreement, specifically including every
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provision of this Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Owner Trustee. Each such
instrument shall be filed with the Owner Trustee and a copy thereof given to
the Administrator and the Security Insurer.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee, 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 Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. AMENDMENT.
(a) This Agreement may be amended by the Depositor and the Owner
Trustee, with the prior written consent of the Security Insurer (so long as
an Insurer Default shall not have occurred and be continuing) but without the
consent of any of the Noteholders, (i) to cure any ambiguity, or (ii) to
correct, supplement or modify any provisions in this Agreement; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder.
(b) This Agreement may also be amended from time to time, with the
prior written consent of the Security Insurer (so long as an Insurer Default
shall not have occurred and be continuing), by the Depositor and the Owner
Trustee and, if such amendment materially and adversely affects the interests
of Noteholders, the consent of a Note Majority (which consent of any Holder
of a Note given pursuant to this Section or pursuant to any other provision
of this Agreement shall be conclusive and binding on such Holder and on all
future Holders of such Note and of any Note issued upon the transfer thereof
or in exchange thereof or in lieu thereof whether or not notation of such
consent is made upon the Note) 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 Holders of Notes;
PROVIDED, HOWEVER, that, subject to the express rights of the Security
Insurer under the Related Documents, including its rights to consent to
certain modifications of the Receivables pursuant to Section 3.2 of the Sale
and Servicing Agreement and its rights referred to in Section 5.02(c) of the
Indenture, no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made on any Note or
the Class A-1 Interest
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Rate, the Class A-2 Interest Rate, the Class A-3 Interest Rate, the Class A-4
Interest Rate or the Class A-5 Interest Rate, or (b) reduce the aforesaid
percentage required to consent to any such amendment or any waiver hereunder,
without the consent of the Holders of all Notes then outstanding.
(c) Prior to the execution of any such amendment or consent, the
Depositor shall furnish written notification of the substance of such
amendment or consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent,
the Owner Trustee shall furnish written notification of the substance of such
amendment or consent to the Indenture Trustee unless such parties have
previously received such notification.
(e) It shall not be necessary for the consent of Noteholders
pursuant to Section 11.1(b) to approve the particular form of any proposed
amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and
any other consents of Noteholders provided for in this Agreement) shall be
subject to such reasonable requirements as the Owner Trustee may prescribe,
including the establishment of record dates.
(f) Prior to the execution of any amendment to this Agreement, the
Owner 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 have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 10.2. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to the principles of conflicts of laws thereof and the obligations,
rights and remedies of the parties under this Agreement shall be determined
in accordance with such laws.
SECTION 10.3. SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement.
SECTION 10.4. THIRD-PARTY BENEFICIARIES. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as otherwise provided in
this Agreement, no other Person shall have any right or obligation hereunder.
Without limiting the
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generality of the foregoing, all covenants and agreements in this Agreement
which expressly confer rights upon the Security Insurer shall be for the
benefit of and run directly to the Security Insurer, and the Security Insurer
shall be entitled to rely on and enforce such covenants, subject, however, to
the limitations on such rights provided in this Agreement and the Related
Documents. The Security Insurer may disclaim any of its rights and powers
under this Agreement (but not its duties and obligations under the Note
Policy) upon delivery of a written notice to the Owner Trustee.
SECTION 10.5. COUNTERPARTS. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and all of which counterparts shall
constitute but one and the same instrument.
SECTION 10.6. NOTICES. All demands, notices and communications
under this Agreement shall be in writing, personally delivered or mailed by
certified mail-return receipt requested, and shall be deemed to have been
duly given upon receipt (a) in the case of the Depositor, at the following
address: 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000,
with copies to: Arcadia Financial Ltd., 0000 Xxxxxxxxxx Xxxxxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: President, (b) in the case of
the Owner Trustee, at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Administration,
(c) in the case of each Rating Agency, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (for Moody's), and 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Asset-Backed Surveillance (for Standard & Poor's), and (d) in the case of the
Security Insurer, Financial Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx Xxxx,
XX 00000, Attention: Surveillance Department, Telex No.: (000) 000-0000,
Confirmation: (000) 000-0000, Telecopy Nos.: (000) 000-0000, (000) 000-0000
(in each case in which notice or other communication to Financial Security
refers to an Event of Default, a claim on the Note Policy or with respect to
which failure on the part of Financial Security to respond shall be deemed to
constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and
the Head--Financial Guaranty Group "URGENT MATERIAL ENCLOSED") or at such
other address as shall be designated by any such party in a written notice to
the other parties.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Depositor, the Security Insurer and the Owner
Trustee have caused this Trust Agreement to be duly executed by their respective
officers as of the day and year first above written.
ARCADIA RECEIVABLES FINANCE CORP.
By /s/ Xxxx X. Xxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and Chief Financial
Officer
ARCADIA RECEIVABLES FINANCE CORP.,
in its capacity as Depositor
By /s/ Xxxx X. Xxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and Chief Financial
Officer
FINANCIAL SECURITY ASSURANCE INC.
By /s/ Xxxxxxx Xxxxxxxxx
--------------------------------------
Authorized Officer
WILMINGTON TRUST COMPANY
By /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
