EXHIBIT 4(f)(52)
AMENDED AND RESTATED TRUST AGREEMENT
between
CREDIT ACCEPTANCE FUNDING LLC 2003-1
Seller
and
WACHOVIA BANK OF DELAWARE, NATIONAL ASSOCIATION
Owner Trustee
Dated as of June 27, 2003
TABLE OF CONTENTS
Page
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ARTICLE I Definitions............................................................................................... 1
SECTION 1.1. Capitalized Terms................................................................................... 1
SECTION 1.2. Other Definitional Provisions....................................................................... 3
ARTICLE II Organization.............................................................................................. 4
SECTION 2.1. Declaration of Trust; Name.......................................................................... 4
SECTION 2.2. Office.............................................................................................. 4
SECTION 2.3. Purposes and Powers................................................................................. 4
SECTION 2.4. Appointment of Owner Trustee........................................................................ 5
SECTION 2.5. Capital Contribution of Trust Estate................................................................ 5
SECTION 2.6. Status of Trust Under Statutory Trust Act; Certain Income Tax Matters............................... 5
SECTION 2.7. Liability of Seller................................................................................. 6
SECTION 2.8. Appointment of Trust Collateral Agent; Title to Trust Property...................................... 6
SECTION 2.9. Situs of Trust...................................................................................... 7
SECTION 2.10. Representations and Warranties of the Seller........................................................ 7
SECTION 2.11. Federal Income Tax Treatment of the Trust........................................................... 8
SECTION 2.12. Covenants of the Seller............................................................................. 9
SECTION 2.13. Covenants of the Certificateholders................................................................. 12
ARTICLE III Certificates and Transfer of Interests.................................................................... 13
SECTION 3.1. Initial Ownership................................................................................... 13
SECTION 3.2. The Certificates.................................................................................... 13
SECTION 3.3. Authentication of Certificates...................................................................... 13
SECTION 3.4. Registration of Transfer and Exchange of Certificates............................................... 13
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates................................................... 15
SECTION 3.6. Persons Deemed Certificateholders................................................................... 15
SECTION 3.7. Access to List of Certificateholders' Names and Addresses........................................... 15
SECTION 3.8. Distributions....................................................................................... 16
SECTION 3.9. ERISA Restrictions.................................................................................. 16
ARTICLE IV Voting Rights and Other Actions........................................................................... 16
SECTION 4.1. Prior Notice to Holders with Respect to Certain Matters............................................. 16
SECTION 4.2. Action by Certificateholders with Respect to Certain Matters........................................ 19
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy............................................. 19
SECTION 4.4. Restrictions on Certificateholders' Power........................................................... 19
SECTION 4.5. Majority Control.................................................................................... 20
SECTION 4.6. Rights of the Class A Insurer....................................................................... 20
ARTICLE V Certain Duties............................................................................................ 21
SECTION 5.1. Accounting and Records to the Certificateholders, the Internal Revenue Service and Others........... 21
SECTION 5.2. Signature on Returns; Tax Matters Partner........................................................... 21
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ARTICLE VI Authority and Duties of Owner Trustee...................................................................... 21
SECTION 6.1. General Authority.................................................................................... 21
SECTION 6.2. General Duties....................................................................................... 22
SECTION 6.3. Action upon Instruction.............................................................................. 22
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......................................................................................... 24
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 Certificates or Contracts............................................... 27
SECTION 7.7. Owner Trustee May Own Certificates 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........................................................................ 29
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..................................................... 31
SECTION 10.1. Eligibility Requirements for Owner Trustee........................................................... 31
SECTION 10.2. Resignation or Removal of Owner Trustee.............................................................. 31
SECTION 10.3. Successor Owner Trustee.............................................................................. 32
SECTION 10.4. Merger or Consolidation of Owner Trustee............................................................. 33
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee........................................................ 33
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; Class A Insurer......................................................................... 36
SECTION 11.7. No Petition.......................................................................................... 36
SECTION 11.8. No Recourse.......................................................................................... 37
SECTION 11.9. Headings............................................................................................. 37
SECTION 11.10. GOVERNING LAW........................................................................................ 37
SECTION 11.11. Servicer............................................................................................. 37
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SECTION 11.12. Class A Insurer Control Rights....................................................................... 37
EXHIBITS
EXHIBIT A FORM OF CERTIFICATE
EXHIBIT B FORM OF CERTIFICATE OF TRUST
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This AMENDED AND RESTATED TRUST AGREEMENT dated as of June 27, 2003
between CREDIT ACCEPTANCE FUNDING LLC 2003-1, a Delaware limited liability
company (the "Seller"), and WACHOVIA BANK OF DELAWARE, NATIONAL ASSOCIATION, a
national banking association, as Owner Trustee (solely in such capacity and not
in its individual capacity, the "Owner Trustee").
PRELIMINARY STATEMENT
The Owner Trustee has executed and caused to be filed with the Delaware
Secretary of State the Certificate of Trust relating to the Trust, on June 9,
2003. The Owner Trustee and the Seller heretofore entered into an Interim Trust
Agreement dated June 9, 2003 relating to the Trust and desire to enter into this
Amended and Restated Trust Agreement in order to amend and restate such Interim
Trust Agreement.
ARTICLE I
Definitions
SECTION 1.1. Capitalized Terms.
For all purposes of this Agreement, the following terms shall have the
meanings set forth below:
"Agreement" shall mean this Amended and Restated Trust Agreement, as
the same may be amended and supplemented from time to time.
"Basic Documents" has the meaning set forth in the Sale and Servicing
Agreement.
"Backup Servicer" shall mean Systems & Services Technologies, Inc.
"Benefit Plan" shall have the meaning assigned to such term in Section
3.9.
"Certificate" means a Trust Certificate.
"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 for the
Trust filed on June 9, 2003, as amended and /or restated from time to time, a
copy of which is attached hereto as Exhibit B.
"Certificate Register" and "Certificate Registrar" shall mean the
register mentioned and the registrar appointed pursuant to Section 3.4.
"Class A Insurer" shall mean Radian Asset Assurance Inc., or its
successor in interest.
"Class A Termination Date" shall mean the date on which all amounts
owing to the Class A Noteholders and, as certified in writing by the Class A
Insurer to the Owner Trustee, all amounts owing to the Class A Insurer under the
Basic Documents shall be paid in full.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee located at One ▇▇▇▇▇▇
Square, 920 No. King Street, 1st Floor, Wilmington, Delaware 19801 or at such
other address as the Owner Trustee may designate by notice to the
Certificateholders, the Class A Insurer and the Seller, or the principal
corporate trust office of any successor Owner Trustee (the address of which the
successor owner trustee will notify the Certificateholders, the Class A Insurer,
and the Seller).
"Credit Acceptance" means Credit Acceptance Corporation, a Michigan
corporation.
"ERISA" shall have the meaning assigned to such term in Section 3.9.
"Expenses" shall have the meaning assigned to such term in Section 8.2.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Certificate is registered on the Certificate Register.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Indenture" shall mean the Indenture dated as of June 27, 2003, between
Credit Acceptance Auto Dealer Loan Trust 2003-1 (the "Issuer") and JPMorgan
Chase Bank, as the Indenture Trustee, as the same may be amended and
supplemented from time to time in accordance with the provisions thereof.
"Majority Certificateholders" shall have the meaning specified in
Section 4.5 hereof.
"Owner Trustee" shall mean Wachovia Bank of Delaware, National
Association, a national banking association, not in its individual capacity but
solely as owner trustee under this Agreement, and any successor Owner Trustee
hereunder.
"Percentage Interest" means, with respect to any Certificates, the
undivided percentage ownership of the Certificates evidenced by such
Certificate, as set forth in such Certificate.
"Record Date" means, with respect to a Distribution Date, the last day
of the calendar month preceding such Distribution Date; provided that the Record
Date with respect to the First Distribution Date shall be the Closing Date.
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"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement among the Trust, the Seller, the Servicer, the Trust Collateral Agent
and Backup Servicer, dated as of June 27, 2003, as the same may be amended and
supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Securityholders" shall mean the Certificateholders and the Class A
Noteholders.
"Seller" shall mean Credit Acceptance Funding LLC 2003-1 in its
capacity as Seller hereunder.
"Statutory Trust Act" 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.
"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 Certificate" means a Certificate evidencing the beneficial
interest of a Certificateholder in the Trust, substantially in the form of
Exhibit A attached hereto.
"Trust Collateral Agent" shall mean, initially, JPMorgan Chase Bank, 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
of the Sale and Servicing Agreement, all of which such property and rights have
been and will be, collaterally assigned to the Indenture Trustee pursuant to the
Granting Clause of the Indenture, all funds on deposit from time to time in the
Trust Accounts and all other property of the Trust from time to time, including
any rights of the Owner Trustee and the Trust pursuant to the Sale and Servicing
Agreement, all of which such property and rights have been and will be, so
collaterally assigned to the Indenture Trustee.
SECTION 1.2. Other Definitional Provisions.
(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.
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(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.
