Exhibit 4.2
TRUST AGREEMENT
between
NATIONSFINANCIAL FUNDING CORPORATION
and
-----------------------
Owner Trustee
Dated as of November 30, 1996
Table of Contents
Page
ARTICLE I Definitions.......................................................
Section 1.1. Capitalized Terms..............................
ARTICLE II Organization.....................................................
Section 2.1. Name ......................................
Section 2.2. Office.........................................
Section 2.3. Purposes and Powers............................
Section 2.4. Appointment of Owner Trustee...................
Section 2.5. Initial Capital Contribution of
Trust Estate.................................
Section 2.6. Declaration of Trust...........................
Section 2.7. Liability of Affiliated Purchaser as
General Partner..............................
Section 2.8. Title to Trust Property........................
Section 2.9. Situs of Trust.................................
Section 2.10. Representations and Warranties
of the Depositor.............................
Section 2.11. Representations and Warranties
of the Affiliated Purchaser..................
Section 2.12. Federal Income Tax Allocations.................
Section 2.13. Covenants of the General Partner...............
Section 2.14. Covenants of the Owners........................
ARTICLE III Trust Certificates and Transfer of
Interests.....................................................
Section 3.1. Initial Ownership..............................
Section 3.2. The Trust Certificates.........................
Section 3.3. Authentication of Trust Certificates...........
Section 3.4. Registration of Transfer and
Exchange of Trust Certificates...............
Section 3.5. Mutilated, Destroyed, Lost or
Stolen Trust Certificates....................
Section 3.6. Persons Deemed Certificateholders..............
Section 3.7. Access to List of Certificate-
holders' Names and Addresses.................
Section 3.8. Maintenance of Office or Agency................
Section 3.9. Appointment of Certificate Paying Agent........
Section 3.10. [Reserved].....................................
Section 3.11. [Reserved].....................................
Section 3.12. Disposition by the General Partner.............
Section 3.13. ERISA Restrictions.............................
Section 3.14. Book-Entry Trust Certificates..................
Section 3.15. Notices to Clearing Agency.....................
Section 3.16. Definitive Trust Certificates..................
ARTICLE IV Actions by Owner Trustee.........................................
Section 4.1. Prior Notice to Owners
with Respect to Certain Matters..............
Section 4.2. Action by Certificateholders with
Respect to Certain Matters...................
Section 4.3. Action by Certificateholders with
Respect to Bankruptcy........................
Section 4.4. Restrictions on Certificateholders'
Power........................................
Section 4.5. Majority Control...............................
Section 4.6. Rights of Insurer..............................
ARTICLE V Application of Trust Funds:
Certain Duties.................................
Section 5.1. Establishment of Certificate Distribution
Account......................................
Section 5.2. Application of Funds in
Certificate Distribution Account.............
Section 5.3. [Reserved].....................................
Section 5.4. Method of Payment..............................
Section 5.5. No Segregation of Monies; No
Interest.....................................
Section 5.6. Accounting and Reports to the
Noteholders, Certificateholders,
the Internal Revenue Service and
Others.......................................
Section 5.7. Signature on Returns; Tax
Matters Partner..............................
ARTICLE VI Authority and Duties of Owner
Trustee........................................
Section 6.1. General Authority..............................
Section 6.2. General Duties.................................
Section 6.3. Action upon Instruction........................
Section 6.4. No Duties Except as Specified in
this Agreement or in Instructions............
Section 6.5. No Action Except under Specified
Documents or Instructions....................
Section 6.6. Restrictions...................................
ARTICLE VII Concerning the Owner Trustee....................................
Section 7.1. Acceptance of Trust and Duties.................
Section 7.2. Furnishing of Documents........................
Section 7.3. Representations and Warranties.................
Section 7.4. Reliance; Advice of Counsel....................
Section 7.5. Not Acting in Individual Capacity..............
Section 7.6. Owner Trustee Not Liable for
Trust Certificates or
Receivables..................................
Section 7.7. Owner Trustee May Own Trust
Certificates and Notes.......................
Section 7.8. Payments from Owner Trust Estate...............
Section 7.9. Doing Business in Other Jurisdictions..........
ARTICLE VIII Compensation of Owner Trustee..................................
Section 8.1. Owner Trustee's Fees and Expenses..............
Section 8.2. Indemnification................................
Section 8.3. Payments to the Owner Trustee..................
Section 8.4. Non-recourse Obligations.......................
ARTICLE IX Termination of Trust Agreement...................................
Section 9.1. Termination of Trust Agreement.................
Section 9.2. Dissolution upon Bankruptcy of the
General Partner .............................
ARTICLE X Successor Owner Trustees and Additional
Owner Trustees.................................
Section 10.1. Eligibility Requirements for Owner
Trustee......................................
Section 10.2. Resignation or Removal of Owner
Trustee......................................
Section 10.3. Successor Owner Trustee........................
Section 10.4. Merger or Consolidation of Owner
Trustee......................................
Section 10.5. Appointment of Co-Trustee or
Separate Trustee.............................
ARTICLE XI Miscellaneous....................................................
Section 11.1. Supplements and Amendments.....................
Section 11.2. No Legal Title to Owner Trust
Estate in Certificateholders.................
Section 11.3. Limitations on Rights of Others................
Section 11.4. Notices........................................
Section 11.5. Severability...................................
Section 11.6. Separate Counterparts..........................
Section 11.7. Third-Party Beneficiaries......................
Section 11.8. [Reserved].....................................
Section 11.9. No Petition....................................
Section 11.10. No Recourse....................................
Section 11.11. Headings.......................................
Section 11.12. GOVERNING LAW..................................
Section 11.13. [Reserved].....................................
Section 11.14. Servicer.......................................
EXHIBITS
Exhibit A Form of Trust Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Certificate Depository Agreement
TRUST AGREEMENT dated as of
November 30, 1996 between NATIONSFINANCIAL
FUNDING CORPORATION, a Delaware
corporation, and _____________________, a
Delaware banking corporation as Owner
Trustee.
ARTICLE I
Definitions
SECTION 1.1. Capitalized Terms. For all purposes of this Agreement,
capitalized terms used herein and not otherwise defined have the meanings
assigned to them in Exhibit A to the Sale and Servicing Agreement, which also
contains rules as to usage and construction that shall be applicable herein.
ARTICLE II
Organization
SECTION 2.1. Name. There is hereby formed a trust to be known as
"NationsFinancial Auto Owner Trust 1996-1", 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) with the proceeds of the sale of the Notes and the
Trust Certificates, to fund the Spread Account and to pay
the organizational, start-up and transactional expenses of
the Trust and to pay the balance to the Depositor pursuant
to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and
convey the Trust Estate (other than the Certificate Policy
and the Certificate Distribution Account) to the Indenture
Collateral Agent pursuant to the Indenture for the benefit
of the Insurer and the Indenture Trustee on behalf of the
Noteholders and to hold, manage and distribute to the
Certificateholders and the Seller pursuant to the terms of
the Sale and Servicing Agreement any portion of the Trust
Estate released from the Lien of, and remitted to the Trust
pursuant to, the Indenture;
(iv) to enter into and perform its obligations under
the Basic Documents to which it is a party;
(v) to engage in those activities, including entering
into agreements, that are necessary, suitable or convenient
to accomplish the foregoing or are incidental thereto or
connected therewith; and
(vi) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in
connection with conservation of the Owner Trust Estate and
the making of distributions to the Certificateholders and
the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor hereby appoints
________________ 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. _________________ 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 Owners, 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.
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 the characterization of the
Trust as a partnership for such tax purposes. Effective as of the date hereof,
the Owner Trustee shall have all rights, powers and duties set forth 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 Affiliated Purchaser as General Partner. (a) The
General Partner 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. The General Partner
shall also be liable directly to and will indemnify the injured party for all
losses, claims, damages, liabilities and expenses of the Trust (including
Expenses, to the extent not paid out of the Owner Trust Estate) to the extent
that the General Partner would be liable if the Trust were a partnership under
the Delaware Revised Uniform Limited Partnership Act in which the General
Partner were a general partner; provided, however, that the General Partner
shall not be liable for any losses incurred by an Owner in the capacity of an
investor in the Trust Certificates or a Note Owner in the capacity of an
investor in the Notes. In addition, any third party creditors of the Trust
(other than in connection with the obligations described in the preceding
sentence for which the General Partner shall not be liable) shall be deemed
third party beneficiaries of this paragraph. The obligations of the General
Partner under this paragraph shall be evidenced by the Trust Certificates
described in Section 3.12, which for purposes of the Business Trust Statute
shall be deemed to be a separate class of Trust Certificates from all other
Trust Certificates issued by the Trust.
(b) No Owner, 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 Owners shall not have legal title to any part of the Trust
Property. The Owners 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 by any Certificateholder of its ownership
interest in the Owner Trust Estate shall operate to terminate this
Agreement or the Trust hereunder or entitle any transferee to an accounting
or to the transfer to it of legal title to any part of the 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 Policies:
(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 now conducted and is proposed to be conducted pursuant to this
Agreement and the Basic Documents.
(b) Due Qualification. The Affiliated Purchaser 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, except when failure to be so qualified would
not have a material adverse effect upon the business and affairs
of the Depositor.
(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) 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 by the Depositor, except for such
as have been obtained, effected or made.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
do not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time)
a default under, the 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.
(f) No Proceedings. There are no proceedings or
investigations pending or, to its knowledge threatened against the
Affiliated Purchaser 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, or (C) seeking any
determination or ruling that might materially and adversely affect
its performance of its obligations
under, or the validity or enforceability of, this Agreement
or any of the Basic Documents.
SECTION 2.11. Representations and Warranties of the Affiliated Purchaser.
The Affiliated Purchaser, as the General Partner, 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 Policies:
(a) Organization and Good Standing. The Affiliated Purchaser
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 now
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 requires such
qualification, except where the failure to be so qualified would not
have a material adverse effect upon the business and affairs of the
Affiliated Purchaser.
(c) Power and Authority. The Affiliated Purchaser has the
corporate power and authority to execute and deliver this Agreement
and to carry out its terms; and the execution, delivery and
performance of this Agreement and the Basic Documents has been duly
authorized by the Affiliated Purchaser by all necessary corporate
action.
(d) No Consent Required. No consent, license, approval or
authorization or registration or declaration with, any Person or with
any governmental authority, bureau or agency is required in
connection with the execution, delivery or performance of this
Agreement and the Basic Documents by the Affiliated Purchaser, except
for such as have been obtained, effected or made.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms
hereof do not conflict with, result in any breach of any of the terms
and provisions of, or constitute (with or without notice or lapse of
time) a default under, the certificate of incorporation or by-laws of
the Affiliated Purchaser, or any material indenture, agreement or
other instrument to which the Affiliated Purchaser 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; nor violate any law or, to
the best of the Affiliated Purchaser's knowledge, any
order, rule or regulation applicable to the Affiliated Purchaser of
any court or of any Federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
the Affiliated Purchaser or its properties.
(f) No Proceedings. There are no proceedings or
investigations pending or, to its knowledge threatened against it
before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over it
or its properties (A) asserting the invalidity of this Agreement or
any 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, or (C) seeking any determination or ruling that might
materially and adversely affect its performance of its obligations
under, or the validity or enforceability of, this Agreement or any of
the Basic Documents.
