Exhibit 4.1
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FORM OF TRUST AGREEMENT
between
ML ASSET BACKED CORPORATION,
as Depositor
and
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as
Owner Trustee
Dated as of __________, 200__
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Table of Contents
Page
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ARTICLE I Definitions................................................1
SECTION 1.1 Capitalized Terms..........................1
SECTION 1.2 Other Definitional Provisions..............3
ARTICLE II Organization...............................................4
SECTION 2.1 Name.......................................4
SECTION 2.2 Office.....................................4
SECTION 2.3 Purposes and Powers........................4
SECTION 2.4 Appointment of Owner Trustee...............5
SECTION 2.5 Initial Capital Contribution of Trust
Estate.....................................5
SECTION 2.6 Declaration of Trust.......................5
SECTION 2.7 Liability of the Transferor................5
SECTION 2.8 Title to Trust Property....................5
SECTION 2.9 Situs of Trust.............................6
SECTION 2.10 Representations and Warranties of the
Depositor..................................6
SECTION 2.11 Federal Income Taxes.......................7
SECTION 2.12 [Reserved].................................8
SECTION 2.13 Covenants of the Holders...................8
ARTICLE III Trust Certificates and Transfer of Interests...............8
SECTION 3.1 Initial Ownership..........................8
SECTION 3.2 The Trust Certificates.....................9
SECTION 3.3 Authentication of Trust Certificates.......9
SECTION 3.4 Registration of Transfer and Exchange of
Trust Certificates.........................9
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen
Trust Certificates........................11
SECTION 3.6 Persons Deemed Certificateholders.........12
SECTION 3.7 Access to List of Certificateholders'
Names and Addresses.......................12
SECTION 3.8 Maintenance of Office or Agency...........12
SECTION 3.9 Appointment of Certificate Paying Agent...13
SECTION 3.10 [Reserved]................................13
SECTION 3.11 [Reserved]................................13
SECTION 3.12 [Reserved]................................13
SECTION 3.13 ERISA Restrictions........................13
SECTION 3.14 [Reserved]................................14
SECTION 3.15 [Reserved]................................14
SECTION 3.16 [Reserved]................................14
SECTION 3.17 Original Issuance.........................14
SECTION 3.18 Actions of Certificateholders.............14
ARTICLE IV Actions by Owner Trustee..................................15
SECTION 4.1 Prior Notice to Holders with Respect
to Certain Matters........................15
SECTION 4.2 Action by Certificateholders with Respect
to Certain Matters........................15
SECTION 4.3 Action by Certificateholders with Respect
to Bankruptcy.............................15
SECTION 4.4 Restrictions on Certificateholders' Power.16
SECTION 4.5 Majority Control..........................16
SECTION 4.6 Rights of Insurer.........................17
ARTICLE V Application of Trust Funds; Certain Duties................17
SECTION 5.1 Establishment of Certificate
Distribution Account.......................17
SECTION 5.2 Application of Funds in Certificate
Distribution Account.......................17
SECTION 5.3 [Reserved].................................19
SECTION 5.4 Method of Payment..........................19
SECTION 5.5 No Segregation of Monies; No Interest......19
SECTION 5.6 Accounting and Reports to the Noteholders,
Certificateholders the Internal Revenue
Service and Others.........................19
SECTION 5.7 Signature on Returns; Tax Matters Partner..20
ARTICLE VI Authority and Duties of Owner Trustee.....................20
SECTION 6.1 General Authority..........................20
SECTION 6.2 General Duties.............................20
SECTION 6.3 Action upon Instruction....................21
SECTION 6.4 No Duties Except as Specified in this
Agreement or in Instructions...............22
SECTION 6.5 No Action Except under Specified Documents
or Instructions............................22
SECTION 6.6 Restrictions...............................22
ARTICLE VII Concerning the Owner Trustee..............................22
SECTION 7.1 Acceptance of Trusts and Duties............22
SECTION 7.2 Furnishing of Documents....................24
SECTION 7.3 Representations and Warranties.............24
SECTION 7.4 Reliance; Advice of Counsel................24
SECTION 7.5 Not Acting in Individual Capacity..........25
SECTION 7.6 Owner Trustee Not Liable for Trust
Certificates or Receivables................25
SECTION 7.7 Owner Trustee May Own Trust Certificates
and Notes..................................26
SECTION 7.8 Payments from Owner Trust Estate...........26
SECTION 7.9 Doing Business in Other Jurisdictions......26
ARTICLE VIII Compensation of Owner Trustee.............................26
SECTION 8.1 Owner Trustee's Fees and Expenses..........26
SECTION 8.2 Indemnification............................26
SECTION 8.3 Payments of Owner Trustee..................27
SECTION 8.4 Non-recourse Obligations...................27
ARTICLE IX Termination of Trust Agreement............................27
SECTION 9.1 Termination of Trust Agreement.............27
ARTICLE X Successor Owner Trustees and Additional Owner Trustees....28
SECTION 10.1 Eligibility Requirements for Owner Trustee.28
SECTION 10.2 Resignation or Removal of Owner Trustee....29
SECTION 10.3 Successor Owner Trustee....................29
SECTION 10.4 Merger or Consolidation of Owner Trustee...30
SECTION 10.5 Appointment of Co-Trustee or Separate
Trustee....................................30
ARTICLE XI Miscellaneous.............................................31
SECTION 11.1 Supplements and Amendments.................31
SECTION 11.2 No Legal Title to Owner Trust Estate
in Certificateholders......................33
SECTION 11.3 Limitations on Rights of Others............33
SECTION 11.4 Notices....................................33
SECTION 11.5 [Reserved].................................33
SECTION 11.6 Severability...............................33
SECTION 11.7 Separate Counterparts......................34
SECTION 11.8 Third-Party Beneficiaries..................34
SECTION 11.9 [Reserved].................................34
SECTION 11.10 No Petition................................34
SECTION 11.11 No Recourse................................34
SECTION 11.12 Headings...................................34
SECTION 11.13 GOVERNING LAW..............................34
SECTION 11.14 Agreement Creates No Partnership Except
for Tax Purposes...........................34
SECTION 11.15 Servicer...................................35
TRUST AGREEMENT dated as of __________, 200__ between ML ASSET BACKED
CORPORATION, a Delaware corporation, as Depositor, and
_________________________, a Delaware banking corporation as Owner Trustee.
ARTICLE I
Definitions
SECTION 1.1 Capitalized Terms. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
"Actual Knowledge" means, with respect to the Owner Trustee,
any officer within the Corporate Trust Administration office of the Owner
Trustee responsible for administering the Trust hereunder, or under the Basic
Documents, who has actual knowledge of an action taken or an action not taken
with regard to the Trust. Actions taken or actions not taken of which the
Owner Trustee should have had knowledge, and constructive knowledge, do not
meet the definition of Actual Knowledge hereunder.
"Agreement" shall mean this Trust Agreement, as the same may
be amended and supplemented from time to time.
"Basic Documents" shall mean Certificate of Trust, the Trust
Agreement, the Sale and Servicing Agreement, the Indenture, the Insurance
Agreement, the Reserve Account Agreement, the Custodial Agreement, the
Depository Agreement and the other documents and certificates delivered in
connection therewith.
"Benefit Plan" shall have the meaning assigned to such term
in Section 3.13.
"Business Trust Statute" shall mean Chapter 38 of Title 12
of the Delaware Code, 12 Del. Code Section 3801 et seq., as the same may be
amended from time to time.
"Certificate" means a Trust Certificate evidencing the
beneficial interest of a Certificateholder in the Trust, substantially in the
form of Exhibit A-1 or Exhibit A-2 attached hereto.
"Certificate Distribution Account" shall have the meaning
assigned to such term in Section 5.1.
"Certificate Majority" means the Holders of more than 50% of
the Outstanding Amount of the Class A Certificates and more than 50% of
Holders of the Class R Certificates.
"Certificate of Trust" shall mean the Certificate of Trust
in the form of Exhibit B to be filed for the Trust pursuant to Section 3810(a)
of the Business Trust Statute.
"Certificate Paying Agent" shall mean any paying agent or
co-paying agent appointed pursuant to Section 3.9 and shall initially be the
Trustee.
"Certificate Register" and "Certificate Registrar" shall
mean the register mentioned and the registrar appointed pursuant to Section
3.4.
"Closing Date" means _____________, 200_.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the Treasury Regulations promulgated
thereunder.
"Corporate Trust Office" shall mean, with respect to the
Owner Trustee, the principal corporate trust office of the Owner Trustee
located _________________________ _________, Xxxxxxxxxx, Xxxxxxxx, 00000, or
at such other address as the Owner Trustee may designate by notice to the
Certificateholders and the Depositor, or the principal corporate trust office
of any successor Owner Trustee (the address of which the successor owner
trustee will notify the Certificateholders and the Depositor).
"Definitive Trust Certificates" shall mean Trust
Certificates issued in certificated, fully registered form as provided in
Section 3.17 hereof.
"Depositor" shall mean ML Asset Backed Corporation in its
capacity as Depositor hereunder.
"ERISA" shall have the meaning assigned to such term in
Section 3.13.
"Expenses" shall have the meaning assigned to such term in
Section 8.2.
"Holder" or "Certificateholder" shall mean the Person in
whose name a Trust Certificate is registered on the Certificate Register.
"Indemnified Parties" shall have the meaning assigned to
such term in Section 8.2.
"Insurer" shall mean ________________________ its successors
and assigns.
"Owner Trust Estate" shall mean all right, title and
interest of the Trust in and to the Trust Property and rights assigned to the
Trust pursuant to Article II of the Sale and Servicing Agreement, all funds on
deposit from time to time in the Trust Accounts and the Certificate
Distribution Account and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the Sale
and Servicing Agreement.
"Owner Trustee" shall mean _______________________, a
Delaware banking corporation, not in its individual capacity but solely as
owner trustee under this Agreement, and any successor Owner Trustee hereunder.
"Person" means any individual, corporation, limited
liability company, estate, partnership, joint venture, association, joint
stock company, trust (including any beneficiary thereof), unincorporated
organization or government or any agency or political subdivision thereof.
"Record Date" shall mean with respect to any Payment Date,
the last day of the calendar month immediately preceding such Payment Date.
"Responsible Officer" means, with respect to the Owner
Trustee, any officer within the Corporate Trust Administration office of the
Owner Trustee, including any Vice President, Assistant Vice President,
Assistant Treasurer, Assistant Secretary or any other officer of the Owner
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement among the Trust, __________________, the Depositor, the
Seller, the Servicer, the Indenture Trustee and the Backup Servicer, dated as
of _______________, 200_, as the same maybe amended and supplemented from time
to time.
"Secretary of State" shall mean the Secretary of State of
the State of Delaware.
"Treasury Regulations" shall mean regulations, including
proposed or temporary regulations, promulgated under the Code. References
herein to specific provisions of proposed or temporary regulations shall
include analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Certificate" shall mean a Certificate.
SECTION 1.2 Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined have the meanings assigned to them in the
Sale and Servicing Agreement or, if not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein. As used in this
Agreement and in any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms not defined in this Agreement or in any
such certificate or other document, and accounting terms partly defined in
this Agreement or in any such certificate or other document to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles as in effect on the date of this Agreement or
any such certificate or other document, as applicable. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and
Exhibit references contained in this Agreement are references to Sections and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."
(d) The definitions contained in this Agreement are
applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the feminine and neuter genders of such terms.
ARTICLE II
Organization
SECTION 2.1 Name. There is hereby formed a trust to be known as
"______________________________" (hereinafter, the "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.
SECTION 2.2 Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Certificateholders and
the Depositor.
SECTION 2.3 Purposes and Powers. (a) The purpose of the Trust is, and
the Trust shall have the power and authority, to engage in the following
activities:
(i) to issue the Notes pursuant to the Indenture and the Trust
Certificates pursuant to this Agreement, and to sell the Notes and
the Trust Certificates;
(ii) to enter into the transactions contemplated by the Sale
and Servicing Agreement;
(iii) with the proceeds of the sale of the Notes, to fund the
Reserve Account, to pay the organizational, start-up and
transactional expenses of the Trust and to pay the balance to the
Transferor pursuant to the Sale and Servicing Agreement;
(iv) to assign, grant, transfer, pledge, mortgage and convey
the Owner Trust Estate (other than the Certificate Distribution
Account) to the Indenture Trustee pursuant to the Indenture for the
benefit of the Insured and the Indenture Trustee on behalf of the
Noteholders and to hold, manage and distribute to the
Certificateholders and the Transferor pursuant to the terms of the
Sale and Servicing Agreement any portion of the Owner Trust Estate
released from the Lien of, and remitted to the Trust pursuant to,
the Indenture;
(v) to enter into and perform its obligations under the Basic
Documents to which it is a party;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of
distributions to the Certificateholders and the Noteholders.
(b) The Trust is hereby authorized to engage in the foregoing
activities. The Trust shall not engage in any activity other than in
connection with the foregoing or other than as required or authorized by the
terms of this Agreement or the Basic Documents.
SECTION 2.4 Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5 Initial Capital Contribution of Trust Estate. The
Depositor 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 the Depositor, as of the date hereof, of
the foregoing contribution, which shall constitute the initial Owner Trust
Estate and shall be deposited in the Certificate Distribution Account.
SECTION 2.6 Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Holders, subject to
the obligations of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a business trust under the
Business Trust Statute and that this Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Trust shall be treated
as a partnership if the Certificates are treated as held by more than one
person and a disregarded entity if the Certificates are treated as held by a
single person. The parties agree that unless otherwise required by appropriate
tax authorities, the Trust will file or cause to be filed annual or other
necessary returns, reports and other forms consistent with this intention.
Effective as of the date hereof, the Owner Trustee shall have all rights,
powers and duties set forth herein and to the extent not inconsistent
herewith, in the Business Trust Statute with respect to accomplishing the
purposes of the Trust. The Owner Trustee shall file the Certificate of Trust
with the Secretary of State.
SECTION 2.7 Liability of the Transferor. (a) The Transferor shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
(b) No Holder, other than to the extent set forth in clause (a),
shall have any personal liability for any liability or obligation of the
Trust.
SECTION 2.8 Title to Trust Property. (a) Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) The Holders shall not have legal title to any part of the Trust
Property. The Holders shall be entitled to receive distributions with respect
to their undivided beneficial ownership interest therein only in accordance
with Articles V and IX. No transfer, by operation of law or otherwise, of any
right, title or interest by any Certificateholder of its ownership interest in
the Owner Trust Estate shall operate to terminate this Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it
of legal title to any part of the Trust Property.
SECTION 2.9 Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware
or the State of New York. Payments will be received by the Trust only in
Delaware or New York, and payments will be made by the Trust only from
Delaware or New York. The Trust shall not have any employees in any state
other than Delaware; provided however, that nothing herein shall restrict or
prohibit the Owner Trustee, in its individual capacity, the Servicer or any
agent of the Trust from having employees within or without the State of
Delaware. The only office of the Trust will be at the Corporate Trust Office
in Delaware.
SECTION 2.10 Representations and Warranties of the Depositor. The
Depositor makes the following representations and warranties on which the
Owner Trustee relies in accepting the Owner Trust Estate in trust and issuing
the Certificates and upon which the Insurer relies in issuing the Policy.
(a) Organization and Good Standing. The Depositor is duly organized
and validly existing as a Delaware corporation with power and authority to own
its properties and to conduct its business as such properties are currently
owned and such business is presently conducted and is proposed to be conducted
pursuant to this Agreement and the Basic Documents.
(b) Due Qualification. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property, the conduct of its business and the performance of its obligations
under this Agreement and the Basic Documents requires such qualification.
(c) Power and Authority. The Depositor has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
the Depositor has full power and authority to sell and assign the property to
be sold and assigned to and deposited with the Trust and the Depositor has
duly authorized such sale and assignment and deposit to the Trust by all
necessary corporate action; and the execution, delivery and performance of
this Agreement has been duly authorized by the Depositor by all necessary
corporate action.
(d) Due Authorization and Enforceability. This Agreement has been
duly authorized, executed and delivered by the Depositor, and, assuming the
due authorization, execution and delivery by the other parties thereto, will
constitute a valid and binding agreement of the Depositor, enforceable against
the Depositor in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and except
as enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law).
(e) No Consent Required. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Basic Documents,
except for such as have been obtained, effected or made.
(f) No Violation. The consummation of the transactions contemplated
by this Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of the Depositor, or any material
indenture, agreement or other instrument to which the Depositor is a party or
by which it is bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic Documents);
nor violate any law or, to the best of the Depositor's knowledge, any order,
rule or regulation applicable to the Depositor of any court or of any Federal
or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties.
(g) No Proceedings. There are no proceedings or investigations
pending or, to its knowledge threatened against it before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A) asserting
the invalidity of this Agreement or any of the Basic Documents, (B) seeking to
prevent the issuance of the Certificates or the Notes or the consummation of
any of the transactions contemplated by this Agreement or any of the Basic
Documents, (C) seeking any determination or ruling that might materially and
adversely affect its performance of its obligations under, or the validity or
enforceability of, this Agreement or any of the Basic Documents, or (D)
seeking to adversely affect the Federal, state or local income tax attributes
of the Certificates.
SECTION 2.11 Federal Income Taxes.
(a) If Certificates are treated as held by more than one person or
the Trust is recharacterized as an entity separate from its owner, each
Certificateholder acknowledges and agrees that the Trust will be treated as a
partnership solely for income tax purposes and that this Agreement does not
create a partnership for any other purpose. No election to treat the Trust
other than as a disregarded entity if the Certificates are treated as held by
a single person or as a partnership if the Certificates are treated as held by
more than one person for Federal income tax purposes or any relevant state tax
purposes shall be made by or on behalf of the Trust, or by any
Certificateholder.
(b) Net income of the Trust for any month as determined for Federal
income tax purposes (and each item of income, gain, loss, credit and deduction
entering into the computation thereof) shall be allocated to the extent of
available net income and in accordance with Federal income tax accounting and
allocation principles, among the Certificateholders as of the first Record
Date following the end of such month, in proportion to their ownership of
principal amount of Trust Certificates on such date, in the priorities set
forth in Section 5.2 herein.
(c) If the net income of the Trust for any month is insufficient
for the allocation described in clause (b) above, subsequent net income shall
first be allocated to make up such shortfall before being allocated as
provided in clause (b).
(d) Net losses of the Trust, if any, for any month as determined
for Federal income tax accounting and allocation purposes (and each item of
income, gain, loss, credit and deduction entering into the computation
thereof) shall be allocated among the Certificateholders as of the first
Record Date following the end of such month in proportion to their ownership
of principal amount of Trust Certificates on such Record Date until the
principal balance of the Trust Certificates is reduced to zero.
(e) Notwithstanding anything provided in this Section 2.11, if the
Certificates are treated as held solely by one person or the Trust has not
been recharacterized as an entity separate from its owner, the application of
clause (b), clause (c) and clause (d) of this Section shall be disregarded
SECTION 2.12 [Reserved].
SECTION 2.13 Covenants of the Holders. Each Holder agrees:
(a) to be bound by the terms and conditions of the Certificates and
of this Agreement, including any supplements or amendments hereto and to
perform the obligations of a Holder as set forth therein or herein, in all
respects as if it were a signatory hereto. This undertaking is made for the
benefit of the Trust, the Insurer, the Owner Trustee and all other Holders
present and future;
(b) to hereby appoint the Owner Trustee as such Holder's agent and
attorney-in-fact to sign any federal income tax information return filed on
behalf of the Trust and agree that, if requested by the Trust, it will sign
such federal income tax information return in its capacity as holder of an
interest in the Trust. Each Holder also hereby agrees that in its tax returns
it will not take any position inconsistent with those taken in any tax returns
filed by the Trust;
(c) to notify the Owner Trustee of any transfer by it of a
Certificate in a taxable sale or exchange, within 30 days of the date of the
transfer; and
(d) until the completion of the events specified in Section 9.1,
not to, for any reason, institute proceedings for the Trust to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or
insolvency proceedings against the Trust, or file a petition seeking or
consenting to reorganization or relief under any applicable federal or state
law relating to bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Trust or a substantial part of its property, or cause or permit the Trust to
make any assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due, or declare or effect
a moratorium on its debt or take any action in furtherance of any such action.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.1 Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5 and until the issuance
of the Trust Certificates, the Depositor shall be the sole beneficiary of the
Trust. Upon issuance in accordance with this Trust Agreement, the Trust
Certificates shall represent fully-paid, non-assessable beneficial interests
in the assets of the Trust, and will entitle the Holders thereof to the
benefits of this Trust Agreement.
SECTION 3.2 The Trust Certificates. The Class A Trust Certificates
shall be issued in minimum denominations of $1,000 and integral multiples
thereof (except for one Trust Certificate which may be issued in a
denomination other than an integral multiple of $1,000). The Class R Trust
Certificates shall be issued in a 100% percentage interest in the Trust. The
Trust Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee. Trust
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 validly issued and entitled to the
benefit of this Agreement, notwithstanding that such individuals or any of
them shall have ceased to be so authorized prior to the authentication and
delivery of such Trust Certificates or did not hold such offices at the date
of authentication and delivery of such Trust Certificates. A transferee of a
Trust Certificate shall become a Certificateholder, and shall be entitled to
the rights and subject to the obligations of a Certificateholder hereunder,
upon due registration of such Trust Certificate in such transferee's name
pursuant to Section 3.4. Upon issuance in accordance with this Trust
Agreement, the Trust Certificates shall represent fully-paid, non-assessable
beneficial interests in the assets of the Trust, and will entitle the Holders
thereof to the benefits of this Trust Agreement.
SECTION 3.3 Authentication of Trust Certificates. Concurrently with
the initial transfer of the Receivables to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause the Trust Certificates in
an aggregate principal amount equal to the initial Certificate Balance and
percentage interest, as applicable, to be executed on behalf of the Trust,
authenticated and delivered to or upon the written order of the Depositor,
signed by its chairman of the board, its president or any vice president, its
treasurer or any assistant treasurer without further corporate action by the
Depositor, in authorized denominations. No Trust Certificate shall entitle its
holder to any benefit under this Agreement, or shall be valid for any purpose,
unless there shall appear on such Trust Certificate a certificate of
authentication substantially in the form set forth in Exhibits A-1 and A-2,
executed by the Owner Trustee or the Owner Trustee's authentication agent, by
manual signature; such authentication shall constitute conclusive evidence
that such Trust Certificate shall have been duly authenticated and delivered
hereunder. All Trust Certificates shall be dated the date of their
authentication.
SECTION 3.4 Registration of Transfer and Exchange of Trust
Certificates. (a) The Certificate Registrar shall keep or cause to be kept, at
the office or agency maintained pursuant to Section 3.8, a Certificate
Register in which, subject to such reasonable regulations as it may prescribe,
the Certificate Registrar shall provide for the registration of Trust
Certificates and of transfers and exchanges of Trust Certificates as herein
provided. The Depositor hereby appoints the Indenture Trustee as the initial
Certificate Registrar.
(b) Upon surrender for registration of transfer of any Trust
Certificate at the office or agency maintained pursuant to Section 3.8,
accompanied by the certification appearing on the reverse of the form of the
Certificate relating to Rule 144A, executed by the Holder of such Certificate,
the Owner Trustee shall execute, authenticate and deliver, (or cause the
Certificate Registrar as its authenticating agent to authenticate and deliver)
in the name of the designated transferee or transferees, one or more new Trust
Certificates in authorized denominations of alike class and aggregate face
amount dated the date of authentication by the Owner Trustee or any
authenticating agent. At the option of a Holder, Trust Certificates may be
exchanged for other Trust Certificates of the same class in authorized
denominations of alike aggregate amount upon surrender of the Trust
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.8.
(c) Every Trust Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the Certificateholder or his attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate Registrar,
which requirements include membership or participation in the Securities
Transfer Agent's Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Certificate Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Exchange Act. Each Trust Certificate surrendered for registration of transfer
or exchange shall be canceled and subsequently disposed of by the Certificate
Registrar in accordance with its customary practice.
(d) No service charge shall be made for any registration of transfer
or exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.
(e) Transfer Restrictions.
(A) No Certificateholder may, in any transaction or series of
transactions, directly or indirectly (each of the following, a "transfer"),
(i) sell, assign or otherwise in any manner dispose of all or any part of its
interest in any Certificate issued to it, whether by act, deed, merger or
otherwise or (ii) mortgage, pledge or create a lien or security interest in
such beneficial interest unless such transfer is made to a Qualified
Institutional Buyer in accordance with Rule 144A, under the Securities Act.
Each Certificateholder (other than the initial Holder which shall be deemed to
have represented that it is an "institutional accredited investor" under Rule
501 of the Securities Act) by acquiring any Certificate or any interest therein
shall be deemed to represent to the Issuer and the Owner Trustee that it is a
Qualified Institutional Buyer. Notwithstanding anything contained herein to the
contrary, neither the Certificate Registrar nor shall the Owner Trustee be
responsible for compliance with the Securities Act or applicable securities
law.
(B) At any time during the taxable year of the Trust, there shall
be no more than 100 Holders. The Certificate Registrar shall take such action
as maybe necessary to ensure that this Section 3.4(e) is satisfied, including,
without limitation, refusing to register the transfer of any Certificate. The
Certificate Registrar shall comply with all reasonable written directions
given by the Owner Trustee.
(C) Each Certificate issued hereunder shall contain the following
legend:
THIS CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH CERTAIN PROVISIONS
OF A TRUST AGREEMENT BETWEEN ML ASSET BACKED CORPORATION AND
______________________________ (THE "TRUST AGREEMENT"). THIS CERTIFICATE HAS
NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY SECURITIES LAWS, AND ISSUER HAS NOT
BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS
AMENDED, AND PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE
TRUST AGREEMENT AND APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED
STATES AND TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), AND SOLELY WITH RESPECT TO THE INITIAL OFFERING OF THE
CERTIFICATES, TO INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE
501(A) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) UPON DELIVERY OF A
REPRESENTATION LETTER TO THE TRUSTEE.
NO EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") AND NO OTHER PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
ANY ENTITY THE ASSETS OF WHICH CONSTITUTE OR ARE DEEMED FOR PURPOSES OF ERISA
OR SECTION 4975 OF THE CODE TO CONSTITUTE THE ASSETS OF ANY SUCH PLAN, MAY
PURCHASE THIS CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE AND THE
HOLDING OF THIS CERTIFICATE OR SUCH INTEREST BY SUCH PLAN (OR ANY ENTITY THE
ASSETS OF WHICH CONSTITUTE `PLAN ASSETS" OF ANY SUCH PLAN) IS SUBJECT TO A
STATUTORY OR ADMINISTRATIVE EXEMPTION. ANY HOLDER HEREOF OR ANY INTEREST
HEREIN THAT IS, OR IS ACTING ON BEHALF OF OR WITH "PLAN ASSETS" OF, AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE, AND WITH RESPECT TO WHICH THE TRUSTEE OR THE OWNER TRUSTEE IS A
"PARTY IN INTEREST" OR A "DISQUALIFIED PERSON", BY PURCHASING THIS CERTIFICATE
OR SUCH INTEREST REPRESENTS THAT ITS PURCHASE OF THIS CERTIFICATE OR SUCH
INTEREST IS SUBJECT TO A STATUTORY OR ADMINISTRATIVE EXEMPTION FROM THE
PROHIBITED TRANSACTION RULES OF ERISA AND SECTION 4975 OF THE CODE.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF THE ISSUER THAT SUCH
PURCHASER HAS NOT ACQUIRED NOR WILL IT SELL, TRADE, TRANSFER, ASSIGN,
PARTICIPATE, PLEDGE, HYPOTHECATE, CAUSE TO BE MARKETED, OR OTHERWISE DISPOSE
OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) ON OR THROUGH (I) AN "ESTABLISHED
SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(B)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, INCLUDING, WITHOUT LIMITATION, AN
OVER-THE-COUNTER-MARKET OR AN "INTERDEALER QUOTATION SYSTEM" THAT REGULARLY
DISSEMINATES FIRM BUY OR SELL QUOTATIONS, OR (II) A "SECONDARY MARKET (OR THE
SUBSTANTIAL EQUIVALENT THEREOF)" WITHIN THE MEANING OF CODE SECTION
7704(B)(2).
[THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE AT
ANY TIME MAYBE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.]
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If (a) any mutilated Trust Certificate shall be surrendered to the Certificate
Registrar, or if the Owner Trustee and the Certificate Registrar shall receive
evidence to their satisfaction of the destruction, loss or theft of any Trust
Certificate and (b) there shall be delivered to the Certificate Registrar and
the Owner Trustee, such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Certificate shall have been acquired by a bona fide purchaser, the Owner
Trustee on behalf of the Trust shall execute and the Owner Trustee or the
Owner Trustee's authentication agent or Certificate Registrar shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Trust Certificate, a new Trust Certificate of like
class, tenor and denomination. In connection with the issuance of any new
Trust Certificate under this Section, the Owner Trustee or the Certificate
Registrar may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith. Any
duplicate Trust Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Certificate shall
be found at any time.
SECTION 3.6 Persons Deemed Certificateholders. Every Person by virtue
of becoming a Certificateholder in accordance with this Agreement shall be
deemed to be bound by the terms of this Agreement. Prior to due presentation
of a Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar and any agent of the Owner Trustee and the Certificate
Registrar may treat the Person in whose name any Trust Certificate shall be
registered in the Certificate Register as the Holder of such Trust Certificate
for the purpose of receiving distributions pursuant to Section 5.2 and for all
other purposes whatsoever, and none of the Owner Trustee or the Certificate
Registrar nor any agent of the Owner Trustee or the Certificate Registrar
shall be bound by any notice to the contrary.
SECTION 3.7 Access to List of Certificateholders' Names and
Addresses. The Certificate Registrar shall furnish or cause to be furnished to
the Owner Trustee, the Insurer, the Servicer or the Depositor, within 15 days
after receipt by the Certificate Registrar of a request therefor from such
Person in writing (or such shorter period as may be specified in such
request), a list, of the names and addresses of the Certificateholders as of
the most recent Record Date. If three or more Holders of Trust Certificates or
one or more Holders of Trust Certificates evidencing not less than 25% of the
Certificate Balance apply in writing to the Certificate Registrar, and such
application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Trust Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Certificate
Registrar shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Each Holder, by receiving and holding a
Trust Certificate, shall be deemed to have agreed not to hold any of the
Depositor, the Servicer, the Insurer, the Certificate Registrar or the Owner
Trustee or any agent thereof accountable by reason of the disclosure of its
name and address, regardless of the source from which such information was
derived.
SECTION 3.8 Maintenance of Office or Agency. The Owner Trustee shall
maintain an office or offices or agency or agencies where Trust 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 Trust Certificates
and the Basic Documents maybe served. The Owner Trustee initially designates
_____________________________, as its office for such purposes. The Owner
Trustee shall give prompt written notice to the Depositor, the Insurer and the
Certificateholders of any change in the location of the Certificate Register
or any such office or agency.
SECTION 3.9 Appointment of Certificate Paying Agent. The Certificate
Paying Agent shall make distributions to Certificateholders from the
Certificate Distribution Account pursuant to Section 5.2 and shall report the
amounts of such distributions to the Owner Trustee. The Certificate Paying
Agent shall invest amounts on deposit in the Certificate Distribution Account
in accordance with Section 5.1 hereof. Any Certificate Paying Agent shall have
the revocable power to withdraw funds from the Certificate Distribution
Account for the purpose of making the distributions referred to above. The
Owner Trustee may revoke such power and remove the Certificate Paying Agent if
the Owner Trustee determines in its sole discretion that the Certificate
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect. The Certificate Paying Agent shall initially be the
Indenture Trustee, and any co-paying agent chosen by the Owner Trustee, and
acceptable to the Servicer. The Certificate Paying Agent shall be permitted to
resign upon 30 days' written notice to the Owner Trustee and the Servicer. In
the event that the Indenture Trustee shall no longer be the Certificate Paying
Agent, the Owner Trustee shall appoint a successor to act as Certificate
Paying Agent (which shall be a bank or trust company). The Owner Trustee shall
cause such successor Certificate Paying Agent or any additional Certificate
Paying Agent appointed by the Owner Trustee to execute and deliver to the
Owner Trustee an instrument in which such successor Certificate Paying Agent
or additional Certificate Paying Agent shall agree with the Owner Trustee that
as Certificate Paying Agent, such successor Certificate Paying Agent or
additional Certificate Paying Agent will hold all sums, if any, held by it for
payment to the Certificateholders in trust for the benefit of the
Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders. The Certificate Paying Agent shall return all unclaimed
funds to the Owner Trustee and upon removal of a Certificate Paying Agent such
Certificate Paying Agent shall also return all funds in its possession to the
Owner Trustee. The provisions of Sections 7.1, 7.3, 7.4, 8.1 and 8.2 shall
apply to the Owner Trustee also in its role as Certificate Paying Agent, for
so long as the Owner Trustee shall act as Certificate Paying Agent and, to the
extent applicable, to any other paying agent appointed hereunder. Any
reference in this Agreement to the Certificate Paying Agent shall include any
co-paying agent unless the context requires otherwise. The Indenture Trustee,
in acting as Certificate Registrar and Certificate Paying Agent hereunder
shall be entitled to the benefit of the same protective and exculpatory
provisions and the indemnity and compensation provisions applicable to the
Indenture Trustee in the Indenture and Sale and Servicing Agreement.
SECTION 3.10 [Reserved].
SECTION 3.11 [Reserved].
SECTION 3.12 [Reserved].
SECTION 3.13 ERISA Restrictions. The Certificates may not be acquired
by or for the account of (i) an employee benefit plan (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to the provisions of Title 1 of ERISA, (ii) a plan
described in Section 4975(e)(1) of the Internal Revenue Code of 1985, as
amended, or (iii) any entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding a Certificate, the Holder thereof shall be deemed to
have represented and warranted that it is not a Benefit Plan.
SECTION 3.14 [Reserved].
SECTION 3.15 [Reserved].
SECTION 3.16 [Reserved].
SECTION 3.17 Original Issuance. The Trust Certificates, upon original
issuance, will be issued in the form of Definitive Trust Certificates to be
delivered by or on behalf of the Trust in accordance with the written
instructions of the Depositor. The Owner Trustee shall recognize the Holders
of the Definitive Trust Certificates as Certificateholders. The Trust
Certificate shall be printed, lithographed or engraved or maybe reproduced in
any other manner as so reasonably acceptable to the Owner Trustee, as evidence
by its execution thereof.
SECTION 3.18 Actions of Certificateholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Certificateholders in person or
by agent duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Owner Trustee and, when required, to the
Depositor or the Servicer. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Agreement and conclusive in favor of the Owner Trustee, the Depositor and the
Servicer, if made in the manner provided in this Section 3.18.
(b) The fact and date of the execution by any Certificateholder of
any such instrument or writing may be proved in any reasonable manor which the
Owner Trustee deems sufficient.
(c) Any request, demand, authorization, direction, notice, consent,
waiver or other act by a Certificateholder shall bind every Holder of every
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, or omitted to be
done, by the Owner Trustee, the Depositor or the Servicer in reliance thereon,
regardless of whether notation of such action is made upon such Certificate.
(d) The Owner Trustee may require such additional proof of any
matter referred to in this Section 3.18 as it shall deem necessary.
ARTICLE IV
Actions by Owner Trustee
SECTION 4.1 Prior Notice to Holders with Respect to Certain Matters.
(a) With respect to the following matters, the Owner Trustee shall not take
action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Certificateholders and the Insurer in writing
of the proposed action and the Certificateholders shall not have notified the
Owner Trustee in writing prior to the 30th day after such notice is given that
such Certificateholders have withheld consent or provided alternative
direction:
(i) (i) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute or unless such amendment would not
materially and adversely affect the interests of the Holders, as
evidenced by all opinion of counsel to such effect);
(ii) (ii) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
required;
(iii) (iii) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
not required and such amendment materially adversely affects the
interest of the Certificateholders; or
(iv) (iv) except pursuant to Section 11.1 of the Sale and
Servicing Agreement, the amendment, change or modification of the
Sale and Servicing Agreement, except to cure any ambiguity or defect
or to amend or supplement any provision in a manner that would not
materially adversely affect the interests of the Certificateholders.
(b) The Owner Trustee shall notify the Certificateholders in writing
of any appointment of a successor Note Registrar, Certificate Paying Agent or
Certificate Registrar within five Business Days of the effective date of such
appointment.
SECTION 4.2 Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the direction
of the Certificateholders in accordance with the Basic Documents, to (a)
remove the Servicer under the Sale and Servicing Agreement pursuant to Section
8.1 thereof following payment of the Notes in full or (b) except as expressly
provided in the Basic Documents, sell the Receivables after the termination of
the Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the
Certificateholders and the furnishing of indemnification satisfactory to the
Owner Trustee by the Certificateholders.
SECTION 4.3 Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to, and shall not, institute
proceedings for the Trust to be adjudicated a bankrupt or insolvent, or
consent to the institution of bankruptcy or insolvency proceedings against the
Trust, or file a petition seeking or consenting to reorganization or relief
under any applicable federal or state law relating to the bankruptcy of the
Trust, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trust or a
substantial part of the property of the Trust or cause or permit the Trust to
make any assignment for the benefit of creditors, or admit in writing the
inability of the Trust to pay its debts generally as they become due, or
declare or effect a moratorium on the debt of the Trust or take any action in
furtherance of any such action relating to the Trust without the unanimous
prior approval of all Certificateholders and the delivery to the Owner Trustee
by each such Certificateholder of a certificate certifying that such
Certificateholder reasonably believes that the Trust is insolvent.
SECTION 4.4 Restrictions on Certificateholders' Power. (a) 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 or would be contrary to Section 2.3 nor shall the Owner
Trustee be obligated to follow any such direction, if given.
(b) No Certificateholder shall have any right by virtue or by
availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to
this Agreement or any Basic Document, unless the Certificateholders are the
instructing party pursuant to Section 6.3 of this Agreement and unless a
Certificateholder previously shall have given to the Owner Trustee a written
notice of default and of the continuance thereof, as provided in this
Agreement, and also unless Certificateholders evidencing not less than 25% of
the Certificate Balance shall have made written request upon the Owner Trustee
to institute such action, suit or proceeding in its own name as Owner Trustee
under this Agreement and shall have offered to the Owner Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Owner Trustee, for 30
days after its receipt of such notice, request, and offer of indemnity, shall
have neglected or refused to institute any such action, suit, or proceeding,
and during such 30day period no request or waiver inconsistent with such
written request has been given to the Owner Trustee pursuant to and in
compliance with this Section or Section 6.3 of this Agreement; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Owner Trustee,
that no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of
this Agreement to affect, disturb, or prejudice the rights of the Holders of
any other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Agreement, except in the manner provided in this Agreement and for the equal,
ratable, and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section 4.4, each and every
Certificateholder and the Owner Trustee shall be entitled to such relief as
can be given either at law or in equity.
SECTION 4.5 Majority Control. No Certificateholder shall have any
right to vote or in any manner otherwise control the operation and management
of the Trust except as expressly provided in this Agreement. Except as
expressly provided herein, any action that may be taken by the
Certificateholders under this Agreement maybe taken by the Holders of each
class of Trust Certificates evidencing not less than a majority of the
Certificate Balance or, in the case of the Class R Certificates, a majority
percentage interest. Except as expressly provided herein, any written notice
of the Certificateholders delivered pursuant to this Agreement shall be
effective if signed by Holders of each Class of Certificates evidencing not
less than a majority of the Certificate Balance or, in the case of the Class R
Certificates, a majority percentage interest at the time of the delivery of
such notice.
SECTION 4.6 Rights of Insurer. Notwithstanding anything to the
contrary in the Basic Documents, for so long as any Notes are Outstanding
under the Indenture, without the prior written consent of the Insurer (so long
as no Insurer Default shall have occurred and be continuing), the Owner
Trustee shall not (i) remove the Servicer, (ii) initiate any claim, suit or
proceeding by the Trust or compromise any claim, suit or proceeding brought by
or against the Trust, other than with respect to the enforcement of any
Receivable or any rights of the Trust thereunder, (iii) authorize the merger
or consolidation of the Trust with or into any other business trust or other
entity (other than in accordance with Section 3.10 of the Indenture) or (iv)
amend the Certificate of Trust.
With respect to the Insurer, the Owner Trustee undertakes to perform
or observe only such of the covenants and obligations of the Owner Trustee as
are expressly set forth in this Agreement, and no implied covenants or
obligations with respect to the Insurer shall be read into this Agreement or
the other Basic Documents against the Owner Trustee. The Owner Trustee shall
not be deemed to owe any fiduciary duty to the Insurer and shall not be liable
to any such person for the failure of the Trust to perform its obligations to
such persons other than as a result of the gross negligence or willful
misconduct of the Owner Trustee in the performance of its express obligations
under this Agreement.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.1 Establishment of Certificate Distribution Account. (a)
The Owner Trustee, for the benefit of the Certificateholders, shall establish
or cause to be established and maintained in the name of the Trust an Eligible
Deposit Account (the "Certificate Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Certificateholders. The Certificate Distribution Account
shall be initially established with the Certificate Paying Agent.
(b) The Owner Trustee shall possess all right, title and interest in
all funds on deposit from time to time in the Certificate Distribution Account
and in all proceeds thereof. If, at any time, the Certificate Distribution
Account ceases to be an Eligible Deposit Account, the Owner Trustee shall
within five (5) Business Days (or such longer period, not to exceed thirty
(30) calendar days, as to which each Rating Agency may consent) establish or
cause to be established a new Certificate Distribution Account as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such new
Certificate Distribution Account.
(c) All amounts held in the Certificate Distribution Account shall,
to the extent permitted by applicable laws, rules and regulations, be
invested, by the Certificate Paying Agent at the Servicer's written direction,
in Eligible Investments that mature not later than one (1) Business Day prior
to the Payment Date for the Collection Period to which such amounts relate.
Investments in Eligible Investments shall be made in the name of the Trust,
and such investments shall not be sold or disposed of prior to their maturity.
Subject to the other provisions hereof, the Owner Trustee shall have sole
control over each such investment and the income thereon, and any certificate
or other instrument evidencing any such investment, if any, shall be delivered
directly to the Owner Trustee. All Investment Earnings on funds in the
Certificate Distribution Account shall be distributed on the next Payment Date
pursuant to Section 5.6 of the Sale and Servicing Agreement.
SECTION 5.2 Application of Funds in Certificate Distribution Account.
(a) On each Payment Date, the Certificate Paying Agent will, based on the
information contained in the Servicer's Certificate delivered on the related
Determination Date pursuant to Section 4.9 of the Sale and Servicing
Agreement, distribute to the Owner Trustee (as necessary) and the
Certificateholders, to the extent of the funds available, amounts deposited in
the Certificate Distribution Account pursuant to Section 5.6(b)(vii) of the
Sale and Servicing Agreement on such Payment Date in the following order of
priority:
(i) first, to the Owner Trustee for any unpaid fees and
expenses due and owing;
(ii) second, to the Class A Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Principal
Distributable Amount; and
(iii) third, to the Class R Certificateholders, in accordance
with the percentage interest held, an amount equal to the remaining
amounts on deposit in the Certificate Distribution Account.
(b) On the Payment Date following the date on which amounts received
in respect of the Transferor's exercise of its option to purchase the corpus
of the Trust pursuant to Section 9.1(a) of the Sale and Servicing Agreement
are deposited in the Certificate Distribution Account, the Certificate Paying
Agent will distribute such amounts taking into account any concurrent
distribution made pursuant to Section 5.2(a):
(i) first, to the Owner Trustee for any unpaid fees and
expenses due and owing;
(ii) second, to the Class A Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Principal
Distributable Amount; and
(iii) third, to the Class R Certificateholders, in accordance
with the percentage interest held, an amount equal to the remaining
amounts on deposit in the Certificate Distribution Account.
(c) On the Payment Date following the date on which the Indenture
Trustee makes payments of money or property in respect of liquidation of the
Trust Property pursuant to Section 5.6 of the Indenture and deposits funds
received in connection with such liquidation in the Certificate Distribution
Account, the Certificate Paying Agent will distribute such funds taking into
account any concurrent distribution made pursuant to Section 5.2(a):
(i) first, to the Owner Trustee for any unpaid fees and
expenses due and owing;
(ii) second, to the Class A Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Principal
Distributable Amount; and
(iii) third, to the Class R Certificateholders, in accordance
with the percentage interest held, an amount equal to the remaining
amounts on deposit in the Certificate Distribution Account.
(d) On each Payment Date, the Certificate Paying Agent shall send to
each Certificateholder the statement provided to the Owner Trustee by the
Servicer pursuant to Section 5.8 of the Sale and Servicing Agreement on such
Payment Date.
(e) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section. The Certificate Paying Agent is hereby
authorized and directed to retain from amounts otherwise distributable to the
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
or Certificate Paying Agent from contesting arty 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 a 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 there is a possibility that withholding
tax is payable with respect to a distribution (such as a distribution to a
non-US Cettificateholder), the Certificate Paying Agent may in it sole
discretion withhold such amounts in accordance with this clause (e). In the
event that an Holder wishes to apply for a refund of any such withholding tax,
the Owner Trustee or Certificate Paying Agent shall reasonably cooperate with
such Certificateholder in making such claim so long as such Certificateholder
agrees to reimburse the Owner Trustee or Certificate Paying Agent for any
out-of-pocket expenses incurred.
SECTION 5.3 [Reserved].
SECTION 5.4 Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Payment Date
shall be made to each Certificateholder of record on the preceding Record Date
either by wire transfer, in immediately available funds, to the account of
such Holder at a bank or other entity having appropriate facilities therefor,
if (i) such Certificateholder shall have provided to the Certificate Registrar
appropriate written instructions at least five Business Days prior to such
Payment Date and such Holder's Trust Certificates in the aggregate evidence a
denomination of not less than $1,000,000 or (ii) such Certificateholder is the
Depositor, or an Affiliate thereof or of the Servicer, or, if not, by check
mailed to such Certificateholder at the address of such holder appearing in
the Certificate Register. Notwithstanding the foregoing, the final
distribution in respect of any Trust Certificate (whether on the Final
Scheduled Payment Date or otherwise) will be payable only upon presentation
and surrender of such Trust Certificate at the office or agency maintained for
that purpose by the Owner Trustee pursuant to Section 3.8.
SECTION 5.5 No Segregation of Monies; No Interest. Subject to
Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need not
be segregated in any manner except to the extent required by law 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.
SECTION 5.6 Accounting and Reports to the Noteholders,
Certificateholders the Internal Revenue Service and Others. Subject to Article
X of the Sale and Servicing Agreement and to Section 2.11 herein, the Owner
Trustee shall (a) maintain (or cause to be maintained) the books of the Trust
on a calendar year basis on the accrual method of accounting, (b) deliver (or
cause to be delivered) to each Certificateholder, as may be required by the
Code and applicable Treasury Regulations, such information as may be required
(including Schedule K-1, if applicable) to enable the Certificateholders to
prepare their Federal and state income tax returns, (c) file or cause to be
filed such tax returns relating to the Trust (including a partnership
information return, Form 1065, if applicable) and make such elections as may
from time to time be required or appropriate under any applicable state or
Federal statute or rule or regulation thereunder so as to maintain the Trust's
characterization as a disregarded entity if the Certificates are treated as
held by a single person or as a partnership if the Certificates are treated as
held by more than one person for Federal income tax purposes and (d) collect
or cause to be collected any withholding tax as described in and in accordance
with Section 5.2(e) with respect to income or distributions to
Certificateholders. The Owner Trustee shall make all elections pursuant to
this Section as directed by the "tax matters partner". The Owner Trustee shall
sign any tax information returns filed pursuant to this Section 5.6 and any
other returns as may be required by law, and in doing so shall rely entirely
upon, and shall have no liability for information provided by, or calculations
provided by, the "tax matters partner". The Owner Trustee shall elect under
Section 1278 of the Code to include in income currently any market discount
that accrues with respect to the Receivables. The Owner Trustee shall make the
election provided under Section 754 of the Code only upon written request of
the Holder of the Class R Certificate.
SECTION 5.7 Signature on Returns; Tax Matters Partner. (a)
Notwithstanding the provisions of Section 5.6, the Owner Trustee shall sign on
behalf of the Trust any tax returns of the Trust, unless applicable law
requires a Certificateholder to sign such documents, in which case such
documents shall be signed by the Holder of the Class R Certificate.
(b) If the Trust is characterized as a partnership for U. S. Federal
income tax purposes, the Holder of the Class R Certificate shall be the "tax
matters partner" of the Trust pursuant to the Code.
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.1 General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is
named as a party and each certificate or other document attached as an exhibit
to or contemplated by the Basic Documents to which the Trust is named as a
party, in each case, in such form as the Depositor
shall approve as evidenced conclusively by the Owner Trustee's execution
thereof, and on behalf of the Trust, to direct the Indenture Trustee to
authenticate and deliver the [Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and Class A-4 Notes] in the aggregate principal amounts, of [$_________,
$_________, $________ and $__________], respectively. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Basic Documents.
SECTION 6.2 General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant
to the terms of this Agreement and to administer the Trust in the interest of
the Holders, subject to the Basic Documents and in accordance with the
provisions of this Agreement. Notwithstanding the foregoing, the Owner Trustee
shall be deemed to have discharged its duties and responsibilities hereunder
and under the Basic Documents to the extent the Servicer has agreed in the
Sale and Servicing Agreement to perform any act or to discharge any duty of
the Owner Trustee hereunder or under any Basic Document, and the Owner Trustee
shall not be liable for the default or failure of the Servicer to carry out
its obligations under the Sale and Servicing Agreement.
SECTION 6.3 Action upon Instruction. (a) Subject to Article IV, the
Holders of a majority of the Outstanding Amount of the Class A Certificates
and a majority percentage interest of the Class R Certificates shall have the
exclusive right to direct the actions of the Owner Trustee in the management
of the Trust, so long as such instructions are not inconsistent with the
express terms set forth herein or in any Basic Document. Such majority of
Certificateholders shall not instruct the Owner Trustee in a manner
inconsistent with this Agreement or the Basic Documents.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any Basic Document or is otherwise contrary
to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
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 written instruction of the Certificateholders received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten days
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Basic Documents, as it shall deem to
be in the best interests of the Certificateholders, and shall have no
liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any
such provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of
such action or inaction, to any Person. If the Owner Trustee shall not have
received appropriate instruction within ten (10) days of such notice (or
within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be under
no duty to, take or refrain from taking such action, not inconsistent with
this Agreement or the Basic Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any Person
for such action or inaction.
SECTION 6.4 No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have arty duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain
from taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly provided by
the terms of this Agreement or in any document or written instruction received
by the Owner Trustee pursuant to Section 6.3; and no implied duties or
obligations shall be read into this Agreement or any Basic Document against
the Owner Trustee. The Owner Trustee shall have no responsibility for filing
any financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or file any Commission filing for the
Trust or to record this Agreement or any Basic Document. The Owner Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take
all action as may be necessary to discharge any Liens on any part of the Owner
Trust Estate that result from actions by, or claims against, the Owner Trustee
(solely in its individual capacity) and that are not related to the ownership
or the administration of the Owner Trust Estate.
SECTION 6.5 No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the Basic
Documents and (iii) in accordance with any document or instruction delivered
to the Owner Trustee pursuant to Section 6.3.
SECTION 6.6 Restrictions. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section
2.3 or (b) that, to the actual knowledge of the Owner Trustee would result in
the Trust becoming taxable as a corporation for Federal income tax purposes.
The Certificateholders shall not direct the Owner Trustee to take action that
would violate the provisions of this Section.
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.1 Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement. The
Owner Trustee, in its individual capacity, and the Certificate Paying Agent
also agree to disburse all moneys actually received by them constituting part
of the Owner Trust Estate upon the terms of the Basic Documents and this
Agreement. The Owner Trustee in its individual capacity shall not be
answerable or accountable hereunder or under any Basic Document undue any
circumstances, except (i) for its own willful misconduct, bad faith or gross
negligence, (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3 expressly made by the Owner Trustee, in its
individual capacity, (iii) for liabilities arising from the failure of the
Owner Trustee to perform obligations expressly undertaken by it in the last
sentence of Section 6.4 hereof, (iv) for any investments issued by the Owner
Trustee or any branch or affiliate thereof in its commercial capacity or (v)
for taxes, fees or other charges on, based on or measured by, any fees,
commissions or compensation received by the Owner Trustee, in its individual
capacity. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Servicer or any Certificateholder or with the consent of the Insurer;
(c) No provision of this Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Basic Document if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or provided
to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution hereof
by the Depositor or for the form, character, genuineness, sufficiency, value
or validity of any of the Owner Trust Estate or for or in respect of the
validity or sufficiency of the Basic Documents, other than the certificate of
authentication on the Trust Certificates, and the Owner Trustee shall in no
event assume or incur any liability, duty or obligation to the Insurer,
Indenture Trustee, any Noteholder or to any Certificateholder, other than as
expressly provided for herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Insurer, Indenture Trustee or the Servicer under any of the
Basic Documents or otherwise and the Owner Trustee shall have no obligation or
liability to perform the obligations of the Trust under this Agreement or the
Basic Documents that are required to be performed by the Indenture Trustee
under the Indenture or the Servicer under the Sale and Servicing Agreement;
and
(g) the Owner Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation under this Agreement or otherwise or in relation to
this Agreement or any Basic 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 Document shall not be construed
as a duty, and the Owner Trustee shall not be answerable for other than its
gross negligence, bad faith or willful misconduct in the performance of any
such act.
SECTION 7.2 Furnishing of Documents. The Owner Trustee shall furnish
to the 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 Documents.
SECTION 7.3 Representations and Warranties. The Owner Trustee in its
individual capacity hereby represents and warrants to the Depositor and to the
Holders and the Insurer (which shall have relied on such representations and
warranties in issuing the Policy), that:
(a) It is a Delaware banking corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware state law, governmental rule or regulation governing
the banking or trust powers of the Owner Trustee or any judgment or order
binding on it, or constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract, agreement or instrument to which
it is a party or by which any of its properties may be bound.
(d) The execution, delivery and performance by the Owner Trustee of
this Agreement does 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 of the State
of Delaware or the United States of America regulating the banking or trust
powers of the Owner Trustee, other than the filing of the Certificate of Trust
with the Secretary of State.
(e) This Agreement has been duly authorized, executed and delivered
by the Owner Trustee and shall constitute the legal, valid, and binding
agreement of the Owner Trustee, enforceable in accordance with its terms,
except as such enforcement maybe limited by bankruptcy, insolvency,
reorganization and other laws affecting the rights of creditors generally, and
by general principles of equity regardless of whether enforcement is pursuant
to a proceeding in equity or at law.
SECTION 7.4 Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of the determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by the
treasurer, secretary or other authorized officers of the relevant party, as to
such fact or matter, and such certificate shall constitute full protection to
the Owner Trustee for any action taken or omitted to be taken by it in good
faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may, at the expense of the Servicer,
act directly or through its agents or attorneys pursuant to agreements entered
into with any of them, and the Owner Trustee shall not be liable for the
conduct or misconduct of such agents or attorneys if such agents or attorneys
shall have been selected by the Owner Trustee with reasonable care, and (ii)
may, at the expense of the Servicer, consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the opinion or advice of any such
counsel, accountants or other such persons and such opinion or advice is not
contrary to this Agreement or any Basic Document herein.
SECTION 7.5 Not Acting in Individual Capacity. Except as provided
herein or in any other Basic Document, in accepting the trusts hereby created
[________________________] acts solely as Owner Trustee hereunder and not in
its individual capacity and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Agreement or any
Basic Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
SECTION 7.6 Owner Trustee Not Liable for Trust Certificates or
Receivables. The statements contained herein and in the Trust Certificates
(other than the signature and countersignature of the Owner Trustee on the
Trust Certificates) shall be taken as the statements of the Depositor and the
Owner Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Agreement, of any Basic Document or of the Trust Certificates (other than the
signature and countersignature of the Owner Trustee on the Trust Certificates)
or the Notes, or of any Receivable or related documents. The Owner Trustee
shall at no time have any responsibility or liability for or with respect to
the legality, validity and enforceability of any Receivable, or the perfection
and priority of any security interest created by any Receivable in any
Financed Vehicle or the maintenance of any such perfection and priority, or
for or with respect to the sufficiency of the Owner Trust Estate or its
ability to generate the payments to be distributed to Certificateholders under
this Agreement or the Noteholders under the Indenture, including, without
limitation: the existence, condition and ownership of any Financed Vehicle;
the existence and enforceability of any insurance thereon; the existence and
contents of any Receivable on any computer or other record thereof; the
validity of the assignment of any Receivable to the Trust or of any
intervening assignment; the completeness of any Receivable; the performance or
enforcement of any Receivable; the compliance by the Depositor or the Servicer
with any warranty or representation made under any Basic Document or in any
related document or the accuracy of any such warranty or representation or any
action of the Trustee or the Servicer or any subservicer taken in the name of
the Owner Trustee.
SECTION 7.7 Owner Trustee May Own Trust Certificates and Notes. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Trustee and the Servicer in banking transactions with the same rights as it
would have if it were not Owner Trustee.
SECTION 7.8 Payments from Owner Trust Estate. All payments to be made
by the Owner Trustee under this Agreement or any of the Basic Documents to
which the Trust or the Owner Trustee is a party shall be made only from the
income and proceeds of the Owner Trust Estate and only to the extent that the
Owner Trust shall have received income or proceeds from the Owner Trust Estate
to make such payments in accordance with the terms hereof.
[_____________________], or any successor thereto, in its individual capacity,
shall not be liable for any amounts payable under this Agreement or any of the
Basic Documents to which the Trust or the Owner Trustee is a party.
SECTION 7.9 Doing Business in Other Jurisdictions. Notwithstanding
anything contained to the contrary, neither [_____________],or any successor
thereto, nor the Owner Trustee shall be required to take any action in any
jurisdiction other than in the State of Delaware if the taking of such action
will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other
governmental authority or agency of any jurisdiction other than the State of
Delaware; (ii) result in any fee, tax or other governmental charge under the
laws of the State of Delaware becoming payable by _____________________ (or
any successor thereto); or (iii) subject ______________________ (or any
successor thereto) to personal jurisdiction in any jurisdiction other than the
State of Delaware for causes of action arising from acts unrelated to the
consummation of the transactions by _________________ (or any successor
thereto) or the Owner Trustee, as the case may be, contemplated hereby.
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.1 Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive from the Servicer as compensation for its services hereunder
such fees as have been separately agreed upon with the Servicer before the
date hereof, and the Owner Trustee shall be entitled to be reimbursed from the
Servicer in accordance with the terms of such agreement for its other
reasonable expenses hereunder, including the reasonable compensation, expenses
and disbursements of such agents, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of
its rights and its duties in accordance with the terms of such agreement.
SECTION 8.2 Indemnification. The Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") shall
be indemnified by the Servicer from and against, any and all liabilities,
obligations, losses, damages, taxes, claims, actions and suits, and any and
all reasonable costs, expenses and disbursements (including reasonable legal
fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against the Owner Trustee or any Indemnified Party in any way relating to or
arising out of this Agreement, the Basic Documents, the Owner Trust Estate,
the administration of the Owner Trust Estate or the action or inaction of the
Owner Trustee hereunder, except only that the Owner Trustee shall not be
indemnified from and against Expenses arising or resulting from any of the
matters described in the third sentence of Section 7.1. The indemnities
contained in this Section shall survive the resignation or termination of the
Owner Trustee or the termination of this Agreement. All amounts payable to the
Owner Trustee under this Section 8.2 shall be paid in accordance with the
terms of the Sale and Servicing Agreement.
SECTION 8.3 Payments of Owner Trustee. Any amounts paid to the Owner
Trustee pursuant to this Article VIII shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment. To the extent that the
Owner Trustee's fees and expenses have not been paid, the Owner Trustee shall
have a lien on the Certificate Distribution Account.
SECTION 8.4 Non-recourse Obligations. Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its
individual capacity and in its capacity as Owner Trustee for the Trust that
all obligations of the Trust to the Owner Trustee individually or as Owner
Trustee for the Trust shall be recourse to the Owner Trust Estate only and
specifically shall not be recourse to the assets of any Holder.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1 Termination of Trust Agreement. (a) This Agreement shall
terminate and the Trust shall wind-up, dissolve and terminate and be of no
further force or effect upon the latest of (i) the maturity or other
liquidation of the last Receivable (including the purchase by the Servicer at
its option of the corpus of the Trust as described in Section 9.1 of the Sale
and Servicing Agreement) and the subsequent distribution of amounts in respect
of such Receivables as provided in the Basic Documents and (ii) six (6) months
after distributions of all moneys and other property or proceeds of Owner
Trust Estate in accordance with the Indenture, Sale and Servicing Agreement
and Article V of this Agreement, including the payment to Certificateholders
of all amounts required to be paid to them pursuant to this Agreement;
provided, however, that the rights to indemnification under Section 8.2 shall
survive the termination of the Trust. The Servicer shall promptly notify the
Owner Trustee of any prospective termination pursuant to this Section 9.1. The
bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder, shall not (x) operate to terminate this Agreement or the
Trust, nor (y) entitle such Cerrificateholder's legal representatives or heirs
to claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Owner Trust Estate
nor (z) otherwise affect the rights, obligations and liabilities of the
parties hereto.
(b) Except as provided in clause (a), neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment
Date upon which the Certificateholders shall surrender their Trust
Certificates to the Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter
to Certificateholders mailed within five (5) Business Days of receipt of
notice of such termination from the Servicer given pursuant to Section 9.1(c)
of the Sale and Servicing Agreement, stating (i) the Payment Date upon or with
respect to which final payment of the Trust Certificates shall be made upon
presentation and surrender of the Trust Certificates at the office of the
Certificate Paying Agent therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such Payment
Date is not applicable, payments being made only upon presentation and
surrender of the Trust Certificates at the office of the Certificate Paying
Agent therein specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the Certificate
Paying Agent at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Trust Certificates, the Certificate Paying
Agent shall cause to be distributed to Certificateholders amounts
distributable on such Payment Date pursuant to Section 5.2.
In the event that all of the Certificateholders shall not
surrender their Trust Certificates for cancellation within six months after
the date specified in the above mentioned written notice, the Owner Trustee
shall give a second written notice to the remaining Certificateholders to
surrender their Trust Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
all the Trust 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 Certificateholders concerning
surrender of their Trust Certificates, and the cost thereof shall be paid out
of the funds and other assets that shall remain subject to this Agreement. Any
funds remaining in the Trust after exhaustion of such remedies shall be
distributed, subject to applicable escheat laws, by the Owner Trustee to the
Depositor.
(d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the Class R Certificateholder.
(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall upon the written direction of the Depositor cause the
Certificate of Trust to be canceled by filing a certificate of cancellation
with the Secretary of State in accordance with the provisions of Section 3810
of the Business Trust Statute.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.1 Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by Federal or
State authorities and (iv) acceptable to the Insurer in its sole discretion,
so long as an Insurer Default shall not have occurred and be continuing. If
such corporation shall publish reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 10.2.
SECTION 10.2 Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Insurer, the
Certificateholders, the Depositor and the Servicer. Upon receiving such notice
of resignation, the Depositor or a Certificate Majority shall, with the prior
written consent of the Insurer, promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee, provided that the Depositor shall have received written confirmation
from each of the Rating Agencies that the proposed appointment will not result
in an increased capital charge to the Insurer by either of the Rating
Agencies. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Insurer may petition any court
of competent jurisdiction for the appointment of a successor the Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Depositor or a Certificate Majority, or if at
any time the Owner Trustee shall be legally unable to act, or shall be
adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Owner Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Depositor or a
Certificate Majority may remove the Owner Trustee. If the Depositor or a
Certificate Majority shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Depositor or a Certificate Majority, as
applicable, with the prior written consent of the Insurer, so long as no
Insurer Default has occurred and is continuing, 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 Depositor, if the Certificate Majority is acting, and one copy to
the successor Owner Trustee and payment of all fees owed to the outgoing Owner
Trustee.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section shall not become effective until acceptance of appointment by the
successor Owner Trustee pursuant to Section 10.3 and payment of all fees and
expenses owed to the outgoing Owner Trustee. The Depositor shall provide
notice of such resignation or removal of the Owner Trustee and to each of the
Rating Agencies.
SECTION 10.3 Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to
the Depositor, the Servicer, the Insurer and to its predecessor Owner Trustee
an instrument accepting such appointment under this Agreement, and thereupon
the resignation or removal of the predecessor Owner Trustee shall become
effective and such successor Owner Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Depositor and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully
and certainly vesting and confirming in the successor Owner Trustee all such
rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
Owner Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section, the Servicer shall mail notice of the successor of
such Owner Trustee to all Certificateholders, the Trustee, the Noteholders and
the Rating Agencies. If the Servicer shall fail to mail such notice within 10
days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Servicer. Any successor Owner Trustee appointed hereunder shall promptly
file a certificate of amendment to the Certificate of Trust with the Delaware
Secretary of State.
SECTION 10.4 Merger or Consolidation of 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 10.1, without the execution
or filing of any instrument or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding, provided
further that the Owner Trustee shall mail notice of any such merger or
consolidation to the Rating Agencies.
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Financed Vehicle may at the time be
located, the Servicer and the Owner Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Owner Trustee, and if Notes are Outstanding, the
Insurer to act as co-trustee, jointly with the Owner Trustee, or separate
trustee or separate trustees, of all or any part of the Owner Trust Estate,
and to vest in such Person, in such capacity, such title to the Trust, or any
part thereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Servicer and the Owner
Trustee may consider necessary or desirable. If the Servicer shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, the Owner Trustee subject, unless an Insurer Default shall have
occurred and be continuing or no Notes remain Outstanding, to the approval of
the Insurer (which approval shall not be unreasonably withheld) shall have the
power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 10.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised
or performed by the Owner Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee
or co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any
law of any jurisdiction in which any particular act or acts are to
be performed, the Owner Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(ii) No trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Servicer and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Owner Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Owner Trustee. Each such
instrument shall be filed with the Owner Trustee and a copy thereof given to
the Servicer and the Insurer.
Any separate trustee or co-trustee may at any time appoint
the Owner Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or
in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Owner Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
ARTICLE XI
Miscellaneous
SECTION 11.1 Supplements and Amendments. (a) This Agreement may be
amended by the Depositor and the Owner Trustee, with the prior written consent
of the Insurer (so long as any Notes are Outstanding and an Insurer Default
shall not have occurred and be continuing) and with prior written notice to
the Rating Agencies, without the consent of any of the Noteholders or the
Certificateholders, (i) to cure any ambiguity or defect or (ii) to correct,
supplement or modify any provisions in this Agreement; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder or Certificateholder.
(b) This Agreement may also be amended by the Depositor and the
Owner Trustee from time to time, (i) with the prior written consent of the
Insurer (so long as any Notes are Outstanding and an Insurer Default shall not
have occurred and be continuing) but without the consent of any Noteholders or
Certificateholders or, (ii) if an Insurer Default shall have occurred and be
continuing, with (x) the consent of a Note Majority, if Notes are Outstanding
and to the extent such amendment materially and adversely affects the
interests of the Noteholders, and (y) the consent of the Holders of
Certificates evidencing not less than a majority of the Certificate Balance
(which consent of any Holder of a Certificate or Note given pursuant to this
Section or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and on all future Holders of such
Certificate or Note and of any Certificate or Note issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon the Certificate or Note) with prior written notice
to the Rating Agencies, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that, subject to the express rights of
the Insurer under the Basic Documents, no such amendment shall (a) increase or
reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that shall be required
to be made for the benefit of the Noteholders or the Cerrificateholders or (b)
reduce the aforesaid percentage of the Outstanding Amount of the Notes and the
Certificate Balance required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes and Holders of all
outstanding Certificates; provided, further, that no such amendment shall
affect the rights or obligations of the Certificate Registrar or Certificate
Paying Agent without its consent
Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the substance
of such amendment or consent to each Certificateholder, the Indenture Trustee
and each of the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Trustee pursuant to this Section to
approve the particular form of any proposed amendment or consent, but it shall
be sufficient if such consent shall approve the substance thereof. The manner
of obtaining such consents (and any other consents of Certificateholders
provided for in this Agreement or in any other Basic Document) and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as the Owner Trustee may
prescribe.
Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.
Prior to the execution of any amendment to this Agreement or
the Certificate of Trust, the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement and that all conditions precedent
to the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 11.2 No Legal Title to Owner Trust Estate in
Certificateholders. 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 Articles V and IX. No transfer, by operation
of law or otherwise, of any right, title or 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 11.3 Limitations on Rights of Others. Except for Section 2.7,
the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Certificateholders, the Servicer and, to the
extent expressly provided herein, the Indenture Trustee, the Insurer and the
Noteholders, and nothing in this Agreement, whether express or implied, shall
be construed to give to any other Person any legal or equitable right, remedy
or claim in the Owner Trust Estate or under or in respect of this Agreement or
any covenants, conditions or provisions contained herein.
SECTION 11.4 Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon receipt, if to the
Owner Trustee, addressed to _____________________, at its Corporate Trust
Office, Attention: Corporate Trust Administration; if to the Insurer,
addressed to Insurer, _______________________________________________________,
Attention: _______________________________________, Confirmation: (__) ___-___,
Telecopy Nos.: (___)___-____, (___) ___-____ (in each case in which notice or
other communication to ________________ refers to an Event of Default, a claim
on the Policies or with respect to which failure on the part of _____________
to respond shall be deemed to constitute consent or acceptance, then a copy of
such notice or other communication should also be sent to the attention of
the__________________________________; or, as to each party, at such other
address as shall be designated by such pasty in a written notice to each other
party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by personal delivery, overnight courier or by
first-class mail, postage prepaid, at the address of such Holder as shown in
the Certificate Register. Any notice so given within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Certificateholder receives such notice.
SECTION 11.5 [Reserved].
SECTION 11.6 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or rider unenforceable such provision in any other jurisdiction.
SECTION 11.7 Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.8 Third-Party Beneficiaries. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Except as otherwise provided in this
Agreement, no other Person shall have any right or obligation hereunder. Upon
issuance of the Policy, this Agreement shall also inure to the benefit of the
Insurer for so long as an Insurer Default shall not have occurred and be
continuing. Without limiting the generality of the foregoing, all covenants
and agreements in this Agreement which confer rights upon the Insurer shall be
for the benefit of and run directly to the Insurer and the Insurer shall be
entitled to rely on and enforce such covenants, subject, however, to the
limitations on such rights provided in this Agreement and the Basic Documents.
The Insurer may disclaim any of its rights and powers under this Agreement
(but not its duties and obligations under the Policy) upon delivery of a
written notice to the Owner Trustee.
SECTION 11.9 [Reserved].
SECTION 11.10 No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Trust Certificate, and the Indenture Trustee
and each Noteholder by accepting the benefits of this Agreement, hereby
covenants and agrees that they will not at any time institute against the
Depositor, or join in any institution against the Depositor of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, this Agreement or any of the Basic Documents.
SECTION 11.11 No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Seller, the Servicer, the
Transferor, the Depositor, the Owner Trustee, the Indenture Trustee, the
Insurer or any Affiliate thereof and no recourse maybe had against such
parties or their assets, except as may be expressly set forth or contemplated
in this Agreement, the Trust Certificates or the Basic Documents.
SECTION 11.12 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.13 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Agreement Creates No Partnership Except for Tax
Purposes. Except as provided in Section 2.11, by acceptance of their
Certificates, each Holder and transferee of a Certificate acknowledges that it
understands and intends that if the Certificates are treated as held by two or
more persons, the arrangement created hereby is a partnership for income tax
purposes and that it intends and expects to be treated as a partner for such
purposes. The provisions of the agreement shall be interpreted and applied in
a manner consistent with such intent. Each Holder acknowledges and agrees that
if the Certificates are treated as held by two or more persons, any tax
partnership created hereby is created solely for income tax purposes and that
this Agreement does not create a partnership for any other purpose.
SECTION 11.15 Servicer. The Servicer is authorized to prepare, or
cause to be prepared, execute and deliver on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust or Owner Trustee to prepare, file or deliver
pursuant to the Basic Documents. Upon written request, the Owner Trustee shall
execute and deliver to the Servicer a limited power of attorney appointing the
Servicer the Trust's agent and attorney-in-fact to prepare, or cause to be
prepared, execute and deliver all such documents, reports, filings,
instruments, certificates and opinions.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
-------------------------------------------,
Owner Trustee
By:
------------------------------------------
Name:
Title:
ML ASSET BACKED CORPORATION,
as Depositor
By:
-----------------------------------------
Name:
Title:
-------------------------------------------,
with respect to Article VIII and Section
11.4, as Servicer
By:
------------------------------------------
Name:
Title:
Acknowledged and Agreed
Indenture Trustee
-----------------------------------------------------
As Certificate Paying Agent and Certificate Registrar
By:
--------------------------------------------------
Name:
Title:
EXHIBIT A-1
CLASS A ASSET BACKED CERTIFICATE
$[______________] ------------------------
Original Principal Registered Owner
Amount No. A-001
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH CERTAIN PROVISIONS
OF A TRUST AGREEMENT BETWEEN ML ASSET BACKED CORPORATION AND
________________________ (THE "TRUST AGREEMENT"). THIS CERTIFICATE HAS NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY SECURITIES LAWS, AND ISSUER HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
AND PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TRUST
INDENTURE AND APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES
AND TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), AND SOLELY WITH RESPECT TO THE INITIAL OFFERING OF THE
CERTIFICATES, TO INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE
501(A) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) UPON DELIVERY OF A
REPRESENTATION LETTER TO THE TRUSTEE.
NO EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") AND NO OTHER PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
ANY ENTITY THE ASSETS OF WHICH CONSTITUTE OR ARE DEEMED FOR PURPOSES OF ERISA
OR SECTION 4975 OF THE CODE TO CONSTITUTE THE ASSETS OF ANY SUCH PLAN, MAY
PURCHASE THIS CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE AND THE
HOLDING OF THIS CERTIFICATE OR SUCH INTEREST BY SUCH PLAN (OR ANY ENTITY THE
ASSETS OF WHICH CONSTITUTE "PLAN ASSETS" OF ANY SUCH PLAN) IS SUBJECT TO A
STATUTORY OR ADMINISTRATIVE EXEMPTION. ANY HOLDER HEREOF OR ANY INTEREST
HEREIN THAT IS, OR IS ACTING ON BEHALF OF OR WITH "PLAN ASSETS" OF, AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE, AND WITH RESPECT TO WHICH THE TRUSTEE OR THE OWNER TRUSTEE IS A
"PARTY IN INTEREST" OR A "DISQUALIFIED PERSON", BY PURCHASING THIS CERTIFICATE
OR SUCH INTEREST REPRESENTS THAT ITS PURCHASE OF THIS CERTIFICATE OR SUCH
INTEREST IS SUBJECT TO A STATUTORY OR ADMINISTRATIVE EXEMPTION FROM THE
PROHIBITED TRANSACTION RULES OF ERISA AND SECTION 4975 OF THE CODE.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF THE ISSUER THAT SUCH
PURCHASER HAS NOT ACQUIRED NOR WILL IT SELL, TRADE, TRANSFER, ASSIGN,
PARTICIPATE, PLEDGE, HYPOTHECATE, CAUSE TO BE MARKETED, OR OTHERWISE DISPOSE
OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) ON OR THROUGH (I) AN "ESTABLISHED
SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(B)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, INCLUDING, WITHOUT LIMITATION, AN
OVER-THE-COUNTER-MARKET OR AN "INTERDEALER QUOTATION SYSTEM" THAT REGULARLY
DISSEMINATES FIRM BUY OR SELL QUOTATIONS, OR (II) A "SECONDARY MARKET (OR THE
SUBSTANTIAL EQUIVALENT THEREOF)" WITHIN THE MEANING OF CODE SECTION
7704(B)(2).
THE PRINCIPAL OF THIS CERTIFICATE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CERTIFICATE AT
ANY TIME MAYBE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
_____________________ VEHICLE RECEIVABLES OWNER TRUST 200_-_
CLASS A ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of motor
vehicle loans secured by new or used automobiles, vans, light duty trucks or
motorcycles and transferred to the Trust by ML Asset Backed Corporation.
(This Trust Certificate does not represent an interest in or
obligation of ____________, __________________, the Owner Trustee or any of
their Affiliates, except to the extent described below.)
THIS CERTIFIES THAT [_________] is the registered owner of [
] ($) nonassessable, fully-paid, beneficial ownership interest in certain
distributions of __________________ Vehicle Receivables Owner Trust 200_-_
(the "Trust") formed by ML Asset Backed Corporation.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the
within-mentioned Trust Agreement.
_________________________________, not _________________________, not
in its individual capacity but solely in its individual capacity but
as Owner Trustee solely as Owner Trustee
By _____________________________ By_____________________________,
Authenticating Agent
By____________________________
The Trust was created pursuant to a Trust Agreement dated as
of _________ [ 1], 200_ (the "Trust Agreement"), between the Depositor and
______________________, as owner trustee (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Trust
Certificates designated as a Class A Asset Backed Certificates (together with
the Class R Asset Backed Certificates, the "Trust Certificates"). Also issued
under the Indenture dated as of ____________ [1], 200_, between the Trust and
________________________, as trustee and indenture collateral agent, are
(four) classes of Notes designated as "Class A-1 _____% Asset Backed Notes"
(the "Class A-1 Notes"), "Class A-1 _____% Asset Backed Notes" (the "Class A-2
Notes", "Class A-3 _____% Asset Backed Notes" (the "Class A-3 Notes") and
"Class A-4 _____% Asset Backed Notes" (the "Class A-4 Notes", and together
with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the
"Notes")). This Trust Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
holder of this Trust Certificate by virtue of the acceptance hereof assents
and by which such holder is bound.
The property of the Trust includes a pool of retail
installment loan contracts secured by new and used automobiles, vans, light
duty trucks or motorcycles (the "Receivables"), all monies due or to become
due thereunder on or after the Initial Cutoff Date with respect to the Initial
Receivables and after the Subsequent Cutoff Date with respect to Subsequent
Receivables, security interests in the vehicles financed thereby, certain bank
accounts and the proceeds thereof, proceeds from claims on certain insurance
policies and certain other rights under the Trust Agreement and the Sale and
Servicing Agreement and all proceeds of the foregoing.
Under the Trust Agreement, there will be distributed on the
fifteenth day of each month or, if such fifteenth day is not a Business Day,
the next succeeding Business Day (the "Payment Date"), commencing in
___________ 200_, to the Person in whose name this Trust Certificate is
registered at the close of business on the Business Day preceding such Payment
Date (the "Record Date") such Certificateholder's fractional undivided
interest in the amount to be distributed to Certificateholders on such Payment
Date. No principal will be paid on the Trust Certificate until the Class A
Notes have been paid in full.
The holder of this Trust Certificate acknowledges and agrees
that its rights to receive distributions in respect of this Trust Certificate
are subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
It is the intent of the Seller, Servicer, the Depositor and
Certificateholders that, for purposes of Federal income taxes, if the
Certificates are treated as held by a single person, the Trust will be
disregarded as an entity separate from its owner and if the Certificates are
treated or held by two or more persons, the Trust will be treated as a
partnership and the Certificateholders will be treated as partners in that
partnership. The Certificateholders by acceptance of a Trust Certificate,
agree to treat, and to take no action inconsistent with such treatment of, the
Trust Certificates for such tax purposes.
Each Certificateholder, by its acceptance of a Trust
Certificate, covenants and agrees that such Certificateholder will not at any
time institute against the Trust, the Transferor or the Depositor, or join in
any institution against the Trust, the Transferor or the Depositor of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Trust Certificate will be made as
provided in the Trust Agreement by or on behalf of the Owner Trustee by wire
transfer or check mailed to the Certificateholder of record in the Trust
Certificate Register without the presentation or surrender of this Trust
Certificate or the making of any notation hereon. Except as otherwise provided
in the Trust Agreement and notwithstanding the above, the final distribution
on this Trust Certificate will be made after due notice by the Owner Trustee
of the pendency of such distribution and only upon presentation and surrender
of this Trust Certificate at the office or agency maintained for the purpose
by the Owner Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this
Trust Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual
signature, this Trust Certificate shall not entitle the holder hereof to any
benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the
Trust and not in its individual capacity, has caused this Trust Certificate to
be duly executed.
________________________ VEHICLE
RECEIVABLES OWNER TRUST 200_-_
By: _____________________________,
not in its individual capacity but solely
as Owner Trustee
Dated: By:_______________________________
(Reverse of Trust Certificate)
The Trust Certificates do not represent an obligation of, or
an interest in, the Seller, the Servicer, the Transferor, the Depositor, the
Owner Trustee or any Affiliates of any of them and no recourse may be had
against such parties or their assets, except as may be expressly set forth or
contemplated herein or in the Trust Agreement, the Indenture or the Basic
Documents. In addition, this Trust Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Receivables, all as more specifically
set forth herein and in the Sale and Servicing Agreement. The Trust
Certificates are limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in
the Sale and Servicing Agreement. A copy of each of the Sale and Servicing
Agreement and the Trust Agreement may be examined during normal business hours
at the principal office of the Seller, and at such other places, if any,
designated by the Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller and the rights of the Certificateholders under the
Trust Agreement at any time by the Seller and the Owner Trustee with the
consent of the holders of the Notes and the Trust Certificates evidencing not
less than a majority of the outstanding Notes and the Certificate Balance. Any
such consent by the holder of this Trust Certificate shall be conclusive and
binding on such holder and on all future holders of this Trust Certificate and
of any Trust Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made upon this
Trust Certificate. The Trust Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the holders of any of
the Trust Certificates.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Trust Certificate is
registerable in the Certificate Register upon surrender of this Trust
Certificate for registration of transfer at the offices or agencies of the
Certificate Registrar maintained by the Owner Trustee in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of
transfer in foam satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Trust Certificates in
authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is ___________________________.
The Class A Certificates are issuable only as registered
Trust Certificates without coupons in minimum denominations of $1,000 or
integral multiples thereof; except as otherwise provided in the Trust
Agreement. As provided in the Trust Agreement and subject to certain
limitations therein set forth, Trust Certificates are exchangeable for new
Trust Certificates in authorized denominations evidencing the same aggregate
denomination, as requested by the holder surrendering the same. no service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar and any agent
of the Owner Trustee or the Certificate Registrar may treat the person in
whose name this Trust Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Certificate Registrar, nor any
such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of
all property held as part of the Trust. The Transferor of the Receivables may
at its option purchase the corpus of the Trust at a price specified in the
Sale and Servicing Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Trust Certificates;
however, such right of purchase is exercisable, subject to certain
restrictions, only as of the last day of any Collection Period as of which the
Pool Balance is 15% or less of the Original Pool Balance.
The Trust Certificates may not be acquired by (a) an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title 1 of ERISA, (b) a plan described in Section 4975(e)
(1) of the Code or (c) any entity whose underlying assets include plan assets
by reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding this Trust Certificate, the Holder hereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.
The recitals contained herein shall be taken as the
statements of the Depositor or the Servicer, as the case may be, and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner
Trustee makes no representations as to the validity or sufficiency of this
Certificate or of any Receivable or related document.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual or
facsimile signature, this Certificate shall not entitle the holder hereof to
any benefit under the Trust Agreement or the Sale and Servicing Agreement or
be valid for any purpose.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
-------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
____________________________________________ Attorney to transfer said Trust
Certificate on the books of the Trust Certificate Registrar, with full power of
substitution in the premises.
The undersigned has requested an exchange or transfer of this
Certificate in the form of an equal principal amount of Certificates evidenced
by one or more Definitive Certificates, to be delivered to the undersigned or,
in the case of a transfer of such Certificate, to such Person as the
undersigned instructs the Trustee.
In connection with such request and in respect of the Certificates
surrendered to the Trustee herewith for transfer (the "Surrendered
Certificate", the Holder of such Surrendered Certificates hereby certifies
that the Surrendered Certificate is being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, the undersigned reasonably
believes is purchasing the Surrendered Certificates for its own account, or
for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is "qualified
institutional buyer" within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144 and the Surrendered
Certificate is being transferred in compliance with any applicable blue sky or
securities laws of any state of the United States or any other applicable
jurisdiction.
This certificate and the statements contained herein are made for the
benefit of the Issuer and the Owner Trustee. The undersigned acknowledges that
the Issuer and the Owner Trustee will rely upon the undersigned's
confirmation, acknowledgments and agreements set forth herein, and the
undersigned agrees to notify the Owner Trustee promptly in writing if any of
the undersigned's representations or warranties herein ceases to be accurate
and complete.
Dated:
*
-------------------------------
Signature Guaranteed:
*
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as maybe determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-2
CLASS R ASSET BACKED CERTIFICATE
100% ------------------------------
Percentage Registered Owner
Interest No. R-001
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS CERTIFICATE IS TRANSFERABLE ONLY UPON COMPLIANCE WITH CERTAIN PROVISIONS
OF A TRUST AGREEMENT BETWEEN ML ASSET BACKED CORPORATION AND
___________________________ (THE "TRUST AGREEMENT'). THIS CERTIFICATE HAS NOT
BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY SECURITIES LAWS, AND ISSUER HAS NOT BEEN
REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
AND PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE TRUST
INDENTURE AND APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES
AND TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), AND SOLELY WITH RESPECT TO THE INITIAL OFFERING OF THE
CERTIFICATES, TO INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE
501(A) (1), (2), (3) OR (7) UNDER THE SECURITIES ACT) UPON DELIVERY OF A
REPRESENTATION LETTER TO THE TRUSTEE.
NO EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA") AND NO OTHER PLAN SUBJECT TO
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
ANY ENTITY THE ASSETS OF WHICH CONSTITUTE OR ARE DEEMED FOR PURPOSES OF ERISA
OR SECTION 4975 OF THE CODE TO CONSTITUTE THE ASSETS OF ANY SUCH PLAN, MAY
PURCHASE THIS CERTIFICATE OR ANY INTEREST HEREIN, UNLESS SUCH PURCHASE AND THE
HOLDING OF THIS CERTIFICATE OR SUCH INTEREST BY SUCH PLAN (OR ANY ENTITY THE
AS SETS OF WHICH CONSTITUTE "PLAN ASSETS" OF ANY SUCH PLAN) IS SUBJECT TO A
STATUTORY OR ADMINISTRATIVE EXEMPTION. ANY HOLDER HEREOF OR ANY INTEREST
HEREIN THAT IS, OR IS ACTING ON BEHALF OF OR WITH "PLAN ASSETS" OF, AN
EMPLOYEE BENEFIT PLAN SUBJECT TO ERISA OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE, AND WITH RESPECT TO WHICH THE TRUSTEE OR THE OWNER TRUSTEE IS A
"PARTY IN INTEREST" OR A "DISQUALIFIED PERSON", BY PURCHASING THIS CERTIFICATE
OR SUCH INTEREST REPRESENTS THAT ITS PURCHASE OF THIS CERTIFICATE OR SUCH
INTEREST IS SUBJECT TO A STATUTORY OR ADMINISTRATIVE EXEMPTION FROM THE
PROHIBITED TRANSACTION RULES OF ERISA AND SECTION 4975 OF THE CODE.
EACH PURCHASER REPRESENTS AND WARRANTS FOR THE BENEFIT OF THE ISSUER THAT SUCH
PURCHASER HAS NOT ACQUIRED NOR WILL IT SELL, TRADE, TRANSFER, ASSIGN,
PARTICIPATE, PLEDGE, HYPOTHECATE, CAUSE TO BE MARKETED, OR OTHERWISE DISPOSE
OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) ON OR THROUGH (i) AN "ESTABLISHED
SECURITIES MARKET" WITHIN THE MEANING OF SECTION 7704(B)(1) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED, INCLUDING, WITHOUT LIMITATION, AN
OVER-THE-COUNTER-MARKET OR AN "INTERDEALER QUOTATION SYSTEM" THAT REGULARLY
DISSEMINATES FIRM BUY OR SELL QUOTATIONS, OR (ii) A "SECONDARY MARKET (OR THE
SUBSTANTIAL EQUIVALENT THEREOF)" WITHIN THE MEANING OF CODE SECTION
7704(B)(2).
_________________ VEHICLE RECEIVABLES OWNER TRUST 200_-_
CLASS R ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of motor
vehicle loans secured by new or used automobiles, vans or light duty trucks
and transferred to the Trust by ML Asset Backed Corporation.
(This Trust Certificate does not represent an interest in or
obligation of _______________, ____________________, the Owner Trustee or any
of their Affiliates, except to the extent described below.)
THIS CERTIFIES THAT [______________] is the registered owner
of a beneficial ownership interest in certain distributions of ______________
Vehicle Receivables Owner Trust 200_-_ (the "Trust") formed by ML Asset Backed
Corporation.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the
within-mentioned Trust Agreement.
____________________________, not in ____________________________, not in
its individual capacity but solely its individual capacity but solely as
as Owner Trustee or Owner Trustee
By________________________________,
By__________________________________ Authenticating Agent
By________________________________
The Trust was created pursuant to a Trust Agreement dated as
of ________ [1 ], 200_ (the "Trust Agreement"), between the Depositor and
_______________________, as owner trustee (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Trust
Certificates designated as a Class R Asset Backed Certificates (together with
the Class A Asset Backed Certificates, the `Trust Certificates"). Also issued
under the Indenture dated as of ___________ [1], 200_, the Trust and
_____________________, as trustee and indenture collateral agent, are four
classes of Notes designated as ["Class A-1 _____% Asset Backed Notes" (the
"Class A-I Notes"), "Class A-2 _____% Asset Backed Notes" (the "Class A-2
Notes"), the "Class A-3 _____% Asset Backed Notes" (the "Class A-3 Notes") and
the "Class A-4 _____% Asset Backed Notes" (the "Class A-4 Notes" and together
with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the
"Notes")]. This Trust Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
holder of this Trust Certificate by virtue of the acceptance hereof assents
and by which such holder is bound. The property of the Trust includes a pool
of retail installment loan contracts secured by new and used automobiles,
vans, light duty trucks or motorcycles (the "Receivables"), all monies due or
to become due thereunder on or after the Initial Cutoff Date with respect to
the Initial Receivables and after the Subsequent Cutoff Date with respect to
Subsequent Receivables, security interests in the vehicles financed thereby,
certain bank accounts and the proceeds thereof, proceeds from claims on
certain insurance policies and certain other rights under the Trust Agreement
and the Sale and Servicing Agreement and all proceeds of the foregoing.
Under the Trust Agreement, there will be distributed on the
fifteenth day of each month or, if such fifteenth day is not a Business Day,
the next succeeding Business Day (the "Payment Date"), commencing in [_____]
200_ the Person in whose name this Trust Certificate is registered at the
close of business on the Business Day preceding such Payment Date (the "Record
Date") such Certificateholder's fractional undivided interest in the amount to
be distributed to Class R Certificateholders, if any, on such Payment Date. No
payments will be paid on this Class R Certificate until the Class A Notes and
the Class A Certificates have been paid in full.
The holder of this Trust Certificate acknowledges and agrees
that its rights to receive distributions in respect of this Trust Certificate
are subordinated to the rights of the Noteholders and the Class A
Certificateholders as described in the Sale and Servicing Agreement, the
Indenture and the Trust Agreement, as applicable.
It is the intent of the Seller, Servicer, the Depositor and
Certificateholders that, for purposes of Federal income taxes, if the
Certificates are treated as held by a single person, the Trust will be
disregarded as an entity separate firm its owner and if the Certificates are
treated or held by two or more persons, the Trust will be treated as a
partnership and the Certificateholders will be treated as partners in that
partnership. The Certificateholders by acceptance of a Trust Certificate,
agree to treat, and to take no action inconsistent with such treatment of, the
Trust Certificates for such tax purposes.
Each Certificateholder, by its acceptance of a Trust
Certificate, covenants and agrees that such Certificateholder will not at any
time institute against the Trust, the Transferor or the Depositor, or join in
any institution against the Trust, the Transferor or the Depositor of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Trust Certificate will be made as
provided in the Trust Agreement by or on behalf of the Owner Trustee by wire
transfer or check mailed to the Certificateholder of record in the Trust
Certificate Register without the presentation or surrender of this Trust
Certificate or the making of any notation hereon. Except as otherwise provided
in the Trust Agreement and notwithstanding the above, the final distribution
on this Trust Certificate will be made after due notice by the Owner Trustee
of the pendency of such distribution and only upon presentation and surrender
of this Trust Certificate at the office or agency maintained for the propose
by the Owner Trustee in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this
Trust Certificate set forth on the reverse hereof, which further provisions
shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual
signature, this Trust Certificate shall not entitle the holder hereof to any
benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in its
individual capacity, has caused this Trust Certificate to be duly executed.
__________________________ VEHICLE
RECEIVABLES OWNER TRUST 200_-_
By: _______________________________,
not in its individual capacity but
solely as Owner Trustee
Dated: By:_________________________________
(Reverse of Trust Certificate)
The Trust Certificates do not represent an obligation of, or
an interest in, the Seller, the Servicer, the Transferor, the Depositor, the
Owner Trustee or any Affiliates of any of them and no recourse may be had
against such parties or their assets, except as may be expressly set forth or
contemplated herein or in the Trust Agreement, the Indenture or the Basic
Documents. In addition, this Trust Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Receivables, all as more specifically
set forth herein and in the Sale and Servicing Agreement. The Trust
Certificates are limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in
the Sale and Servicing Agreement. A copy of each of the Sale and Servicing
Agreement and the Trust Agreement may be examined during normal business hours
at the principal office of the Seller, and at such other places, if any,
designated by the Seller, by any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Seller and the rights of the Certificateholders under the
Trust Agreement at any time by the Seller and the Owner Trustee with the
consent of the holders of the Notes and the Trust Certificates evidencing not
less than a majority of the outstanding Notes and the Certificate Balance. Any
such consent by the holder of this Trust Certificate shall be conclusive and
binding on such holder and on all future holders of this Trust Certificate and
of any Trust Certificate issued upon the transfer hereof or in exchange hereof
or in lieu hereof whether or not notation of such consent is made upon this
Trust Certificate. The Trust Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the holders of any of
the Trust Certificates.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Trust Certificate is
registerable in the Certificate Register upon surrender of this Trust
Certificate for registration of transfer at the offices or agencies of the
Certificate Registrar maintained by the Owner Trustee in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Trust Certificates in
authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is _________________________.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, Trust Certificates are exchangeable for new
Trust Certificates in authorized denominations evidencing the same aggregate
denomination, as requested by the holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar and any agent
of the Owner Trustee or the Certificate Registrar may treat the person in
whose name this Trust Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Certificate Registrar, nor any
such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of
all property held as part of the Trust. The Transferor may at its option
purchase the corpus of the Trust at a price specified in the Sale and
Servicing Agreement, and such purchase of the Receivables and other property
of the Trust will effect early retirement of the Trust Certificates; however,
such right of purchase is exercisable, subject to certain restrictions, only
as of the last day of any Collection Period as of which the Pool Balance is
15% or less of the Original Pool Balance.
The Trust Certificates may not be acquired by (a) an
employee benefit plan (as defined in Section 3(3) of ER1SA) that is subject to
the provisions of Title 1 of ERISA, (b) a plan described in Section 4975(e)
(1) of the Code or (c) any entity whose underlying assets include plan assets
by reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding this Trust Certificate, the Holder hereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.
The recitals contained herein shall be taken as the
statements of the Depositor, the Transferor or the Servicer, as the case
maybe, and the Owner Trustee assumes no responsibility for the correctness
thereof. The Owner Trustee makes no representations as to the validity or
sufficiency of this Certificate or of any Receivable or related document.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual or
facsimile signature, this Certificate shall not entitle the holder hereof to
any benefit under the Trust Agreement or the Sale and Servicing Agreement or
be valid for any purpose.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
-------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
the within Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
______________________________________________ Attorney to transfer said Trust
Certificate on the books of the Trust Certificate Registrar, with full power
of substitution in the premises.
The undersigned has requested an exchange or transfer of this
Certificate in the form of an equal principal amount of Certificates evidenced
by one or more Definitive Certificates, to be delivered to the undersigned or,
in the case of a transfer of such Certificate, to such Person as the
undersigned instructs the Trustee.
In connection with such request and in respect of the Certificates
surrendered to the Trustee herewith for transfer (the "Surrendered
Certificate"), the Holder of such Surrendered Certificates hereby certifies
that the Surrendered Certificate is being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, the undersigned reasonably
believes is purchasing the Surrendered Certificates for its own account, or
for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is "qualified
institutional buyer" within the meaning of Rule 144A, in each case in a
transaction meeting the requirements of Rule 144 and the Surrendered
Certificate is being transferred in compliance with any applicable blue sky or
securities laws of any state of the United States or any other applicable
jurisdiction.
This certificate and the statements contained herein are made for the
benefit of the Issuer and the Owner Trustee. The undersigned acknowledges that
the Issuer and the Owner Trustee will rely upon the undersigned's
confirmation, acknowledgments and agreements set forth herein, and the
undersigned agrees to notify the Owner Trustee promptly in writing if any of
the undersigned's representations or warranties herein ceases to be accurate
and complete.
Dated:
*
--------------------------------
Signature Guaranteed:
*
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
____________________ VEHICLE RECEIVABLES
OWNER TRUST 200_-_
THIS Certificate of Trust of ________________ Vehicle
Receivables Owner Trust 200_-_ (the "Trust"), dated as of _____________ ___,
200_, is being duly executed and filed by _____________________________, a
____________ as trustee to form a business trust under the Delaware Business
Trust Act (12 Del. Code, ss. 3801 et seq.).
1. Name. The name of the business trust formed hereby is
______________ Vehicle Receivables Owner Trust 200_-_.
2. Delaware Trustee. The name and principal place of business
of the trustee of the trust in the State of Delaware is _____________________.
3. Effective Date. This Certificate of Trust will be effective
______________, 200_.
IN WITNESS WHEREOF, the undersigned, being the sole trustees
of the Trust, have executed this Certificate of Trust as of the date first
above written.
_________________________________, not in its
individual capacity but solely as Owner
Trustee of the Trust.
By:
------------------------------------------
Name:
Title:
