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EXHIBIT 10.4
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AMENDED AND RESTATED
TRUST AGREEMENT
between
FIRST MERCHANTS AUTO RECEIVABLES CORPORATION II,
as Depositor,
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
Dated as of June 1, 1997
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Capitalized Terms 1
SECTION 1.02. Other Definitional Provisions 3
ARTICLE II
Organization
SECTION 2.01. Name 4
SECTION 2.02. Office 4
SECTION 2.03. Purposes and Powers 4
SECTION 2.04. Appointment of Owner Trustee 5
SECTION 2.05. Initial Capital Contribution of Owner Trust Estate 5
SECTION 2.06. Declaration of Trust 5
SECTION 2.07. Liability of the Owners 6
SECTION 2.08. Title to Trust Property 6
SECTION 2.09. Situs of Trust 6
SECTION 2.10. Representations and Warranties of the Depositor 6
SECTION 2.11. Maintenance of the Demand Note 7
SECTION 2.12. Tax Treatment 7
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Ownership 8
SECTION 3.02. The Trust Certificates 8
SECTION 3.03. Authentication of Trust Certificates 9
SECTION 3.04. Registration of Transfer and Exchange of Trust
Certificates 9
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates 11
SECTION 3.06. Persons Deemed Owners 12
SECTION 3.07. Access to List of Certificateholders' Names and
Addresses 12
SECTION 3.08. Maintenance of Office or Agency 12
SECTION 3.09. Appointment of Paying Agent 13
SECTION 3.10. Trust Certificate Transfer Restrictions 13
SECTION 3.11. Ownership by Depositor of Trust Certificates 13
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ARTICLE IV
Actions by Owner Trustee
SECTION 4.01. Prior Notice with Respect to Certain Matters 14
SECTION 4.02. Action by Owners with Respect to Certain Matters 14
SECTION 4.03. Action by Owners with Respect to Bankruptcy 15
SECTION 4.04. Restrictions on Owners' Power 15
SECTION 4.05. Majority Control 15
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Establishment of Trust Account 15
SECTION 5.02. Application of Trust Funds 16
SECTION 5.03. Method of Payment 16
SECTION 5.04. No Segregation of Moneys; No Interest. 16
SECTION 5.05. Accounting and Reports to the Noteholders, Owners,
the Internal Revenue Service and Others 16
SECTION 5.06. Signature on Returns; Tax Returns; Tax Matters Partner 17
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.01. General Authority 17
SECTION 6.02. General Duties 17
SECTION 6.03. Action upon Instruction 18
SECTION 6.04. No Duties Except as Specified in this Agreement or in
Instructions 18
SECTION 6.05. No Action Except Under Specified Documents or
Instructions 19
SECTION 6.06. Restrictions 19
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.01. Acceptance of Trusts and Duties 19
SECTION 7.02. Furnishing of Documents 20
SECTION 7.03. Representations and Warranties 21
SECTION 7.04. Reliance; Advice of Counsel 21
SECTION 7.05. Not Acting in Individual Capacity 22
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates or for
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Receivables 22
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes 22
SECTION 7.08. Pennsylvania Motor Vehicle Sales Finance Act Licenses 22
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.01. Owner Trustee's Fees and Expenses 23
SECTION 8.02. Indemnification 23
SECTION 8.03. Payments to the Owner Trustee 23
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement 23
SECTION 9.02. Dissolution upon Bankruptcy of the Depositor 24
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner Trustee 25
SECTION 10.02. Resignation or Removal of Owner Trustee 25
SECTION 10.03. Successor Owner Trustee 26
SECTION 10.04. Merger or Consolidation of Owner Trustee 27
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee 27
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments 28
SECTION 11.02. No Legal Title to Owner Trust Estate in Owners 29
SECTION 11.03. Limitations on Rights of Others 30
SECTION 11.04. Notices 30
SECTION 11.05. Severability 30
SECTION 11.06. Separate Counterparts 30
SECTION 11.07. Successors and Assigns 30
SECTION 11.08. Covenants of the Depositor 31
SECTION 11.09. No Petition 31
SECTION 11.10. No Recourse 31
SECTION 11.11. Headings 31
SECTION 11.12. GOVERNING LAW 31
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AMENDED AND RESTATED TRUST AGREEMENT dated as of June 1, 1997, between
FIRST MERCHANTS AUTO RECEIVABLES CORPORATION II, a Delaware corporation,
as depositor (the "Depositor"), and CHASE MANHATTAN BANK DELAWARE, a
Delaware banking corporation, as owner trustee (the "Owner Trustee").
WHEREAS, the Depositor and the Owner Trustee entered into a Trust
Agreement dated as of May 20, 1997 (the "Trust Agreement");
WHEREAS, the Trust Agreement is being amended and restated as of June 1,
1997;
NOW, THEREFORE, the Depositor and the Owner Trustee hereby agree as
follows:
ARTICLE I
Definitions
SECTION 1.01. Capitalized TermsSECTION 1.01. Capitalized Terms. For all
purposes of this Agreement, the following terms shall have the meanings set
forth below:
"Administration Agreement" shall mean the Administration Agreement dated
as of June 1, 1997, among the Trust, the Indenture Trustee and First Merchants
Acceptance Corporation, as Administrator.
"Agreement" shall mean this Amended and Restated Trust Agreement, as the
same may be amended and supplemented from time to time.
"Benefit Plan" shall have the meaning assigned to such term in Section
11.13.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as the same may be amended from time
to time.
"Certificate Balance" shall mean the Initial Certificate Balance reduced
by all amounts allocable to principal previously distributed to
Certificateholders.
"Certificate Distribution Account" shall have the meaning assigned to such
term in Section 5.01.
"Certificate of Trust" shall mean the Certificate of Trust in the form of
Exhibit B filed for the Trust pursuant to Section 3810(a) of the Business Trust
Statute.
"Certificate Register" and "Certificate Registrar" shall mean the register
mentioned in and the registrar appointed pursuant to Section 3.04.
"Certificateholder" or "Holder" shall mean a Person in whose name a Trust
Certificate is registered.
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"Code" shall mean the Internal Revenue Code of 1986, as amended, 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 ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other address in the
State of Delaware as the Owner Trustee may designate by notice to the Owners
and the Depositor, or the principal corporate trust office of any successor
Owner Trustee at the address in the State of Delaware designated by such
successor Owner Trustee by notice to the Owners and the Depositor.
"Demand Note" shall mean the Demand Note dated May 21, 1996 from First
Merchants Acceptance Corporation to the Depositor.
"Depositor" shall mean First Merchants Auto Receivables Corporation II in
its capacity as depositor hereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Expenses" shall have the meaning assigned to such term in Section 8.02.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.02.
"Indenture" shall mean the Indenture dated as of June 1, 1997 between the
Trust and ▇▇▇▇▇▇ Trust and Savings Bank, as Indenture Trustee.
"Initial Certificate Balance" shall mean $8,582,293.55.
"Notes" shall mean the 6.85% Asset Backed Notes issued pursuant to the
Indenture.
"Owner" shall mean each Holder of a Trust Certificate.
"Owner Trust Estate" shall mean all right, title and interest of the Trust
in and to the property and rights assigned to the Trust pursuant to Article II
of the Sale and Servicing Agreement, all funds on deposit from time to time in
the Trust Accounts and the Certificate Distribution Account 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 and the
Administration Agreement.
"Owner Trustee" shall mean Chase Manhattan Bank Delaware, a Delaware
banking corporation, not in its individual capacity but solely as owner trustee
under this Agreement, and any successor Owner Trustee hereunder.
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"Paying Agent" shall mean any paying agent or co-paying agent appointed
pursuant to Section 3.09 and shall initially be The Chase Manhattan Bank.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint stock company, limited liability company,
trust (including any beneficiary thereof), unincorporated organization, or
government or any agency or political subdivision thereof.
"Placement Agent" means Greenwich Capital Markets, Inc. ("Greenwich") as
Placement Agent under the Placement Agent and Purchase Agreement dated June 19,
1997 among Greenwich, the Depositor and First Merchants Acceptance Corporation.
"Record Date" shall mean, with respect to any Distribution Date, the last
day of the month preceding such Distribution Date.
"Sale and Servicing Agreement" shall mean the Sale and Servicing Agreement
dated as of June 1, 1997, among the Trust, as issuer, the Depositor, as seller,
First Merchants Acceptance Corporation, as originator and sub-servicer, LSI
Financial Group, as servicer, and ▇▇▇▇▇▇ Trust and Savings Bank, as indenture
trustee, backup servicer and custodian, as the same may be amended or
supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"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" shall mean a certificate evidencing the beneficial
interest of an Owner in the Trust, substantially in the form attached hereto as
Exhibit A.
SECTION 1.02. Other Definitional Provisions 1.02. Other Definitional
Provisions. (a) Capitalized terms used and not otherwise defined herein have
the meanings assigned to them in the Sale and Servicing Agreement or, if not
defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant
hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective
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meanings given to them under generally accepted accounting principles. To the
extent that the definitions of accounting terms in this Agreement or in any
such certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions contained
in this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular and plural forms of such terms and to the masculine, feminine and
neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to
a Person are also to its permitted successors and assigns.
ARTICLE II
Organization
SECTION 2.01. Name 2.01. Name. The Trust created hereby shall be known
as "First Merchants Auto Trust 1997-2," 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 2.02. OfficeSECTION 2.02. Office. The office of the Trust shall
be in care of the Owner Trustee at the Corporate Trust Office or at such other
address in Delaware as the Owner Trustee may designate by written notice to the
Owners and the Depositor.
SECTION 2.03. Purposes and PowersSECTION 2.03. Purposes and Powers. (a)
The purpose of the Trust is to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Trust
Certificates pursuant to this Agreement and to sell the Notes and the
Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates, to purchase the Receivables and to pay the organizational,
start-up and transactional expenses of the Trust;
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(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute
to the Owners pursuant to the terms of the Sale and Servicing Agreement
any portion of the Trust Estate released from the Lien of, and remitted
to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation
of the Owner Trust Estate and the making of distributions to the Owners
and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the Basic Documents.
SECTION 2.04. Appointment of Owner TrusteeSECTION 2.04. Appointment of
Owner Trustee. The Depositor hereby appoints the Owner Trustee as trustee of
the Trust effective as of the date hereof, to have all the rights, powers and
duties set forth herein.
SECTION 2.05. Initial Capital Contribution of Owner Trust EstateSECTION
2.05. Initial Capital Contribution of Owner Trust Estate. The Depositor hereby
sells, assigns, transfers, conveys and sets over to the Owner Trustee, as of
the date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt
in trust from the Depositor, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and shall
be deposited in the Certificate Distribution Account. The Depositor shall pay
organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee.
SECTION 2.06. Declaration of TrustSECTION 2.06. Declaration of Trust.
The Owner Trustee hereby declares that it will hold the Owner Trust Estate in
trust upon and subject to the conditions set forth herein for the use and
benefit of the Owners, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that the Trust constitute
a business trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such business trust. 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 assets of the
partnership being the Receivables and other assets held by the Trust, the
partners of the partnership being the Certificateholders, and the Notes being
debt of the partnership. The parties agree that, unless otherwise required by
appropriate tax authorities, the Trust 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
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date hereof, the Owner Trustee shall have all rights, powers and duties set
forth herein and in the Business Trust Statute with respect to accomplishing
the purposes of the Trust.
SECTION 2.07. Liability of the Owners 2.07. Liability of the Owners. (a)
The Depositor shall be liable directly to and will indemnify any injured party
for all losses, claims, damages, liabilities and expenses of the Trust
(including Expenses, to the extent not paid out of the Owner Trust Estate) to
the extent that the Depositor would be liable if the Trust were a partnership
under the Delaware Revised Uniform Limited Partnership Act in which the
Depositor were a general partner; provided, however, that the Depositor shall
not be liable for any losses incurred by a Certificateholder in the capacity of
an investor in the Trust Certificates, or by a Noteholder in the capacity of an
investor in the Notes. In addition, any third party creditors of the Trust
(other than in connection with the obligations described in the preceding
sentence for which the Depositor shall not be liable) shall be deemed third
party beneficiaries of this paragraph. The obligations of the Depositor under
this paragraph shall be evidenced by the Trust Certificates described in
Section 3.11, which for purposes of the Business Trust Statute shall be deemed
to be a separate class of Trust Certificates from all other Trust Certificates
issued by the Trust; provided that the rights and obligations evidenced by all
Trust Certificates, regardless of class, shall, except as provided in this
Section, be identical.
(b) No Owner, other than to the extent set forth in paragraph (a) above,
shall have any personal liability for any liability or obligation of the Trust.
SECTION 2.08. Title to Trust PropertySECTION 2.08. Title to Trust
Property. Legal title to all the Owner Trust Estate 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 Owner Trust Estate to be
vested in a trustee or trustees, in which case title shall be deemed to be
vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the
case may be.
SECTION 2.09. Situs of TrustSECTION 2.09. Situs of Trust. The Trust
will be located and administered in the State of Delaware. All bank accounts
maintained by the Owner Trustee on behalf of the Trust shall be located in the
State of Delaware or the State of New York. The Trust shall not have any
employees in any state other than Delaware; provided, however, that nothing
herein shall restrict or prohibit the Owner Trustee from having employees
within or without the State of Delaware. Payments will be received by the
Trust only in Delaware or New York, and payments will be made by the Trust only
from Delaware or New York. The only office of the Trust will be at the
Corporate Trust Office in Delaware.
SECTION 2.10. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee that:
(a) The Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
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(b) The Depositor is duly qualified to do business as a foreign
corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of its
property or the conduct of its business shall require such
qualifications.
(c) The Depositor has the power and authority to execute and deliver
this Agreement and to carry out its terms; the Depositor has full power
and authority to sell and assign the property to be sold and assigned to
and deposited with the Trust and the Depositor has duly authorized such
sale and assignment and deposit to the Trust by all necessary corporate
action; and the execution, delivery and performance of this Agreement
have been duly authorized by the Depositor by all necessary corporate
action.
(d) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof 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 incorporation or bylaws of the Depositor, or any
indenture, agreement or other instrument to which the Depositor 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, to the best of the Depositor's
knowledge, any order, rule or regulation applicable to the Depositor of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Depositor or its properties.
(e) There are no proceedings or investigations pending or threatened
before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Depositor or
its properties: (A) asserting the invalidity of this Agreement, (B)
seeking to prevent the consummation of any of the transactions
contemplated by this Agreement or (C) seeking any determination or ruling
that might materially and adversely affect the performance by the
Depositor of its obligations under, or the validity or enforceability of,
this Agreement.
SECTION 2.11. Maintenance of the Demand NoteSECTION 2.11. Maintenance of
the Demand Note. To the fullest extent permitted by applicable law, the
Depositor agrees that it shall not sell, convey, pledge, transfer or otherwise
dispose of the Demand Note.
SECTION 2.12. Tax TreatmentSECTION 2.12. Tax Treatment. Net income of
the Trust for any month as determined for federal income tax purposes (and each
item of income, gain, loss and deduction entering into the computation thereof)
shall be allocated:
(a among the Certificate Owners as of the first day following the end of
such month, in proportion to their ownership of principal amount of Trust
Certificates on such date, net income in an amount up to the sum of (i) the
Certificateholders' Monthly Interest Distributable Amount for such month, (ii)
interest on the excess, if any, of the
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Certificateholders' Interest Distributable Amount for the preceding
Distribution Date over the amount in respect of interest that is actually
deposited in the Certificate Distribution Account on such preceding
Distribution Date, to the extent permitted by law, at the Pass-Through Rate
from such preceding Distribution Date through the current Distribution Date,
(iii) the portion of the market discount on the Receivables accrued during such
month that is allocable to the excess, if any, of the initial aggregate
principal amount of the Trust Certificates over their initial aggregate issue
price, (iv) any amount expected to be distributed to the Certificateholders
pursuant to Section 5.07(g) of the Sale and Servicing Agreement (to the extent
not previously allocated pursuant to this clause), and (v) any other amounts of
income payable to the Certificateholders for such month; such sum to be reduced
by any amortization by the Trust of premium on Receivables that corresponds to
any excess of the issue price of Trust Certificates over their principal
amount; and
(b) to the Company, to the extent of any remaining net income.
If the net income of the Trust for any month is insufficient for the
allocations described in clause (a) above, subsequent net income shall first be
allocated to make up such shortfall before being allocated as provided in the
preceding sentence. Net losses of the Trust, if any, for any month as
determined for federal income tax purposes (and each item of income, gain, loss
and deduction entering into the computation thereof) shall be allocated to the
Company to the extent the Company is reasonably expected to bear the economic
burden of such net losses, and any remaining net losses shall be allocated
among the Certificate Owners as of the first Record Date following the end of
such month in proportion to their ownership of principal amount of Trust
Certificates on such Record Date. The Company is authorized to modify the
allocations in this paragraph if necessary or appropriate, in its sole
discretion, for the allocations to fairly reflect the economic income, gain or
loss to the Company or to the Certificate Owners, or as otherwise required by
the Code.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial OwnershipSECTION 3.01. Initial Ownership. Upon
the formation of the Trust by the contribution by the Depositor pursuant to
Section 2.05 and until the issuance of the Trust Certificates, the Depositor
shall be the sole beneficiary of the Trust.
SECTION 3.02. The Trust CertificatesSECTION 3.02. The Trust
Certificates. The Trust Certificates shall be issued in minimum denominations
of $250,000 and in integral multiples of $1,000 in excess thereof; provided,
however, that the Trust Certificate issued to the Depositor pursuant to Section
3.11 may be issued in such denomination as is required to include any residual
amount. The Trust Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of an authorized officer of the Owner Trustee.
Trust Certificates bearing the manual or facsimile signatures of individuals
who were, at the time when such signatures shall have been affixed, authorized
to sign on behalf of the Trust, shall be validly issued and entitled to the
benefit of this Agreement, notwithstanding that such individuals or any of them
shall have ceased to be
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so authorized prior to the authentication and delivery of such Trust
Certificates or did not hold such offices at the date of authentication and
delivery of such Trust Certificates.
A transferee of a Trust Certificate shall become a Certificateholder and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Trust
Certificate duly registered in such transferee's name pursuant to Section 3.04.
Each Holder of the Trust Certificates, by its acceptance of a Trust
Certificate, shall be deemed to have agreed to treat the Trust as a partnership
with the Trust Certificates representing partnership interests therein and the
Notes representing debt thereof. In the event that a Holder transfers any
Trust Certificate to any other Person, such Holder, by its transfer, and such
Person, by its acceptance of the Trust Certificate so transferred, shall be
subject to the same condition.
SECTION 3.03. Authentication of Trust CertificatesSECTION 3.03.
Authentication of Trust Certificates. On the Closing Date, the Owner Trustee
shall cause the Trust Certificates in an aggregate principal amount equal to
the Initial Certificate Balance to be executed on behalf of the Trust,
authenticated and delivered to or upon the written order of the Depositor,
signed by its chairman of the board, its president, any vice president,
secretary or any assistant treasurer, without further corporate action by the
Depositor, in authorized denominations. No Trust Certificate shall entitle its
Holder to any benefit under this Agreement or be valid for any purpose unless
there shall appear on such Trust Certificate a certificate of authentication
substantially in the form set forth in Exhibit A, executed by the Owner Trustee
or The Chase Manhattan Bank, as the Owner Trustee's authenticating agent, by
manual signature; such authentication shall constitute conclusive evidence that
such Trust Certificate shall have been duly authenticated and delivered
hereunder. All Trust Certificates shall be dated the date of their
authentication.
SECTION 3.04. Registration of Transfer and Exchange of Trust
CertificatesSECTION 3.04. Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.08, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Trust Certificates and of
transfers and exchanges of Trust Certificates as herein provided. The Chase
Manhattan Bank shall be the initial Certificate Registrar.
The Trust Certificates have not been and will not be registered under the
Securities Act and will not be listed on any exchange or traded on an
"established securities market" as defined in Treas. Reg. Section 1.7704-1(e)
(including an interdealer quotation system that regularly disseminates firm buy
or sell quotations by identified brokers or dealers by electronic means or
otherwise).
Notwithstanding anything to the contrary contained herein, no resale or
other transfer of a Trust Certificate or any interest therein shall be made if
the transferee (or any person or entity for whom such transferee is acting as
agent or custodian in connection with the acquisition of such Trust
Certificate) is a partnership, grantor trust or S corporation for federal
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income tax purposes (a "Flow-Through Entity") unless either: (i) all Trust
Certificates owned by or on behalf of such Flow-Through Entity will represent
less than 50% of the value of all assets owned by or on behalf of such
Flow-Through Entity and no special allocation of income, gain, loss, deduction
or credit from such Trust Certificates will be made among the beneficial owners
of such Flow-Through Entity; or (ii) the number of members of such Flow-Through
Entity is restricted such that no member of such Flow-Through Entity may own
Trust Certificates representing less than two percent of the Certificate
Balance and no member of such Flow-Through Entity is itself a Flow-Through
Entity that would not satisfy the requirements of clause (i). In order to
assure compliance with the foregoing restrictions, the Holder desiring to
effect such transfer shall certify to the Owner Trustee or the Certificate
Registrar and the Depositor in writing the facts surrounding the transfer in
substantially the form set forth in Exhibit D (the "Investment Letter").
The Trust shall cause each Trust Certificate to contain a legend stating
that transfer of the Trust Certificate is subject to certain restrictions and
referring prospective purchasers of such Certificates to this Section 3.04 with
respect to such restrictions.
No transfer of a Trust Certificate shall be made unless such transfer is
exempt from the registration requirements under the Securities Act and state
securities laws. In order to assure compliance with the Securities Act and
such laws, the Holder desiring to effect such transfer and such Holder's
prospective transferee shall each certify to the Owner Trustee or the
Certificate Registrar and the Depositor in writing the facts surrounding the
transfer in substantially the forms set forth in Exhibit C (the "Transferor
Certificate") and Exhibit D (the "Investment Letter"). Except in the case of a
transfer as to which the proposed transferee has provided an Investment Letter
with respect to a Rule 144A transaction, there shall also be delivered to the
Owner Trustee an Opinion of Counsel that such transfer may be made pursuant to
an exemption from the Securities Act and state securities laws, which Opinion
of Counsel shall not be an expense of the Trust, the Owner Trustee or the
Indenture Trustee (unless it is the transferee from whom such opinion is to be
obtained) or of the Depositor or First Merchants Acceptance Corporation;
provided that such Opinion of Counsel in respect of the applicable state
securities laws may be a memorandum of law rather than an opinion if such
counsel is not licensed in the applicable jurisdiction. The Depositor shall
provide to any Holder of a Trust Certificate and any prospective transferee
designated by any such Holder information regarding the Trust Certificates and
the Receivables and such other information as shall be necessary to satisfy the
condition to eligibility set forth in Rule 144A(d)(4) for transfer of any such
Trust Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. Each Holder of a
Trust Certificate desiring to effect such a transfer shall, and does hereby
agree to, indemnify the Trust, the Owner Trustee, the Indenture Trustee and the
Depositor against any liability that may result if the transfer is not so
exempt or is not made in accordance with federal and state securities laws.
No transfer of a Trust Certificate shall be made to any Person unless the
Owner Trustee has received (A) a certificate in the form of paragraph 3 to the
Investment Letter attached hereto as Exhibit D from such Person to the effect
that such Person is not (i) an employee
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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 Code or
(iii) any entity whose underlying assets include plan assets by reason of a
plan's investment in the entity (each, a "Benefit Plan"), (B) an Opinion of
Counsel satisfactory to the Owner Trustee and the Depositor to the effect that
the purchase and holding of such Trust Certificate will not constitute or
result in the assets of the Trust being deemed to be "plan assets" subject to
the prohibited transactions provisions of ERISA or Section 4975 of the Code and
will not subject the Owner Trustee, the Indenture Trustee or the Depositor to
any obligation in addition to those undertaken in the Basic Documents or (C) if
such Person is an insurance company, a representation that such Person is an
insurance company that is purchasing such Trust Certificates with funds
contained in an "insurance company general account" (as such term is defined in
section v(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60"))
and that the purchase and holding of such Trust Certificates and any deemed
extension of credit from a Certificateholder which is a party in interest to a
Plan, the assets of which are held by such "insurance company" are covered
under PTCE 95-60; provided, however, that the Owner Trustee will not require
such certificate or opinion in the event that, as a result of a change of law or
otherwise, counsel satisfactory to the Owner Trustee has rendered an Opinion of
Counsel to the effect that the purchase and holding of a Trust Certificate by a
Benefit Plan or a Person that is purchasing or holding such a Trust Certificate
with the assets of a Benefit Plan will not constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code.
The preparation and delivery of the certificate and opinions referred to
above shall not be an expense of the Trust, the Owner Trustee, the Indenture
Trustee, the Servicer or the Depositor.
Upon surrender for registration of transfer of any Trust Certificate at
the office or agency maintained pursuant to Section 3.08, the Owner Trustee
shall execute, authenticate and deliver (or shall cause The Chase Manhattan
Bank as its authenticating agent to authenticate and deliver), in the name of
the designated transferee or transferees, one or more new Trust Certificates in
authorized denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent. At the option
of a Certificateholder, Trust Certificates may be exchanged for other Trust
Certificates of authorized denominations of a like aggregate amount upon
surrender of the Trust Certificates to be exchanged at the office or agency
maintained pursuant to Section 3.08.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Certificateholder or such Certificateholder's attorney duly
authorized in writing. Each Trust Certificate surrendered for registration of
transfer or exchange shall be cancelled and subsequently disposed of by the
Owner Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum
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sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Trust Certificates.
The preceding provisions of this Section notwithstanding, the Owner
Trustee shall not make, and the Certificate Registrar shall not register
transfers or exchanges of, Trust Certificates for a period of 15 days preceding
the due date for any payment with respect to the Trust Certificates.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust
CertificatesSECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust
Certificates. If (a) any mutilated Trust Certificate shall be surrendered to
the Certificate Registrar, or if the Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Certificate and (b) there shall be delivered to the Certificate Registrar and
the Owner Trustee such security or indemnity as may be required by them to save
each of them harmless, then in the absence of notice that such Trust
Certificate has been acquired by a bona fide purchaser, the Owner Trustee on
behalf of the Trust shall execute and the Owner Trustee or The Chase Manhattan
Bank, as the Owner Trustee's authenticating agent, shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Certificate, a new Trust Certificate of like tenor and
denomination. In connection with the issuance of any new Trust Certificate
under this Section, the Owner Trustee or the Certificate Registrar may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Trust Certificate
issued pursuant to this Section shall constitute conclusive evidence of
ownership in the Trust, as if originally issued, whether or not the lost,
stolen or destroyed Trust Certificate shall be found at any time.
SECTION 3.06. Persons Deemed OwnersSECTION 3.06. Persons Deemed Owners.
Prior to due presentation of a Trust Certificate for registration of transfer,
the Owner Trustee, the Certificate Registrar or any Paying Agent may treat the
Person in whose name any Trust Certificate is registered in the Certificate
Register as the owner of such Trust Certificate for the purpose of receiving
distributions pursuant to Section 5.02 and for all other purposes whatsoever,
and none of the Owner Trustee, the Certificate Registrar or any Paying Agent
shall be bound by any notice to the contrary.
SECTION 3.07. Access to List of Certificateholders' Names and
AddressesSECTION 3.07. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer and the Depositor, within 15 days after receipt by the Owner Trustee
of a written request therefor from the Servicer or the Depositor, a list, in
such form as the Servicer or the Depositor may reasonably require, of the names
and addresses of the Certificateholders as of the most recent Record Date. If
(i) three or more Certificateholders or (ii) one or more Holders of Trust
Certificates evidencing not less than 25% of the Certificate Balance apply in
writing to the Owner Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their
rights under this Agreement or under the Trust Certificates and such
application is accompanied by a copy of the communication that such applicants
propose to transmit, then the Owner Trustee shall, within five Business Days
after the receipt of such application, afford such applicants access during
normal business hours to the current list of
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Certificateholders. Each Certificateholder, by receiving and holding a Trust
Certificate, shall be deemed to have agreed not to hold any of the Depositor,
the Certificate Registrar or the Owner Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 3.08. Maintenance of Office or AgencySECTION 3.08. Maintenance
of Office or Agency. The Owner Trustee shall maintain in the Borough of
Manhattan, the City of New York, an office or offices or agency or agencies
where Trust Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Owner Trustee in respect
of the Trust Certificates and the Basic Documents may be served. The Owner
Trustee initially designates The Chase Manhattan Bank, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as its office for such purposes. The Owner Trustee shall
give prompt written notice to the Depositor and to the Certificateholders of
any change in the location of the Certificate Register or any such office or
agency.
SECTION 3.09. Appointment of Paying AgentSECTION 3.09. Appointment of
Paying Agent. The Paying Agent shall make distributions to Certificateholders
from the Certificate Distribution Account pursuant to Section 5.02 and shall
report the amounts of such distributions to the Owner Trustee. Any Paying
Agent shall have the revocable power to withdraw funds from the Certificate
Distribution Account for the purpose of making the distributions referred to
above. The Owner Trustee may revoke such power and remove the Paying Agent if
the Owner Trustee determines in its sole discretion that the Paying Agent shall
have failed to perform its obligations under this Agreement in any material
respect. The Paying Agent initially shall be The Chase Manhattan Bank, and any
co-paying agent chosen by The Chase Manhattan Bank and acceptable to the Owner
Trustee. The Chase Manhattan Bank shall be permitted to resign as Paying Agent
upon 30 days' written notice to the Owner Trustee. In the event that The Chase
Manhattan Bank shall no longer be the Paying Agent, the Owner Trustee shall
appoint a successor to act as Paying Agent (which shall be a bank or trust
company). The Owner Trustee shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Owner Trustee to execute and deliver
to the Owner Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Owner Trustee that, as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be
paid to such Certificateholders. The Paying Agent shall return all unclaimed
funds to the Owner Trustee and upon removal of a Paying Agent such Paying Agent
shall also return all funds in its possession to the Owner Trustee. The
provisions of Sections 7.01, 7.03, 7.04 and 8.01 shall apply to the Owner
Trustee also in its role as Paying Agent, for so long as the Owner Trustee
shall act as Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Agreement to the Paying Agent
shall include any co-paying agent unless the context requires otherwise.
SECTION 3.10. Trust Certificate Transfer RestrictionsSECTION 3.10. Trust
Certificate Transfer Restrictions. The Trust Certificates may not be acquired
by or for the account of (i) an employee benefit plan (as defined in Section
3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii) a
plan described in
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Section 4975(e)(1) of the Code or (iii) any entity whose underlying assets
include plan assets by reason of a plan's investment in the entity (each, a
"Benefit Plan"). By accepting and holding a Trust Certificate, the Holder
thereof shall be deemed to have represented and warranted that it is not a
Benefit Plan.
SECTION 3.11. Ownership by Depositor of Trust Certificates3.11. Ownership
by Depositor of Trust Certificates. The Depositor shall on the Closing Date
purchase from the Placement Agent Trust Certificates representing at least 1%
of the Initial Certificate Balance and shall thereafter retain beneficial and
record ownership of Trust Certificates representing at least 1% of the
Certificate Balance. Any attempted transfer of any Trust Certificate that
would reduce such interest of the Depositor below 1% of the Certificate Balance
shall be void. The Owner Trustee shall cause any Trust Certificate issued to
the Depositor in respect of 1% of the Certificate Balance to contain a legend
stating "THIS TRUST CERTIFICATE IS NON-TRANSFERABLE".
ARTICLE IV
Actions by Owner Trustee
SECTION 4.01. Prior Notice with Respect to Certain Matters. With respect
to the following matters, the Owner Trustee shall not take action unless at
least 30 days before the taking of such action, the Owner Trustee shall have
notified the Certificateholders and the Note Insurer (so long as no Note
Insurer Default shall have occurred and be continuing) in writing of the
proposed action and neither the Note Insurer (so long as no Note Insurer
Default shall have occurred and be continuing, in which case the Indenture
Trustee shall have such right of the Note Insurer) nor the Owners shall have
notified the Owner Trustee in writing prior to the 30th day after such notice
is given that such Owners or the Note Insurer (so long as no Note Insurer
Default shall have occurred and be continuing) have withheld consent or
provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims or
lawsuits brought in connection with the collection of the Receivables) and the
compromise of any action, claim or lawsuit brought by or against the Trust
(except with respect to the aforementioned claims or lawsuits for collection of
the Receivables);
(b) the election by the Trust to file an amendment to the Certificate of
Trust (unless such amendment is required to be filed under the Business Trust
Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment would materially adversely affect the interests of the Owners;
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(e) the amendment, change or modification of the Administration Agreement,
except to cure any ambiguity or to amend or supplement any provision in a
manner or add any provision that would not materially adversely affect the
interests of the Owners; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of a
successor Certificate Registrar, or the consent to the assignment by the Note
Registrar, Paying Agent, Indenture Trustee or Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable.
SECTION 4.02. Action by Owners with Respect to Certain Matters. The
Owner Trustee shall not have the power, except upon the written direction of
the Owners (with the consent of the Note Insurer (so long as no Note Insurer
Default shall have occurred and be continuing; and if a Note Insurer Default
shall have occured and be continuing, with the consent of the Indenture
Trustee)), to (a) remove the Administrator under the Administration Agreement
pursuant to Section 8 thereof, (b) appoint a successor Administrator pursuant
to Section 8 of the Administration Agreement, (c) remove the Servicer under the
Sale and Servicing Agreement pursuant to Section 8.02 thereof, (d) amend the
Sale and Servicing Agreement pursuant to Section 10.01(b) of such document, or
(e) except as expressly provided in the Basic Documents, sell the Receivables
after the termination of the Indenture. The Owner Trustee shall take the
actions referred to in the preceding sentence only upon written instructions
signed by the Owners.
SECTION 4.03. Action by Owners with Respect to Bankruptcy . The Owner
Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Owners and the Note Insurer (so long as no Note Insurer Default shall have
occurred and be continuing) or the Indenture Trustee (if a Note Insurer Default
shall have occurred and be continuing) and the delivery to the Owner Trustee by
each such Owner of a certificate certifying that such Owner reasonably believes
that the Trust is insolvent.
SECTION 4.04. Restrictions on Owners' Power . The Owners shall not
direct the Owner Trustee to take or to refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the
Owner Trustee under this Agreement or any of the Basic Documents or would be
contrary to Section 2.03; nor shall the Owner Trustee be obligated to follow
any such direction, if given.
SECTION 4.05. Majority Control. Except as expressly provided herein, any
action that may be taken by the Owners under this Agreement may be taken by the
Holders of Trust Certificates evidencing not less than a majority of the
Certificate Balance. Except as expressly provided herein, any written notice
of the Owners delivered pursuant to this Agreement shall be effective if signed
by Holders of Trust Certificates evidencing not less than a majority of the
Certificate Balance at the time of the delivery of such notice.
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ARTICLE V
ARTICLE V Application of Trust Funds; Certain Duties
SECTION 5.01. Establishment of Trust Account. The Owner Trustee, for the
benefit of the Certificateholders, shall establish and maintain in the name of
the Trust an Eligible Deposit Account (the "Certificate Distribution Account"),
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Certificateholders.
The Owner Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Certificate Distribution Account and in all
proceeds thereof. Except as otherwise expressly provided herein, the
Certificate Distribution Account shall be under the sole dominion and control
of the Owner Trustee for the benefit of the Certificateholders. If, at any
time, the Certificate Distribution Account ceases to be an Eligible Deposit
Account, the Owner Trustee (or the Depositor on behalf of the Owner Trustee, if
the Certificate Distribution Account is not then held by the Owner Trustee or
an affiliate thereof) shall within 10 Business Days (or such longer period, not
to exceed 30 calendar days, as to which each Rating Agency may consent)
establish a new Certificate Distribution Account as an Eligible Deposit Account
and shall transfer any cash and/or any investments to such new Certificate
Distribution Account.
SECTION 5.02. Application of Trust Funds. (a) On each Distribution
Date, the Owner Trustee will distribute to Certificateholders, on a pro rata
basis, amounts deposited in the Certificate Distribution Account pursuant to
Section 5.06 of the Sale and Servicing Agreement with respect to such
Distribution Date.
(b) On each Distribution Date, the Owner Trustee shall send to each
Certificateholder the statement or statements provided to the Owner Trustee by
the Servicer pursuant to Section 5.11 of the Sale and Servicing Agreement with
respect to such Distribution Date.
(c) In the event that any withholding tax is imposed on the Trust's payment
(or allocations of income) to an Owner, such tax shall reduce the amount
otherwise distributable to the Owner in accordance with this Section. The
Owner Trustee is hereby authorized and directed to retain from amounts
otherwise distributable to the Owners sufficient funds for the payment of any
tax that is legally owed by the Trust (but such authorization shall not prevent
the Owner Trustee from contesting any such tax in appropriate proceedings and
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings). The amount of any withholding tax imposed with respect to
an Owner shall be treated as cash distributed to such Owner at the time it is
withheld by the Trust and remitted to the appropriate taxing authority. If
there is a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a non-U.S. Owner), the Owner Trustee
may in its sole discretion withhold such amounts in accordance with this
paragraph (c).
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SECTION 5.03. Method of Payment. Subject to Section 9.01(c),
distributions required to be made to Certificateholders on any Distribution
Date shall be made to each Certificateholder of record on the preceding Record
Date either by wire transfer, in immediately available funds, to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five Business Days prior to
such Distribution Date and such Holder's Trust Certificates in the aggregate
evidence a denomination of not less than $1,000,000, or, if not, by check
mailed to such Certificateholder at the address of such Certificateholder
appearing in the Certificate Register.
SECTION 5.04. No Segregation of Moneys; No Interest. Subject to Sections
5.01 and 5.02, moneys received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law or the Sale and
Servicing Agreement and may be deposited under such general conditions as may
be prescribed by law, and the Owner Trustee shall not be liable for any
interest thereon.
SECTION 5.05. Accounting and Reports to the Noteholders, Owners, the
Internal Revenue Service and Others. The Owner Trustee shall (a) maintain (or
cause to be maintained) the books of the Trust on a calendar year basis and the
accrual method of accounting, (b) deliver to each Owner, as may be required by
the Code and applicable Treasury Regulations, such information as may be
required (including Schedule K-1) to enable each Owner to prepare its federal
and state income tax returns, (c) file such tax returns relating to the Trust
(including a partnership information return, IRS Form 1065) and make such
elections as from time to time may be required or appropriate under any
applicable state or federal statute or any rule or regulation thereunder so as
to maintain the Trust's characterization as a partnership for federal income
tax purposes, (d) cause such tax returns to be signed in the manner required by
law and (e) collect or cause to be collected any withholding tax as described
in and in accordance with Section 5.02(c) with respect to income or
distributions to Owners. 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 Receivables. The Owner Trustee shall not make the election
provided under Section 754 of the Code.
SECTION 5.06. Signature on Returns; Tax Returns; Tax Matters Partner.
(a) The Owner Trustee shall sign on behalf of the Trust the tax returns of the
Trust, unless applicable law requires an Owner to sign such documents, in which
case such documents shall be signed by the Depositor. The Owner Trustee shall
file Internal Revenue Service Form 8832 and elect for the Trust to be treated
as a domestic eligible entity with multiple owners that will be treated as a
partnership for federal income tax purposes. (b) The Depositor shall be
designated the "tax matters partner" of the Trust pursuant to Section
6231(a)(7)(A) of the Code and Applicable Treasury Regulations.
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ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents (including amendments
thereto) to which the Trust is to be a party and each certificate or other
document attached as an exhibit to or contemplated by the Basic Documents to
which the Trust is to be a party, in each case, in such form as the Depositor
shall approve, as evidenced conclusively by the Owner Trustee's execution
thereof. 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 Basic Documents. The Owner Trustee is further authorized from time to time
to take such action as the Administrator recommends with respect to the Basic
Documents (including executing amendments thereto).
SECTION 6.02. General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant
to the terms of this Agreement and the Basic Documents to which the Trust is a
party and to administer the Trust in the interest of the Owners, 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 to the extent the Administrator has agreed in the Administration
Agreement to perform any act or to discharge any duty of the Owner Trustee
hereunder or under any Basic Document, and the Owner Trustee shall not be held
liable for the default or failure of the Administrator to carry out its
obligations under the Administration Agreement.
SECTION 6.03. Action upon Instruction. (a) Subject to Article IV and in
accordance with the terms of the Basic Documents, the Owners may by written
instruction direct the Owner Trustee in the management of the Trust. Such
direction may be exercised at any time by written instruction of the Owners
pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action hereunder or
under any Basic Document if the Owner Trustee shall have reasonably determined,
or shall have been advised by counsel, that such action is likely to result in
liability on the part of the Owner Trustee or is contrary to the terms hereof
or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or under
any Basic Document, the Owner Trustee shall promptly give notice (in such form
as shall be appropriate under the circumstances) to the Owners 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 Owners received, the Owner Trustee shall not be liable on account of such
action to any Person. If the Owner Trustee shall not have received appropriate
instruction within 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
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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 Owners, and shall have no liability to any Person for such
action or inaction.
(d) In the event that the Owner Trustee is unsure as to the application of
any provision of this Agreement or any 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 Owners requesting
instruction and, to the extent that the Owner Trustee acts or refrains from
acting in good faith in accordance with any such instruction received, the
Owner Trustee shall not be liable, on account of such action or inaction, to
any Person. If the Owner Trustee shall not have received appropriate
instruction within 10 days of such notice (or within such shorter period of
time as reasonably may be specified in such notice or may be necessary under
the circumstances) it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Agreement or the Basic Documents,
as it shall deem to be in the best interests of the Owners, and shall have no
liability to any Person for such action or inaction.
SECTION 6.04. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain
from taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly provided by
the terms of this Agreement or in any document or written instruction received
by the Owner Trustee pursuant to Section 6.03; and no implied duties or
obligations shall be read into this Agreement or any 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 Securities and Exchange
Commission filing for the Trust 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 Owner Trust Estate that result from actions by, or
claims against, the Owner Trustee that are not related to the ownership or the
administration of the Owner Trust Estate.
SECTION 6.05. No Action Except Under Specified Documents or
InstructionsSECTION 6.05. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the Basic
Documents and (iii) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 6.03.
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SECTION 6.06. Restrictions. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section
2.03 or (b) that, to the actual knowledge of the Owner Trustee, would result in
the Trust's becoming taxable as a corporation for federal, Arkansas or Illinois
income tax purposes. The Owners shall not direct the Owner Trustee to take
action that would violate the provisions of this Section.
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.01. Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts, but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all moneys actually received by it constituting
part of the Owner Trust Estate upon the terms of the Basic Documents and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder
or under any Basic Document under any circumstances, except (i) for its own
willful misconduct or negligence or (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 7.03 expressly made by the
Owner Trustee. In particular, but not by way of limitation (and subject to the
exceptions set forth in the preceding sentence):
(a) The Owner Trustee shall not be liable for any error of judgment made by
a Trust Officer of the Owner Trustee;
(b) The Owner Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in accordance with the instructions of the
Administrator or any Owner;
(c) No provision of this Agreement or any Basic Document shall require the
Owner Trustee to expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder or under
any Basic Document if the Owner Trustee shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured or provided to it;
(d) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) The Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by
the Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate, or for or in respect of the validity
or sufficiency of the Basic Documents, other than the certificate of
authentication on the Trust Certificates, and the Owner Trustee shall in no
event assume
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or incur any liability, duty or obligation to any Noteholder or to
any Owner, other than as expressly provided for herein or expressly agreed to
in the Basic Documents;
(f) The Owner Trustee shall not be liable for the default or misconduct of
the Administrator, the Depositor, the Servicer, the Sub-servicer, the Indenture
Trustee 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 of the Trust under this Agreement or the Basic Documents that are
required to be performed by the Administrator under the Administration
Agreement, the Indenture Trustee under the Indenture or the Depositor, the
Servicer, the Sub-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 any of
the Owners, unless such Owners have offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities that
may be incurred by the Owner Trustee therein or thereby. The right of the
Owner Trustee to perform any discretionary act enumerated in this Agreement or
in any Basic Document shall not be construed as a duty, and the Owner Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of any such act.
SECTION 7.02. Furnishing of Documents. The Owner Trustee shall furnish
to the Owners, promptly upon receipt of a written request therefor, duplicates
or copies of all reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Owner Trustee under the
Basic Documents.
SECTION 7.03. Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Depositor, for the benefit of the Owners, that:
(a) It is a banking corporation duly organized and validly existing in good
standing under the laws of the State of Delaware. It has all requisite
corporate power and authority 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 or the delivery by it of this Agreement, nor the
consummation by it of the transactions contemplated hereby, nor compliance by
it with any of the terms or provisions hereof will contravene any federal or
Delaware law, governmental rule or regulation governing the banking or trust
powers of the Owner Trustee or any judgment or order binding on it, or
constitute any default under its charter documents or bylaws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or by which
any of its properties may be bound.
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(d) It is a corporation satisfying the provisions of Section 3807(a) of the
Business Trust Statute; authorized to exercise corporate trust powers; having a
combined capital and surplus of at least $50,000,000 and subject to supervision
or examination by federal or state authorities; and having (or having a parent
that has) time deposits that are rated at least A-1 by Standard & Poor's and
P-1 by Moody's.
SECTION 7.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter,
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i0 may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants
and other skilled Persons to be selected with reasonable care and employed by
it. The Owner Trustee shall not be liable for anything done, suffered or
omitted in good faith by it in accordance with the written opinion or advice of
any such counsel, accountants or other such Persons and not contrary to this
Agreement or any Basic Document.
SECTION 7.05. Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created, Chase Manhattan Bank
Delaware 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 Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates or for
Receivables. The recitals contained herein and in the Trust Certificates
(other than the signature and countersignature of the Owner Trustee on the
Trust Certificates) shall be taken as the statements of the Depositor, and the
Owner Trustee assumes no responsibility for the correctness thereof. Except as
set forth in Section 7.03, the Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, of any Basic Document or of the
Trust Certificates (other than the signature and countersignature of the Owner
Trustee on the Trust Certificates) or the Notes, or of any Receivable or
related documents. The Owner
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Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Receivable or the
perfection and priority of any security interest created by any Receivable in
any Financed Vehicle or the maintenance of any such perfection and priority, or
for or with respect to the sufficiency of the Owner Trust Estate or its ability
to generate the payments to be distributed to Certificateholders under this
Agreement or the Noteholders under the Indenture, including, without
limitation: the existence, condition and ownership of any Financed Vehicle;
the existence and enforceability of any insurance thereon; the existence and
contents of any Receivable on any computer or other record thereof; the
validity of the assignment of any Receivable to the Trust or of any intervening
assignment; the completeness of any Receivable; the performance or enforcement
of any Receivable; the compliance by the Depositor, the Servicer, the
Sub-servicer or the Backup Servicer with any warranty or representation made
under any Basic Document or in any related document or the accuracy of any such
warranty or representation, or any action of the Administrator, the Indenture
Trustee, the Servicer or the Backup Servicer or any subservicer taken in the
name of the Owner Trustee.
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Administrator, the Indenture Trustee, the Servicer and the Sub-servicer in
banking transactions with the same rights as it would have if it were not Owner
Trustee.
SECTION 7.08. Pennsylvania Motor Vehicle Sales Finance Act
Licenses. The Owner Trustee, in its individual capacity, shall use its best
efforts to maintain, and the Owner Trustee, as Owner Trustee, shall cause the
Trust to use its best efforts to maintain, the effectiveness of all licenses
required under the Pennsylvania Motor Vehicle Sales Finance Act in connection
with this Agreement and the Basic Documents and the transactions contemplated
hereby and thereby until such time as the Trust shall terminate in accordance
with the terms hereof.
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.01. Owner Trustee's Fees and Expenses. As compensation for its
services hereunder, the Owner Trustee shall receive the Owner Trustee Fee as
provided in the Sale and Servicing Agreement.
SECTION 8.02. Indemnification. The Administrator shall be liable as
primary obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from and
against, any and all liabilities, obligations, losses, damages, taxes, claims,
actions and suits, and any and all reasonable costs, expenses and disbursements
(including reasonable legal fees and expenses) of any kind and nature
whatsoever (collectively, "Expenses") which may at any time be imposed on,
incurred by, or asserted against the Owner Trustee or any Indemnified Party in
any way relating to or arising
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out of this Agreement, the Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or inaction of the Owner
Trustee hereunder, except only that the Administrator shall not be liable for
or required to indemnify an Indemnified Party from and against Expenses arising
or resulting from any of the matters described in the third sentence of Section
7.01. The indemnities contained in this Section 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 the Administrator, which approval shall not be
unreasonably withheld.
SECTION 8.03. 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 Owner Trust Estate immediately after such payment.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement. (a) This Agreement (other
than Article VIII) and the Trust shall terminate and be of no further force or
effect upon the final distribution by the Owner Trustee, notwithstanding the
payment in full of the Certificates, of all moneys or other property or
proceeds of the Owner Trust Estate in accordance with the terms of the
Indenture and the Sale and Servicing Agreement, including, without limitation
Section 5.06(b)(12) of the Sale and Servicing Agreement, and Article V hereof.
Subject to Section 9.02, the bankruptcy, liquidation, dissolution, death or
incapacity of any Owner shall not (x) operate to terminate this Agreement or
the Trust or (y) entitle such Owner'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 Owner Trust Estate or (z)
otherwise affect the rights, obligations and liabilities of the parties hereto.
(b) Neither the Depositor nor any Owner shall be entitled to revoke or
terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Distribution
Date upon which Certificateholders shall surrender their Trust Certificates to
the Paying Agent for payment of the final distribution and cancellation, shall
be given by the Owner Trustee by letter to Certificateholders mailed within
five Business Days of receipt of notice of such termination from the Servicer
given pursuant to Section 9.01(c) of the Sale and Servicing Agreement, stating
(i) the Distribution Date upon or with respect to which final payment of the
Trust Certificates shall be made upon presentation and surrender of the Trust
Certificates at the office of the Paying Agent therein designated, (ii) the
amount of any such final payment and (iii) that the Record Date otherwise
applicable to such Distribution Date is not applicable, payments being made
only upon presentation and surrender of the Trust Certificates at the office of
the Paying Agent therein specified. The Owner Trustee shall give such notice
to the
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Certificate Registrar (if other than the Owner Trustee) and the Paying
Agent at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Trust Certificates, the Paying Agent shall
cause to be distributed to Certificateholders amounts distributable on such
Distribution Date pursuant to Section 5.02.
In the event that all of the Certificateholders shall not surrender their
Trust Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Owner Trustee shall give a second
written notice to the remaining Certificateholders to surrender their Trust
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Trust Certificates
shall not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the remaining Certificateholders concerning surrender of their Trust
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to this Agreement. Any funds remaining in the
Trust after exhaustion of such remedies shall be distributed by the Owner
Trustee to the Depositor, subject to applicable escheat laws.
(d) Upon the winding up of the Trust and its termination, the Owner Trustee
shall cause the Certificate of Trust to be cancelled by filing a certificate of
cancellation with the Secretary of State in accordance with the provisions of
Section 3810 of the Business Trust Statute.
SECTION 9.02. Dissolution upon Bankruptcy of the Depositor. In the event
that an Insolvency Event shall occur with respect to the Depositor, this
Agreement shall be terminated in accordance with Section 9.01 90 days after
the date of such Insolvency Event, unless, before the end of such 90-day
period, the Owner Trustee shall have received written instructions from (a)
Holders (other than the Depositor) of Trust Certificates representing more than
50% of the Certificate Balance (not including the Certificate Balance of the
Trust Certificates held by the Depositor) and (b) each of the (i) Holders (as
defined in the Indenture) of Notes representing more than 50% of the
Outstanding Amount of the Notes and (ii) the Note Insurer (so long as no Note
Insurer Default shall have occurred and be continuing), to the effect that each
such party disapproves of the termination of the Trust. Promptly after the
occurrence of any Insolvency Event with respect to the Depositor, (A) the
Depositor shall give the Indenture Trustee, the Note Insurer and the Owner
Trustee written notice of such Insolvency Event, (B) the Owner Trustee shall,
upon the receipt of such written notice from the Depositor, give prompt written
notice to the Certificateholders, the Note Insurer and the Indenture Trustee,
of the occurrence of such event and (C) the Indenture Trustee shall, upon
receipt of written notice of such Insolvency Event from the Owner Trustee or the
Depositor, give prompt written notice to the Noteholders and the Note Insurer
of the occurrence of such event; provided, however, that any failure to give a
notice required by this sentence shall not prevent or delay, in any manner, a
termination of the Trust pursuant to the first sentence of this Section 9.02.
Upon a termination pursuant to this Section, the Owner Trustee shall direct the
Indenture Trustee promptly to sell the assets of the Trust (other than the
Trust Accounts and the Certificate Distribution Account) in a commercially
reasonable manner and on
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commercially reasonable terms. The proceeds of such a sale of the assets of
the Trust shall be treated as collections under the Sale and Servicing
Agreement.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; authorized to exercise corporate
trust powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authorities; and
having (or having a parent that has) time deposits that are rated at least A-1
by Standard & Poor's and P-1 by Moody's. If such corporation shall publish
reports of condition at least annually pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Owner Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.02.
SECTION 10.02. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Administrator, the Indenture Trustee
and the Note Insurer. Upon receiving such notice of resignation, the Depositor
(with the prior written consent of the Note Insurer, unless a Note Insurer
Default has occurred and is continuing) shall promptly appoint a successor
Owner Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Owner Trustee and one copy to the successor
Owner Trustee. If no successor Owner Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 10.01 and shall fail to resign after written
request therefor by the Administrator, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or
a receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Administrator may remove the Owner Trustee. If the
Administrator shall remove the Owner Trustee under the authority of the
immediately preceding sentence, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed and one
copy to the successor Owner Trustee, and shall pay all fees owed to the
outgoing Owner Trustee.
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Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Administrator shall provide notice of such
resignation or removal of the Owner Trustee to each Rating Agency and the Note
Insurer (so long as no Note Insurer Default shall have occurred and be
continuing).
SECTION 10.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.01 or 10.02 shall execute, acknowledge and
deliver to the Administrator 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 Administrator
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 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Administrator shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders, the Note Insurer
(so long as no Note Insurer Default shall have occurred and be continuing) and
the Rating Agencies. If the Administrator shall fail to mail such notice
within 10 days after acceptance of such appointment by the successor Owner
Trustee, the successor Owner Trustee shall cause such notice to be mailed at
the expense of the Administrator.
SECTION 10.04. 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, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding;
provided, that such corporation shall be eligible pursuant to Section 10.01
and, provided, further, that the Owner Trustee shall mail notice of such merger
or consolidation to each Rating Agency and the Note Insurer (so long as no Note
Insurer Default shall have occurred and be continuing).
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SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Administrator and Owner Trustee to act as co-trustee, jointly
with the Owner Trustee, or as separate trustee or separate trustees, of all or
any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Trust or any part thereof and, subject to the other
provisions of this Section, such powers, duties, obligations, rights and trusts
as the Administrator and the Owner Trustee may consider necessary or desirable.
If the Administrator shall not have joined in such appointment within 15 days
after the receipt by it of a request so to do, the Owner Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee
under this Agreement shall be required to meet the terms of eligibility as a
successor Owner Trustee pursuant to Section 10.01 and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed upon
the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be 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 Owner Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Owner Trustee;
(b) No trustee under this Agreement shall be personally liable by reason
of any act or omission of any other trustee under this Agreement; and
(c) The Administrator 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
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the liability of, or affording protection to, the Owner Trustee. Each such
instrument shall be filed with the Owner Trustee and a copy thereof given to
the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Owner Trustee, to the extent permitted by law, without the appointment
of a new or successor co-trustee or separate trustee.
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments. This Agreement may be amended
by the Depositor and the Owner Trustee, with the consent of the Note Insurer
(so long as no Note Insurer Default shall have occurred and be continuing) or
the Indenture Trustee (if a Note Insurer Default shall have occurred and be
continuing) and with prior written notice to each Rating Agency, without the
consent of any of the Noteholders or the Certificateholders, to cure any
ambiguity, to correct or supplement any provisions in this Agreement or for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions in this Agreement or of modifying in any manner the
rights of the Noteholders or the Certificateholders; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Depositor and
the Owner Trustee, with the consent of the Note Insurer (so long as no Note
Insurer Default shall have occurred and be continuing) and with prior written
notice to each Rating Agency, with the consent of the Holders (as defined in
the Indenture) of Notes evidencing not less than a majority of the Outstanding
Amount of the Notes and the consent of the Holders of Certificates evidencing
not less than a majority of the Certificate Balance, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided, however, that no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on Receivables or
distributions that shall be required to be made for the benefit of the
Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of
the Outstanding Amount of the Notes and the Certificate Balance required to
consent to any such amendment, without the consent of Holders of all the
outstanding Notes and Certificates.
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Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment
or consent to each Certificateholder, the Indenture Trustee and each Rating
Agency.
It shall not be necessary for the consent of Certificateholders,
Noteholders or the Note Insurer pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be
sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Certificateholders provided
for in this Agreement or in any other Basic Document) and of evidencing the
authorization of the execution thereof by Certificateholders 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 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. The Owner Trustee may, but shall
not be obligated to, enter into any such amendment that affects the Owner
Trustee's own rights, duties or immunities under this Agreement or otherwise.
In connection with the execution of any amendment to this Trust Agreement
or any amendment of any other agreement to which the Trust is a party, the
Owner Trustee shall be entitled to receive and conclusively rely upon an
Opinion of Counsel to the effect that such amendment is authorized or permitted
by the Basic Documents and that all conditions precedent in the Basic Documents
for the execution and delivery thereof by the Trust or the Owner Trustee, as
the case may be, have been satisfied.
SECTION 11.02. No Legal Title to Owner Trust Estate in Owners. Neither
the Depositor nor the Owners shall have legal title to any part of the Owner
Trust Estate. The Owners shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Articles V and IX. No transfer, by operation of law or otherwise, of any right,
title or interest of the Owners to and in their ownership interest in the Owner
Trust Estate shall operate to terminate this Agreement or the trusts hereunder
or entitle any transferee to an accounting or to the transfer to it of legal
title to any part of the Owner Trust Estate.
SECTION 11.03. Limitations on Rights of Others. Except for Section 2.07,
the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Owners, the Administrator, the Note Insurer and, to
the extent expressly provided herein, the Indenture Trustee and the
Noteholders, and nothing in this Agreement (other than Section 2.07 hereof),
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Owner Trust Estate or under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
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SECTION 11.04. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days
after mailing if mailed by certified mail, postage prepaid (except that notice
to the Owner Trustee shall be deemed given only upon actual receipt by the
Owner Trustee), if to the Owner Trustee, addressed to the Corporate Trust
Office; if to the Depositor, addressed to First Merchants Auto Receivables
Corporation II, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Secretary; or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Agreement shall be conclusively presumed to
have been duly given, whether or not the Certificateholder receives such
notice.
SECTION 11.05. 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 11.06. Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, each of
the Depositor and its permitted assignees, the Owner Trustee and its successors
and each Owner and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument
or action by an Owner shall bind the successors and assigns of such Owner.
SECTION 11.08. Covenants of the Depositor. In the event that (a) the
Certificate Balance shall be reduced by Realized Losses and (b) any litigation
with claims in excess of $1,000,000 to which the Depositor is a party which
shall be reasonably likely to result in a material judgment against the
Depositor that the Depositor will not be able to satisfy shall be commenced,
during the period beginning immediately following the commencement of such
litigation and continuing until such litigation is dismissed or otherwise
terminated (and, if such litigation has resulted in a final judgment against
the Depositor, such judgment has been satisfied), the Depositor shall not pay
any dividend to First Merchants Acceptance Corporation, or make any
distribution on or in respect of its capital stock to First Merchants
Acceptance Corporation, or repay the principal amount of any indebtedness of
the Depositor held by First Merchants Acceptance Corporation, unless (i) after
giving effect to such payment, distribution or repayment, the Depositor's
liquid assets shall not be less than the amount of actual damages claimed in
such litigation or (ii) the Rating Agency Condition shall have been satisfied
with respect to any such payment, distribution
31
36
or repayment. The Depositor will not at any time institute against the Trust
any bankruptcy proceedings under any United States federal or state bankruptcy
or similar law in connection with any obligations relating to the Trust
Certificates, the Notes, the Trust Agreement or any of the Basic Documents.
SECTION 11.09. No Petition. The Owner Trustee, by entering into this
Agreement, each Certificateholder, by accepting a Trust Certificate, and the
Indenture Trustee and each Noteholder, by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Depositor or the Trust, or join in any institution against the
Depositor or the Trust of, any bankruptcy proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Trust Certificates, the Notes, this Agreement or any of the
Basic Documents.
SECTION 11.10. No Recourse. Each Certificateholder by accepting a Trust
Certificate acknowledges that such Trust Certificate represents a beneficial
interest in the Trust only and does not represent an interest in or an
obligation of the Depositor, the Servicer, the Administrator, the Owner
Trustee, the Indenture Trustee, the Sub-servicer, the Backup Servicer or any
Affiliate thereof and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this Agreement,
the Trust Certificates or the Basic Documents.
SECTION 11.11. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING LAWSECTION. 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.
32
37
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Trust Agreement to be duly executed by their respective officers
hereunto duly authorized, as of the day and year first above written.
FIRST MERCHANTS AUTO RECEIVABLES
CORPORATION II, as Depositor
by:__________________________________
Name:
Title:
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but solely
as Owner Trustee
by:_________________________________
Name:
Title:
38
EXHIBIT A
FORM OF TRUST CERTIFICATE
THIS TRUST CERTIFICATE IS SUBORDINATE TO THE NOTES, AS SET FORTH IN THE SALE
AND SERVICING AGREEMENT.
THIS TRUST CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR UNDER THE SECURITIES OR
BLUE SKY LAWS OF ANY STATE IN THE UNITED STATES OR ANY FOREIGN SECURITIES LAWS.
BY ITS ACCEPTANCE OF THIS TRUST CERTIFICATE THE HOLDER HEREOF UNLESS SUCH
HOLDER IS THE DEPOSITOR OR AN AFFILIATE THEREOF IS DEEMED TO REPRESENT TO THE
DEPOSITOR AND THE OWNER TRUSTEE (i) THAT IT IS AN "ACCREDITED INVESTOR" AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D PROMULGATED UNDER
THE 1933 ACT (AN "ACCREDITED INVESTOR") AND THAT IT IS ACQUIRING THIS TRUST
CERTIFICATE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A
FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE ACCREDITED INVESTORS
UNLESS THE HOLDER IS A BANK ACTING IN ITS FIDUCIARY CAPACITY) FOR INVESTMENT
AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, THE PUBLIC
DISTRIBUTION HEREOF OR (ii) THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE 1933 ACT AND IS ACQUIRING SUCH TRUST CERTIFICATE
FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR
AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS).
NO SALE, PLEDGE OR OTHER TRANSFER OF THIS TRUST CERTIFICATE MAY BE MADE BY ANY
PERSON UNLESS EITHER (i) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO THE
DEPOSITOR, (ii) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO AN ACCREDITED
INVESTOR THAT EXECUTES A CERTIFICATE, SUBSTANTIALLY IN THE FORM SPECIFIED IN
THE TRUST AGREEMENT, TO THE EFFECT THAT IT IS AN ACCREDITED INVESTOR ACTING FOR
ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT
FOR OTHERS (WHICH OTHERS ALSO ARE ACCREDITED INVESTORS UNLESS THE HOLDER IS A
BANK ACTING IN ITS FIDUCIARY CAPACITY), (iii) SO LONG AS THIS TRUST CERTIFICATE
IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE 1933 ACT, SUCH SALE,
PLEDGE OR OTHER TRANSFER IS MADE TO A PERSON WHOM THE PROSPECTIVE TRANSFEROR
REASONABLY BELIEVES AFTER DUE INQUIRY IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A), ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF
OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED
INSTITUTIONAL BUYERS) TO WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE OR TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, OR (iv) SUCH SALE, PLEDGE OR OTHER
TRANSFER IS OTHERWISE MADE IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT, IN WHICH CASE (A) THE OWNER TRUSTEE SHALL REQUIRE
THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE TRANSFEREE CERTIFY TO
THE OWNER TRUSTEE AND THE DEPOSITOR IN WRITING THE FACTS SURROUNDING SUCH
TRANSFER, WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO
THE OWNER TRUSTEE AND THE DEPOSITOR, AND (B) THE OWNER TRUSTEE SHALL REQUIRE A
WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF THE DEPOSITOR,
ANY AFFILIATE OF THE DEPOSITOR OR THE OWNER TRUSTEE) SATISFACTORY TO THE
DEPOSITOR AND THE OWNER TRUSTEE TO THE EFFECT THAT
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39
SUCH TRANSFER WILL NOT VIOLATE THE 1933 ACT. NO SALE, PLEDGE OR OTHER TRANSFER
MAY BE MADE TO ANY ONE PERSON FOR SECURITIES WITH A FACE AMOUNT OF LESS THAN
$250,000 AND, IN THE CASE OF ANY PERSON ACTING ON BEHALF OF ONE OR MORE THIRD
PARTIES (OTHER THAN A BANK (AS DEFINED IN SECTION 3(a)(2) OF THE 1933 ACT)
ACTING IN ITS FIDUCIARY CAPACITY), FOR SECURITIES WITH A FACE AMOUNT OF LESS
THAN $250,000 FOR EACH SUCH THIRD PARTY."
EACH SECURITYHOLDER, BY ITS ACCEPTANCE OF THIS SECURITY, COVENANTS AND AGREES
THAT SUCH SECURITYHOLDER, SHALL NOT, PRIOR TO THE DATE THAT IS ONE YEAR AND ONE
DAY AFTER THE TERMINATION OF THE TRUST AGREEMENT, ACQUIESCE, PETITION OR
OTHERWISE INVOKE OR CAUSE THE TRUST OR THE DEPOSITOR TO INVOKE THE PROCESS OF
ANY COURT OR GOVERNMENTAL AUTHORITY FOR THE PURPOSE OF COMMENCING OR SUSTAINING
A CASE AGAINST THE TRUST OR THE DEPOSITOR UNDER ANY FEDERAL OR STATE
BANKRUPTCY, INSOLVENCY, REORGANIZATION OR SIMILAR LAW, OR APPOINTING A
RECEIVER, LIQUIDATOR, ASSIGNEE, TRUSTEE, CUSTODIAN, SEQUESTRATOR OR OTHER
SIMILAR OFFICIAL OF THE TRUST OR THE DEPOSITOR OR ANY SUBSTANTIAL PART OF ITS
PROPERTY, OR ORDERING THE WINDING UP OR LIQUIDATION OF THE AFFAIRS OF THE TRUST
OR THE DEPOSITOR.
NO TRANSFER OF A TRUST CERTIFICATE SHALL BE MADE TO ANY PERSON UNLESS THE OWNER
TRUSTEE HAS RECEIVED (A) A CERTIFICATE IN THE FORM OF PARAGRAPH 3 TO THE
INVESTMENT LETTER ATTACHED TO THE TRUST AGREEMENT AS EXHIBIT D FROM SUCH PERSON
TO THE EFFECT THAT SUCH PERSON IS NOT (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 CODE OR (III) ANY ENTITY WHOSE
UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE
ENTITY (EACH, A "BENEFIT PLAN"), (B) AN OPINION OF COUNSEL SATISFACTORY TO THE
OWNER TRUSTEE AND THE DEPOSITOR TO THE EFFECT THAT THE PURCHASE AND HOLDING OF
SUCH TRUST CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN THE ASSETS OF THE TRUST
BEING DEEMED TO BE "PLAN ASSETS" SUBJECT TO THE PROHIBITED TRANSACTIONS
PROVISIONS OF ERISA OR SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE OWNER
TRUSTEE, THE INDENTURE TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION
TO THOSE UNDERTAKEN IN THE BASIC DOCUMENTS OR (C) IF SUCH PERSON IS AN
INSURANCE COMPANY, A REPRESENTATION THAT SUCH PERSON IS AN INSURANCE COMPANY
THAT IS PURCHASING SUCH TRUST CERTIFICATES WITH FUNDS CONTAINED IN AN
"INSURANCE COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE
PURCHASE AND HOLDING OF SUCH TRUST CERTIFICATES AND ANY DEEMED EXTENSION OF
CREDIT FROM A CERTIFICATEHOLDER WHICH IS A PARTY IN INTEREST TO A PLAN, THE
ASSETS OF WHICH ARE HELD BY SUCH "INSURANCE COMPANY" ARE COVERED UNDER PTCE
95-60.
THE TRANSFER OF EACH TRUST CERTIFICATE SHALL BE SUBJECT TO CERTAIN RESTRICTIONS
LISTED IN SECTION 3.04 OF THE TRUST AGREEMENT.
A-2
40
NUMBER $_________
R- CUSIP NO. _______
FIRST MERCHANTS AUTO TRUST 1997-2
12.25% ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined below, the
property of which consists of (a) the Receivables and all moneys received
thereon on or after the Cutoff Date; (b) the security interests in the Financed
Vehicles and any accessions thereto granted by Obligors pursuant to the
Receivables and any other interest of the Depositor in such Financed Vehicles;
(c) any Liquidation Proceeds and any other proceeds with respect to the
Receivables from claims on any physical damage, credit life or disability
insurance policies covering Financed Vehicles or Obligors, including any
vendor's single interest or other collateral protection insurance policy; (d)
any property that shall have secured a Receivable and shall have been acquired
by or on behalf of the Depositor, the Servicer or the Trust; (e) all documents
and other items contained in the Receivables Files and the Legal Files; (f) all
of the Depositor's rights (but not its obligations) under the Receivables
Purchase Agreement; (g) all right, title and interest in all funds on deposit
from time to time in the Trust Accounts and the Certificate Distribution
Account, and in all investments and proceeds thereof (including all income
thereon); and (h) the proceeds of any and all of the foregoing.
THIS TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR AN OBLIGATION OF
FIRST MERCHANTS AUTO RECEIVABLES CORPORATION II, FIRST MERCHANTS ACCEPTANCE
CORPORATION OR ANY OF THEIR RESPECTIVE AFFILIATES.
THIS CERTIFIES THAT ________________ is the registered owner of
____________________________________________ DOLLARS nonassessable, fully paid,
fractional undivided interest in FIRST MERCHANTS AUTO TRUST 1997-2 (the
"Trust"), formed by FIRST MERCHANTS AUTO RECEIVABLES CORPORATION II, a Delaware
corporation (the "Depositor").
The Trust was created pursuant to a Trust Agreement dated as of May 20,
1997, as amended and restated by an Amended and Restated Trust Agreement dated
as of June 1, 1997 (as so amended and restated and further amended or
supplemented from time to time, the "Trust Agreement"), between the Depositor
and Chase Manhattan Bank Delaware, as owner trustee (the "Owner Trustee"), a
summary of certain of the pertinent provisions of which is set forth below. To
the extent not otherwise defined herein, the capitalized terms used herein have
the meanings assigned to them in the Trust Agreement or the Sale and Servicing
Agreement dated as of June 1, 1997 (as amended and supplemented from time to
time, the "Sale and Servicing Agreement"), among the Trust, the Depositor, as
seller, First Merchants Acceptance Corporation, as originator and sub-servicer
(in such capacities, the "Originator" and the "Sub-servicer"), LSI Financial
Group, as servicer (the "Servicer"), and ▇▇▇▇▇▇ Trust and Savings Bank, as
indenture trustee, backup servicer and custodian (in such capacities, the
"Indenture Trustee", "Backup Servicer" and "Custodian"), as applicable.
A-3
41
This Trust Certificate is one of the duly authorized Trust Certificates
designated as "12.25% Asset Backed Certificates" (herein called the "Trust
Certificates"). Also issued under an Indenture dated as of June 1, 1997 (the
"Indenture"), between the Trust and ▇▇▇▇▇▇ Trust and Savings Bank, as indenture
trustee, are the Notes designated as "6.85% Asset Backed Notes" (the "Notes").
This Trust Certificate is issued under and is subject to the terms, provisions
and conditions of the Trust Agreement, to which Trust Agreement the Holder of
this Trust Certificate by virtue of its acceptance hereof assents and by which
such Certificateholder is bound. The property of the Trust consists of a pool
of retail installment contracts for new and used automobiles, vans, minivans
and light duty trucks (the "Receivables") and all monies received thereon on or
after June 1, 1997, 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 and all proceeds of the foregoing. The rights of
the Certificateholders are subordinate to the rights of the Noteholders, as set
forth in the Sale and Servicing Agreement.
Under the Trust Agreement and 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 (each, a "Distribution Date"), commencing
on July 15, 1997, to the Person in whose name this Trust Certificate is
registered at the close of business on the last day of the immediately
preceding month (the "Record Date"), such Certificateholder's fractional
undivided interest in the amount to be distributed to Certificateholders on
such Distribution Date. No distributions of principal will be made on any
Trust Certificate, other than in respect of any Certificateholders' Additional
Principal Distribution Amount, until all of the Notes have been paid in full.
The Holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinate to the rights of the Noteholders as described in the Sale and
Servicing Agreement and the Indenture.
It is the intent of the Depositor, the Servicer and the Certificateholders
that, for purposes of federal income, state and local income and single
business tax and any other income taxes, in the event the Trust Certificates
are held by more than one Owner, the Trust will be treated as a partnership and
the Certificateholders will be treated as partners in that partnership. The
Certificateholders, by acceptance of a Trust Certificate, shall be deemed to
have agreed to the above treatment and to taking no action inconsistent
therewith. Each Certificateholder, by its acceptance of a Trust Certificate,
agrees to treat, and to take no action inconsistent with the treatment of, the
Trust Certificates for such tax purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Trust Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Depositor or the Trust, or join in any institution against the
Depositor or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificates, the Notes, the Trust Agreement
or any of the Basic Documents.
A-4
42
Distributions on this Trust Certificate will be made as provided in the
Trust Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Trust Certificate or the making of any
notation hereon. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Trust Certificate
will be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Trust Certificate
at the office or agency maintained for that purpose by the Owner Trustee in the
Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, by manual signature, this Trust
Certificate shall not entitle the Holder hereof to any benefit under the Trust
Agreement or the Sale and Servicing Agreement or be valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-5
43
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Trust Certificate to be duly executed.
FIRST MERCHANTS AUTO TRUST 1997-2
by: CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity
but solely as Owner Trustee
Dated: by: _____________________________
Authorized Signatory
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned Trust
Agreement.
CHASE MANHATTAN BANK DELAWARE, CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee or as Owner Trustee
by:
THE CHASE MANHATTAN BANK, as
Authenticating Agent
by:____________________
Authorized Signatory
by:____________________
Authorized Signatory
44
[REVERSE OF TRUST CERTIFICATE]
The Trust Certificates do not represent an obligation of, or an interest
in, the Depositor, the Servicer, the Sub-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 expressly set forth or contemplated herein or in the
Trust Agreement or the Basic Documents. In addition, this Trust Certificate is
not guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect to the
Receivables (and certain other amounts), all as more specifically set forth
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 by any
Certificateholder upon written request during normal business hours at the
principal office of the Depositor and at such other places, if any, designated
by the Depositor.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Owner Trustee with the consent of the Holders
of the Trust Certificates and the Notes, each voting as a class, evidencing not
less than a majority of the Certificate Balance and the outstanding principal
balance of the Notes. Any such consent by the Holder of this Trust Certificate
shall be conclusive and binding on such Holder and on all future Holders of
this Trust Certificate and of any Trust Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent is made upon this Trust Certificate. The Trust Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in
the Certificate Register upon surrender of this Trust Certificate for
registration of transfer at the offices or agencies of the Certificate
Registrar 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 Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Trust Certificates of
authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is The Chase Manhattan Bank, New York, New
York.
Each Holder of the Trust Certificates, by its acceptance of a Trust
Certificate, shall be deemed to have agreed to treat the Trust as a partnership
with the Trust Certificates representing partnership interests therein and the
Notes representing debt thereof. In the event that a Holder transfers any
Trust Certificate to any other Person, such Holder, by its transfer, and such
Person, by its acceptance of the Trust Certificate so transferred, shall be
subject to the same condition.
Except as provided in the Trust Agreement, the Trust Certificates are
issuable only as registered Trust Certificates without coupons in denominations
of $250,000 and in integral multiples of $1,000 in excess thereof provided,
however, that the Trust Certificate
A-7
45
issued to the Depositor pursuant to Section 3.11 of the Trust Agreement may be
issued in such denomination as is required to include any residual amount. As
provided in the Trust Agreement and subject to certain limitations therein set
forth, Trust Certificates are exchangeable for new Trust Certificates of
authorized denominations evidencing the same aggregate denomination, as
requested by the Certificateholder surrendering the same. No service charge
will be made for any such registration of transfer or exchange, but the Owner
Trustee or the Certificate Registrar may require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar may treat the Person in whose name this
Trust Certificate is registered as the owner hereof for all purposes, and none
of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Owner Trust Estate. The Servicer of the
Receivables may at its option purchase the Owner Trust Estate at a price
specified in the Sale and Servicing Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of the
Trust Certificates; provided, however, such right of purchase is exercisable
only as of the last day of any Collection Period as of which the Pool Balance
is less than or equal to 10% of the Initial Pool Balance.
The Trust Certificates may not be acquired by (a) an employee benefit plan
(as defined in Section 3(3) of ERISA) that is subject to the provisions of
Title I of ERISA, (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 or which uses plan assets to acquire Trust
Certificates (each, a "Benefit Plan"). By accepting and holding this Trust
Certificate, the Holder hereof shall be deemed to have represented and
warranted that it is not a Benefit Plan.
A-8
46
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
the within Trust Certificate, and all rights thereunder, and hereby irrevocably
constitutes and appoints ____________________________________________, attorney,
to transfer said Trust Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
_________________
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Trust
Certificate in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in STAMP
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
A-9
47
EXHIBIT B
Form of Certificate of Trust of First Merchants Auto Trust 1997-2
THIS Certificate of Trust of FIRST MERCHANTS AUTO TRUST 1997-2 (the
"Trust"), dated [ ], 1997, is being duly executed and filed by Chase Manhattan
Bank Delaware, a Delaware banking corporation, as trustee, to form a business
trust under the Delaware Business Trust Act (12 Del. Code, Section 3801 et
seq.).
1. Name. The name of the business trust formed hereby is FIRST MERCHANTS
AUTO TRUST 1997-2.
2. Delaware Trustee. The name and business address of the trustee of the
Trust in the State of Delaware is Chase Manhattan Bank Delaware, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trustee
Administration Department.
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.
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as owner trustee under a
Trust Agreement dated as of June [],
1997
By: ________________________________
Name:
Title:
B-1
48
EXHIBIT C
FORM OF TRANSFEROR CERTIFICATE
[DATE]
First Merchants Auto Receivables
Corporation II
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Chase Manhattan Bank Delaware, as Owner Trustee
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: First Merchants Auto Trust 1997-2
12.25% Asset Backed Certificates
Ladies and Gentlemen:
In connection with our disposition of the above-referenced 12.25% Asset
Backed Certificates (the "Certificates") we certify that (a) we understand that
the Certificates have not been registered under the Securities Act of 1933, as
amended (the "Act"), and are being transferred by us in a transaction that is
exempt from the registration requirements of the Act and (b) we have not
offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act.
Very truly yours,
[NAME OF TRANSFEROR]
By: ____________________
Authorized Officer
C-1
49
EXHIBIT D
FORM OF INVESTMENT LETTER
First Merchants Auto Receivables
Corporation II, as Depositor
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Chase Manhattan Bank Delaware, as Owner Trustee
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
In connection with our proposed purchase of $
aggregate principal amount of 12.25% Asset Backed Certificates (the
"Certificates") of First Merchants Auto Trust 1997-2 (the "Trust"), we confirm
that:
1. We understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "1933 Act"), and may
not be sold except as permitted in the following sentence. We understand
and agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, (x) that such Certificates are being
offered only in a transaction not involving any public offering within
the meaning of the 1933 Act and (y) that such Certificates may be resold,
pledged or transferred only (i) to the Depositor, (ii) to an "accredited
investor" as defined in Rule 501(a)(1),(2),(3) or (7) (an "Accredited
Investor") under the 1933 Act acting for its own account (and not for the
account of others) or as a fiduciary or agent for others (which others
also are Accredited Investors unless the holder is a bank acting in its
fiduciary capacity) that executes a certificate substantially in the form
hereof, (iii) so long as such Certificate is eligible for resale pursuant
to Rule 144A under the 1933 Act ("Rule 144A"), to a person whom we
reasonably believe after due inquiry is a "qualified institutional buyer"
as defined in Rule 144A, acting for its own account (and not for the
account of others) or as a fiduciary or agent for others (which others
also are "qualified institutional buyers") to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A or
(iv) in a sale, pledge or other transfer made in a transaction otherwise
exempt from the registration requirements of the 1933 Act, in which case
the Owner Trustee shall require that both the prospective transferor and
the prospective transferee certify to the Owner Trustee and the Depositor
in writing the facts surrounding such transfer, which certification shall
be in form and substance satisfactory to the Owner Trustee and the
Depositor. Except in the case of a transfer described in clauses (i) or
(iii) above, the Owner Trustee shall require a written opinion of counsel
(which will not be at the expense of the Depositor, any affiliate of the
Depositor or the Owner Trustee) satisfactory to the Depositor and the
Owner Trustee be delivered to the Depositor and the Owner Trustee to the
effect that such transfer will not violate the 1933 Act, in each case in
accordance with any applicable securities laws of any state of the United
States. We will notify any purchaser of the Certificates from us of the
above resale restrictions, if then applicable. We further understand
that in connection with any transfer of the Certificates by us that the
Depositor and the Owner Trustee may request, and if so requested we will
furnish such certificates and other information as they may reasonably
require to confirm that any such transfer complies with the foregoing
restrictions. We understand that no sale, pledge or other transfer may
be made to any one
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person of Certificates with a face amount of less than
$250,000 and, in the case of any person acting on behalf of one or more
third parties (other than a bank (as defined in Section 3(a)((2) of the
▇▇▇▇ ▇▇▇) acting in its fiduciary capacity), of Certificates with a face
amount of less than $250,000 for each such third party.
We have received a copy of the offering memorandum, dated June 20,
1997 (the "Certificate Memorandum"), relating to the Certificates and
such other information as we deem necessary in order to make our
investment decision and we have been provided the opportunity to ask
questions of, and receive answers from, the Seller, concerning the
Seller, the Originator, the Servicer and the terms and conditions of the
offering described in the Certificate Memorandum. We have received and
understand the above, and understand that substantial risks are involved
in an investment in the Certificates. We represent that in making our
investment decision to acquire the Certificates, we have not relied on
representations, warranties, opinions, projections, financial or other
information or analysis, if any, supplied to it by any person, including
you, the Placement Agent or the Initial Purchaser or any of your or their
affiliates, except as expressly contained in the Certificate Memorandum
and in the other written information, if any, discussed above. We
acknowledge that we have read and agreed to the matters stated in the
"Notice to Investors" contained in such Certificate Memorandum, including
the restrictions on duplication and circulation of such Certificate
Memorandum. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of
an investment in the Certificates, and we are able to bear the
substantial economic risks of such an investment. We have relied upon
our own tax, legal and financial advisors in connection with our decision
to purchase Notes.
2. [CHECK ONE]
p (a) We are an "accredited investor" (as defined in Rule
501(a)(1),(2),(3) or (7) of Regulation D under the ▇▇▇▇ ▇▇▇) acting
for our own account (and not for the account of others) or as a
fiduciary or agent for others (which others also are Accredited
Investors unless we are a bank acting in its fiduciary capacity).
We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our
investment in the Certificates, and we and any accounts for which we
are acting are each able to bear the economic risk of our or their
investment for an indefinite period of time. We are acquiring the
Certificates for investment and not with a view to, or for offer and
sale in connection with, a public distribution.
p (b) We are a "qualified institutional buyer" as defined
under Rule 144A under the 1933 Act and are acquiring the
Certificates for our own account (and not for the account of others)
or as a fiduciary or agent for others (which others also are
"qualified institutional buyers"). We are familiar with Rule 144A
under the 1933 Act and are aware that the seller of the Certificates
and other parties intend to rely on the statements made herein and
the exemption from the registration requirements of the 1933 Act
provided by Rule 144A.
3. We are not (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 Code or (iii) any entity
whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). We hereby acknowledge
that no transfer of any Certificate shall be permitted to be made to any
person unless the Owner Trustee has received (i) a certificate from such
transferee to the effect of the preceding sentence, (ii) an opinion of
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51
counsel satisfactory to the Owner Trustee to the effect that the purchase
and holding of any such Certificate will not constitute or result in the
assets of the Trust being deemed to be "plan assets" and subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code
and will not subject the Owner Trustee, ▇▇▇▇▇▇ Trust and Savings Bank, as
Indenture Trustee or the Depositor to any obligation in addition to those
undertaken in the Basic Documents with respect to the Certificates
(provided, however, that the Owner Trustee will not require such
certificate or opinion in the event that, as a result of change of law or
otherwise, counsel satisfactory to the Owner Trustee has rendered an
opinion to the effect that the purchase and holding of any such
Certificate by a Benefit Plan or a Person that is purchasing or holding
any such Certificate with the assets of a Benefit Plan will not
constitute or result in a prohibited transaction under ERISA or Section
4975 of the Code) or (iii) if the transferee is an insurance company, a
representation that the transferee is an insurance company that is
purchasing such certificates with funds contained in an "Insurance
Company General Account" (as such term is defined in Section V(e) of
Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the
purchase and holding of such Certificates and any deemed extension of
credit from a Certificateholder which is a party in interest to a Plan,
the assets of which are held by such "Insurance Company" are covered
under PTCE 95-60.
4. We understand that the Depositor, the Owner Trustee, the seller,
the Trust, Greenwich Capital Markets, Inc. ("Greenwich") and others will
rely upon the truth and accuracy of the foregoing acknowledgments,
representations and agreements, and we agree that if any of the
acknowledgments, representations and warranties deemed to have been made
by us by our purchase of the Certificates, for our own account or for one
or more accounts as to each of which we exercise sole investment
discretion, are no longer accurate, we shall promptly notify the
Depositor the Owner Trustee and Greenwich.
5. We are not, nor is any person or entity for whom we are acting as
agent or custodian in connection with the acquisition of such
Certificate, a partnership, grantor trust or S corporation for federal
income tax purposes (a "Flow-Through Entity") unless either: (i) all
Certificates owned by or on behalf of such Flow-Through Entity will
represent less than 50% of the value of all assets owned by or on behalf
of such Flow-Through Entity and no special allocation of income, gain,
loss, deduction or credit from such Certificates will be made among the
beneficial owners of such Flow-Through Entity; or (ii) the number of
members of such Flow-Through Entity are restricted such that no member of
such Flow-Through Entity may own less than two percent of the total
outstanding Certificate Balance and no member of such Flow-Through Entity
is itself a Flow-Through Entity that would not satisfy the requirements
of clause (i).
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6. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with
respect to the matters covered hereby.
Capitalized terms used herein but not otherwise defined herein are
used as defined in the Trust Agreement.
Very truly yours,
[NAME OF PURCHASER]
By:_________________________________
Name:
Title:
Date:________________________________
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