(g) Demand Note. It has been duly capitalized by the delivery of
a demand note (the "Demand Note") from NationsBank Corporation in the
amount of $1,000,000 which Demand Note has not been canceled, waived
or terminated. The proceeds of such Demand Note have not been used and
will not be used to pay (i) any of the expenses of the Depositor in
connection with the transactions contemplated by the Basic Documents
or (ii) the purchase price for the Certificates purchased pursuant to
Section 3.12. Such Demand Note is enforceable against NationsBank
Corporation, subject to its terms, and subject to applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance,
reorganization and similar laws now or hereafter in effect relating to
creditors' rights generally and court decisions with respect thereto,
and subject to general principles of equity (whether applied in a
proceeding at law or in equity).
SECTION 2.12. Federal Income Tax Allocations. 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:
(a) to the extent of available net income, 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, an amount of net income up to the sum
of (i) the Certificateholders' Monthly Interest Distributable Amount
for such month, (ii) interest on the excess, if any, of the
Certificateholders' Interest Distributable Amount for the preceding
Distribution Date over the amount in respect of interest at the
Certificate Rate that is actually deposited in the Certificate
Distribution Account on such preceding Distribution Date, to the
extent permitted by law, at the Certificate Rate from such preceding
Distribution Date through the current Distribution Date, and (iii) the
portion of the market discount on the Receivables accrued during such
month that is allocable to the excess of the initial aggregate
principal amount of the Trust Certificates over their initial
aggregate issue price; and
(b) to the General Partner, to the extent of any remaining net
income.
If the net income of the Trust for any month is insufficient for the
allocations described in clause (a) above, subsequent net income shall first be
allocated to make up such shortfall before being allocated as provided in clause
(b). Net losses of the Trust, if any, for any month as determined for Federal
income tax purposes (and each item of income, gain, loss, credit and deduction
entering into the computation thereof) shall be allocated to the General Partner
to the extent the General Partner is reasonably expected as determined by the
Servicer to bear the economic burden of such net losses, then net losses shall
be allocated among the Certificateholders as of the first Record Date following
the end of such month in proportion to their ownership of principal amount of
Trust Certificates on such Record Date until the principal balance of the Trust
Certificates is reduced to zero. The General Partner is authorized to modify the
allocations in this paragraph if necessary or appropriate, in its sole
discretion, for the allocations to fairly reflect the economic income, gain or
loss to the General Partner, the Certificateholders, or as otherwise required by
the Code.
SECTION 2.13. Covenants of the General Partner. The General Partner agrees
and covenants for the benefit of each Owner, the Insurer and the Owner Trustee,
during the term of this Agreement, and to the fullest extent permitted by
applicable law, that:
(a) it shall not assign, sell, convey, pledge, transfer,
reconvey, cancel, forgive, compromise or otherwise dispose of the
Demand Note held by it, in whole or in part;
(b) it shall not sell, assign, transfer, give or encumber,
by operation of law or otherwise, in whole or in part, the interest
evidenced by its Trust Certificates acquired pursuant to Section 3.12
without the consent of the Insurer;
(c) other than pursuant to Section 2.7 or in connection with
routine administrative matters, it shall not create, incur or suffer
to exist any indebtedness or engage in any business, except, in each
case, as permitted by its certificate of incorporation and the Basic
Documents;
(d) it shall not, for any reason, institute proceedings for
the Trust to be adjudicated 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 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;
(e) it shall obtain from each counterparty to each Basic
Document to which it or the Trust is a party and each other agreement
entered into on or after the date hereof to which it or the Trust is
a party, an agreement by each such counterparty that prior to the
occurrence of the event specified in Section 9.1(e) such counterparty
shall not institute against, or join any other Person in instituting
against, it or the Trust, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings or other similar
proceedings under the laws of the United States or any state of the
United States;
(f) it shall not, for any reason, withdraw or attempt to
withdraw from this Agreement, dissolve, institute proceedings for it
to be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against it, or
file a petition seeking or consenting to reorganization or relief
under any applicable federal or state law relating to bankruptcy, or
consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a
substantial part of its property, or make any assignment for the
benefit of creditors, or admit in writing its inability to pay its
debts generally as they become due, or declare or effect a moratorium
on its debt or take any action in furtherance of any such action; and
(g) it shall not make any distribution other than to the
Trust or unless the aggregate net worth of the General Partner
following such distribution shall be at least equal to the Minimum
Net Worth unless the General Partner shall deliver to the Owner
Trustee, the Trustee and the Insurer an Opinion of Counsel to the
effect that the failure to maintain such Minimum Net Worth shall not
cause the Trust to be an association taxable as a corporation or a
publicly traded partnership.
SECTION 2.14. Covenants of the Owners. Each Owner by becoming a beneficial
owner of the Book-Entry Trust Certificate agrees:
(a) to be bound by the terms and conditions of the
Certificates of which such Owner is the beneficial owner and of this
Agreement, including any supplements or amendments hereto and to
perform the obligations of an Owner 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 Owner Trustee, the Insurer and
all other Owners present and future;
(b) to hereby appoint the General Partner as such Owner'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 Owner 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) if such Owner is other than an individual or other
entity holding its Certificate through a broker who reports
securities sales on Form 1099-B, 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(e), not to, for any reason, institute
proceedings for the Trust or the General Partner 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.
SECTION 3.2. The Trust Certificates. The Trust Certificates shall be issued
in denominations of $1,000 and integral multiples thereof; provided, however,
that Trust Certificates may be issued to the General Partner pursuant to Section
3.12 in such denominations as to represent at least 1% of the initial
Certificate Balance. 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.
SECTION 3.3. Authentication of Trust Certificates. Concurrently with the
initial sale 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 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 Exhibit A, executed by
the Owner Trustee or ____________________ as 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.
