EXHIBIT 4.1
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AMENDED AND RESTATED TRUST AGREEMENT
between
ML ASSET BACKED CORPORATION,
as Depositor
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Owner Trustee
Dated as of May 31, 2007
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Capitalized Terms..............................................1
Section 1.02. Other Definitional Provisions..................................3
ARTICLE II
ORGANIZATION
Section 2.01. Name...........................................................4
Section 2.02. Office.........................................................4
Section 2.03. Purposes and Powers............................................4
Section 2.04. Appointment of Owner Trustee...................................5
Section 2.05. Initial Capital Contribution of Trust Estate...................5
Section 2.06. Declaration of Trust...........................................5
Section 2.07. Characterization of the Trust for Tax Purposes.................5
Section 2.08. Liability of Certificateholders................................6
Section 2.09. Title to Trust Property........................................6
Section 2.10. Situs of Trust.................................................6
Section 2.11. Representations, Warranties and Covenants of the Depositor.....6
Section 2.12. Federal Income Tax Matters.....................................7
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01. Initial Ownership..............................................8
Section 3.02. The Trust Certificates.........................................8
Section 3.03. Execution, Authentication and Delivery of Trust Certificates...8
Section 3.04. Registration of Certificates; Transfer and Exchange of
Trust Certificates; Limitations on Transfer....................8
Section 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates.......10
Section 3.06. Persons Deemed Owners.........................................11
Section 3.07. Access to List of Certificateholders' Names and Addresses.....11
Section 3.08. Maintenance of Office or Agency...............................11
Section 3.09. Appointment of Paying Agent...................................12
Section 3.10. Definitive Trust Certificates.................................12
Section 3.11. Certificates Nonassessable and Fully Paid.....................12
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.01. Prior Notice with Respect to Certain Matters..................13
Section 4.02. Action by Certificateholders with Respect to Certain Matters..15
Section 4.03. Restrictions on Certificateholders' Power.....................15
Section 4.04. Majority Control..............................................15
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.01. Establishment of Trust Account................................15
Section 5.02. Application of Trust Funds....................................16
Section 5.03. Method of Payment.............................................17
Section 5.04. No Segregation of Moneys; No Interest.........................17
Section 5.05. Accounting and Reports to Certificateholders, the
Internal Revenue Service and Others...........................17
Section 5.06. Signature on Returns; Tax Matters Partner.....................17
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01. General Authority.............................................18
Section 6.02. General Duties................................................18
Section 6.03. Action upon Instruction.......................................18
Section 6.04. No Duties Except as Specified in this Agreement or
in Instructions...............................................19
Section 6.05. No Action Except Under Specified Documents or Instructions....19
Section 6.06. Restrictions..................................................19
Section 6.07. Administrative Duties.........................................20
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.01. Acceptance of Trusts and Duties...............................22
Section 7.02. Furnishing of Documents.......................................24
Section 7.03. Representations and Warranties................................24
Section 7.04. Reliance; Advice of Counsel...................................24
Section 7.05. Not Acting in Individual Capacity.............................25
Section 7.06. Owner Trustee Not Liable for Trust Certificates or
for Receivables...............................................25
Section 7.07. Owner Trustee May Own Trust Certificates and Notes............25
Section 7.08. Doing Business in Other Jurisdictions.........................26
Section 7.09. Paying Agent, Certificate Registrar and Authenticating Agent..26
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ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.01. Owner Trustee's Fees and Expenses.............................26
Section 8.02. Indemnification...............................................26
Section 8.03. Payments to the Owner Trustee.................................27
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
Section 9.01. Termination of Trust Agreement................................27
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.01. Eligibility Requirements for Owner Trustee...................28
Section 10.02. Resignation or Removal of Owner Trustee......................29
Section 10.03. Successor Owner Trustee......................................29
Section 10.04. Merger or Consolidation of Owner Trustee.....................30
Section 10.05. Appointment of Co-Trustee or Separate Trustee................30
ARTICLE XI
MISCELLANEOUS
Section 11.01. Supplements and Amendments...................................31
Section 11.02. No Legal Title to Trust Estate in Certificateholders.........32
Section 11.03. Limitations on Rights of Others..............................32
Section 11.04. Notices......................................................33
Section 11.05. Severability.................................................33
Section 11.06. Separate Counterparts........................................33
Section 11.07. Successors and Assigns.......................................33
Section 11.08. Covenants of the Depositor...................................33
Section 11.09. No Petition..................................................34
Section 11.10. No Recourse..................................................34
Section 11.11. Headings.....................................................34
Section 11.12. GOVERNING LAW................................................34
Section 11.13. Xxxxxxxx-Xxxxx...............................................34
Section 11.14. Acceptance of Terms of Agreement.............................34
Section 11.15. Information to Be Provided by the Owner Trustee..............34
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Exhibit A Form of Trust Certificate...................................A-1
Exhibit B Form of Transferor Certificate..............................B-1
Exhibit C Form of Investment Letter...................................C-1
Exhibit D Form of Rule 144A Letter....................................D-1
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This AMENDED AND RESTATED TRUST AGREEMENT, dated as of May 31, 2007,
is between ML ASSET BACKED CORPORATION, a Delaware corporation, as depositor
(the "Depositor"), and U.S. BANK TRUST NATIONAL ASSOCIATION, a national banking
corporation, as owner trustee (the "Owner Trustee").
WHEREAS, the Owner Trustee and the Depositor entered into a Trust
Agreement dated as of April 17, 2007 (the "Original Trust Agreement"); and
WHEREAS, the Original Trust Agreement is being amended and restated as
of May 31, 2007;
NOW, THEREFORE, the Depositor and the Owner Trustee hereby agree that
the Original Trust Agreement shall be amended and restated as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Capitalized Terms. For all purposes of this Agreement,
the following terms have the meanings set forth below:
"Agreement" means this Amended and Restated Trust Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"Bankruptcy Action" has the meaning assigned to such term in Section
4.01.
"Certificate Distribution Account" has the meaning assigned to such
term in Section 5.01.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit A to the Original Trust Agreement.
"Certificate Register" and "Certificate Registrar" means the register
mentioned in and the registrar appointed pursuant to Section 3.04.
"Code" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder.
"Depositor" means ML Asset Backed Corporation, and its successors, in
its capacity as depositor hereunder.
"Distribution Date" means the fifteenth (15th) day of each calendar
month or, if such day is not a Business Day, the next succeeding Business Day.
"Expenses" has the meaning assigned to such term in Section 8.02.
"Holder" or "Certificateholder" means a Person in whose name a Trust
Certificate is registered in the Certificate Register; except that when used in
reference to the Notes, "Holder" shall have the meaning provided therefor under
the Indenture.
"Indemnified Parties" has the meaning assigned to such term in Section
8.02.
"Indenture" means the Indenture, dated as of May 31, 2007, among the
Trust, HSBC Bank USA, National Association, as Indenture Trustee and U.S. Bank
National Association, as Securities Administrator, as amended, supplemented or
otherwise modified from time to time.
"Indenture Trustee" means HSBC Bank USA, National Association, a
national banking association, not in its individual capacity, but as Indenture
Trustee under the Indenture, or any successor Indenture Trustee under the
Indenture.
"Investment Letter" has the meaning assigned to such term in Section
3.04.
"Notes" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class B Notes and the Class C Notes.
"Original Trust Agreement" has the meaning set forth in the recitals.
"Owner Trustee" means U.S. Bank Trust National Association, a national
banking association, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 3.09 and shall initially be the Owner Trustee.
"Percentage Interest" means, as to any Trust Certificate, the
percentage interest, specified on the face thereof, in the distributions on the
Trust Certificates pursuant to this Agreement.
"Protected Purchaser" has the meaning set forth in Section 8-303 of
the UCC.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of May 31, 2007, among the Trust, as issuer, the Depositor, U.S. Bank
National Association, as Master Servicer, and HSBC Bank USA, National
Association, as Indenture Trustee, as the same may be amended, supplemented or
otherwise modified from time to time.
"Secretary of State" means the Secretary of State of the State of
Delaware.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Administrator" means U.S. Bank National Association, a
national banking association, not in its individual capacity but solely as
Securities Administrator under the Indenture, or any successor Securities
Administrator under the Indenture.
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"Similar Law" means any foreign, federal, state or local law with
provisions substantially similar to Title I of ERISA or Section 4975 of the
Code.
"Statutory Trust Statute" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code xx.xx. 3801 et seq., as the same may be amended from time to
time.
"Transferor Certificate" has the meaning assigned to such term in
Section 3.04.
"Treasury Regulations" means regulations, including proposed or
temporary Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust Certificates" means the certificates evidencing the beneficial
interest in the Trust, in the form of Exhibit A hereto.
Section 1.02. Other Definitional Provisions.
(a) Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Appendix A to the Sale and Servicing Agreement.
(b) All terms defined in this Agreement and used in any instrument
governed hereby and in any certificate or other document made or delivered
pursuant hereto shall have the respective meanings ascribed thereto herein
unless such terms are otherwise defined in such certificate or other document.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles. To the extent that the
definitions of accounting terms in this Agreement or in any such certificate or
other document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Agreement or
in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; "or" includes "and/or"; and
the term "including" means "including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular and plural forms of such terms and to the masculine, feminine and
neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of
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agreements or instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
ORGANIZATION
Section 2.01. Name. The Trust heretofore created and continued
hereby is known as "Merrill Auto Trust Securitization 2007-1," 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 2.02. Office. The office of the Trust shall be in care of
the Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the
Certificateholders and the Depositor.
Section 2.03. Purposes and Powers. The purpose of the Trust is to
engage in the following activities and the Owner Trustee acting on behalf of the
Trust shall have the power and authority:
(a) 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, in each case in accordance with the Basic Documents;
(b) with the proceeds of the sale of the Notes and the Trust
Certificates, to purchase or otherwise acquire the Receivables, to pay the
organizational, start-up and transactional expenses of the Trust and to pay the
balance of such proceeds to the Depositor pursuant to the Sale and Servicing
Agreement;
(c) to assign, grant, transfer, pledge, mortgage and convey the Trust
Estate pursuant to the Indenture and to hold, manage and distribute to the
Certificateholders 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;
(d) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(e) 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
(f) subject to compliance with the Basic Documents, to engage in such
other activities as may be required in connection with conservation of the Trust
Estate and the making of distributions to the Certificateholders and the
Noteholders.
The Owner Trustee acting on behalf of 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 other
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Basic Documents. Specifically, the Owner Trustee, on behalf of the Trust, shall
have no authority to engage in any business operation, acquire any assets other
than those specifically included in the Trust Property or the Owner Trust Estate
under Article II of the Sale and Servicing Agreement or otherwise vary the
assets held by the Trust, except as authorized by the terms of this Agreement or
the other Basic Documents.
Section 2.04. Appointment of Owner Trustee. The Depositor hereby
confirms the appointment of the Owner Trustee as trustee of the Trust effective
as of the date of creation of the Trust, to have all the rights, powers and
duties set forth herein.
The Owner Trustee may engage, in the name of the Trust or in its own
name on behalf of the Trust, in the activities of the Trust, make and execute
contracts on behalf of the Trust and xxx on behalf of the Trust.
Section 2.05. 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 Trust Estate and
shall be deposited in the Certificate Distribution Account. The Depositor 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.
Section 2.06. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholders, subject to
the obligations of the Trust under the Basic Documents. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and in the Statutory Trust Statute with respect to accomplishing the
purposes of the Trust. The Owner Trustee has filed the Certificate of Trust with
the Secretary of State of the State of Delaware.
Section 2.07. Characterization of the Trust for Tax Purposes. It is
the intention of the parties hereto that (i) the Trust constitute a statutory
trust under the Statutory Trust Statute and that this Agreement constitute the
governing instrument of such statutory trust and (ii) for federal, state and
local income and franchise tax purposes, the Trust shall be treated as a grantor
trust of the type described in Treasury Regulation ss.301.7701-4(c), with the
assets of the Trust being the Receivables and other assets held by the Trust,
and the Notes being non-recourse debt of the Certificateholders, provided that
if the Trust is not properly characterized as a grantor trust of the type
described in Treasury Regulation ss.301.7701-4(c) (i.e., if one or more classes
of Notes are treated as equity in the Trust for federal income tax purposes),
the Trust shall be treated for federal, State and local income and franchise tax
purposes as a partnership (other than an association or publicly traded
partnership), with the assets of the partnership being the Receivables and other
assets held by the Trust, the partners of the partnership being the
Certificateholders and the Holders of the Notes that are treated as equity in
the Trust, and the remaining Notes constituting indebtedness of the partnership.
The parties agree that, unless otherwise required by the appropriate tax
authorities, the Trust will file or cause to be filed
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annual or other necessary returns, reports and other forms consistent with the
foregoing characterization of the Trust for such tax purposes.
Section 2.08. Liability of Certificateholders. The Certificateholders
(including the Depositor or any Affiliate thereof) shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the general corporation law of the State
of Delaware.
Section 2.09. Title to Trust Property. Subject to the Indenture, legal
title to all the Trust Estate shall be vested at all times in the Owner Trustee,
in its capacity as trustee for the Trust, in accordance with Section 3805(f) of
the Statutory Trust Statute, with the same effect as if such property were held
in the name of the Trust as a separate legal entity.
Section 2.10. Situs of Trust. The Trust will be located in the State
of Delaware and administered in the States of Delaware, New York or Minnesota.
All bank accounts maintained by the Owner Trustee on behalf of the Trust shall
be located in the States of Delaware, New York or Minnesota. The Trust shall not
have any employees; provided, however, that nothing herein shall restrict or
prohibit the Owner Trustee from having employees within or without the State of
Delaware. Payments will be received by the Trust only in Delaware, New York or
Minnesota, and payments will be made by the Trust only from Delaware, New York
or Minnesota. The only office of the Trust will be at the Corporate Trust
Office.
Section 2.11. Representations, Warranties and Covenants of the
Depositor. The Depositor hereby represents and warrants to the Owner Trustee
that:
(a) The Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware, with power
and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted.
(b) The Depositor 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
or the conduct of its business shall require such qualifications.
(c) The Depositor has the power and authority to execute and deliver
this Agreement and to carry out its terms; the Depositor has full power and
authority to transfer and assign the property to be transferred and assigned to
and deposited with the Trust and the Depositor has duly authorized such transfer
and assignment and deposit to the Trust by all necessary corporate action; and
the execution, delivery and performance of this Agreement have been duly
authorized by the Depositor by all necessary corporate action.
(d) The Depositor has duly executed and delivered this Agreement, and
this Agreement constitutes a legal, valid and binding obligation of the
Depositor, enforceable against the Depositor, in accordance with its terms.
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(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not (i) 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 the by-laws of the Depositor, or any indenture, agreement or
other instrument to which the Depositor is a party or by which it is bound, (ii)
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) or (iii) 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) There are no proceedings or investigations pending or threatened
before any court, regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its properties (i)
asserting the invalidity of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
(g) The representations and warranties of the Depositor in Section 5.1
of the Sale and Servicing Agreement are true and correct.
Section 2.12. Federal Income Tax Matters. (a) The Certificateholders
acknowledge that it is their intent and that they understand it is the intent of
the Depositor that, for federal, State and local income and franchise tax
purposes, the Trust shall be treated as a grantor trust of the type described in
Treasury Regulation ss.301.7701-4(c). The Depositor hereby agrees and each
Certificateholder by acceptance of a Trust Certificate agrees to such treatment
and each agrees to take no action inconsistent with such treatment as a grantor
trust. If the Trust is not properly characterized as a grantor trust of the type
described in Treasury Regulation ss.301.7701-4(c) (i.e., to the extent that one
or more classes of Notes are treated as equity for federal income tax purposes),
the Trust will be treated as a partnership (other than an association or
publicly traded partnership) for federal, State and local income and franchise
tax purposes, and income, gain or loss of the Trust for such month as determined
for federal income tax purposes shall be allocated among the Certificateholders
as of the Record Date occurring within such month, in proportion to their
ownership of the Certificate Percentage Interest on such date.
(b) Each Certificateholder agrees to provide to the Trust (a) an IRS
Form W-9 (or other similar or successor form) as is necessary to establish an
exemption from United States federal backup withholding with respect to such
Certificateholder (i) on or promptly after the date hereof (or, if later, the
date on which it becomes a Certificateholder hereunder) and (ii) upon the
occurrence of any event that would require the amendment or resubmission of any
such Form previously provided hereunder and such other forms or information in
connection therewith reasonably requested by the Trust.
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(c) The Trust 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
Certificateholders, or as otherwise required by the Code.
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01. Initial Ownership. Upon the formation of the Trust by
the execution of the Original Trust Agreement and until the issuance of the
Trust Certificates, the Depositor shall be the sole beneficiary of the Trust.
Section 3.02. The Trust Certificates.
(a) The Trust Certificates shall be issued in minimum denominations of
a one percent (1%) Percentage Interest in the Trust. The Trust Certificates
shall be executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee. Trust Certificates bearing the manual
or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefit of this Agreement and shall
be valid and binding obligations of the Trust, 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.
(b) A transferee of a Trust Certificate, if any, shall become a
Certificateholder, shall become bound by this Agreement and shall be entitled to
the rights and subject to the obligations of a Certificateholder hereunder upon
such transferee's acceptance of a Trust Certificate duly registered in such
transferee's name pursuant to Section 3.04.
Section 3.03. Execution, Authentication and Delivery of Trust
Certificates. On the Closing Date, the Owner Trustee shall cause the Trust
Certificates in an aggregate Percentage Interest equal to 100% to be executed on
behalf of the Trust and authenticated by the Owner Trustee on behalf of the
Trust and delivered to or upon the written order of Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, without further action by the Depositor, in
authorized denominations. No Trust Certificate shall entitle the related
Certificateholder to any benefit under this Agreement or 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, 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.
When a Trust Certificate is duly executed and issued by the Owner
Trustee and duly authenticated in accordance with this Agreement, the Trust
Certificate will be fully paid, validly issued, nonassessable and entitled to
the benefits of this Agreement.
Section 3.04. Registration of Certificates; Transfer and Exchange of
Trust Certificates; Limitations on Transfer. (a) The Certificate Registrar shall
keep or cause to be kept, at the office or agency maintained pursuant to Section
3.08, a Certificate Register in which,
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subject to such reasonable regulations as it may prescribe, the Trust shall
provide for the registration of Trust Certificates and of transfers and
exchanges of Trust Certificates as herein provided. The Owner Trustee shall be
the initial Certificate Registrar. No transfer of a Trust Certificate shall be
recognized except upon registration of such transfer in the Certificate
Register.
The Trust Certificates have not been and will not be registered under the
Securities Act and will not be listed on any exchange. No transfer of a Trust
Certificate shall be made unless such transfer is made pursuant to an effective
registration statement under the Securities Act and any applicable State
securities laws or is exempt from the registration requirements under the
Securities Act and such State securities laws. In the event that a transfer is
to be made in reliance upon an exemption from the Securities Act and State
securities laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer and such
Certificateholder's prospective transferee shall each certify to the Owner
Trustee in writing the facts surrounding the transfer in substantially the forms
set forth in Exhibit B (the "Transferor Certificate") and either Exhibit C (the
"Investment Letter") or Exhibit D (the "Rule 144A Letter"). The Depositor shall
provide to any Certificateholder and any prospective transferee designated by
any such Certificateholder, information regarding the Trust Certificates and,
based solely on information received from the Master Servicer, the Receivables
Servicer and, to the extent reasonably obtainable by the Depositor, such other
information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Trust Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. Each Certificateholder desiring to effect such
a transfer shall, and does hereby agree to, indemnify the Trust, the Owner
Trustee, and the Depositor against any liability that may result if the transfer
is not so exempt or is not made in accordance with federal and state securities
laws. The Owner Trustee shall cause each Trust Certificate to contain a legend
in the form set forth on the form of Trust Certificate attached hereto as
Exhibit A.
(b) With respect to each transfer of a Trust Certificate, the
prospective transferee shall be deemed to represent the following:
(i) It is not, and each account (if any) for which it is
purchasing the Trust Certificates is not (1) an employee benefit plan, as
defined in Section 3(3) of ERISA, that is subject to Title I of ERISA, (2)
a plan described in Section 4975(e)(1) of the Code that is subject to
Section 4975 of the Code, (3) a governmental plan, as defined in Section
3(32) of ERISA, subject to any federal, State or local law which is, to a
material extent, similar to the provisions of Section 406 of ERISA or
Section 4975 of the Code, (4) an entity whose underlying assets include
plan assets by reason of a plan's investment in the entity (within the
meaning of Department of Labor Regulation 29 C.F.R. Section 2510.3-101 or
otherwise under ERISA) or (5) a person investing "plan assets" of any such
plan (including for purposes of this clause (5), an insurance company
general account, but excluding any entity registered under the Investment
Company Act of 1940, as amended).
(ii) It understands that any purported transfer of any Trust
Certificate (or any interest therein) to any Person who does not meet the
conditions of
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paragraph (i) above shall be, to the fullest extent permitted by law, void
ab initio, and the purported transferee in such a transfer shall not be
recognized by the Trust or any other Person as a Certificateholder for any
purpose.
(c) Upon surrender for registration of transfer of any Trust
Certificate at the office or agency maintained pursuant to Section 3.08 and upon
compliance with any provisions of this Agreement relating to such transfer, the
Owner Trustee shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Trust Certificates of a
like Certificate Percentage Interest dated the date of authentication by the
Owner Trustee or any authenticating agent. At the option of a Certificateholder,
Trust Certificates may be exchanged for other Trust Certificates of a like
Certificate Percentage Interest upon surrender of the Trust Certificates to be
exchanged at the office or agency maintained pursuant to Section 3.08.
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 related Certificateholder or such Certificateholder's attorney
duly authorized in writing. Each Trust Certificate surrendered for registration
of transfer or exchange shall be cancelled and subsequently disposed of by the
Certificate Registrar 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 Certificates.
The preceding provisions of this Section 3.04 notwithstanding, the Owner
Trustee shall not make and the Certificate Registrar need not register any
transfer or exchange of Trust Certificates for a period of 15 days preceding any
Payment Date for any payment with respect to the Trust Certificates.
Section 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates.
(a) If (i) 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
(ii) there shall be delivered to the Certificate Registrar and the Owner Trustee
such security or indemnity as may be required by them to save each of them
harmless, then in the absence of written notice that such Trust Certificate has
been acquired by a Protected Purchaser, the Owner Trustee, on behalf of the
Trust, shall execute and the Owner Trustee 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 tenor and denomination. If, after
the delivery of such replacement Trust Certificate or payment of a destroyed,
lost or stolen Trust Certificate, a Protected Purchaser of the original Trust
Certificate in lieu of which such replacement Trust Certificate was issued
presents for payment such original Trust Certificate, the Trust and the Owner
Trustee shall be entitled to recover such replacement Trust Certificate (or such
payment) from the Person to whom such replacement Trust Certificate was
delivered or any assignee of such Person, except a Protected Purchaser, and
shall be entitled
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to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Trust or the Owner Trustee. 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 ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust
Certificate shall be found at any time.
(b) The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Certificates.
Section 3.06. Persons Deemed Owners. Prior to due presentation of a
Trust Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar or any Paying Agent may treat the Person in whose name any
Trust Certificate is registered in the Certificate Register as the owner of such
Trust Certificate for the purpose of receiving distributions pursuant to Section
5.02 and for all other purposes whatsoever, and none of the Owner Trustee, the
Certificate Registrar or any Paying Agent shall be bound by any notice to the
contrary.
Section 3.07. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Master Servicer, the Paying Agent and the Depositor, within 15 days after
receipt by the Owner Trustee of a written request therefor from the Master
Servicer, the Paying Agent or the Depositor, a list, in such form as the Master
Servicer or the Depositor may reasonably require, of the names and addresses of
the Certificateholders as of the most recent Record Date. The Certificate
Registrar shall also furnish to the Owner Trustee and the Paying Agent a copy of
such list at any time there is a change therein. If (i) three or more
Certificateholders or (ii) one or more Certificateholders evidencing not less
than 25% of the Certificate Percentage Interests 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 Certificateholder, by receiving and holding a Trust
Certificate, shall be deemed to have agreed not to hold any of the Depositor,
the Certificate Registrar or the Owner Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived. The Certificate Registrar shall upon the request of the
Owner Trustee provide such list, or access to such list, of Certificateholders
as contemplated by this Section 3.07.
Section 3.08. Maintenance of Office or Agency. The Owner Trustee shall
designate an office or offices or agency or agencies located in the United
States 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 the Corporate Trust Office of the Owner
Trustee as the office for such purposes. The Owner Trustee shall give prompt
written
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notice to the Depositor and the Certificateholders of any change in the location
of the Certificate Register or any such office or agency.
Section 3.09. Appointment of Paying Agent. The Paying Agent shall make
distributions to Certificateholders from the Certificate Distribution Account
pursuant to Section 5.02 and shall report the amounts of such distributions to
the Owner Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Certificate Distribution Account for the purpose of making the
distributions referred to above. The Owner Trustee may revoke such power and
remove the Paying Agent if the Owner Trustee determines in its sole discretion
that the Paying Agent shall have failed to perform its obligations under this
Agreement in any material respect. The Paying Agent initially shall be the Owner
Trustee or, as provided in the Sale and Servicing Agreement, the Securities
Administrator. As Paying Agent, the Owner Trustee shall 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. Any Paying Agent other than the Owner Trustee shall be
permitted to resign as Paying Agent upon 30 days' prior written notice to the
Owner Trustee. In the event that the Owner Trustee shall no longer be the Paying
Agent, the Owner Trustee shall appoint a successor to act as Paying Agent (which
shall be a bank or trust company). The Owner Trustee shall cause such successor
Paying Agent or any additional Paying Agent appointed hereunder to execute and
deliver to the Owner Trustee an instrument in which such successor Paying Agent
or additional Paying Agent shall agree with the Owner Trustee that, as Paying
Agent, such successor Paying Agent or additional 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 Paying Agent shall return all unclaimed funds to
the Owner Trustee and upon resignation or removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to the Owner Trustee. The
provisions of Sections 7.01, 7.03, 7.04, 8.01 and 8.02 shall apply to the Owner
Trustee in its role of Paying Agent and Certificate Registrar, for so long as
the Owner Trustee shall act as Paying Agent and Certificate Registrar and, to
the extent applicable, to any other paying agent appointed hereunder. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
Section 3.10. Definitive Trust Certificates. The Trust Certificates,
upon original issuance, will be issued in the form of a typewritten Trust
Certificate or Trust Certificates in substantially the form attached hereto as
Exhibit A to be delivered to the related Certificateholders, by, or on behalf
of, the Trust. Such Trust Certificate or Trust Certificates shall be registered
on the Certificate Register in the name of the Holder thereof. The Trust
Certificates shall be printed, lithographed, typewritten or engraved or may be
produced in any other manner as is reasonably acceptable to the Owner Trustee,
as evidenced by its execution thereof.
Section 3.11. Certificates Nonassessable and Fully Paid.
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Trust Certificates shall be nonassessable for
any losses or expenses of the Trust or for any reason whatsoever, and, upon the
authentication thereof by the Owner Trustee pursuant to Section 3.03, 3.04 or
3.05, the Trust Certificates are and shall be deemed fully paid.
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.01. Prior Notice 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 of record as of the preceding Record Date in
writing of the proposed action and such Certificateholders specified in Section
4.04 hereof shall not have notified the Owner Trustee in writing prior to the
thirtieth 30th day after such notice is given that such Certificateholders have
withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Owner Trustee
(except claims or lawsuits brought in connection with the collection of the
Receivables) and the compromise of any action, claim or lawsuit brought by or
against the Owner Trustee (except with respect to the aforementioned claims or
lawsuits for collection of the Receivables);
(b) the election by the Owner Trustee to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Statutory Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture or any
other change to this Agreement or any other Basic Document in circumstances
where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture or any
other change to this Agreement or any other Basic Document in circumstances
where the consent of any Noteholder is not required and such amendment would
materially adversely affect the interests of the Certificateholders;
(e) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of a
successor Certificate Registrar, or the consent to the assignment by the Note
Registrar, Paying Agent, Indenture Trustee or Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable;
(f) the consent to the calling or waiver of any default of any Basic
Document;
(g) the consent to the assignment by the Indenture Trustee or the
Master Servicer of their respective obligations under any Basic Document, unless
permitted in the Basic Documents;
(h) except as provided in Article IX hereof, dissolve, terminate or
liquidate the Trust in whole or in part;
(i) merge or consolidate the Trust with or into any other entity, or
convey or transfer all or substantially all of the Trust's assets to any other
entity;
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(j) cause the Trust to incur, assume or guaranty any indebtedness
other than as set forth in this Agreement or the other Basic Documents;
(k) do any act that conflicts with any other Basic Document;
(l) do any act that would make it impossible to carry on the ordinary
business of the Trust as described in Section 2.03;
(m) confess a judgment against the Trust;
(n) possess Trust assets, or assign the Trust's right to property, for
other than a Trust purpose;
(o) cause the Trust to lend any funds to any entity, unless permitted
in the Basic Documents; or
(p) change the Trust's purpose and powers from those set forth in this
Trust Agreement.
In addition, the Trust shall not commingle its assets with those of
any other entity except, to the extent permitted hereunder, with the Owner
Trustee. The Trust shall maintain its financial and accounting books and records
separate from those of any other entity. Except as expressly set forth herein,
the Trust shall not pay the indebtedness, operating expenses and liabilities of
any other entity. The Trust shall maintain appropriate minutes or other records
of all appropriate actions and shall maintain its office separate from the
offices of the Depositor and the Master Servicer.
The Owner Trustee shall not have the power, except upon the written
direction of the Certificateholders pursuant to Section 4.04, and to the extent
otherwise consistent with the Basic Documents and permitted by applicable law,
to (i) institute proceedings to have the Owner Trustee or the Trust declared or
adjudicated bankrupt or insolvent, (ii) consent to the institution of bankruptcy
or insolvency proceedings against the Owner Trustee or the Trust, (iii) file a
petition or consent to a petition seeking reorganization or relief on behalf of
the Owner Trustee or the Trust under any applicable federal or State law
relating to bankruptcy, (iv) consent to the appointment of a conservator,
receiver, liquidator, assignee, trustee, sequestrator (or any similar official)
of the Owner Trustee or the Trust or a substantial portion of the property of
the Owner Trustee or the Trust, (v) make any assignment for the benefit of the
Owner Trustee's or the Trust's creditors, (vi) cause the Owner Trustee or the
Trust to admit in writing its inability to pay its debts generally as they
become due, or (vii) take any action, or cause the Owner Trustee or the Trust to
take any action, in furtherance of any of the foregoing (any of the above, a
"Bankruptcy Action"). So long as the Indenture remains in effect and to the
fullest extent permitted by applicable law, no Certificateholder shall have the
power to take, and shall not take, any Bankruptcy Action with respect to the
Owner Trustee or the Trust or direct the Owner Trustee to take any Bankruptcy
Action with respect to the Owner Trustee or the Trust. Additionally, the Owner
Trustee shall not have the power to commence a Bankruptcy Action without the
unanimous prior approval of all Certificateholders and the delivery to the Owner
Trustee by each such Certificateholder of a certification certifying that such
Certificateholder reasonably believes that the Trust is insolvent.
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Section 4.02. Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the written
direction of (a) the Certificateholders owning 25% Certificate Percentage
Interest, to remove the Master Servicer pursuant to Section 7.1 under the Sale
and Servicing Agreement or (b) Certificateholders owning 100% Certificate
Percentage Interest, to amend the Sale and Servicing Agreement pursuant to the
proviso to Section 9.1(b). In addition, the Owner Trustee shall not have the
power, except upon the written direction of the Certificateholders, except as
expressly provided in the Basic Documents, sell the Receivables after the
termination of the Indenture.
Section 4.03. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or to 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 (including Section 2.03
hereof) or any of the other Basic Documents; nor shall the Owner Trustee be
obligated to follow any such direction, if given.
Section 4.04. Majority Control. Except as expressly provided herein,
any action that may be taken by the Certificateholders under this Agreement may
be taken by the Certificateholders evidencing not less than a majority of the
Certificate Percentage Interests. Except as expressly provided herein, any
written notice of the Certificateholders delivered pursuant to this Agreement
shall be effective if signed by Holders of Trust Certificates evidencing not
less than a majority of the Certificate Percentage Interests at the time of the
delivery of such notice.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.01. Establishment of Trust Account. The Paying Agent shall
establish and maintain on behalf of the Trust an Eligible Deposit Account (the
"Certificate Distribution Account"), bearing a designation clearly indicating
that the funds deposited therein are held for the benefit of the
Certificateholders. The title of the Certificate Distribution Account shall be
"Xxxxxxx Auto Trust Securitization 2007-1: Certificate Distribution Account for
the benefit of the Certificateholders."
The Trust 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. Except as otherwise expressly provided herein, the Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee, on behalf of the Trust, for the benefit of the Certificateholders. If,
at any time, the Certificate Distribution Account ceases to be an Eligible
Deposit Account, the Owner Trustee (or the Depositor on behalf of the Owner
Trustee, if the Certificate Distribution Account is not then held by the Owner
Trustee or an affiliate thereof) shall within ten Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) cause the Paying Agent to establish a new Certificate Distribution
Account as an Eligible Deposit Account and shall transfer any cash and/or any
investments from the account that is no longer an Eligible Deposit Account to
such new Certificate Distribution Account.
15
Section 5.02. Application of Trust Funds.
(a) On each Distribution Date, the Paying Agent shall distribute to
Certificateholders amounts deposited in the Certificate Distribution Account
pursuant to Sections 8.2(c)(xii) and the third from last sentence of Section
8.2(d) of the Indenture with respect to such Distribution Date.
(b) On each Distribution Date, the Owner Trustee shall cause the
Paying Agent to send to each Certificateholder the statement or statements
provided to the Owner Trustee by the Indenture Trustee pursuant to Section 4.7
of the Sale and Servicing Agreement with respect to such Distribution Date.
(c) 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 such Certificateholder in accordance with
this Section. The Owner Trustee and the Paying Agent are hereby authorized and
directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is legally
owed by the Trust (but such authorization shall not prevent the Owner Trustee or
the Paying Agent 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 Owner Trustee on behalf of 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-U.S. Certificateholder), the Owner Trustee or the Paying
Agent may in its sole discretion withhold such amounts in accordance with this
paragraph. If a Certificateholder wishes to apply for a refund of any such
withholding tax, the Owner Trustee and each Paying Agent shall reasonably
cooperate with such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Owner Trustee and each Paying Agent
for any out of pocket expenses incurred.
(d) Any Certificateholder which is organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date such
Person becomes a Certificateholder, so notify the Owner Trustee and the Paying
Agent and either (i) provide the Owner Trustee and the Paying Agent with
Internal Revenue Service Form X-0XXX, X-0XXX, W-8IMY (including all required
attachments thereto) or other similar forms, as appropriate, or (ii) notify the
Owner Trustee and the Paying Agent that it is not entitled to an exemption from
United States withholding tax or a reduction in the rate thereof on payments of
interest. Any such Certificateholder agrees by its acceptance of a Trust
Certificate, on an ongoing basis, to provide like certification for each taxable
year and to notify the Owner Trustee and the Paying Agent should subsequent
circumstances arise affecting the information provided the Owner Trustee in
clauses (a) and (b) above. The Owner Trustee and the Paying Agent shall be fully
protected in relying upon, and each Certificateholder by its acceptance of a
Trust Certificate hereunder agrees to indemnify and hold the Owner Trustee and
the Paying Agent harmless against all claims or liability of any kind arising in
connection with or related to the Owner Trustee's and the Paying Agent's
reliance upon any documents, forms or information provided by any
Certificateholder to the Owner Trustee.
16
Section 5.03. Method of Payment. Subject to Section 9.01(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
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Certificate
Registrar and the Paying Agent appropriate written instructions at least five
Business Days prior to such Distribution Date or, if not, by check mailed to
such Certificateholder at the address of such Certificateholder appearing in the
Certificate Register.
Section 5.04. No Segregation of Moneys; No Interest. Subject to
Sections 5.01 and 5.02, moneys received by the Owner Trustee hereunder need not
be segregated in any manner except to the extent required by law or the Sale and
Servicing Agreement, and may be deposited under such general conditions as may
be prescribed by law, and the Owner Trustee shall not be liable for any interest
thereon.
Section 5.05. Accounting and Reports to Certificateholders, the
Internal Revenue Service and Others. The Trust shall (a) maintain (or cause to
be maintained) the books of the Trust on a calendar year basis and the accrual
method of accounting, (b) deliver (or cause to delivered) to each
Certificateholder each Investor Report delivered to the Owner Trustee pursuant
to Section 3.8 of the Sale and Servicing Agreement, (c) deliver (or cause to
delivered) to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
providing a Schedule K-1 to each partner if the Trust is required to be treated
as a partnership for federal income tax purposes) to enable each
Certificateholder to prepare its federal and state income tax returns, (d)
prepare (or cause to be prepared), file (or cause to be filed) such tax returns
relating to the Trust (including a partnership information return, IRS Form 1065
if the Trust is required to be treated as a partnership for federal income tax
purposes) and make such elections as from time to time may be required or
appropriate under any applicable state or federal statute or any rule or
regulation thereunder so as to maintain the Trust's characterization, (e) cause
such tax returns to be signed in the manner required by law and (f) collect or
cause to be collected any withholding tax as described in and in accordance with
Section 5.02(c) with respect to income or distributions to Certificateholders.
The Trust or the tax matters partner shall elect under Section 1278 of the Code
to include in income currently any market discount that accrues with respect to
the Receivables. The Trust shall not make the election provided under Section
754 of the Code, if applicable.
Section 5.06. Signature on Returns; Tax Matters Partner.
(a) The Owner Trustee shall sign, on behalf of the Trust, the tax
returns of the Trust, if any, unless applicable law requires a Certificateholder
to sign such documents.
(b) In the event that the Trust is required to be treated as a
partnership for federal income tax purposes, the Certificateholder holding a
majority of the Certificate Percentage Interest shall be designated the "tax
matters partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code.
17
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to be
a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party, in each
case as evidenced conclusively by the Owner Trustee's execution thereof. In
addition to the foregoing, the Owner Trustee is authorized 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 Depositor or the
Administrator directs with respect to and in accordance with the Basic Documents
(except to the extent that this Agreement expressly requires the consent of
Certificateholders for such action, in which case the Owner Trustee shall not
take such action without such consent).
Section 6.02. 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 Basic Documents to which the
Trust is a party and to administer the Trust in the interest of the
Certificateholders, subject to the Basic Documents and in accordance with the
provisions of this Agreement.
Section 6.03. Action upon Instruction.
(a) Subject to Article IV and in accordance with the terms of the
Basic Documents, the Certificateholders may, by written instruction, direct the
Owner Trustee in the management of the Trust. Such direction may be exercised at
any time by written instruction of the Certificateholders pursuant to Article
IV.
(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 under
any Basic Document, the Owner Trustee shall promptly give notice (in such form
as shall be appropriate under the circumstances) to the Certificateholders of
record as of the preceding Record Date 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 such 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.
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(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 of record as of the preceding Record Date requesting
instruction and, to the extent that the Owner Trustee acts in good faith in
accordance with any such instruction received or, if instructed not to act, in
good faith refrains from acting, the Owner Trustee shall not be liable, on
account of such action or inaction, to any Person. If the Owner Trustee shall
not have received appropriate instruction within ten days of such notice (or
within such shorter period of time as reasonably may be specified in such notice
or may be necessary under the circumstances) it may, but shall be under no duty
to, take or refrain from taking such action not inconsistent with this Agreement
or the other Basic Documents, as it shall deem to be in the best interests of
the Certificateholders, and shall have no liability to any Person for such
action or inaction.
Section 6.04. 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 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 or the Trust 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 6.03; and no implied duties or
obligations shall be read into this Agreement or any other 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 other 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 Trust
Property that result from actions by, or claims against, the Owner Trustee in
its individual capacity that are not related to the ownership or the
administration of the Trust Property.
Section 6.05. 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 Trust Property 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 any provision of this Agreement.
Section 6.06. Restrictions. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 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.
19
Section 6.07. Administrative Duties.
(a) Subject to the restrictions contained in Article IV, the Owner
Trustee shall prepare or shall cause the preparation by other appropriate
Persons (and such preparation shall not be the responsibility of the Seller, the
Administrator, the Depositor, the Indenture Trustee or the Master Servicer) of
all such documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Trust to prepare, file or deliver pursuant to the
Indenture with respect to the following matters under the Indenture
(parenthetical section references are to sections of the Indenture):
(i) (a) the appointment of a successor Note Registrar and (b)
giving the Indenture Trustee notice of any appointment of a new Note
Registrar and the location, or change in location, of the Note Registrar
(Section 2.5);
(ii) the delivery for cancellation of any Note delivered to the
Issuer for cancellation, and the direction to destroy or return such Note
(Section 2.9);
(iii) the preparation of Definitive Notes in accordance with the
instructions of the Clearing Agency (Section 2.13);
(iv) the designation of an office in the Borough of Manhattan,
City of New York, for registration of transfer or exchange of Notes
(Section 3.2);
(v) the preparation of an Issuer Order directing the Paying Agent
to deposit with the Securities Administrator all sums held in trust by such
Paying Agent (Section 3.3 and 4.3);
(vi) the preparation of an Issuer Order directing the Securities
Administrator to provide notification of any unclaimed monies and
repayments (Section 3.3);
(vii) the filing of all supplements and amendments to the
Indenture, instruments of further assurance and other instruments and the
taking of such other action as is necessary or advisable to protect the
Trust Estate, including the preparation and filing of any financing
statements and continuation statements (Section 3.5);
(viii) the annual delivery of Opinions of Counsel as to the Trust
Estate, and the and the annual delivery of the Officer's Certificate and
certain other statements as to compliance with the Indenture (Sections 3.6
and 3.9);
(ix) the preparation and obtaining of documents and instruments
required for the release of the Issuer from its obligations under the
Indenture (Section 3.10(b));
(x) the execution of any further instruments and the performance
of any acts reasonably necessary to carry out more effectively the purpose
of the Indenture (Section 3.17);
20
(xi) the execution of any replacement swap agreements, including
all related documents (Section 3.20);
(xii) upon its actual knowledge of such, the delivery to the
Indenture Trustee of written notice in the form of an Officer's Certificate
of any event that with the giving of notice and the lapse of time would
become an Event of Default under clause (iii) of Section 5.1 of the
Indenture (Section 5.1);
(xiii) the performance of any lawful action as the Controlling
Party may request to compel or secure the performance and observance by the
Seller of each of its obligations to the Issuer in the Basic Documents
(Section 5.16);
(xiv) the preparation of any written instruments required to
confirm more fully the authority of any co-trustee or separate trustee and
any written instructions necessary in connection with the resignation or
removal of any co-trustee or separate trustee (Sections 6.8 and 6.10);
(xv) receiving and administering requests of Noteholders for the
current list of Noteholders (Section 7.2);
(xvi) upon its actual knowledge of such, the notification to the
Indenture Trustee if and when the Notes are listed on any stock exchange
(Section 7.4);
(xvii) the delivery of new Notes conforming to any supplemental
indenture (Section 9.6);
(xviii) the duty to furnish to the Rating Agencies and the
Indenture Trustee notice of redemption of Notes, if the Master Servicer has
not previously done so (Section 10.1);
(xix) the duty to notify Noteholders of redemption of the Notes
or to cause the Indenture Trustee to provide such notification (Section
10.2);
(xx) the preparation and delivery of all Officer's Certificates
and Independent Certificates with respect to any requests by the Issuer to
the Indenture Trustee to take any action under the Indenture (Section
11.1(a));
(xxi) the preparation and delivery of all Officer's Certificates
and the obtaining of Independent Certificates, if necessary, for the
release of property from the lien of the Indenture (Section 11.1(b)); and
(xxii) the preparation and delivery to Noteholders and the
Indenture Trustee of any agreements or requests by the Noteholders with
respect to alternate payment and notice provisions (Section 11.6).
(b) The Owner Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
among the Depositor and the Owner Trustee, and the Owner Trustee shall be
reimbursed for its other
21
reasonable expenses hereunder in the priority set forth in Section 8.2 in the
Indenture. In performing its duties under Section 5.05 or 6.07, the Owner
Trustee shall be entitled to the indemnification provided by the Issuer under
Section 8.02 of this Agreement, in the priority set forth in Section 8.2 of the
Indenture.
(c) It is understood and agreed that the Owner Trustee shall be
entitled to engage outside counsel, independent accountants and other experts to
assist the Owner Trustee in connection with the performance of its duties set
forth in Sections 5.05 and 6.07, including the preparation of all tax reports
and returns, securities law filings, Opinions of Counsel and Independent
Certificates and the Owner Trustee shall be reimbursed for the expenses of such
experts in accordance with the priority set forth in Section 8.2 of the
Indenture. The Owner Trustee shall not be obligated to engage any expert or
perform any duty as required under Sections 5.05 and 6.07 for which
reimbursement would exceed $1,000 until such amount has been paid to the Owner
Trustee, if payment of such reimbursable amount is required of the Owner Trustee
prior to the next Distribution Date.
(d) The Depositor and the Master Servicer shall furnish to the Owner
Trustee from time to time such additional information regarding the Trust or the
Basic Documents as the Owner Trustee shall reasonably request. The Note
Registrar will furnish or cause to be furnished to the Indenture Trustee and the
Owner Trustee at such times as the Indenture Trustee or the Owner Trustee may
request in writing, within thirty days after receipt by the Note Registrar of
any such request, a list, in such form as the Indenture Trustee or Owner Trustee
may reasonably require, of the names and addresses of the Holders of Notes as of
a date not more than ten days prior to the time such list is furnished;
provided, however, that so long as the Indenture Trustee is the Note Registrar,
no such list shall be required to be furnished to the Indenture Trustee.
(e) The Owner Trustee shall not be responsible for taking any action
with respect to this Section 6.07 unless a responsible officer in the Corporate
Trust Administration Department of the Owner Trustee has actual knowledge or has
received written notice of the need to take such action.
(f) The rights and protections afforded to the Owner Trustee pursuant
to Article VII of this Agreement shall also be afforded to the Owner Trustee
with respect to the performance of its administrative duties under this Section
6.07.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.01. Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts, but only upon the terms of this Agreement. The
Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the 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 or gross negligence or
(ii) in the case of the inaccuracy of any representation or warranty contained
in Section 7.03 expressly made by the Owner
22
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 Trust 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
Depositor, the Administrator or any Certificateholder;
(c) no provision of this Agreement or any other 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 Trust Estate, or for or in respect of the validity or
sufficiency of the other Basic Documents, other than the certificate of
authentication on the Trust Certificates, and the Owner Trustee, in its
individual capacity, shall in no event assume or incur any liability, duty or
obligation to any Noteholder or to any Certificateholder, other than as
expressly provided for herein or expressly agreed to in the other Basic
Documents;
(f) the Owner Trustee shall not be responsible for monitoring the
performance of, and shall not be liable for the default or misconduct of the
Depositor, the Master Servicer, the Indenture Trustee, the Administrator or any
other Person 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 other Basic Documents that are required to be
performed by the Indenture Trustee under the Indenture or the Depositor or the
Master Servicer under the Sale and Servicing Agreement or the Administrator
under the Administration 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 other Basic Document, at the request, order or direction of any
of the Certificateholders, unless such Certificateholders have offered to the
Owner Trustee security, in its individual capacity, or indemnity satisfactory to
it against the costs, expenses and liabilities that may be incurred by the Owner
Trustee, in its individual capacity, therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Agreement or in any
other Basic Document shall not be
23
construed as a duty, and the Owner Trustee shall not be answerable for other
than its gross negligence or willful misconduct in the performance of any such
act.
Section 7.02. 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 7.03. Representations and Warranties. The Owner Trustee, in
its individual capacity, hereby represents and warrants to the Depositor, for
the benefit of the Certificateholders, that:
(a) It is a national banking association duly organized and validly
existing in good standing under the laws of the United States. 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 the other Basic Documents,
and this Agreement and the other Basic Documents will be executed and delivered
by one of its officers who is duly authorized to execute and deliver this
Agreement and the other Basic Documents on its behalf.
(c) Neither the execution or 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 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 bylaws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
(d) It is a corporation satisfying the provisions of Section 3807(a)
of the Statutory Trust Statute; it is a national banking association duly
organized and validly existing in good standing under the laws of the United
States; it is authorized to exercise corporate trust powers; having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authorities; and it has (or has a parent that
has) time deposits that are rated at least "A-1" by Standard & Poor's and
"Prime-1" by Moody's or is otherwise acceptable to each Rating Agency.
Section 7.04. Reliance; Advice of Counsel.
(a) The Owner Trustee (either in its individual capacity or as 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 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
24
treasurer or other authorized officers of the relevant party, as to such fact or
matter, and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the other
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled Persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted
reasonably and in good faith by it in accordance with the written opinion or
advice of any such counsel, accountants or other such Persons.
Section 7.05. Not Acting in Individual Capacity. Except as expressly
provided in this Article VII, in accepting the trusts hereby created, U.S. Bank
Trust National Association acts solely as Owner Trustee hereunder and not in its
individual capacity, and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or any other Basic
Document shall look only to the Trust Property for payment or satisfaction
thereof.
Section 7.06. Owner Trustee Not Liable for Trust Certificates or for
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. Except as set
forth in Section 7.03, the Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, of any other 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 Trust
Property 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 Master 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 Indenture Trustee or the Master Servicer or any sub-Servicer taken in the
name of the Owner Trustee.
Section 7.07. 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
Indenture Trustee and the Master
25
Servicer in banking transactions with the same rights as it would have if it
were not Owner Trustee.
Section 7.08. Doing Business in Other Jurisdictions. Notwithstanding
anything contained herein to the contrary, the Owner Trustee shall not be
required to take any action in any jurisdiction other than in the States of
Delaware, New York or Minnesota if the taking of such action will (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 required by,
any State or other governmental authority or agency of any jurisdiction other
than the States of Delaware, New York or Minnesota; (ii) result in any fee, tax
or other governmental charge under the laws of any jurisdiction or any political
subdivisions thereof in existence on the date hereof other than the States of
Delaware, New York or Minnesota becoming payable by the Owner Trustee; or (iii)
subject to the Owner Trustee to personal jurisdiction in any jurisdiction other
than the States of Delaware, New York or Minnesota for causes of action arising
from acts unrelated to the consummation of the transactions by the Owner
Trustee, as the case may be, contemplated hereby. The Owner Trustee shall be
entitled to obtain advice of counsel (which advice shall be an expense of the
Trust under Section 8.01) to determine whether any action required to be taken
pursuant to the Agreement results in the consequences described in clauses (i),
(ii) and (iii) of the preceding sentence. In the event that said counsel advises
the Owner Trustee that such action will result in such consequences, the Owner
Trustee will appoint an additional trustee pursuant to Section 10.05 to proceed
with such action.
Section 7.09. Paying Agent, Certificate Registrar and Authenticating
Agent. The rights and protections afforded to the Owner Trustee pursuant to this
Article VII and Sections 8.02, 10.02, and 10.03 shall also be afforded to the
Paying Agent, authenticating agent and Certificate Registrar.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive from the Depositor or the Trust as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between the Depositor and the Owner Trustee, and the Owner Trustee shall be
reimbursed by the Depositor or the Trust 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, in the priority set forth in Section 8.2 in the Indenture.
Section 8.02. Indemnification. The Trust and the Depositor shall
jointly and severally indemnify the Owner Trustee and its successors, assigns,
agents and servants (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature whatsoever
(collectively, "Expenses") which may at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this
26
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 Trust shall not be liable for or required to indemnify an
Indemnified Party from or against Expenses arising or resulting from (i) the
willful misconduct or gross negligence of the Owner Trustee or (ii) the
inaccuracy of a representation or warranty made by the Owner Trustee in Section
7.03. The indemnities contained in this Section shall survive the resignation or
removal of the Owner Trustee or the termination of this Agreement. In the event
of any claim, action or proceeding for which indemnity will be sought pursuant
to this Section, the Indemnified Party's choice of legal counsel shall be
subject to the approval of the Depositor, which approval shall not be
unreasonably withheld.
Section 8.03. Payments to the Owner Trustee. Any amounts paid by the
Trust pursuant to this Article VIII shall be payable solely in the priority set
forth in Section 8.2 of the Indenture and shall be deemed not to be a part of
the Trust Estate immediately after such payment.
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
Section 9.01. Termination of Trust Agreement.
(a) The Trust shall dissolve upon the earlier of (i) the payment in
full or other liquidation and discharge in accordance with the Sale and
Servicing Agreement of each Receivable and (ii) the sale by the Trust of all of
the Receivables in accordance with the Indenture and the Sale and Servicing
Agreement, including pursuant an exercise of the option to purchase under
Section 8.1 of the Sale and Servicing Agreement, and in each case upon the final
distribution of all moneys or other property or proceeds of the Trust Estate in
accordance with the terms of the Indenture, Article VIII of the Sale and
Servicing Agreement, Section 5.02 of this Agreement and the Statutory Trust
Statute. Any money or other property held as part of the Owner Trust Estate
following such distribution shall be distributed to the Certificateholders pro
rata. The bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not (i) operate to dissolve or terminate this Agreement
or the Trust, (ii) entitle such Certificateholder's legal representatives or
heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of all or any part of the Trust or Trust Estate or
(iii) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) This Agreement and the Trust are irrevocable. Except as provided
in Section 9.01(a) and in this Section 9.01(b), neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Trust or this
Agreement.
(c) Notice of any dissolution of the Trust, specifying the
Distribution Date upon which Certificateholders shall surrender their Trust
Certificates to the 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 Master Servicer given pursuant to Section 8.1 of the Sale
and Servicing Agreement, stating (i) the Distribution Date upon or with respect
to which final payment of the Trust
27
Certificates shall be made upon presentation and surrender of the Trust
Certificates at the office of the 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
Paying Agent therein specified. The Owner Trustee shall give such notice to the
Certificate Registrar (if other than the Owner Trustee) and the Paying Agent at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Trust Certificates, the Paying Agent shall cause to be
distributed to Certificateholders amounts distributable on such Distribution
Date pursuant to Section 5.02.
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 by the Owner
Trustee to the Depositor, subject to applicable escheat laws.
(d) Upon the winding up of the Trust in accordance with the Statutory
Trust Statute (including, without limitation, the reasonable provision for
payment of all obligations of the Trust in accordance with Section 3808(e) of
the Statutory Trust Statute), 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 Statutory
Trust Statute and thereupon the Trust and this Agreement (other than Article
VIII) shall terminate.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Statutory Trust Statute; authorized to exercise corporate trust
powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authorities;
incorporated or chartered under the laws of the State of Delaware or the federal
laws of the United States; and having (or having a parent that has) time
deposits that are rated at least "Prime-1" by Moody's and at least "A-1" by
Standard & Poor's, or which is otherwise acceptable to each Rating Agency. If
such corporation shall publish reports of condition at least annually pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose 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 10.02.
28
Section 10.02. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Depositor, the Indenture Trustee and the
Rating Agencies. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Owner Trustee by written instrument, in duplicate,
one copy of which instrument shall be delivered to the resigning Owner Trustee
and one copy to the successor Owner Trustee. 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 may petition
any court of competent jurisdiction for the appointment of a successor Owner
Trustee; provided, however, that such right to appoint or to petition for the
appointment of any such successor shall in no event relieve the resigning Owner
Trustee from any obligations otherwise imposed on it under the Basic Documents
until such successor has in fact assumed such appointment.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor may remove the Owner Trustee. If the Depositor
shall remove the Owner Trustee under the authority of the immediately preceding
sentence, the Depositor shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed and one copy to the successor
Owner Trustee, and shall pay 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 10.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Depositor shall provide notice of such
resignation or removal of the Owner Trustee to each Rating Agency.
Section 10.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.01 or 10.02 shall execute, acknowledge and
deliver to the Depositor, the Indenture Trustee and to its predecessor Owner
Trustee an instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of the predecessor Owner Trustee shall
become effective, and such successor Owner Trustee, without any further act,
deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor under this Agreement, with like effect
as if originally named as Owner Trustee. The predecessor Owner Trustee shall,
upon payment of its fees and expenses, deliver to the successor Owner Trustee
all documents and statements and monies held by it under this Agreement; and the
Depositor and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
29
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 as a successor Owner Trustee pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Depositor shall mail notice thereof to all
Certificateholders, the Master Servicer, the Indenture Trustee, the Noteholders
and the Rating Agencies. If the Depositor shall fail to mail such notice within
ten days after acceptance of such appointment by the successor Owner Trustee,
the successor Owner Trustee shall cause such notice to be mailed at the expense
of the Trust.
Any successor Owner Trustee appointed pursuant to this Section 10.03
shall promptly file an amendment to the Certificate of Trust with the Secretary
of State identifying the name and principal place of business of such successor
Owner Trustee in the State of Delaware.
Section 10.04. Merger or Consolidation of Owner Trustee. Any Person
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, 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, that such Person shall be eligible pursuant to Section 10.01; and
provided further, that the Owner Trustee shall mail notice of such merger or
consolidation to each Rating Agency; and provided, further, that such successor
Owner Trustee shall file an amendment to the Certificate of Trust as described
in Section 10.03.
Section 10.05. 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 Trust Estate or any Financed Vehicle may at the time be located, the
Owner Trustee shall have the power and shall execute and deliver all instruments
to appoint one or more Persons approved by the Owner Trustee to act as
co-trustee, jointly with the Owner Trustee, or as separate trustee or separate
trustees, of all or any part of the Trust Estate, and to vest in such Person, in
such capacity, such title to the Trust Estate or any part thereof and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Owner Trustee may consider necessary or desirable. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor Owner Trustee pursuant to Section 10.01
and no notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) 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
30
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 Estate 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;
(b) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(c) the Owner Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor co-trustee or separate trustee.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Supplements and Amendments. This Agreement may be
amended by the Depositor and the Owner Trustee, with prior written notice to
each Rating Agency, without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement or
of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by the satisfaction of the Rating Agency Condition with respect to such
amendment, adversely affect in any material respect the interests of any
Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Depositor
and the Owner Trustee, with prior written notice to each Rating Agency, with the
consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and the consent of the Holders of Certificates
evidencing not less than a majority of the Certificate
31
Percentage Interests, 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 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 aforesaid
Certificate Percentage Interests required to consent to any such amendment,
without the consent of the Holders of all then-outstanding Notes and the
Certificateholders of all then-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 Indenture Trustee and each
Rating Agency.
It shall not be necessary for the consent of Certificateholders or
Noteholders 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 or Noteholders 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, any other
Basic Document 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 (if any) to such amendment specified in this Agreement and
the other Basic Documents have been met. The Owner Trustee may, but shall not be
obligated to, enter into any such amendment that affects the Owner Trustee's own
rights, duties or immunities under this Agreement or otherwise.
Section 11.02. No Legal Title to Trust Estate in Certificateholders.
Neither the Depositor nor the Certificateholders shall have legal title to any
part of the 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 undivided ownership interest in the Owner Trust Estate shall operate to
terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
Section 11.03. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Depositor, the
Certificateholders, the Paying Agent, the Certificate Registrar and, to the
extent expressly provided herein, the Indenture 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
32
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
Section 11.04. 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
by the intended recipient or three Business Days after mailing if mailed by
first-class mail, postage prepaid (except that notice to the Owner Trustee shall
be deemed given only upon actual receipt by the Owner Trustee), if to the Owner
Trustee, addressed to the Corporate Trust Office; if to the Depositor, addressed
to ML Asset Backed Corporation, 4 World Financial Center, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, facsimile (000) 000-0000, Attention: Xxx Xxxxx ; if to
Issuer, addressed to Merrill Auto Trust Securitization 2007-1 c/o ML Asset
Backed Corporation, 4 World Financial Center, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, facsimile (000) 000-0000, Attention: Xxx Xxxxx; or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party. A copy of any such notice shall also be mailed to
the Master Servicer, addressed to: U.S. Bank Portfolio Services, 0000 Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxx 00000, Attention: MATS 2007-1, and U.S.
Bank Corporate Trust Services, 00 Xxxxxxxxxx Xxxxxx, Mailcode: EP-MN-WS3D, Xx.
Xxxx, Xxxxxxxxx 00000-0000, facsimile (000) 000-0000, Attention: MATS 2007-1.
(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 Certificateholder 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 such
Certificateholder receives such notice.
Section 11.05. Severability. Any provision of this Agreement or the
Trust Certificates 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 or of
the Trust Certificates, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 11.06. 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 11.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of the
Depositor and its permitted assignees, the Owner Trustee and its successors and
each Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument or
action by a Certificateholder shall bind the successors and assigns of such
Certificateholder.
Section 11.08. Covenants of the Depositor. The Depositor will not at
any time institute against the Trust any bankruptcy proceedings under any United
States federal or state
33
bankruptcy or similar law in connection with any obligations relating to the
Trust Certificates, the Notes, this Agreement or any of the other Basic
Documents.
Section 11.09. No Petition. The Owner Trustee, by entering into this
Agreement, each Certificateholder, by accepting a Trust Certificate, and the
Indenture Trustee and each Noteholder, by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Depositor or the Trust or join in any institution against the
Depositor or the Trust of, any bankruptcy 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
other Basic Documents.
Section 11.10. No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Trust Certificate represents a
beneficial interest in the Trust only and does not represent an interest in or
an obligation of the Depositor, the Master Servicer, the Owner Trustee, the
Indenture Trustee 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. Xxxxxxxx-Xxxxx. Notwithstanding anything contained
herein or in any other Basic Document to the contrary, the Owner Trustee shall
not be required to execute, deliver or certify on behalf of the Trust or any
other Person any filings, certificates, affidavits or other instruments
(including any Xxxxxxxx-Xxxxx Certification) required under the Xxxxxxxx-Xxxxx
Act of 2002.
Section 11.14. Acceptance of Terms of Agreement. The receipt and
acceptance of a Trust Certificate by a Certificateholder, without any signature
or further manifestation of assent, shall constitute the unconditional
acceptance by the Certificateholder of all the terms and provisions of this
Agreement, and shall constitute the agreement of the Certificateholder that the
terms and provisions of this Agreement shall be binding, operative and effective
as between the Owner Trustee and the Certificateholder.
Section 11.15. Information to Be Provided by the Owner Trustee. For as
long as the Trust is subject to the reporting requirements under the Exchange
Act, the Owner Trustee shall promptly upon request, provide to the Depositor, in
writing. such information regarding the Owner Trustee as is reasonably requested
for the purpose of compliance with Item 1117 of Regulation AB.
34
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.
ML ASSET BACKED CORPORATION,
as Depositor
By: /s/ Xxxxxxxx X. Xxxxx
------------------------
Name: Xxxxxxxx X. Xxxxx
Title: President
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Owner
Trustee
By: /s/ Xxxxx X. Xxxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
35
EXHIBIT A
---------
FORM OF TRUST CERTIFICATE
-------------------------
THIS TRUST CERTIFICATE IS SUBORDINATE TO THE NOTES, AS SET FORTH IN
THE SALE AND SERVICING AGREEMENT.
THIS TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. IN ADDITION, THE
TRANSFER OF THIS TRUST CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND
CONDITIONS SET FORTH IN SECTION 3.04 OF THE TRUST AGREEMENT UNDER WHICH THIS
TRUST CERTIFICATE IS ISSUED (A COPY OF WHICH TRUST AGREEMENT IS AVAILABLE FROM
THE OWNER TRUSTEE OR UPON REQUEST), INCLUDING RECEIPT BY THE OWNER TRUSTEE OF AN
INVESTMENT LETTER IN WHICH THE TRANSFEREE MAKES CERTAIN REPRESENTATIONS.
THE HOLDER OF THIS TRUST CERTIFICATE ACKNOWLEDGES AND AGREES THAT ITS
RIGHTS TO RECEIVE DISTRIBUTIONS ARE SUBORDINATED TO THE RIGHTS OF THE
NOTEHOLDERS AS DESCRIBED IN THE SALE AND SERVICING AGREEMENT, THE INDENTURE AND
THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY GOVERNMENTAL AGENCY.
A-1
NUMBER R-___ PERCENTAGE INTEREST: [ ]%
MERRILL AUTO TRUST SECURITIZATION 2007-1 CERTIFICATE evidencing a
fractional undivided beneficial interest in the Trust, as defined below. The
property of the Trust includes a pool of motor vehicle installment sale
contracts and loans, substantially all of which are secured by security
interests in Mitsubishi Motors automobiles, light duty trucks and sport utility
vehicles, conveyed by ML Asset Backed Corporation.
THIS TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR AN
OBLIGATION OF XXXXXXX XXXXX BANK USA, ML ASSET BACKED CORPORATION OR ANY OF
THEIR RESPECTIVE AFFILIATES.
THIS CERTIFIES THAT ________________ is the registered owner of a
____% PERCENT nonassessable, fully paid, undivided beneficial interest in
MERRILL AUTO TRUST SECURITIZATION 2007-1, a Delaware statutory trust (the
"Trust"), formed by ML ASSET BACKED CORPORATION, a Delaware corporation (the
"Depositor").
The Trust was created pursuant to Amended and Restated Trust Agreement
dated as of May 31, 2007 (as amended, supplemented or otherwise modified from
time to time, the "Trust Agreement"), between the Depositor and U.S. Bank Trust
National Association, as owner trustee (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement or the Sale and Servicing
Agreement dated as of May 31, 2007 (as amended, supplemented or otherwise
modified from time to time, the "Sale and Servicing Agreement"), among the
Trust, the Depositor and Xxxxxxx Xxxxx Bank USA, as Seller, U.S. Bank National
Association, as Master Servicer.
This Trust Certificate is one of the duly authorized Trust
Certificates designated as "Asset Backed Certificates" (herein called the "Trust
Certificates"). Also issued under an Indenture dated as of May 31, 2007 (as
amended, supplemented or otherwise modified from time to time, the "Indenture"),
among the Trust, HSBC Bank USA, National Association, as indenture trustee (the
"Indenture Trustee") and U.S. Bank National Association, as securities
administrator (the "Securities Administrator"), are the classes of Notes
designated as "5.3469% Asset Backed Notes, Class A-1," "5.43% Asset Backed
Notes, Class A-2," "Floating Rate Asset Backed Notes, Class A-3," "Floating Rate
Asset Backed Notes, Class A-4" (collectively, the "Class A Notes"), "5.79% Asset
Backed Notes, Class B" (the "Class B Notes"), and "5.96% Asset Backed Notes,
Class C" (the "Class C Notes", and, together with the Class A Notes, the Class B
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 its acceptance
hereof assents and by which such Certificateholder is bound. The property of the
Trust consists of the Owner Trust Estate. The rights of the Certificateholders
are subordinate to the rights of the Noteholders, as set forth in the Indenture.
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
(each, a "Distribution Date"), commencing on July 15, 2007, to the Person in
whose name this Trust Certificate is registered on the last day of the
immediately preceding month (the "Record Date"), such
A-2
Certificateholder's fractional undivided interest in the amount to be
distributed to Certificateholders on such Distribution Date.
The Holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinate to the rights of the Noteholders as described in the Sale and
Servicing Agreement and the Indenture.
It is the intent of the Depositor and the Certificateholders that,
solely for income and franchise tax purposes the Trust shall be treated as a
grantor trust (or to the extent required, as a partnership) for income and
franchise tax purposes. A Certificateholder, by its acceptance of a Trust
Certificate, agrees to treat, and to take no action inconsistent with such
treatment of the Trust.
A Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Depositor, the Owner Trustee or the Trust, or join in any
institution against the Depositor, the Owner Trustee or the Trust of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or State bankruptcy or
similar law in connection with any obligations relating to the Trust
Certificates, the Notes, the Trust Agreement or any of the other Basic
Documents.
Distributions on this Trust Certificate will be made as provided in
the Trust Agreement by the Owner Trustee or the Paying Agent by wire transfer or
check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Trust Certificate or the making of
any notation hereon.
Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Trust Certificate will
be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Trust Certificate
at the office or agency designated for that purpose by the Owner Trustee as set
forth in the Trust Agreement.
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 or the authenticating
agent, 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.
A-3
IN WITNESS WHEREOF, the Owner Trustee has caused this Trust
Certificate to be duly executed.
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Owner Trustee
Dated: [ ], 2007 By:_____________________________________
Authorized Signatory
A-4
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the
within-mentioned Trust Agreement.
U.S. BANK TRUST NATIONAL U.S. BANK TRUST NATIONAL
ASSOCIATION, as Owner Trustee ASSOCIATION, as Owner Trustee
By: ________________________________
as Authenticating Agent
By:___________________________________ By:_____________________________________
Authorizing Agent Authorizing Agent
A-5
[REVERSE OF TRUST CERTIFICATE]
The Trust Certificates do not represent an obligation of, or an
interest in, the Depositor, the Master Servicer, the Owner Trustee in its
individual capacity or any affiliates of any of them and no recourse may be had
against such parties or their assets, except as expressly set forth or
contemplated herein or in the Trust Agreement or the other 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 and
recoveries with respect to the Receivables (and certain other amounts), all as
more specifically set forth in the Trust Agreement and in the Sale and Servicing
Agreement. A copy of each of the Sale and Servicing Agreement and the Trust
Agreement may be examined by any Certificateholder upon written request during
normal business hours at the principal office of the Depositor and at such other
places, if any, designated by the Depositor.
The Trust Agreement permits, with certain exceptions provided therein,
the amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Owner Trustee, with prior written notice to
each Rating Agency, with the consent of the Holders of Notes evidencing not less
than a majority of the Outstanding Amount of the Notes and the consent of the
Certificateholders evidencing not less than a majority of the Certificate
Percentage Interests in the Trust Certificates, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Trust Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders. 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 herefor 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 designated
by the Owner Trustee as set forth in the Trust Agreement, 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 of authorized denominations evidencing the same aggregate interest
in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is the Owner Trustee.
Except as provided in the Trust Agreement, the Trust Certificates are
issuable only as registered Trust Certificates without coupons in minimum
denominations of one percent Certificate Percentage Interest. As provided in the
Trust Agreement and subject to certain limitations therein set forth, Trust
Certificates are exchangeable for new Trust Certificates of authorized
denominations evidencing the same aggregate denomination, as requested by the
Certificateholder 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
A-6
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the
Owner Trustee or the Certificate Registrar may treat the Person in whose name
this Trust Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar or 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 Estate. The Master Servicer, under certain
circumstances with the prior consent of the Certificateholders, may at its
option purchase the Trust Estate 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; provided, however, that
such right of purchase is exercisable only as of the Determination Date as of
which the aggregate Principal Balance of the Receivables is less than or equal
to 10% 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 I of ERISA or Similar Law, (b) a plan described in Section 4975(e)(1) of
the Code that is subject to Section 4975 of the Code or Similar Law, (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan") or (d) a Person investing
"plan assets" of an entity of any Person described in clauses (a) through (c).
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.
A-7
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, and hereby irrevocably
constitutes and appoints ____________, attorney, to transfer said Trust
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated: ____________________________________ */
Signature Guaranteed:
____________________________________ */
______________
*/ NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Trust
Certificate in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in STAMP
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-8
EXHIBIT B
FORM OF TRANSFEROR CERTIFICATE
[DATE]
U.S. Bank Trust National Association,
as Owner Trustee
00 Xxxxxxxxxx Xxxxxx
XX-XX XX0X
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Servces/ MATS 2007-1
HSBC Bank USA, National Association
as Indenture Trustee
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Merrill Auto Trust Securitization 2007-1
c/o ML Asset Backed Corporation
Four World Financial Center
Xxxxx Xxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx
Re: Merrill Auto Trust Securitization 2007-1
Ladies and Gentlemen:
In connection with our disposition of the Asset Backed Certificates
(the "Trust Certificates") issued by the referenced trust (the "Trust") we
certify that (a) we understand that the Trust Certificates have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and are being transferred by us in a transaction that is exempt from the
registration requirements of the Securities Act and (b) we have not offered or
sold any Trust Certificates to, or solicited offers to buy any Trust
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Securities
Act.
Very truly yours,
[NAME OF TRANSFEROR]
By:_____________________________________
Authorized Officer
B-1
EXHIBIT C
FORM OF INVESTMENT LETTER
[DATE]
U.S. Bank Trust National Association,
as Owner Trustee
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Services/MATS 2007-1
HSBC Bank USA, National Association,
as Indenture Trustee
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Merrill Auto Trust Securitization 2007-1
c/o ML Asset Backed Corporation
Four World Financial Center
Xxxxx Xxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx
Re: Merrill Auto Trust Securitization 2007-1, Trust Certificates
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Trust
Certificates (the "Certificates") we certify that (a) we understand that the
Certificates are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the Act
and any such laws, (b) we are an institutional "accredited investor," as defined
in Rule 501(a)(1), (2), (3) or (7) in Regulation D under the Act or an entity in
which all of the equity owners are institutional "accredited investors," as
defined in Rule 501(a)(1), (2), (3) or (7) in Regulation D under the Act, and
have such knowledge and experience in financial and business matters that we are
capable of evaluating the merits and risks of investments in the Certificates,
(c) we have had the opportunity to ask questions of and receive answers from the
seller concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are acquiring the Certificates for investment
for our own account and not with a view to any distribution of such Certificates
(but without prejudice to our right at all times to sell or otherwise dispose of
the Certificates in accordance with clause (f) below), (e) we have not offered
or sold any Certificates to, or solicited offers to buy any Certificates from,
any person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action that would result in a violation of Section 5
of the Act or any state securities laws and (f) we will not sell, transfer or
C-1
otherwise dispose of any Certificates unless (1) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Act and in compliance with any relevant state securities laws or is exempt from
such registration requirements and (2) the purchaser or transferee of such
Certificate has executed and delivered to you a certificate to substantially the
same effect as this certificate and (3) the purchaser or transferee has
otherwise complied with any conditions for transfer set forth in the Amended and
Restated Trust Agreement dated as of, 2007, between ML Asset Backed Corporation
and U.S. Bank Trust National Association, as Owner Trustee.
Very truly yours,
[NAME OF TRANSFEREE]
By:_____________________________
Authorized Officer
C-2
EXHIBIT D
FORM OF RULE 144A LETTER
[DATE]
U.S. Bank Trust National Association,
as Owner Trustee
EP-MN-WS3D
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Services/ MATS 2007-1
HSBC Bank USA, National Association
as Indenture Trustee
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Merrill Auto Trust Securitization 2007-1
c/o ML Asset Backed Corporation
Four World Financial Center
Xxxxx Xxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx
Re: Merrill Auto Trust Securitization 2007-1, Trust Certificates
Ladies and Gentlemen:
In connection with our acquisition of the above-referenced Trust
Certificates (the "Certificates") we certify that (a) we understand that the
Certificates are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the Act
and any such laws, (b) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
investments in the Certificates, (c) we have had the opportunity to ask
questions of and receive answers from the seller concerning the purchase of the
Certificates and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Certificates, (d) we have not,
nor has anyone acting on our behalf, offered, transferred, pledged, sold or
otherwise disposed of the Certificates or any interest in the Certificates, or
solicited any offer to buy, transfer, pledge or otherwise dispose of the
Certificates or any interest in the Certificates from any person in any manner,
or made any general solicitation by means of general advertising or in any other
manner, or taken any other action that would constitute a distribution of the
Certificates under the Act or that would render the disposition of the
Certificates a violation of Section 5 of the Act or any state securities laws or
require registration pursuant thereto, and we will not act, or authorize any
person to act, in such manner with respect to the Certificates, and (e) we are a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Act. We are aware that the
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sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and
understand that such Certificates may be resold, pledged or transferred only to
a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is being made
in reliance on Rule 144A.
Very truly yours,
[NAME OF TRANSFEREE]
By:__________________________________
Authorized Officer
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