TRUST AGREEMENT
Dated as of March 1, 1999
among
ARCADIA RECEIVABLES FINANCE CORP.,
FINANCIAL SECURITY ASSURANCE INC.
and
WILMINGTON TRUST COMPANY
Owner Trustee
ARCADIA AUTOMOBILE RECEIVABLES TRUST, 1999-A
TABLE OF CONTENTS
PAGE
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INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Usage of Terms . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.3. Section References . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.4. Material Adverse Effect. . . . . . . . . . . . . . . . . . . 4
ARTICLE II
CREATION OF TRUST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.1. Creation of Trust. . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2. Office . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3. Purposes and Powers. . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.4. Appointment of Owner Trustee . . . . . . . . . . . . . . . . 5
SECTION 2.5. Initial Capital Contribution of Trust Estate . . . . . . . . 5
SECTION 2.6. Declaration of Trust . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.7. Liability of the Depositor . . . . . . . . . . . . . . . . . 5
SECTION 2.8. Title to Trust Property. . . . . . . . . . . . . . . . . . . 6
SECTION 2.9. Situs of Trust . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.10. Representations and Warranties of the Depositor. . . . . . . 6
SECTION 2.11. Federal Income Tax Treatment . . . . . . . . . . . . . . . . 7
SECTION 2.12. Covenants of the Depositor . . . . . . . . . . . . . . . . . 8
SECTION 2.13. Ownership of Trust . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.14. Maintenance of Office or Agency. . . . . . . . . . . . . . . 9
ARTICLE III
ACTIONS BY OWNER TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.1. Action by the Security Insurer with Respect to Bankruptcy. . 9
SECTION 3.2. Rights of Security Insurer . . . . . . . . . . . . . . . . . 9
ARTICLE IV
CERTAIN DUTIES OF TRUST . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.1. Accounting; Reports; Tax Returns . . . . . . . . . . . . . . 10
ARTICLE V
AUTHORITY AND DUTIES OF OWNER TRUSTEE . . . . . . . . . . . . . . . . . . 11
SECTION 5.1 General Authority. . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.2 General Duties . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 5.3 Action upon Instruction. . . . . . . . . . . . . . . . . . . 11
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SECTION 5.4. No Duties Except as Specified in this Agreement or in Instructions............ 13
SECTION 5.5. No Action Except under Specified Documents or Instructions.................... 13
SECTION 5.6. Restrictions.................................................................. 13
SECTION 5.7. Administration Agreement...................................................... 13
ARTICLE VI
CONCERNING THE OWNER TRUSTEE............................................................... 14
SECTION 6.1. Acceptance of Trustee and Duties.............................................. 14
SECTION 6.2. Representations and Warranties................................................ 16
SECTION 6.3. Reliance; Advice of Counsel................................................... 16
SECTION 6.4. Not Acting in Individual Capacity............................................. 17
SECTION 6.5. Owner Trustee Not Liable for Notes or Receivables............................. 17
SECTION 6.6. Owner Trustee May Own Notes................................................... 18
ARTICLE VII
COMPENSATION OF OWNER TRUSTEE.............................................................. 18
SECTION 7.1. Owner Trustee's Fees and Expenses............................................. 18
SECTION 7.2. Indemnification............................................................... 18
SECTION 7.3. Non-recourse Obligations...................................................... 18
ARTICLE XIII
TERMINATION................................................................................ 19
SECTION 8.1. Termination of the Trust...................................................... 19
SECTION 8.2. Dissolution Events with respect to the Depositor.............................. 19
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES..................................... 20
SECTION 9.1. Eligibility Requirements for Owner Trustee.................................... 20
SECTION 9.2. Resignation or Removal of Owner Trustee....................................... 20
SECTION 9.3. Successor Owner Trustee....................................................... 21
SECTION 9.4. Merger or Consolidation of Owner Trustee...................................... 22
SECTION 9.5. Appointment of Co-Trustee or Separate Trustee................................. 22
ARTICLE X
MISCELLANEOUS PROVISIONS................................................................... 23
SECTION 10.1. Amendment.................................................................... 23
SECTION 10.2. Governing Law................................................................ 24
SECTION 10.3. Severability of Provisions................................................... 25
SECTION 10.4. Third-Party Beneficiaries.................................................... 25
SECTION 10.5. Counterparts................................................................. 25
SECTION 10.6. Notices...................................................................... 25
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EXHIBITS
Exhibit A -- Form of Certificate of Trust
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THIS TRUST AGREEMENT, dated as of March 1, 1999, is made among
Arcadia Receivables Finance Corp., a Delaware corporation (the "Seller"),
Financial Security Assurance Inc. ("Financial Security") and Wilmington
Trust Company, a Delaware banking corporation, as Owner Trustee (in such
capacity, the "Owner Trustee").
In consideration of the mutual agreements herein contained, and of
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. All terms defined in the Spread Account
Agreement or the Sale and Servicing Agreement (each as defined below) shall
have the same meaning in this Agreement. Whenever capitalized and used in
this Agreement, the following words and phrases, unless otherwise specified,
shall have the following meanings:
ADMINISTRATION AGREEMENT: The Administration Agreement, dated as of
March 17, 1999, between the Administrator and the Trust, as the same may be
amended and supplemented from time to time.
ADMINISTRATOR: Wilmington Trust Company, a Delaware banking
corporation, or any successor Administrator under the Administration
Agreement.
AFL: Arcadia Financial Ltd., a Minnesota corporation, and its
successors in interest.
AGREEMENT OR "THIS AGREEMENT": This Trust Agreement, all amendments
and supplements thereto and all exhibits and schedules to any of the
foregoing.
AUTHENTICATION AGENT: Wilmington Trust Company, or its successor in
interest, and any successor authentication agent appointed as provided in this
Agreement.
BUSINESS TRUST STATUTE: Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as the same may be amended from time
to time.
CERTIFICATE OF TRUST: The Certificate of Trust in the form of
Exhibit A hereto filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
CODE: The Internal Revenue Code of 1986, as amended.
CORPORATE TRUST OFFICE: The principal office of the Owner Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the Closing Date is located at Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention:
Corporate Trust Administration; the telecopy number for such office on the
date of the execution of this Agreement is (000) 000-0000.
DEPOSITOR: The Seller in its capacity as depositor hereunder.
DISSOLUTION EVENT: With respect to the Depositor, means the
termination or dissolution of such Person, or the occurrence of an Insolvency
Event with respect to such Person.
EXPENSES: The meaning assigned to such term in Section 7.2.
INDEMNIFIED PARTIES: The meaning assigned to such term in Section
7.2.
INDEMNIFIED PARTIES: The meaning assigned to such term in Section
7.2.
INSTRUCTING PARTY: The meaning assigned to such term in Section
5.3(a).
OWNER TRUSTEE: Wilmington Trust Company, or its successor in
interest, acting not individually but solely as trustee, and any successor
trustee appointed as provided in this Agreement.
RECORD DATE: With respect to any Distribution Date, the close of
business on the last Business Day immediately preceding such Distribution
Date.
RELATED DOCUMENTS: The Sale and Servicing Agreement, the Indenture,
the Notes, the Purchase Agreements, each Subsequent Transfer Agreement, each
Subsequent Purchase Agreement, the Custodian Agreement, the Note Policy, the
Spread Account Agreement, the Stock Pledge Agreement, the Insurance
Agreement, the Administration Agreement, the Lockbox Agreement, the
Depository Agreement, and the Underwriting Agreement between AFL and the
Seller and the underwriters of the Notes. The Related Documents executed by
any party are referred to herein as "such party's Related Documents," "its
Related Documents" or by a similar expression.
SALE AND SERVICING AGREEMENT: The Sale and Servicing Agreement,
dated as of March 1, 1999 among the Trust, the Seller, AFL, in its individual
capacity and as Servicer, and Norwest Bank Minnesota, National Association,
as Backup Servicer, as the same may be amended and supplemented from time to
time.
SECRETARY OF STATE: The Secretary of State of the State of Delaware.
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SECURITY INSURER: Financial Security Assurance Inc., or its
successor in interest.
SELLER: Arcadia Receivables Finance Corp., a Delaware corporation,
or its successor in interest.
SPREAD ACCOUNT: The Series 1999-A Spread Account established and
maintained pursuant to the Spread Account Agreement.
SPREAD ACCOUNT AGREEMENT: The Spread Account Agreement, dated as of
March 25, 1993, as thereafter amended and restated, among the Seller, AFL,
the Security Insurer, the Collateral Agent and the Indenture Trustee, as the
same may be amended, supplemented or otherwise modified in accordance with
the terms thereof.
STOCK PLEDGE AGREEMENT: The Third Amended and Restated Stock Pledge
Agreement, dated as of March 25, 1993, as thereafter amended and restated,
among the Security Insurer, AFL and the Collateral Agent, relating to the
stock of each of Arcadia First GP Inc., Arcadia Second GP Inc. and the
Seller, as the same may be amended, supplemented or otherwise modified in
accordance with the terms thereof.
TRUST: The trust created by this Agreement, the estate of which
consists of the Trust Property.
TRUST ACCOUNTS: The Collection Account, the Subcollection Account,
the Lockbox Account, the Pre-Funding Account, the Reserve Account and the
Note Distribution Account.
TRUST PROPERTY: The property and proceeds of every description
conveyed pursuant to Section 2.5 hereof and Sections 2.1 and 2.4 of the Sale
and Servicing Agreement, together with the Trust Accounts (including all
Eligible Investments therein and all proceeds therefrom).
SECTION 1.2. USAGE OF TERMS. With respect to all terms used in this
Agreement, the singular includes the plural and the plural the singular;
words importing any gender include the other genders; references to "writing"
including printing, typing, lithography, and other means of reproducing words
in a visible form; references to agreements and other contractual instruments
include all subsequent amendments thereto or changes therein entered into in
accordance with their respective terms and not prohibited by this Agreement;
references to Persons include their permitted successors and assigns; and the
terms "include" or "including" mean "include without limitation" or
"including without limitation." To the extent that definitions are contained
in this Agreement, or in any such certificate or other document, such
definitions shall control.
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SECTION 1.3. SECTION REFERENCES. All references to Articles,
Sections, paragraphs, subsections, exhibits and schedules shall be to such
portions of this Agreement unless otherwise specified.
SECTION 1.4. MATERIAL ADVERSE EFFECT. Whenever a determination is
to be made under this Agreement as to whether a given event, action, course
of conduct or set of facts or circumstances could or would have a material
adverse effect on the Trust (or any similar or analogous determination), such
determination shall be made without taking into account the insurance
provided by the Note Policy.
ARTICLE II
CREATION OF TRUST
SECTION 2.1. CREATION OF TRUST. There is hereby formed a trust to
be known as "Arcadia Automobile Receivables Trust, 1999-A," in which name the
Trust may conduct business, make and execute contracts and other instruments
and xxx and be sued.
SECTION 2.2. OFFICE. The office of the Trust shall be in care of
the Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the Security
Insurer and the Depositor.
SECTION 2.3. PURPOSES AND POWERS. The purpose of the Trust is, and
the Trust shall have the power and authority, to engage in the following
activities:
(i) to issue the Notes pursuant to the Indenture and to
sell the Notes;
(ii) with the proceeds of the sale of the Notes, to fund the
Pre-Funding Account and the Reserve Account, to pay the organizational,
start-up and transactional expenses of the Trust and to pay the balance
to the Seller pursuant to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey
the Trust Property to the Indenture Collateral Agent pursuant to the
Indenture for the benefit of the Security Insurer and the Indenture
Trustee on behalf of the Noteholders and to hold, manage and distribute
to the Depositor pursuant to the terms of the Sale and Servicing
Agreement any portion of the Trust Property released from the Lien of,
and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the
Related Documents to which it is to be a party;
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(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Related Documents, to engage
in such other activities as may be required in connection with
conservation of the Trust Property and the making of distributions to
the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or expressly authorized by the terms of
this Agreement or the Related Documents.
SECTION 2.4. APPOINTMENT OF OWNER TRUSTEE. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein, and the
Owner Trustee hereby accepts such appointment.
SECTION 2.5. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the
Owner Trustee, as of the date hereof, the sum of $10. 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 Property. 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 2.6. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein, subject to the interests and rights in the Trust
Property granted to other Persons by the Related Documents. It is the
intention and agreement of the parties hereto that the Trust constitute a
business trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such business trust. None of the
parties hereto shall make the election provided in Treasury Regulation
Section 301.7701-3(c) to have the Trust classified as an association taxable
as a corporation. On the date hereof, the Owner Trustee shall file the
Certificate of Trust required by Section 3810(a) of the Business Trust
Statute in the Office of the Secretary of State. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and in the Business Trust Statute with respect to accomplishing the
purposes of the Trust.
SECTION 2.7. LIABILITY OF THE DEPOSITOR. The Depositor shall be liable
directly to indemnify each injured party for all losses, claims, damages,
liabilities and expenses of the Trust, to the extent not paid out of the
Trust Property, to the extent provided in, and subject to the terms and
conditions contained in, the Spread Account Agreement; PROVIDED, FURTHER,
that the Depositor shall not be liable to indemnify any injured party if
such party has agreed that its recourse against the Trust for any obligation
or liability of the Trust to such party shall be limited
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to the assets of the Trust. In addition, any third party creditors of the
Trust (other than in connection with the obligations described in the
provisos to the preceding sentence for which the Depositor shall not be
liable) shall be deemed third party beneficiaries of this paragraph.
SECTION 2.8. TITLE TO TRUST PROPERTY. Legal title to all the Trust
Property shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Trust Property to be vested in a trustee or trustees, in which case title
shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a
separate trustee, as the case may be.
SECTION 2.9. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of
Delaware. The Trust shall not have any employees in any state other than
Delaware; PROVIDED, HOWEVER, that nothing herein shall restrict or prohibit
the Owner Trustee, the Servicer or any agent of the Trust from having
employees within or without the State of Delaware. Payments will be received
by the Trust only in Delaware, and payments will be made by the Trust only
from Delaware. The only office of the Trust will be at the Corporate Trust
Office in Delaware.
SECTION 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. By
execution of this Agreement, the Depositor makes the following
representations and warranties with respect to itself on which the Owner
Trustee relies in accepting the Trust Property in trust and upon which the
Security Insurer relies in issuing the Note Policy.
(a) ORGANIZATION AND GOOD STANDING. It has been duly organized and is
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 as such business is
currently conducted and is proposed to be conducted pursuant to this
Agreement and the Related Documents.
(b) DUE QUALIFICATION. It is duly qualified to do business as a
foreign corporation in good standing, and has obtained all necessary licenses
and approvals, in all jurisdictions in which the ownership or lease of its
property, the conduct of its business and the performance of its obligations
under this Agreement and the Related Documents requires such qualification.
(c) POWER AND AUTHORITY. It has the power and authority to execute and
deliver this Agreement and its Related Documents and to perform its
obligations pursuant thereto; and the execution, delivery and performance of
this Agreement and its Related Documents have been duly authorized by all
necessary corporate action.
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(d) NO CONSENT REQUIRED. No consent, license, approval or
authorization or registration or declaration with any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Related
Documents, except for such as have been obtained, effected or made.
(e) NO VIOLATION. The consummation of the transactions contemplated by
this Agreement and its Related Documents and the fulfillment of its
obligations under this Agreement and its Related Documents shall not conflict
with, result in any breach of any of the terms and provisions of or
constitute (with or without notice, lapse of time or both) a default under,
its certificate of incorporation or by-laws, or any indenture, agreement,
mortgage, deed of trust or other instrument to which it is a party or by
which it is bound, or result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture, agreement,
mortgage, deed of trust or other instrument, or violate any law, order, rule
or regulation applicable to it of any court or of any federal or state
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over it or any of its properties.
(f) NO PROCEEDINGS. There are no proceedings or investigations pending
or, to its knowledge threatened against it before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality
having jurisdiction over it or its properties (A) asserting the invalidity of
this Agreement or any of the Related Documents, (B) seeking to prevent the
issuance of the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Related Documents, or (C)
seeking any determination or ruling that might materially and adversely affect
its performance of its obligations under, or the validity or enforceability
of, this Agreement or any of the Related Documents.
SECTION 2.11. FEDERAL INCOME TAX TREATMENT. The Depositor, the
Servicer, the Owner Trustee and each Noteholder agree to treat, and to take
no action inconsistent with the treatment of, the Notes as indebtedness for
purposes of federal, state, local and foreign income or franchise taxes and
any other tax imposed on or measured by income. Each Noteholder, by
acceptance of its Note, agrees to be bound by the provisions of this Section
2.11. Each Noteholder agrees that it will cause any Note Owner acquiring an
interest in a Note through it to comply with this Agreement as to the
treatment of the Notes as indebtedness under applicable tax law, as described
in this Section 2.11. Furthermore, subject to Section 4.1, the Depositor and
the Trustee shall treat the Trust as a security device only, and shall not
file tax returns or obtain an employer identification number on behalf of the
Trust.
In the event that any class of Notes is deemed for federal income tax
purposes to represent an equity interest in the Trust, the Trust shall be
treated for federal income tax purposes as a partnership among the Holders of
such Notes and the Depositor. In the event such a partnership is deemed to
exist, the net income of the Trust for any month as determined for Federal
income tax purposes (and each item of income, gain, loss and deduction
entering into the computation thereof) shall be allocated:
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(a) among the Noteholders as of the first Record Date following
the end of such month, in proportion to their ownership of principal
amount of Notes on such date, an amount of net income up to the sum of
(i) Noteholders' Interest Distributable Amount for such month, (ii) the
portion of the market discount on the Receivables accrued during such
month that is allocable to the excess of the initial aggregate principal
amount of the Notes over their initial aggregate issue price, and (iii)
any Note Prepayment Premium distributable to the Noteholders with
respect to such month; and
(b) next, to the Depositor to the extent of any remaining net
income.
If the net income of the Trust for any month is insufficient for the
allocations described in clause (a) above, subsequent net income shall first
be allocated to make up such shortfall before being allocated as provided in
clause (b). Net losses of the Trust, if any, for any month as determined for
Federal income tax purposes (and each item of income, gain, loss and
deduction entering into the computation thereof) shall be allocated to the
Depositor to the extent the Depositor is reasonably expected to bear the
economic burden of such net losses, then net losses shall be allocated among
the Noteholders as of the first Record Date following the end of such month
in proportion to their ownership of principal amount of the Notes on such
Record Date. The Depositor is authorized to modify the allocation in this
paragraph if necessary or appropriate, in its sole discretion, for the
allocations to reflect fairly the economic income, gain or loss to the
Noteholders to comply with the provisions of the Code and the accompanying
Treasury Regulations.
SECTION 2.12. COVENANTS OF THE DEPOSITOR. The Depositor agrees and
covenants for the benefit of the Security Insurer and the Owner Trustee,
during the term of this Agreement, and to the fullest extent permitted by
applicable law, that:
(a) it shall not sell, assign, transfer, give or encumber, by
operation of law or otherwise, in whole or in part, its interest in
the Trust;
(b) it shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as
permitted by its certificate of incorporation and the Related Documents;
(c) it shall not, for any reason, institute proceedings for the
Trust to be adjudicated as bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust,
or file a petition seeking or consenting to reorganization or relief
under any applicable federal or state law relating to the bankruptcy of
the Trust, or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Trust
or a substantial part of the property of the Trust or cause or permit
the Trust to make any assignment for the benefit of creditors, or admit
in writing the inability of the Trust to pay its debts generally as they
become due,
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or declare or effect a moratorium on the debt of the Trust or take any
action in furtherance of any such action;
(d) it shall obtain from each counterparty to each Related
Document to which it or the Trust is a party and each other agreement
entered into on or after the date hereof to which it or the Trust is a
party, an agreement by each such counterparty that prior to the
occurrence of the event specified in Section 8.1(c) such counterparty
shall not institute against, or join any other Person in instituting
against, it or the Trust, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or other similar proceedings under
the laws of the United States or any state of the United States; and
(e) it shall not, for any reason, withdraw or attempt to withdraw
from this Agreement, dissolve, institute proceedings for it to be
adjudicated as bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against it, or file a petition
seeking or consenting to reorganization or relief under any applicable
federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of it or a substantial part of its property,
or make any assignment for the benefit of creditors, or admit in writing
its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of
any such action.
SECTION 2.13. OWNERSHIP OF TRUST. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.5, the Depositor
shall be the sole beneficiary of the Trust.
SECTION 2.14. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee shall
maintain in Wilmington, Delaware, an office or offices or agency or agencies
where notices and demands to or upon the Owner Trustee in respect of the
Related Documents may be served. The Owner Trustee initially designates
Wilmington Trust Company, Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000 as its principal corporate trust office for such
purposes. The Owner Trustee shall give prompt written notice to the
Depositor and the Security Insurer of any change in the location of any such
office or agency.
ARTICLE III
ACTIONS BY OWNER TRUSTEE
SECTION 3.1. ACTION BY THE SECURITY INSURER WITH RESPECT TO BANKRUPTCY.
The Owner Trustee shall not have the power to commence a voluntary proceeding
in bankruptcy relating to the Trust without the prior written consent of the
Security Insurer.
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SECTION 3.2. RIGHTS OF SECURITY INSURER. Notwithstanding anything to
the contrary in the Related Documents, without the prior written consent of
the Security Insurer (so long as no Insurer Default shall have occurred and
be continuing), the Owner Trustee shall not (i) remove the Administrator, the
Servicer or the Backup Servicer, (ii) initiate any claim, suit or proceeding
by the Trust or compromise any claim, suit or proceeding brought by or
against the Trust, (iii) authorize the merger or consolidation of the Trust
with or into any other business trust or other entity (other than in
accordance with Section 3.10 of the Indenture) or (iv) amend the Certificate
of Trust.
ARTICLE IV
CERTAIN DUTIES OF TRUST
SECTION 4.1. ACCOUNTING; REPORTS; TAX RETURNS.
(a) The Administrator has agreed pursuant to the Administration
Agreement that the Administrator shall (i) maintain (or cause to be
maintained) the books of the Trust on a calendar year basis on the accrual
method of accounting, and (ii) file or cause to be filed all documents
required to be filed by the Trust with the Securities and Exchange Commission
and otherwise take or cause to be taken all such actions as are notified by
the Servicer in writing to the Administrator as being required for the
Trust's compliance with all applicable provisions of state and federal
securities laws.
(b) Consistent with Section 2.11, the Depositor, the Owner Trustee and
the Administrator shall not file any federal income tax returns on behalf of
the Trust; provided, however, that if any class of Notes is treated as an
equity interest in the Trust, the Administrator shall file or cause to be
filed such tax returns relating to the Trust (including a partnership
information return, Form 1065), and direct the Owner Trustee to make such
elections as may from time to time be required or appropriate under any
applicable state or Federal statute or rule or regulation thereunder so as to
maintain the Trust's characterization as a partnership for Federal income tax
purposes. If the Trust is treated as a partnership for federal income tax
purposes, the Depositor shall be the "tax matters partner" of the Trust
pursuant to the Code.
(c) The Owner Trustee shall make all elections pursuant to this Section
4.1 only as directed in writing by the Depositor, with the consent of the
Security Insurer. The Depositor hereby directs the Owner Trustee to elect
under Section 1278 of the Code to include in income currently any market
discount that accrues with respect to the Receivables.
(d) Upon the direction of the Depositor, the Owner Trustee shall sign
on behalf of the Trust the tax returns of the Trust, if any, unless
applicable law requires the Depositor to sign such documents, in which case
such documents shall be signed by the Depositor. In signing any tax return of
the Trust, the Owner Trustee shall rely entirely upon, and shall have no
liability for, information or calculations provided by the Depositor.
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(e) None of the parties hereto shall make the election provided in
Treasury Regulation Section 301.7701-3(c) to have the Trust classified as an
association taxable as a corporation.
ARTICLE V
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 5.1. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Related 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 Related Documents to which the Trust is to be a
party and any amendment thereto, and on behalf of the Trust, to direct the
Indenture Trustee to authenticate and deliver the Class A-1 Notes in the
aggregate principal amount of $60,000,000, the Class A-2 Notes in the
aggregate principal amount of $153,000,000, the Class A-3 Notes in the
aggregate principal amount of $65,000,000, the Class A-4 Notes in the
aggregate principal amount of $105,000,000 and the Class A-5 Notes in the
aggregate principal amount of $167,000,000. In addition to the foregoing, the
Owner Trustee is authorized, but shall not be obligated, to take all actions
required of the Trust pursuant to the Related Documents. The Owner Trustee is
further authorized, on behalf of the Trust, to enter into the Administration
Agreement, to appoint, with the consent of the Security Insurer, a successor
Administrator and to take from time to time such action as the Instructing
Party recommends with respect to the Related Documents so long as such
actions are consistent with the terms of the Related Documents.
SECTION 5.2. GENERAL DUTIES. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged through the Administrator or such
agents as shall be appointed with the consent of the Security Insurer) all of
its responsibilities pursuant to the terms of this Agreement and the Related
Documents subject to the Related Documents and in accordance with the
provisions of this Agreement. Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Related Documents to the extent the Administrator has
agreed in the Administration Agreement to perform any act or to discharge any
duty of the Owner Trustee hereunder or under any Related Document, and the
Owner Trustee shall not be liable for the default or failure of the
Administrator to carry out its obligations under the Administration
Agreement. Notwithstanding anything herein or in any Related Document to the
contrary, the Owner Trustee shall discharge its obligations pursuant to
Section 5.3 and Section 5.4 of the Sale and Servicing Agreement directly and
not through the Administrator or any agent.
SECTION 5.3. ACTION UPON INSTRUCTION.
(a) Subject to Article IV and the terms of the Spread Account
Agreement, the Security Insurer (so long as an Insurer Default shall not have
occurred and be continuing) or the Depositor (if an Insurer Default shall
have occurred and be continuing) (the "Instructing Party") shall have the
exclusive right to direct the actions of the Owner Trustee in the management
of the
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Trust, so long as such instructions are not inconsistent with the express
terms set forth herein or in any Related Document. The Instructing Party
shall not instruct the Owner Trustee in a manner inconsistent with this
Agreement or the Related Documents. Notwithstanding the foregoing, the owner
Trustee shall, upon due authorization and consent by the Seller, execute and
deliver such notices, consents to the service of process and other necessary
registration forms as may be required to qualify the Trust under the
securities laws of any jurisdiction in which the underwriters of the Trust's
securities may seek to qualify the securities for sale. The Trust is not
hereby authorized without the express consent of the Seller to qualify the
Seller as a foreign corporation or to execute on behalf of the Seller a
general consent to service of process in any jurisdiction.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Related Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such
action is contrary to the terms hereof or of any Related Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Related Document, the Owner Trustee shall promptly give notice (in such form
as shall be appropriate under the circumstances) to the Instructing Party
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction received from the Instructing Party, 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 Related Documents, and shall have no liability to
any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the application
of any provision of this Agreement or any Related Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any
such instruction received, the Owner Trustee shall not be liable, on account
of such action or inaction, to any Person. If the Owner Trustee shall not
have received appropriate instruction within 10 days of such notice (or
within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent
with this Agreement or the Related Documents, as it shall deem to be in the
best interests of the Owners, and shall have no liability to any Person for
such action or inaction.
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SECTION 5.4. NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT OR IN
INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Trust Property, or to otherwise take or refrain
from taking any action under, or in connection with, any document
contemplated hereby to which the Trust is a party, except as expressly
provided by the terms of this Agreement (including as provided in Section
5.2) or in any written instruction received by the Owner Trustee pursuant to
Section 5.3; and no implied duties or obligations shall be read into this
Agreement or any Related Document against the Owner Trustee. The Owner
Trustee shall have no responsibility for preparing, monitoring or filing any
financing or continuation statements in any public office at any time or
otherwise to perfect or maintain the perfection of any security interest or
lien granted to it hereunder or to record this Agreement or any Related
Document; however, the Owner Trustee will from time to time execute and
deliver such financing or continuation statements as are prepared by the
Servicer and delivered to the Owner Trustee for its execution on behalf of
the Trust for the purpose of perfecting or maintaining the perfection of such
a security interest or lien or effecting such a recording. The Owner Trustee
nevertheless agrees that it will, at its own cost and expense (and not at the
expense of the Trust), promptly take all action as may be necessary to
discharge any liens on any part of the Trust Property that are attributable
to claims against the Owner Trustee in its individual capacity that are not
related to the ownership or the administration of the Trust Property.
SECTION 5.5. NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR
INSTRUCTIONS. The Owner Trustee shall not manage, control, use, sell,
dispose of or otherwise deal with any part of, the 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 Related
Documents and (iii) in accordance with any document or instruction delivered
to the Owner Trustee pursuant to Section 5.3.
SECTION 5.6. RESTRICTIONS. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section
2.3 or (b) that, to the actual knowledge of the Owner Trustee, would result
in the Trust's becoming taxable as a corporation for Federal income tax
purposes.
SECTION 5.7. ADMINISTRATION AGREEMENT.
(a) The Administrator is authorized to execute on behalf of the Trust
all documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust to prepare, file or deliver pursuant to the
Related Documents. Upon written request, the Owner Trustee shall execute and
deliver to the Administrator a power of attorney appointing the Administrator
its agent and attorney-in-fact to execute all such documents, reports,
filings, instruments, certificates and opinions.
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(b) If the Administrator shall resign or be removed pursuant to the
terms of the Administration Agreement, the Owner Trustee may, and is hereby
authorized and empowered to, subject to obtaining the prior written consent
of the Security Insurer, appoint or consent to the appointment of a successor
Administrator pursuant to the Administration Agreement.
(c) If the Administration Agreement is terminated, the Owner Trustee
may, and is hereby authorized and empowered to, subject to obtaining the
prior written consent of the Security Insurer, appoint or consent to the
appointment of a Person to perform substantially the same duties as are
assigned to the Administrator in the Administration Agreement pursuant to an
agreement containing substantially the same provisions as are contained in
the Administration Agreement.
(d) The Owner Trustee shall promptly notify the Security Insurer of any
default by or misconduct of the Administrator under the Administration
Agreement of which the Owner Trustee has received written notice or of which
a Responsible Officer has actual knowledge.
ARTICLE VI
CONCERNING THE OWNER TRUSTEE
SECTION 6.1. ACCEPTANCE OF TRUSTEE 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 monies actually received by it
constituting part of the Trust Property upon the terms of the Related
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Related Document under any circumstances,
except (i) for its own willful misconduct or gross negligence, (ii) in the
case of the inaccuracy of any representation or warranty contained in Section
6.2, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of
Section 5.4 hereof, (iv) for any investments issued by the Owner Trustee or
any branch or affiliate thereof in its commercial capacity or (v) for taxes,
fees or other charges on, based on or measured by, any fees, commissions or
compensation received by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the instructions of the Instructing Party;
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(c) no provision of this Agreement or any Related 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 Related 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 this Agreement or any of the
Related 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 the Security Insurer or for the
form, character, genuineness, sufficiency, value or validity of any of
the Trust Property or for or in respect of the validity or sufficiency
of the Related Documents and the Owner Trustee shall in no event assume
or incur any liability, duty, or obligation to the Security Insurer, the
Custodian, the Indenture Trustee or to any Noteholder, other than as
expressly provided for herein and in the Related Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Administrator, the Security Insurer, the Custodian,
the Indenture Trustee or the Servicer under any of the Related 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
Related Documents that are required to be performed by the Administrator
under the Administration Agreement, the Security Insurer under the Note
Policy, the Custodian under the Custodian Agreement, the Indenture
Trustee under the Indenture or the Servicer under the Sale and Servicing
Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or
otherwise or in relation to this Agreement or any Related Document, at
the request, order or direction of the Instructing Party, unless such
Instructing Party has offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may
be incurred by the Owner Trustee therein or thereby. The right of the
Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Related Document shall not be 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 6.2. REPRESENTATIONS AND WARRANTIES. The Owner Trustee hereby
represents and warrants to the Depositor and the Security Insurer (which
shall have relied on such representations and warranties in issuing the Note
Policy) that:
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(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Delaware. It
has all requisite corporate power and authority and all franchises,
grants, authorizations, consents, orders and approvals from all
governmental authorities necessary to execute, deliver and perform its
obligations under this Agreement and each Related Document to which the
Trust is a party.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement and each Related Document
to which the Trust is a party, and this Agreement and each Related
Document will be executed and delivered by one of its officers who is
duly authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any Federal or Delaware law, governmental rule or
regulation governing the banking or trust powers of the Owner Trustee or
any judgment or order binding on it, or constitute any default under its
charter documents or by-laws or any indenture, mortgage, contract,
agreement or instrument to which it is a party or by which any of its
properties may be bound or result in the creation or imposition of any
lien, charge or encumbrance on the Trust Property resulting from actions
by or claims against the Owner Trustee individually which are unrelated
to this Agreement or the Related Documents.
SECTION 6.3. RELIANCE; ADVICE OF COUNSEL.
(a) The Owner Trustee shall incur no liability to anyone in acting upon
any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond, or other document or paper believed by it
to be genuine and believed by it to be signed by the proper party or parties.
The Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive
evidence that such resolution has been duly adopted by such body and that the
same is in full force and effect. As to any fact or matter the method of the
determination of which is not specifically prescribed herein, the Owner
Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer 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
Related 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
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misconduct of such agents or attorneys if such agents or attorneys shall have
been selected by the Owner Trustee with reasonable care, and (ii) may consult
with counsel, accountants and other skilled persons to be selected with
reasonable care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
written opinion or advice of any such counsel, accountants or other such
persons and not contrary to this Agreement or any Related Document.
SECTION 6.4. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VI, in accepting the trusts hereby created Wilmington Trust
Company 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 Related Document
shall look only to the Trust Property for payment or satisfaction thereof.
SECTION 6.5. OWNER TRUSTEE NOT LIABLE FOR NOTES OR RECEIVABLES. The
recitals contained herein shall be taken as the statements of the Depositor
(other than the signature or counter-signature of the Owner Trustee on the
Notes), and the Owner Trustee assumes no responsibility for the correctness
thereof. The Owner Trustee makes no representations as to the validity or
sufficiency of this Agreement or of any Related Document or the Notes (other
than the signature or counter-signature of the Owner Trustee on 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 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 Noteholders under the Indenture, including, without limitation: the
existence, condition and ownership of any Financed Vehicle; the existence and
enforceability of any insurance thereon; the existence and contents of any
Receivable or any computer or other record thereof; the validity of the
assignment of any Receivable to the Trust or of any intervening assignment;
the validity or sufficiency of the Note Policy; the completeness of any
Receivable; the performance or enforcement of any Receivable; the compliance
by the Seller or the Servicer with any warranty or representation made under
any Related Document or in any related document or the accuracy of any such
warranty or representation or any action of the Indenture Trustee, the
Custodian or the Servicer taken in the name of the Owner Trustee.
SECTION 6.6. OWNER TRUSTEE MAY OWN NOTES. The Owner Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may deal with the Depositor, the Seller, the Indenture Trustee and the
Servicer in banking or other transactions with the same rights as it would
have it if were not Owner Trustee.
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ARTICLE VII
COMPENSATION OF OWNER TRUSTEE
SECTION 7.1. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof between AFL and the Owner
Trustee, and the Owner Trustee shall be entitled to be reimbursed by AFL for
its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder; PROVIDED,
HOWEVER, that the Owner Trustee shall only be entitled to reimbursement for
expenses hereunder to the extent such expenses (i) are fees of outside
counsel engaged by the Owner Trustee in respect of the performance of its
obligations hereunder or (ii) relate to the performance of its obligations
pursuant to Section 4.1 hereof.
SECTION 7.2. INDEMNIFICATION. AFL shall be liable as primary obligor
for, and shall indemnify the Owner Trustee in its individual capacity and its
successors, assigns, agents and servants, and any co-trustee (including
Xxxxxxx X. Xxxx) (collectively, the "Indemnified Parties") from and against,
any and all liabilities, obligations, losses, damages, taxes, claims, actions
and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature
whatsoever (collectively, "Expenses") which may at any time be imposed on,
incurred by, or asserted against the Owner Trustee or any Indemnified Party
in any way relating to or arising out of this Agreement, the Related
Documents, the Trust Property, the administration of the Trust Property or
the action or inaction of the Owner Trustee hereunder, except only that AFL
shall not be liable for or required to indemnify the Owner Trustee from and
against Expenses arising or resulting from any of the matters described in
the third sentence of Section 6.1. The indemnities contained in this Section
shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement.
SECTION 7.3. NON-RECOURSE OBLIGATIONS. Notwithstanding anything in
this Agreement or any Related Document, the Owner Trustee agrees in its
individual capacity and in its capacity as Owner Trustee for the Trust that
all obligations of the Trust to the Owner Trustee individually or as Owner
Trustee for the Trust shall be recourse to the Trust Property only.
ARTICLE VIII
TERMINATION
SECTION 8.1. TERMINATION OF THE TRUST.
(a) The respective obligations and responsibilities of the Depositor
and the Owner Trustee created by this Agreement and the Trust created by this
Agreement shall terminate upon the latest of (i) the maturity or other
liquidation of the last Receivable (including the
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purchase as of any Accounting Date by the Seller or the Servicer at its
option of the corpus of the Trust as described in Section 9.1 of the Sale and
Servicing Agreement) and the subsequent distribution of amounts in respect of
such Receivables as provided in the Related Documents, (ii) the payment to the
Security Insurer of all amounts payable or reimbursable to it pursuant to the
Sale and Servicing Agreement or (iii) at the time provided in Section 8.2. In
any case, there shall be delivered to the Owner Trustee, the Indenture
Trustee and the Rating Agencies an Opinion of Counsel that all applicable
preference periods under federal, state and local bankruptcy, insolvency and
similar laws have expired with respect to the payments pursuant to clause
(ii); PROVIDED, HOWEVER, that in no event shall the trust created by this
Agreement continue beyond the expiration of 21 years from the death of the
last survivor of the descendants living on the date of this Agreement of Xxxx
Xxxxxxx of the Commonwealth of Massachusetts; and PROVIDED, FURTHER, that the
rights to indemnification under Section 7.2 shall survive the termination of
the Trust. The Servicer shall promptly notify the Owner Trustee and the
Security Insurer of any prospective termination pursuant to this Section 8.1.
(b) Except as provided in Section 8.1(a), the Depositor shall not be
entitled to revoke or terminate the Trust.
(c) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with
the provisions of Section 3810 of the Business Trust Statute.
SECTION 8.2. DISSOLUTION EVENTS WITH RESPECT TO THE DEPOSITOR. In the
event that a Dissolution Event shall occur with respect to the Depositor, the
Owner Trustee promptly upon obtaining knowledge of such occurrence shall
request an opinion of counsel from counsel acceptable to the Security Insurer
to the effect that a failure to terminate the Trust upon the occurrence of
such Dissolution Event (and the transfer, if any, of the interest in the
Trust held by the Depositor) will not cause the Trust to be treated as an
association (or publicly traded partnership) taxable as a corporation for
federal income tax purposes. In the event that the Owner Trustee is unable to
obtain such an opinion the Trust will terminate within 90 days after the
occurrence of the Dissolution Event with respect to the Depositor. Promptly
after the occurrence of the event referred to above, (i) the Depositor shall
give the Indenture Trustee, the Owner Trustee and the Security Insurer
written notice of the occurrence of such event, (ii) the Owner Trustee shall,
upon the receipt of such written notice, give prompt written notice to the
Indenture Trustee of the occurrence of such event and (iii) the Indenture
Trustee shall, upon receipt of written notice of the occurrence of such event
from the Owner Trustee or the Seller, give prompt written notice to the
Noteholders of the occurrence of such event; PROVIDED, HOWEVER, that any
failure to give a notice required by this sentence shall not prevent or
delay, in any manner, a termination of the Trust pursuant to the first
sentence of this Section 8.2. Upon a termination pursuant to this Section,
the Owner Trustee shall direct the Indenture Trustee to sell the assets of
the Trust (other than the Trust Accounts) at one or more private or public
sales
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conducted in any manner permitted by law. The proceeds of such a sale of the
assets of the Trust shall be distributed as provided in Section 9.1(b) of the
Sale and Servicing Agreement.
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 9.1. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by Federal or
State authorities; (iv) having (or having a parent which has) a rating of at
least Baa3 by Moody's or A-1 by Standard & Poor's; and (v) acceptable to the
Security Insurer in its sole discretion, so long as an Insurer Default shall
not have occurred and be continuing. If such corporation shall publish
reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for
the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. In case at any
time the Owner Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Owner Trustee shall resign immediately in the
manner and with the effect specified in Section 9.2.
SECTION 9.2. RESIGNATION OR REMOVAL OF OWNER TRUSTEE. The Owner
Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor, the Security
Insurer and the Servicer at least 30 days before the date specified in such
instrument. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor Owner Trustee meeting the qualifications set
forth in Section 9.1 by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to
the successor Owner Trustee, provided that the Depositor shall have received
written confirmation from each of the Rating Agencies that the proposed
appointment will not result in an increased capital charge to the Security
Insurer by either of the Rating Agencies. If no successor Owner Trustee shall
have been so appointed and have accepted appointment within 30 days after
the giving of such notice of resignation, the resigning Owner Trustee or the
Security Insurer may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 9.1 and shall fail to resign after
written request therefor by the Depositor or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent,
or a receiver of the Owner Trustee or of its property shall be appointed, or
any public officer shall take charge or control of the Owner Trustee or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor, with the consent of the Security Insurer (so
long as an Insurer Default shall not have occurred and be continuing) may
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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 meeting the qualification
requirements of Section 9.1 by written instrument, in triplicate, one copy of
which instrument shall be delivered to the outgoing Owner Trustee so removed,
one copy to the Security Insurer and one copy to the successor Owner Trustee
and payment of all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until all fees and expenses, including any
indemnity payments, due to the outgoing Owner Trustee have been paid and
until acceptance of appointment by the successor Owner Trustee pursuant to
Section 9.3. The Depositor shall provide notice of such resignation or
removal of the Owner Trustee to each of the Rating Agencies.
SECTION 9.3. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 9.2 shall execute, acknowledge and deliver to
the Depositor, the Security Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become
effective and such successor Owner Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties,
and obligations of its predecessor under this Agreement, with like effect as
if originally named as Owner Trustee. The predecessor Owner Trustee shall
deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement; and the Depositor and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties,
and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Depositor shall mail notice of the successor of such Owner
Trustee to the Indenture Trustee, the Noteholders and the Rating Agencies. If
the Depositor shall fail to mail such notice within 10 days after acceptance
of appointment by the successor Owner Trustee, the successor Owner Trustee
shall cause such notice to be mailed at the expense of the Depositor.
SECTION 9.4. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any corporation
into which the Owner Trustee may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder,
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provided such corporation shall be eligible pursuant to Section 9.1, without
the execution or filing of any instrument or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding,
and provided further that the Owner Trustee shall mail notice of such merger
or consolidation to the Rating Agencies.
SECTION 9.5. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Property or any Financed Vehicle may at the time be
located, the Administrator and the Owner Trustee acting jointly shall have
the power and shall execute and deliver all instruments to appoint one or
more Persons approved by the Owner Trustee and the Security Insurer to act as
co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Trust Property, and to vest in such
Person, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Administrator and the Owner Trustee may
consider necessary or desirable. If the Administrator shall not have joined
in such appointment within 15 days after the receipt by it of a request so to
do, the Owner Trustee, subject to the approval of the Security Insurer, shall
have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor trustee pursuant to Section 9.1 and no notice of the appointment of
any co-trustee or separate trustee shall be required pursuant to Section 9.2.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed the Owner Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties, and obligations (including the
holding of title to the Trust Property or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Owner
Trustee;
(ii) no trustee under this Agreement shall be personally liable
by reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Administrator and the Owner Trustee acting jointly may
at any time accept the resignation of or remove any separate trustee or
co-trustee.
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Any notice, request or other writing given to the Owner Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Owner Trustee or separately, as may be provided therein, subject to all
the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Owner Trustee. Each such instrument shall be
filed with the Owner Trustee and a copy thereof given to the Administrator
and the Security Insurer.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. AMENDMENT.
(a) This Agreement may be amended by the Depositor and the Owner
Trustee, with the prior written consent of the Security Insurer (so long as
an Insurer Default shall not have occurred and be continuing) but without the
consent of any of the Noteholders, (i) to cure any ambiguity, or (ii) to
correct, supplement or modify any provisions in this Agreement; PROVIDED,
HOWEVER, that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder.
(b) This Agreement may also be amended from time to time, with
the prior written consent of the Security Insurer (so long as an Insurer
Default shall not have occurred and be continuing), by the Depositor and the
Owner Trustee and, if such amendment materially and adversely affects the
interests of Noteholders, the consent of a Note Majority (which consent of
any Holder of a Note given pursuant to this Section or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Holder
and on all future Holders of such Note and of any Note issued upon the
transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Note) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement, or of modifying in any manner the rights of the Holders of
Notes; PROVIDED, HOWEVER, that, subject to the express rights of the Security
Insurer under the Related Documents, including its rights to consent to
certain modifications of the Receivables pursuant to Section 3.2 of the Sale
and
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Servicing Agreement and its rights referred to in Section 5.02(c) of the
Indenture, 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 on any Note or
the Class A-1 Interest Rate, the Class A-2 Interest Rate, the Class
A-3 Interest Rate, the Class A-4 Interest Rate or the Class A-5 Interest Rate
or (b) reduce the aforesaid percentage required to consent to any such
amendment or any waiver hereunder, without the consent of the Holders of all
Notes then outstanding.
(c) Prior to the execution of any such amendment or consent, the
Depositor shall furnish written notification of the substance of such
amendment or consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the
substance of such amendment or consent to the Indenture Trustee unless such
parties have previously received such notification.
(e) It shall not be necessary for the consent of Noteholders
pursuant to Section 11.1(b) 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 Noteholders provided for in this Agreement) shall be subject to
such reasonable requirements as the Owner Trustee may prescribe, including
the establishment of record dates.
(f) Prior to the execution of any amendment to this Agreement,
the Owner Trustee shall be entitled to receive and rely upon an Opinion
of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and that all conditions precedent to the
execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 10.2. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware without
regard to the principles of conflicts of laws thereof and the obligations,
rights and remedies of the parties under this Agreement shall be determined
in accordance with such laws.
SECTION 10.3. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement.
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SECTION 10.4. THIRD-PARTY BENEFICIARIES. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and permitted assigns. Except as otherwise provided in
this Agreement, no other Person shall have any right or obligation hereunder.
Without limiting the generality of the foregoing, all covenants and
agreements in this Agreement which expressly confer rights upon the Security
Insurer shall be for the benefit of and run directly to the Security Insurer,
and the Security Insurer shall be entitled to rely on and enforce such
covenants, subject, however, to the limitations on such rights provided in
this Agreement and the Related Documents. The Security Insurer may disclaim
any of its rights and powers under this Agreement (but not its duties and
obligations under the Note Policy) upon delivery of a written notice to the
Owner Trustee.
SECTION 10.5. COUNTERPARTS. For the purpose of facilitating its
execution and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts
shall be deemed to be an original, and all of which counterparts shall
constitute but one and the same instrument.
SECTION 10.6. NOTICES. All demands, notices and communications
under this Agreement shall be in writing, personally delivered or mailed by
certified mail-return receipt requested, and shall be deemed to have been
duly given upon receipt (a) in the case of the Depositor, at the following
address: 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000,
with copies to: Arcadia Financial Ltd., 0000 Xxxxxxxxxx Xxxxxx Xxxxx,
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, Attention: President, (b) in the case of
the Owner Trustee, at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Administration, (c) in
the case of each Rating Agency, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(for Moody's), and 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Asset-Backed Surveillance (for Standard & Poor's), and (d) in the case of the
Security Insurer, Financial Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx
Xxxx, XX 00000, Attention: Surveillance Department, Telex No.: (212)
688-3101, Confirmation: (000) 000-0000, Telecopy Nos.: (000) 000-0000, (212)
339-3529 (in each case in which notice or other communication to Financial
Security refers to an Event of Default, a claim on the Note Policy or with
respect to which failure on the part of Financial Security to respond shall
be deemed to constitute consent or acceptance, then a copy of such notice or
other communication should also be sent to the attention of the General
Counsel and the Head--Financial Guaranty Group "URGENT MATERIAL ENCLOSED") or
at such other address as shall be designated by any such party in a written
notice to the other parties.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Depositor, the Security Insurer and the
Owner Trustee have caused this Trust Agreement to be duly executed by their
respective officers as of the day and year first above written.
ARCADIA RECEIVABLES FINANCE CORP.
By /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
ARCADIA RECEIVABLES FINANCE CORP.,
in its capacity as Depositor
By /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
FINANCIAL SECURITY ASSURANCE INC.
By /s/ Xxxxxx Xxxxxxx
----------------------------------
Authorized Officer
WILMINGTON TRUST COMPANY
By /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