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 Owner Trustee
shall provide for the registration of Trust Certificates and of transfers and
exchanges of Trust Certificates as herein provided. _____________________ shall
be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate at the
office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute, authenticate and deliver (or shall cause _____________________ 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 a like 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 a like aggregate amount upon
surrender of the Trust Certificates to be exchanged at the office or agency
maintained pursuant to Section 3.8.
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 Owner Trustee in accordance with its customary practice.
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.
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 Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Trust Certificate and (b)
there shall be delivered to the Certificate Registrar, the Owner Trustee and
(unless an Insurer Default shall have occurred and be continuing) the Insurer,
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 _____________________, as the Owner
Trustee's authenticating agent, shall authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen 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 or Owner 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 the Insurer and any agent of the Owner Trustee, the
Certificate Registrar and the Insurer, may treat the Person in whose name any
Trust Certificate shall be registered in the Certificate Register as the Owner
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, the Certificate Registrar or the Insurer nor any agent of the Owner
Trustee, the Certificate Registrar or the Insurer shall be bound by any notice
to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and Addresses. The
Owner Trustee shall furnish or cause to be furnished to the Servicer, the
Depositor or (unless an Insurer Default shall have occurred and be continuing)
the Insurer, within 15 days after receipt by the Owner Trustee of a request
therefor from such Person in writing, 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 Owner
Trustee, 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 Owner
Trustee 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 Owner Trustee or the Insurer 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 in the Borough of Manhattan in the City of New York, 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
may be served. The Owner Trustee initially designates ---------------------,
---------------------------------------, as its principal corporate trust office
for such purposes. The Owner Trustee shall give prompt written notice to the
Depositor, the Certificateholders and (unless an Insurer Default shall have
occurred and be continuing) the Insurer 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. 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
_____________________, 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 Owner 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 in its
individual capacity 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 and (unless an Insurer Default shall have
occurred and be continuing) the Insurer 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 and 8.1 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.
SECTION 3.10. [Reserved]
SECTION 3.11. [Reserved]
SECTION 3.12. Disposition by the General Partner. On
---------------------------------- the Closing Date, the Affiliated Purchaser
shall purchase for adequate consideration and retain beneficial and record
ownership of Trust Certificates representing at least 1% of the initial
Certificate Balance, which Trust Certificates shall be issued in definitive
form. Any attempted transfer of any Trust Certificate that would reduce such
interest of the General Partner to below 1% of the Certificate Balance shall be
void; provided, however, -------- ------- that such Trust Certificate may be
transferred to a successor General Partner pursuant to Section 9.2. The Owner
Trustee shall cause any Trust Certificate issued to the General Partner to
contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE."
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. Book-Entry Trust Certificates. The
----------------------------- Trust Certificates, upon original issuance, will
be issued in the form of a typewritten Trust Certificate or Trust Certificates
representing Book-Entry Trust Certificates, to be delivered by or on behalf of
the Trust to The Depository Trust Company, the initial Clearing Agency;
provided, however, that one Definitive -------- ------- Trust Certificate (as
defined below) may be issued to the Affiliated Purchaser, as General Partner
pursuant to Section 3.12. Such Book-Entry Trust Certificate shall initially be
registered on the Certificate Register in the name of Cede & Co., the nominee of
the initial Clearing Agency, and no beneficial owner (other than the General
Partner) will receive a Definitive Trust Certificate representing such
beneficial owner's interest in such Trust Certificate, except as provided in
Section 3.16. Unless and until Definitive Trust Certificates have been issued to
beneficial owners pursuant to Section 3.16:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Certificate Registrar and the Owner Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Agreement relating to the Book-Entry Trust Certificates (including
the payment of principal of and interest on the Book-Entry Trust
Certificates and the giving of instructions or directions to Owners
of Book-Entry Trust Certificates) as the sole Holder of Book-Entry
Trust Certificates and shall have no obligations to the Owners
thereof;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Agreement, the provisions of this
Section shall control;
(iv) the rights of the Owners of the Book-Entry Trust
Certificates shall be exercised only through the Clearing Agency and
shall be limited to those established by law and agreements between
such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement,
unless and until Definitive Trust Certificates are issued pursuant to
Section 3.16, the Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
payments of principal of and interest on the Book-Entry Trust
Certificates to such Clearing Agency Participants; and
(v) whenever this Agreement requires or permits actions to
be taken based upon instructions or directions of Holders of Trust
Certificates evidencing a specified percentage of the Certificate
Balance, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions to
such effect from Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the
beneficial interest in the Book-Entry Trust Certificates and has
delivered such instructions in writing to the Owner Trustee.
SECTION 3.15. Notices to Clearing Agency. Whenever a notice or other
communication to the Owners is required under this Agreement, unless and until
Definitive Trust Certificates shall have been issued to Owners pursuant to
Section 3.16, the Owner Trustee shall give all such notices and communications
specified herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners, except to the General Partner.
SECTION 3.16. Definitive Trust Certificates. If (i) the Servicer advises
the Owner Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Trust
Certificates, and the Servicer is unable to locate a qualified successor, (ii)
the Servicer at its option advises the Owner Trustee in writing that it elects
to terminate the book-entry system through the Clearing Agency or (iii) after
the occurrence of an Event of Default, Owners of Certificates representing
beneficial interests aggregating at least a majority of the Certificate Balance
advise the Clearing Agency in writing that the continuation of a book-entry
system through the Clearing Agency is no longer in the best interest of the
Owners of Trust Certificates, then the Clearing Agency shall notify all Owners
and the Owner Trustee of the occurrence of any such event and of the
availability of the Definitive Trust Certificates to Owners requesting the same.
Upon surrender to the Owner Trustee of the typewritten Trust Certificate or
Trust Certificates representing the Book-Entry Trust Certificates by the
Clearing Agency, accompanied by registration instructions, the Owner Trustee
shall execute and authenticate the Definitive Trust Certificates in accordance
with the instructions of the Clearing Agency. Neither the Certificate Registrar
nor the Owner Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Trust Certificates, the Owner
Trustee shall recognize the Holders of the Definitive Trust Certificates as
Certificateholders. The Definitive Trust Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Owner Trustee, as evidenced by its execution thereof.
ARTICLE IV
Actions by Owner Trustee
SECTION 4.1. Prior Notice to Owners with Respect to Certain Matters. 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 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:
(a) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute or unless such amendment would not
materially and adversely affect the interests of the Owners);
(b) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any
Noteholder is required;
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any
Noteholder is not required and such amendment materially
adversely affects the interest of the Certificateholders;
or
(d) except pursuant to Section 11.1(b) 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.
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
thereof.
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 or the Insurer in accordance with the Basic Documents, to (a)
remove the Servicer under the Sale and Servicing Agreement pursuant to Section
8.1 thereof or (b) except as expressly provided in the Basic Documents, sell the
Receivables after the termination of the Indenture. The Owner Trustee shall take
the actions referred to in the preceding sentence only upon written instructions
signed by the 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, commence any
proceeding or other actions contemplated by Section 2.13(d) relating to the
Trust without the prior written consent of the Insurer (unless an Insurer
Default shall have occurred and be continuing) and 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 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
30-day period no request or waiver inconsistent with such written request has
been given to the Owner Trustee pursuant to and in compliance with this Section
or Section 6.3; 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. Nothing in this Agreement shall be
construed as giving the Certificateholders any right to make a claim under the
Certificate Policy.
SECTION 4.5. Majority Control. No Certificate Owner 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 may be taken by the Holders of Trust Certificates evidencing not
less than a majority of the Certificate Balance. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to this
Agreement shall be effective if signed by Holders of Certificates evidencing not
less than a majority of the Certificate Balance at the time of the delivery of
such notice.
SECTION 4.6. Rights of Insurer. Notwithstanding anything to the contrary in
the Basic Documents, without the prior written consent of the Insurer (so long
as no Insurer Default 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.
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 and
maintain 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.
(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 Business Days (or such longer period, not to
exceed 30 calendar days, as to which each Rating Agency and, so long as no
Insurer Default shall have occurred and be continuing, the Insurer may
consent) establish 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 Owner Trustee at the Servicer's written direction, in
Eligible Investments that mature not later than one Business Day prior to
the Distribution Date for the Monthly 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 Distribution 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 Distribution Date, the Owner Trustee 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
Certificateholders, to the extent of the funds available, amounts deposited in
the Certificate Distribution Account pursuant to Sections 5.6(b) and 9.1 of the
Sale and Servicing Agreement on such Distribution Date in the following order of
priority:
(i) first, from the amounts deposited in the Certificate
Distribution Account pursuant to Section 5.6(b)(v) or Section
9.1(b)(v) of the Sale and Servicing Agreement, to the
Certificateholders, on a pro rata basis, an amount equal to the
Certificateholders' Interest Distributable Amount; and
(ii) second, from the amounts deposited in the Certificate
Distribution Account pursuant to Section 5.6(b)(vi) or Section
9.1(b)(vi) of the Sale and Servicing Agreement, to the
Certificateholders, on a pro rata basis, an amount equal to the
Certificateholders' Principal
Distributable Amount.
(b) On the Distribution Date following the date on which amounts
received in respect of the Seller's or the Servicer'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 Owner Trustee will distribute such amounts taking
into account any concurrent distribution made pursuant to Section 5.2(a):
(i) first, to the Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Interest
Distributable Amount; and
(ii) second, to the Certificateholders, on a pro rata
basis, for amounts due and unpaid on the Certificates for
principal.
(c) On the Distribution Date on which Insolvency Proceeds are
deposited in the Certificate Distribution Account pursuant to Section
9.1(b) of the Sale and Servicing Agreement (or on the Distribution Date
immediately following such deposit if such proceeds are not deposited in
the Certificate Distribution Account on a Distribution Date), the Owner
Trustee will distribute the Insolvency Proceeds so deposited in the
Certificate Distribution Account taking into account any concurrent
distribution made pursuant to Section 5.2(a):
(i) first, to the Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Interest
Distributable Amount; and
(ii) second, to the Certificateholders, on a pro rata
basis, for amounts due and unpaid on the Certificates for
principal.
(d) On the Distribution 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 5.06 of the Indenture and deposits
funds received in connection with such liquidation in the Certificate
Distribution Account, the Owner Trustee will distribute such funds taking
into account any concurrent distribution made pursuant to Section 5.2(a):
(i) first, to the Certificateholders, on a pro rata
basis, an amount equal to the Certificateholders' Interest
Distributable Amount; and
(ii) second, to the Certificateholders, on a pro rata
basis, for amounts due and unpaid on the Certificates for
principal; and
(e) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement provided to the Owner Trustee by the
Servicer pursuant to Section 5.7 of the Sale and Servicing Agreement on
such Distribution Date.
(f) 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 Owner Trustee 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 from contesting any such tax in appropriate proceedings, and
withholding payment of such tax, if permitted by law, pending the outcome
of such proceedings). The amount of any withholding tax imposed with
respect to 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 Certificateholder), the Owner Trustee may in it
sole discretion withhold such amounts in accordance with this clause (f).
In the event that an Owner wishes to apply for a refund of any such
withholding tax, the Owner Trustee shall reasonably cooperate with such
Certificateholder in making such claim so long as such Certificateholder
agrees to reimburse the Owner Trustee for any out-of-pocket expenses
incurred.
(g) Any funds remaining in the Certificate Distribution Account after
distribution of all amounts specified in this Section 5.2 shall be
distributed to the General Partner.
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 Distribution 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
Distribution 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
General Partner, or an Affiliate thereof, or, if not, by check mailed to such
Certificateholder at the address of such holder appearing in the Certificate
Register; provided, however, that, unless Definitive Trust Certificates have
been issued pursuant to Section 3.16, with respect to Trust Certificates
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), distributions will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Notwithstanding the foregoing, the final distribution in respect of any
Trust Certificate (whether on the Final Scheduled Distribution 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 Sections 10.1(b)(iii) and
10.1(c) of the Sale and Servicing Agreement, the General Partner 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) to enable each Certificateholder to prepare its 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), and direct
the Owner Trustee to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a partnership for
Federal income tax purposes and (d) collect or cause to be collected any
withholding tax as described in and in accordance with Section 5.2(c) with
respect to income or distributions to Certificateholders. The Owner Trustee
shall make all elections pursuant to this Section as directed by the General
Partner. The Owner Trustee shall sign all 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 General 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 not make the election provided under Section 754 of the Code.
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 the tax returns of the Trust, unless applicable law requires a
Certificateholder or an Owner to sign such documents, in which case such
documents shall be signed by the General Partner.
(b) The General Partner 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 and
any amendment thereto, in each case, in such form as the Depositor shall approve
as evidenced conclusively by the Owner Trustee's execution thereof, and on
behalf of the Trust, to direct the Trustee to authenticate and deliver Class A-1
Notes in the aggregate principal amount of $_____________, Class A-2 Notes in
the aggregate principal amount of $_____________ and Class A-3 Notes in the
aggregate principal amount of $_____________. In addition to the foregoing, the
Owner Trustee is authorized, but shall not be obligated, to take all actions
required of the Trust pursuant to the Basic Documents. The Owner Trustee is
further authorized from time to time to take such action as the Instructing
Party recommends with respect to the Basic Documents so long as such activities
are consistent with the terms of the Basic Documents.
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 the Sale and Servicing Agreement and to
administer the Trust in the interest of the Owners, 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 and the
terms of the Spread Account Agreement, the Insurer (so long as an Insurer
Default shall not have occurred and be continuing) or the Certificateholders (if
an Insurer Default shall have occurred and be continuing) (the "Instructing
Party") shall have the exclusive right to direct the actions of the Owner
Trustee in the management of the Trust, so long as such instructions are not
inconsistent with the express terms set forth herein or in any Basic Document.
The Instructing Party shall not instruct the Owner Trustee in a manner
inconsistent with this Agreement or the 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 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 any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 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's 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 Trust and Duties. The Owner Trustee accepts the
trust hereby created and agrees to perform its duties hereunder with respect to
such trust but only upon the terms of this Agreement. The Owner Trustee also
agrees to disburse all moneys actually received by it constituting part of the
Owner Trust Estate upon the terms of the Basic Documents and this Agreement. The
Owner Trustee in its individual capacity shall not be answerable or accountable
hereunder or under any Basic Document under any circumstances, except (i) for
its own willful misconduct, bad faith or negligence, (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 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;
(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, Trustee,
Indenture Collateral Agent, the Collateral Agent, any Noteholder or
to any Certificateholder, other than as expressly provided for herein
and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Insurer, the 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 Insurer under the Certificate Policy, by the 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 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, the Owners
and the Insurer (which shall have relied on such representations and warranties
in issuing the Policies), 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.
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 trust hereunder and
in the performance of its duties and obligations under this Agreement
or the Basic Documents, the Owner Trustee (i) may act directly or
through its agents or attorneys pursuant to agreements entered into
with any of them, and the Owner Trustee shall not be liable for the
conduct or misconduct of such agents or attorneys if such agents or
attorneys shall have been selected by the Owner Trustee with
reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed
by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written
opinion or advice of any such counsel, accountants or other such
persons and not contrary to this Agreement or any Basic Document.
SECTION 7.5. Not Acting in Individual Capacity. Except as expressly
provided herein or in any other Basic Document, in accepting the trust 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 recitals 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: 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 as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between ____________ and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by the General
Partner for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder; provided,
-------- however, that the Owner Trustee shall only be entitled to -------
reimbursement for expenses hereunder to the extent such expenses (i) are fees of
outside counsel engaged by the Owner Trustee in respect of the performance of
its obligations hereunder, but up to a dollar amount not to exceed the amount
previously agreed to with _________ and only so long as the Owner Trustee has
given the General Partner prior notice of its engagement of such counsel; or
(ii) relate to the performance of its obligations pursuant to Section 5.6
hereof.
SECTION 8.2. Indemnification. The General Partner shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnitees") 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 Indemnitee 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 General Partner shall not be liable for
or required to indemnify the Owner Trustee from and against Expenses arising or
resulting from any of the matters described in the third sentence of Section
7.1. If a claim is made against any Indemnitee which could give rise to
indemnification hereunder, such Indemnitee, upon receiving such claim, shall
give notice thereof to the General Partner; provided, however, that failure to
give or delay in giving such notice shall not release the General Partner from
any of its indemnification obligations hereunder unless and only to the extent
that the General Partner can demonstrate it was harmed thereby. The General
Partner shall be entitled to defend any such claim through counsel selected by
it (so long as such counsel is reasonably acceptable to the Indemnitee) and each
Indemnitee will extend reasonable cooperation to the General Partner and such
counsel in connection with such defense. The indemnities contained in this
Section shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement.
SECTION 8.3. Payments to the 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.
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 Owner.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement. (a) This Agreement and the
Trust shall 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
Related Documents, (ii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement and the payment to the
Insurer of all amounts payable or reimbursable to it pursuant to the Sale and
Servicing Agreement, or (iii) at the time provided in Section 9.2.; provided,
however, that in no event shall the trust created by this Agreement continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants living on the date of this Agreement of Xxxx Xxxxxxx of the
Commonwealth of Massachusetts; and provided, further, that the rights to
indemnification under Section 8.2 shall survive the termination of the Trust.
The Servicer shall promptly notify the Owner Trustee and the Insurer of any
prospective termination pursuant to this Section 9.1. Except as provided in
Section 9.2, the bankruptcy, liquidation, dissolution, death or incapacity of
any Certificateholder or Owner, other than the General Partner as described in
Section 9.2, shall not (x) operate to terminate this Agreement or the Trust, nor
(y) entitle such Certificateholder's or Owner'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 the
General Partner nor any Certificateholder shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the 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 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 Distribution
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 Distribution 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 Distribution 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 General Partner. As soon as
practicable after the termination of the Trust, the Owner Trustee shall
surrender the Certificate Policy to the Insurer for cancellation.
(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 General Partner.
(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with
the provisions of Section 3810 of the Business Trust Statute.
SECTION 9.2. Dissolution upon Bankruptcy of the General Partner. In the
event that an Insolvency Event shall occur with respect to the General Partner,
this Agreement shall be terminated in accordance with Section 9.1 90 days after
the date of such Insolvency Event, unless, before the end of such 90-day period,
the Owner Trustee shall have received written instructions from
Certificateholders holding a majority of the Certificate Balance (other than the
General Partner) to the effect that each such party disapproves of the
liquidation of the Receivables and termination of the Trust. Promptly after the
occurrence of any Insolvency Event with respect to the General Partner, (i) the
General Partner shall give the Trustee, the Owner Trustee and the Insurer
written notice of such Insolvency Event, (ii) the Owner Trustee shall, upon the
receipt of such written notice from the General Partner, give prompt written
notice to the Certificateholders and the Trustee of the occurrence of such event
and (iii) the Trustee shall, upon receipt of written notice of such Insolvency
Event from the Owner Trustee or the General Partner, give prompt written notice
to the Noteholders of the occurrence of such event; provided, however, that any
failure to give a notice required by this sentence shall not prevent or delay,
in any manner, a termination of the Trust pursuant to the first sentence of this
Section 9.2. Upon a termination pursuant to this Section, the Insurer or, if an
Insurer Default has occurred and is continuing, the Owner Trustee shall direct
the Trustee promptly to sell the assets of the Owner Trust Estate (other than
the Certificate Policy) in a commercially reasonable manner and on commercially
reasonable terms. The proceeds of such a sale of the assets of the Trust shall
be treated as collections under the Sale and Servicing Agreement and shall be
distributed in accordance with Section 9.1(b) thereof.
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 trust hereby created by giving
written notice thereof to the General Partner, the Insurer and the Servicer.
Upon receiving such notice of resignation, the General Partner shall promptly
appoint a successor Owner Trustee by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Owner Trustee and one
copy to the successor Owner Trustee, provided that the General Partner 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 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 General Partner, 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 General Partner with the consent of the Insurer (so long
as an Insurer Default shall not have occurred and be continuing) may remove the
Owner Trustee. If the General Partner shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the General Partner shall
promptly appoint a successor Owner Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the outgoing Owner Trustee so
removed, one copy to the Insurer and one copy to the successor Owner Trustee and
payment of all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The General Partner shall provide notice of such
resignation or removal of the Owner Trustee 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
General Partner, 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 General Partner 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.
SECTION 10.4. Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 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 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 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, 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 trust 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 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 from time to time, with the prior
written consent of the Insurer (so long as an Insurer Default shall not have
occurred and be continuing) by the Depositor and the Owner Trustee, with prior
written notice to the Rating Agencies, with the consent of the Holders of Notes
evidencing not less than a majority of the Outstanding Amount of the Notes and,
to the extent such amendment materially and adversely affects the interests of
the Noteholders, 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)
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 Certificateholders 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.
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 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 trust
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of the Owner Trust Estate.
SECTION 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 Trustee and the Noteholders, and nothing in this Agreement,
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Owner Trust 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 the Corporate Trust Office; if to the Depositor,
addressed to NationsFinancial Funding Corporation, 000 Xxxx Xxxx X. Xxxxxxxxx
Xxxxxxx, Xxxxxx, Xxxxx 00000, Attention: _____________________ with a copy to
NationsCredit Commercial Corporation, Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, Attention: General Counsel; if to the holder of the Insurer,
addressed to Insurer, Financial Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Surveillance Department, Telex No.: (212) 688-
3101, Confirmation: (000) 000-0000, Telecopy Nos.: (212) 339- 3518, (212)
339-3529 (in each case in which notice or other communication to the Insurer
refers to an Event of Default, a claim on the Policies or with respect to which
failure on the part of the Insurer to respond shall be deemed to constitute
consent or acceptance, then a copy of such notice or other communication should
also be sent to the attention of the General Counsel and Head-Financial Guaranty
Group "URGENT MATERIAL ENCLOSED"); or, as to each party, at such other address
as shall be designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Any notice
so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.5. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.6. Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7. 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 Certificate 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 Policies) upon delivery
of a written notice to the Owner Trustee.
SECTION 11.8. [Reserved.]
SECTION 11.9. No Petition. The Owner Trustee (in its individual capacity
and as Owner Trustee), by entering into this Agreement, each Certificateholder,
by accepting a Trust Certificate, and the 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 General Partner, or join in any
institution against the General Partner 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 11.10. 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 General Partner, the Owner
Trustee, the Trustee, the Insurer or any Affiliate thereof and no recourse may
be had against such parties or their assets, except as may be expressly set
forth or contemplated in this Agreement, the Trust Certificates or the Basic
Documents.
SECTION 11.11. 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 11.12. 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 11.13. [Reserved].
SECTION 11.14. 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:
NATIONSFINANCIAL FUNDING
CORPORATION
Depositor,
By:--------------------------
Name:
Title:
ACCEPTED AND AGREED
with respect to the
provisions relating to
the Affiliated Purchaser
and the General Partner
[AFFILIATED PURCHASER]
By: __________________
Name:
Title:
EXHIBIT A
NUMBER $
R- CUSIP NO.
SEE REVERSE FOR CERTAIN DEFINITIONS
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS TRUST CERTIFICATE IS DISTRIBUTABLE IN INSTALLMENTS AS
SET FORTH IN THE TRUST AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS
TRUST CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF.]
[THIS CERTIFICATE IS NOT TRANSFERABLE]2
--------
2 To be inserted on the Certificate to be held by the General
Partner.
____% ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes certain rights
respecting a pool of retail installment sale contracts secured by new or used
automobiles, vans or light duty trucks and sold to the Trust by NationsFinancial
Funding Corporation
(This Trust Certificate does not represent an interest in or obligation of
NationsFinancial Funding Corporation or any of its Affiliates, except to the
extent described below.)
THIS CERTIFIES THAT is the registered owner of DOLLARS nonassessable,
fully-paid, beneficial ownership interest in certain distributions of
NationsFinancial Auto Owner Trust 1996-1 (the "Trust") formed by
NationsFinancial Funding Corporation, a Delaware corporation (the "Seller"). The
Trust Certificates have a Certificate Rate of ____% per annum.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the
within-mentioned Trust Agreement.
----------------------- -----------------------
not in its individual not in its individual
capacity but solely as capacity but solely as
Owner Trustee or Owner Trustee
By _____________________,
Authenticating Agent
by__________________________
by________________________
The Trust was created pursuant to a Trust Agreement dated as of November
30, 1996 (the "Trust Agreement"), between the Seller and _____________________,
as owner trustee (in such capacity, 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 "____% Asset Backed Certificates" (herein called the "Trust
Certificates"). Also issued under the Indenture dated as of November 30, 1996,
among the Trust, ___________________________, as trustee and indenture
collateral agent, are three classes of Notes designated as "Class A-1 ______%
Asset Backed Notes" (the "Class A-l Notes"), "Class A-2 Floating
Rate Asset Backed Notes (the "Class A-2 Notes"), "Class A-3 ____% Asset Backed
Notes" (the "Class A-3 Notes", together with the Class A-2 Notes and the Class
A-1 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 certain rights respecting a pool of retail installment sale contracts
secured by new and used automobiles, vans or light duty trucks (the
"Receivables"), all monies due thereunder on or after Cutoff Date (other than
amounts received in connection with Collateral Protection Insurance), in the
case of Pre-Computed Receivables or received thereafter in the case of Simple
Interest Receivables, security interests in the vehicles financed thereby,
certain bank accounts and the proceeds thereof, certain proceeds from claims on
certain insurance policies and certain other rights under the Trust Agreement
and the Sale and Servicing Agreement, all right, to the and interest of the
Seller in and to the Purchase Agreement dated as of November 30, 1996 between
SunStar Acceptance Corporation and the Seller and all proceeds of the foregoing.
Under the Trust Agreement, there will be distributed on the 15th day of
each month or, if such 15th day is not a Business Day, the next Business Day
(the "Distribution Date"), commencing on ________ __, 1996, to the Person in
whose name this Trust Certificate is registered at the close of business on the
Business Day preceding such Distribution Date (the "Record Date") such
Certificateholder's fractional undivided interest in the amount to be
distributed to Certificateholders on such Distribution Date. No principal will
be paid on the Trust Certificate until the Class A-3 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.
The Certificates are entitled to the benefits of a financial guaranty
insurance policy (the "Certificate Policy") issued by Financial Security
Assurance Inc. (the "Insurer"), pursuant to which the Insurer has
unconditionally guaranteed payment of the Certificateholders' Interest
Distributable Amount and the Certificateholders' Principal Distributable Amount,
on each Distribution Date, all and to the extent as more fully set forth in the
Sale and Servicing Agreement.
It is the intent of the Seller, Servicer, holder of the General Partner and
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a partnership and the Certificateholders (including the General
Partner) will be treated as partners in that partnership. The General Partner
and the other Certificateholders by acceptance of a Trust Certificate, agree to
treat, and to take no action inconsistent with the treatment of, the Trust
Certificates for such tax purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Trust Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the General Partner, or join in any institution against the General Partner 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 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 that with respect to Trust Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. 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.
NATIONSFINANCIAL AUTO OWNER TRUST
1996-1
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 General Partner, 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 and payments under the Certificate Policy, 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 _____________
_______.
Except for Trust Certificates issued to the Depositor and transferred to
the General Partner, the Trust Certificates are issuable only as registered
Trust Certificates without coupons in 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, the Insurer and any agent of
the Owner Trustee, the Certificate Registrar or the Insurer 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, the Insurer
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 Servicer 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
Monthly Period as of which the Pool Balance is 5% 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) (l) 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 General Partner 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.
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
NATIONSFINANCIAL AUTO OWNER TRUST 1996-1
THIS Certificate of Trust of NationsFinancial Auto Owner Trust 1996-1(the
"Trust"), dated as of __, 199 , is being duly executed and filed by , a and , an
individual, as trustees, 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 NationsFinancial
Auto Owner Trust 1996-1.
2. This Certificate of Trust will be effective __, 199 . --
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:
