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TRUST AGREEMENT
AMONG
HATTIESBURG GAS STORAGE COMPANY
SELLER
HATTIESBURG INDUSTRIAL GAS SALES COMPANY
SELLER AND SERVICER
AND
WILMINGTON TRUST COMPANY
OWNER TRUSTEE
DATED AS OF NOVEMBER 21, 1995
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . 1
SECTION 1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
ORGANIZATION. . . . . . . . . . . . . 1
SECTION 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2.2 Office . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2.3 Purposes and Powers. . . . . . . . . . . . . . . . . . 1
SECTION 2.4 Appointment of Owner Trustee . . . . . . . . . . . . . 2
SECTION 2.5 Initial Capital Contribution of Owner
Trust Estate . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.6 Declaration of Trust . . . . . . . . . . . . . . . . . 2
SECTION 2.7 Liability of the Residual Certificateholder
and the Investor Certificateholders. . . . . . . . . . 3
SECTION 2.8 Title to Trust Property. . . . . . . . . . . . . . . . 3
SECTION 2.9 Situs of Trust . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.10 Representations and Warranties of
Servicer and Seller. . . . . . . . . . . . . . . . . . 3
SECTION 2.11 Tax Treatment. . . . . . . . . . . . . . . . . . . . . 3
ARTICLE III
THE INVESTOR CERTIFICATES. . . . . . . . . . 4
SECTION 3.1 Investor Certificates. . . . . . . . . . . . . . . . . 4
SECTION 3.2 Form of the Investor Certificates. . . . . . . . . . . 4
SECTION 3.3 Execution, Authentication and Delivery . . . . . . . . 4
SECTION 3.4 Registration; Registration of Transfer
and Exchange of Investor Certificates. . . . . . . . . 5
SECTION 3.5 Investor Certificate Transfer Restrictions . . . . . . 6
SECTION 3.6 Mutilated, Destroyed, Lost or Stolen
Investor Certificates. . . . . . . . . . . . . . . . . 7
SECTION 3.7 Persons Deemed Investor Certificateholders . . . . . . 8
SECTION 3.8 Access to List of Investor Certificateholders'
Names and Addresses. . . . . . . . . . . . . . . . . . 8
SECTION 3.9 Maintenance of New York Office . . . . . . . . . . . . 8
SECTION 3.10 Distributions. . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.11 Investor Certificates Held by HGSC . . . . . . . . . . 9
SECTION 3.12 Servicer or HGSC as Investor
Certificateholder. . . . . . . . . . . . . . . . . . . 10
ARTICLE IV
THE RESIDUAL CERTIFICATE. . . . . . . . . . 10
SECTION 4.1 Residual Certificate . . . . . . . . . . . . . . . . . 10
SECTION 4.2 Form of the Residual Certificate . . . . . . . . . . . 10
SECTION 4.3 Execution, Authentication and Delivery . . . . . . . . 11
SECTION 4.4 No Transfer. . . . . . . . . . . . . . . . . . . . . . 11
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PAGE
ARTICLE V
ACCOUNTS; DISTRIBUTIONS . . . . . . . . . . 11
SECTION 5.1 Establishment of Accounts. . . . . . . . . . . . . . . 11
SECTION 5.2 Distributions. . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.3 Method of Payment. . . . . . . . . . . . . . . . . . . 17
SECTION 5.4 Accounting and Reports to Certificateholders,
the Internal Revenue Service and Others. . . . . . . . 17
SECTION 5.5 Signature on Returns; Tax Matters Partner. . . . . . . 17
ARTICLE VI
CAPITAL ACCOUNTS; ALLOCATIONS. . . . . . . . . 17
SECTION 6.1 Capital Accounts . . . . . . . . . . . . . . . . . . . 17
SECTION 6.2 Allocations of Income and Losses . . . . . . . . . . . 18
ARTICLE VII
ACTIONS BY THE OWNER TRUSTEE. . . . . . . . . 18
SECTION 7.1 Action by Investor Certificateholders
with Respect to Certain Matters. . . . . . . . . . . . 18
SECTION 7.2 Action by Investor Certificateholders
with Respect to Bankruptcy . . . . . . . . . . . . . . 19
SECTION 7.3 Restrictions on Certificateholders' Power. . . . . . . 19
ARTICLE VIII
COVENANTS OF THE SERVICER AND OTHERS. . . . . . . 19
SECTION 8.1 Covenants of the Servicer and Others . . . . . . . . . 19
SECTION 8.2 Purchase of Investor Certificates. . . . . . . . . . . 19
ARTICLE IX
THE OWNER TRUSTEE. . . . . . . . . . . . 19
SECTION 9.1 Duties of the Owner Trustee. . . . . . . . . . . . . . 19
SECTION 9.2 Rights of the Owner Trustee. . . . . . . . . . . . . . 20
SECTION 9.3 Acceptance of Trusts and Duties. . . . . . . . . . . . 21
SECTION 9.4 Action upon Instruction by Investor
Certificateholders . . . . . . . . . . . . . . . . . . 22
SECTION 9.5 Furnishing of Documents. . . . . . . . . . . . . . . . 23
SECTION 9.6 Representations and Warranties of
the Owner Trustee. . . . . . . . . . . . . . . . . . . 23
SECTION 9.7 Reliance; Advice of Counsel. . . . . . . . . . . . . . 24
SECTION 9.8 Owner Trustee May Own Investor Certificates. . . . . . 24
SECTION 9.9 Compensation and Indemnity . . . . . . . . . . . . . . 24
SECTION 9.10 Replacement of the Owner Trustee . . . . . . . . . . . 25
SECTION 9.11 Merger or Consolidation of the Owner Trustee . . . . . 26
SECTION 9.12 Appointment of Co-Trustee or Separate
Trustee. . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 9.13 Eligibility Requirements for
the Owner Trustee. . . . . . . . . . . . . . . . . . . 27
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PAGE
ARTICLE X
TERMINATION OF TRUST AGREEMENT . . . . . . . . 28
SECTION 10.1 Termination of Trust Agreement . . . . . . . . . . . . 28
SECTION 10.2 Dissolution upon Bankruptcy of the Residual
Certificateholder. . . . . . . . . . . . . . . . . . . 29
ARTICLE XI
AMENDMENTS AND WAIVERS . . . . . . . . . . 30
SECTION 11.1 Purpose of Amendments and Waivers. . . . . . . . . . . 30
SECTION 11.2 Form of Amendments or Waivers. . . . . . . . . . . . . 31
ARTICLE XII
MISCELLANEOUS. . . . . . . . . . . . . 31
SECTION 12.1 No Legal Title to Owner Trust Estate . . . . . . . . . 31
SECTION 12.2 Limitations on Rights of Others. . . . . . . . . . . . 31
SECTION 12.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 12.4 Severability . . . . . . . . . . . . . . . . . . . . . 32
SECTION 12.5 Counterparts . . . . . . . . . . . . . . . . . . . . . 32
SECTION 12.6 Successors and Assigns . . . . . . . . . . . . . . . . 32
SECTION 12.7 Confidentiality. . . . . . . . . . . . . . . . . . . . 32
SECTION 12.8 No Recourse. . . . . . . . . . . . . . . . . . . . . . 33
SECTION 12.9 Headings . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 12.10 Collateral Sharing and Security Agreement. . . . . . . 33
SECTION 12.11 Governing Law. . . . . . . . . . . . . . . . . . . . . 34
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SCHEDULES
Schedule 1 Schedule of Monthly Return Of Capital on the Certificates
Schedule 2 Schedule of Payments and Distributions in Respect of the
Residual Certificate
Schedule 3 Closing Conditions
EXHIBITS
Exhibit A Form of Investor Certificate
Exhibit B Form of Residual Certificate
Exhibit C Form of Certificate of Trust
Exhibit D Form of Undertaking Letter
Exhibit E Form of Servicer's Certificate
Exhibit F Operation of Trust
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TRUST AGREEMENT, dated as of November 21, 1995, by and among
Hattiesburg Gas Storage Company, a Delaware general partnership ("HGSC"),
Hattiesburg Industrial Gas Sales Company, a Delaware corporation (the "Servicer"
and together with HGSC, the "Seller"), and Wilmington Trust Company, as owner
trustee (the "Owner Trustee").
The Servicer, the Seller and the Owner Trustee hereby agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. Certain capitalized terms used in this
Agreement shall have the respective meanings assigned to them in Part I of
APPENDIX A to the Sale and Servicing Agreement. All references herein to "the
Agreement" or "this Agreement" are to this Trust Agreement as it may be amended
and supplemented from time to time, the Exhibits hereto and the capitalized
terms used herein which are defined in such APPENDIX A, and all references
herein to Articles, Sections and subsections are to Articles, Sections and
subsections of this Agreement unless otherwise specified. The rules of
construction set forth in Part II of such APPENDIX A shall be applicable to this
Agreement.
ARTICLE II
ORGANIZATION
SECTION 2.1 NAME. The Trust created hereby shall be known as the
"FRGC Owner Trust" in which name the Owner Trustee may conduct the business of
the Trust, make and execute contracts and other instruments on behalf of the
Trust and xxx and be sued on behalf of the Trust.
SECTION 2.2 OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Certificateholders
and the Servicer.
SECTION 2.3 PURPOSES AND POWERS. The purpose of the Trust is to
engage in the following activities:
(i) to acquire, manage and hold the Purchased Contract
Receivables, the other Purchased Property and the other parts of the Owner
Trust Estate;
(ii) to issue two classes of certificates, designated as the
"Investor Certificates" and the "Residual Certificate" each such class to
have the rights and restrictions provided for herein;
(iii) to make payments or distributions on the Certificates
to the Certificateholders, to make deposits into and withdrawals from the
Investment Account, the Collection Account and other accounts established
pursuant to the
Basic Trust Documents and to pay the organizational,
start-up and transactional expenses of the Trust;
(iv) to enter into and perform its obligations and exercise
its rights under the Basic Trust Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable, desirable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith;
and
(vi) subject to compliance with the Basic Trust Documents,
to engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of payments or
distributions to the Certificateholders.
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 Trust Documents. As of the date hereof, the Trust owns no real
property in the State of Louisiana.
SECTION 2.4 APPOINTMENT OF OWNER TRUSTEE. HGSC hereby appoints the
Owner Trustee as the 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 OWNER TRUST ESTATE. HGSC
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges
receipt in trust from HGSC, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and shall be
deposited in the Collection Account. Prior to the issuance of the Certificates
to the Investor Certificateholders, HGSC shall be the sole beneficiary of the
Trust. HGSC shall pay organizational expenses of the Trust as they may arise or
shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by it.
SECTION 2.6 DECLARATION OF TRUST. The Owner Trustee hereby declares
that it shall hold the Owner Trust Estate in trust upon and subject to the
conditions and obligations set forth herein and in the Sale and Servicing
Agreement for the use and benefit of the Certificateholders. It is the
intention of the parties hereto that the Trust constitute a business trust under
the Business Trust Statute, that this Agreement constitute the governing
instrument of such business trust and that the Certificates represent the equity
interests therein. The rights of the Certificateholders shall be determined as
set forth herein and in the Business Trust Statute and the relationship between
the parties hereto created by this Agreement shall not constitute indebtedness
for any purpose. It is the intention of the parties hereto that, solely for
purposes of federal income taxes, state and local income and franchise taxes,
and any other taxes imposed upon, measured by or based upon gross or net income,
the Trust shall be treated as a partnership. The parties agree that, unless
otherwise required by appropriate tax authorities, the Trust shall file or cause
to be filed annual or other
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necessary returns, reports and other forms consistent with the characterization
of the Trust as a partnership for such tax purposes. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth in
this Agreement, the Sale and Servicing Agreement and the Business Trust Statute
with respect to accomplishing the purposes of the Trust.
SECTION 2.7 LIABILITY OF THE RESIDUAL CERTIFICATEHOLDER AND THE
INVESTOR CERTIFICATEHOLDERS.
(a) The Residual Certificateholder shall be liable directly to and
shall indemnify the Trust and any Investor Certificateholder for all losses,
claims, damages, liabilities and expenses (collectively, "Losses") incurred by
the Trust or such Investor Certificateholder to the extent that the Residual
Certificateholder would be liable if the Trust were a partnership under the
Delaware Revised Uniform Limited Partnership Act in which the Residual
Certificateholder were a general partner; PROVIDED, HOWEVER, that the Residual
Certificateholder shall not be liable for any Losses incurred by an Investor
Certificateholder as a result of any default by an Obligor under the Purchased
Contract Receivables.
(b) No Investor Certificateholder, other than the Residual
Certificateholder to the extent set forth in subsection 2.7(a), shall have any
personal liability for any liability or obligation of the Trust.
SECTION 2.8 TITLE TO TRUST PROPERTY. 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 or a
separate trustee, as the case may be.
SECTION 2.9 SITUS OF TRUST. The Trust shall be located and
administered in the State of Delaware. The Trust shall not have any employees
in any state other than Delaware; PROVIDED, HOWEVER, that nothing herein shall
restrict or prohibit the Owner Trustee from having employees within or without
the State of Delaware. The only office of the Trust shall be the Corporate
Trust Office in Delaware.
SECTION 2.10 REPRESENTATIONS AND WARRANTIES OF SERVICER AND SELLER.
Each of the Seller and the Servicer (in its capacity as Servicer and Operator)
hereby represents and warrants to the Owner Trustee, for the benefit of the
Owner Trustee and the Investor Certificateholders, that (i) each of the
representations and warranties of the Seller and the Servicer contained in
Sections 3.1 and 3.2 of the Sale and Servicing Agreement are true and correct as
of the date hereof and (ii) after giving effect to the closing of the
transactions contemplated by the Basic Documents, the Consolidated Net Worth of
HGSC will be at least equal to the Initial Required Net Worth.
SECTION 2.11 TAX TREATMENT. HGSC and the Owner Trustee, by entering
into this Agreement, and the Investor Certificateholders, by acquiring any
Investor Certificate, (i) express their intention that the Certificates qualify
under
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applicable tax law as partnership interests in a partnership which holds the
Owner Trust Estate for their benefit, and (ii) unless otherwise required by
appropriate taxing authorities, agree to treat the Certificates as partnership
interests in such a partnership for the purposes of federal income taxes, state
and local income and franchise taxes, and any other taxes imposed upon, measured
by or based upon gross or net income.
ARTICLE III
THE INVESTOR CERTIFICATES
SECTION 3.1 INVESTOR CERTIFICATES. The Investor Certificates shall
represent fractional undivided beneficial interests in the Trust, including the
right to receive, subject to the terms and conditions set forth herein,
distributions to be made to the Investor Certificateholders as set forth in
Article V hereof.
SECTION 3.2 FORM OF THE INVESTOR CERTIFICATES.
(a) The Investor Certificates shall be substantially in the form set
forth in EXHIBIT A and shall be issued in minimum denominations of $1,000,000,
except for one Investor Certificate which may be issued to HGSC in any
denomination. The Investor Certificates shall be executed on behalf of the
Trust by manual or facsimile signature of a Responsible Officer of the Owner
Trustee. Investor Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be, when authenticated pursuant
to Section 3.3, validly issued and entitled to the benefits of this Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of such Investor
Certificates or did not hold such offices at the date of authentication and
delivery of such Investor Certificates.
(b) The Investor Certificates shall be issued in definitive, fully-
registered form only. The Investor Certificates shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods (with
or without steel engraved borders) all as determined by the officers executing
such Investor Certificates, as evidenced by their execution of such Investor
Certificates.
(c) The terms of the Investor Certificates set forth in EXHIBIT A
(including, without limitation, the legend set forth therein) shall form part of
this Agreement.
SECTION 3.3 EXECUTION, AUTHENTICATION AND DELIVERY. Concurrently
with the sale of the Purchased Contract Receivables to the Trust pursuant to the
Sale and Servicing Agreement, the Owner Trustee shall cause the Investor
Certificates in an aggregate amount equal to the initial Investor Certificate
Balance to be executed on behalf of the Trust, authenticated and delivered to
the Initial Investors pursuant to the Certificate Purchase Agreement upon the
written order of HGSC, signed by a duly authorized officer of the Servicer, as
managing general partner of HGSC, without further action by HGSC, in authorized
denominations. No Investor Certificate shall
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entitle its holder to any benefit under this Agreement, or shall be valid for
any purpose, unless there shall appear on such Investor Certificate a
certificate of authentication substantially in the form set forth in EXHIBIT A
executed by the Owner Trustee,by manual signature. Such authentication shall
constitute conclusive evidence that such Investor Certificate shall have been
duly authenticated and delivered hereunder. All Investor Certificates shall be
dated the date of their authentication.
SECTION 3.4 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE OF
INVESTOR CERTIFICATES.
(a) The Investor Certificate Registrar shall keep or cause to be
kept, at the office or agency maintained pursuant to Section 3.9, an Investor
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Owner Trustee shall provide for the registration of Investor
Certificates and transfers and exchanges of Investor Certificates as provided
herein; PROVIDED, HOWEVER, that no Investor Certificate may be subdivided upon
registration of transfer or exchange such that the denomination of any resulting
Investor Certificate would have been less than $1,000,000 if such Investor
Certificate had been issued in the initial distribution of Investor
Certificates. Wilmington Trust Company shall be the initial Investor
Certificate Registrar. Upon any resignation of an Investor Certificate
Registrar, the Owner Trustee shall promptly appoint a successor.
(b) The Servicer shall have the right to inspect the Investor
Certificate Register at all reasonable times and to obtain copies thereof for
purposes of performing its obligations under the Sale and Servicing Agreement.
(c) Upon surrender for registration of transfer of any Investor
Certificate at the office or agency maintained pursuant to Section 3.9, the
Owner Trustee shall, subject to compliance with any restrictions on transfer set
forth in EXHIBIT A, execute on behalf of the Trust, authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Investor
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Owner Trustee. The Owner Trustee shall not be
obligated to, and shall not, cause any transfer to be registered unless the
restrictions on transfer set forth in EXHIBIT A have been complied with. In
addition, if the Servicer shall have advised the Owner Trustee in writing that
an Undertaking Letter shall be required with respect to any transfer, such
registration of transfer shall not be effective unless the requirements of
Section 3.5, with respect to the delivery of an Undertaking Letter, shall have
been complied with.
(d) At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of authorized
denominations of a like aggregate principal amount upon surrender of the
Investor Certificates to be exchanged at the office or agency maintained
pursuant to Section 3.9. Whenever any Investor Certificates are so surrendered
for exchange, the Owner Trustee shall execute on behalf of the Trust,
authenticate and deliver one or more Investor Certificates dated the date of
authentication by the Owner Trustee. Such Investor Certificates shall be
delivered to the Investor Certificateholder making the exchange.
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(e) Every Investor Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Owner Trustee duly
executed by the Investor Certificateholder or his attorney duly authorized in
writing and such other documents and instruments as may be required by
Section 3.5. Each Investor Certificate surrendered for registration of transfer
or exchange shall be cancelled and subsequently destroyed or otherwise disposed
of by the Owner Trustee in accordance with its customary practice.
(f) No service charge shall be made for any registration of transfer
or exchange of Investor Certificates, but the Owner Trustee 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 Investor Certificates.
SECTION 3.5 INVESTOR CERTIFICATE TRANSFER RESTRICTIONS.
(a) The Investor Certificates may not be acquired by or for the
account of (i) an employee benefit plan (as defined in Section 3(3) of ERISA)
that is subject to the provisions of Title I of ERISA, (ii) a plan described in
Section 4975(e)(1) of the Code or (iii) any entity whose underlying assets
include plan assets by reason of a plan's investment in the entity (each, a
"BENEFIT PLAN") unless the acquisition and holding of the Investor Certificates
by such an entity does not constitute a non-exempt prohibited transaction within
the meaning of ERISA and the Code. Any transferee of an Investor
Certificateholder shall execute and deliver to the Owner Trustee an Undertaking
Letter in the form set forth in EXHIBIT D. Transfers of Investor Certificates
are also subject to the restrictions set forth in the legends contained in
EXHIBIT A hereto. The Investor Certificates are also subject to the minimum
denomination specified in Section 3.2(a).
(b) None of the Investor Certificates shall be traded on an
established securities market or issued in a transaction registered under the
Securities Act of 1933, as amended.
(c) No transfer of any Investor Certificate shall be effective and
any such purported transfer shall not be recognized or approved by the Owner
Trustee at a time when the Investor Certificates are readily tradeable on a
secondary market, unless the Owner Trustee receives in connection with any such
purported transfer an opinion of counsel reasonably acceptable to the Owner
Trustee to the effect that such transfer will not cause the Trust to be treated
as a publicly traded partnership.
(d) No transfer of any Investor Certificate shall be effective and
any such purported transfer shall not be recognized or approved by the Owner
Trustee if the effect of such transfer would be to cause the Trust to be
beneficially owned by more than 50 Persons.
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SECTION 3.6 MUTILATED, DESTROYED, LOST OR STOLEN INVESTOR CERTIFICATES.
(a) If (i) any mutilated Investor Certificate is surrendered to the
Investor Certificate Registrar, or the Investor Certificate Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any Investor
Certificate (PROVIDED, that an Institutional Investor that is an Investor
Certificateholder, or the nominee of which is an Investor Certificateholder, may
provide its own written evidence of such destruction, loss or theft and such
written evidence shall be deemed satisfactory for such purpose), and (ii) there
is delivered to the Investor Certificate Registrar, the Owner Trustee and the
Trust such security or indemnity as may be required by them and is reasonably
acceptable to the Servicer to hold each of them harmless (PROVIDED, that if the
Investor Certificateholder is, or is a nominee for, an Institutional Investor
with a claims-paying ability or long-term debt rating of at least investment
grade or its equivalent, then an unsecured agreement of indemnity by such
Institutional Investor shall be deemed satisfactory for such purpose), then, in
the absence of notice to the Investor Certificate Registrar or the Owner Trustee
that such Investor Certificate has been acquired by a bona fide purchaser, the
Owner Trustee shall execute on behalf of the Trust and the Owner Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Investor Certificate, a replacement Investor
Certificate in authorized denominations of a like amount; PROVIDED, HOWEVER,
that if the final distribution with respect to any such destroyed, lost or
stolen Investor Certificate, but not a mutilated Investor Certificate, shall
have become or within seven days shall be required to be made, then instead of
issuing a replacement Investor Certificate the Owner Trustee may make the final
distribution with respect to such destroyed, lost or stolen Investor Certificate
when so required to be made.
(b) If, after the delivery of a replacement Investor Certificate or
distribution in respect of a destroyed, lost or stolen Investor Certificate
pursuant to subsection 3.6(a), a bona fide purchaser of the original Investor
Certificate in lieu of which such replacement Investor Certificate was issued
presents for payment such original Investor Certificate, the Owner Trustee shall
be entitled to recover such replacement Investor Certificate (or such
distribution) from the Person to whom it was delivered or any Person taking such
replacement Investor Certificate from such Person to whom such replacement
Investor Certificate was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Owner Trustee in connection therewith.
(c) In connection with the issuance of any replacement Investor
Certificate under this Section 3.6, the Owner Trustee or HGSC may require the
payment by such Investor Certificateholder of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto.
(d) Any duplicate Investor Certificate issued pursuant to this
Section 3.6 in replacement of any mutilated, destroyed, lost or stolen Investor
Certificate shall constitute an original additional contractual obligation of
the Trust, whether or not the mutilated, destroyed, lost or stolen Investor
Certificate shall be found at any time or be enforced by anyone, and shall be
entitled to all the benefits of this Agreement
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equally and proportionately with any and all other Investor Certificates duly
issued hereunder.
(e) The provisions of this Section 3.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Investor
Certificates.
SECTION 3.7 PERSONS DEEMED INVESTOR CERTIFICATEHOLDERS. Prior to due
presentation of an Investor Certificate for registration of transfer, the Owner
Trustee or the Investor Certificate Registrar may treat the Person in whose name
any Investor Certificate shall be registered in the Investor Certificate
Register as the Investor Certificateholder of such Investor Certificate for the
purpose of receiving distributions pursuant to Article V and for all other
purposes whatsoever, and neither the Owner Trustee nor the Investor Certificate
Registrar shall be bound by any notice to the contrary.
SECTION 3.8 ACCESS TO LIST OF INVESTOR CERTIFICATEHOLDERS' NAMES AND
ADDRESSES.
(a) The Owner Trustee shall furnish or cause to be furnished to the
Servicer, within 10 Business Days after registering any change in ownership of
the Investor Certificates, a list, in such form as the Servicer may reasonably
require, of the names and addresses of the Investor Certificateholders as of the
most recent Record Date.
(b) Within five Business Days after the receipt by the Investor
Certificate Registrar of a written request by any Investor Certificateholder
stating that such Investor Certificateholder desires to communicate with other
Investor Certificateholders, the Owner Trustee shall provide such Investor
Certificateholder with a copy of the most recent list of the names and addresses
of the Investor Certificateholders as set forth in the Investor Certificate
Registrar.
(c) The Owner Trustee may provide information with respect to the
name and addresses of the Investor Certificateholders and the Investor
Certificate Balance held by them to the Collateral Trustee for purposes of the
Collateral Sharing and Security Agreement.
(d) Each Investor Certificateholder, by receiving and holding an
Investor Certificate, shall be deemed to have agreed not to hold either the
Servicer or the Owner Trustee accountable by reason of the disclosure of its
name and address for purposes of this Agreement, regardless of the source from
which such information was derived.
SECTION 3.9 MAINTENANCE OF NEW YORK OFFICE. The Owner Trustee shall
maintain in the Borough of Manhattan, the City of New York, an office or offices
or agency or agencies where Investor Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Investor Certificates and the Basic
Documents may be served. The Owner Trustee initially designates the offices of
Xxxxxx Trust Company, 177 Water
-8-
Street, 4th Floor, New York, New York 10005, Attention: Xxxxxxxx Aloissi, as
its principal office for such purposes. The Owner Trustee shall give prompt
written notice to the Servicer and to the Certificateholders of any change in
the location of the Investor Certificate
Register or any such office or agency.
SECTION 3.10 DISTRIBUTIONS. The Paying Agent shall make
distributions to Investor Certificateholders pursuant to Section 5.2 and shall
report the amounts of such distributions to the Owner Trustee. Any Paying Agent
shall have the revocable power to withdraw funds from the Collection Account for
the purpose of making the distributions referred to above. The Owner Trustee
may revoke such power and remove the Paying Agent if the Owner Trustee
determines in its sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement in any material respect. The
Paying Agent shall initially be Wilmington Trust Company. Any Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Owner Trustee. If Wilmington Trust Company shall no longer be the Paying Agent,
the Owner Trustee shall appoint a successor to act as Paying Agent (which shall
be a bank or trust company). The Owner Trustee shall cause such successor
Paying Agent to execute and deliver to the Owner Trustee an instrument in which
such successor Paying Agent shall agree with the Owner Trustee that as Paying
Agent, such successor Paying Agent shall hold all sums, if any, held by it for
distribution to the Investor Certificateholders in trust for the benefit of the
Investor Certificateholders entitled thereto until such sums shall be paid to
such Investor Certificateholders. The Paying Agent shall return all unclaimed
funds to the Owner Trustee and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the Owner Trustee. The
provisions of Sections 9.3, 9.6, 9.7, 9.8 and 9.9 shall apply to the Owner
Trustee also in its role as Paying Agent, for so long as the Owner Trustee shall
act as Paying Agent.
SECTION 3.11 INVESTOR CERTIFICATES HELD BY HGSC. On and after the
Closing Date, HGSC shall, except as provided below, maintain beneficial and
record ownership of Investor Certificates representing not less than 20% of the
Investor Certificate Balance; PROVIDED that such Investor Certificates may be
transferred to another FRGC Party or any Person that succeeds to the business of
HGSC if (x) the Owner Trustee receives an opinion of counsel (a copy of which
shall be provided to the Rating Agency) reasonably acceptable to the Owner
Trustee to the effect that the proposed transfer will not adversely affect the
Trust's tax classification as a partnership or (y) HGSC (or any such successor)
obtains the consent of the Majority Certificateholders, which consent may be
withheld at the sole discretion of the Investor Certificateholders; PROVIDED
that nothing in this Section 3.11 shall prohibit or otherwise restrict the sale,
transfer or assignment by HGSC (or any such successor) of the right to
distributions and any other payments in respect of the Investor Certificates
held by HGSC (or any such successor). Except as provided in the immediately
preceding sentence, any attempted transfer of any Investor Certificate by HGSC
(or any such successor) that would reduce such interest of HGSC (or any such
successor) below 20% of the Investor Certificate Balance shall be void. The
Owner Trustee shall cause any Investor Certificate issued to HGSC (or any such
successor) to contain a legend stating "THIS INVESTOR CERTIFICATE IS NOT
TRANSFERABLE, EXCEPT AS PROVIDED IN SECTION 3.11 OF THE TRUST AGREEMENT."
Except as otherwise
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provided herein, any Investor Certificates held by HGSC, another FRGC Party or
any Person that succeeds to the business of HGSC shall not have any rights to
vote hereunder as long as they are held by any FRGC Party.
SECTION 3.12 SERVICER OR HGSC AS INVESTOR CERTIFICATEHOLDER. The
Servicer or HGSC in its individual or any other capacity may, subject to
Section 3.11, become the owner or pledgee of Investor Certificates and may in
its capacity as such owner or pledgee, subject to the provisions limiting voting
rights pursuant to Section 3.11, otherwise deal with the Owner Trustee or its
Affiliates as if it were not the Servicer or Seller.
ARTICLE IV
THE RESIDUAL CERTIFICATE
SECTION 4.1 RESIDUAL CERTIFICATE. The Residual Certificate shall
represent a fractional undivided beneficial interest in the Trust subordinated
to the interests of the Investor Certificateholders, including the right to
receive, subject to the terms and conditions set forth herein, (i) on each
Distribution Date, the balance of the collections on the Purchased Contract
Receivables after the Investor Certificateholders have received all
distributions to which they are entitled hereunder and (ii) any other
distribution to be made to the Residual Certificateholder as set forth in
Article V hereof on such Distribution Date. The holder of the Residual
Certificate shall have no right to vote with respect to the appointment of a
successor Owner Trustee or the Servicer.
SECTION 4.2 FORM OF THE RESIDUAL CERTIFICATE.
(a) The Residual Certificate shall be substantially in the form set
forth in EXHIBIT B. The Residual Certificate shall be executed on behalf of the
Trust by manual or facsimile signature of a Responsible Officer of the Owner
Trustee. The Residual 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, when authenticated pursuant
to Section 4.3, validly issued and entitled to the benefits of the Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of the Residual Certificate
or did not hold such offices at the date of authentication and delivery of the
Residual Certificate.
(b) The Residual Certificate shall be issued in definitive, fully-
registered form only. The Residual Certificate shall be typewritten, printed,
lithographed or engraved or produced by any combination of these methods (with
or without steel engraved borders) all as determined by the officers executing
the Residual Certificate, as evidenced by their execution thereof.
(c) The terms of the Residual Certificate set forth in EXHIBIT B
(including, without limitation, the legend set forth therein) shall form part of
this Agreement.
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SECTION 4.3 EXECUTION, AUTHENTICATION AND DELIVERY. Concurrently
with the sale of the Purchased Contract Receivables to the Trust pursuant to the
Sale and Servicing Agreement, the Owner Trustee shall cause the Residual
Certificate to be executed on behalf of the Trust, authenticated and delivered
to HGSC in return for the Initial Residual Capital paid in immediately available
funds, signed by its chairman of the board, its president or any vice president,
without further corporate action by the Servicer. The Residual Certificate
shall not entitle the holder thereof to any benefit under this Agreement, or be
valid for any purpose, unless there shall appear on the Residual Certificate a
certificate of authentication substantially in the form set forth in EXHIBIT B,
executed by the Owner Trustee by manual signature. Such authentication shall
constitute conclusive evidence that the Residual Certificate shall have been
duly authenticated and delivered hereunder. The Residual Certificate shall be
dated the date of its authentication.
SECTION 4.4 NO TRANSFER. On and after the Closing Date, HGSC shall,
except as provided below, maintain beneficial and record ownership of the
Residual Certificate; PROVIDED that (i) the right to distributions and other
payments in respect of the Residual Certificate may be pledged by HGSC to the
Collateral Trustee under the Collateral Sharing and Security Agreement and
(ii) the Residual Certificate may be transferred to another FRGC Party or any
Person that succeeds to the business of HGSC if (x) the Owner Trustee receives
an opinion of counsel reasonably acceptable to the Owner Trustee to the effect
that the proposed transfer will not adversely affect the Trust's tax
classification as a partnership or (y) HGSC (or any such successor) obtains the
consent of the Majority Certificateholders, which consent may be withheld at the
sole discretion of the Investor Certificateholders; PROVIDED that nothing in
this Section 4.4 shall prohibit or otherwise restrict the sale, transfer or
assignment by HGSC (or any such successor) of the right to distributions and
other payments in respect of the Residual Certificate. Any attempted transfer
of the Residual Certificate by HGSC (or any such successor) other than to any
other FRGC Party or any Person that succeeds to the business of HGSC shall be
void. Transfers of the Residual Certificates shall be subject to the provisions
set forth in Sections 3.5(b), (c) and (d). The Residual Certificate shall bear
a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT AS PROVIDED IN
SECTION 4.4 OF THE TRUST AGREEMENT."
ARTICLE V
ACCOUNTS; DISTRIBUTIONS
SECTION 5.1 ESTABLISHMENT OF ACCOUNTS.
(a) The Owner Trustee, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Owner Trustee an Eligible
Account known as the FRGC Owner Trust Collection Account (the "COLLECTION
ACCOUNT"), bearing an additional designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders. If a
Lockbox Account is established, all funds received in the Lockbox Account shall
be deposited by the Owner Trustee into the Collection Account and all Liquidated
Damages or other funds received by the Owner
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Trustee in respect of the Purchased Contract Receivables shall be deposited into
the Collection Account, in each case within one Business Day of receipt thereof.
Any funds received upon the sale of the Investor Certificates and the Residual
Certificate that are not used to acquire the Purchased Contract Receivables
shall also be deposited in the Collection Account. Funds on deposit in the
Collection Account shall be invested by the Owner Trustee only in Eligible
Investments. All earnings on such investment shall be deposited in the
Collection Account.
(b) The Owner Trustee, for the benefit of the Certificateholders,
shall establish and maintain in the name of the Owner Trustee an Eligible
Account known as the FRGC Owner Trust Investment Account (the "INVESTMENT
ACCOUNT"), bearing an additional designation clearly indicating that the funds
deposited therein are held for the benefit of the Certificateholders. On each
Distribution Date until the aggregate amount deposited (without giving effect to
any withdrawals made from the Investment Account hereunder) in the Investment
Account, plus interest thereon, equals $1,800,000, the Owner Trustee shall
withdraw from the Collection Account pursuant to clause (iii) of Section 5.2(d)
the amount required thereby and deposit such amount into the Investment Account.
Funds on deposit in the Investment Account shall be invested by the Owner
Trustee only in Eligible Investments. From and after the date on which the
amount deposited (without giving effect to any withdrawals) in the Investment
Account pursuant to Section 5.2(d)(iii) and interest thereon first equals or
exceeds $1,800,000, no additional funds shall be required to be deposited into
the Investment Account and all further interest on the funds in the Investment
Account earned after such date (net of any investment losses) shall be
distributed to the Residual Certificateholder. Funds on deposit in the
Investment Account shall be distributed to the Residual Certificateholder on the
terms and conditions set forth in Section 5.2(f).
(c) The Owner Trustee shall possess all right, title and interest in
and to all funds on deposit from time to time in the Collection Account and the
Investment Account and in all proceeds thereof. Except as otherwise provided
herein, the Collection Account and the Investment Account shall each be under
the sole dominion and control of the Owner Trustee for the benefit of the
Certificateholders. If, at any time, the Collection Account or the Investment
Account ceases to be an Eligible Account, the Owner Trustee shall within 10
Business Days establish a new Collection Account or Investment Account, as the
case may be, as an Eligible Account and shall cause any cash or any investments
in the old Collection Account or Investment Account to be transferred to such
new Collection Account or Investment Account, as applicable.
SECTION 5.2 DISTRIBUTIONS.
(a) On or before the day that is two Business Days prior to each
Distribution Date, the Servicer shall calculate the Collected Amount and all
other amounts required to determine the amounts to be deposited in or paid from
each of the Collection Account and the Investment Account on such Distribution
Date.
(b) On or before the day that is two Business Days prior to each
Distribution Date, the Servicer shall deliver to the Owner Trustee a certificate
in
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substantially the form attached hereto as EXHIBIT E (the "SERVICER'S
CERTIFICATE") executed by the President or any Vice President of the Servicer
containing all information necessary to the Owner Trustee for making the
calculations, withdrawals, deposits, transfers and distributions required by
this Article V, the status of each Purchased Contract Receivable and all
information required to be provided to Investor Certificateholders pursuant to
Section 5.2(g).
(c) On or before the day preceding each Distribution Date, the Owner
Trustee shall cause to be made the following withdrawals, deposits, transfers
and distributions in the amounts set forth in the Servicer's Certificate for
such Distribution Date:
(i) from the Collection Account to the Servicer, in
immediately available funds, the Reinvestment Income in respect of such
Distribution Date; and
(ii) from the Investment Account to the Collection Account,
the lesser of (A) the amount of cash or other immediately available funds
in the Investment Account on the day preceding such Distribution Date and
(B) the amount, if any, by which the sum of the Aggregate Fixed Return and
Aggregate Return of Capital for such Distribution Date exceeds the
Collected Amount in respect of such Distribution Date.
(d) Before 12:00 noon, New York City time, on each Distribution Date,
the Owner Trustee (based on the information contained in the Servicer's
Certificate for such Distribution Date) shall, subject to Section 5.2(f), make
the following distributions from the Collection Account (after the withdrawals,
deposits and transfers specified in Section 5.2(c) have been made) in the
following order of priority:
(i) first, to the Investor Certificateholders, on a pro
rata basis, the lesser of, for such Distribution Date, (A) the Total
Available Amount and (B) the Aggregate Fixed Return;
(ii) second, to the Investor Certificateholders, on a pro
rata basis, the lesser of, for such Distribution Date, (A) the Total
Available Amount (as such amount has been reduced by the distributions
described in clause (i) above) and (B) the Aggregate Return Of Capital;
(iii) third, subject to Section 5.1(b), to the Investment
Account, the lesser of (A) the Total Available Amount (as such amount has
been reduced by the distributions described in clauses (i) and (ii) above)
and (B) the Monthly Deposit Amount;
(iv) fourth, to the Investor Certificateholders, on a pro
rata basis, the lesser of, for such Distribution Date, (A) the Total
Available Amount (as such amount has been reduced by the distributions
described in clauses (i), (ii) and (iii) above) and (B) the Additional
Distributions, if any, payable on such
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Distribution Date and any Additional Distributions that were required to be
paid on a prior Distribution Date but were not paid; and
(v) fifth, subject to paragraph (e) below, to the Residual
Certificateholder, the balance of the Collected Amount.
(e) In addition to, and without limiting, the distributions contained
in Section 5.2(d), on each Distribution Date for each Monthly Period following
the effective date of a Regulatory Increase (including the Monthly Period in
which such Regulatory Increase occurs), the Owner Trustee (based on the
information contained in the Servicer's Certificate for such Distribution Date)
shall, subject to Section 5.2(f), distribute to the Investor Certificateholders,
on a pro rata basis, 10% of collections on the Contract Regulatory Receivables
received during the related Monthly Period.
(f) At any time after the Investor Certificate Balance shall have
been reduced to zero (including on the same date on which the Investor
Certificate Balance has been reduced to zero), distributions from the Trust
shall be made as follows:
(i) If the Seller has paid Liquidated Damages in respect of
all Purchased Contract Receivables, then the Investor Certificateholders
shall be entitled to no further distributions from the Trust other than any
Additional Distributions that are then payable, and all funds in the
Collection Account and the Investment Account shall thereafter be
distributed to the Residual Certificateholder.
(ii) In all other circumstances, the Investor
Certificateholders shall be entitled thereafter only to payments from the
Trust pursuant to Section 5.2(e), and the Residual Certificateholder shall
receive a distribution of (A) all funds in the Investment Account and
(B) all funds in the Collection Account other than the amount necessary to
pay amounts payable pursuant to Section 5.2(e).
(iii) After all payments, if any, required to be made
pursuant to Section 5.2(e) have been made, then the Investor
Certificateholders shall be entitled to no further payments from the Trust,
and all funds in the Collection Account and the Investment Account shall be
distributed to the Residual Certificateholder.
(iv) On the first Business Day after the Investor
Certificateholders shall have received all distributions required pursuant
to Sections 5.2(d) and (e), the Residual Certificateholder may request the
Owner Trustee to distribute all remaining assets (whether in the form of
cash or other property) of the Owner Trust Estate, after payment of all
expenses, to the Residual Certificateholder.
The provisions of this Section 5.2(f) shall in no event limit the rights of the
Investor Certificateholders to distributions required to be made prior to the
dates or events set forth in this Section 5.2(f).
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(g) On each Distribution Date, the Owner Trustee shall send to each
Investor Certificateholder and the Rating Agency the Servicer's Certificate
furnished pursuant to Section 5.2(b). In addition to the items set forth in
Section 5.2(b), the Servicer's Certificate shall set forth the following
information as to the Investor Certificates with respect to such Distribution
Date or the preceding Monthly Period, as applicable:
(i) the Collected Amount for such Monthly Period;
(ii) the amount of Liquidated Damages paid and required to be
paid by the Seller since the immediately preceding Distribution Date;
(iii) the Total Available Amount in respect of such Distribution Date;
(iv) the distributable amount determined pursuant to Section 5.2(d)(i)
in respect of such Distribution Date;
(v) the distributable amount determined pursuant to Section
5.2(d)(ii) in respect of such Distribution Date;
(vi) the distributable amount determined pursuant to Section
5.2(d)(iii) in respect of such Distribution Date;
(vii) the distributable amount determined pursuant to Section
5.2(d)(iv) in respect of such Distribution Date;
(viii) the distributable amount determined pursuant to Section 5.2(d)(v)
in respect of the Distribution Date;
(ix) the transfer from the Collection Account to the Servicer pursuant
to Section 5.2(c)(i) in respect of such Distribution Date;
(x) the amount transferred from the Investment Account to the
Collection Account pursuant to Section 5.2(c)(ii);
(xi) the distributable amount determined pursuant to Section 5.2(e) in
respect of such Distribution Date;
(xii) the balance of the Investment Account on such Distribution Date,
after giving effect to distributions, withdrawals, transfers and deposits
made on such date, and the change in such balance from that of the
immediately preceding Distribution Date;
(xiii) the Investor Certificate Balance after giving effect to the
distributions to be made on such Distribution Date;
(xiv) the amount by which the sum of the funds transferred pursuant to
Section 5.2(d)(iii) and the distributions made pursuant to Section
5.2(d)(v) are
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less than the amount scheduled to be paid pursuant to such Sections as of
such Distribution Date in Schedule 2; and
(xv) the status of each Purchased Contract Receivable, including
identifying any Purchased Contract Receivable that is not current and the
age of such Purchased Contract Receivable and the actions being taken to
collect on such past due Purchased Contract Receivable.
Each amount set forth pursuant to clauses (iv), (v), (vi), (vii), (xi) and
(xiii) above shall also be expressed as a dollar amount per $1,000 of the
initial Investor Certificate Balance.
(h) If any withholding tax is imposed on the Trust's distributions
(or allocations of income) to any Certificateholder, such tax shall reduce the
amount otherwise distributable to such Certificateholder in accordance with this
Section 5.2. The Owner Trustee is hereby authorized and directed to retain from
amounts otherwise distributable to any Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed
with respect to any Certificateholder shall be treated as cash distributed to
such Certificateholder at the time it is withheld by the Trust and remitted to
the appropriate taxing authority. If any Certificateholder wishes to apply for
a refund of any such withholding tax, the Owner Trustee shall reasonably
cooperate with such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Owner Trustee for any out-of-pocket
expenses incurred.
(i) Within the prescribed period of time for tax reporting purposes
after the end of each calendar year during the term of this Agreement, the
Servicer shall prepare and execute and the Owner Trustee shall mail to each
Person who at any time during such calendar year shall have been an Investor
Certificateholder and received any payments thereon, a statement prepared and
supplied by the Servicer containing the sum of the amounts set forth in each of
clauses (iv), (v), (vi), (vii), (xi) and (xiii) of Section 5.2(g) for such
calendar year or, if such Person shall have been an Investor Certificateholder
during a portion of such calendar year and received any payments thereon, for
the applicable portion of such year, for the purposes of such Investor
Certificateholders' preparation of federal income tax returns.
(j) The Servicer shall be provided full access to information with
respect to the Collection Account and Investment Account in order to perform its
obligations hereunder, including the right (x) to receive directly from the
Eligible Institution or Eligible Institutions in which such accounts are
established copies of all statements, confirmations and notices provided to the
Owner Trustee, (y) to make inquiries directly to such Eligible Institution or
Eligible Institutions regarding deposits, withdrawals and other payments to or
from such accounts and balances in such accounts and (z) any other information
relating to such matters as the Servicer may from time to time reasonably
request.
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SECTION 5.3 METHOD OF PAYMENT.
(a) Distributions required to be made to Investor Certificateholders
on any Distribution Date shall be made to each Investor Certificateholder of
record on the related Record Date (i) by wire transfer, in immediately available
funds, to the account of such Investor Certificateholder at a bank or other
entity having appropriate facilities therefor if such Investor Certificateholder
shall have provided to the Seller appropriate written instructions at least five
Business Days prior to such Record Date or (ii) if clause (i) is not applicable,
by check mailed to such Investor Certificateholder at the address of such
Investor Certificateholder appearing in the Investor Certificate Register.
(b) Distributions required to be made to the Servicer pursuant to
Section 5.2(c)(i) and to the Residual Certificateholder shall be made (i) by
wire transfer, in immediately available funds, to the account of the Servicer or
the Residual Certificateholder, as the case may be, at a bank or other entity
having appropriate facilities therefor if such Person shall have furnished to
the Owner Trustee appropriate written instructions at least five Business Days
prior to such Distribution Date or (ii) if clause (i) is not applicable by check
mailed to the Servicer or the Residual Certificateholder, as the case may be, at
the address provided pursuant to APPENDIX B to the Sale and Servicing Agreement.
SECTION 5.4 ACCOUNTING AND REPORTS TO CERTIFICATEHOLDERS, THE
INTERNAL REVENUE SERVICE AND OTHERS. The Owner Trustee shall (a) maintain (or
cause to be maintained) the books of the Trust on the basis of a fiscal year
ending December 31 on the accrual method of accounting, (b) deliver to each
Certificateholder, as may be required by the Code and applicable Treasury
Regulations or otherwise, such information as may be required to enable each
Certificateholder to prepare its federal income tax returns, (c) file or cause
to be filed such tax returns relating to the Trust and make such elections as
may from time to time be required or appropriate under any applicable state or
federal statute or rule or regulation thereunder so as to maintain the Trust's
characterization as a partnership for federal income tax purposes, (d) cause
such tax returns to be signed in the manner required by law and (e) collect or
cause to be collected any withholding tax as described in and in accordance with
subsection 5.2(h) with respect to income or distributions to Certificateholders.
SECTION 5.5 SIGNATURE ON RETURNS; TAX MATTERS PARTNER. The Residual
Certificateholder shall sign on behalf of the Trust any and all tax returns of
the Trust. The Residual Certificateholder shall be the "tax matters partner" of
the Trust pursuant to the Code.
ARTICLE VI
CAPITAL ACCOUNTS; ALLOCATIONS
SECTION 6.1 CAPITAL ACCOUNTS. A separate capital account ("CAPITAL
ACCOUNT") shall be established and maintained for each Certificateholder. The
Capital Account of each Certificateholder shall be credited with the initial
purchase price paid
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by such Certificateholder for its Certificates and allincome and gain allocated
to such Certificateholder pursuant to Section 6.2, andshall be debited by the
amount of any loss or deduction allocated to suchCertificateholder pursuant to
Section 6.2 and all distributions made to suchCertificateholder pursuant to
Article V. To the extent not provided for in thepreceding sentence, the Capital
Accounts of the Certificateholders shall beadjusted and maintained in accordance
with the rules of Treasury RegulationsSection 1.704-1(b)(2)(iv), as the same may
be amended or revised. Anyreferences in any section of this Agreement to the
Capital Account of aCertificateholder shall be deemed to refer to such Capital
Account as the samemay be credited or debited from time to time as set forth
above. In the eventof any transfer of any Certificate in accordance with the
terms of thisAgreement, the transferee shall succeed to the Capital Account of
the transferorto the extent it relates to the transferred Certificate.
SECTION 6.2 ALLOCATIONS OF INCOME AND LOSSES. All items of income,
gain, loss and deductions shall be allocated to the Certificateholders' Capital
Accounts in a manner consistent with the distribution procedures set forth in
Article V; PROVIDED, HOWEVER, that any loss resulting from a default on a
Purchased Contract Receivable shall be allocated to the Residual
Certificateholder; and PROVIDED, FURTHER, that if the losses resulting from a
default on one or more Purchased Contract Receivables would exceed the current
balance of the Residual Certificateholder's Capital Account, then an amount of
such losses equal to the current balance of the Residual Certificateholder's
Capital Account shall be allocated to the Residual Certificateholder and any
excess losses shall be allocated to the Investor Certificateholders on a pro
rata basis in accordance with the balances in their Capital Accounts.
ARTICLE VII
ACTIONS BY THE OWNER TRUSTEE
SECTION 7.1 ACTION BY INVESTOR CERTIFICATEHOLDERS WITH RESPECT TO
CERTAIN MATTERS. The Owner Trustee shall not have the power, except upon the
written direction of the Majority Certificateholders, to (a) remove the Servicer
under the Sale and Servicing Agreement pursuant to Section 7.1 thereof or
(b) require the Operator to engage a substitute operator under the Sale and
Servicing Agreement pursuant to Section 5.2(b) thereof. The Owner Trustee shall
not have the power, except upon the written direction of the Majority
Certificateholders and the Residual Certificateholder, to sell the Purchased
Contract Receivables or any interest therein or release any Obligor of any
obligation with respect thereto; PROVIDED, HOWEVER, that the Majority
Certificateholders may so direct the Owner Trustee without the consent of the
Residual Certificateholder if there shall occur and be continuing a breach by an
FRGC Party under any covenant, representation or warranty under any of the Basic
Documents in a manner which materially adversely affects (after giving effect to
the distribution of any Additional Net Distribution Amount payable in connection
with such event) the Investor Certificateholders, and the Seller or the
Servicer, as the case may be, fails to remedy such breach within 30 days after
receiving written notice from the Owner Trustee or any Investor
Certificateholder.
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SECTION 7.2 ACTION BY INVESTOR CERTIFICATEHOLDERS WITH RESPECT TO
BANKRUPTCY. The Owner Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the unanimous prior
approval of all Investor Certificateholders unless the Owner Trustee reasonably
believes that the Trust is insolvent.
SECTION 7.3 RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. The
Certificateholders 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 Basic
Documents, nor shall the Owner Trustee be obligated to follow any such
direction, if given.
ARTICLE VIII
COVENANTS OF THE SERVICER AND OTHERS
SECTION 8.1 COVENANTS OF THE SERVICER AND OTHERS. Until such time as
all required distributions have been made on the Investor Certificates pursuant
to the terms hereof, each of HIG (in its capacity as Servicer and Operator) and
the Seller, for the benefit of the Trust and the Investor Certificateholders,
agrees to perform and comply with each of the covenants set forth in the Sale
and Servicing Agreement to be performed by it.
SECTION 8.2 PURCHASE OF INVESTOR CERTIFICATES. The Seller will not,
and will not permit any Affiliate, to purchase or otherwise acquire, directly or
indirectly, any of the Investor Certificates except pursuant to an offer to
purchase made by the Seller or an Affiliate pro rata to all Investor
Certificateholders upon the same terms and conditions. Any such offer shall
remain open for at least 20 Business Days.
ARTICLE IX
THE OWNER TRUSTEE
SECTION 9.1 DUTIES OF THE OWNER TRUSTEE.
(a) The Owner Trustee undertakes to perform such duties, and only
such duties, as are specifically set forth in this Agreement and the other Basic
Trust Documents, including the administration of the Trust in the interest of
the Certificateholders, in accordance with the provisions of this Agreement and
the other Basic Trust Documents. No implied covenants or obligations shall be
read into this Agreement or any other Basic Trust Document against the Owner
Trustee.
(b) Notwithstanding the foregoing, the Owner Trustee shall be deemed
to have discharged its duties and responsibilities hereunder and under the Basic
Trust Documents to the extent the Servicer has agreed in the Basic Trust
Document to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Trust Document, and the Owner Trustee shall not be
liable for the default or
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failure of the Servicer to carry out its obligations under any of the Basic
Trust Documents.
(c) In the absence of bad faith on its part, the Owner Trustee may
conclusively rely upon certificates or opinions furnished to it and conforming
to the requirements of this Agreement in determining the truth of the statements
and the correctness of the opinions contained therein; PROVIDED, HOWEVER, that
the Owner Trustee shall have examined such certificates or opinions so as to
determine compliance of the same with the requirements of this Agreement.
(d) The Owner Trustee shall not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this subsection 9.1(d) shall not limit the effect of
subsection 9.1(a) or (b);
(ii) the Owner Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is proved
that the Owner Trustee was negligent in ascertaining the pertinent facts;
and
(iii) the Owner Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 7.1 or 9.4.
(e) Subject to Section 5.1, monies received by the Owner Trustee
hereunder need not be segregated in any manner except to the extent required by
law, this Agreement or the Sale and Servicing Agreement and may be deposited
under such general conditions as may be prescribed by law, and the Owner Trustee
shall not be liable for any interest thereon.
(f) The Owner Trustee shall not take any action that (i) is
inconsistent with the purposes of the Trust set forth in Section 2.3 or
(ii) would, to the actual knowledge of a Responsible Officer of the Owner
Trustee, result in the Trust's becoming taxable as a corporation for federal
income tax purposes.
(g) Neither the Servicer nor the Certificateholders shall direct the
Owner Trustee to take any action that would violate the provisions of this
Section 9.1.
SECTION 9.2 RIGHTS OF THE OWNER TRUSTEE. The Owner Trustee is
authorized and directed to execute and deliver the Basic Trust Documents and
each certificate or other document attached as an exhibit to or contemplated by
the Basic Trust Documents to which the Trust is to be a party, in such form as
the Owner Trustee shall approve as evidenced conclusively by the Owner Trustee's
execution thereof. 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 Trust Documents.
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SECTION 9.3 ACCEPTANCE OF TRUSTS AND DUTIES. Except as otherwise
provided in this Article IX, in accepting the trusts hereby created, the Owner
Trustee acts solely as trustee hereunder and not in its individual capacity and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any Basic Trust Document shall
look only to the Owner Trust Estate for payment or satisfaction thereof. The
Owner Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all monies actually received by it
constituting part of the Owner Trust Estate upon the terms of this Agreement.
The Owner Trustee shall not be liable or accountable hereunder or under any
Basic Trust Document under any circumstances, except (i) for its own negligent
action, its own negligent failure to act or its own willful misconduct or
(ii) in the case of the inaccuracy of any representation or warranty contained
in Section 9.6 and expressly made 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 at any time have any responsibility
or liability for or with respect to the legality, validity and
enforceability of any Contract, any Purchased Contract Receivable or for or
with respect to the sufficiency of the Owner Trust Estate or its ability to
generate the distributions and payments to be made to Certificateholders
under this Agreement;
(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 Servicer or any Certificateholder in accordance with this Agreement;
(c) no provision of this Agreement or any Basic Trust 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 Trust Document, if the Owner Trustee shall
have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Trust
Documents, including the Investor Certificate Balance and any return on the
Investor Certificates;
(e) the Owner Trustee shall not be responsible for or in respect of,
and the Owner Trustee does not make any representation as to the validity
or sufficiency of, any provision of this Agreement or for the due execution
hereof by the Servicer 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, the
Certificates (other than the certificate of authentication on the
Certificates) or of any Contract, any Purchased Contract Receivables or any
related documents, and the Owner Trustee shall not in any event assume or
incur any liability, duty or obligation to any Investor
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Certificateholder or to the Servicer, other than as expressly provided for
herein and in the Basic Trust Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Servicer or the Seller under any of the Basic Trust
Documents or otherwise, and the Owner Trustee shall not have any obligation
or liability to perform the obligations of the Trust under this Agreement
or the Basic Trust Documents that are required to be performed by the
Servicer under the Sale and Servicing Agreement; and
(g) the Owner Trustee shall not be under any 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 Trust Document, at
the request, order or direction of any of the Certificateholders, unless
such Certificateholders have 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 Trust Document shall not be construed as a duty,
and the Owner Trustee shall not be answerable for other than its negligence
or willful misconduct in the performance of any such act.
SECTION 9.4 ACTION UPON INSTRUCTION BY INVESTOR CERTIFICATEHOLDERS.
(a) Subject to Section 7.3, the Majority Certificateholders may by
written instruction direct the Owner Trustee in the management of the Trust.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be
required to take any action hereunder or under any Basic Trust 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 Trust 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 Trust Document, or is unsure as to the application,
intent, interpretation or meaning of any provision of this Agreement or the
Basic Trust Documents, the Owner Trustee shall promptly give notice (in such
form as shall be appropriate under the circumstances) to all of the Investor
Certificateholders 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 such instruction 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 instructions from the Majority Certificateholders 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 which is
consistent, in its view, with this Agreement and the Basic Trust Documents, and
as it shall deem to be in the best
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interests of the Investor Certificateholders,
and the Owner Trustee shall have no liability to any Person for any such action
or inaction.
SECTION 9.5 FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
to the Investor Certificateholders, 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 Trust Documents and such other information as the
Investor Certificateholders may reasonably request.
SECTION 9.6 REPRESENTATIONS AND WARRANTIES OF THE OWNER TRUSTEE.
The Owner Trustee hereby represents and warrants to the Servicer, for the
benefit of the Investor Certificateholders and the Servicer, that:
(a) It is a banking corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation. The
eligibility requirements set forth in Section 9.13(a)-(c) are satisfied with
respect to it.
(b) It has full power, authority and legal right to execute, deliver
and perform the Basic Trust Documents to which it is a party, and has taken all
necessary action to authorize the execution, delivery and performance by it of
the Basic Trust Documents to which it is a party.
(c) The execution, delivery and performance by it of the Basic Trust
Documents to which it is a party (i) shall not violate any provision of any law
or regulation governing the banking and trust powers of the Owner Trustee or any
order, writ, judgment or decree of any court, arbitrator or Governmental
Authority applicable to the Owner Trustee or any of its assets, (ii) shall not
violate any provision of the corporate charter or by-laws of the Owner Trustee,
or (iii) shall not violate any provision of, or constitute, with or without
notice or lapse of time, a default under, or result in the creation or
imposition of any Lien on any properties included in the Trust pursuant to the
provisions of any mortgage, indenture, contract, agreement or other undertaking
to which it is a party, which violation, default or Lien could reasonably be
expected to have a material adverse effect on the Owner Trustee's performance or
ability to perform its duties under the Basic Trust Documents to which it is a
party or on the transactions contemplated in the Basic Trust Documents to which
it is a party.
(d) The execution, delivery and performance by it of the Basic Trust
Documents to which it is a party shall not require the authorization, consent or
approval of, the giving of notice to, the filing or registration with, or the
taking of any other action in respect of, any Governmental Authority or agency
regulating the corporate trust activities of the Owner Trustee.
(e) The Basic Trust Documents to which it is a party have been duly
executed and delivered by the Owner Trustee and constitutes the legal, valid and
binding agreement of the Owner Trustee, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, or other similar laws affecting the enforcement of creditors'
rights in general and by
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general principles of equity, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
SECTION 9.7 RELIANCE; ADVICE OF COUNSEL.
(a) The Owner Trustee shall not incur any 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
and need not investigate any fact or matter in any such document. The Owner
Trustee may accept a certified copy of a resolution of the board of directors or
other governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which
is not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer or other authorized officers of the relevant party as to such
fact or matter, and such certificate shall constitute full protection to it for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Trust Documents, the Owner Trustee: (i) may act directly or through its agents,
attorneys, custodians or nominees pursuant to agreements entered into with any
of them, and shall not be liable for the conduct or misconduct of such agents,
attorneys, custodians or nominees if such agents, attorneys, custodians or
nominees shall have been selected by it with reasonable care; and (ii) may
consult with counsel, accountants and other skilled professionals 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 opinion or advice of any such counsel, accountants or other such Persons and
not contrary to this Agreement or any Basic Document.
SECTION 9.8 OWNER TRUSTEE MAY OWN INVESTOR CERTIFICATES. The Owner
Trustee in its individual or any other capacity may become the owner or pledgee
of Investor Certificates and may in its capacity as such owner or pledgee deal
with the Servicer in transactions in the same manner as it would have if it were
not a trustee hereunder.
SECTION 9.9 COMPENSATION AND INDEMNITY. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between the Servicer and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by the
Servicer for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, custodians, nominees,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder. The Servicer shall indemnify the Owner Trustee and its successors,
assigns, directors, officers, employees and agents in accordance with the
provisions of Section 6.1 of the Sale and Servicing Agreement. The compensation
and indemnities described in this Section 9.9 shall survive the resignation
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or termination of the Owner Trustee or the termination of this Agreement. Any
amounts paid to the Owner Trustee pursuant to this Article IX shall be deemed
not to be a part of the Owner Trust Estate immediately after such payment.
SECTION 9.10 REPLACEMENT OF THE OWNER TRUSTEE.
(a) The Owner Trustee may give notice of its intent to resign and be
discharged from the trusts hereby created by written notice thereof to the
Servicer and the Investor Certificateholders; PROVIDED that no such resignation
shall become effective, and the Owner Trustee shall not resign, prior to the
time set forth in Section 9.10(c). The Servicer shall appoint, subject to the
written consent of the Majority Certificateholders, a successor Owner Trustee by
delivering a written instrument, in duplicate, to the resigning Owner Trustee
and the successor Owner Trustee. If no successor Owner Trustee shall have been
appointed and have accepted appointment within 30 days after the giving of such
notice, the resigning Owner Trustee giving such notice may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee. The
Servicer shall, subject to the written consent of the Majority
Certificateholders, remove the Owner Trustee if:
(i) the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 9.13 and shall fail to resign
after written notice thereof is provided by the Servicer;
(ii) the Owner Trustee shall be adjudged bankrupt or
insolvent;
(iii) a receiver or other public officer shall be appointed
or take charge or control of the Owner Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation; or
(iv) the Owner Trustee shall otherwise be incapable of acting.
(b) If the Owner Trustee gives notice of its intent to resign or is
removed or if a vacancy exists in the office of the Owner Trustee for any
reason, the Servicer, subject to the written consent of the Majority
Certificateholders, 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 and one copy to the successor Owner Trustee)
and shall pay all fees owed to the outgoing Owner Trustee.
(c) Any resignation or removal of the Owner Trustee and appointment
of a successor Owner Trustee pursuant to any of the provisions of this Section
9.10 shall not become effective and no such resignation shall be deemed to have
occurred until a written acceptance of appointment is delivered by the successor
Owner Trustee to the outgoing Owner Trustee and the Servicer and all fees and
expenses due to the outgoing Owner Trustee are paid. Any successor Owner
Trustee appointed pursuant to this Section 9.10 shall be eligible to act in such
capacity in accordance with Section 9.13 and, following compliance with the
preceding sentence, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor under this
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Agreement, with like effect as if originally named as the Owner Trustee. The
Servicer shall provide notice of any resignation or proposed removal and
replacement of the Owner Trustee to all Investor Certificateholders and the
Rating Agency.
(d) 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. The Servicer 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.
(e) Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 9.10, the Servicer shall mail notice of the successor
of the Owner Trustee to all Certificateholders and the Rating Agency.
(f) The Residual Certificateholder shall not be entitled to remove or
replace the Owner Trustee.
SECTION 9.11 MERGER OR CONSOLIDATION OF THE OWNER TRUSTEE. Any
Person into which the Owner Trustee may be merged or converted or with which it
may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
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 Person shall be eligible pursuant to Section 9.13, and without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto; PROVIDED, HOWEVER, that the Owner Trustee shall as promptly
as reasonably practical prior to the merger or consolidation mail notice of such
merger or consolidation to all Investor Certificateholders and the Rating
Agency.
SECTION 9.12 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Owner Trust Estate may at the time be located, the Owner
Trustee shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Owner Trustee to act as co-trustee,
jointly with the Owner Trustee, or as separate trustee or 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 9.12, such powers, duties, obligations, rights
and trusts as the Owner Trustee may consider necessary or desirable. 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 9.13 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 9.10.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
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(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 authorize 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;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Agreemen (unless such other trustee acts or fails to act at the direction
of such first trustee); and
(iii) the Owner Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) 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.
(d) Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 9.13 ELIGIBILITY REQUIREMENTS FOR THE OWNER TRUSTEE. The
Owner Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute. The Owner Trustee shall at all
times: (a) be authorized to exercise corporate trust powers; (b) have a
combined capital and surplus of at least $250,000,000 and be subject to
supervision or examination by federal or state authorities; and (c) have a
certificate of deposit rating of at least D-1 by the Rating Agency or be
otherwise satisfactory to the Rating Agency. 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
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of this Section 9.13, 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. If at any time the Owner Trustee shall cease
to be eligible in accordance with the provisions of this Section 9.13, the Owner
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.10.
ARTICLE X
TERMINATION OF TRUST AGREEMENT
SECTION 10.1 TERMINATION OF TRUST AGREEMENT.
(a) This Agreement (other than Section 9.9) and the Trust shall
terminate and be of no further force or effect on the earlier of (i) the final
distribution by the Owner Trustee of all monies or other property or proceeds of
the Owner Trust Estate in accordance with the terms of Article V or (ii) at the
time provided in Section 10.2. The bankruptcy, liquidation, dissolution, death
or incapacity of any Certificateholder, other than HGSC in its capacity as the
Residual Certificateholder as described in Section 10.2, shall not (x) operate
to terminate this Agreement or the Trust, nor (y) entitle such Investor
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 the Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.
(b) Except as provided in Section 10.1(a), none of the Servicer, the
Seller or any Certificateholder shall be entitled to revoke or terminate the
Trust or this Agreement.
(c) Notice of any termination of the Trust, except as otherwise
provided in Section 10.2, specifying the Distribution Date upon which the
Investor Certificateholders shall surrender their Investor Certificates, and the
Residual Certificateholder shall surrender the Residual Certificate, to the
Owner Trustee for payment of the final distribution and cancellation, shall be
given by the Owner Trustee by letter to the Investor Certificateholders and the
Residual Certificateholder mailed within five Business Days prior to such final
Distribution Date, stating: (i) the Distribution Date upon or with respect to
which the final distribution on the Certificates shall be made upon presentation
and surrender of the Certificates at the office of the Owner Trustee therein
designated; (ii) the amount of any such final distribution; and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
distributions being made only upon presentation and surrender of the
Certificates at the office of the Owner Trustee therein specified. Upon
presentation and surrender of the Certificates to the Owner Trustee, the
Servicer shall cause to be distributed to Investor Certificateholders and to the
Residual Certificateholder amounts distributable on such Distribution Date in
accordance with Section 5.2. Notwithstanding the foregoing, all references to
presentation and surrender in this Section 10.1(c) are subject to
Section 10.1(h) and any such notice shall so provide.
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(d) If all of the Investor Certificateholders shall not surrender
their Investor Certificates for cancellation within six months after the date
specified in the written notice specified in Section 10.1(c), the Owner Trustee
shall give a second written notice to the remaining Investor Certificateholders
to surrender their Investor Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
all the Investor 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 remaining Investor Certificateholders
concerning surrender of their Investor Certificates, and the cost thereof shall
be paid out of the funds and other assets that shall remain subject to this
Agreement. Subject to applicable laws with respect to escheat of funds, any
funds remaining in the Trust after exhaustion of such remedies in the preceding
sentence shall be deemed property of the Residual Certificateholder and
distributed by the Owner Trustee to the Residual Certificateholder.
(e) On the Business Day immediately following the final Distribution
Date and after the final distribution has been made to Investor
Certificateholders pursuant to Section 5.2, any remaining funds on deposit in
the Investment Account shall be distributed to the Residual Certificateholder by
the Owner Trustee.
(f) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
(g) Within sixty days of the later of (i) the cancellation of all of
the Investor Certificates pursuant to Section 10.1(c) or Section 10.1(d), or
(ii) payment to the Residual Certificateholder of funds remaining in the Trust
pursuant to Sections 10.1(d) and (e), the Owner Trustee shall provide the Rating
Agency with written notice stating that all Investor Certificates have been so
cancelled or such funds have been so paid to the Residual Certificateholder.
(h) Notwithstanding the foregoing provisions of this Section 10.1, if
an Investor Certificateholder is an Institutional Investor (or a nominee of an
Institutional Investor), such Institutional Investor shall use its reasonable
efforts to surrender its Investor Certificates upon written request of the Trust
following final payment in respect thereof, but shall not be required to
surrender its Investor Certificates as a condition to receipt of any payment in
respect of any Investor Certificate. If an Institutional Investor shall not
have surrendered its Investor Certificates within ten Business Days of being so
requested to do so pursuant to this Section 10.1(h), such Institutional Investor
will be deemed to indemnify, defend and hold harmless the Trust, the Owner
Trustee and the Seller from and against any and all costs, expenses, losses,
claims, damages and liabilities (including, without limitation, expenses of
counsel and expenses of litigation) arising out of or incurred in connection
with such failure to surrender its Investor Certificates.
SECTION 10.2 DISSOLUTION UPON BANKRUPTCY OF THE RESIDUAL
CERTIFICATEHOLDER. Subject to the liquidation, winding-up and dissolution
procedures and
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time periods described below, upon the occurrence of an Insolvency Event with
respect to the Residual Certificateholder, the Trust shall terminate, subject
to the liquidation, winding-up and dissolution procedures
described below, and provided that the rights and obligations of the parties to
this Agreement shall not terminate during such liquidation, winding-up and
dissolution. Promptly after the occurrence of any Insolvency Event with respect
to the Residual Certificateholder: (i) the Residual Certificateholder shall
give the Owner Trustee written notice of such Insolvency Event and (ii) the
Owner Trustee shall, upon the receipt of such written notice from the Residual
Certificateholder, give prompt written notice to the Investor Certificateholders
of the occurrence of such event; PROVIDED, HOWEVER, that any failure to give a
notice required by this sentence shall not prevent or delay in any manner a
termination of the Trust pursuant to the first sentence of this Section 10.2.
Ninety days after the date the Residual Certificateholder gives the notice
described in the preceding sentence, unless the Owner Trustee shall have
received written instructions from the Majority Certificateholders as of the
close of the preceding Distribution Date, to the effect that such Persons
disapprove of the prospective liquidation of the assets held by the Trust and
the prospective termination of the Trust and wish to reconstitute the Trust
pursuant to terms corresponding to the terms of this Agreement, the Owner
Trustee shall promptly sell, dispose of or otherwise liquidate or realize upon
the assets of the Trust in a commercially reasonable manner and on commercially
reasonable terms (which may include continuing to hold the Purchased Contract
Receivables and receiving collections thereon). The proceeds of any such sale,
disposition or liquidation of the assets of the Trust shall be treated as
collections on the Purchased Contract Receivables and deposited in the
Collection Account and promptly distributed by the Owner Trustee in accordance
with Section 5.2.
ARTICLE XI
AMENDMENTS AND WAIVERS
SECTION 11.1 PURPOSE OF AMENDMENTS AND WAIVERS. This Agreement may
be amended, or any provision hereof may be waived, from time to time by the
Residual Certificateholder, the Servicer and the Owner Trustee with the consent
of the Majority Certificateholders (which consent, whether given pursuant to
this Section 11.1 or pursuant to any other provision of this Agreement, shall be
conclusive and binding on all Investor Certificateholders and on all future
holders of Investor Certificates and of any Investor Certificates issued upon
the transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Investor Certificates) for the purpose
of adding any provisions to or changing in any manner or eliminating or waiving
compliance with any of the provisions of this Agreement, or of modifying in any
manner the rights of the Investor Certificateholders; PROVIDED, HOWEVER, that no
such amendment or waiver shall, without the consent of the Investor
Certificateholder of each Investor Certificate at the time outstanding
(a) change in any manner the amount of, or accelerate or delay the timing of,
distributions that shall be required to be made on any Investor Certificate,
(b) adjust the Fixed Return Rate, (c) change the aforesaid percentage required
to consent to any such amendment or waiver or (d) amend Section 7.2 or
Section 10.2. No amendment or waiver affecting the interest of the Residual
Certificateholder shall be made without its consent.
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SECTION 11.2 FORM OF AMENDMENTS OR WAIVERS.
(a) Prior to the execution of any amendment or waiver pursuant to
Section 11.1, the Owner Trustee shall furnish written notification of the
substance of such amendment or waiver to the Investor Certificateholders and the
Rating Agency.
(b) Promptly after the execution of any amendment or waiver pursuant
to Section 11.1, the Owner Trustee shall furnish a copy of such amendment or
waiver to each Investor Certificateholder and the Rating Agency.
(c) The particular form of any proposed amendment or waiver shall be
required to be provided to the Investor Certificateholders and the Rating Agency
in connection with any request for an amendment or waiver. The manner of
obtaining such consents (and any other amendments or waivers of Investor
Certificateholders provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Investor Certificateholders shall be subject to such reasonable requirements as
the Owner Trustee may prescribe.
(d) 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 of the State of Delaware.
(e) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust or waiver of any provision of this Agreement, the Owner
Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating
that the execution of such amendment or waiver is authorized or permitted by
this Agreement and that all conditions precedent to such execution have been
satisfied. The Owner Trustee may, but shall not be obligated to, enter into any
such amendment or waiver which affects its own rights, duties or immunities
under this Agreement or otherwise.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 NO LEGAL TITLE TO OWNER TRUST ESTATE. The
Certificateholders shall not have legal title to any part of the Owner Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
the Basic Trust Documents. No transfer, by operation of law or otherwise, of
any right, title, and interest of the Certificateholders to and in their
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 Owner Trust Estate.
SECTION 12.2 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of
this Agreement are solely for the benefit of the Owner Trustee, the Servicer and
the Certificateholders, 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
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the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 12.3 NOTICES. All demands, notices and communications upon
or to the Servicer, the Owner Trustee, the Rating Agency or any
Certificateholder under this Agreement shall be delivered as specified in
APPENDIX B to the Sale and Servicing Agreement.
SECTION 12.4 SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed enforceable to the fullest extent permitted, and if not so
permitted, shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
SECTION 12.5 COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts (and by different parties on separate
counterparts), each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument.
SECTION 12.6 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Servicer, HGSC, the Owner Trustee, the Residual Certificateholder and each
Investor Certificateholder and their respective successors and permitted
assigns, all as herein provided. Any request, notice, direction, consent,
waiver or other instrument or action by an Investor Certificateholder shall bind
the successors and assigns of such Investor Certificateholder.
SECTION 12.7 CONFIDENTIALITY. For the purposes of this
Section 12.7, "Confidential Information" means information delivered to an
Investor Certificateholder by or on behalf of the Trust or the Servicer in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by the Investor
Certificateholder as being confidential information of the Servicer or the
Trust, provided that such term does not include information that (a) was
publicly known or otherwise known to the Investor Certificateholder prior to the
time of such disclosure, (b) subsequently becomes publicly known through no act
or omission by the Investor Certificateholder or any Person acting on its
behalf, (c) otherwise becomes known to the Investor Certificateholder other than
through disclosure by any FRGC Party or (d) constitutes financial statements
delivered to it under this Agreement that are otherwise publicly available.
Each Investor Certificateholder will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by it in good
faith to protect confidential information of third parties delivered to it,
provided that each Investor Certificateholder may deliver or disclose
Confidential Information to (i) its directors, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of its investment in the Trust), (ii) its financial
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advisors and other professional advisors who agree to hold confidential the
Confidential Information substantially in accordance with the terms of this
Section 12.7, (iii) any other Certificateholder, (iv) any Institutional Investor
to which the Investor Certificateholder sells or offers to sell its Investor
Certificates (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 12.7),
(v) any Person from which it offers to purchase any security of the Trust or any
FRGC Party (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 12.7),
(vi) any federal or state regulatory authority having jurisdiction over it,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access
to information about its investment portfolio, or (viii) any other Person to
which such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to it, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which it is a party or (z) if a default by the Servicer under any
of the Basic Trust Documents has occurred and is continuing, to the extent it
may reasonably determine such delivery and disclosure to be necessary or
appropriate. Each Investor Certificateholder, by its acceptance of an Investor
Certificate, will be deemed to have agreed to be bound by and to be entitled to
the benefits of this Section 12.7 as though it were a party to this Agreement.
SECTION 12.8 NO RECOURSE. Each Investor Certificateholder by
accepting an Investor Certificate acknowledges that such Person's Investor
Certificate represents a beneficial interest in the Trust only and does not
represent interest in or obligation of the Servicer, the Seller, the Owner
Trustee or any Affiliate thereof. Except as expressly provided in the Basic
Trust Documents, neither the Servicer nor the Owner Trustee in their respective
individual capacities, nor any of their respective partners, beneficiaries,
agents, officers, directors, employees or successors or assigns, shall be
personally liable for, nor shall recourse be had to any of them for, the
distribution of the Investor Certificate Balance with respect to (or earnings
on) the Investor Certificates, or the Owner Trustee's performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Investor Certificates or this Agreement, it being understood
that such covenants and obligations have been made by the Owner Trustee solely
in its capacity as the Owner Trustee. Each Investor Certificateholder by the
acceptance of an Investor Certificate shall agree that, except as expressly
provided in the Basic Trust Documents, in the case of nonpayment of any amounts
with respect to the Investor Certificates, it shall have no claim against any of
the foregoing for any deficiency, loss or claim therefrom.
SECTION 12.9 HEADINGS. The headings of the various Articles and
Sections herein are for purposes of reference only and shall not affect the
meaning or interpretation of any provision hereof.
SECTION 12.10 COLLATERAL SHARING AND SECURITY AGREEMENT. The
Investor Certificateholders agree to be bound by the terms and conditions of the
Collateral Sharing and Security Agreement.
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SECTION 12.11 GOVERNING LAW. This agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of
Delaware, excluding choice-of-law principles of the laws of such State that
would require the application of the laws of a jurisdiction other than such
State.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, in the presence of the undersigned witnesses, as of the day and year
first above written.
HATTIESBURG GAS STORAGE COMPANY
By: HATTIESBURG INDUSTRIAL
GAS SALES COMPANY, its
General Partner
By:/s/ X.X. Xxxxxx
---------------------------
X. X. Xxxxxx, Vice President
Witnesses:
/s/ Xxxxxxxx X. Xxxxx
-----------------
/s/ Xxxxxxx Xxxxx
-----------------
HATTIESBURG INDUSTRIAL GAS SALES
COMPANY
By:/s/ X.X Xxxxxx
---------------------------
X. X. Xxxxxx, Vice President
Witnesses:
/s/ Xxxxxxxx X. Xxxxx
-----------------
/s/ Xxxxxxx Xxxxx
-----------------
WILMINGTON TRUST COMPANY,
as Owner Trustee
By: /s/ W. Xxxxx Xxxxxxxxxx
-----------------------
Name: W. Xxxxx Xxxxxxxxxx
Title: Financial Services Officer
Witnesses:/s/ Xxxxxxxx X. Xxxxx
-----------------
/s/ Xxxxxxx Xxxxx
-----------------
-00-
XXXXX XX XXX XXXX )
)
COUNTY OF NEW YORK )
On this the 21st day of November, 1995, before me, Xxxxx X. Xxxxx, the
undersigned officer, personally appeared X. X. Xxxxxx, who acknowledged himself
to be the Vice President of HATTIESBURG INDUSTRIAL GAS SALES COMPANY, the
general partner of HATTIESBURG GAS STORAGE COMPANY, and that he, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained.
In witness whereof, I hereunto set my hand and official seal.
/s/ Xxxxx X. Xxxxx
------------------
Notary Public in and for the
State of New York
My Commission expires:
July 31, 0000
------------------
XXXXX XX XXX XXXX )
)
COUNTY OF NEW YORK )
On this the 21st day of November, 1995, before me, Xxxxx X. Xxxxx, the
undersigned officer, personally appeared X. X. Xxxxxx, who acknowledged himself
to be the Vice President of HATTIESBURG INDUSTRIAL GAS SALES COMPANY, and that
he, being authorized to do so, executed the foregoing instrument for the
purposes therein contained.
In witness whereof, I hereunto set my hand and official seal.
/s/ Xxxxx X Xxxxx
--------------------
Notary Public in and for the
State of New York
My Commission expires:
July 31, 0000
----------------------
-00-
XXXXX XX XXX XXXX )
)
COUNTY OF NEW YORK )
On this the 21st day of November, 1995, before me, Xxxxx X. Xxxxx, the
undersigned officer, personally appeared W. Xxxxx Xxxxxxxxxx, who acknowledged
himself to be the Financial Services Officer of WILMINGTON TRUST COMPANY, and
that he, being authorized to do so, executed the foregoing instrument for the
purposes therein contained.
In witness whereof, I hereunto set my hand and official seal.
/s/ Xxxxx X. Xxxxx
----------------------
Notary Public in and for the
State of New York
My Commission expires:
July 31, 1996
----------------------
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