There is hereby formed a trust to be known as "Credit Acceptance Auto
Dealer Loan Trust 2003-1", in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust, and ▇▇▇ and be sued.
SECTION 2.2. Office.
The office of the Trust shall be in care of the Owner Trustee at the
Corporate Trust Office or at such other address as the Owner Trustee may
designate by written notice to the Certificateholders, the Class A Insurer and
the Seller.
SECTION 2.3. Purposes and Powers.
(a) The purpose of the Trust is, and the Trust shall have
the power and authority, to engage in the following activities:
(i) to issue the Class A Notes pursuant to the
Indenture and the Certificates pursuant to this Agreement, and to sell
the Class A Notes and the Certificates;
(ii) with the proceeds of the sale of the Class A
Notes and the Certificates, to fund the Reserve Account and to pay the
organizational, start-up and
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transactional expenses of the Trust and to pay the balance to the
Seller pursuant to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage
and convey the Trust Property to the Trust Collateral Agent pursuant to
the Sale and Servicing Agreement for the benefit of the
Securityholders, the Class A Insurer and the Seller pursuant to the
terms of the Sale and Servicing Agreement;
(iv) to enter into, execute 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;
(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 Certificateholders, the Class A Insurer and the
Class A Noteholders; and
(vii) at any time to enter into derivatives
transactions.
The Trust is hereby authorized to engage in the foregoing activities.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Agreement
or the Basic Documents.
SECTION 2.4. Appointment of Owner Trustee.
Pursuant to the Interim Trust Agreement, the Seller appointed the Owner
Trustee as trustee of the Trust effective as of the date of the Interim Trust
Agreement, to have all the rights, powers and duties set forth therein. The
Owner Trustee by its execution hereof accepts and confirms such appointment and
shall have all of the rights, powers and duties set forth herein and therein.
SECTION 2.5. Capital Contribution of Trust Estate.
Pursuant to the Interim Trust Agreement, the Seller sold, assigned,
transferred, conveyed and set over to the Owner the sum of $1.00. The Owner
Trustee hereby acknowledges receipt in trust from the Seller, as of the date of
the Interim Trust Agreement, 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 Statutory Trust Act; Certain Income
Tax Matters.
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 use and
benefit of the Securityholders, the Class A Insurer and the Seller, subject to
the obligations of the Trust under Basic Documents.
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It is the intention of the parties hereto that the Trust constitute a statutory
trust under the Statutory Trust Act and that this Agreement constitute the
governing instrument of such statutory trust. Should the Certificates be held by
more than one Holder, it is the intention of the parties hereto that, solely for
income and franchise tax purposes, the Trust shall be treated as a partnership
with the owners of the Certificates being partners in such partnership for
federal income tax purposes. The parties agree that, unless otherwise required
by appropriate tax authorities, the Trust and the owners of the Certificates,
provided that there is more than one owner of such Certificates, will file or
cause to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as a partnership for such tax
purposes. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and duties set forth herein and to the extent not inconsistent
herewith, in the Statutory Trust Act with respect to accomplishing the purposes
of the Trust. The Owner Trustee shall file the Certificate of Trust with the
Secretary of State.
SECTION 2.7. Liability of Seller.
The Seller shall pay organizational expenses of the Trust as they may
arise or shall, upon the request of the Owner Trustee and upon receipt of
documentation or invoices therefor, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
SECTION 2.8. Appointment of Trust Collateral Agent; Title to Trust
Property.
(a) [Reserved]
(b) The specific rights, duties and obligations of the
Trust Collateral Agent shall be as set forth in the Sale and Servicing
Agreement. Upon the issuance of the Class A Notes and the Certificates, the
Seller 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 lien of 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, a
co-trustee and/or a separate trustee, in which case title shall be deemed to be
vested in the Owner Trustee or a separate trustee, as the case may be. The
Holders shall not have legal title to any part of the Trust Property. The
Holders shall be entitled to receive distributions with respect to their
beneficial ownership interest therein only in accordance with Article V of the
Sale and Servicing Agreement and Article IX hereof. No transfer, by operation of
law or otherwise, of any right, title or interest by any Certificateholder of
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.
(d) Pursuant to Section 3803 of the Statutory Trust Act,
the Holders 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.
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SECTION 2.9. Situs of Trust.
The Trust will be located and administered 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 Servicer, the Backup Servicer,
or any agent of the Trust from having employees within or without the State of
Delaware. The only office of the Trust will be at the Corporate Trust Office in
Delaware.
SECTION 2.10. Representations and Warranties of the Seller.
The Seller makes the following representations and warranties on which
the Owner Trustee relies in accepting the Trust Property in trust and issuing
the Certificates and on which the Class A Insurer relies in issuing the Class A
Note Insurance Policy.
(a) Organization and Good Standing. The Seller 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.
(b) Due Qualification. The Seller 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 Seller 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 Seller has full
power and authority to sell and assign the property to be sold and assigned to
and deposited with the Trust and the Seller 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 Seller by all necessary
action.
(d) Enforceability. The Seller 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 Seller, enforceable
against Seller in accordance with their terms, and subject to applicable
bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and
similar laws now or hereafter in effect relating to creditors' rights generally
or the rights of creditors of banks the deposit accounts of which are insured by
the Federal Deposit Insurance Corporation and subject to general principles of
equity (whether applied in a proceeding at law or in equity).
(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 of this Agreement and the Basic Documents,
except for such as have been obtained, effected or made.
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(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 the limited liability company agreement of the Seller, or any
material indenture, agreement or other instrument to which the Seller 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 Seller of any
court or of any federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Seller or its
properties.
(g) No Proceedings. There are no proceedings or
investigations pending or, to the Seller's knowledge, threatened against the
Seller before any court, regulatory body, administrative agency or other
tribunal or governmental instrumentality having jurisdiction over it or its
properties (A) asserting the invalidity of this Agreement or any of the Basic
Documents, (B) seeking to prevent the issuance of the Certificates or the Class
A 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 Certificates or the Class A Notes.
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) Neither the Owner Trustee nor any Certificateholder
will, under any circumstances, and at any time, make an election on IRS Form
8832 or otherwise, to classify the Trust as an association taxable as a
corporation for federal, state or any other applicable tax purpose.
(c) 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.
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SECTION 2.12. Covenants of the Seller.
The Seller agrees and covenants for the benefit of each Holder, the
Class A Insurer and the Owner Trustee, during the term of this Agreement, and to
the fullest extent permitted by applicable law, that:
(a) it shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as permitted by
its certificate of formation and 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, 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 the occurrence of the event
specified in Section 9.1(e) such counterparty shall not institute against, or
join any other Person in instituting against, it or the Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the
United States;
(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,
dissolve, 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, 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;
(e) the Seller is a limited purpose limited liability
company whose activities are restricted in its certificate of formation and
limited liability company agreement to activities related to purchasing or
otherwise acquiring Dealer Loans and related collateral, and related assets and
rights and conducting any related or incidental business or activities it deems
necessary or appropriate to carry out its primary purpose, including entering
into agreements such as the Basic Documents;
(f) the Seller has not engaged, and does not presently
engage, in any activity other than those activities expressly permitted
hereunder and under the other Basic
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Documents, nor has the Seller entered into any agreement other than this Trust
Agreement, the other Basic Documents to which it is a party, and with the prior
written consent of the Class A Noteholders, any other agreement necessary to
carry out more effectively the provisions and purposes hereof or thereof;
(g) (A) the Seller maintains its own deposit account or
accounts, separate from those of any of its Affiliates, with commercial banking
institutions, (B) the funds of the Seller are not and have not been diverted to
any other Person or for other than the corporate use of the Seller, and (C)
except as may be expressly permitted by this Trust Agreement, the funds of the
Seller are not and have not been commingled with those of any of its Affiliates;
(h) to the extent that the Seller contracts or does
business with vendors or service providers where the goods and services provided
are partially for the benefit of any other Person, the costs incurred in so
doing are fairly allocated to or among the Seller and such entities for whose
benefit the goods and services are provided, and each of the Seller and each
such entity bears its fair share of such costs; and, all material transactions
between the Seller and any of its Affiliates shall be only on an arms-length
basis;
(i) the Seller maintains a principal executive and
administrative office through which its business is conducted and a telephone
number and stationery through which all business correspondence and
communication are conducted, in each case separate from those of the Originator
and its Affiliates, or, if it shares office space with the Originator or any of
its Affiliates, it shall allocate fairly and reasonably any overhead and expense
for such shared office space;
(j) the Seller conducts its affairs strictly in
accordance with its certificate of formation and limited liability company
agreement and observes all necessary, appropriate and customary limited
liability company formalities, including (A) holding all regular and special
meetings appropriate to authorize all limited liability company action (which,
in the case of regular meetings, are held at least annually), (B) keeping
separate and accurate minutes of such meetings, (C) passing all resolutions or
consents necessary to authorize actions taken or to be taken, and (D)
maintaining accurate and separate books, records and accounts, including
intercompany transaction accounts;
(k) all decisions with respect to its business and daily
operations are independently made by the Seller (although the officer making any
particular decision may also be an employee, officer or director of an Affiliate
of the Seller) and are not dictated by any Affiliate of the Seller (it being
understood that the Servicer, which is an Affiliate of the Seller, will
undertake and perform all of the operations, functions and obligations of it set
forth herein and it may appoint sub-servicers, which may be Affiliates of the
Seller, to perform certain of such operations, functions and obligations);
(l) the Seller acts solely in its own limited liability
company name and through its own authorized officers and agents, which can also
be officers and agents of an Affiliate;
10
(m) no Affiliate of the Seller advances funds to the
Seller, other than as is otherwise provided herein or in the other Basic
Documents, and no Affiliate of the Seller otherwise supplies funds to, or
guaranties debts of, the Seller; provided, however, that an Affiliate of the
Seller may provide funds to the Seller in connection with the capitalization of
the Seller;
(n) other than organizational expenses and as expressly
provided herein or in its certificate of formation and limited liability company
agreement, the Seller pays all expenses, indebtedness and other obligations
incurred by it;
(o) the Seller does not guarantee, and is not otherwise
liable, with respect to any obligation of any of its Affiliates;
(p) any financial reports required of the Seller comply
with GAAP and are issued separately from, but may be consolidated with, any
reports prepared for any of its Affiliates;
(q) at all times the Seller is adequately capitalized to
engage in the transactions contemplated in its certificate of formation;
(r) the financial statements and books and records of the
Seller reflect the separate corporate existence of the Seller;
(s) the Seller does not act as agent for any Affiliates
of itself, but instead presents itself to the public as a limited liability
company separate from each such entity and independently engaged in the business
of purchasing and financing Contracts;
(t) the Seller shall at all times have at least two
independent directors (each an "Independent Director). An Independent Directors
shall be any person who (a) is not and has not been (i) a stockholder, officer,
director (except in its capacity as Independent Directors of the Seller),
partner, member or employee of the Seller's ultimate parent or any Subsidiaries
or Affiliates thereof or of a significant customer, creditor, supplier or
independent contractor of the Seller, its ultimate parent or any Subsidiaries or
Affiliates thereof, and is not himself such a significant customer, creditor,
supplier or independent contractor, or (ii) a member of the immediate family of
any person described above, and (b) does not directly or indirectly own any
class of voting securities of the Seller or any of its Subsidiaries or
Affiliates. As used in this covenant of the Seller, the terms "Affiliate" and
"Subsidiary" shall have the meanings ascribed thereto in the limited liability
company agreement of the Seller as of the date of this Agreement;
(u) the certificate of formation or limited liability
company agreement of the Seller require the affirmative vote of the independent
directors before a voluntary petition under Section 301 of the Bankruptcy Code
may be filed by the Seller, and the Seller to maintain correct and complete
books and records of account and minutes of the meetings and other proceedings
of its board of directors; and
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(v) the Seller acknowledges that the parties hereto are
entering into this Trust Agreement and the other Basic Documents in reliance
upon the Seller being, on the Closing Date and at all times during the term of
this Trust Agreement, a limited purpose entity.
SECTION 2.13. Covenants of the Certificateholders.
Each Certificateholder by becoming a beneficial owner of the
Certificate agrees:
(a) to be bound by the terms and conditions of the
Certificates of which such Certificateholder is the beneficial owner and of this
Agreement, including any supplements or amendments hereto 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 Class A Insurer and all other
Certificateholders present and future;
(b) to the appointment of the Seller 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) that all transactions and agreements between the
Trust on the one hand, and any of the Owner Trustee, the Indenture Trustee, the
Trust Collateral Agent, the Seller and any Certificateholder on the other hand,
shall reflect the separate legal existence of each entity and will be formally
documented in writing;
(d) not to take any position in such Certificateholder's
tax returns inconsistent with those taken in any tax returns filed by the Trust;
(e) 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
(f) 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 Seller to be adjudicated a bankrupt or
insolvent, or consent to the institution of bankruptcy or insolvency proceedings
against the Trust or the Seller, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trust or the Seller or
a substantial part of its property, or cause or permit the Trust or the Seller
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.
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ARTICLE III
Certificates and Transfer of Interests
SECTION 3.1. Initial Ownership.
Effective upon the formation of the Trust by the contribution by the
Seller pursuant to Section 2.5, the Seller shall be deemed to have acquired and
to have become the owner of a 100% interest in the Trust and at all times prior
to the issuance of any Certificates pursuant to Section 3.3 shall be the sole
beneficial owner and beneficiary of the Trust.
SECTION 3.2. The Certificates.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of authentication and
delivery of such Certificates. 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 provided,
that the number of Certificateholders at no time may exceed 95. Notwithstanding
the provisions of Section 3.4 hereof, if the Seller is the Holder of a
Certificate, it shall not pledge, sell, transfer, assign or convey such
Certificate without the consent of the Class A Insurer, until the earlier of:
(i) the Class A Termination Date; and (ii) the date on which Credit Acceptance
is no longer Servicer under the Sale and Servicing Agreement.
SECTION 3.3. Authentication of Certificates.
Concurrently with the initial sale of the Contracts and other Trust
Property to the Trust pursuant to Section 2.01 of the Sale and Servicing
Agreement, the Owner Trustee shall cause one or more Certificates having the
respective Percentage Interests (in the aggregate not to exceed 100%) specified
in writing by the Seller to be authenticated, issued and delivered to or upon
the written order of the Seller, signed by its president or any vice president,
any assistant treasurer or any assistant secretary without further action by the
Seller. 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, by manual signature; such
authentication shall constitute conclusive evidence that such Certificate shall
have been duly authenticated and delivered hereunder. All Certificates shall be
dated the date of their authentication.
SECTION 3.4. Registration of Transfer and Exchange of Certificates.
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 Certificates and of transfers and
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exchanges of Certificates as herein provided. Wachovia Bank of Delaware,
National Association, shall be the initial Certificate Registrar.
The Certificate Registrar shall provide the Indenture Trustee, the
Trust Collateral Agent and the Class A Insurer with a list of the names and
addresses of the Certificateholders 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
Certificates, the Certificate Registrar shall notify the Indenture Trustee, the
Trust Collateral Agent and the Class A Insurer of the name and address of the
transferee in writing, by facsimile, on the day of such transfer.
Upon surrender for registration of transfer of any Certificate at the
Corporate Trust Office, the Owner Trustee shall execute, authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Certificates in authorized denominations of a like class and aggregate face
amount dated the date of authentication by the Owner Trustee or any
authenticating agent. At the option of a Holder, Certificates may be exchanged
for other Certificates of the same class in authorized denominations of a like
aggregate amount upon surrender of the Certificates to be exchanged at the
Corporate Trust Office.
Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP. 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 Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Certificates have not been registered under the Securities Act or
any state securities law. Subject to the provisions of Section 3.1 hereof, the
Certificate Registrar shall not register the transfer of any Certificate or
unless such resale or transfer is: (i) pursuant to an effective registration
statement under the Securities Act; (ii) to the Seller; or (iii) unless it shall
have received a representation letter or such other representations and an
Opinion of Counsel satisfactory to the Seller or the Owner Trustee and, prior to
the Class A Termination Date, the Class A Insurer, to the effect that such
resale or transfer is made (A) in a transaction exempt from the registration
requirements of the Securities Act and applicable state securities laws, or (B)
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) that is aware that such resale or other transfer is being made
in reliance upon Rule 144A. Until the earlier of (i) such time as the
Certificates shall be registered pursuant to a registration statement filed
under
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the Securities Act and (ii) the date three years from the later of the date of
the original authentication and delivery of the Certificates and the date any
Certificate was acquired from the Seller or any affiliate of the Seller, the
Certificates shall bear a legend substantially to the effect set forth in the
preceding two sentences. Neither the Seller, the Servicer, the Trust nor the
Owner Trustee is obligated to register the Certificates under the Securities Act
or to take any other action not otherwise required under this Agreement to
permit the transfer of Certificates without registration.
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 Class A 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 Owner Trustee on behalf of the
Trust shall execute and the Owner Trustee, 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 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 Certificateholders.
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 Trust Collateral Agent, the Class
A Insurer and any agent of the Owner Trustee, the Trust Collateral Agent, the
Class A 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 for all other purposes whatsoever, and none
of the Owner Trustee, the Trust Collateral Agent, the Class A Insurer or the
Certificate Registrar nor any agent of the Owner Trustee, the Class A Insurer or
the Certificate Registrar shall be bound by any notice to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and Addresses.
The Owner Trustee shall cause to be furnished to the Trust Collateral
Agent, the Servicer or the Seller and, prior to the Class A Termination Date,
the Class A Insurer, within 15 days after receipt by the Owner Trustee of a
request therefor from such Person in writing, a list, of the names and addresses
of the Certificateholders as of the most recent Record Date. If three or more
Holders of Certificates or one or more Holders of Certificates evidencing not
less than 25% of the Certificate Interest apply in writing to the Owner Trustee,
and such application states that the applicants desire to communicate with other
Certificateholders with respect to their
15
rights under this Agreement or under the Certificates and such application is
accompanied by a copy of the communication that such applicants propose to
transmit, then the Owner Trustee shall, within five Business Days after the
receipt of such application, afford such applicants access during normal
business hours to the current list of Certificateholders. Each Holder, by
receiving and holding a Certificate, shall be deemed to have agreed not to hold
any of the Seller, the Servicer, the Class A Insurer, the Trust Collateral Agent
or the Owner Trustee or any agent thereof accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 3.8. Distributions.
Distributions on the Certificates shall be made in accordance with
Section 5.08(a) and Section 5.10 of the Sale and Servicing Agreement.
SECTION 3.9. ERISA Restrictions.
The Certificates may not be acquired by or transferred to (i) an
employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) that is subject to the
provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1) of
the Internal Revenue Code of 1986, as amended, or (iii) any entity whose
underlying assets include plan assets by reason of a plan's investment in the
entity (each, a "Benefit Plan"). In connection with any acquisition or transfer
of a Certificate, the Holder thereof shall be required to represent and warrant
that it is not a Benefit Plan.
ARTICLE IV
Voting Rights and Other Actions
SECTION 4.1. Prior Notice to Holders with Respect to Certain Matters.
(a) The Owner Trustee shall not take any of the actions
set forth below unless (i) the Owner Trustee shall have notified the
Certificateholders and, prior to the Class A Termination Date, the Class A
Insurer, in writing of the proposed action at least 30 days before the taking of
such action, and (ii) the Class A Insurer prior to the Class A Termination Date,
and thereafter, the Majority Certificateholders, have 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 Statutory Trust Act);
(ii) the amendment of the Indenture by a
supplemental indenture in circumstances where the consent of any Class
A Noteholder is required;
(iii) the amendment of the Indenture by a
supplemental indenture in circumstances where the consent of any Class
A Noteholder is not required and such amendment materially adversely
affects the interest of the Certificateholders;
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(iv) except pursuant to Section 11.01 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;
(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;
(xi) cause the Trust to incur, assume or
guaranty any indebtedness except as set forth in this Agreement;
(xii) the initiation of any material
claim or litigation by the Trust (except for claims or lawsuits brought
in connection with the collection of Contracts or Dealer Loans;) or
(xiii) the appointment, pursuant to the
Indenture of a successor Indenture Trustee or the consent to the
assignment by the Indenture Trustee, Certificate Registrar or Owner
Trustee of any of its obligations under the Indenture or any other
Basic Document.
(b) In addition, the Trust shall not commingle its assets
with those of any other entity. The Trust shall maintain its financial and
accounting books and records separate from those of any other entity. Except as
expressly set forth herein or in any other Basic Document, the Trust shall pay
its indebtedness and expenses from its own funds and shall not pay the
indebtedness or operating expenses of any other entity. The Trust shall maintain
appropriate minutes or other records of all appropriate actions and shall
maintain its office separate from the offices of the Seller and its affiliates
(c) The Trust and each Certificateholder shall comply
with the following covenants:
(i) Neither the Owner Trustee nor any
Certificateholder shall cause the funds and other assets of the Trust
to be commingled with those of any other individual, corporation,
estate partnership, joint venture, association, joint stock company,
trust, unincorporated organization, government or agency or political
subdivision thereof or any other entity.
17
(ii) Neither the Owner Trustee nor any
Certificateholder shall cause the Trust to be, become or hold itself
out as being liable for the debts of any other party, and neither the
Trust nor any Certificateholder shall act as agents for each other. The
Trust shall not guarantee the indebtedness of or make loans to any
other party or any Certificateholder. No Certificateholder may
guarantee the indebtedness of or make loans to the Trust or hold itself
out as being liable for the debts of the Trust.
(iii) Neither the Owner Trustee nor any
Certificateholder shall cause the Trust (A) to act other than solely in
its Trust name and through its duly authorized officers or agents in
the conduct of its business, (B) to prepare all Trust correspondence
otherwise than in the Trust name, (C) to conduct its business other
than so as not to mislead others as to the identity of the entity with
which they are conducting business; and no Certificateholder will be
involved in the day-to-day management of the Trust.
(iv) The Owner Trustee shall maintain on behalf
of the Trust all statutory trust records and books of account of the
Trust and neither the Owner Trustee nor any Certificateholder shall
cause the Trust to commingle its statutory trust records and books of
account with the corporate records and books of account maintained by
any Certificateholder or the Owner Trustee on behalf of the Trust shall
reflect the separate existence of the Trust. The books of the Trust may
be kept (subject to any provision contained in any applicable statutes)
inside or outside the State of Delaware at such place or places as may
be designated from time to time by the Owner Trustee with notice to the
Class A Insurer.
(v) The Trust shall take such formalities as may
be necessary to authorize all of its actions as may be required by law.
(vi) The Owner Trustee shall cause the Trust to
(1) conduct its business in an office separate from that of each
Certificateholder, (2) maintain stationery, if any, separate from that
of each Certificateholder, (3) except as expressly set forth herein, to
pay its indebtedness, operating expenses, and liabilities from its own
funds, and not to pay the indebtedness, operating expenses and
liabilities of any other entity, (4) observe all statutory formalities
under the Statutory Trust Act, and (5) keep in full effect its
existence, rights and franchises as a statutory trust under the laws of
the State of Delaware until dissolved in accordance with the Basic
Documents.
(d) For accounting purposes, the Trust shall be treated
as an entity separate and distinct from any Certificateholder. The pricing and
other material terms of all transactions and agreements to which the Trust is a
party shall be intrinsically fair to all parties thereto. This Agreement is and
shall be the only agreement among the parties thereto with respect to the
creation, operation and termination of the Trust.
(e) The Owner Trustee shall not have the power, except
upon the direction of the Class A Insurer and the Certificateholders, and to the
extent otherwise consistent with the Basic Documents, to (i) remove or replace
the Servicer, the Backup Servicer or the Indenture Trustee, (ii) institute
proceedings to have the Trust declared or adjudicated a
18
bankruptcy or insolvent, (iii) consent to the institution of bankruptcy or
insolvency proceedings against the Trust, (iv) file a petition or consent to a
petition seeking reorganization or relief on behalf of the Trust under any
applicable federal or state law relating to bankruptcy, (v) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or any
similar official) of the Trust or a substantial portion of the property of the
Trust, (vi) make any assignment for the benefit of the Trust's creditors, (vii)
cause the Trust to admit in writing its inability to pay its debts generally as
they become due, (viii) take any action, or cause the Trust to take any action,
in furtherance of any of the foregoing (any of the above, a "Bankruptcy
Action"). So long as the Indenture and Sale and Servicing Agreement remain in
effect, no Certificateholder shall have the power to take, and shall not take,
any Bankruptcy Action with respect to the Trust or direct the Owner Trustee to
take any Bankruptcy Action with respect to the Trust.
(f) The Owner Trustee shall notify the Seller, the
Servicer, the Class A Insurer and the Certificateholders in writing of any
appointment of a successor Note Registrar, Trust Collateral Agent or Certificate
Registrar within five Business Days of its receipt thereof.
SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters.
The Owner Trustee shall not have the power, except upon the written
direction of the Certificateholders with the prior written consent of the Class
A Insurer or, prior to the Class A Termination Date, the Class A Insurer in
accordance with the Basic Documents, to (a) remove the Servicer under the Sale
and Servicing Agreement or (b) except as expressly provided in the Basic
Documents, sell the Dealer Loans after the termination of the Indenture. The
Owner Trustee shall take the actions referred to in the preceding sentence only
upon written instructions signed by the Certificateholders or the Class A
Insurer, as applicable, and written consent of the Class A Insurer and the
furnishing of indemnification satisfactory to the Owner Trustee by the
Certificateholders.
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to, and shall not, commence
or join in any proceeding or other actions contemplated by Section 2.12(c)
relating to the Trust without the unanimous prior approval of all
Certificateholders and, prior to the Class A Termination Date, the Class A
Insurer, and the delivery to the Owner Trustee by each such Certificateholder of
a certificate certifying that such person reasonably believes that the Trust is
insolvent and, prior to the Class A Termination Date, written consent of the
Class A Insurer.
SECTION 4.4. Restrictions on Certificateholders' Power.
(a) The Certificateholders shall not direct the Owner
Trustee to take or refrain from taking any action if such action or inaction
would be contrary to any obligation of the Trust or the Owner Trustee under this
Agreement or any of the Basic Documents or would be contrary to Section 2.3 nor
shall the Owner Trustee follow any such direction, if given.
(b) No Certificateholder shall have any right by virtue
or by availing itself of any provisions of this Agreement to institute any suit,
action, or proceeding in equity or at law upon or under or with respect to this
Agreement or any Basic Document, unless the Certificateholders are the
Instructing Party pursuant to Section 6.3 and unless a Certificateholder
19
previously shall have given to the Owner Trustee a written notice of default and
of the continuance thereof, as provided in this Agreement, and also unless
Certificateholders evidencing not less than 25% of the Certificate Interest
shall have made written request upon the Owner Trustee to institute such action,
suit or proceeding in its own name as Owner Trustee under this Agreement and
shall have offered to the Owner Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Owner Trustee, for 30 days after its receipt of such notice,
request, and offer of indemnity, shall have neglected or refused to institute
any such action, suit, or proceeding, and during such 30-day period no request
or waiver inconsistent with such written request has been given to the Owner
Trustee pursuant to and in compliance with this Section or Section 6.3; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Owner Trustee, that
no one or more Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb, or prejudice the rights of the Holders of any
other of the Certificates, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Agreement, except in the manner provided in this Agreement and for the equal,
ratable, and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Owner Trustee shall be entitled to such relief as can be given either at
law or in equity.
SECTION 4.5. Majority 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. Except as expressly provided herein, any action that
may be taken by the Certificateholders under this Agreement shall be taken by
the Holders of Certificates evidencing not less than 51% of the Certificate
Interest (the "Majority Certificateholders"). Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to this
Agreement shall be effective if signed by the Majority Certificateholders at the
time of the delivery of such notice.
SECTION 4.6. Rights of the Class A Insurer.
Notwithstanding anything to the contrary in the Basic Documents,
without the prior written consent of the Class A Insurer, prior to the Class A
Termination Date, neither the Owner Trustee nor any Certificateholder shall (i)
remove the Servicer, (ii) initiate any claim, suit or proceeding by the Trust or
compromise any claim, suit or proceeding brought by or against the Trust, other
than with respect to the enforcement of any Dealer Loan or Contract 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 or convey or
transfer all or substantially all of the Trust Property to any other entity,
(iv) amend the Certificate of Trust or (v) amend this Agreement.
20
ARTICLE V
Certain Duties
SECTION 5.1. Accounting and Records to the Certificateholders, the
Internal Revenue Service and Others.
Subject to the Code and Section 4.01 of the Sale and Servicing
Agreement, the Owner Trustee shall (a) maintain (or cause to be maintained) the
books of the Trust on a calendar year basis on the accrual method of accounting,
(b) deliver (or cause to be delivered) to each Certificateholder, as may be
required by the Code and applicable Treasury Regulations, such information as
may be required (including Schedule K-1) to enable each Certificateholder to
prepare its federal and state income tax returns, and (c) file or cause to be
filed such tax returns relating to the Trust, and make such elections as may
from time to time be required or appropriate under any applicable state or
federal statute or rule or regulation thereunder. The Owner Trustee shall make
all elections pursuant to this Section as directed in writing by the Seller. The
Owner Trustee shall sign all tax information returns filed pursuant to this
Section and any other returns as may be required by law, and in doing so shall
rely entirely upon, and shall have no liability for information provided by, or
calculations provided by, the Seller. The Owner Trustee shall elect under
Section 1278 of the Code to include in income currently any market discount that
accrues with respect to the Dealer Loans. The Owner Trustee shall not make the
election provided under Section 754 of the Code.
SECTION 5.2. Signature on Returns; Tax Matters Partner.
(a) Notwithstanding the provisions of Section 5.1, 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 such documents shall be signed by the Seller as "tax matters
partner".
(b) The Certificateholders hereby elect the Seller 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 the Basic Documents to which the Trust is named as a party and any amendment
thereto, in each case, in such form as the Seller 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 Class A
Notes in the aggregate principal amount of $100,000,000. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, to take
all actions required of the Trust pursuant to the
21
Basic Documents. The Owner Trustee is further authorized from time to time to
take such action as the Instructing Party (as defined below) shall direct in
writing with respect to the Basic Documents so long as such activities are
consistent with 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: (a) discharge (or cause
to be discharged) all of its responsibilities pursuant to the terms of this
Agreement and to administer the Trust in the interest of the Holders and the
Class A Insurer, 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 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 (ii) to the
extent that Owner Trustee has contracted with a third party acceptable to the
Class A Insurer to discharge such duties and responsibilities. The Servicer, the
Backup Servicer, the Trust Collateral Agent and the Seller shall all be deemed
acceptable to the Class A Insurer; and (b) to obtain and preserve the Trust's
qualification to do business in each jurisdiction in which, based upon the
advice of the Seller or the Servicer, such qualification is or shall be
necessary to protect the validity and enforceability of the Basic Documents and
related instruments and agreements, the Class A Notes and the Trust Property.
SECTION 6.3. Action upon Instruction.
(a) Subject to Article IV, the Certificateholders holding
not less than 51% of the Certificate Interest, with, prior to the Class A
Termination Date, the consent of the Class A Insurer (the "Instructing Party")
shall have the exclusive right to direct the actions of the Owner Trustee in the
management of the Trust, so long as such instructions are not inconsistent with
the express terms set forth herein or in any Basic Document or with instructions
of the Class A Noteholders acting pursuant to the Basic Documents. The
Instructing Party shall not instruct the Owner Trustee in a manner inconsistent
with this Agreement or the Basic Documents.
(b) The Owner Trustee shall not be required to take any
action hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is contrary
to the terms hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide
between alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Instructing Party received, the Owner
Trustee shall not be liable on
22
account of such action to any Person. If the Owner Trustee shall not have
received appropriate instruction within ten (10) days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Basic Documents, as it shall deem to be in the best interests of the
Certificateholders and the Class A Insurer, and shall have no liability to any
Person for such action or inaction absent gross negligence or willful
misconduct.
(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 and, to the extent that the Owner Trustee acts or refrains from acting in
good faith in accordance with any such instruction received, the Owner Trustee
shall not be liable, on account of such action or inaction, to any Person. If
the Owner Trustee shall not have received appropriate instruction within ten
(10) days of such notice (or within such shorter period of time as reasonably
may be specified in such notice or may be necessary under the circumstances) it
may, but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Basic Documents, as it shall deem to be
in the best interests of the Certificateholders and the Class A Insurer, and
shall have no liability to any Person for such action or inaction, absent gross
negligence or willful misconduct.
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 to otherwise take or refrain from taking any
action under, or in connection with, any document contemplated hereby to which
the Owner Trustee is a party, except as expressly provided by the terms of this
Agreement or in any document or written instruction received by the Owner
Trustee pursuant to Section 6.3; and no implied duties or obligations shall be
read into this Agreement or any Basic Document against the Owner Trustee. The
Owner Trustee shall have no responsibility for filing any financing or
continuation statement in any public office at any time or to otherwise perfect
or maintain the perfection of any security interest or lien granted to it
hereunder or to prepare or file any 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
23
the authority conferred upon the Owner Trustee pursuant to this Agreement, (ii)
in accordance with the Basic Documents and (iii) in accordance with any document
or instruction delivered to the Owner Trustee pursuant to Section 6.3.
SECTION 6.6. Restrictions.
The Owner Trustee shall not take any action (a) that is inconsistent
with the purposes of the Trust set forth in Section 2.3 or (b) that, to the
actual knowledge of the Owner Trustee, would result in the Trust's becoming
taxable as a corporation for federal income tax purposes. The Certificateholders
shall not direct the Owner Trustee to take action that would violate the
provisions of this Section.
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.1. Acceptance of 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 and the Basic Documents. The Owner Trustee also agrees to
disburse all moneys actually received by it constituting part of the Trust
Property upon the terms of the Basic Documents and 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 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 by a Responsible Officer of the Owner Trustee or for any
information contained in 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, the Backup 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
liability (financial or otherwise) 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
24
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 Class A 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 Seller 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 Certificates, 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 Class A Insurer, any Class A Noteholder
or to any Certificateholder, other than as expressly provided for herein and in
the Basic Documents;
(f) the Owner Trustee shall not be liable for the default
or misconduct of the Seller, the Indenture Trustee, the Trust Collateral Agent,
the Class A Insurer, the Servicer or the Backup Servicer under any of the Basic
Documents or otherwise and the Owner Trustee shall have no obligation or
liability to perform the obligations under this Agreement or the Basic Documents
that are required to be performed by the Seller under this Agreement, by the
Indenture Trustee under the Indenture or the Trust Collateral Agent or the
Servicer or the Backup Servicer under the Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement, or to
institute, conduct or defend any litigation under this Agreement or otherwise or
in relation to this Agreement or any Basic Document, at the request, order or
direction of the Instructing Party or any of the Certificateholders, unless such
Instructing Party or Certificateholders have 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 Certificateholders, the Class A
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.
The Owner Trustee hereby represents and warrants to the Seller, the
Class A Insurer (which has relied on such representations and warranties in
issuing the Class A Note Policy) and the Securityholders, that:
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(a) It is a national banking association, duly organized
and validly existing in good standing under the laws of the United States of
America. It has all requisite corporate power and authority to execute, deliver
and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to
authorize the execution and delivery by it of this Agreement, and this Agreement
will be executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
SECTION 7.4. Reliance; Advice of Counsel.
(a) 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 Trust Agreement. The Owner Trustee may accept
a certified copy of a resolution of the board of directors of the Seller or
other governing body of any corporate party or other entity 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 are acceptable to the Class A Insurer
(provided that any person to whom duties and obligations of the Owner Trustee
are delegated pursuant to and in accordance with the Basic Documents shall be
deemed to be acceptable to the Class A Insurer), and (ii) may consult with
counsel, accountants and other skilled persons acceptable to the Class A Insurer
that are 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
26
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.
SECTION 7.5. Not Acting in Individual Capacity.
Except as provided in this Article VII, in accepting the trusts hereby
created, Wachovia Bank of Delaware, National Association acts solely as Owner
Trustee hereunder and not in its individual capacity and all Persons having any
claim against the Owner Trustee by reason of the transactions contemplated by
this Agreement or any Basic Document shall look only to the Trust Property for
payment or satisfaction thereof.
SECTION 7.6. Owner Trustee Not Liable for Certificates or Contracts.
The recitals contained herein and in the Certificates (other than the
signature and countersignature of the Owner Trustee on the Certificates) shall
be taken as the statements of the Seller 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 Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates) or the Class A Notes,
or of any Dealer Loan, Contract 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 Dealer Loan or Contract, or the
perfection and priority of any security interest created by any Dealer Loan or
Contract in any Financed Vehicle or the maintenance of any such perfection and
priority, or for or with respect to the sufficiency of the Trust Property or its
ability to generate the payments to be distributed to Certificateholders under
this Agreement or the Class A 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 Dealer Loan or Contract on any computer or other
record thereof; the validity of the assignment of any Dealer Loan or Contract to
the Trust or of any intervening assignment; the completeness of any Dealer Loan
or Contract; the performance or enforcement of any Dealer Loan or Contract; the
compliance by the Seller, 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, the Backup Servicer or any sub-servicer taken
in the name of the Owner Trustee.
SECTION 7.7. Owner Trustee May Own Certificates and Notes.
The Owner Trustee in its individual or any other capacity may become
the owner or pledgee of Certificates or Class A Notes and may deal with the
Seller, 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 Owner Trustee 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 corpus, income and proceeds
of the Trust Property and only to the extent that the Owner Trustee shall have
received corpus, income or proceeds from the Trust
27
Property to make such payments in accordance with the terms hereof. Wachovia
Bank of Delaware, National Association, or any successor thereto, in its
individual capacity, shall not be liable for any amounts payable under this
Agreement or any of the Basic Documents to which the Trust or the Owner Trustee
is a party.
SECTION 7.9. Doing Business in Other Jurisdictions.
Notwithstanding anything contained herein to the contrary, neither
Wachovia Bank of Delaware, National Association nor 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 Wachovia Bank of Delaware, National Association (or any successor
thereto); or (iii) subject Wachovia Bank of Delaware, National Association (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 Wachovia Bank of Delaware, National
Association (or any successor thereto) or the Owner Trustee, as the case may be,
contemplated hereby.
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.1. Owner Trustee's Fees and Expenses.
The Owner Trustee shall receive as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between Credit Acceptance and the Owner Trustee, and the Owner Trustee shall be
entitled to be reimbursed therefor by the Issuer as set forth in Section 5.08(a)
of the Sale and Servicing Agreement.
SECTION 8.2. Indemnification.
Credit Acceptance shall be liable as primary obligor for, and shall
indemnify Wachovia Bank of Delaware, National Association, individually and as
Owner Trustee and its officers, directors, successors, assigns, agents and
servants (collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against any Indemnified Party in any way relating to or arising out of this
Agreement, the Basic Documents, the Trust Property, the administration of the
Trust Property or the action or inaction of the Owner Trustee hereunder, within
thirty (30) days of a demand by the Owner Trustee, upon receipt by the Owner
Trustee of an invoice or other demand for payment, except only that Credit
Acceptance shall not be liable for or required to indemnify the Owner Trustee
from and against:
28
(i) Expenses arising or resulting from the gross negligence, willful misconduct
or bad faith of the Owner Trustee or (ii) any Expenses which would constitute
recourse for uncollectible Dealer Loans. Credit Acceptance shall advance to each
Indemnified Party expenses incurred in defending any claim, demand, action, suit
or proceeding, provided that such Indemnified Party shall be obligated to repay
such amount if a court of competent jurisdiction determines that such
Indemnified Party was not entitled to indemnification hereunder. The indemnities
contained in this Section and the rights of the Owner Trustee under Section 8.1
shall be joint and several with the indemnification obligations of the Trust
pursuant to Section 6.05 of the Sale and Servicing Agreement and shall survive
the resignation or termination of the Owner Trustee or the termination of this
Agreement In any event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section, the Owner Trustee's choice of legal
counsel shall be subject to the approval of Credit Acceptance which approval
shall not be unreasonably withheld.
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.
SECTION 8.4 Non-Recourse Obligations.
Notwithstanding anything in this Agreement or any Basic Document, the
Owner Trustee agrees that all obligations of the Trust 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 5.08 of the Sale and
Servicing Agreement and specifically shall not be recourse to the assets of any
Holder. Wachovia Bank of Delaware, National Association agrees not to seek
recourse against any Holder with respect to any obligations of the Trust owed to
it.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement.
(a) This Agreement shall terminate and the Trust shall
dissolve upon the latest of (i) the maturity, payment in full or other
liquidation of the last Dealer Loan (including the purchase by the Servicer or
the Seller 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 Dealer Loans as provided in the Basic Documents and
the satisfaction and discharge of the Indenture and the termination of the Sale
and Servicing Agreement or (ii) the payment to Certificateholders of all amounts
required to be paid to them pursuant to this Agreement and the payment to each
of the Class A Noteholders and the Class A 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, and the
terms of Section 11.7 hereof 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 Statutory Trust Act, and the Owner Trustee shall be entitled to
rely without investigation upon the
29
certificates of: (i) the Indenture Trustee pursuant to Section 4.1 of the
Indenture; (ii) the Servicer pursuant to Section 7.06 of the Sale and Servicing
Agreement; and (iii) the Class A Insurer pursuant to Section 4.03 of the
Insurance Agreement as to the absence of liabilities. The Seller shall promptly
notify the Owner Trustee and the Class A Insurer in writing of any prospective
termination pursuant to this Section 9.1. The bankruptcy, liquidation,
dissolution, death or incapacity of any 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) Except as provided in clause (a), neither the Seller
nor any Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying
the Distribution Date upon which the Certificateholders shall surrender their
Certificates to the Trust Collateral Agent, as paying agent who shall then
surrender such Certificates to the Owner Trustee for cancellation, shall be
given by the Owner Trustee by letter to Certificateholders mailed within five
Business Days of receipt of notice of such termination from the Seller or
Servicer, as the case may be, given pursuant to Section 10.01(b) of the Sale and
Servicing Agreement, stating (i) the Distribution Date upon or with respect to
which final distributions on the Certificates shall be made upon presentation
and surrender of the Certificates at the office of the Trust Collateral Agent
therein designated, (ii) the amount of any such final distribution, 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
Certificates 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 Class A Insurer and the Trust Collateral Agent at the time
such notice is given to Certificateholders. Upon presentation and surrender of
the Certificates to the Owner Trustee, the Trust Collateral Agent shall cause to
be distributed to Certificateholders amounts distributable on such Distribution
Date pursuant to Section 5.08 of the Sale and Servicing Agreement.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above-mentioned written notice, the Owner Trustee shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Any funds remaining in the Trust after two
years shall be distributed, subject to applicable escheat laws, by the Owner
Trustee or the Trust Collateral Agent upon the written direction of the Seller
to the Seller and Holders shall look solely to the Seller 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
30
known claims and obligations of the Trust shall be distributed by the Owner
Trustee to the Seller.
(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 Statutory
Trust Act.
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 Statutory
Trust Act; (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; provided however, the net worth
of the parent organization of such corporation shall be included in the
determination of the combined capital and surplus of such corporation; and (iv)
prior to the Class A Termination Date, acceptable to the Class A Insurer in its
sole discretion. 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.
SECTION 10.2. Resignation or Removal of Owner Trustee.
The Owner Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Seller, the Class
A Insurer and the Servicer. Upon receiving such notice of resignation, the
Seller shall promptly appoint a successor Owner Trustee acceptable to the Class
A Insurer and satisfying the qualifications of Section 10.1 hereof by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Owner Trustee and one copy to the successor Owner Trustee; provided
that the Seller shall have received written confirmation from the Rating Agency
that the proposed appointment will not result in an increased capital charge to
the Class A Insurer by the Rating Agency. If no successor Owner Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Owner Trustee or, prior to
the Class A Termination Date, the Class A Insurer may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee
acceptable to the Class A Insurer and satisfying the qualifications of Section
10.1 hereof.
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 Seller with
31
the prior written consent of the Class A Insurer 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, prior to the Class A Termination Date, the
Class A Insurer or the Seller with, prior to the Class A Termination Date, the
consent of the Class A Insurer may remove the Owner Trustee. If the Seller or
the Class A Insurer shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Seller shall, or the Class A Insurer may,
promptly appoint a successor Owner Trustee acceptable to the Class A Insurer,
and satisfying the qualifications set forth in Section 10.1 hereto by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
outgoing Owner Trustee so removed, one copy to the Class A Insurer, one copy to
the successor Owner Trustee and payment of all fees owed to the outgoing Owner
Trustee; provided, that the Seller shall have received written confirmation from
the Rating Agency that the proposed appointment will not result in an increased
capital charge to the Class A Insurer by the Rating Agency.
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 Seller shall provide notice of such resignation
or removal of the Owner Trustee to the Rating Agency and the Trust Collateral
Agent.
SECTION 10.3. Successor Owner Trustee.
Any successor Owner Trustee appointed pursuant to Section 10.2 shall
execute, acknowledge and deliver to the Seller, the Class A 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 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 Seller 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 Class A Insurer,
the Class A Noteholders and the Rating Agency. If the Servicer shall fail to
mail such notice within 10 days after acceptance of
32
appointment by the successor Owner Trustee, the successor Owner Trustee shall
cause such notice to be mailed at the expense of the Servicer.
Any successor Owner Trustee appointed pursuant to this Section 10.3
shall promptly file an amendment to the Certificate of Trust with the Secretary
of State of Delaware, identifying the name and address of such successor Owner
Trustee in the State of Delaware.
SECTION 10.4. Merger or Consolidation of Owner Trustee.
Any corporation into which the Owner Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Owner Trustee shall be a party,
or any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided further that the Owner Trustee shall mail notice of such merger or
consolidation to the Class A Insurer and the Rating Agency.
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 Class A Insurer to act as co-trustee,
jointly with the Owner Trustee, or separate trustee or separate trustees, of all
or any part of the Trust Property, and to vest in such Person, in such capacity,
such title to the Trust, or any part thereof, and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the 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, with the consent
of the Class A Insurer, have the power to make such appointment. No co-trustee
or separate trustee under this Agreement shall be required to meet the terms of
eligibility as a successor trustee pursuant to Section 10.1 and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Owner Trustee shall be conferred upon and
exercised or performed by the Owner Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Owner Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed, the
Owner Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including
the holding of title to the Trust or any portion
33
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 Seller 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 Class A
Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
Miscellaneous
SECTION 11.1. Supplements and Amendments.
(a) This Agreement may be amended by the Seller and the
Owner Trustee, with (x) prior to the Class A Termination Date, the prior written
consent of the Class A Insurer and (y) prior written notice to the Rating
Agency, without the consent of any of the Class A Noteholders or the
Certificateholders, (i) to cure any ambiguity or defect, (ii) to correct,
supplement or modify any provisions in this Agreement or (iii) 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 such action shall not, as evidenced by an Opinion of Counsel which
may be based upon a certificate of the Seller, adversely affect in any material
respect the interests of any Class A Noteholder.
(b) This Agreement may also be amended from time to time
by the Seller and the Owner Trustee, with (x) prior written notice to the Rating
Agency and (y) prior to the Class A Termination Date, the written consent of the
Class A Insurer and thereafter, the consent of the Majority Certificateholders
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
34
(a) above; provided, however, that, subject to the express rights of the Class A
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 Dealer Loans or distributions that shall be required to be made
for the benefit of the Class A Noteholders or (b) reduce the percentage of the
Outstanding Amount of the Class A Notes required to consent to any such
amendment, without the consent of the Holders of all the outstanding Class A
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 Class A Insurer, the
Indenture Trustee and the Rating Agency.
It shall not be necessary for the consent of the Class A Noteholders or
the Indenture Trustee pursuant to this Section to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents shall
be subject to such reasonable requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of Trust, the
Owner Trustee shall cause the filing of such amendment with the Secretary of
State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee, the Indenture Trustee and the Class A
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.
Except for Section 2.7, the provisions of this Agreement are solely for
the benefit of the Owner Trustee, the Seller, the Certificateholders, the
Servicer, the Class A Insurer, the Backup Servicer and, to the extent expressly
provided herein, the Indenture Trustee, the Trust Collateral Agent and the Class
A 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 Seller, addressed to Credit
Acceptance Funding LLC 2003-1: Credit Acceptance Funding LLC 2003-1, Jr., Silver
Triangle Building, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇-▇▇▇▇; Attention: ▇▇▇▇▇
35
▇. ▇▇▇▇▇▇; phone number: (▇▇▇) ▇▇▇-▇▇▇▇ (ext. 884); fax number: (▇▇▇) ▇▇▇-▇▇▇▇ ;
if to the Class A Insurer, addressed to Radian Asset Assurance Inc., ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Chief Risk Officer, Chief
Legal Officer, "Urgent Material Enclosed", or, as to each party, at such other
address as shall be designated by such party in a written notice to each other
party; if to the Indenture Trustee, the Trust Collateral Agent, the Servicer,
the Backup Servicer or the Rating Agency, addressed to each respective entity as
set forth in the notice provisions of the Basic Documents.
(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; Class A Insurer.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto, the Class A Insurer (to the extent set forth herein) and their
respective successors and permitted assigns. Without limiting the generality of
the foregoing, all covenants and agreements in this Agreement which confer
rights upon the Class A Insurer shall be for the benefit of and run directly to
the Class A Insurer, and the Class A Insurer shall be entitled to rely on and
enforce such covenants, subject, however, to the limitations on such rights
provided in this Agreement and the Basic Documents. The Class A Insurer may
disclaim any of its respective rights and powers under this Agreement (but not
its duties and obligations under the Class A Note Insurance Policy), upon
delivery of a written notice to the Owner Trustee.
SECTION 11.7. 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 Class A Noteholder by accepting
the benefits of this Agreement, hereby covenants and agrees that they will not
at any time institute against the Seller or the Trust, or join in any
institution against the Seller or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any federal or state bankruptcy
36
or similar law in connection with any obligations relating to the Certificates,
the Class A Notes, this Agreement or any of the Basic Documents.
SECTION 11.8. No Recourse.
Each Certificateholder, by accepting a Certificate acknowledges that
such Certificateholder's Certificates represent beneficial interests in the
Trust only and do not represent interests in or obligations of the Seller, the
Servicer, the Backup Servicer, the Owner Trustee, the Indenture Trustee, the
Class A Insurer or 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 Certificates or the
Basic Documents.
SECTION 11.9. 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 11.10. 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 11.11. Servicer.
The Servicer is authorized to prepare, or cause to be prepared, execute
and deliver on behalf of the Trust all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Trust or
Owner Trustee to prepare, file or deliver pursuant to the Basic Documents. Upon
written request, the Owner Trustee shall execute and deliver to the Servicer a
limited power of attorney appointing the Servicer the Trust's agent and
attorney-in-fact to prepare, or cause to be prepared, execute and deliver all
such documents, reports, filings, instruments, certificates and opinions.
SECTION 11.12. Class A Insurer Control Rights.
So long as any Class A Note is outstanding, the Class A Insurer shall
have the power to exercise the voting rights granted to the Class A Noteholders,
except as set forth in Section 11.1 hereof; provided, however, during the
continuance of a Class A Insurer Default, all voting, consent or control rights
of the Class A Insurer shall be suspended. Upon the cure of a Class A Insurer
Default, such voting, consent and control rights shall be reinstated.
37
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.
WACHOVIA BANK OF DELAWARE,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner Trustee
By: /S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CREDIT ACCEPTANCE FUNDING LLC
2003-1, as
Seller
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: VP Finance & Treasurer
[Trust Agreement Signature Page]
EXHIBIT A
FORM OF CERTIFICATE
SEE ATTACHED PAGES FOR CERTAIN DEFINITIONS
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENTS TO THE CLASS A
NOTES AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES OR "BLUE SKY"
LAWS. THE HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES THAT THIS
CERTIFICATE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) SO LONG AS
THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OR (3) IN RELIANCE ON ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND SUBJECT TO THE RECEIPT BY THE OWNER TRUSTEE OF A
CERTIFICATION OF THE TRANSFEREE AND AN OPINION OF COUNSEL (SATISFACTORY TO THE
INDENTURE TRUSTEE, THE CLASS A INSURER AND THE ISSUER) TO THE EFFECT THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.
NO RESALE OR OTHER TRANSFER OF THIS CERTIFICATE MAY BE MADE UNLESS THE
CERTIFICATE REGISTRAR SHALL HAVE RECEIVED A REPRESENTATION LETTER IN
SUBSTANTIALLY THE FORM REQUIRED BY THE AGREEMENT REFERRED TO BELOW FROM THE
TRANSFEREE OF THIS CERTIFICATE OR SUCH OTHER REPRESENTATIONS (OR AN OPINION OF
COUNSEL) AS MAY BE APPROVED BY THE SELLER AND THE CLASS A INSURER, TO THE EFFECT
THAT SUCH A TRANSFER MAY BE MADE PURSUANT TO AN EXEMPTION FROM THE SECURITIES
ACT, INCLUDING RULE 144A THEREUNDER, AND APPLICABLE STATE SECURITIES LAWS AND
SUCH TRANSFEREE WILL NOT ACQUIRE THIS CERTIFICATE WITH THE ASSETS OF ANY
"EMPLOYEE BENEFIT PLAN" AS DEFINED IN SECTION 3(3) OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") (WHICH IS SUBJECT TO TITLE I
OF ERISA) OR ANY "PLAN" AS DEFINED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE").
NUMBER Percentage Interest 100%
R-1
SEE REVERSE FOR CERTAIN DEFINITIONS
AMOUNTS IN RESPECT OF THIS CERTIFICATE ARE DISTRIBUTABLE AS SET FORTH
IN THE TRUST AGREEMENT.
ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in the property of the Trust, as
defined below, the property of which includes a pool of dealer loans secured by
retail installment sales contracts secured by new or used automobiles, vans or
light duty trucks and sold to the Trust by Credit Acceptance Funding LLC 2003-1.
(THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF CREDIT
ACCEPTANCE FUNDING LLC 2003-1 OR ANY OF ITS AFFILIATES, EXCEPT TO THE EXTENT
DESCRIBED BELOW.)
THIS CERTIFIES THAT [_________] is the registered owner of the
Percentage Interest set forth above of the beneficial ownership interest in
certain distributions of Credit Acceptance Auto Dealer Loan Trust 2003-1 (the
"Trust") formed by Credit Acceptance Funding LLC 2003-1, a Delaware special
purpose limited liability company (the "Seller"). The Certificates do not accrue
interest.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
WACHOVIA BANK OF DELAWARE,
NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Owner Trustee
by: __________________________________________
Authenticating Agent
The Trust was created pursuant to a Certificate of Trust and an Interim
Trust Agreement dated as of June 9, 2003 (the "Trust Agreement"), between the
Seller and Wachovia Bank of Delaware, National Association, as owner trustee, in
its capacity as trustee, and not in its individual capacity (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated
as "Asset Backed Certificates" (herein called the "Certificates"). In addition
to the Certificates, there were also issued, under the Indenture dated as of
June 27, 2003, between the Trust and JPMorgan Chase Bank, as Indenture Trustee,
one class of Notes designated as "2.77% Class A Asset Backed Notes" (the "Class
A Notes" or the "Notes"). This Certificate is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the holder of this Certificate by virtue of the acceptance hereof
assents and by which such holder is bound. The property of the Trust includes a
pool of dealer loans secured by retail installment sale contracts (which are
secured by new and used automobiles, vans or light trucks) (the "Dealer Loans"),
all monies due thereunder after the applicable Cutoff Date, security interests
in the vehicles financed thereby, certain bank accounts and the proceeds
thereof, proceeds from claims on certain insurance policies and certain other
rights under the Trust Agreement and the Sale and Servicing Agreement, all
right, to and interest of the Seller in and to the Contribution Agreement dated
as of June 27, 2003 between the Originator and the Seller and all proceeds of
the foregoing.
Under the Sale and Servicing Agreement, there will be distributed on
the 15th day of each month or, if such 15th day is not a Business Day, the next
Business Day (the "Distribution Date"), commencing on July 15, 2003, to the
Person in whose name this Certificate is registered at the close of business on
the last day of the month preceding such Distribution Date (the "Record Date")
such Certificateholder's fractional undivided interest in the amount to be
distributed, if any, to Certificateholders on such Distribution Date.
The holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate are subordinated to the
rights of the Class A Noteholders as described in the Sale and Servicing
Agreement, the Indenture and the Trust Agreement, as applicable.
It is the intent of the Seller, the Servicer, and the
Certificateholders that, for purposes of federal income taxes, the Trust will be
treated as a partnership and the Certificateholders will be treated as partners
in that partnership. The Seller and the other Certificateholders by acceptance
of a Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates for such tax purposes as partnership interests in
the Trust. Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Trust or the Seller, or join in any institution against the Trust or the
Seller of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Certificates, the Class A Notes, the Trust Agreement or any of the Basic
Documents.
Distributions on this Certificate will be made as provided in the Sale
and Servicing Agreement by the Trust Collateral Agent by wire transfer or check
mailed to the Certificateholder of record in the Certificate Register without
the presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and the Sale and
Servicing Agreement and, notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Owner Trustee of the
pendency of such distribution and only upon presentation and surrender of this
Certificate at the Corporate Trust Office.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Certificate to be duly executed.
CREDIT ACCEPTANCE AUTO DEALER LOAN
TRUST 2003-1
By: WACHOVIA BANK OF DELAWARE,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as Owner
Trustee
By: ___________________________________________
(Reverse of Certificate)
The Certificates do not represent an obligation of, or an interest in,
the Seller, the Servicer, the Backup Servicer, the Owner Trustee or any
Affiliates of any of them and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated herein or in
the Trust Agreement, the Indenture or the Basic Documents. In addition, this
Certificate is not guaranteed by any governmental agency or instrumentality and
is limited in right of payment to certain collections with respect to the Dealer
Loans, all as more specifically set forth herein and in the Sale and Servicing
Agreement. A copy of each of the Sale and Servicing Agreement and the Trust
Agreement may be examined during normal business hours at the principal office
of the Seller, and at such other places, if any, designated by the Seller, by
any Certificateholder upon written request.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Trust Agreement at any
time by the Seller and the Owner Trustee with, prior to the Class A Termination
Date, the prior written consent of Radian Asset Assurance Inc. (the "Class A
Insurer"), and, in certain circumstances, the consent of the holders of the
Class A Notes evidencing not less than 51% of the then-outstanding Class A Note
Balance. Any such consent shall be conclusive and binding on such holder and on
all future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent is made upon this Certificate. The Trust Agreement also permits
the amendment thereof, in certain limited circumstances, without the consent of
the holders of any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth and set forth on the front of this Certificate, the transfer
of this Certificate is registerable in the Certificate Register upon surrender
of this Certificate for registration of transfer at the offices or agencies of
the Certificate Registrar maintained by the Owner Trustee in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder hereof or such holder's attorney duly authorized in
writing, and thereupon one or more new Certificates in authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee; provided, however, that prior to the Class A Termination
Date, this Certificate is non-transferable without the prior written consent of
the Class A Insurer. The initial Certificate Registrar appointed under the Trust
Agreement is Wachovia Bank of Delaware, National Association.
The Certificates are issuable only as registered Certificates. As
provided in the Trust Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates in authorized
denominations evidencing the same aggregate denomination, as requested by the
holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge payable in connection therewith.
The Owner Trustee, the Class A Insurer, the Certificate Registrar and
any agent of the Owner Trustee or the Certificate Registrar or the Class A
Insurer may treat the person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Owner Trustee, the Certificate
Registrar, the Class A Insurer nor any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to Certificateholders
of all amounts required to be paid to them pursuant to the Trust Agreement and
the Sale and Servicing Agreement, upon the payment to the Class A Insurer of all
amounts required to be paid to the Class A Insurer under the Basic Documents,
and the disposition of all property held as part of the Trust. The Servicer or
the Seller, as the case may be may at its option purchase the corpus of the
Trust at a price specified in the Sale and Servicing Agreement, and such
purchase of the Dealer Loans and other property of the Trust will effect early
retirement of the Certificates; however, such right of purchase is exercisable,
subject to certain restrictions, only as of the last day of any Collection
Period as of which the Class A Note Balance is 15% or less of the initial Class
A Note Balance, including any such purchase on such Purchase Date.
The Certificates may not be acquired by (a) an employee benefit plan
(as defined in Section 3(3) of ERISA) that is subject to the provisions of Title
I of ERISA, (b) a plan described in Section 4975(e) (1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). In connection with any
acquisition or transfer of a Certificate, the Holder thereof shall be required
to represent and warrant that it is not a Benefit Plan.
The recitals contained herein shall be taken as the statements of the
Seller or the Servicer, as the case may be, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Certificate or of any
Contracts or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
__________________________________ Attorney to transfer said Certificate on the
books of the Certificate Registrar, with full power of substitution in the
premises.
Dated:
______________________________*
----------
* NOTICE: The signature to this assignment must correspond with the
name of the registered owner as it appears on the face of the within Certificate
in every particular, without alteration, enlargement or any change whatsoever.
EXHIBIT B
FORM OF
CERTIFICATE OF TRUST OF
CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2003-1
This Certificate of Trust of Credit Acceptance Auto Dealer Loan Trust
2003-1 (the "Trust"), dated as of June 9, 2003, is being duly executed and filed
by Wachovia Bank of Delaware, National Association, a national banking
association, as trustee (the "Owner Trustee"), to form a statutory trust under
the Delaware Statutory Trust Act (12 Del. Code, Section 3801 et seq.).
1. Name. The name of the statutory trust formed hereby is Credit
Acceptance Auto Dealer Loan Trust 2003-1.
2. Delaware Trustee. The name and business address of the Owner
Trustee is:
Wachovia Bank of Delaware, National Association
One ▇▇▇▇▇▇ Square
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IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
WACHOVIA BANK OF DELAWARE,
NATIONAL ASSOCIATION,
not in its individual capacity but solely as
owner trustee of the Trust.
By: __________________________________________
Name:
Title: