EXHIBIT 4.1
TRUST AGREEMENT
between
UNITED FIDELITY FINANCE, LLC,
as Transferor
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
Dated as of August 1, 2002
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UNITED FIDELITY AUTO RECEIVABLES TRUST 2002-A
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................................................................1
SECTION 1.1 Capitalized Terms.............................................................1
SECTION 1.2 Other Definitional Provisions.................................................4
ARTICLE II ORGANIZATION...........................................................................................4
SECTION 2.1 Declaration of Trust; Name....................................................4
SECTION 2.2 Office .......................................................................
SECTION 2.3 Purposes and Powers...........................................................5
SECTION 2.4 Appointment of Owner Trustee..................................................8
SECTION 2.5 Initial Capital Contribution of Trust Estate..................................8
SECTION 2.6 Status of Trust Under Trust Statute...........................................8
SECTION 2.7 Expenses9
SECTION 2.8 Appointment of Trust Collateral Agent; Title to Trust Property................9
SECTION 2.9 Situs of Trust................................................................9
SECTION 2.10 Representations and Warranties of the Transferor.............................10
SECTION 2.11 Federal Income Tax Treatment of the Trust....................................12
SECTION 2.12 Covenants of the Transferor..................................................12
SECTION 2.13 Covenants of the Certificateholder...........................................13
ARTICLE III THE CERTIFICATE AND TRANSFER OF INTERESTS............................................................14
SECTION 3.1 Initial Ownership............................................................14
SECTION 3.2 The Certificate..............................................................14
SECTION 3.3 Authentication of Certificate................................................14
SECTION 3.4 Registration of Transfer and Exchange of the Certificate.....................15
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates............................17
SECTION 3.6 Persons Deemed Certificateholder.............................................17
ARTICLE IV VOTING RIGHTS AND OTHER ACTIONS.......................................................................18
SECTION 4.1 Prior Notice with Respect to Certain Matters.................................18
SECTION 4.2 Action with Respect to Certain Matters.......................................19
SECTION 4.3 Restrictions on Certificateholder's Power....................................19
SECTION 4.4 Control 20
SECTION 4.5 Rights of Note Insurer.......................................................20
ARTICLE V CERTAIN DUTIES.........................................................................................20
SECTION 5.1 Accounting and Records to the Certificateholder, the Internal Revenue
Service and Others...........................................................20
SECTION 5.2 Signature on Returns; Tax Matters Partner....................................21
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE.................................................................21
SECTION 6.1 General Authority............................................................21
SECTION 6.2 General Duties...............................................................21
SECTION 6.3 Action upon Instruction......................................................22
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SECTION 6.4 No Duties Except as Specified in this Agreement or in Instructions...........23
SECTION 6.5 No Action Except under Specified Documents or Instructions...................23
SECTION 6.6 Restrictions.................................................................23
ARTICLE VII CONCERNING THE OWNER TRUSTEE.........................................................................24
SECTION 7.1 Acceptance of Trusts and Duties..............................................24
SECTION 7.2 Furnishing of Documents......................................................25
SECTION 7.3 Representations and Warranties...............................................25
SECTION 7.4 Reliance; Advice of Counsel..................................................26
SECTION 7.5 Not Acting in Individual Capacity............................................27
SECTION 7.6 Owner Trustee Not Liable for the Certificate or Receivables..................27
SECTION 7.7 Owner Trustee May Own the Certificate and Notes..............................27
SECTION 7.8 Payments from Trust Property.................................................27
SECTION 7.9 Doing Business in Other Jurisdictions........................................28
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE.......................................................................28
SECTION 8.1 Owner Trustee's Fees and Expenses............................................28
SECTION 8.2 Indemnification..............................................................28
SECTION 8.3 Payments to the Owner Trustee................................................28
SECTION 8.4 Non-Recourse Obligations.....................................................29
ARTICLE IX TERMINATION OF TRUST AGREEMENT........................................................................29
SECTION 9.1 Termination of Trust Agreement...............................................29
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES.................................................30
SECTION 10.1 Eligibility Requirements for Owner Trustee...................................30
SECTION 10.2 Resignation or Removal of Owner Trustee......................................31
SECTION 10.3 Successor Owner Trustee......................................................31
SECTION 10.4 Merger or Consolidation of Owner Trustee.....................................32
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee................................32
ARTICLE XI MISCELLANEOUS.........................................................................................34
SECTION 11.1 Supplements and Amendments...................................................34
SECTION 11.2 Limitations on Rights of Others..............................................35
SECTION 11.3 Notices 35
SECTION 11.4 Severability.................................................................36
SECTION 11.5 Separate Counterparts........................................................36
SECTION 11.6 Assignments..................................................................36
SECTION 11.7 Note Insurer.................................................................36
SECTION 11.8 No Petition..................................................................36
SECTION 11.9 No Recourse..................................................................37
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SECTION 11.10 Headings37
SECTION 11.11 GOVERNING LAW................................................................37
SECTION 11.12 The Bank37
SECTION 11.13 No Legal Title to Trust Property in Certificateholder........................37
SECTION 11.14 Bankruptcy Matters...........................................................38
SECTION 11.15 Effect of Policy Expiration Date.............................................38
EXHIBITS
EXHIBIT A FORM OF CERTIFICATE
EXHIBIT B FORM OF CERTIFICATE OF TRUST
EXHIBIT C FORM OF ERISA CERTIFICATION
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This TRUST AGREEMENT dated as of August 1, 2002 between UNITED
FIDELITY FINANCE, LLC, a Delaware limited liability company (the "Transferor"),
and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Owner Trustee
(the "Owner Trustee").
PRELIMINARY STATEMENT
The Owner Trustee shall execute and cause to be filed with the
Delaware Secretary of State the Certificate of Trust relating to the Trust.
ARTICLE I
DEFINITIONS
SECTION 1.1 Capitalized Terms.
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For all purposes of this Agreement, the following terms shall
have the meanings set forth below:
"Agreement" shall mean this Trust Agreement, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
"Back-up Servicer" shall mean Xxxxx Fargo Bank Minnesota,
National Association, in its capacity as Back-up Servicer under the Sale and
Servicing Agreement.
"Bank" shall mean United Fidelity Bank, fsb, a federally
chartered savings association.
"Certificate" means a certificate issued by the Trust, which
is substantially in the form attached hereto as Exhibit A.
"Certificate Distribution Account" shall mean the account
designated as such as established and maintained pursuant to the Sale and
Servicing Agreement.
"Certificate of Trust" shall mean the Certificate of Trust in
the form of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of
the Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean
the register mentioned and the registrar appointed pursuant to Section 3.4.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and Treasury Regulations promulgated thereunder.
"Collateral Agent" shall mean Xxxxx Fargo Bank Minnesota,
National Association, in its capacity as collateral agent, including its
successors-in-interest, until and unless a successor Person shall become the
Collateral Agent pursuant to the Spread Account Agreement, and thereafter,
"Collateral Agent" shall mean such successor Person.
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"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Administration or at such other address as the Owner
Trustee may designate by notice to the Certificateholder, the Note Insurer, the
Indenture Trustee and the Transferor, or the principal corporate trust office of
any successor Owner Trustee (the address of which the successor owner trustee
will notify the Certificateholder, the Note Insurer, the Indenture Trustee and
the Transferor).
"Holder" or "Certificateholder" shall mean the Person in whose
name a Certificate is registered on the Certificate Register.
"Indenture" shall mean the Indenture dated as of August 1,
2002, between the Issuer and Xxxxx Fargo Bank Minnesota, National Association,
as the Indenture Trustee, as the same may be amended and supplemented from time
to time in accordance with the provisions thereof.
"Insolvency Event" means, with respect to a specified Person,
(a) the filing of a petition against such Person or the entry of a decree or
order for relief by a court having jurisdiction in the premises in respect of
such Person or any substantial part of its property in an involuntary case under
any applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or appointing a receiver, conservator, liquidator,
assignee, custodian, trustee, sequestrator, or similar official for such Person
or for any substantial part of its property, or ordering the winding-up or
liquidation of such Person's affairs, and such petition, decree or order
remaining unstayed and in effect for a period of 60 consecutive days; or (b) the
commencement by such Person of a voluntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or
the consent by such Person to the entry of an order for relief in an involuntary
case under any such law, or the consent by such Person to the appointment of or
taking possession by, a receiver, conservator, liquidator, assignee, custodian,
trustee, sequestrator, or similar official for such Person or for any
substantial part of its property, or the making by such person of any general
assignment for the benefit of creditors, or the failure by such person generally
to pay its debts as such debts become due, or the taking of action by such
Person in furtherance of any of the foregoing.
"Instructing Party" has the meaning given such term in Section
4.2.
"Issuer" means the Trust.
"Master Servicer" shall mean the Bank in its capacity as
Master Servicer under the Sale and Servicing Agreement.
"Note Insurer" shall mean Financial Security Assurance Inc., a
monoline insurance company incorporated under the laws of the State of New York,
or its successor in interest as issuer of the Note Policy.
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"Note Policy" shall have the meaning assigned to such term in
the Insurance Agreement.
"Owner Trustee" shall mean Wilmington Trust Company, a
Delaware banking corporation, not in its individual capacity but solely as owner
trustee under this Agreement, and any successor Owner Trustee hereunder.
"Record Date" shall mean with respect to a Distribution Date,
the close of business on the last day of the month immediately preceding such
Distribution Date.
"Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement, dated as of August 1, 2002, among the Trust, the
Transferor, the Originator, the Master Servicer, the Trust Collateral Agent and
the Back-up Servicer, as the same may be amended and supplemented from time to
time in accordance with the terms thereof.
"Secretary of State" shall mean the Secretary of State of the
State of Delaware.
"Securityholders" shall mean the Certificateholders and the
Noteholders.
"Transferor" shall mean United Fidelity Finance, LLC, a
Delaware limited liability company, in its capacity as Transferor hereunder.
"Treasury Regulations" shall mean regulations, including
proposed or temporary regulations, promulgated under the Code. References herein
to specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean the trust established by this Agreement.
"Trust Collateral Agent" shall mean, initially, Xxxxx Fargo
Bank Minnesota, National Association, in its capacity as trust collateral agent,
including its successors-in-interest, until and unless a successor Person shall
have become the Trust Collateral Agent pursuant to the Sale and Servicing
Agreement, and thereafter "Trust Collateral Agent" shall mean such successor
Person.
"Trust Property" shall mean all right, title and interest of
the Trust in and to the property and rights assigned to the Trust pursuant to
Section 2.01 and Section 2.02(a) of the Sale and Servicing Agreement and
pursuant to each Transfer Agreement and all amounts and property from time to
time held in or credited to the Trust Accounts and the Lock-Box Account (to the
extent such amounts and property in the Lock-Box Account relate to the
Receivables).
"Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as the same may be amended
from time to time.
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"United Fidelity" shall mean United Fidelity Finance, LLC, a
Delaware limited liability company.
"Wilmington Trust" shall mean Wilmington Trust Company, a
Delaware banking corporation, in its individual capacity and not as Owner
Trustee.
SECTION 1.2 Other Definitional Provisions.
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(a) Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Sale and Servicing Agreement or, if not defined
therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II
ORGANIZATION
SECTION 2.1 Declaration of Trust; Name.
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There is hereby formed a trust to be known as "United Fidelity
Auto Receivables Trust 2002-A", in which name the Owner Trustee may conduct the
business of the Trust,
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make and execute contracts and other instruments on behalf of the Trust and xxx
and be sued on behalf of the Trust.
SECTION 2.2 Office.
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The office of the Trust shall be in care of the Owner Trustee
at the Corporate Trust Office or at such other address as the Owner Trustee may
designate by written notice to the Certificateholder, the Note Insurer and the
Transferor.
SECTION 2.3 Purposes and Powers.
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The Trust and the parties to this Agreement shall be subject
to the following provisions regarding the purposes, powers and procedures of the
Trust:
(a) The sole purpose of the Trust is to acquire Trust Property pursuant to
the Sale and Servicing Agreement and each Transfer Agreement and to conserve the
Trust Property and collect and disburse the periodic income therefrom and act
pursuant to the Basic Documents, and, in furtherance thereof, the Trust shall
have the power and authority, to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Certificate
pursuant to this Agreement, to sell the Notes, to sell and/or transfer the
Certificate in accordance with the provisions of this Agreement and to pay
interest and principal on the Notes and distributions on the Certificate;
(ii) with the proceeds of the sale of the Notes to fund the
Pre-Funding Account and the Capitalized Interest Account, at the direction
of the Certificateholder, to fund the Spread Account Initial Deposit and
any Spread Account Additional Deposit in the Spread Account, to pay the
organizational, start-up and transactional expenses of the Trust and to pay
the balance to the Transferor pursuant to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Property to the Indenture Trustee pursuant to the Indenture for the
benefit of the Noteholders and the Note Insurer and to hold, manage and
distribute to the Certificateholder pursuant to the terms of the Sale and
Servicing Agreement and the Spread Account 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 Basic
Documents to which it is a party;
(v) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or
are incidental thereto or connected therewith; and
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(vi) subject to compliance with the Basic 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 Certificateholder,
the Note Insurer and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
(b) The Trust's only assets shall be the Trust Property. Other than in
connection with the Notes or as otherwise contemplated in the Basic Documents,
the Trust shall not secure any indebtedness with any of the Trust Property.
(c) Other than with respect to the transfer to the Trust of the Trust
Property or its obligations under the Basic Documents, the Trust will acquire no
obligations of, shall not make loans or advances to, will not borrow funds from,
shall not assume or guarantee the obligations or liabilities of, shall not have
its obligations or liabilities guaranteed by, and shall not hold itself out as
responsible for the debts and obligations of the Owner Trustee, the
Certificateholder, the Bank, the Transferor, the Indenture Trustee, the Trust
Collateral Agent or any other Person or entity.
(d) The Owner Trustee shall not manage, control, use, sell, dispose of or
otherwise deal with any part of the Trust Property except in accordance with the
specific limitations set forth in this Agreement and the other Basic Documents
to which the Trust is a party.
(e) Other than for federal income tax purposes, the Trust shall, in all
dealings with the public, identify itself under the name of the Trust and as a
separate and distinct entity from any other Person or entity. All transactions
and agreements between the Trust and third parties shall be conducted in the
name of the Trust as an entity separate and independent from the Owner Trustee,
the Indenture Trustee, the Trust Collateral Agent, the Bank, the Transferor and
the Certificateholder.
(f) Other than for federal income tax purposes, all transactions and
agreements between the Trust on the one hand, and any of the Owner Trustee,
Wilmington Trust, the Indenture Trustee, the Trust Collateral Agent, the
Transferor, the Bank and the Certificateholder on the other hand, shall reflect
the separate legal existence of each entity and will be formally documented in
writing. The pricing and other material terms of all such transactions and
agreements shall be on terms substantially similar to those that would be
available on an arm's-length basis with unaffiliated third parties.
(g) The Trust shall not commingle its funds and other assets with those of
any other Person or business entity and shall maintain its assets and
liabilities in such a manner that it shall not be costly or difficult to
segregate, ascertain or identify its individual assets and liabilities from
those of any other Person or entity. The Owner Trustee, the Trust Collateral
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Agent or the Indenture Trustee, as contemplated by the Basic Documents, shall
hold the Trust Property on behalf of the Trust.
(h) The Trust shall pay its liabilities and losses as they become due from
the Trust Property; provided, however, that, except as provided in the Basic
Documents, none of the Trust Property shall be used to pay the liabilities
(including liability in respect of guaranties) and losses of Wilmington Trust,
the Transferor, the Bank, the Indenture Trustee, the Trust Collateral Agent or
the Certificateholder. The Trust has been structured to maintain capital in an
amount reasonably sufficient to meet the anticipated needs of the Trust.
(i) The Trust shall not share any of the same officers or other employees
with the Master Servicer, the Back-up Servicer, the Transferor, the Bank, the
Indenture Trustee, the Trust Collateral Agent or the Certificateholder;
provided, however, that the Owner Trustee may act in such capacity on behalf of
the Trust and the Certificateholder and the Bank may act as administrator on
behalf of the Trust and the Certificateholder.
(j) The Trust shall not, jointly with the Master Servicer, the Back-up
Servicer, the Transferor, the Bank, the Indenture Trustee, the Trust Collateral
Agent or the Certificateholder contract or do business with vendors or service
providers or share overhead expenses; provided, however, that the Owner Trustee
may act in such capacity on behalf of the Trust and the Certificateholder and
the Bank may act as administrator on behalf of the Trust and the
Certificateholder.
(k) The Trust shall maintain any bank accounts, books and records and
annual financial statements prepared in accordance with generally accepted
accounting principles, separate from those of the Owner Trustee, Wilmington
Trust, the Indenture Trustee, the Trust Collateral Agent, the Transferor, the
Bank and the Certificateholder. The foregoing will reflect that the assets and
liabilities of and all transactions and transfers of funds involving the Trust
shall be separate from those of each such other entity, and the Trust shall pay
or bear the cost of the preparation of its own financial statements and shall
not pay or bear the cost of the preparation of the financial statements of any
such other entity. Neither the accounting records nor the financial statements
of the Trust will indicate that the Trust Property is available to pay creditors
of Wilmington Trust, the Indenture Trustee, the Trust Collateral Agent, the
Transferor, the Bank or the Certificateholder or any other Person or entity.
(l) The Owner Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust without the prior approval of the
Certificateholder and the Transferor and the delivery to the Owner Trustee by
the Certificateholder and the Transferor of a certificate stating that such
entity reasonably believes that the Trust is insolvent.
(m) The Owner Trustee covenants and agrees that it will not at any time
institute against the Transferor, or join in any institution against the
Transferor of any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceeding under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Transferor or this Agreement. The Owner Trustee covenants and
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agrees that it will not, in any capacity, seek the substantive consolidation of
the assets of the Trust with the Transferor.
(n) The Certificate cannot be transferred other than pursuant to Section
3.4.
(o) The Certificate shall entitle any Certificateholder only to the
benefits and distributions as are expressly set forth in this Agreement, the
Sale and Servicing Agreement and the Spread Account Agreement.
(p) The Trust and this Agreement may not be revoked or terminated except in
accordance with Section 9.1 of this Agreement and in no event shall the
Certificateholder have the ability to terminate the Trust unilaterally.
(q) The Trust shall not consensually merge or consolidate with any Person.
(r) Neither the Transferor nor the Certificateholder shall request or
instruct the Owner Trustee to take or refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the Owner
Trustee under this Agreement or contrary to the limited purposes of the Trust,
and the Owner Trustee shall be under no obligation to comply with any such
request or instruction if given.
SECTION 2.4 Appointment of Owner Trustee.
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The Transferor hereby appoints the Owner Trustee as trustee of
the Trust effective as of the date hereof, to have all the rights, powers and
duties set forth herein.
SECTION 2.5 Initial Capital Contribution of Trust Estate.
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The Transferor hereby sells, assigns, transfers, conveys and
sets over to the Owner Trustee, as of the date hereof, the sum of $1. The Owner
Trustee hereby acknowledges receipt in trust from the Transferor, as of the date
hereof, of the foregoing contribution, which shall constitute the initial Trust
Property and shall be deposited with the Trust Collateral Agent for deposit in
the Certificate Distribution Account.
SECTION 2.6 Status of Trust Under Trust Statute.
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The Owner Trustee hereby declares that it will hold the Trust
Property in trust upon and subject to the conditions set forth herein for the
sole purpose of conserving the Trust Property and collecting and disbursing the
periodic income therefrom for the use and benefit of the Certificateholder,
subject to the obligations of the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a statutory trust
under the Trust Statute and that this Agreement constitute the governing
instrument of such statutory trust. Effective as of the date hereof, the Owner
Trustee shall have all rights, powers and duties expressly set forth herein and
to the extent not inconsistent herewith, in the Trust Statute with respect to
accomplishing the purposes of the Trust. The Owner Trustee shall file the
Certificate of Trust with the Secretary of State. The Certificateholder shall
not have any personal liability for any liability or obligation of the Trust.
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SECTION 2.7 Expenses.
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The Owner Trustee shall be reimbursed for any organizational
expenses of the Trust paid by the Owner Trustee in accordance with Section
5.12(a) of the Sale and Servicing Agreement.
SECTION 2.8 Appointment of Trust Collateral Agent; Title to Trust Property.
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(a) The Transferor, in its capacity as the seller to, creator of, and as
original, sole beneficiary of the Trust does hereby name Xxxxx Fargo Bank
Minnesota, National Association to act as the initial collateral agent (the
"Trust Collateral Agent") to hold the Trust Property pursuant to the Sale and
Servicing Agreement for the benefit of the Note Insurer, the Indenture Trustee
and the Noteholders.
(b) The specific rights, duties and obligations of the Trust Collateral
Agent shall be as set forth in the Sale and Servicing Agreement. For as long as
any Notes are outstanding, the Trust Collateral Agent shall act solely for the
benefit of the Indenture Trustee, the Note Insurer and the Noteholders. Upon the
issuance of the Notes and the Certificate, the Transferor shall have only such
rights with respect to the Trust Collateral Agent as shall be specified in the
Sale and Servicing Agreement.
(c) Subject to the Indenture, 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 or a separate trustee, as the case may
be. The Certificateholder shall not have legal title to any part of the Trust
Property. The Certificateholder shall be entitled to receive distributions with
respect to its beneficial ownership interest therein only in accordance with the
Sale and Servicing Agreement, the Spread Account Agreement and this Agreement.
No transfer, by operation of law or otherwise, of any right, title or interest
by the Certificateholder of its beneficial ownership interest in the Trust
Property shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Property.
(d) Pursuant to Section 3803 of the Statutory Trust Act, the
Certificateholder shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations organized under the General
Corporation Law of the State of Delaware.
SECTION 2.9 Situs of Trust.
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The Trust will be located in the State of Delaware. The Trust
shall not have any employees; provided, however, that nothing herein shall
restrict or prohibit the Owner Trustee, the Back-up Servicer, the Master
Servicer or any agent of the Trust from having employees within or without the
State of Delaware. The only office of the Trust will be at the Corporate Trust
Office in Delaware.
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SECTION 2.10 Representations and Warranties of the Transferor.
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The Transferor makes the following representations and
warranties on which the Owner Trustee and the Trust rely in accepting the Trust
Property in trust and issuing the Certificate and on which the Note Insurer
relies in issuing the Note Policy:
(a) Organization and Good Standing. The Transferor is duly organized and
validly existing as a Delaware limited liability company with power and
authority to own its properties and to conduct its business as such properties
are currently owned and such business is presently conducted and is proposed to
be conducted pursuant to this Agreement and the Basic Documents and has and had
at all relevant times power, authority and legal right to acquire, own and sell
the Receivables.
(b) Due Qualification. The Transferor is duly qualified to do business as a
limited liability company in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or lease of
its property, the conduct of its business and the performance of its obligations
under this Agreement and the Basic Documents requires such qualification.
(c) Power and Authority. The Transferor has the power and authority to
execute and deliver this Agreement and the other Basic Documents to which it is
a party and to carry out their respective terms; the Transferor has full power
and authority to sell and assign the property to be sold and assigned to and
deposited with the Trust and the Transferor has duly authorized such sale and
assignment and deposit to the Trust by all necessary action; and the execution,
delivery and performance of this Agreement and the other Basic Documents to
which it is a party have been duly authorized by the Transferor by all necessary
action.
(d) Enforceability. The Transferor has duly executed and delivered this
Agreement and the other Basic Documents to which it is a party and this
Agreement and the other Basic Documents to which it is a party constitute legal,
valid and binding obligations of the Transferor, enforceable against the
Transferor in accordance with their terms.
(e) No Consent Required. No consent, license, approval or authorization or
registration or declaration with, any Person or with any governmental authority,
bureau or agency is required in connection with the execution, delivery or
performance by the Transferor of this Agreement or the other Basic Documents to
which its is a party, except for such as have been obtained, effected or made.
(f) No Violation. The consummation of the transactions contemplated by this
Agreement and the other Basic Documents to which it is a party and the
fulfillment of the terms hereof and thereof do not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the certificate of formation or
limited liability company agreement of the Transferor, or any indenture,
agreement
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or other instrument to which the Transferor is a party or by which it is bound;
nor result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or any order,
rule or regulation applicable to the Transferor of any court or of any federal
or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Transferor or its properties.
(g) No Proceedings. There are no proceedings or investigations pending or,
to the Transferor's knowledge, threatened against the Transferor before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A) asserting the
invalidity of this Agreement or any of the Basic Documents, (B) seeking to
prevent the issuance of the Certificate or the Notes or the consummation of any
of the transactions contemplated by this Agreement or any of the Basic
Documents, (C) seeking any determination or ruling that might materially and
adversely affect its performance of its obligations under, or the validity or
enforceability of, this Agreement or any of the Basic Documents, or (D) seeking
to adversely affect the federal income tax or other federal, state or local tax
attributes of the Certificate or the Notes.
(h) No Liens. Upon the conveyance, assignment or other transfer of any of
the Trust Assets by the Transferor to the Trust pursuant to the Sale and
Servicing Agreement and each Transfer Agreement, as applicable, the Transferor
will have conveyed to the Trust good title, free and clear of any Lien and the
Trust will have the right to Grant and deliver the Trust Property to the
Indenture Trustee in accordance with the Indenture and upon the Grant and
delivery of the Trust Property by the Trust to the Indenture Trustee in the
manner contemplated by the Indenture, and assuming the validity and binding
effect of the Indenture, the Indenture Trustee will have obtained a valid first
priority security interest therein, prior to all Liens.
(i) Records. Immediately upon the sale or other delivery of any Trust
Property to the Trust pursuant to the Sale and Servicing Agreement and each
Transfer Agreement, as applicable, the Transferor will make any appropriate
notations on its records to indicate that the Trust Property has been
transferred to the Trust pursuant to the Sale and Servicing Agreement and each
Transfer Agreement, as applicable, and, to the extent it constitutes Trust
Property, has been pledged by the Trust to the Indenture Trustee to secure
payment of the Notes. The Transferor's financial statements will indicate that
the Trust Property is not an asset of the Transferor and not available to the
Transferor's creditors.
(j) Separate Entity. The Transferor will hold itself out to the public
under its own name as a separate and distinct entity and conduct its business so
as not to mislead others as to its identity. Without limiting the generality of
the foregoing, all oral and written communications, including, without
limitation, all letters, invoices, contracts, statements and applications will
be made solely in the name of the Trust if they are made on behalf of the Trust
and solely in the name of the Transferor if they are made on behalf of the
Transferor.
(k) Bankruptcy Filings. The Transferor has no present intent to cause a
voluntary bankruptcy of the Trust.
11
SECTION 2.11 Federal Income Tax Treatment of the Trust.
-----------------------------------------
(a) For so long as the Trust has a single owner for federal income tax
purposes, it will, pursuant to Treasury Regulations promulgated under section
7701 of the Code, be disregarded as an entity distinct from the
Certificateholder for all federal income tax purposes. Accordingly, for federal
income tax purposes, the Certificateholder will be treated as (i) owning all
assets owned by the Trust, (ii) having incurred all liabilities incurred by the
Trust, and (iii) all transactions between the Trust and the Certificateholder
will be disregarded.
(b) In the event that the Trust has two or more equity owners for federal
income tax purposes, the Trust will be treated as a partnership. At any such
time that the Trust has two or more equity owners, this Agreement may need to be
amended, in accordance with Section 11.1 herein, and appropriate provisions may
need to be added so as to provide for treatment of the Trust as a partnership.
(c) Except as set forth in Article V, the Owner Trustee shall have no
obligation to file tax filings for the Trust.
(d) Neither the Owner Trustee nor any Certificateholder will, under any
circumstances, file a Form 8832, or any successor form, on behalf of the Trust.
SECTION 2.12 Covenants of the Transferor.
---------------------------
The Transferor agrees and covenants for the benefit of each Holder, each
Noteholder, the Note Insurer, the Indenture Trustee, the Trust Collateral Agent
and the Owner Trustee, during the term of this Agreement, and to the fullest
extent permitted by applicable law, that:
(a) 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
formation, limited liability company agreement and the Basic Documents;
(b) it shall not, for any reason, institute proceedings for the Trust to be
adjudicated bankrupt or insolvent, or consent to or join in 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, conservator, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Trust or a substantial part of
the property of the Trust or cause or permit the Trust to make any assignment
for the benefit of creditors, or admit in writing the inability of the Trust to
pay its debts generally as they become due, or declare or effect a moratorium on
the debt of the Trust or take any action in furtherance of any such action;
(c) it shall obtain from each counterparty to each Basic Document to which
it or the Trust is a party and each other agreement entered into on or after the
date hereof to which it or the Trust is a party, an agreement by each such
counterparty that prior to one year and one day after the completion of the
event specified in Section 9.1(e) such counterparty shall not
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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
(d) it shall not, for any reason, withdraw or attempt to withdraw from this
Agreement or any other Basic Document to which it is a party, to the full extent
permitted by law dissolve, or, without the consent required by its limited
liability company agreement, institute proceedings for it to be adjudicated a
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, conservator,
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 Covenants of the Certificateholder.
----------------------------------
The Certificateholder by becoming a beneficial owner of a Certificate or by
its acceptance of a Certificate agrees:
(a) to be bound by the terms and conditions of the Certificate of which
such Certificateholder is the beneficial owner and of this Agreement and the
other Basic Documents, including any supplements or amendments hereto and
thereto and to perform the obligations of a Certificateholder as set forth
therein or herein, in all respects as if it were a signatory hereto. This
undertaking is made for the benefit of the Trust, the Owner Trustee, the Note
Insurer, the Indenture Trustee, the Trust Collateral Agent, the Transferor, the
Noteholders and any other Certificateholder, present and future;
(b) to the appointment of the Owner Trustee as such Certificateholder's
agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Trust and, if requested by the Trust, to sign such
federal income tax information return in its capacity as holder of an interest
in the Trust;
(c) not to take any position in such Certificateholder's tax returns
inconsistent with those taken in any tax returns filed by the Trust;
(d) if such Certificateholder is other than an individual or other entity
holding its Certificate through a broker who reports securities sales on Form
1099-B, to notify the Owner Trustee in writing of any transfer by it of a
Certificate in a taxable sale or exchange, within 30 days of the date of the
transfer; and
(e) until one year and one day after the completion of the events specified
in Section 9.1(e), not, for any reason, to institute proceedings for the Trust
or the Transferor (unless the consent required by its limited liability company
agreement is obtained) to be adjudicated a bankrupt or insolvent, or consent to
the institution of bankruptcy or insolvency proceedings
13
against the Trust or the Transferor, 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, conservator,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Trust or the Transferor or a substantial part of its property, or cause or
permit the Trust or the Transferor to make any assignment for the benefit of its
creditors or to admit in writing its inability to pay its debts generally as
they become due, or declare or effect a moratorium on its debt or take any
action in furtherance of any such action.
ARTICLE III
THE CERTIFICATE AND TRANSFER OF INTERESTS
SECTION 3.1 Initial Ownership.
-----------------
Upon the formation of the Trust by the contribution by the Transferor
pursuant to Section 2.5 and until the issuance of the Certificate to the initial
Certificateholder the Transferor shall be the sole beneficiary of the Trust.
SECTION 3.2 The Certificate.
---------------
The Certificate shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee. A Certificate
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Certificate or did not hold such offices at the date of authentication and
delivery of such Certificate. A transferee of a Certificate shall become a
Certificateholder, and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder, upon due registration of such
Certificate in such transferee's name pursuant to Section 3.4 hereof.
SECTION 3.3 Authentication of Certificate.
-----------------------------
Concurrently with the initial sale of the Receivables and other Trust
Property to the Trust pursuant to Section 2.01 of the Sale and Servicing
Agreement and the issuance of the Notes pursuant to the Indenture, the Owner
Trustee, or the Owner Trustee's authenticating agent, shall cause one
Certificate to be authenticated and delivered to or upon the written order of
the Transferor, signed by its president or any vice president, any assistant
treasurer or any assistant secretary without further company action by the
Transferor. No Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose, unless there shall appear on such
Certificate a certificate of authentication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee or the Owner Trustee's
authenticating agent, by manual signature; such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated and
delivered hereunder. Each Certificate shall be dated the date of its
authentication.
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SECTION 3.4 Registration of Transfer and Exchange of the Certificate.
--------------------------------------------------------
(a) The Owner Trustee is hereby directed by the Transferor to issue on
behalf of the Trust to United Fidelity, a Certificate, duly executed and
delivered in exchange therefor, evidencing ownership of 100% of the beneficial
ownership in the assets of the Trust.
(b) To the fullest extent permitted by law, neither the registered nor the
beneficial interest in any Certificate may be transferred, assigned,
hypothecated or pledged in any manner by any direct or indirect owner thereof
(including any transferee thereof subsequent to the date hereof) without the
prior written notice by such owner to each of the Note Insurer and the Owner
Trustee. Any purported transfer, assignment, hypothecation or pledge in any
manner of any such registered or beneficial interest in any Certificate in the
Trust in violation of this Section 3.4(b) shall be null and void and shall not
cause any rights to inure to the benefit of the purported transferee.
(c) The Certificate Registrar shall keep or cause to be kept, at the
Corporate Trust Office, a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Owner Trustee shall provide for
the registration of the Certificate and of transfers and exchanges of the
Certificate as herein provided. The Owner Trustee shall be the initial
Certificate Registrar.
The Certificate Registrar shall provide the Trust Collateral Agent, the
Collateral Agent and the Note Insurer with the name and address of the
Certificateholder on the Closing Date, to the extent such information has been
provided to the Certificate Registrar and in the form provided to the
Certificate Registrar on such date. Upon any transfers of the Certificate, the
Certificate Registrar shall notify the Trust Collateral Agent, the Collateral
Agent and the Note Insurer of the name and address of the transferee in writing,
by facsimile, on the day of such transfer, or promptly thereafter.
(d) Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Trust shall execute, and the Owner Trustee, or the
Owner Trustee's authenticating agent, shall authenticate and deliver, in the
name of the designated transferee or transferees, a new Certificate evidencing a
100% beneficial interest in the assets of the Trust dated the date of
authentication by the Owner Trustee or any authenticating agent.
Each Certificate surrendered for registration of transfer or exchange shall
be canceled and subsequently disposed of by the Owner Trustee in accordance with
its customary practice.
No service charge shall be made for any registration of transfer or
exchange of the Certificate, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any expense, tax or
governmental charge that may be imposed in connection with any transfer or
exchange of the Certificate.
(e) The Certificate has not been registered under the Securities Act or any
state securities law. The Certificate Registrar shall not register the transfer
of any Certificate or
15
unless it shall have received a representation letter or an Opinion of Counsel
satisfactory to the Transferor and the Note Insurer, to the effect that such
resale or transfer is made to a person who the transferor of the Certificate
reasonably believes is a qualified institutional buyer (within the meaning of
Rule 144A under the Securities Act ("Rule 144A")) that is aware that such resale
or other transfer is being made in reliance upon Rule 144A. The Certificate
shall bear a legend substantially to the effect set forth in the preceding two
sentences. Neither the Transferor, the Indenture Trustee, the Trust nor the
Owner Trustee is obligated to register the Certificate under the Securities Act
or to take any other action not otherwise required under this Agreement to
permit the transfer of the Certificate without registration. Notwithstanding
anything contained herein to the contrary, the Owner Trustee shall not be
responsible for ascertaining whether any transfer complies with the registration
provisions or exemptions from the Securities Act, the Securities Exchange Act of
1934, as amended, applicable state securities law or the Investment Company Act
of 1940, as amended; provided, however, that if a certificate is specifically
required to be delivered to the Owner Trustee by a purchaser or transferee of a
Certificate, the Owner Trustee shall be under a duty to examine the same to
determine whether it conforms to the requirements of this Trust Agreement and
shall promptly notify the party delivering the same if such certificate does not
so conform.
(f) In furtherance of and in limitation of the foregoing, the
Certificateholder, by acceptance of its Certificate, specifically acknowledges
that it has no right to or interest in any monies at any time held pursuant to
the Spread Account Agreement prior to the release of such monies pursuant to
Section 3.03 of the Spread Account Agreement, such monies being held in trust
for the benefit of the Noteholders and the Note Insurer. Notwithstanding the
foregoing, in the event that it is ever determined that provisions of the Sale
and Servicing Agreement and the Spread Account Agreement shall be considered to
constitute a security agreement, the Transferor and the Certificateholder hereby
grant to the Collateral Agent for the benefit of the Noteholders and the Note
Insurer a first priority perfected security interest in such amounts, to be
applied as set forth in Section 3.03 of the Spread Account Agreement. In
addition, the Certificateholder by acceptance of its Certificate hereby appoints
the Transferor as its agent to pledge a first priority perfected security
interest in the Spread Account, and any amounts held therein from time to time
to the Collateral Agent for the benefit of the Indenture Trustee and the Note
Insurer pursuant to the Spread Account Agreement and agrees to execute and
deliver such instruments of conveyance, assignment, grant and confirmation, as
well as financing statements, in each case as the Note Insurer shall consider
reasonably necessary in order to perfect the Collateral Agent's Security
Interest in the Collateral (as such terms are defined in the Spread Account
Agreement).
(g) No transfer of a Certificate shall be made to any Person unless the
Owner Trustee has received a certificate (substantially in the form of Exhibit C
hereto) from such transferee to the effect that such transferee is not a Plan,
and is not acting on behalf of or investing the assets of a Plan. The
preparation and delivery of the certificate referred to above shall not be an
expense of the Trust, the Owner Trustee or the Transferor but shall be borne by
the transferee. Each transferee of a beneficial ownership interest in a
book-entry Certificate shall be deemed to represent that it is not a Plan and is
not acting on behalf of or investing the assets of a Plan.
16
(h) In order to preserve the exemption for resales and transfers provided
by Rule 144A, the Transferor shall provide to any Holder of a Certificate and
any prospective purchaser designated by such Holder, upon request of such Holder
or such prospective purchaser, such information required by Rule 144A as will
enable the resale of such Certificate to be made pursuant to Rule 144A. The
Owner Trustee shall cooperate with the Transferor in providing the Transferor
such information regarding the Certificate, the Trust Property and other matters
regarding the Trust as the Transferor shall reasonably request to meet its
obligations under the preceding sentence.
(i) A Certificate may be transferred in whole but not in part. Any
attempted transfer of the Certificate that would divide the beneficial ownership
in the Trust shall be void.
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (a) any mutilated Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate, and (b) there
shall be delivered to the Certificate Registrar, the Note Insurer and the Owner
Trustee, such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Certificate shall have
been acquired by a bona fide purchaser, the Trust shall execute and the Owner
Trustee, or the Owner Trustee's authenticating agent, shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like class, tenor and denomination. In
connection with the issuance of any new Certificate under this Section, the
Owner Trustee or the Certificate Registrar may require the payment of a sum
sufficient to cover any expense, tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section shall constitute conclusive evidence of an ownership interest in
the Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
SECTION 3.6 Persons Deemed Certificateholder.
--------------------------------
Every Person by virtue of becoming a Certificateholder in accordance with
this Agreement shall be deemed to be bound by the terms of this Agreement. Prior
to due presentation of a Certificate for registration of transfer, the Owner
Trustee, the Certificate Registrar, the Note Insurer and any agent of the Owner
Trustee, the Note Insurer and the Certificate Registrar, may treat the Person in
whose name any Certificate shall be registered in the Certificate Register as
the owner of such Certificate for the purpose of receiving distributions
pursuant to the Sale and Servicing Agreement and the Spread Account Agreement
and for all other purposes whatsoever, and none of the Owner Trustee, the Note
Insurer or the Certificate Registrar nor any agent of the Owner Trustee, the
Note Insurer or the Certificate Registrar shall be bound by any notice to the
contrary.
17
ARTICLE IV
VOTING RIGHTS AND OTHER ACTIONS
SECTION 4.1 Prior Notice with Respect to Certain Matters.
--------------------------------------------
The Owner Trustee shall not take any of the actions set forth below unless
the Owner Trustee shall have notified the Certificateholder and the Note Insurer
of the proposed action and the Certificateholder, with the prior written consent
of the Note Insurer, has approved such action in writing, which approval has
been received by the Owner Trustee by the 30th day after such notice has been
given:
(i) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Trust
Statute);
(ii) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder or the Note Insurer is
required;
(iii) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the
Certificateholders;
(iv) except pursuant to Section 12.01 of the Sale and Servicing
Agreement, the amendment, change or modification of the Sale and Servicing
Agreement.
(v) except as provided in Article IX hereof, dissolve, terminate or
liquidate the Trust in whole or in part;
(vi) do any act which would make it impossible to carry on the
ordinary business of the Trust;
(vii) confess a judgment against the Trust; or
(viii) possess Trust assets, or assign the Trust's right to property,
for other than a Trust purpose;
(ix) cause the Trust to lend any funds to any entity;
(x) change the Trust's purpose and powers from those set forth in this
Agreement; or
(xi) cause the Trust to incur, assume or guaranty any indebtedness
except as set forth in the Basic Documents.
18
SECTION 4.2 Action with Respect to Certain Matters.
---------------------------------------
The Owner Trustee shall not have the power, except upon the written
direction of the Controlling Party, or after the Notes and Reimbursement
Obligations have been paid in full and the expiration of the Note Policy in
accordance with its terms and written notice thereof has been delivered to the
Owner Trustee, the Certificateholder (such directing party, the "Instructing
Party"), and in accordance with the Basic Documents, to (a) remove the Servicer,
the Master Servicer or the Back-up Servicer under the Sale and Servicing
Agreement or (b) except as expressly provided in the Basic Documents, sell the
Receivables after the termination of the Indenture. The Owner Trustee shall take
the actions referred to in the preceding sentence only upon written instructions
signed by the Instructing Party and the furnishing of indemnification
satisfactory to the Owner Trustee by the Certificateholder. Notwithstanding
anything to the contrary set forth in this Agreement, any instruction, direction
or consent to be given by the Controlling Party or Instructing Party under this
Agreement or any other Basic Document to the Owner Trustee shall include a
certification by such Controlling Party or Instructing Party that such Person is
the Controlling Party or Instructing Party in accordance with the provisions of
the Basic Documents, and the Owner Trustee shall have no liability to the extent
it relies in good faith thereon. With respect to instructions to the Owner
Trustee, the Certificateholder agrees to be subordinated to the rights of the
Controlling Party or Instructing Party, as the case may be, as set forth herein
and any fiduciary duties or liabilities of the Owner Trustee to the
Certificateholder in connection therewith shall be deemed waived. However, in no
event shall the Owner Trustee be deemed to owe any fiduciary duties to the
Controlling Party or Instructing Party.
SECTION 4.3 Restrictions on Certificateholder's Power.
-----------------------------------------
(a) The Instructing Party shall not direct the Owner Trustee to take or
refrain from taking any action if such action or inaction would be contrary to
any obligation of the Trust or the Owner Trustee under this Agreement or any of
the Basic Documents or would be contrary to Section 2.3 nor shall the Owner
Trustee follow any direction to the extent the Owner Trustee has actual
knowledge that such direction is in violation hereof.
(b) No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Basic Document, unless the Certificateholder is the Instructing Party
pursuant to Section 6.3 and unless the Certificateholder previously shall have
given to the Owner Trustee a written notice of default and of the continuance
thereof, as provided in this Agreement, and also unless the Certificateholder
shall have made written request upon the Owner Trustee to institute such action,
suit or proceeding in its own name as Owner Trustee under this Agreement and
shall have offered to the Owner Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Owner Trustee, for 30 days after its receipt of such notice,
request, and offer of indemnity, shall have neglected or refused to institute
any such action, suit, or proceeding, and during such 30-day period no request
or waiver inconsistent with such written request has been given to the Owner
Trustee pursuant to and in compliance with this Section or Section 6.3. For the
protection and enforcement of the provisions of this Section, the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.
19
SECTION 4.4 Control.
-------
No Certificateholder shall have any right to vote or in any manner
otherwise control the operation and management of the Trust except as expressly
provided in this Agreement.
SECTION 4.5 Rights of Note Insurer.
----------------------
Notwithstanding anything to the contrary in the Basic Documents, subject to
Section 11.15, without the prior written consent of the Note Insurer (so long as
the Owner Trustee has not received written notice that an Insurer Default shall
have occurred and be continuing), the Owner Trustee shall not (i) remove the
Servicer, the Master Servicer or the Back-up Servicer, (ii) initiate any claim,
suit or proceeding by the Trust or compromise any claim, suit or proceeding
brought by or against the Trust, other than with respect to the enforcement of
any Receivable or any rights of the Trust thereunder, (iii) authorize the merger
or consolidation of the Trust with or into any other statutory trust or other
entity (other than in accordance with Section 3.10 of the Indenture) or (iv)
amend the Certificate of Trust (except as may be required by the Trust Statute).
ARTICLE V
CERTAIN DUTIES
SECTION 5.1 Accounting and Records to the Certificateholder, the Internal
Revenue Service and Others.
---------------------------
The Originator shall (a) maintain (or cause to be maintained) the books of
the Trust on a calendar year basis, (b) deliver (or cause to be delivered) to
each Certificateholder, as may be required by the Code and applicable Treasury
Regulations, such information as may be requested to enable each
Certificateholder to prepare its federal and state income tax returns, and (c)
file or cause to be filed such tax returns relating to the Trust provided to it
in execution form, and pursuant to direction of the Bank make such elections,
except as prohibited by Section 2.11(d), as may from time to time be requested
in connection with any applicable state or federal statute or rule or regulation
thereunder. The Originator shall make all elections pursuant to this Section as
directed in writing by the Bank. The Owner Trustee shall sign all tax
information returns provided to it in execution form pursuant to this Section
and any other returns as may be requested by the Bank, and in doing so shall
rely entirely upon, and shall have no liability for information provided by, or
calculations provided by, the Bank. The Trust shall elect under Section 1278 of
the Code to include in income currently any market discount that accrues with
respect to the Receivables. The Trust shall not make the election provided under
Section 754 of the Code. The Owner Trustee shall not take any action that, to
its actual knowledge, would cause the Trust to be treated as an association
taxable as a corporation under Treasury Regulations Section 301.7701-3(a) for
federal income tax purposes.
20
SECTION 5.2 Signature on Returns; Tax Matters Partner.
-----------------------------------------
(a) The Owner Trustee shall sign on behalf of the Trust the tax returns of
the Trust, if any, unless applicable law requires a Certificateholder to sign
such documents, in which case, as provided in Section 5.1 such documents shall
be signed by the Bank as "tax matter partner".
(b) The Certificateholder hereby elects the Bank as the "tax matters
partner" of the Trust pursuant to Section 6231 of the Code and the Treasury
Regulations promulgated thereunder.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1 General Authority.
-----------------
The Owner Trustee is authorized and directed to execute and deliver on
behalf of the Trust the Basic Documents to which the Trust is named as a party
and each certificate or other document attached as an exhibit to or contemplated
by or incidental to the Basic Documents to which the Trust is named as a party
and any amendment thereto, in each case, in such form as the Transferor shall
approve as evidenced conclusively by the Owner Trustee's execution thereof, and
on behalf of the Trust, to direct the Indenture Trustee to authenticate and
deliver the Notes in the aggregate principal amount of $49,500,000. In addition
to the foregoing, the Owner Trustee is authorized, but shall not be obligated to
the extent the Originator is otherwise obligated pursuant to Section 11.01 of
the Sale and Servicing Agreement, to take all actions required of the Trust
pursuant to the Basic Documents. The Owner Trustee is further authorized from
time to time to take such action as the Instructing Party shall direct in
writing with respect to the Basic Documents so long as such activities are not
in violation of the terms of the Basic Documents. The Instructing Party hereby
agrees not to instruct the Owner Trustee to take any action which is
inconsistent with or in violation of the terms of the Basic Documents.
SECTION 6.2 General Duties.
--------------
It shall be the duty of the Owner Trustee to discharge (or cause to be
discharged) all of its express responsibilities pursuant to the terms of this
Agreement and to administer the Trust in the interest of the registered
Certificateholder, subject to the Basic Documents and in accordance with the
provisions of this Agreement. Notwithstanding the foregoing, the Owner Trustee
shall be deemed to have discharged its duties and responsibilities hereunder and
under the Basic Documents (i) to the extent the Servicer has agreed in the Sale
and Servicing Agreement and/or Section 11.12 hereof to perform any act or to
discharge any duty of the Owner Trustee or the Trust hereunder or under any
Basic Document, and the Owner Trustee shall not be liable for the default or
failure of the Servicer to carry out its obligations under the Sale and
Servicing Agreement and/or Section 11.12 hereof or (ii) to the extent that Owner
Trustee has contracted with a third party acceptable to the Note Insurer to
discharge such duties and responsibilities. The Back-up Servicer, the Master
Servicer, the Trust Collateral Agent and the Transferor shall all be deemed
acceptable to the Note Insurer.
21
It shall also be the duty of the Owner Trustee to cooperate with the Bank
in obtaining and preserving the Trust's qualification to do business in each
jurisdiction in which, based upon the advice of the Bank, such qualification is
or shall be necessary to protect the validity and enforceability of the Basic
Documents and related instruments and agreements, the Notes and the Trust
Property.
SECTION 6.3 Action upon Instruction.
-----------------------
(a) Subject to Article IV and the terms of the Spread Account Agreement,
the Instructing Party shall have the exclusive right to direct the actions of
the Owner Trustee in the management of the Trust, so long as such instructions
are not in violation of the express terms set forth herein or in any Basic
Document. The Instructing Party shall not instruct the Owner Trustee in a manner
inconsistent with this Agreement or the Basic Documents.
(b) The Owner Trustee shall not be required to take any action hereunder or
under any Basic Document if the Owner Trustee shall have reasonably determined,
or shall have been advised by counsel, that such action is likely to result in
liability or unreimbursed expenses on the part of the Owner Trustee or is
contrary to the terms hereof or of any Basic Document or is otherwise contrary
to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction from it as to the course of action to be adopted, and to
the extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Instructing Party received, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Basic Documents, as it shall deem to be in the best interests of the
Certificateholder and shall have no liability to any Person for such action or
inaction except as otherwise expressly provided in this Agreement.
(d) In the event that the Owner Trustee is unsure as to the application of
any provision of this Agreement or any Basic Document or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction from it and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
22
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may, but shall be under no duty to, take or refrain
from taking such action, not inconsistent with this Agreement or the Basic
Documents, as it shall deem to be in the best interests of the Certificateholder
and shall have no liability to any Person for such action or inaction except as
otherwise expressly provided in this Agreement.
SECTION 6.4 No Duties Except as Specified in this Agreement or in
Instructions.
-------------
The Owner Trustee shall not have any duty or obligation to manage, make any
payment with respect to, register, record, sell, dispose of, or otherwise deal
with the Trust Property or act on behalf of the Issuer, or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Owner Trustee or the Issuer is a party, except
as expressly provided by the terms of this Agreement or in any document or
written instruction received by the Owner Trustee pursuant to Section 6.3
hereunder; and no implied duties or obligations shall be read into this
Agreement or any Basic Document against the Owner Trustee. The Owner Trustee
shall have no responsibility for officer's certificates or certificates of
compliance to be executed by the Issuer or for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to prepare or file any filing for the Trust with the Securities and
Exchange Commission or to record this Agreement or any Basic Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any Liens on any part of the
Trust Property that result from actions by, or claims against, the Owner Trustee
(solely in its individual capacity) and that are not related to the ownership or
the administration of the Trust Property.
SECTION 6.5 No Action Except under Specified Documents or Instructions.
----------------------------------------------------------
The Owner Trustee shall not manage, control, use, sell, dispose of or
otherwise deal with any part of the Trust Property except (i) in accordance with
the powers granted to and the authority conferred upon the Owner Trustee
pursuant to this Agreement, (ii) in accordance with the Basic Documents, or
(iii) in accordance with any document or instruction delivered by the
Instructing Party to the Owner Trustee pursuant to Section 6.3 hereunder.
SECTION 6.6 Restrictions.
------------
The Owner Trustee shall not take any action (a) that violates the purposes
of the Trust set forth in Section 2.3 or (b) that, to the actual knowledge of
the Owner Trustee, would result in the Trust's becoming taxable as a corporation
for federal income tax purposes. The Instructing Party shall not direct the
Owner Trustee to take action that would violate the provisions of this Section.
23
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.1 Acceptance of Trusts and Duties.
-------------------------------
The Owner Trustee accepts the trusts hereby created and agrees to perform
its duties hereunder with respect to such trusts but only upon the terms of this
Agreement. The Owner Trustee also agrees to disburse all moneys actually
received by it constituting part of the Trust Property upon the terms of this
Agreement. The Owner Trustee shall not be answerable or accountable in its
individual capacity hereunder or under any Basic Document under any
circumstances, except (i) for its own willful misconduct, bad faith or gross
negligence, (ii) in the case of the inaccuracy of any representation or warranty
contained in Section 7.3 expressly made by the Owner Trustee, (iii) for
liabilities arising from the failure of the Owner Trustee to perform obligations
expressly undertaken by it in the last sentence of Section 6.4 hereof, (iv) for
any profits on 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, and every provision of this Trust Agreement
relating to the conduct or affecting the liability of or affording protection to
the Owner Trustee shall be subject to this Section. 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 or for any information
contained in the Prospectus and the Private Placement Memorandum;
(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, the Servicer or any Certificateholder in accordance
with the terms of this Agreement and the Basic Documents;
(c) no provision of this Agreement or any Basic Document shall require the
Owner Trustee to expend or risk funds or otherwise incur any financial liability
in the performance of any of its rights or powers hereunder or under any Basic
Document if the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness of the Trust evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by the
Transferor 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 Basic Documents, other than the certificate of authentication
on the Certificate, and the Owner Trustee shall in no event assume or incur any
liability, duty or obligation to the Indenture Trustee, the Trust Collateral
Agent, the Note Insurer, any Noteholder or to any Certificateholder, other than
as expressly provided for herein;
24
(f) the Owner Trustee shall not be liable for the default or misconduct of
the Issuer, the Bank, the Transferor, the Indenture Trustee, the Trust
Collateral Agent, the Note Insurer or the Servicer under any of the Basic
Documents or otherwise and the Owner Trustee shall have no obligation or
liability to perform, oversee or otherwise monitor the obligations under this
Agreement or the Basic Documents that are required to be performed by the
Transferor under this Agreement, by the Indenture Trustee under the Indenture,
by the Trust Collateral Agent or the Servicer under the Sale and Servicing
Agreement, or by the Issuer under the Basic Documents, except as expressly set
forth in this Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Basic Document, at the request, order or direction of the
Instructing Party of the Certificateholder, unless such Instructing Party or
Certificateholder has offered to the Owner Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities that
may be incurred by the Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Agreement or in any
Basic Document shall not be construed as a duty, and the Owner Trustee shall not
be answerable for other than its gross negligence, bad faith or willful
misconduct in the performance of any such act.
SECTION 7.2 Furnishing of Documents.
-----------------------
The Owner Trustee shall furnish to the Certificateholder, the Note Insurer
and the Rating Agencies promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.3 Representations and Warranties.
------------------------------
Each of the Owner Trustee and Wilmington Trust hereby represents and
warrants to the Transferor, the Note Insurer (which shall have relied on such
representations and warranties in issuing the Note Policy) and the Holders,
that:
(a) It is a Delaware banking corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware and it holds
all grants, authorizations, consents, orders and approvals from all governmental
authorities of the State of Delaware and under the laws of the State of Delaware
to carry on its trustee business as presently conducted. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.
(b) It has taken all corporate action necessary to authorize the execution
and delivery by it of this Agreement, and this Agreement has been executed and
delivered by one of its authorized signatories who is duly authorized to execute
and deliver this Agreement on its behalf.
25
(c) Neither the execution nor the delivery by it of this Agreement, nor the
consummation by it of the transactions contemplated hereby nor compliance by it
with any of the terms or provisions hereof will contravene any federal or
Delaware state law, governmental rule or regulation governing the banking or
trust powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound or result in the creation or imposition of
any lien, charge or encumbrance on the Trust Property resulting from action by
or claims against Wilmington Trust, except as expressly contemplated by this
Agreement or the Indenture.
(d) The Owner Trustee has no present intent to cause a voluntary bankruptcy
of the Trust.
SECTION 7.4 Reliance; Advice of Counsel.
---------------------------
(a) In the absence of bad faith, willful misconduct or gross negligence,
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 reasonably believed by it to be
genuine and to be signed by the proper party or parties; however, the Owner
Trustee shall examine the same to determine whether or not they conform on their
face to the requirements of this Agreement. The Owner Trustee may accept a
certified copy of a resolution of the board of directors or other governing body
of any corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of the determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer,
secretary or other authorized officers of the relevant party, as to such fact or
matter, and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such persons and according to such opinion not
contrary to this Agreement or any Basic Document.
26
SECTION 7.5 Not Acting in Individual Capacity.
---------------------------------
Except as provided in this Article VII, in accepting the trusts hereby
created, Wilmington Trust acts solely as Owner Trustee hereunder and not in its
individual capacity and all Persons having any claim against the Owner Trustee
by reason of the transactions contemplated by this Agreement or any Basic
Document shall look only to the Trust Property for payment or satisfaction
thereof.
SECTION 7.6 Owner Trustee Not Liable for the Certificate or Receivables.
-----------------------------------------------------------
The recitals contained herein and in the Certificate (other than the
signature and countersignature of the Owner Trustee on the Certificate) shall be
taken as the statements of the Transferor and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Basic Document or of the Certificate (other than the signature and
countersignature of the Owner Trustee on the Certificate) or the Notes, or of
any Receivable or related documents. The Owner Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Receivable, or the perfection and priority of any security
interest created by any Receivable in any Financed Vehicle or the maintenance of
any such perfection and priority, or for or with respect to the sufficiency of
the Trust Property or its ability to generate the payments to be distributed to
the Certificateholder under this Agreement or the Noteholders under the
Indenture, including, without limitation: the existence, condition and ownership
of any Financed Vehicle; the existence and enforceability of any insurance
thereon; the existence and contents of any Receivable on any computer or other
record thereof; the validity of the assignment of any Receivable to the Trust or
of any intervening assignment; the completeness of any Receivable; the
performance or enforcement of any Receivable; the compliance by the Transferor,
the Servicer or any other Person with any warranty or representation made under
any Basic Document or in any related document or the accuracy of any such
warranty or representation or any action of the Trust Collateral Agent or the
Servicer, or any subservicer taken in the name of the Owner Trustee.
SECTION 7.7 Owner Trustee May Own the Certificate and Notes.
-----------------------------------------------
The Owner Trustee in its individual or any other capacity may become the
owner or pledgee of the Certificate or Notes and may deal with the Transferor,
the Trust Collateral Agent and the Servicer in banking transactions with the
same rights as it would have if it were not Owner Trustee.
SECTION 7.8 Payments from Trust Property.
----------------------------
All payments to be made by the Trust Collateral Agent on behalf of the
Trust under this Agreement or any of the Basic Documents to which the Trust or
the Owner Trustee is a party shall be made only from the income and proceeds of
the Trust Property and only to the extent that the Trust Collateral Agent shall
have received income or proceeds from the Trust
27
Property to make such payments in accordance with the terms hereof. Wilmington
Trust, or any successor thereto, in its individual capacity, shall not be liable
for any amounts payable on behalf of the Trust under this Agreement or any of
the Basic Documents to which the Trust or the Owner Trustee is a party.
SECTION 7.9 Doing Business in Other Jurisdictions.
-------------------------------------
Notwithstanding anything contained herein to the contrary, neither
Wilmington Trust or any successor thereto, nor the Owner Trustee shall be
required to take any action in any jurisdiction other than in the State of
Delaware if the taking of such action will, even after the appointment of a
co-trustee or separate trustee in accordance with Section 10.5 hereof, (i)
require the consent or approval or authorization or order of or the giving of
notice to, or the registration with or the taking of any other action in respect
of, any state or other governmental authority or agency of any jurisdiction
other than the State of Delaware; (ii) result in any fee, tax or other
governmental charge under the laws of the State of Delaware becoming payable by
Wilmington Trust (or any successor thereto); or (iii) subject Wilmington Trust
(or any successor thereto) to personal jurisdiction in any jurisdiction other
than the State of Delaware for causes of action arising from acts unrelated to
the consummation of the transactions by Wilmington Trust (or any successor
thereto) or the Owner Trustee, as the case may be, contemplated hereby.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.1 Owner Trustee's Fees and Expenses.
---------------------------------
In accordance with the priorities set forth in Section 5.12(a) of the Sale
and Servicing Agreement, the Owner Trustee shall receive as compensation for its
services hereunder the Owner Trustee Fee, and the Owner Trustee shall be
entitled to be reimbursed in accordance with such priorities for its other
reasonable expenses incurred 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 and under the Basic Documents.
SECTION 8.2 Indemnification.
---------------
Each of the Owner Trustee and Wilmington Trust and its officers, directors,
successors, assigns, agents and servants shall be indemnified by the Bank as and
to the extent set forth in Section 7.03(c) of the Sale and Servicing Agreement.
SECTION 8.3 Payments to the Owner Trustee.
-----------------------------
Any amounts paid to the Owner Trustee pursuant to this Article VIII shall
be deemed not to be a part of the Trust Property immediately after such payment.
28
SECTION 8.4 Non-Recourse Obligations.
------------------------
Notwithstanding anything in this Agreement or any Basic Document, the Owner
Trustee agrees in its individual capacity and in its capacity as Owner Trustee
for the Trust that all obligations of the Trust to the Owner Trustee
individually or as Owner Trustee for the Trust shall be recourse to the Trust
Property only, shall be paid in accordance with the priorities set forth in
Section 5.12(a) of the Sale and Servicing Agreement and specifically shall not
be recourse to the assets of any Holder (except as otherwise provided herein).
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.1 Termination of Trust Agreement.
------------------------------
(a) This Agreement shall terminate and the Trust shall wind up and dissolve
upon the latest of (i) the maturity or other liquidation of the last Receivable
(including the purchase by the Servicer at its option of the corpus of the Trust
as described in Section 10.01 of the Sale and Servicing Agreement) and the
subsequent distribution of amounts in respect of such Receivables as provided in
the Basic Documents and the satisfaction and discharge of the Indenture and the
termination of the Sale and Servicing Agreement, (ii) the payment to the
Certificateholder of all amounts required to be paid to the Certificateholder
pursuant to this Agreement, (iii) the expiration of the Note Policy in
accordance with its terms, and (iv) the payment to each of the Noteholders and
the Note Insurer of all amounts payable to it under the Basic Documents;
provided, however, that the rights to indemnification under Section 8.2 and the
rights of the Owner Trustee under Section 8.1 shall survive the termination of
the Trust and that the winding up of the Trust shall be conducted in accordance
with Section 3808(e) of the Trust Statute. The Transferor or the Servicer shall
promptly notify the Owner Trustee and the Note Insurer in writing of any
prospective termination pursuant to this Section 9.1. The bankruptcy,
liquidation, dissolution, death or incapacity of the Certificateholder shall not
(x) operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or Trust Property nor (z) otherwise affect the rights,
obligations and liabilities of the parties hereto.
(b) Neither the Transferor nor any Certificateholder shall be entitled to
revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which the Certificateholder shall surrender its Certificate to the
Trust Collateral Agent, as paying agent who shall then surrender such
Certificate to the Owner Trustee for cancellation, shall be given by the Owner
Trustee by letter to the Certificateholder mailed within five Business Days of
receipt of notice of such termination from the Servicer given pursuant to
Section 10.01 of the Sale and Servicing Agreement, stating (i) the Distribution
Date upon or with respect to which final payment of the Certificate shall be
made upon presentation and surrender of the Certificate at the office of the
Trust Collateral Agent therein designated, (ii) the amount of any
29
such final payment and (iii) that the Record Date otherwise applicable to such
Distribution Date is not applicable, payments being made only upon presentation
and surrender of the Certificate at the office of the Owner Trustee therein
specified. The Owner Trustee shall give such notice to the Certificate Registrar
(if other than the Owner Trustee), the Note Insurer and the Trust Collateral
Agent at the time such notice is given to the Certificateholder. Upon
presentation and surrender of the Certificate to the Owner Trustee, the Trust
Collateral Agent shall cause to be distributed to the Certificateholder amounts
distributable on such Distribution Date pursuant to Section 5.12(a) of the Sale
and Servicing Agreement.
In the event that the Certificateholder shall not surrender its Certificate
for cancellation within six months after the date specified in the
above-mentioned written notice, the Owner Trustee shall give a second written
notice to the Certificateholder to surrender its Certificate for cancellation
and receive the final distribution with respect thereto. If within one year
after the second notice the Certificate shall not have been surrendered for
cancellation, any funds remaining in the Trust after exhaustion of such remedies
shall be distributed, subject to applicable escheat laws, by the Trust
Collateral Agent to the Transferor and the Certificateholder shall look solely
to the Transferor for payment.
(d) Any funds remaining in the Trust after funds for final distribution
have been distributed or set aside for distribution and reasonable provision has
been made for known claims and obligations of the Trust shall be distributed to
the Certificateholder.
(e) Upon dissolution and the winding up of the Trust pursuant to Section
9.1(a), 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 Trust Statute.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1 Eligibility Requirements for Owner Trustee.
------------------------------------------
The Owner Trustee shall at all times be a corporation or other institution
(i) satisfying the provisions of Section 3807(a) of the Trust Statute; (ii)
authorized to exercise corporate trust powers; (iii) having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authorities and (iv) acceptable to the Note Insurer in its sole
discretion, so long as an Insurer Default shall not have occurred and be
continuing. If such corporation or other institution 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 or other
institution shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 10.2.
30
SECTION 10.2 Resignation or Removal of Owner Trustee.
---------------------------------------
(a) The Owner Trustee may at any time resign and be discharged from the
trusts hereby created by giving 60 days' written notice thereof to the
Transferor, the Note Insurer, the Certificateholder and the Servicer. Upon
receiving such notice of resignation, the Certificateholder shall with the prior
written consent of the Note Insurer use its best efforts promptly to appoint a
successor Owner Trustee in the manner and meeting the qualifications hereinafter
provided by written instrument or instruments delivered pursuant to Section 11.3
to such resigning Owner Trustee and the successor Owner Trustee. Except as
provided in subsection (b) of this Section 10.2, the appointment of any
successor Owner Trustee is subject to the consent and approval of the
Certificateholder. The Certificateholder may remove the Owner Trustee for any
reason and appoint a successor Owner Trustee by written instrument or
instruments delivered to the Owner Trustee so removed and the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
(b) If at any time, the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Certificateholder 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 Certificateholder, with the prior written
consent of the Note Insurer, so long as an Insurer Default shall not have
occurred and be continuing, may remove the Owner Trustee. If the Owner Trustee
shall be removed under the authority of the immediately preceding sentence, the
removing party shall promptly appoint a successor Owner Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
outgoing Owner Trustee so removed, one copy to the Note Insurer, one copy to the
successor Owner Trustee and payment of all fees owed to the outgoing Owner
Trustee.
(c) Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Transferor shall provide notice of such
resignation or removal of the Owner Trustee to the Rating Agencies.
SECTION 10.3 Successor Owner Trustee.
-----------------------
Any successor Owner Trustee appointed pursuant to Section 10.2 shall
execute, acknowledge and deliver to the Transferor, the Note Insurer, the
Servicer 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
31
like effect as if originally named as Owner Trustee. The predecessor Owner
Trustee shall upon payment of its fees and expenses deliver to the successor
Owner Trustee all documents and statements and monies held by it under this
Agreement; and the Transferor and the predecessor Owner Trustee shall execute
and deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the successor Owner
Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Indenture Trustee, the Trust Collateral
Agent, the Note Insurer, the Noteholders and the Rating Agencies. If the
Servicer shall fail to mail such notice within 10 days after acceptance of
appointment by the successor Owner Trustee, the successor Owner Trustee shall
cause such notice to be mailed at the expense of the Servicer. Upon acceptance
of appointment by a successor Owner Trustee pursuant to this Section, such
successor Owner Trustee shall file or cause to be filed an amendment to the
Certificate of Trust of the Secretary of State in the State of Delaware,
identifying its name and place of business in Delaware (the cost of which shall
be borne by the Bank).
SECTION 10.4 Merger or Consolidation of Owner Trustee.
----------------------------------------
Any corporation into which the Owner Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided further that the Owner Trustee shall (i) mail notice of such merger or
consolidation to the Note Insurer and the Rating Agencies and (ii) file an
amendment to the Certificate of Trust as required under Section 10.3 above.
SECTION 10.5 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions of this Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Property or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Note 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
32
trusts as the Servicer and the Owner Trustee may consider necessary or
desirable. If the Servicer shall not have joined in such appointment within 15
days after the receipt by it of a request so to do, the Owner Trustee shall have
the power to make such appointment with the consent of the Note Insurer. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to Section 10.1 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Owner Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Servicer and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee and a
copy thereof given to the Servicer and a copy to the Note 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.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Supplements and Amendments.
--------------------------
(a) This Agreement may be amended by the Transferor and the Owner Trustee,
with the prior written consent of the Note Insurer and with prior written notice
to the Rating Agencies, without the consent of any of the Noteholders or the
Certificateholder, (i) to cure any ambiguity or defect or (ii) to add any other
provisions with respect to matters or questions arising under this Agreement
that shall not be inconsistent with the provisions of this Agreement; provided,
however, that any such action set forth in clause (ii) above shall not, as
evidenced by an Opinion of Counsel delivered to the Owner Trustee, the Rating
Agencies and the Note Insurer, which may be based upon a certificate of the
Servicer, affect in any respect the interests of any Noteholder or
Certificateholder.
(b) This Agreement may also be amended from time to time, with the prior
written consent of the Note Insurer, by the Transferor and the Owner Trustee,
with prior written notice to the Rating Agencies, to the extent such amendment
affects the interest of the Noteholders, with the consent of the Noteholders
holding not less than 51% of the outstanding Note Balance, and the consent of
the Certificateholder (which consent of any Holder of a Certificate or Note
given pursuant to this Section or pursuant to any other provision of this
Agreement shall be conclusive and binding on such Holder and on all future
Holders of such Certificate or Note and of any Certificate or Note issued upon
the transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Certificate or Note) for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement other than under (a) above or of modifying in any
manner the rights of the Noteholders or the Certificateholder; provided,
however, that, subject to the express rights of the Note Insurer under the Basic
Documents no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made for the benefit
of the Noteholders or the Certificateholders or (b) reduce the aforesaid
percentage of the outstanding Note Balance required to consent to any such
amendment, without the consent of the Holders of all the outstanding Notes.
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder, the Note Insurer, the Indenture Trustee, the
Trust Collateral Agent, the Collateral Agent and each of the Rating Agencies.
It shall not be necessary for the consent of the Certificateholder or the
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of the Certificateholder provided for in this Agreement or in any
other Basic Document) and of evidencing the authorization of the execution
thereof by the Certificateholder shall be subject to such reasonable
requirements as the
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Owner Trustee may prescribe. Promptly after the execution of any amendment to
the Certificate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee and the Note Insurer 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, that all conditions
precedent to the execution and delivery of such amendment have been satisfied
and that any such amendment would not result in the Trust becoming taxable as a
corporation for federal income tax purposes. The Owner Trustee may, but shall
not be obligated to, enter into any such amendment which affects the Owner
Trustee's own rights, duties or immunities under this Agreement or otherwise.
SECTION 11.2 Limitations on Rights of Others.
-------------------------------
The provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Transferor, the Certificateholders, the Servicer, the Note Insurer
and, to the extent expressly provided herein, the Indenture Trustee, the Trust
Collateral Agent, the Collateral Agent and the Noteholders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Trust Property or
under or in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 11.3 Notices.
-------
(a) Unless otherwise expressly specified or permitted by the terms hereof,
all notices shall be in writing and shall be deemed given upon receipt
personally delivered, delivered by overnight courier or mailed first class mail
or certified mail, in each case return receipt requested, and shall be deemed to
have been duly given upon receipt, if to the Owner Trustee, addressed to the
Corporate Trust Office; if to the Transferor, addressed to United Fidelity
Finance, LLC Attention: President, if to the Note Insurer, addressed to
Financial Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000,
Attention: Transaction Oversight, Re: United Fidelity Auto Receivables Trust
2002-A (in each case in which notice or other communication to Financial
Security Assurance, Inc. refers to an Event of Default, a claim on the Note
Policy or with respect to which failure on the part of Financial Security
Assurance, Inc. 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 of the Financial Guaranty Group,
marked "URGENT MATERIAL ENCLOSED"); if to the Rating Agencies, addressed to
Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or
Standard & Poor's, a division of The XxXxxx-Xxxx Companies, 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 respectively, if to the Indenture Trustee, the Trust
Collateral Agent, the Collateral Agent, the Servicer, the Back-up Servicer or
the Master Servicer, addressed to each respective entity as set forth in the
notice provisions of the Basic Documents, or, as to each party, at such other
address as shall be designated by such party in a written notice to each other
party.
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(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
SECTION 11.4 Severability.
------------
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 11.5 Separate Counterparts.
---------------------
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
SECTION 11.6 Assignments.
-----------
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
SECTION 11.7 Note Insurer.
------------
Without limiting the generality of the foregoing, all covenants and
agreements in this Agreement which confer rights upon the Note Insurer shall be
for the benefit of and run directly to the Note Insurer, and the Note Insurer
shall be entitled to rely on and enforce such covenants and agreements, subject,
however, to the limitations on such rights provided in this Agreement and the
Basic Documents. The Note Insurer may disclaim any of its respective 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 11.8 No Petition.
-----------
The Owner Trustee (in its individual capacity and as Owner Trustee), by
entering into this Agreement, each Certificateholder, by accepting a
Certificate, and the Indenture Trustee and each Noteholder by accepting the
benefits of this Agreement, hereby covenants and agrees that they will not at
any time institute against the Transferor or the Trust, or join in any
institution against the Transferor or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law in connection
with any obligations relating to the Certificate, the Notes, this Agreement or
any of the Basic Documents.
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SECTION 11.9 No Recourse.
-----------
Each Certificateholder, by accepting a Certificate, acknowledges that such
Certificateholder's Certificate represents a 100% beneficial interest in the
assets of the Trust only and does not represent an interest in or obligation of
the Transferor, the Servicer, the Back-up Servicer, the Master Servicer, the
Originator, the Owner Trustee, the Indenture Trustee, the Note Insurer, the
Collateral Agent, the Trust Collateral Agent or any Affiliate thereof and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated in this Agreement, the Certificate or the
Basic Documents.
SECTION 11.10 Headings.
--------
The headings of the various Articles and Sections herein are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 11.11 GOVERNING LAW.
-------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
SECTION 11.12 The Bank.
--------
The Bank, as administrator of the Trust, is authorized to prepare, or cause
to be prepared, execute and deliver on behalf of the Trust all such documents,
reports, filings, instruments, certificates, tax returns and opinions and take
such action as it shall be the duty of the Trust or Owner Trustee to prepare,
file, deliver or take pursuant to the Basic Documents. Upon written request, the
Owner Trustee shall execute and deliver to the Bank a limited power of attorney
appointing the Bank the Trust's agent and attorney-in-fact to prepare, or cause
to be prepared, execute and deliver all such documents, reports, filings,
instruments, certificates and opinions. It is acknowledged that the Owner
Trustee's role is that of a passive trustee and that the fees being charged by
the Owner Trustee are not intended to compensate the Owner Trustee for
performing the duties described in the first sentence of this paragraph, it
being understood that such duties are not the responsibility of the Owner
Trustee.
SECTION 11.13 No Legal Title to Trust Property in Certificateholder.
-----------------------------------------------------
The Certificateholder shall not have legal title to any part of the Trust
Property. The Certificateholder shall be entitled to receive distributions only
in accordance with the Sale and Servicing Agreement, the Spread Account
Agreement and this Agreement. No transfer, by operation of law or otherwise, of
any right, title or interest of the Certificateholder to and in its ownership
interest in the Trust Property shall operate to terminate this Agreement or the
trusts hereunder or entitle any transferee to an accounting or to the transfer
to it of legal title to any part of the Trust Property.
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SECTION 11.14 Bankruptcy Matters.
------------------
Neither the Certificateholder nor any party to this Agreement shall not (i)
take any action to cause the Trust to dissolve in whole or in part; (ii)
institute the filing of a bankruptcy petition based upon any claim in its favor
arising hereunder or under the Basic Documents; (iii) file a petition or consent
to a petition seeking relief on behalf of the Trust under bankruptcy laws; (iv)
consent to the appointment of any trustee, receiver, conservator, assignee,
sequestrator, custodian, liquidator (or other similar official) of the Trust or
a substantial portion of the property of the Trust; or (v) cause the Trust to
make any general assignment for the benefit of creditors of the Trust or take
any action in furtherance of any of the above actions unless the
Certificateholder and the Indenture Trustee shall have provided their written
consent.
SECTION 11.15 Effect of Policy Expiration Date.
Notwithstanding anything to the contrary set forth herein, all references
to any right of the Note Insurer to direct, appoint, consent to, accept, approve
of, take or omit to take any action under this Agreement or any other Basic
Document shall be inapplicable at all times after the Policy Expiration Date,
and (i) if such reference provides for another party or parties to take or omit
to take any such action following an Insurer Default, such party or parties
shall also be entitled to take or omit to take such action following the Policy
Expiration Date and (ii) if such reference does not provide for another party or
parties to take or omit to take any such action following an Insurer Default,
then the Indenture Trustee acting at the direction of the Majority Noteholders
shall have the right to take or omit to take any such action following the
Policy Expiration Date. In addition, any other provision of this Agreement or
any other Basic Document which is operative based in whole or in part on whether
an Insurer Default has or has not occurred shall, at all times on or after the
Policy Expiration Date, be deemed to refer to whether or not the Policy
Expiration Date has occurred.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed by their respective officers hereunto duly authorized as of the
day and year first above written.
WILMINGTON TRUST COMPANY,
as Owner Trustee
By: /s/ Xxxxxx X. XxxXxxxxx
----------------------------
Name: Xxxxxx X. XxxXxxxxx
-------------------------
Title: Vice President
-------------------------
UNITED FIDELITY FINANCE, LLC,
as Transferor
By: /s/ Xxxxxx X. Xxxx
----------------------------
Name: Xxxxxx X. Xxxx
-------------------------
Title: President
-------------------------
[Signature Page to the Trust Agreement]
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