EXHIBIT 10.7(c)
Execution Copy
AMENDMENT NO. 2 TO
MASTER TRUST ACCOUNT AGREEMENT
THIS AMENDMENT NO. 2 TO MASTER TRUST ACCOUNT AGREEMENT (this "Amendment")
is made as of May 21, 2004 by and among UNION ACCEPTANCE CORPORATION ("UAC"),
individually and as predecessor servicer (the "Predecessor Servicer"), UAC
SECURITIZATION CORPORATION ("UACSC") as seller, BNY MIDWEST TRUST COMPANY, as
successor to the corporate trust administration of Xxxxxx Trust and Savings
Bank, as indenture trustee under the various Indentures described below other
than the 2000-B Indenture (as defined below) (the "BNY Indenture Trustee") and
as trustee (the "PSA Trustee") under the various Pooling and Servicing
Agreements, THE BANK OF NEW YORK, as indenture trustee under the 2000-B
Indenture (the "BONY Indenture Trustee"; and together with the BNY Indenture
Trustee and the PSA Trustee, the "Trustees"), WILMINGTON TRUST COMPANY, as
master trustee (the "Master Trustee"), SYSTEMS & SERVICES TECHNOLOGIES, INC.,
("SST" and, in its capacity as servicer or successor servicer under the
Servicing Agreements, "Servicer" or "Successor Servicer"), JPMORGAN CHASE BANK,
as master trust paying agent (the "Master Trust Paying Agent"), MBIA INSURANCE
CORPORATION, as financial guaranty insurer ("MBIA") and the CREDITOR
REPRESENTATIVE (UAC, UACSC, the Trustees, the Master Trustee, SST, the Master
Trust Paying Agent, MBIA and the Creditor Representative, each party in each of
its capacities listed above, collectively the "MTAA Parties").
PRELIMINARY STATEMENTS
WHEREAS, the MTAA Parties entered into that certain Master Trust Account
Agreement dated as of April 17, 2003, (as amended by Amendment No. 1, dated as
of October 7, 2003, the "Master Trust Agreement");
WHEREAS, UAC directly or acting through an agent has collected and may in
the future collect Sales Tax Refunds from certain states which provide for such
refunds and permit the party who provided financing for the Sales Tax to claim
the refund if the Obligor on such financing defaults on his obligations;
WHEREAS, Sales Tax Refunds do not inure to the benefit of the Obligor in
respect of the "Written-Off Receivable" (as hereinafter defined) and receipt of
the refund does not affect the principal balance or interest or other amounts
due in respect of the receivable, all of which remain owed by the Obligor;
WHEREAS, Article III, Part F, of UAC's Plan of Reorganization stipulates,
in part, that, among the sources of cash to be made available to pay the holders
of allowed claims pursuant to such plan, is cash received in the form of
federal, state and local tax refunds;
WHEREAS, UAC has sought to collect such Sales Tax Refunds in an effort to
provide for the payment of claims of creditors pursuant to the plan as confirmed
by the Bankruptcy Court
and intends to make such refunds available for distributions to holders of
allowed claims in accordance with its plan of Reorganization;
WHEREAS, some of the Sales Tax Refunds that have been paid to UAC by States
and that may in the future be refunded to UAC relate to Receivables as to which
UAC sold all of its right, title and interest to UACSC and/or a Trust prior to
the time such Receivables became Written-Off Receivables;
WHEREAS, MBIA, as Insurer with respect to each of the Transactions, has
asserted that Sales Taxes Refunds paid by States to UAC in respect of
Transaction Receivables, are among the collateral serving as security for the
Transactions because the rights to such refunds were assigned to each
securitization trust related to a Transaction when it was formed and the
Transaction Receivables were transferred to such trust; and UAC and the Creditor
Representative maintain that such trusts and noteholders in the Transactions
have no such claim upon the Sales Tax Refunds, inasmuch as such refunds do not
affect the balance of the Receivables in the Transactions and no provision of
the Transaction Documents expressly provides for the assignment of rights to any
tax refunds to the Transaction trusts;
WHEREAS, accordingly, a dispute has arisen among the parties in interest
with respect only to Sales Tax Refunds related to the Transaction Receivables as
to whether such Applicable Sales Tax Refunds must be paid for the benefit of the
Secured Parties in the Transactions or may be paid directly by UAC to creditors
with distributions under its Plan of Reorganization.
WHEREAS, the parties desire to enter into this amendment to settle such
dispute without the necessity, inconvenience or expense of litigation;
WHEREAS, in addition, the parties desire to address the possibility that
UAC may become obligated to remit previously received Sales Tax Refunds related
to Transaction Receivables to States if and when deficiency balances are
subsequently collected on Transaction Receivables and to provide means to repay
such amounts to UAC to the extent UAC is subject to such an obligation;
WHEREAS, the parties desire to provide for the most efficient arrangements
to address the payment and potential remittance of Sales Tax Refunds by
utilizing the mechanisms created in the Master Trust Agreement; and
WHEREAS, for good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties hereto mutually desire to enter into this
Amendment as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the agreements
herein contained, the parties hereto agree as follows.
SECTION 1. General Definitions. Capitalized terms used herein shall have
the meanings assigned to such terms in the Master Trust Agreement.
SECTION 2. Amendments to the Master Trust Agreement.
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(a) Section 1.01 of the Master Trust Agreement is hereby amended to
insert the following definitions therein:
"Sales Taxes" means any sales, value added or similar excise tax on
the sale of goods paid to a State in respect of the sale of a Financed
Vehicle, the payment of which was included in the amount financed by a
Receivable acquired by UAC from an auto dealer or originated by UAC upon
referral from an auto dealer.
"Sales Tax Refund" means the amount actually received by UAC from a
State refunding Sales Taxes previously paid on sale of a Financed Vehicle,
that were financed by UAC with proceeds of a Receivable, less all
commissions, contingent fees and similar expenses paid to third parties to
pursue and obtain such refund payment.
"Sales Tax Remittances" means the amount of Sales Tax Refunds related
to Transaction Receivables previously paid by a State to UAC that UAC, any
of its subsidiaries or any of the Trusts is obligated to repay to a State
(regardless whether such amount is actually required to be paid or has
served to reduce the amount of any future Sales Tax Refunds or other
amounts otherwise payable by the State to UAC) because of the successful
collection of deficiency balances on a Written-Off Receivable that is a
Transaction Receivable for which a Sales Tax Refund was previously
collected and the required portion thereof remitted to the Master Trust
Account.
"Transaction Receivables" means, for purposes of determining whether
50% of a related Sales Tax Refund is required to be paid to the Master
Trust, a Written-Off Receivable that, at the time it became a Written-Off
Receivable, was owned by a Trust or UACSC and pledged under an Indenture as
collateral for a Transaction.
"Written-Off Receivable" means any simple interest or pre-computed
(add-on) interest installment sales contract or installment loan and
security agreement either owned by UAC, UACSC or a Trust with respect to
which a tax or similar loss has been claimed by UAC entitling it to receive
a Sales Tax Refund under applicable state law.
(b) Section 1.01 of the Master Trust Agreement is hereby further
amended to restate the definition of "Available Excess Cash" to read as
follows:
"Available Excess Cash" shall mean $12,500,000, less an amount
equal to 50% of Sales Tax Refunds related to Transaction Receivables
actually received by UAC from time to time, plus 50% of Sales Tax
Remittances related to Transaction Receivables actually paid or
credited to States from time to time.
(c) Section 2.05(c), priority Fourth, of the Master Trust Agreement is
hereby amended to read as follows:
"First, to the Master Trust Paying Agent, all accrued and unpaid
indemnity amounts owed to the Master Trust Paying Agent pursuant to
Section 6.03 hereof and not paid by SST; and, second, to UAC or at its
direction, an amount equal to 50% of Sales Tax
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Remittances related to Transaction Receivables that have been or are
required to be repaid or credited to States to the extent such Sales
Tax Remittances have not otherwise been recovered by UAC through
reductions of Sales Tax Refunds to be remitted by it to the Master
Trust Paying Agent;"
SECTION 3. Allocation and Payment of Sales Tax Refunds. UAC shall pay to
the Master Trust Paying Agent for deposit in the Master Trust Account 50% of
Sales Tax Refunds related to Transaction Receivables that it receives from
States from time to time. The MTAA Parties acknowledge that the first such
deposit in respect of Sales Tax Refunds related to Transaction Receivables
currently held by UAC is $433,178.54 (50% of $866,357.07). UAC shall use its
reasonable best efforts to determine (as further provided in Section 4) the
appropriate allocation of Sales Tax Refunds it receives among those related to
Transaction Receivables and those related to other Receivables, promptly, and in
any event within 90 days of its receipt of a Sales Tax Refund. UAC shall make
the deposits called for by this Section 3 within 30 days of finalizing such
determination with respect to a particular Sales Tax Refund payment. UAC may
reduce such amount payable by an amount equal to 50% of Sales Tax Remittances
which are then due to be paid, were previously paid by UAC and not previously
reimbursed or paid from the Master Trust, or which have served to reduce any
payment received by UAC from a State. In the event and to the extent that UAC
reduces the amount remitted pursuant to the immediately preceding sentence, UAC
shall not be entitled to seek recovery of such Sales Tax Remittances from the
Master Trust Account under Section 2.05(c) of the Agreement.
SECTION 4. State Settlement Procedures. MBIA and the Creditor
Representative acknowledge that it is most efficient for UAC and the States to
settle sales tax refund issues by reference to all affected Financed Vehicles in
respect of Receivables that became Written-Off Receivables in a given time
period, without regard to which entity or trust held the Receivable at the time
it became a Written-Off Receivable. UAC is hereby authorized by the MTAA Parties
to continue this practice. In addition, any settlement with respect to refund
issues reached with respect to a particular State may take account of Sales Tax
Remittances due in respect of Written-Off Receivables on which deficiency
balances have been collected (again, without differentiation among specific
holders or Transactions) and may serve to reduce the net amount of the refund
received. Accordingly, following any such settlement and the receipt of a refund
or the payment of a remittance or both, UAC shall, acting in good faith, use its
reasonable best efforts to determine the equitable allocation of Sales Tax
Refunds and responsibility for Sales Tax Remittances that are required to be
accounted for, with the intent that 50% of Sales Tax Refunds related to
Transaction Receivables shall inure to and benefit the Master Trust, but also
that 50% of Sales Tax Remittances related to Transaction Receivables shall be
borne by the Master Trust. From time to time, at the request of MBIA, the Paying
Agent, the Master Trustee, an Indenture Trustee or the Creditor Representative,
UAC shall provide an accounting in reasonable detail demonstrating its
determination of the net entitlement and accountability of the Master Trust for
Sales Tax Refunds and Sales Tax Remittances related to Transaction Receivables.
SECTION 5. Procedural Efficiency. The parties acknowledge that the Master
Trust was established, together with related amendments to the affected
Transaction Documents, to provide
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for cross-collateralization of each of the Transactions by making excess cash
collateral in any Transaction available to the other Transactions and for the
purposes described in the Master Trust. MBIA, UAC and the Creditor
Representative agree that no particular purpose would be served by dividing the
portion of the Sales Tax Refunds related to Transaction Receivables to be paid
to the Master Trust hereunder among the specific Transactions to which they
might otherwise be allocated because the amounts involved do not justify the
administrative time and effort that would be required and the funds inuring to
any Transaction would ultimately be available to or from the Master Trust or
other Transactions by virtue of the mechanisms established in the Master Trust
in any event. Therefore, payment of the stipulated portion of Sales Tax Refunds
related to Transaction Receivables to, and repayment of any required Sales Tax
Remittances from, the Master Trust shall be conducted as provided herein.
SECTION 6. Release and Estoppel. The MTAA Parties (other than UAC and the
Creditor Representative; and the Trustees, at the direction of MBIA and UACSC
pursuant to Section 7 below) agree not to take any action to assert any interest
in or right to Sales Tax Refunds received by UAC or which may be claimed by UAC
from time to time, other than the 50% share of Sales Tax Refunds related to
Transaction Receivables required to be paid to the Master Trust Account as
provided by Section 3 hereof, and hereby waive any such interest. UAC hereby
agrees not to take any action to assert any interest in or right as against the
Trusts or MBIA to the 50% share of Sales Tax Refunds related to Transaction
Receivables required to be paid to the Master Trust Account as provided by
Section 3 hereof, and hereby waives any such interest except insofar as such
collections may be subsequently released to UAC in accordance with Sections
2.05(c), 2.06 or Section 2.07 of the Agreement; provided, that the foregoing
shall not impair UAC's rights to claim Sales Tax Refunds from states as
contemplated herein. The Plan Committee and the Creditor Representative support
and concur in the settlements and agreements reflected herein.
SECTION 7. Direction and Waiver. By its signature hereto, each of UACSC and
MBIA, as the Control Party for the Transactions, hereby directs the Trustees to
execute and deliver this Amendment. Each of the parties hereto acknowledges and
agrees to the foregoing and agrees that compliance with this Amendment shall be
deemed to comply with the terms of the Transaction Documents and the Master
Trust Agreement, and that the Trustees shall have no liability to any party
hereto for acting in accordance with such direction.
SECTION 8. Conditions Precedent; Direction to Master Trustee. The Master
Trustee shall have received an executed counterpart of this Amendment from each
of the parties hereto. Upon such receipt by the Master Trustee, the MTAA Parties
(other than the Master Trustee) hereby direct the Master Trustee to execute and
deliver this Amendment.
SECTION 9. Reference to and Effect on the Master Trust Agreement. Except as
specifically set forth above, the Master Trust Agreement, and all other
documents, instruments and agreements executed and/or delivered in connection
therewith, shall remain in full force and effect, and are hereby ratified and
confirmed. The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein and for the limited purposes set forth
herein, operate as a waiver of any right, power or remedy of any MTAA Party, nor
constitute a waiver of any provisions of the Master Trust Agreement, or any
other documents, instruments and agreements executed and/or delivered in
connection therewith.
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SECTION 10. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED,
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.
SECTION 11. Counterparts. This Amendment may be executed in counterparts by
the parties hereto, and each such counterpart shall be considered an original
and all such counterparts shall constitute one and the same instrument.
Remainder of page intentionally blank.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment, all as
of the day and year first above mentioned.
UNION ACCEPTANCE CORPORATION,
individually and as Predecessor Servicer
under each Servicing Agreement
By: /s/ Xxxx X. Xxx
-------------------------------------------------
Name: Xxxx X. Xxx
Title: President & CFO
UAC SECURITIZATION CORPORATION,
as Seller under each Grantor Trust Servicing
Agreement and Owner Trust Servicing
Agreement and Certificateholder
By: /s/ Xxxx Xxxxxxxx
-------------------------------------------------
Name: Xxxx Xxxxxxxx
Title: President
WILMINGTON TRUST COMPANY,
as Master Trustee
By: /s/ Xxxx Xxx Xxxxxxx
-------------------------------------------------
Name: Xxxx Xxx Xxxxxxx
Title: Assistant Vice President
BNY MIDWEST TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee under the various Indentures other
than the 2000-B Indenture described in the Master
Trust Agreement and as Trustee under the various
Pooling and Servicing Agreements described in the
Master Trust Agreement
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Assistant Vice President
Signature Page to
Amendment No. 2 to
Master Trust Account Agreement
THE BANK OF NEW YORK, not
in its individual capacity
but solely as Indenture
Trustee under the 2000-B
Indenture described in the
Master Trust Agreement
By: /s/ Xxxx X. Xxxxxxx
-------------------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Agent
SYSTEMS & SERVICES TECHNOLOGIES, INC.,
as Servicer or Successor Servicer
under the Servicing Agreements
By: /s/ Xxxxxx X. Xxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Executive Vice President/Secretary/
General Counsel
JPMORGAN CHASE BANK, as Master Trust Paying Agent
By: /s/ Xxxxx Xxxxxxx
-------------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Assistant Vice President
MBIA INSURANCE CORPORATION
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
CREDITOR REPRESENTATIVE
By: Plan Committee under the Second
Amended Plan of Reorganization of
Union Acceptance Corporation
By: Xxxxxxx XxXxxxxxx LLP
By: /s/ Xxxxx X. Xxxxx
-------------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Partner
Signature Page to
Amendment No. 2 to
Master Trust Account Agreement
ACKNOWLEDGED AND AGREED:
WACHOVIA CAPITAL MARKETS, LLC
(Deal Agent for the UACSC Transaction)
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
VARIABLE FUNDING CAPITAL CORPORATION
(Noteholder on the UACSC Transaction)
By: Wachovia Capital Markets, LLC, as Attorney-in-Fact
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Vice President
Signature Page to
Amendment No. 2 to
Master Trust Account Agreement
