Exhibit 4.1
EXECUTION COPY
AMENDED AND RESTATED
TRUST AGREEMENT
among
BOND SECURITIZATION, L.L.C.
Depositor,
NEW SOUTH FEDERAL SAVINGS BANK
Servicer
and
WILMINGTON TRUST COMPANY
Owner Trustee
Dated as of November 26, 2002
TABLE OF CONTENTS
ARTICLE I DEFINITIONS .................................................................... 1
SECTION 1.1 Capitalized Terms ........................................................ 1
SECTION 1.2 Other Definitional Provisions ............................................ 2
ARTICLE II ORGANIZATION ................................................................... 3
SECTION 2.1 Name ..................................................................... 3
SECTION 2.2 Office ................................................................... 3
SECTION 2.3 Purposes and Powers ...................................................... 3
SECTION 2.4 Appointment of Owner Trustee ............................................. 4
SECTION 2.5 Initial Capital Contribution of Trust Estate ............................. 4
SECTION 2.6 Declaration of Trust ..................................................... 4
SECTION 2.7 Title to Trust Property .................................................. 4
SECTION 2.8 Situs of Trust ........................................................... 5
SECTION 2.9 Representations and Warranties of the Depositor .......................... 5
SECTION 2.10 Covenants of the Certificateholder ....................................... 6
SECTION 2.11 Federal Income Tax Treatment of the Trust ................................ 6
SECTION 2.12 Federal Income Tax Allocations ........................................... 7
SECTION 2.13 Accounting and Reports to the Noteholders, Certificateholder,
the Internal Revenue Service and Others .................................. 7
SECTION 2.14 Signature on Returns; Tax Matters Partner ................................ 8
ARTICLE III CERTIFICATE AND TRANSFER OF INTEREST ........................................... 8
SECTION 3.1 Ownership ................................................................ 8
SECTION 3.2 The Certificate .......................................................... 8
SECTION 3.3 Authentication of Certificate ............................................ 8
SECTION 3.4 Registration of Transfer and Exchange of Certificate ..................... 9
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates ........................ 9
SECTION 3.6 Persons Deemed Certificateholders ........................................ 10
SECTION 3.7 Maintenance of Office or Agency .......................................... 10
SECTION 3.8 Disposition in Whole But Not in Part ..................................... 10
SECTION 3.9 ERISA Restrictions ....................................................... 10
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ARTICLE IV VOTING RIGHTS AND OTHER ACTIONS ............................................. 11
SECTION 4.1 Prior Notice to Holder with Respect to Certain Matters ................... 11
SECTION 4.2 Action by Certificateholder with Respect to Certain Matters .............. 11
SECTION 4.3 Restrictions on Certificateholder's Power ................................ 11
SECTION 4.4 Rights of Insurer ........................................................ 12
ARTICLE V AUTHORITY AND DUTIES OF OWNER TRUSTEE ....................................... 12
SECTION 5.1 General Authority ........................................................ 12
SECTION 5.2 General Duties ........................................................... 12
SECTION 5.3 Action upon Instruction .................................................. 13
SECTION 5.4 No Duties Except as Specified in this Agreement or in Instructions ....... 14
SECTION 5.5 No Action Except under Specified Documents or Instructions ............... 14
SECTION 5.6 Restrictions ............................................................. 14
ARTICLE VI CONCERNING THE OWNER TRUSTEE ................................................ 15
SECTION 6.1 Acceptance of Trusts and Duties .......................................... 15
SECTION 6.2 Furnishing of Documents .................................................. 16
SECTION 6.3 Representations and Warranties ........................................... 16
SECTION 6.4 Reliance; Advice of Counsel .............................................. 17
SECTION 6.5 Not Acting in Individual Capacity ........................................ 17
SECTION 6.6 Owner Trustee Not Liable for Certificate or Receivables .................. 17
SECTION 6.7 Owner Trustee May Own Certificate and Notes .............................. 18
SECTION 6.8 Payments from Owner Trust Estate ......................................... 18
SECTION 6.9 Doing Business in Other Jurisdictions .................................... 18
ARTICLE VII COMPENSATION OF OWNER TRUSTEE ............................................... 19
SECTION 7.1 Owner Trustee's Fees and Expenses ........................................ 19
SECTION 7.2 Indemnification .......................................................... 19
SECTION 7.3 Payments to the Owner Trustee ............................................ 19
SECTION 7.4 Non-recourse Obligations ................................................. 19
ARTICLE VIII TERMINATION OF TRUST AGREEMENT .............................................. 20
SECTION 8.1 Termination of Trust Agreement ........................................... 20
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ARTICLE IX SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES ...................... 21
SECTION 9.1 Eligibility Requirements for Owner Trustee ............................. 21
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 ............................................................... 24
SECTION 10.1 Supplements and Amendments ............................................. 24
SECTION 10.2 No Legal Title to Owner Trust Estate in Certificateholder .............. 26
SECTION 10.3 Limitations on Rights of Others ........................................ 26
SECTION 10.4 Notices ................................................................ 26
SECTION 10.5 Severability ........................................................... 27
SECTION 10.6 Separate Counterparts .................................................. 27
SECTION 10.7 Assignments ............................................................ 27
SECTION 10.8 No Petition ............................................................ 27
SECTION 10.9 No Recourse ............................................................ 28
SECTION 10.10 Headings ............................................................... 28
SECTION 10.11 GOVERNING LAW .......................................................... 28
SECTION 10.12 Administrative Duties of Servicer ...................................... 29
EXHIBITS
Exhibit A Form of Certificate
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This AMENDED AND RESTATED TRUST AGREEMENT dated as of November 26, 2002
among BOND SECURITIZATION, L.L.C., a Delaware limited liability company, as
depositor (the "Depositor"), NEW SOUTH FEDERAL SAVINGS BANK, a federally
chartered savings bank, as Servicer (the "Servicer"), and Wilmington Trust
Company, a Delaware banking corporation, as Owner Trustee, (the "Owner
Trustee").
ARTICLE I
Definitions
SECTION 1.1 Capitalized Terms. For all purposes of this Agreement, the
following terms will have the meanings set forth below:
"Agreement" means this Trust Agreement, as the same may be amended and
supplemented from time to time.
"Benefit Plan" has the meaning assigned to such term in Section 3.9.
"Certificate" means a trust certificate evidencing the beneficial interest
of a Certificateholder in the Trust, substantially in the form of Exhibit A
attached hereto.
"Certificateholder" or "Holder" means the person in whose name a
Certificate is registered on the Certificate Register, initially New South.
"Certificate Register" and "Certificate Registrar" means the register
mentioned and the registrar appointed pursuant to Section 3.4.
"Corporate Trust Office" means, with respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee located at Xxxxxx Square
North, 0000 X. Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or at such other
address as the Owner Trustee may designate by notice to the Certificateholder,
or the principal corporate trust office of any successor Owner Trustee (the
address of which the successor owner trustee will notify the Certificateholder).
"Depositor" is defined in the preamble.
"ERISA" has the meaning assigned to such term in Section 3.9.
"Expenses" has the meaning assigned to such term in Section 7.2.
"Indemnified Parties" has the meaning assigned to such term in Section 7.2.
"Indenture" means the Indenture dated as of November 26, 2002, between the
Issuer and JPMorgan Chase, as Indenture Trustee, as the same may be amended and
supplemented from time to time.
"Other Assets" means any assets or interests therein of the Depositor,
other than the Owner Trust Estate conveyed or purported to be conveyed by the
Depositor to another
securitization trust or other Person or Persons in connection therewith (whether
by way of a sale, capital contribution or by virtue of the granting of a Lien).
"Owner Trust Estate" means all right, title and interest of the Trust in
and to the property and rights assigned to the Trust pursuant to Article II of
the Sale and Servicing Agreement, all funds on deposit from time to time in the
Trust Accounts (other than Investment Earnings on deposit in the Capitalized
Interest Account) and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the Sale and
Servicing Agreement.
"Owner Trustee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.
"Record Date" means with respect to any Payment Date, the close of business
on the last Business Day immediately preceding such Payment Date.
"Responsible Officer" means, with respect to the Owner Trustee, any officer
within the Corporate Trust Administration office of the Owner Trustee with
direct responsibility for the administration of the Trust and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement dated
as of November 26, 2002, among the Trust, the Depositor, New South, as Servicer
and Custodian, and JPMorgan Chase Bank, as Indenture Trustee, as the same may be
amended and supplemented from time to time.
"Treasury Regulations" means regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations will include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" means the owner trust established by this Agreement.
SECTION 1.2 Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Sale and Servicing Agreement or, if not defined
therein, in the Indenture.
(b) All terms defined in this Agreement will have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, will have the respective
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meanings given to them under generally accepted accounting principles as in
effect on the date of this Agreement or any such certificate or other document,
as applicable. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document will control.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement will refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" will mean
"including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II
Organization
SECTION 2.1 Name. There is hereby formed a trust to be known as "New South
Motor Vehicle Trust 2002-A," in which name the Trust and the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued.
SECTION 2.2 Office. The office of the Trust will be in care of the Owner
Trustee at the Corporate Trust Office or at such other address as the Owner
Trustee may designate by written notice to the Certificateholder.
SECTION 2.3 Purposes and Powers.
(a) The purpose of the Trust is, and the Trust will have the power and
authority, to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Certificate
pursuant to this Agreement, and to sell, transfer and exchange the Notes and
the Certificate and to pay interest on and principal of the Notes and
distributions on the Certificate.
(ii) to acquire the property and assets set forth in the Sale and
Servicing Agreement from the Depositor pursuant to the terms thereof, to make
deposits to and withdrawals from the Collection Account, the Note Distribution
Account, the Reserve Account, the Capitalized Interest Account, the
Pre-Funding Account and any other Trust Account and to pay the organizational,
start-up and transactional expenses of the Trust;
(iii) to assign, grant, transfer, pledge, mortgage and convey the Trust
Estate to the Indenture Trustee pursuant to the Indenture for the benefit of
the Insurer on behalf of the Noteholders and to hold, manage and distribute to
the Certificateholder pursuant to the terms
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of the Sale and Servicing Agreement any portion of the Trust Estate released
from the Lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic Documents
to which it is 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 Basic Documents, to engage in such
other activities as may be required in connection with conservation of the
Owner Trust Estate and the making of distributions to the Certificateholder
and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
will not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
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.
SECTION 2.5 Initial Capital Contribution of Trust Estate. The Owner Trustee
hereby acknowledges prior receipt in trust from the Depositor, as of the date
hereof, of the sum of $1 which contribution will constitute the initial Owner
Trust Estate. The Servicer will pay organizational expenses of the Trust as they
may arise or will, 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 Owner Trust Estate in trust upon and subject to the conditions set
forth herein for the use and benefit of the Holder, subject to the obligations
of the Trust under the Basic Documents. It is the intention of the parties
hereto that the Trust constitute an owner trust under the common law of the
State of Delaware. Effective as of the date hereof, the Owner Trustee will have
all rights, powers and duties set forth herein.
The Holder will not have any personal liability for any liability or
obligation of the Trust.
SECTION 2.7 Title to Trust Property.
(a) Legal title to all the Owner Trust Estate will 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 Owner Trust Estate to be vested
in a trustee or trustees, in which case title will be deemed to be vested in the
Owner Trustee, a co-trustee and/or a separate trustee, as the case may be. If
any portion of the Owner Trust Estate is deemed vested in the Owner Trustee, a
co-trustee and/or separate trustee, the Owner Trustee, upon having actual
knowledge thereof, will immediately notify the Indenture Trustee and the
Servicer, and the Servicer will cause to be filed such UCC
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financing statements and related filing documents or writings as are necessary
to maintain the Indenture Trustee's security interest in the Owner Trust Estate.
(b) The Holder will not have legal title to any part of the Trust
Property. The Holder is entitled to receive distributions with respect to its
undivided ownership interest therein only in accordance with Article VIII. No
transfer, by operation of law or otherwise, of any right, title or interest by
the Certificateholder of its ownership interest in the Owner Trust Estate will
operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Property.
SECTION 2.8 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 will be located in the State of Delaware or New York.
Payments will be received by the Trust only in Delaware or New York and payments
will be made by the Trust only from Delaware or New York. The Trust will not
have any employees in any state other than Delaware; provided, however, that
nothing herein will restrict or prohibit the Owner Trustee, the Servicer or any
agent of the Trust from having employees within or without the State of
Delaware. The only office of the Trust will be at the Corporate Trust Office
located in Delaware.
SECTION 2.9 Representations and Warranties of the Depositor. The Depositor
makes the following representations and warranties on which the Owner Trustee
relies in accepting the Owner Trust Estate in trust and executing the
Certificate, upon which the Servicer relies in administering the Trust and upon
which the Insurer relies in issuing the Note Policy.
(a) Organization and Good Standing. The Depositor is duly organized and
validly existing as a Delaware limited liability company with power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted and is proposed to
be conducted pursuant to this Agreement and the Basic Documents.
(b) Due Qualification. The Depositor is duly qualified to do business as a
foreign limited liability company in good standing, and has obtained all
necessary licenses and approvals, in all jurisdictions in which the ownership or
lease of its property, the conduct of its business and the performance of its
obligations under this Agreement and the Basic Documents requires such
qualification, except where the failure to have such qualifications, licenses
and approvals would not have a material adverse effect on the Depositor.
(c) Power and Authority. (i) The Depositor has the power and authority to
execute and deliver this Agreement and to carry out its terms; (ii) the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Trust and the Depositor has duly
authorized such sale and assignment and deposit to the Trust by all necessary
action; and (iii) the execution, delivery and performance of this Agreement has
been duly authorized by the Depositor by all necessary 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
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agency is required in connection with the execution, delivery or performance of
this Agreement and the Basic Documents, except for such as have been obtained,
effected or made.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time) a default under, the limited liability
agreement of the Depositor, or any material indenture, agreement or other
instrument to which the Depositor is a party or by which it is bound; nor result
in the creation or imposition of any Lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to the Depositor
of any court or of any federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Depositor or
its properties.
(f) No Proceedings. There are no proceedings or investigations pending or,
to the Depositor's knowledge, threatened against it before any court, regulatory
body, administrative agency or other tribunal or governmental instrumentality
having jurisdiction over the Depositor or its properties (A) asserting the
invalidity of this Agreement or any of the Basic Documents, (B) seeking to
prevent the issuance of the Certificate or the Notes or the consummation of any
of the transactions contemplated by this Agreement or any of the Basic
Documents, (C) seeking any determination or ruling that might materially and
adversely affect the Depositor's performance of its obligations under, or the
validity or enforceability of, this Agreement or any of the Basic Documents, or
(D) seeking to adversely affect the applicable state tax franchise or income tax
attributes, or federal income tax attributes, of the Notes or the Certificate.
SECTION 2.10 Covenants of the Certificateholder. The Certificateholder
agrees:
(a) to be bound by the terms and conditions of the Certificate of which
the Holder is the owner and of this Agreement, including any supplements or
amendments hereto and to perform the obligations of a Holder as set forth
therein or herein, in all respects as if it were a signatory hereto. This
undertaking is made for the benefit of the Depositor, the Trust, the Owner
Trustee and the Insurer; and
(b) until the completion of the events specified in Section 8.1(d), not
to, 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
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trust or a substantial
part of its property, or cause or permit the Trust to make any assignment for
the benefit of its 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.
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SECTION 2.11 Federal Income Tax Treatment of the Trust.
(a) It is the intention of the parties hereto that, solely for income and
franchise tax purposes, until the Certificate is held by other than New South,
the Trust will be disregarded as an entity separate from New South and the Notes
will be characterized as debt. At such time that the Certificate is held by more
than one Person, it is the intention of the parties hereto that, solely for
income and franchise tax purposes, the Trust shall be treated as a partnership,
with the assets of the partnership being the Receivables and other assets held
by the Trust, the partners of the partnership being the Certificateholders, and
the Notes being debt of the partnership. The Depositor and the
Certificateholders by acceptance of a Certificate agree to such treatment and
agree to take no action inconsistent with such treatment. The parties agree
that, unless otherwise required by appropriate tax authorities, until the
Certificates are held by more than one Person the Trust will not file or cause
to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as an entity separate from its
owner.
(b) Neither the Owner Trustee nor any Certificateholder will, under any
circumstances, and at any time, make an election on IRS Form 8832 or otherwise,
to classify the Trust as an association taxable as a corporation for federal,
state or any other applicable tax purpose.
SECTION 2.12 Federal Income Tax Allocations. If the Certificate is held by
more than one Person,
(a) amounts paid to Certificateholders pursuant to the Sale and Servicing
Agreement shall be treated as "guaranteed payments" within the meaning of
Section 707(c) of the Code; and
(b) to the extent that the characterization provided for in paragraph (a)
of this Section 2.12 is not respected, gross ordinary income of the Trust for
such month as determined for federal income tax purposes (and each item of
income, gain, credit, loss or deduction entering into the computation thereof),
to the extent thereof, shall be allocated among the Certificateholders as of the
first Record Date following the end of such month, in proportion to their
percentage interest of ownership in the Trust on such date.
Net losses of the Trust, if any, for any month as determined for federal income
tax purposes (and each item of income, gain, loss, credit and deduction entering
into the computation thereof) shall be allocated to New South to the extent New
South is reasonably expected as determined by the Servicer to bear the economic
burden of such net losses, then net losses shall be allocated among the
Certificateholders as of the first Record Date following the end of such month
in proportion to their percentage interest of ownership in the Trust on such
Record Date. New South is authorized to modify the allocations in this paragraph
if necessary or appropriate, in its sole discretion, for the allocations to
fairly reflect the economic income, gain or loss to New South, the
Certificateholders, or as otherwise required by the Code. Notwithstanding
anything provided in this Section 2.12, if the Certificate is held solely by one
Person, the application of this Section 2.12 shall be disregarded.
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SECTION 2.13 Accounting and Reports to the Noteholders, Certificateholder,
the Internal Revenue Service and Others. Subject to Section 2.11(a), the Owner
Trustee shall (a) maintain (or cause to be maintained) the books of the Trust on
a calendar year basis on the accrual method of accounting, (b) deliver (or cause
to be delivered) to the Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
Schedule K-1) to enable the Certificateholder to prepare its federal and state
income tax returns, (c) prepare and file such tax returns relating to the Trust
(including a partnership information return, Form 1065, if applicable), and make
such elections as may from time to time be required or appropriate under any
applicable state or federal statute or rule or regulation thereunder so as to
maintain the Trust's characterization as a partnership for federal income tax
purposes, (d) cause such tax returns to be signed in the manner required by law
and (e) collect or cause to be collected any withholding tax with respect to
income or distributions to Certificateholder. The Owner Trustee shall cooperate
with the Servicer in making all elections pursuant to this Section 2.13 as
directed in writing by the Servicer. The Trust shall elect under Section 1278 of
the Code to include in income currently any market discount that accrues with
respect to the Receivables and shall elect under Section 171 of the Code to
amortize any bond premium with respect to the Receivables. The Trust shall not
make the election provided under Section 754 of the Code.
SECTION 2.14 Signature on Returns; Tax Matters Partner. (a) Notwithstanding
the provisions of Section 2.13 and subject to Section 2.11(a), the Servicer
shall sign on behalf of the Trust the tax returns of the Trust, unless
applicable law requires the Owner Trustee to sign such documents, in which case
such documents shall be signed by the Owner Trustee at the written direction of
the Servicer.
(b) Subject to Section 2.11(a), the Servicer shall be the "tax matters
partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code and
applicable Treasury Regulations.
ARTICLE III
Certificate and Transfer of Interest
SECTION 3.1 Ownership. Upon the formation of the Trust by the contribution
by the Depositor pursuant to Section 2.5 and until the issuance of the
Certificate to the initial Certificateholder, the Depositor will be the sole
beneficiary of the Trust.
SECTION 3.2 The Certificate. The Certificate will be executed on behalf of
the Trust by manual or facsimile signature of an authorized officer of the Owner
Trustee. A Certificate bearing the manual or facsimile signatures of individuals
who were, at the time when such signatures will have been affixed, authorized to
sign on behalf of the Trust, will be validly issued and entitled to the benefit
of this Agreement, notwithstanding that such individuals or any of them will
have ceased to be so authorized prior to the authentication and delivery of such
Certificate or did not hold such offices at the date of authentication and
delivery of such Certificate. A transferee of a Certificate will become a
Certificateholder, and will be entitled to the rights and subject to the
obligations of a Certificateholder hereunder, upon due registration of such
Certificate in such transferee's name pursuant to Section 3.4.
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SECTION 3.3 Authentication of Certificate. Concurrently with the initial
sale of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee will cause the Certificate to be executed on behalf
of the Trust, authenticated and delivered to or upon the written order of the
Depositor, signed by its chairman of the board, its president, its chief
financial officer, its chief accounting officer, any vice president, its
secretary, any assistant secretary, its treasurer or any assistant treasurer
without further action by the Depositor, in authorized denominations. No
Certificate will entitle its holder to any benefit under this Agreement, or will
be valid for any purpose, unless there will appear on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit A,
executed by the Owner Trustee, by manual signature; such authentication will
constitute conclusive evidence that such Certificate is duly authenticated and
delivered hereunder. The Certificate will be dated the date of its
authentication.
SECTION 3.4 Registration of Transfer and Exchange of Certificate.
(a) The Certificate Registrar will keep or cause to be kept, at the office
or agency maintained pursuant to Section 3.7, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Owner Trustee
will provide for the registration of the Certificate and of transfers and
exchanges of the Certificate as herein provided. The Owner Trustee will be the
initial Certificate Registrar.
(b) The Certificateholder will provide the Certificate Registrar and the
Indenture Trustee with the name and address of the Certificateholder on the
Closing Date. Upon any transfers of the Certificate, the Certificate Registrar
will notify the Indenture Trustee of the name and address of the transferee in
writing, by facsimile, on the day of such transfer.
(c) Upon surrender for registration of transfer of the Certificate at the
office or agency maintained pursuant to Section 3.7, the Owner Trustee will
execute, authenticate and deliver, in the name of the designated transferee or
transferees, a new Certificate dated the date of authentication by the Owner
Trustee or any authenticating agent.
(d) A Certificate presented or surrendered for registration of transfer or
exchange will be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Certificateholder or his attorney duly authorized in writing. Each
Certificate surrendered for registration of transfer or exchange will be
canceled and subsequently disposed of by the Owner Trustee or the Certificate
Registrar in accordance with its customary practice.
(e) No service charge will be made for any registration of transfer or
exchange of the Certificate, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any expense, tax or
governmental charge that may be imposed in connection with any transfer or
exchange of the Certificate.
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate will be surrendered to the Certificate Registrar, or if
the Certificate Registrar will receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there will be delivered to
the Certificate Registrar and the Owner Trustee such security or indemnity as
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may be required by them to save each of them harmless, then in the absence of
notice that such Certificate has been acquired by a bona fide purchaser, the
Owner Trustee on behalf of the Trust will execute and the Owner Trustee will
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like class, tenor
and denomination. In connection with the issuance of any new Certificate under
this Section 3.5, the Owner Trustee or the Certificate Registrar may require the
payment of a sum sufficient to cover any expense, tax or other governmental
charge that may be imposed in connection therewith. Any duplicate Certificate
issued pursuant to this Section 3.5 will constitute conclusive evidence of an
ownership interest in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate will be found at any time.
SECTION 3.6 Persons Deemed Certificateholders. Every Person by virtue of
becoming a Certificateholder in accordance with this Agreement is deemed to be
bound by the terms of this Agreement. Prior to due presentation of the
Certificate for registration of transfer, the Owner Trustee, the Certificate
Registrar or the Insurer and any agent of the Owner Trustee, the Certificate
Registrar or the Insurer, may treat the person in whose name any Certificate
will be registered in the Certificate Register as the owner of such Certificate
for the purpose of receiving distributions pursuant to the Sale and Servicing
Agreement and for all other purposes whatsoever, and none of the Owner Trustee,
the Certificate Registrar or the Insurer nor any agent of the Owner Trustee, the
Certificate Registrar or the Insurer will be bound by any notice to the
contrary.
SECTION 3.7 Maintenance of Office or Agency. The Owner Trustee will
maintain an office or offices or agency or agencies where the Certificate may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Owner Trustee in respect of the Certificate and the Basic
Documents may be served. The Owner Trustee initially designates its principal
Corporate Trust Office for such purposes. The Owner Trustee will give prompt
written notice to the Seller, the Certificateholder and (unless an Insurer
Default has occurred and is continuing) the Insurer of any change in the
location of the Certificate Register or any such office or agency.
SECTION 3.8 Disposition in Whole But Not in Part. The Certificate may be
transferred in whole but not in part. To the fullest extent permitted by
applicable law, any attempted transfer of the Certificate that would divide the
ownership of the Trust Estate is void.
SECTION 3.9 ERISA Restrictions. The Certificate may not be acquired by or
for the account of (i) an employee benefit plan (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that
is subject to the provisions of Title I of ERISA, (ii) a plan (as defined in
Section 4975(e)(1) of the Code), or (iii) any entity whose underlying assets
include assets of a plan described in (i) or (ii) above by reason of such plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding its
beneficial ownership interest in its Certificate, the Holder thereof is deemed
to have represented and warranted that it is not a Benefit Plan.
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ARTICLE IV
Voting Rights and Other Actions
SECTION 4.1 Prior Notice to Holder with Respect to Certain Matters. With
respect to the following matters, the Owner Trustee will not take action unless
at least 30 days before the taking of such action, the Owner Trustee will have
notified the Certificateholder in writing of the proposed action and the
Certificateholder will not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that the Certificateholder has withheld
consent or provided alternative direction:
(a) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholder; or
(c) the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement any
provision in a manner that would not materially adversely affect the interests
of the Certificateholder.
The Owner Trustee will notify the Certificateholder in writing of any
appointment of a successor Note Registrar, Certificate Registrar or Indenture
Trustee within five Business Days after receipt of notice thereof.
SECTION 4.2 Action by Certificateholder with Respect to Certain Matters.
The Owner Trustee will not have the power to (a) remove the Servicer under the
Sale and Servicing Agreement or (b) except as expressly provided in the Basic
Documents, sell the Receivables after the termination of the Indenture. The
Owner Trustee will take the actions referred to in the preceding sentence only
upon written instructions signed by the Certificateholder and the furnishing of
indemnification satisfactory to the Owner Trustee by the Certificateholder.
SECTION 4.3 Restrictions on Certificateholder's Power.
(a) The Certificateholder will not direct the Owner Trustee to take or
refrain from taking any action if such action or inaction would be contrary to
any obligation of the Trust or the Owner Trustee under this Agreement or any of
the Basic Documents or would be contrary to Section 2.3 nor will the Owner
Trustee be obligated to follow any such direction, if given.
(b) The Certificateholder will not have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Basic Document, unless the Certificateholder is the Instructing Party
pursuant to Section 5.3 and unless the Certificateholder previously will have
given to the Owner Trustee a written notice of default and of the continuance
thereof, as provided in this Agreement, and also unless Certificateholder will
have made written request upon the Owner Trustee to institute such action, suit
or proceeding in its own name as Owner Trustee under this Agreement and will
have offered to the Owner Trustee such reasonable
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indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Owner Trustee, for 30 days after its
receipt of such notice, request, and offer of indemnity, has neglected or
refused to institute any such action, suit, or proceeding, and during such
30-day period no request or waiver inconsistent with such written request has
been given to the Owner Trustee pursuant to and in compliance with this Section
4.3 or Section 5.3. For the protection and enforcement of the provisions of this
Section, the Certificateholder and the Owner Trustee is entitled to such relief
as can be given either at law or in equity.
SECTION 4.4 Rights of Insurer. Notwithstanding anything to the contrary in
the Basic Documents, without the prior written consent of the Insurer (so long
as no Insurer Default has occurred and is continuing), the Owner Trustee will
not (i) remove the Servicer, (ii) initiate any claim, suit or proceeding by the
Trust or compromise any claim, suit or proceeding brought by or against the
Trust, other than with respect to the enforcement of any Receivable or any
rights of the Trust thereunder or (iii) authorize the merger or consolidation of
the Trust with or into any other trust or other entity (other than in accordance
with Section 3.10 of the Indenture).
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
Basic Documents to which the Trust is named as a party and each certificate or
other document attached as an exhibit to or contemplated by the Basic Documents
to which the Trust is named as a party and any amendment thereto, in each case,
in such form as the Certificateholder will approve as evidenced conclusively by
the Owner Trustee's execution thereof, and on behalf of the Trust, to direct the
Indenture Trustee to authenticate and deliver Class A-1 Notes in the aggregate
principal amount of $35,000,000, Class A-2 Notes in the aggregate principal
amount of $45,400,000 and Class A-3 Notes in the aggregate principal amount of
$56,951,213. In addition to the foregoing, the Owner Trustee is authorized, but
will not be obligated, to take all actions required of the Trust pursuant to the
Basic Documents. The Owner Trustee is further authorized from time to time to
take such action as the Instructing Party recommends with respect to the Basic
Documents, except to the extent that this Agreement expressly requires the
consent of the Certificateholder for such action.
SECTION 5.2 General Duties. It will be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the other Basic Documents and to administer the
Trust in the interest of the Holder, subject to the Basic Documents and in
accordance with the provisions of this Agreement. Notwithstanding the foregoing,
the Owner Trustee is deemed to have discharged its duties and responsibilities
hereunder and under the Basic Documents to the extent the Servicer has agreed to
perform any act or to discharge any duty of the Trust or the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee will not be liable
for the default or failure of the Servicer to carry out its obligations. The
Owner Trustee shall have no obligation to administer, service or collect the
Receivables or to maintain, monitor or otherwise supervise the administration,
servicing or collection of the Receivables.
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SECTION 5.3 Action upon Instruction.
(a) Subject to Article IV, the Insurer (so long as any Class A Notes are
outstanding and an Insurer Default will not have occurred and be continuing) or
the Certificateholder (if an Insurer Default has occurred and is continuing or
if no Class A Notes are outstanding) (the "Instructing Party") has the exclusive
right to direct the actions of the Owner Trustee in the management of the Trust.
The Instructing Party will ensure that such instructions are not inconsistent
with the express terms set forth herein or in any Basic Document. The
Instructing Party will not instruct the Owner Trustee in a manner inconsistent
with this Agreement or the Basic Documents.
(b) The Owner Trustee will not be required to take any action hereunder or
under any Basic Document if the Owner Trustee has reasonably determined, or has
been advised by counsel, that such action is likely to result in liability on
the part of the Owner Trustee or is contrary to the terms hereof or of any Basic
Document or is otherwise contrary to law and a copy of such opinion has been
provided to the Servicer.
(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
Basic Document, the Owner Trustee will promptly give notice (in such form as
will 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 of
the Instructing Party received, the Owner Trustee will not be liable on account
of such action to any Person. If the Owner Trustee will 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 will be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Basic
Documents, as it will deem to be in the best interests of the Certificateholder,
and will have no liability to any Person for such action or inaction.
(d) If the Owner Trustee is unsure as to the application of any provision
of this Agreement or any Basic Document or any such provision is ambiguous as to
its application, or is, or appears to be, in conflict with any other applicable
provision, or if 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 will 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 will not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee will 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 will be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Basic
Documents, as it will deem to be in the best interests of the Certificateholder,
and will have no liability to any Person for such action or inaction.
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SECTION 5.4 No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee will not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 5.3; and no implied duties or obligations will
be read into this Agreement or any Basic Document against the Owner Trustee. The
Owner Trustee will have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to prepare or file any Commission or other filing for the Trust or
to record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Owner Trustee (solely in its
individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.
SECTION 5.5 No Action Except under Specified Documents or Instructions. The
Owner Trustee will not manage, control, use, sell, dispose of or otherwise deal
with any part of the Owner Trust Estate 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 Basic Documents or (iii) in accordance
with any document or instruction delivered to the Owner Trustee pursuant to
Section 5.3.
SECTION 5.6 Restrictions. The Owner Trustee will 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 a Responsible Officer of the Owner Trustee,
would result in the Trust's becoming taxable as a corporation for federal income
tax purposes. The Instructing Party will not direct the Owner Trustee to take
action that would violate the provisions of this Section.
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ARTICLE VI
Concerning the Owner Trustee
SECTION 6.1 Acceptance of Trusts 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 moneys actually received by it constituting part of the
Owner Trust Estate upon the terms of the Basic Documents and this Agreement. The
Owner Trustee will not be answerable or accountable hereunder or under any Basic
Document under any circumstances, except (i) for its own misconduct, bad faith
or negligence, (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 6.3 expressly made by the Owner Trustee, (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
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 will not be liable for any error of judgment made by
a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee will not be liable with respect to any action taken
or omitted to be taken by it in accordance with the instructions of the
Instructing Party, the Servicer or the Certificateholder;
(c) no provision of this Agreement or any Basic Document will 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 Basic
Document if the Owner Trustee has 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 will the Owner Trustee be personally liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes or amounts distributable on the
Certificate;
(e) the Owner Trustee will not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by the
Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate or for or in respect of the validity
or sufficiency of the Basic Documents, other than the certificate of
authentication on the Certificate, and the Owner Trustee will in no event assume
or incur any personal liability, duty or obligation to the Insurer, Trustee,
Indenture Trustee, the Collateral Agent, any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in the Basic
Documents;
(f) the Owner Trustee will not be personally liable for the default or
misconduct of the Insurer, the Servicer, the Indenture Trustee, or the Servicer
under any of the Basic Documents or otherwise and the Owner Trustee has no
obligation or personal liability to perform
15
the obligations under this Agreement or the Basic Documents that are required to
be performed by the Servicer, the Indenture Trustee or the Servicer under the
Sale and Servicing Agreement; and
(g) the Owner Trustee will 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 Basic Document, at the request, order or written direction of
the Instructing Party or the Certificateholder, unless such Instructing Party or
Certificateholder 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 Basic
Document will not be construed as a duty, and the Owner Trustee will not be
answerable for other than its negligence, bad faith or misconduct in the
performance of any such act.
With respect to the Insurer or Instructing Party, the Owner Trustee
undertakes to perform or observe only such of the covenants and obligations of
the Owner Trustee as are expressly set forth in the Agreement, and no implied
covenants or obligations with respect to the Insurer or Instructing Party shall
be read into this Agreement or the other Basic Documents against the Owner
Trustee. The Owner Trustee shall not be deemed to owe any fiduciary duty to the
Insurer or Instructing Party, and shall not be liable to any such person for the
failure of the Trust to perform its obligations to such persons other than as a
result of the negligence or misconduct of the Owner Trustee in the performance
of its express obligations under this Agreement.
SECTION 6.2 Furnishing of Documents. The Owner Trustee will furnish to the
Certificateholder promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 6.3 Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Depositor, the Holder and the Insurer (which will
have relied on such representations and warranties in issuing the Note Policy),
that:
(a) It is a Delaware banking corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware and having an
office in the State of Delaware. It has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) This Agreement constitutes a legal, valid and binding obligation of
the Owner Trustee, enforceable against the Owner Trustee in accordance with its
terms, subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws affecting enforcement of the rights of creditors of banks generally and to
equitable limitations on the availability of specific remedies.
16
(d) 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 state 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.
SECTION 6.4 Reliance; Advice of Counsel.
(a) The Owner Trustee will incur no personal 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, secretary or other authorized officers of the
relevant party, as to such fact or matter, and such certificate will 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 Basic
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 will not be personally liable for the conduct or misconduct of such
agents, custodians, nominees (including persons acting under power of attorney)
or attorneys if such agents, custodians, nominees or attorneys will have been
selected by the Owner Trustee with reasonable care, and (ii) may consult with
counsel, accountants and other skilled persons knowledgeable in the relevant
area to be selected in good faith. The Owner Trustee will not be personally
liable for anything done, suffered or omitted in good faith by it in accordance
with the opinion or advice of any such counsel, accountants or other such
persons and according to such opinion not contrary to this Agreement or any
Basic Document.
SECTION 6.5 Not Acting in Individual Capacity. Except as provided in this
Article VI, in accepting the trust 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 Basic Document will look only to the Owner
Trust Estate for payment or satisfaction thereof.
SECTION 6.6 Owner Trustee Not Liable for Certificate or Receivables. The
recitals contained herein and in the Certificate (other than the signature and
countersignature of the Owner Trustee on the Certificate) will be taken as the
statements of the Certificateholder 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, of any
Basic Document or of the Certificate (other than the signature and
countersignature of the Owner Trustee on the Certificate) or the Notes, or of
any Receivable or related documents. The Owner Trustee will at
17
no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Receivable, or the perfection and
priority of any security interest created by any Receivable in any Financed
Vehicle or the maintenance of any such perfection and priority, or for or with
respect to the sufficiency of the Owner Trust Estate or its ability to generate
the payments to be distributed to Certificateholder under this Agreement or 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 on any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment; the
completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by the Depositor, the Servicer or any other Person
with any warranty or representation made under any Basic Document or in any
related document or the accuracy of any such warranty or representation or any
action of the Indenture Trustee or the Servicer or any subservicer taken in the
name of the Owner Trustee.
SECTION 6.7 Owner Trustee May Own Certificate and Notes. The Owner Trustee
in its individual or any other capacity may become the owner or pledgee of the
Certificate or the Notes and may deal with the Depositor, the Indenture Trustee
and the Servicer in banking transactions with the same rights as it would have
if it were not Owner Trustee.
SECTION 6.8 Payments from Owner Trust Estate. All payments to be made by
the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party will be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trust
will have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Wilmington Trust Company, or any
successor thereto, in its individual capacity, will not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.
SECTION 6.9 Doing Business in Other Jurisdictions. Notwithstanding anything
contained herein to the contrary, neither Wilmington Trust Company or any
successor thereto, nor the Owner Trustee will be required to take any action in
any jurisdiction other than in the Delaware if the taking of such action will,
even after the appointment of a co-trustee or separate trustee in accordance
with Section 9.5 hereof, (i) require the consent or approval or authorization or
order of or the giving of notice to, or the registration with or the taking of
any other action in respect of, any state or other governmental authority or
agency of any jurisdiction other than the State of Delaware; (ii) result in any
fee, tax or other governmental charge under the laws of the Delaware becoming
payable by Wilmington Trust Company (or any successor thereto); or (iii) subject
Wilmington Trust Company (or any successor thereto) to personal jurisdiction in
any jurisdiction other than the State of Delaware for causes of action arising
from acts unrelated to the consummation of the transactions by Wilmington Trust
Company (or any successor thereto) or the Owner Trustee, as the case may be,
contemplated hereby.
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ARTICLE VII
Compensation of Owner Trustee
SECTION 7.1 Owner Trustee's Fees and Expenses. The Owner Trustee will
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between New South and the Owner
Trustee, and the Owner Trustee will be entitled to be reimbursed by New South
for its other reasonable and actual expenses hereunder, including the reasonable
and actual 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 and under the Basic Documents, except any such expense that may be
attributable to its willful misconduct, gross negligence or bad faith.
SECTION 7.2 Indemnification. New South will indemnify the Owner Trustee and
its officers, directors, employees, successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all costs,
expenses, losses, damages, claims and liabilities, arising out of or resulting
from this Agreement, the Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or inaction of the Owner
Trustee hereunder, except that New South will not be liable for or required to
indemnify the Owner Trustee from and against Expenses (i) arising or resulting
from any of the matters described in the third sentence of Section 6.1 and (ii)
constituting federal, state or other taxes arising out of any fees paid to the
Owner Trustee pursuant to the Basic Documents.
Indemnification under this Section 7.2 will include reasonable fees and
expenses of counsel and expenses of litigation and the indemnities contained in
this Section and the rights under Section 7.1 will survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In any
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section 7.2, the Owner Trustee's choice of legal counsel will
be subject to the approval of New South which approval will not be unreasonably
withheld.
SECTION 7.3 Payments to the Owner Trustee. Any amounts paid to the Owner
Trustee pursuant to this Article VII will be deemed not to be a part of the
Owner Trust Estate immediately after such payment.
SECTION 7.4 Non-recourse Obligations. Notwithstanding anything in this
Agreement or any Basic 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
will be with recourse to the Owner Trust Estate only and specifically will be
without recourse to the assets of the Holder.
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ARTICLE VIII
Termination of Trust Agreement
SECTION 8.1 Termination of Trust Agreement.
(a) This Agreement and the Trust will terminate and be of no further
force or effect upon the latest of (i) the maturity or other liquidation of the
last Receivable (including the purchase by the Servicer at its option of the
corpus of the Trust as described in Section 10.1 of the Sale and Servicing
Agreement) and the subsequent distribution of amounts in respect of such
Receivables as provided in the Basic Documents, or (ii) the payment to the
Certificateholder of all amounts required to be paid to it pursuant to this
Agreement and the payment to the Insurer of all amounts payable or reimbursable
to it pursuant to the Sale and Servicing Agreement; provided, however, that the
rights to indemnification under Section 7.2 and the rights under Section 7.1
will survive the termination of the Trust; provided, further, that in no event
shall the Trust created by this Agreement continue beyond the expiration of 21
years less one day from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late ambassador of the Court of St. Xxxxx, living on the
date of this Agreement. New South or the Servicer will promptly notify the Owner
Trustee and the Insurer of any prospective termination pursuant to this Section.
The bankruptcy, liquidation, dissolution, death or incapacity of the
Certificateholder, will not (x) operate to terminate this Agreement or the
Trust, nor (y) entitle the Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Owner Trust Estate
nor (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Neither the Depositor nor the Certificateholder will be entitled to
revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which the Certificateholder will surrender the Certificate to the Indenture
Trustee for payment of the final distribution and cancellation, will be given by
the Owner Trustee by letter to the Certificateholder mailed within five Business
Days of receipt of notice of such termination from the Servicer given pursuant
to Section 10.1(c) of the Sale and Servicing Agreement, stating (i) the Payment
Date upon or with respect to which final payment of the Certificate will be made
upon presentation and surrender of the Certificate at the office of the
Indenture Trustee therein designated, (ii) the amount of any such final payment,
(iii) that the Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and surrender of the
Certificate at the office of the Indenture Trustee therein specified and (iv)
interest will cease to accrue on the Certificate. The Owner Trustee will give
such notice to the Indenture Trustee at the time such notice is given to the
Certificateholder. Upon presentation and surrender of the Certificate, the
Indenture Trustee will cause to be distributed to the Certificateholder amounts
distributable on such Payment Date pursuant to Section 5.7 of the Sale and
Servicing Agreement.
If the Certificateholder does not surrender the Certificate for
cancellation within six months after the date specified in the above mentioned
written notice, the Owner Trustee will give a second written notice to the
Certificateholder to surrender the Certificate for cancellation
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and receive the final distribution with respect thereto. If within one year
after the second notice the Certificate will not have been surrendered for
cancellation, the Owner Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the Certificateholder concerning
surrender of its Certificate, and the cost thereof will be paid out of the funds
and other assets that will remain subject to this Agreement. Any funds remaining
in the Trust after exhaustion of such remedies will be distributed, subject to
applicable escheat laws, by the Owner Trustee to the Holder.
ARTICLE IX
Successor Owner Trustees and Additional Owner Trustees
SECTION 9.1 Eligibility Requirements for Owner Trustee. The Owner Trustee
will at all times be a bank (i) authorized to exercise corporate trust powers;
(ii) having a combined capital and surplus of at least $50,000,000 and subject
to supervision or examination by Federal or State authorities; and (iii)
acceptable to the Insurer in its sole discretion, so long as an Insurer Default
will not have occurred and be continuing. If such bank will 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 9.1, the combined capital and surplus of such corporation will 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 will cease to be
eligible in accordance with the provisions of this Section, the Owner Trustee
will 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 Insurer and the Servicer.
Upon receiving such notice of resignation, the Servicer will promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument will be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee, provided that the Servicer has received written
confirmation from each of the Rating Agencies that the proposed appointment will
not result in an increased capital charge to the Insurer by either of the Rating
Agencies. If no successor Owner Trustee has been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee or the Insurer may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee; provided,
however, that such right to appoint or to petition for the appointment of any
such successor shall in no event relieve the resigning Owner Trustee from any
obligations otherwise imposed on it under the Basic Documents until such
successor has in fact assumed such appointment.
If at any time the Owner Trustee will cease to be eligible in accordance
with the provisions of Section 9.1 and will fail to resign after written request
therefor by the Servicer, or if at any time the Owner Trustee will be legally
unable to act, or will be adjudged bankrupt or insolvent, or a receiver of the
Owner Trustee or of its property will be appointed, or any public officer will
take charge or control of the Owner Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Servicer
with the consent of the Insurer (so long as an Insurer Default will not have
occurred and be continuing) may remove the Owner Trustee. If the Servicer will
remove the Owner Trustee under the authority of the
21
immediately preceding sentence, the Servicer will promptly appoint a successor
Owner Trustee by written instrument, in duplicate, one copy of which instrument
will be delivered to the outgoing Owner Trustee so removed, one copy to the
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 will
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 9.3 and payment of all fees and expenses owed to the
outgoing Owner Trustee. The Servicer will 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 will execute, acknowledge and deliver to the
Depositor, the Servicer and the 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 will become effective
and such successor Owner Trustee, without any further act, deed or conveyance,
will 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 will upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement; and the Servicer and the predecessor
Owner Trustee will 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 will accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee will
be eligible pursuant to Section 9.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 9.4, the Servicer will mail notice of the successor of such Owner
Trustee to the Certificateholder, the Indenture Trustee, the Noteholders and the
Rating Agencies. If the Servicer will fail to mail such notice within 10 days
after acceptance of appointment by the successor Owner Trustee, the successor
Owner Trustee will cause such notice to be mailed at the expense of the
Servicer.
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 will be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, will be the successor of the Owner Trustee hereunder, provided
such corporation will 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; provided further that
the Owner Trustee will 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 Owner Trust Estate or any Financed
22
Vehicle may at the time be located, the Servicer and the Owner Trustee acting
jointly have the power and will execute and deliver all instruments to appoint
one or more Persons approved by the Owner Trustee and the Insurer to act as
co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Owner Trust Estate, 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 Servicer and the Owner Trustee may
consider necessary or desirable. If the Servicer will not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Owner Trustee subject, unless an Insurer Default has occurred and is continuing,
to the approval of the Insurer (which approval will not be unreasonably
withheld) has the power to make such appointment. No co-trustee or separate
trustee under this Agreement will 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 will be required pursuant to Section 9.3.
Each separate trustee and co-trustee will, 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 will 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 will 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 or any
portion thereof in any such jurisdiction) will 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 will be personally liable by reason
of any act or omission of any other trustee under this Agreement; and
(iii) the Servicer 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 will 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 will refer to this Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, will 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 provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument will be filed with the Owner Trustee and a
copy thereof given to the Servicer and the 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
23
lawful act under or in respect of this Agreement on its behalf and in its name.
If any separate trustee or co-trustee will die, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts will 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
SECTION 10.1 Supplements and Amendments. Except as described in Section
10.1(b) with respect to any amendment requiring the consent of each Holder of
any Outstanding Note affected thereby, (a) so long as no Insurer Default has
occurred and is continuing, this Agreement may be amended from time to time by
the parties hereto with the consent of the Insurer (which consent will not be
unreasonably withheld), but without the consent of any of the Noteholders. If an
Insurer Default has occurred and is continuing, this Agreement may be amended
from time to time by the parties hereto, with the consent of the Insurer (which
consent will not be unreasonably withheld), but without the consent of any of
the Noteholders; provided that the Indenture Trustee has received an officer's
certificate of the Servicer stating that, in the reasonable belief of the
certifying officer, such action will not materially adversely affect the
interests of the Noteholders.
(a) In addition, if an Insurer Default has occurred and is continuing,
the parties hereto, with the consent of the Insurer and the Majority
Noteholders, may also amend this Agreement in order to add, change or eliminate
any other provisions with respect to matters or questions arising under this
Agreement or affecting the rights of the Noteholders; provided, that no such
amendment may, without the consent of the Insurer and the Holder of each
Outstanding Note affected thereby:
(i) change the Final Scheduled Payment Date for any Class of the Class
A Notes or the due date for any installment of interest on any Class A Note,
or reduce the principal amount thereof, the interest rate thereon or the
Redemption Price with respect thereto, or change any place of payment where,
or the coin or currency in which, any Note or the interest thereon is
payable;
(ii) reduce the percentage of the Outstanding Amount of the Class A
Notes, the consent of the Holders of which is required for any such amendment
or for any waiver of compliance with certain provisions of this Agreement or
certain defaults hereunder and their consequences as provided for in this
Agreement;
(iii) modify or alter the provisions of this Agreement regarding the
voting of Class A Notes held by the Trust, any obligor on the Notes, New
South or any affiliate of the foregoing;
(iv) permit the creation of any lien ranking prior to or on a parity
with the lien of the Indenture with respect to any part of the Trust Estate
or, except as otherwise permitted or contemplated herein or in any of the
Basic Documents, terminate the lien of the Indenture on
24
any property at any time subject thereto or deprive the Holder of any Note of
the security provided by the lien of the Indenture; or
(v) reduce the percentage of the Outstanding Amount of the Class A Notes
required to direct the Indenture Trustee to sell or liquidate the Owner Trust
Estate.
The Indenture Trustee may determine whether or not any Class A Notes
would be affected by any amendment and such determination will be conclusive
upon the Holders of all Class A Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee will not be liable
for any such determination made in good faith and will be entitled to receive,
and will be fully protected in relying upon, an Opinion of Counsel stating that
the execution of any amendment is authorized or permitted by this Agreement.
(c) Promptly after the execution of any such amendment or consent, the
Owner Trustee will furnish written notification of the substance of such
amendment or consent to the Certificateholder, the Indenture Trustee and each of
the Rating Agencies.
(d) It will not be necessary for the consent of Certificateholder, the
Noteholders or the Indenture Trustee pursuant to this Section 10.1 to approve
the particular form of any proposed amendment or consent, but it will be
sufficient if such consent will approve the substance thereof. The manner of
obtaining such consents (and any other consents of the Certificateholder
provided for in this Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by Certificateholder will be subject
to such reasonable requirements as the Owner Trustee may prescribe.
(e) Prior to the execution of any amendment to this Agreement, the Owner
Trustee will 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 will 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.
(f) Notwithstanding the foregoing, this Agreement may be amended by the
Depositor and the Servicer, with the consent of the Insurer, but without the
consent of any of the Noteholders or any other Person to add, modify or
eliminate such provisions as may be necessary or advisable in order to enable
(a) the Depositor or the Servicer or any of their Affiliates to otherwise comply
with or obtain more favorable treatment under any law or regulation or any
accounting rule or principle; it being a condition to any such amendment that
the Rating Agency Condition shall have been met. "Rating Agency Condition"
means, with respect to any event, either (a) written confirmation by such Rating
Agency that the occurrence of such event will not cause it to downgrade its
rating assigned to the Class A Notes or the shadow rating assigned to the Class
A Notes without the benefit of the Insurance Policy or (b) that such Rating
Agency shall have been given notice of such event at least ten (10) days prior
to such event (or, if ten (10) days advance notice is impracticable, as much
advance notice as is practicable) and such Rating Agency shall not have issued
any written notice that the occurrence of such event will cause it to downgrade
its rating assigned to the Class A Notes or the shadow rating assigned to the
Class A Notes without the benefit of the Insurance Policy.
25
SECTION 10.2 No Legal Title to Owner Trust Estate in Certificateholder. The
Certificateholder will not have legal title to any part of the Owner Trust
Estate. The Certificateholder will be entitled to receive distributions in
accordance with the Sale and Servicing Agreement and Article VIII. No transfer,
by operation of law or otherwise, of any right, title or interest of the
Certificateholder to and in its ownership interest in the Owner Trust Estate
will operate to terminate this Agreement or the trust hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Owner Trust Estate.
SECTION 10.3 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Depositor, the
Certificateholder, the Servicer and, to the extent expressly provided herein,
the Insurer, the Indenture Trustee and the Noteholders, and nothing in this
Agreement, whether express or implied, will be construed to give to any other
Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 10.4 Notices.
(a) All demands, notices and communications hereunder will be in writing
and will be deemed to have been duly given to the addressee if mailed, by
first-class registered mail, postage prepaid service, confirmed facsimile
transmission, or a nationally recognized express courier, as follows:
If to the Servicer:
New South Federal Savings Bank
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
If to the Owner Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxx
Facsimile: (000) 000-0000
with a copy to:
New South Federal Savings Bank
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Facsimile: (000) 000-0000
If to the Depositor:
Bond Securitization, L.L.C.
1 Bank Xxx Xxxxx
00
Xxxxxxx, Xx 00000
Attention: Xxxxx X. Xxxxxxxxxx
Facsimile: (000) 000-0000
If to the Insurer:
Ambac Assurance Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Department ABS
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxxx, Vice President
Facsimile: (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 will 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, as to each
party, at such other address as will be designated by such party in a written
notice to each other party. Any such demand, notice or communication hereunder
will be deemed to have been received on the date delivered to or received at the
premises of the addressee as evidenced by the date noted on the return receipt.
(b) Any notice required or permitted to be given to a Certificateholder
will be given by first-class mail, postage prepaid, at the address of the
Holder. Any notice so mailed within the time prescribed in this Agreement will
be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 10.5 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction will, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction will not invalidate or render unenforceable
such provision in any other jurisdiction.
SECTION 10.6 Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered will be an original, but all such counterparts will together
constitute but one and the same instrument.
SECTION 10.7 Assignments. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and permitted
assigns.
SECTION 10.8 No Petition. The Owner Trustee (not in its individual capacity
but solely as the Owner Trustee), by entering into this Agreement, the
Certificateholder, by accepting a Certificate, and the Indenture Trustee and
each Noteholder by accepting the benefits of this Agreement, hereby covenants
and agrees that they will not at any time institute against the Trust or the
Depositor, or solicit or join in or cooperate with or encourage any institution
against the
27
Trust or the Depositor of any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Certificates, the Notes, this Agreement or any of
the Basic Documents.
SECTION 10.9 No Recourse. (a) The Certificateholder by accepting a
Certificate acknowledges that the Certificate represents a beneficial interest
in the Trust only and does not represent interests in or obligations of the
Depositor, the Servicer, the Owner Trustee, the Indenture Trustee, the Insurer
or any Affiliate thereof and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated in this
Agreement, the Certificate or the Basic Documents.
(b) In furtherance of and not in derogation of the foregoing, to the
extent the Depositor enters into other securitization transactions, the
Certificateholder, by accepting the Certificate, acknowledges and agrees that it
shall have no right, title or interest in or to Other Assets. To the extent
that, notwithstanding the agreements and provisions contained in the preceding
sentence, the Certificateholder either (i) asserts an interest or claim to, or
benefit from, Other Assets, whether asserted against or through the Depositor or
any other Person owned by the Depositor, or (ii) is deemed to have any such
interest, claim or benefit in or from Other Assets, whether by operation of law,
legal process, pursuant to applicable provisions of insolvency laws or otherwise
(including by virtue of Section 1111(b) of the Federal Bankruptcy Code or any
successor provision having similar effect under the Bankruptcy Code), and
whether deemed asserted against or through the Depositor or any other Person
owned by the Depositor, then the Certificateholder, by accepting the
Certificate, further acknowledges and agrees that any such interest, claim or
benefit in or from Other Assets is and shall be expressly subordinated to the
indefeasible payment in full of all obligations and liabilities of the Depositor
which, under the terms of the relevant documents relating to the securitization
of such Other Assets, are entitled to be paid from, entitled to the benefits of,
or otherwise secured by such Other Assets (whether or not any such entitlement
or security interest is legally perfected or otherwise entitled to priority of
distribution or application under applicable law, including insolvency laws, and
whether asserted against the Depositor or any other Person owned by the
Depositor), including the payment of post-petition interest on such other
obligations and liabilities. This subordination agreement shall be deemed a
subordination agreement within the meaning of Section 510(a) of the Bankruptcy
Code. The Certificateholder, by acceptance of the Certificate, further
acknowledges and agrees that no adequate remedy at law exists for a breach of
this Section 10.9(b) and the terms of this Section 10.9(b) may be enforced by an
action for specific performance. The provisions of this Section 10.9(b) shall be
for the third party benefit of those entitled to rely thereon and shall survive
the termination of this Agreement.
SECTION 10.10 Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and will not define or limit any of
the terms or provisions hereof.
SECTION 10.11 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
28
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER WILL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.12 Administrative Duties of Servicer. The Servicer is authorized
to prepare, or cause to be prepared, execute and deliver on behalf of the Trust
all such documents, reports, filings, instruments, certificates and opinions as
it will be the duty of the Trust or Owner Trustee to prepare, file or deliver
pursuant to the Basic Documents. Upon written request, the Owner Trustee will
execute and deliver to the Servicer a limited power of attorney appointing the
Servicer the Trust's agent and attorney-in-fact to prepare, or cause to be
prepared, execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.
[Remainder of page intentionally left blank.]
29
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed by their respective officers hereunto duly authorized as of
the day and year first above written.
WILMINGTON TRUST COMPANY
Owner Trustee
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
BOND SECURITIZATION, L.L.C.
Depositor
By: /s/ Xxxxx X. Xxxxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Managing Director
NEW SOUTH FEDERAL SAVINGS BANK
Servicer
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Executive Vice President
[Trust Agreement]
EXHIBIT A
FORM OF CERTIFICATE
NUMBER
R-1
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE IS NOT TRANSFERABLE,
EXCEPT UNDER THE LIMITED CONDITIONS
SPECIFIED IN THE TRUST AGREEMENT
_______________________________
ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of retail
installment sale contracts secured by new or used automobiles or light duty
trucks.
(This Certificate does not represent an interest in or obligation of Bond
Securitization, L.L.C. or New South Federal Savings Bank or any of their
respective Affiliates.)
THIS CERTIFIES THAT [__________] is the registered owner of a
nonassessable, fully-paid, beneficial ownership interest in certain
distributions of New South Motor Vehicle Trust 2002-A (the "Trust") formed by
Bond Securitization, L.L.C., a Delaware limited liability company (the
"Depositor").
The Trust was created pursuant to a Trust Agreement dated November 26,
2002, (the "Trust Agreement"), among the Depositor, New South Federal Savings
Bank (the "Servicer") and Wilmington Trust Company, as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Trust Agreement or, if not
defined therein, in the Sale and Servicing Agreement.
This is the duly authorized Certificate designated as "Asset Backed
Certificate" (herein called the "Certificate"). Also issued under the Indenture,
dated as of November 26, 2002, between the Trust, and JPMorgan Chase Bank, as
trustee, are three classes of Notes designated as "Class A-1 1.44% Asset Backed
Notes" (the "Class A-1 Notes"), "Class A-2 1.94% Asset Backed Notes" (the "Class
A-2 Notes") and "Class A-3 3.03% Asset Backed Notes" (the "Class A-3 Notes").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the holder of this
Certificate by virtue of the acceptance hereof assents and by which such holder
is bound. The property of the Trust includes a pool of Receivables sold to the
Trust by the Depositor, certain monies due thereunder on or after the Related
Cutoff Date, security interests in the vehicles financed thereby, certain bank
accounts and the proceeds thereof, proceeds from claims on certain insurance
policies and certain other rights under the Trust Agreement and the Sale and
Servicing Agreement, all right, to and interest of the Depositor in and to the
Purchase Agreement dated as of November 26, 2002 between New South Federal
Savings Bank and the Depositor and all proceeds of the foregoing.
The holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Sale and Servicing Agreement, the
Indenture and the Trust Agreement, as applicable.
It is the intent of the Depositor, New South and the Certificateholder
that, for purposes of federal income, state and local income and franchise tax,
so long as the Certificate is held solely by New South, the Trust will be
disregarded as an entity separate from its owner. At such time that the
Certificate is held by more than one person, it is the intent of the Depositor,
New South and the Certificateholder that, for purposes of federal income, state
and local income and franchise tax, the Trust will be treated as a partnership,
the assets of which are the assets held by the Trust, and the Certificateholders
will be treated as partners in that partnership. The Certificateholder, by
acceptance of a Certificate, agrees to treat, and to take no action inconsistent
with the treatment of, the Certificates as such for tax purposes.
Each Certificateholder, by its acceptance of a Certificate, covenants and
agrees that such Certificateholder will not at any time institute against the
Depositor or the Trust, or join in or encourage any institution against the
Depositor or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Certificates, the Notes, the Trust Agreement or any
of the Basic Documents.
In furtherance of and not in derogation of the foregoing, to the extent the
Depositor enters into other securitization transactions, each Certificateholder,
by accepting a Certificate, acknowledges and agrees that it shall have no right,
title or interest in or to any assets or interests therein of the Depositor
conveyed or purported to be conveyed by the Depositor to another securitization
trust or other Person or Persons in connection therewith (whether by way of a
sale, capital contribution or by virtue of the granting of a Lien) ("Other
Assets"). To the extent that, notwithstanding the agreements and provisions
contained herein, a Certificateholder either (i) asserts an interest or claim
to, or benefit from, Other Assets, whether asserted against or through the
Depositor or any other Person owned by the Depositor, or (ii) is deemed to have
any such interest, claim or benefit in or from Other Assets, whether by
operation of law, legal process, pursuant to applicable provisions of insolvency
laws or otherwise (including by virtue of Section 1111(b) of the Federal
Bankruptcy Code or any successor provision having similar effect under the
Bankruptcy Code), and whether deemed asserted against or through the Depositor
or any other Person owned by the Depositor, then each Certificateholder, by
accepting a Certificate, further acknowledges and agrees that any such interest,
claim or benefit in or from Other Assets is and shall be expressly subordinated
to the indefeasible payment in full of all obligations and liabilities of the
Depositor which, under the terms of the relevant documents relating to the
securitization of such Other Assets, are entitled to be paid from, entitled to
the benefits of, or otherwise secured by such Other Assets (whether or not any
such entitlement or security interest is legally perfected or otherwise entitled
to priority of distribution or application under applicable
A-2
law, including insolvency laws, and whether asserted against the Depositor or
any other Person owned by the Depositor), including the payment of post-petition
interest on such other obligations and liabilities. This subordination agreement
shall be deemed a subordination agreement within the meaning of Section 510(a)
of the Bankruptcy Code. Each Certificateholder, by acceptance of a Certificate,
further acknowledges and agrees that no adequate remedy at law exists for a
breach of this paragraph and the terms of this paragraph may be enforced by an
action for specific performance. The provisions of this paragraph shall be for
the third party benefit of those entitled to rely thereon and shall survive the
termination of the Trust Agreement.
Distributions on this Certificate will be made as provided in the Trust
Agreement and the Sale and Servicing Agreement by the Indenture Trustee by wire
transfer or check mailed to the Certificateholder without the presentation or
surrender of this Certificate or the making of any notation hereon. Except as
otherwise provided in the Trust Agreement or the Sale and Servicing Agreement
and notwithstanding the above, the final distribution on this Certificate will
be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency maintained for the purpose by the Indenture Trustee.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions will for all purposes have
the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by an
authorized officer of the Owner Trustee, by manual signature, this Certificate
will not entitle the holder hereof to any benefit under the Trust Agreement or
the Sale and Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE WILL BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
WILL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-3
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Certificate to be duly executed.
NEW SOUTH MOTOR VEHICLE
TRUST 2002-A
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
Dated: November 26, 2002 By:_________________________________________
Authorized Signatory
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to in the within-mentioned Trust Agreement.
WILMINGTON TRUST COMPANY, OR WILMINGTON TRUST COMPANY,
not in its individual capacity but not in its individual capacity but
solely as Owner Trustee solely as Owner Trustee
By: _________________________ By: _________________________________
Authenticating Agent Authorized Signatory
By: _________________________
Authorized Signatory
A-4
(Reverse of Certificate)
The Certificate does not represent an obligation of, or an interest in, the
Depositor, the Servicer, the Owner Trustee or any Affiliates of any of them and
no recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein or in the Trust Agreement, the
Indenture or the Basic Documents. In addition, this Certificate is not
guaranteed by any governmental agency or instrumentality and is limited in right
of payment to certain collections with respect to the Receivables, all as more
specifically set forth herein and in the Sale and Servicing Agreement. A copy of
each of the Sale and Servicing Agreement and the Trust Agreement may be examined
during normal business hours at the principal office of the Servicer, and at
such other places, if any, designated by the Servicer, by any Certificateholder
upon written request.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the holder hereof or such holder's attorney duly authorized in writing, and
thereupon a new Certificate evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is Wilmington Trust Company. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any expense, tax or governmental charge payable in
connection therewith.
The Owner Trustee, the Insurer and any agent of the Owner Trustee or the
Insurer may treat the person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Owner Trustee, the Insurer nor
any such agent will be affected by any notice to the contrary.
The Certificate may not be acquired by (a) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (b) a plan (as defined in Section 4975(e)(1) of the Code) or (c) any
entity whose underlying assets include assets of a plan described in (a) or (b)
above by reason of such plan's investment in the entity (each, a "Benefit
Plan"). By accepting and holding this Certificate, the Holder hereof will be
deemed to have represented and warranted that it is not a Benefit Plan.
The recitals contained herein will be taken as the statements of the Trust
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
Certificate or of any Receivable or related document.
Unless the certificate of authentication hereon will have been executed by an
authorized officer of the Owner Trustee, by manual or facsimile signature, this
Certificate will not entitle the Holder hereof to any benefit under the Trust
Agreement or the Sale and Servicing Agreement or be valid for any purpose.
A-5
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_________________________________________________________________the within
Certificate, and all rights thereunder, hereby irrevocably constituting and
appointing
___________________________________ Attorney to transfer said Certificate on the
books of the Certificate Registrar, with full power of substitution in the
premises.
Dated: __________________________________*
Signature
Guaranteed: __________________________________*
_____________________________
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Certificate in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in STAMP or such other "signature guarantee program" as may be
determined by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
A-6
