Exhibit 10.2
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AMENDED AND RESTATED
TRUST AGREEMENT
between
MFN SECURITIZATION LLC
Depositor
and
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
Owner Trustee
Dated as of June 1, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS................................................... 1
SECTION 1.1. CAPITALIZED TERMS...........................................1
SECTION 1.2. OTHER DEFINITIONAL PROVISIONS...............................3
ARTICLE II. ORGANIZATION...................................................4
SECTION 2.1. NAME........................................................4
SECTION 2.2. OFFICE......................................................4
SECTION 2.3. PURPOSES AND POWERS.........................................4
SECTION 2.4. APPOINTMENT OF OWNER TRUSTEE................................5
SECTION 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE................5
SECTION 2.6. DECLARATION OF TRUST........................................5
SECTION 2.7. INTENT AS TO BUSINESS TRUST.................................5
SECTION 2.8. TITLE TO TRUST PROPERTY.....................................5
SECTION 2.9. SITUS OF TRUST..............................................6
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR.............6
SECTION 2.11. COVENANTS OF THE CERTIFICATEHOLDER..........................7
SECTION 2.12. FEDERAL INCOME TAX TREATMENT OF THE TRUST...................8
ARTICLE III. CERTIFICATE AND TRANSFER OF INTEREST...........................8
SECTION 3.1. INITIAL 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
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..................12
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SECTION 4.4. RIGHTS OF SECURITY INSURER............................. ...12
ARTICLE V. AUTHORITY AND DUTIES OF OWNER TRUSTEE...................... ..12
SECTION 5.1. GENERAL AUTHORITY..........................................12
SECTION 5.2. GENERAL DUTIES.............................................13
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...............................................15
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 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
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...................23
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SECTION 9.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE..............23
ARTICLE X. MISCELLANEOUS.................................................24
SECTION 10.1. SUPPLEMENTS AND AMENDMENTS.................................24
SECTION 10.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN CERTIFICATEHOLDER..25
SECTION 10.3. LIMITATIONS ON RIGHTS OF OTHERS............................25
SECTION 10.4. NOTICES....................................................26
SECTION 10.5. SEVERABILITY...............................................26
SECTION 10.6. SEPARATE COUNTERPARTS......................................26
SECTION 10.7. ASSIGNMENTS; SECURITY INSURER..............................26
SECTION 10.8. NO RECOURSE................................................27
SECTION 10.9. HEADINGS...................................................27
SECTION 10.10. GOVERNING LAW..............................................27
SECTION 10.11. SERVICER AND SUBSERVICER...................................27
SECTION 10.12. OTHER MATTERS RELATING TO THE INSURER......................27
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This AMENDED AND RESTATED TRUST AGREEMENT dated as of June 1, 2001 between
MFN SECURITIZATION LLC, a Delaware limited liability company (the "SELLER"), and
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association
as Owner Trustee, amends and restates in its entirety that certain Declaration
of Trust dated as of May 29, 2001 between the Seller and the Owner Trustee (the
"ORIGINAL TRUST AGREEMENT").
ARTICLE I.
DEFINITIONS
SECTION 1.1. CAPITALIZED TERMS. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
"AGREEMENT" shall mean this Amended and Restated Trust Agreement, as the
same may be amended and supplemented from time to time.
"BASIC DOCUMENTS" shall mean this Agreement, the Certificate of Trust, the
Sale and Servicing Agreement, the Spread Account Agreement, the Insurance
Agreement, the Indemnification Agreement, the Indenture, the Securities Account
Control Agreement and the other documents and certificates delivered in
connection therewith.
"BENEFIT PLAN" shall have the meaning assigned to such term in Section 3.9.
"BUSINESS TRUST STATUTE" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 DEL. CODE Section 3801 ET SEQ. as the same may be amended from time to
time.
"CERTIFICATE" 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" shall mean the person in whose name a
Certificate is registered on the Certificate Register, initially MFN
Securitization LLC.
"CERTIFICATE OF TRUST" shall mean the Certificate of Trust in the form of
Exhibit B filed for the Trust pursuant to Section 3810(a) of the Business Trust
Statute.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" shall mean the register
mentioned and the registrar appointed pursuant to Section 3.4.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"CORPORATE TRUST OFFICE" shall mean, with respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee located at One Xxxxxx
Square, 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx, 00000, or the
principal corporate trust office of any successor Owner Trustee (the address of
which the successor Owner Trustee will notify the Depositor).
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"DEPOSITOR" shall mean the Seller in its capacity as Depositor hereunder.
"DISTRIBUTION DATE" shall have the meaning set forth in the Sale and
Servicing Agreement.
"ERISA" shall have the meaning assigned to such term in Section 3.9.
"EXPENSES" shall have the meaning assigned to such term in Section 7.2.
"INDEMNIFIED PARTIES" shall have the meaning assigned to such term in
Section 7.2.
"INDENTURE" shall mean the Indenture dated as of June 1, 2001, among the
Trust and Xxxxx Fargo Bank Minnesota, National Association, as Trust Collateral
Agent and Trustee, as the same may be amended and supplemented from time to
time.
"INSTRUCTING PARTY" shall have the meaning assigned to such term in Section
5.3(a).
"MERCURY FINANCE" shall mean Mercury Finance Company LLC.
"NOTES" shall mean the Class A-1 4.05125% Asset-Backed Notes and the Class
A-2 5.07000% Asset-Backed Notes.
"OWNER TRUST ESTATE" shall mean 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 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 and the Spread Account Agreement.
"OWNER TRUSTEE" shall mean First Union Trust Company, National Association,
a national banking association, not in its individual capacity but solely as
owner trustee under this Agreement, and any successor Owner Trustee hereunder.
"RECORD DATE" shall mean with respect to any Distribution Date, the close
of business on the last Business Day immediately preceding such Distribution
Date.
"RESPONSIBLE OFFICER" shall mean, 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" shall mean the Sale and Servicing Agreement
among the Trust, the Seller, Mercury Finance, MFN Financial Corporation, the
Trust Collateral Agent and Systems & Services Technologies, Inc., dated as of
June 1, 2001, as the same may be amended and supplemented from time to time.
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"SECRETARY OF STATE" shall mean the Secretary of State of the State of
Delaware.
"SECURITIES ACCOUNT CONTROL AGREEMENT" shall mean the Securities Account
Control Agreement, dated as of June 1, 2001, among the Trust and Xxxxx Fargo
Bank Minnesota, National Association as Trust Collateral Agent and as Securities
Intermediary.
"SECURITY INSURER" shall mean XL Capital Assurance Inc., or its successor
in interest.
"SPREAD ACCOUNT" shall mean the Series 2001-A Spread Account established
and maintained pursuant to the Spread Account Agreement.
"SPREAD ACCOUNT AGREEMENT" shall mean the Master Spread Account Agreement,
dated as of June 1, 2001 among MFN Securitization LLC, the Security Insurer, and
Xxxxx Fargo Bank, Minnesota, National Association, the Collateral Agent, as the
same may be amended, supplemented or otherwise modified in accordance with the
terms thereof.
"TREASURY REGULATIONS" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"TRUST" shall mean the trust formed pursuant to the Original Trust
Agreement and continued pursuant to this Agreement.
"TRUST COLLATERAL AGENT" shall mean, initially, Xxxxx Fargo Bank Minnesota,
National Association, in its capacity as trust collateral agent, including its
successors in interest, until and unless a successor Person shall have become
the Trust Collateral Agent pursuant to the Sale and Servicing Agreement, and
thereafter "Trust Collateral Agent" shall mean such successor Person.
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 Spread Account Agreement or in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(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, shall have the respective 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
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definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
(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. The Trust formed under the Original Trust Agreement
shall continue to be known as "MFN Auto Receivables Trust 2001-A," in which name
the Owner Trustee shall, subject to this Agreement, have power and authority and
is hereby authorized and empowered, without need for further action on the part
of the Owner Trustee, to 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 shall 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 shall have the power and
authority, to:
(i) acquire and hold the assets comprising the Owner Trust Estate;
(ii) issue the Notes pursuant to the Indenture and the Certificate
pursuant to this Agreement, and to sell the Notes;
(iii) deliver the Notes and Certificates to the Seller upon the
transfer of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement;
(iv) assign, grant, transfer, pledge, mortgage and convey the Owner
Trust Estate to the Trust Collateral Agent pursuant to the Indenture for
the benefit of the Security Insurer and the Trustee on behalf of the
Noteholders and to hold, manage and distribute to the Certificateholder
pursuant to the terms of the Sale and Servicing
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Agreement any portion of the Trust Estate released from the Lien of, and
remitted to the Trust pursuant to, the Indenture;
(v) enter into and perform its obligations under the Basic Documents
to which it is a party; 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 which it is a
party, 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 shall 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 to which it is a Party.
SECTION 2.4. APPOINTMENT OF OWNER TRUSTEE. The Depositor hereby confirms
the appointment of 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 receipt in trust from the Depositor pursuant to the
Original Trust Agreement of the sum of $10 which contribution shall constitute
the initial Owner Trust Estate. The Depositor shall pay organizational expenses
of the Trust as they may arise.
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.
SECTION 2.7. INTENT AS TO BUSINESS TRUST. It is the intention of the
parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Agreement constitutes the governing instrument of
such business trust.
The Holder shall not have any personal liability for any liability or
obligation of the Trust.
SECTION 2.8. TITLE TO TRUST PROPERTY.
(a) Legal title to all the Owner Trust Estate shall be vested at all times
in the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Owner Trust Estate to be vested
in a trustee or trustees, in which case title shall be deemed to be vested in
the Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.
(b) The Holder shall not have legal title to any part of the Owner Trust
Estate. The Holder shall be entitled to receive distributions with respect to
its undivided ownership interest
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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 shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Trust Property.
SECTION 2.9. SITUS OF TRUST. The Trust will be located and administered in
the State of Delaware. All bank accounts maintained by or for the Owner Trustee
on behalf of the Trust shall be located in the State of Delaware, the State of
New York or State of Minnesota. Payments will be received by the Trust only in
Delaware, New York or Minnesota and payments will be made by the Trust only from
Delaware or New York. The Trust shall not have any employees in any state other
than Delaware; PROVIDED, HOWEVER, that nothing herein shall restrict or prohibit
the Owner Trustee, the Servicer or any agent of the Trust from having employees
within or without the State of Delaware. The only office of the Trust will be at
the Corporate Trust Office located in Delaware.
SECTION 2.10. 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 issuing the
Certificate and upon which the Security 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 other Basic
Documents to which it is a party.
(b) DUE QUALIFICATION. It 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 where the failure to
do so would materially and adversely affect the Depositor's ability to
perform its obligations under this Agreement and the other Basic Documents
to which it is a party.
(c) POWER AND AUTHORITY. The Depositor has the power and authority to
execute and deliver this Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the property to
be sold and assigned to and deposited with the Trust; and the execution,
delivery and performance of this Agreement has been duly authorized by the
Depositor by all necessary limited liability company action.
(d) NO CONSENT REQUIRED. The Depositor is not required to obtain the
consent of any other Person which has not been obtained or any consent,
license, approval or authorization or registration or declaration with, any
governmental authority, bureau or agency in connection with the execution,
delivery, performance validity or enforceability of this Agreement and the
other Basic Documents to which it is a party which, if not obtained, would
materially and adversely affect the Depositor's ability to
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perform its obligations under this Agreement or the other Basic Documents
to which it is a party.
(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 company 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 its knowledge, threatened against it before any court, regulatory
body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A) asserting
the invalidity of this Agreement or any other 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 other Basic Documents, (C) seeking any determination or ruling
that could reasonably be expected to materially and adversely affect its
performance of its obligations under, or the validity or enforceability of,
this Agreement or any of the other Basic Documents, or (D) seeking to
adversely affect the federal income tax or other federal, state or local
tax attributes of the Notes or the Certificate.
SECTION 2.11. 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 beneficial 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 Trust and
the Owner Trustee; 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
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effect a moratorium on its debt or take any action in furtherance of any
such action.
SECTION 2.12. FEDERAL INCOME TAX TREATMENT OF THE TRUST.
(a) For so long as the Trust has a single owner for federal income tax
purposes, it will, pursuant to Treasury Regulations promulgated under section
7701 of the Code, be disregarded as an entity distinct from the
Certificateholder for all federal income tax purposes. Accordingly, for federal
income tax purposes, the Certificateholder will be treated as (i) owning all
assets owned by the Trust, (ii) having incurred all liabilities incurred by the
Trust, and (iii) all transactions between the Trust and the Certificateholder
will be disregarded.
(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.
(c) In the event that the Trust has two equity owners for federal income
tax purposes, the Trust will be treated as a partnership. At any such time that
the Trust has two equity owners, this Agreement will be amended, in accordance
with Section 10.1 herein, and appropriate provisions will be added so as to
provide for treatment of the Trust as a partnership, including provisions to
protect the partnership from being treated as a publicly traded partnership
under the Code.
ARTICLE III.
CERTIFICATE AND TRANSFER OF INTEREST
SECTION 3.1. INITIAL OWNERSHIP. Since the formation of the Trust by the
contribution by the Depositor and until the issuance of the Certificate to the
initial Certificateholder, the Depositor has been and shall continue to be the
sole beneficiary of the Trust.
SECTION 3.2. THE CERTIFICATE. The Certificate shall 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 shall have been affixed,
authorized to sign on behalf of the Trust, shall be validly issued and entitled
to the benefit of this Agreement, notwithstanding that such individuals or any
of them shall have ceased to be so authorized prior to the authentication and
delivery of such Certificate or did not hold such offices at the date of
authentication and delivery of such Certificate. A transferee of a Certificate
shall become a Certificateholder, and shall 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.
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
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Trustee shall 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 president or any vice president, its treasurer or any assistant
treasurer without further corporate action by the Depositor, in authorized
denominations. No Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee or the person then acting as the
Owner Trustee's authenticating agent, by manual signature; such authentication
shall constitute conclusive evidence that such Certificate shall have been duly
authenticated and delivered hereunder. The Certificate shall be dated the date
of its authentication.
SECTION 3.4. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATE. The
Certificate Registrar shall 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 shall provide
for the registration of the Certificate and of transfers and exchanges of the
Certificate as herein provided. First Union Trust Company, National Association
shall be the initial Certificate Registrar.
The Certificate Registrar shall provide the Trust Collateral Agent with the
name and address of the Certificateholder on the Closing Date. Upon any
transfers of the Certificate, the Certificate Registrar shall notify the Trust
Collateral Agent of the name and address of the transferee in writing, by
facsimile, on the day of such transfer.
Upon surrender for registration of transfer of the Certificate at the
office or agency maintained pursuant to Section 3.7, the Owner Trustee shall
execute, authenticate and deliver (or shall cause the person then acting as its
authenticating agent to authenticate and deliver), in the name of the designated
transferee, a new Certificate dated the date of authentication by the Owner
Trustee or any authenticating agent.
A Certificate presented or surrendered for registration of transfer or
exchange shall 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, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("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 Exchange Act. Each Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Owner Trustee in accordance with its customary practice.
No service charge shall 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 tax or governmental charge
that may be imposed in connection with any transfer or exchange of the
Certificate.
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SECTION 3.5. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a) any
mutilated Certificate shall be surrendered to the Certificate Registrar, or if
the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar and the Owner Trustee, such security or indemnity
as may be required by them to save each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee, or
the person then acting as the Owner Trustee's authenticating agent, shall
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, the Owner Trustee or the Certificate Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the Trust, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.
SECTION 3.6. PERSONS DEEMED CERTIFICATEHOLDERS. Every Person by virtue of
becoming a Certificateholder in accordance with this Agreement shall be deemed
to be bound by the terms of this Agreement. Prior to due presentation of the
Certificate for registration of transfer, the Owner Trustee and the Certificate
Registrar and any agent of the Owner Trustee or the Certificate Registrar, may
treat the person in whose name any Certificate shall 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 any agent of the Owner Trustee, the Certificate Registrar shall be
bound by any notice to the contrary.
SECTION 3.7. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee shall
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 offices at
One Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx, 00000, as
its principal corporate trust office for such purposes. The Owner Trustee shall
give prompt written notice to the Depositor, the Certificateholder 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. Any attempted transfer of the Certificate
that would divide the ownership of the Owner Trust Estate shall be void. The
Owner Trustee shall cause any Certificate issued to contain a legend stating
"THIS CERTIFICATE IS NOT TRANSFERABLE, EXCEPT UNDER THE LIMITED CONDITIONS
SPECIFIED IN THE TRUST AGREEMENT".
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) that is
10
subject to Section 4975 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 shall be
deemed to have represented and warranted that it is not a Benefit Plan.
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 shall not take action, on
behalf of the Trust or otherwise, unless (i) at least 30 days before the taking
of such action, the Owner Trustee shall have notified the Certificateholder and,
unless an Insurer Default shall have occurred and be continuing, the Security
Insurer in writing of the proposed action and the Certificateholder and the
Security Insurer shall not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that the Certificateholder and the
Security Insurer, if applicable, have withheld consent or provided alternative
direction and (ii) with respect to the action described in subclause (a) below,
the Owner Trustee shall have obtained the prior written consent of the Security
Insurer, which consent shall not be unreasonably withheld:
(a) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute or unless such amendment would not
adversely affect the interests of the Holder);
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) 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
(d) except pursuant to Section 12.1 of the Sale and Servicing
Agreement, 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 shall notify the Certificateholder in writing of any
appointment of a successor Note Registrar or Trust Collateral Agent within five
Business Days after receipt of notice thereof.
SECTION 4.2. ACTION BY CERTIFICATEHOLDER WITH RESPECT TO CERTAIN MATTERS.
The Owner Trustee shall not have the power, except upon the direction of the
Certificateholder or the Security Insurer in accordance with the Basic
Documents, to (a)
11
remove the Servicer under the Sale and Servicing Agreement pursuant to Section
9.2 thereof or (b) except as expressly provided in the Basic Documents, sell the
Receivables after the termination of the Indenture. The Owner Trustee shall 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 shall 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 other Basic Documents or would be contrary to Section 2.3 nor shall the
Owner Trustee be obligated to follow any such direction, if given.
(b) The Certificateholder shall 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 shall 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 shall
have made written request upon the Owner Trustee to institute such action, suit
or proceeding in the name of the Trust under this Agreement and shall have
offered to the Owner Trustee such reasonable 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, shall have 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 or Section 5.3. For the
protection and enforcement of the provisions of this Section, the
Certificateholder and the Owner Trustee shall be entitled to such relief as can
be given either at law or in equity.
SECTION 4.4. RIGHTS OF SECURITY INSURER. Notwithstanding anything to the
contrary in the Basic Documents, without the prior written consent of the
Security Insurer (so long as no Insurer Default shall have occurred and be
continuing), the Owner Trustee shall not (i) remove the 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, (iii)
authorize the merger or consolidation of the Trust with or into any other
business trust or other entity (other than in accordance with Section 3.10 of
the Indenture) or (iv) amend the Certificate of Trust (other than any amendment
required by the Business Trust Statute or as would not materially adversely
affect the interests of the Security Insurer).
ARTICLE V.
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 5.1. GENERAL AUTHORITY.
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(a) 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 Depositor shall approve as evidenced conclusively by the
Owner Trustee's execution thereof, and on behalf of the Trust, to direct the
Trustee to authenticate and deliver Class A-1 Notes in the aggregate principal
amount of $116,000,000 and the Class A-2 Notes in the aggregate principal amount
of $185,000,000. In addition to the foregoing, the Owner Trustee is authorized,
but shall not be obligated, to take all actions required of the Trust pursuant
to the 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 so long as such activities are consistent with the terms of the
Basic Documents.
(b) The Owner Trustee shall sign on behalf of the Trust any applicable tax
returns of the Trust, unless applicable law requires a Certificateholder to sign
such documents.
SECTION 5.2. GENERAL DUTIES. It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Sale and Servicing Agreement 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 shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement 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 shall not
be liable for the default or failure of the Servicer to carry out its
obligations under the Sale and Servicing Agreement.
SECTION 5.3. ACTION UPON INSTRUCTION.
(a) Subject to Article IV and the terms of the Spread Account Agreement,
the Security Insurer (so long as an Insurer Default shall not have occurred and
be continuing) or the Certificateholder (if an Insurer Default shall have
occurred and be continuing) (the "INSTRUCTING PARTY") shall have the exclusive
right to direct the actions of the Owner Trustee in the management of the Trust,
so long as such instructions are not inconsistent with the express terms set
forth herein or in any Basic Document. The Instructing Party shall not instruct
the Owner Trustee in a manner inconsistent with this Agreement or the other
Basic Documents.
(b) The Owner Trustee shall not be required to take any action hereunder or
under any Basic Document if the Owner Trustee shall have reasonably determined,
or shall have been advised by counsel, that such action is likely to result in
liability on the part of the Owner Trustee or is contrary to the terms hereof or
of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances)
13
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 shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten days of
such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the other Basic Documents, as it shall deem
to be in the best interests of the Certificateholder, and shall have no
liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the application of
any provision of this Agreement or any other Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Instructing
Party requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the other Basic
Documents, as it shall deem to be in the best interests of the
Certificateholder, and shall have no liability to any Person for such action or
inaction.
SECTION 5.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the 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
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Securities and Exchange Commission 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 shall not manage, control, use, sell, dispose of or
14
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 other Basic Documents
and (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 shall not take any action (a)
that is inconsistent with the purposes of the Trust set forth in Section 2.3 or
(b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes. The
Certificateholder shall not direct the Owner Trustee to take action that would
violate the provisions of this Section.
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 this Agreement and the other Basic
Documents. The Owner Trustee shall not be answerable or accountable hereunder or
under any Basic Document under any circumstances, except (i) for its own willful
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 any investments issued by the Owner Trustee or any branch
or affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the
instructions of the Instructing Party, the Servicer or the
Certificateholder;
(c) no provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur
any financial liability in the performance of any of its rights or
powers hereunder or under any Basic Document if the Owner Trustee
shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not
reasonably assured or provided to it;
15
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement or for the due
execution hereof by the Depositor or 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 shall in no event assume or incur
any liability, duty or obligation to the Security Insurer, Trustee,
Trust Collateral Agent, the Collateral Agent, any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in
the other Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Security Insurer, the Trustee, the Trust Collateral
Agent or the Servicer under any of the Basic Documents or otherwise
and the Owner Trustee shall have no obligation or liability to perform
the obligations under this Agreement or the Basic Documents that are
required to be performed by the Trustee under the Indenture or the
Trust Collateral Agent or the Servicer under the Sale and Servicing
Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any Basic Document, at
the request, order or 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 shall not be construed as a duty, and the Owner
Trustee shall not be answerable for other than its negligence, bad
faith or willful misconduct in the performance of any such act.
SECTION 6.2. FURNISHING OF DOCUMENTS. The Owner Trustee shall 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 Security Insurer
(which shall have relied on such representations and warranties in issuing the
Note Policy), that:
16
(a) It is a national banking association, and is duly authorized and
licensed under applicable law to conduct its business as presently conducted. 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) 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 shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. The Owner
Trustee may accept a certified copy of a resolution of the board of directors or
other governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which is
not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer, secretary or other authorized officers of the relevant party,
as to such fact or matter, and such certificate shall constitute full protection
to the Owner Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the other
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 shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and according to such opinion not
contrary to this Agreement or any other Basic Document.
SECTION 6.5. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in this
Article VI, in accepting the trust hereby created First Union Trust Company,
National Association 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
17
by this Agreement or any Basic Document shall 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) shall be taken as the
statements of the Depositor 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 other 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 shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Receivable, or the
perfection and priority of any security interest created by any Receivable in
any 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 Trustee or the Servicer or any subservicer taken in the name of
the Owner Trustee.
SECTION 6.7. OWNER TRUSTEE MAY OWN NOTES. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of the Notes
and may deal with the Depositor, the 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 other Basic Documents to
which the Trust or the Owner Trustee is a party shall be made only from the
income and proceeds of the Owner Trust Estate and only to the extent that the
Trust shall have received income or proceeds from the Owner Trust Estate to make
such payments in accordance with the terms hereof. First Union Trust Company,
National Association, or any successor thereto, in its individual capacity,
shall not be liable for any amounts payable under this Agreement or any of the
other 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 First Union Trust Company,
National Association or any other successor thereto, nor the Owner Trustee shall
be required to take any action in any jurisdiction other than in the State of
Delaware if the taking of such action will, 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
18
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 State of Delaware becoming payable by First Union Trust Company,
National Association (or any successor thereto); or (iii) subject First Union
Trust Company, National Association (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
First Union Trust Company, National Association (or any successor thereto) or
the Owner Trustee, as the case may be, contemplated hereby.
ARTICLE VII.
COMPENSATION OF OWNER TRUSTEE
SECTION 7.1. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between Mercury Finance and the
Owner Trustee, and the Owner Trustee shall receive payment of such fees, and
shall be entitled to be reimbursed for its other reasonable expenses hereunder,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder and under the other Basic Documents. Such fees and expenses shall be
paid and reimbursed in accordance with Section 5.7(b) of the Sale and Servicing
Agreement.
SECTION 7.2. INDEMNIFICATION. The Depositor shall be liable as primary
obligor for, and shall indemnify the Owner Trustee and its officers, directors,
successors, assigns, agents and servants (collectively, the "INDEMNIFIED
PARTIES") from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever (collectively, "EXPENSES") which may at any time be
imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
other Basic Documents, the Owner Trust Estate, the administration of the Owner
Trust Estate or the action or inaction of the Owner Trustee hereunder, except
only that the Depositor shall not be liable for or required to indemnify the
Owner Trustee from and against Expenses arising or resulting from any of the
matters described in the third sentence of Section 6.1. The indemnities
contained in this Section and the rights under Section 7.1 shall 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, the Owner Trustee's choice of legal
counsel shall be subject to the approval of the Depositor which approval shall
not be unreasonably withheld. Mercury Finance shall be jointly and severally
liable for the indemnification duties and obligations of the Depositor which are
described in this Section 7.2.
SECTION 7.3. PAYMENTS TO THE OWNER TRUSTEE. Any amounts paid to the Owner
Trustee pursuant to this Article VII shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment.
19
SECTION 7.4. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in this
Agreement or any other 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 shall be with recourse to the Owner Trust Estate only and
specifically shall be without recourse to the assets of the Holder and are
payable only in accordance with the Sale and Servicing Agreement.
ARTICLE VIII.
TERMINATION OF TRUST AGREEMENT
SECTION 8.1. TERMINATION OF TRUST AGREEMENT.
(a) This Agreement and the Trust shall terminate in accordance with Section
3808 of the Business Trust Statute 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 Section 5.7(b) of the Sale and Servicing
Agreement and pursuant to Section 3.03(b) of the Spread Account Agreement, in
its capacity as Reversionary Holder thereunder and the payment to the Security
Insurer of all amounts payable or reimbursable to it pursuant to the Sale and
Servicing Agreement and the Insurance Agreement; PROVIDED, HOWEVER, that the
rights to indemnification under Section 7.2 and the rights under Section 7.1
shall survive the termination of the Trust. The Seller or the Servicer shall
promptly notify the Owner Trustee and the Security Insurer of any prospective
termination pursuant to this Section. The bankruptcy, liquidation, dissolution,
death or incapacity of the Certificateholder shall 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 shall be entitled to
revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which the Certificateholder shall surrender the Certificate to the
Trust Collateral Agent for payment of the final distribution and cancellation,
shall 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 Distribution Date upon or with respect to which final payment of
the Certificate shall be made upon presentation and surrender of the Certificate
at the office of the Trust Collateral Agent therein designated, (ii) the amount
of any such final payment, and (iii) that the Record Date otherwise applicable
to such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificate at the office of the Trust
Collateral Agent therein specified. The Owner Trustee shall give such notice to
the Trust Collateral Agent at the
20
time such notice is given to the Certificateholder. Upon presentation and
surrender of the Certificate, the Trust Collateral Agent shall cause to be
distributed to the Certificateholder amounts distributable on such Distribution
Date pursuant to Section 5.7 of the Sale and Servicing Agreement.
In the event that the Certificateholder shall not surrender the Certificate
for cancellation within six months after the date specified in the above
mentioned written notice, the Owner Trustee shall give a second written notice
to the Certificateholder to surrender the Certificate for cancellation and
receive the final distribution with respect thereto. If within one year after
the second notice the Certificates shall 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 shall be paid out of the
funds and other assets that shall remain subject to this Agreement. Any funds
remaining in the Trust after exhaustion of such remedies shall be distributed,
subject to applicable escheat laws, by the Owner Trustee to the Holder.
(d) Upon the completion of the winding up of the Trust in accordance with
Section 3808 of the Business Trust Statute and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE IX.
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 9.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner Trustee
shall at all times be a corporation (i) satisfying the provisions of Section
3807(a) of the Business Trust Statute; (ii) authorized to exercise corporate
trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iv) acceptable to the Security Insurer in its sole discretion,
so long as an Insurer Default shall not have occurred and be continuing. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 9.2.
SECTION 9.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Depositor, the Security Insurer and the Servicer.
Upon receiving such notice of resignation, the Depositor shall promptly appoint
a successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee, provided that the Depositor shall have received written
confirmation from each of the Rating Agencies that the proposed appointment will
not result in an increased capital charge to the Security Insurer by either of
the
21
Rating Agencies. If no successor Owner Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Security Insurer may petition
any court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 9.1 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Owner Trustee shall be
legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver
of the Owner Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Owner Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor with the consent of the Security Insurer (so long as an Insurer
Default shall not have occurred and be continuing) may remove the Owner Trustee.
If the Depositor shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Depositor shall promptly appoint a successor
Owner Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the outgoing Owner Trustee so removed, one copy to the
Security Insurer and one copy to the successor Owner Trustee and payment of all
fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until 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 Depositor shall provide notice of such resignation
or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 9.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee appointed
pursuant to Section 9.2 shall execute, acknowledge and deliver to the Depositor,
the Servicer, the Security Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall 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 Depositor and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties and
obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 9.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to the Certificateholder, the Trustee, the Noteholders and the Rating
Agencies. If the Servicer shall fail to mail such notice
22
within 10 days after acceptance of appointment by the successor Owner Trustee,
the successor Owner Trustee shall cause such notice to be mailed at the expense
of the 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 shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 9.1, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided
further that the Owner Trustee shall mail notice of such merger or consolidation
to the Rating Agencies.
SECTION 9.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. Notwithstanding
any other provisions of this Agreement, at any time, for the purpose of meeting
any legal requirements of any jurisdiction in which any part of the Owner Trust
Estate or any Financed Vehicle may at the time be located, the Servicer and the
Owner Trustee acting jointly shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Owner Trustee and
the Security Insurer to act as co-trustee, jointly with the Owner Trustee, or
separate trustee or separate trustees, of all or any part of the 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 shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, the Owner Trustee subject, unless an Insurer Default shall have
occurred and be continuing, to the approval of the Security Insurer (which
approval shall not be unreasonably withheld) shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee pursuant to
Section 9.1 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 9.3.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Owner Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
23
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the 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 shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee and a
copy thereof given to the Servicer and the Security Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. SUPPLEMENTS AND AMENDMENTS.
(a) This Agreement may be amended by the Depositor and the Owner Trustee,
with the prior written consent of the Security Insurer (unless both (i) no
Insurer Default shall have occurred and is continuing and (ii) the proposed
amendment would not materially and adversely affect the interests of the
Security Insurer) and with prior written notice to the Rating Agencies, without
the consent of any of the Noteholders or the Certificateholder, (i) to cure any
ambiguity or defect or (ii) to correct, supplement or modify any provisions in
this Agreement; PROVIDED, HOWEVER, that such action shall not, as evidenced by
an Opinion of Counsel which may be based upon a certificate of the Servicer,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder.
(b) This Agreement may also be amended from time to time, with the prior
written consent of the Security Insurer (unless both (i) no an Insurer Default
shall have occurred and be continuing and (ii) the proposed amendment would not
materially and adversely affect the interests of the Security Insurer) by the
Depositor and the Owner Trustee, with prior written notice to the Rating
Agencies, to the extent such amendment materially and adversely affects the
interests of the Noteholders, with the consent of the Note Majority, and the
consent of the
24
Certificateholder (which consent of any Holder of a Certificate or Note given
pursuant to this Section or pursuant to any other provision of this Agreement
shall be conclusive and binding on such Holder) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholder; PROVIDED, HOWEVER, that, subject to the express rights of
the Security Insurer under the Basic Documents, no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Receivables or distributions that shall be
required to be made for the benefit of the Noteholders or the Certificateholder
or (b) reduce the aforesaid percentage of the Note Majority required to consent
to any such amendment, without the consent of the Holders of all the outstanding
Notes and the Certificateholder. If an Indenture Event of Default shall have
occurred and be continuing, no amendment shall adversely affect the Security
Insurer.
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to the Certificateholder, the Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholder, the
Noteholders or the Trustee pursuant to this Section to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of the Noteholders and the Certificateholder
provided for in this Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by Noteholders and the
Certificateholder shall be subject to such reasonable requirements as the Owner
Trustee may prescribe. Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such amendment
with the Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 10.2. NO LEGAL TITLE TO OWNER TRUST ESTATE IN CERTIFICATEHOLDER.
The Certificateholder shall not have legal title to any part of the Owner Trust
Estate. 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 shall 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 Security Insurer, the Trustee and the Noteholders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Owner Trust
25
Estate or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 10.4. NOTICES.
(a) Unless otherwise expressly specified or permitted by the terms hereof,
all notices shall be in writing and shall be deemed given upon receipt
personally delivered, delivered by overnight courier or mailed first class mail
or certified mail, in each case return receipt requested, and shall be deemed to
have been duly given upon receipt, if to the Owner Trustee, addressed to the
Corporate Trust Office;
if to the Depositor, addressed to MFN Securitization LLC, 000 Xxxxx
Xxxxx, Xxxxx 000, Xxxx Xxxxxx, Xxxxxxxx, 00000;
if to the Security Insurer, addressed to Security Insurer, XL Capital
Assurance, Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx Xxxx, Xxx Xxxx
00000 (in each case in which notice or other communication to the
Security Insurer refers to an Event of Default, a claim on the Note
Policy or with respect to which failure on the part of the Security
Insurer to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should
also be sent to the attention of the General Counsel and the
Head-Financial Guaranty Group and shall be marked to indicate "URGENT
MATERIAL ENCLOSED");
or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of the
Holder. Any notice so mailed within the time prescribed in this Agreement shall
be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 10.5. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall 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 shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
26
SECTION 10.7. ASSIGNMENTS; SECURITY INSURER. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
SECTION 10.8. NO RECOURSE. The Certificateholder by accepting a Certificate
acknowledges that the Certificate represents a beneficial interest in the Trust
only and do not represent interests in or obligations of the Seller, the
Servicer, the Owner Trustee, the Trustee, the Security 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 other Basic Documents.
SECTION 10.9. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 10.10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 10.11. SERVICER AND SUBSERVICER. The Servicer and each Subservicer
are 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 shall 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 shall execute and deliver to the Servicer or the
Subservicer, as the case may be a limited power of attorney appointing the
Servicer or the Subservicer, as the case may be 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.
SECTION 10.12. OTHER MATTERS RELATING TO THE INSURER.
(a) The Security Insurer is an express third-party beneficiary of this
Agreement.
(b) The Owner Trustee shall provide the Security Insurer copies of any
report, notice, Opinion of Counsel, Officer's Certificate, request for consent
or request for amendment to any document related hereto promptly upon the Owner
Trustee's production or receipt thereof.
[Remainder of page intentionally left blank.]
27
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.
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
Owner Trustee
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Trust Officer
MFN SECURITIZATION LLC
Depositor
By: /s/ Xxxxxx Xxxx
--------------------------------------------
Name: Xxxxxx Xxxx
Title: President
ACKNOWLEDGED AND AGREED TO:
MERCURY FINANCE COMPANY LLC,
Solely with respect to Section 7.1 and 7.2
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
S-1
EXHIBIT A
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 used automobiles and sold to the Trust by
MFN Securitization LLC.
(THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF MFN
SECURITIZATION LLC OR ANY OF ITS AFFILIATES, EXCEPT TO THE EXTENT DESCRIBED
BELOW.)
THIS CERTIFIES THAT [____________] is the registered owner of a
nonassessable, fully-paid, beneficial ownership interest in certain
distributions of MFN Auto Receivables Trust 2001-A (the "TRUST") formed by MFN
Securitization LLC, a Delaware limited liability company (the "SELLER").
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is the Certificate referred to
in the within-mentioned Trust Agreement.
[________________________________] [________________________________]
not in its individual capacity but not in its individual capacity but
solely as Owner Trustee solely as Owner Trustee
By: ________________________________ or
By: [_____________________________]
Authenticating Agent
By:
1
The Trust was created pursuant to a Declaration of Trust dated as of May
29, 2001, as amended and restated as of June 1, 2001 (the "TRUST AGREEMENT"),
between the Seller and First Union Trust Company, National Association 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.
This is the duly authorized Certificate designated as "ASSET BACKED
CERTIFICATE" (herein called the "CERTIFICATE"). Also issued under the Indenture,
dated as of June 1, 2001, among the Trust, Xxxxx Fargo Bank Minnesota, National
Association, as trustee and trust collateral agent, are two classes of Notes
designated as "CLASS A-1 4.05125% ASSET BACKED NOTES" (the "CLASS A-1 NOTES")
and "CLASS A-2 5.07000% ASSET BACKED NOTES" (the "CLASS A-2 NOTES" and together
with the Class A-1 Notes, the "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 retail installment sale contracts secured by automobiles (the
"RECEIVABLES"), all monies received on or after Cutoff Date (excluding any
Add-on Balances), 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 Seller in and to
the Purchase Agreement dated as of June 1, 2001 between Mercury Finance Company
LLC,. and the Seller 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.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Owner 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 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 Owner
Trustee in the City of Wilmington, the State of Delaware.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Owner Trustee, by manual signature, this
Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or the Sale and Servicing Agreement or be valid for any purpose.
2
THIS CERTIFICATE SHALL 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
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
THIS CERTIFICATE IS NOT TRANSFERABLE, EXCEPT UNDER THE LIMITED CONDITIONS
SPECIFIED IN THE TRUST AGREEMENT.
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.
MFN AUTO RECEIVABLES TRUST 2001-A
By: First Union Trust Company,
National Association
not in its individual capacity but
solely as Owner Trustee
Dated: June 28, 2001
4
(Reverse of Certificate)
The Certificate does not represent an obligation of, or an interest in, the
Seller, the Servicer, the Owner Trustee, the Security Insurer 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 other 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 Seller, and at such other places, if any, designated by the
Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller under the Trust Agreement at any time by the Seller and the Owner Trustee
with the consent of the Security Insurer and the Note Majority and the
Certificateholder. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and on all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
Certificateholder.
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 in the City of Wilmington, the State of Delaware, 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 First Union Trust Company, National Association. 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 tax or governmental charge payable in connection
therewith.
The Owner Trustee and any agent of the Owner Trustee may treat the person
in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee nor any such agent shall be affected by
any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and the
Trust created thereby shall terminate upon the payment to the Certificateholder
of all amounts required to be paid to it pursuant to the Trust Agreement and the
Sale and Servicing Agreement and the disposition of all property held as part of
the Trust. The Seller may at its option purchase the corpus of the Trust at a
price specified in the Sale and Servicing Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of the
Certificate;
5
however, such right of purchase is exercisable, subject to certain restrictions,
only as of the last day of any Collection Period as of which the Pool Balance is
10% or less of the Original Pool Balance.
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) that is
subject to subject to Section 4975 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 shall be deemed to
have represented and warranted that it is not a Benefit Plan.
The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, 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 shall have been executed by
an authorized officer of the Owner Trustee, by manual or facsimile signature,
this Certificate shall not entitle the Holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.
6
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: By:____________________________________________*
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.
7
EXHIBIT B
FORM OF
CERTIFICATE OF TRUST
OF
MFN AUTO RECEIVABLES TRUST 2001-A
This Certificate of Trust of MFN Auto Receivables Trust 2001-A (the
"TRUST") is being duly executed and filed on behalf of the Trust by First Union
Trust Company, National Association, a national banking association, as trustee,
to form a business trust under the Delaware Business Trust Act (12 DEL. C.
Section 3801 ET SEQ.) (the "ACT").
1. NAME. The name of the business trust formed hereby is MFN Auto
Receivables Trust 2001-A.
2. DELAWARE TRUSTEE. The name and business address of the trustee with a
principal place of business in the State of Delaware is First Union Trust
Company, National Association, One Xxxxxx Square, 000 Xxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate of
Trust in accordance with Section 3811(a)(1) of the Act.
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as trustee of the Trust
By:_____________________________________
Name:
Title:
