Exhibit 10.3
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BUNGE MASTER TRUST
POOLING AGREEMENT
Among
BUNGE FUNDING, INC.
BUNGE MANAGEMENT SERVICES, INC.,
as Servicer
and
THE CHASE MANHATTAN BANK,
as Trustee
Dated as of August 25, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS............................................................1
SECTION 1.01. Definitions...........................................1
SECTION 1.02. Other Definitional Provisions.........................1
ARTICLE II
CONVEYANCE OF LOANS; REPRESENTATIONS,
WARRANTIES AND COVENANTS...............................................3
SECTION 2.01. Conveyance of Loans...................................3
SECTION 2.02. Acceptance by Trustee.................................6
SECTION 2.03. Representations and Warranties of the
Company Relating to the Company.......................6
SECTION 2.04. Representations and Warranties of the
Company Relating to the Purchased Loans..............10
SECTION 2.05. Adjustment Payment for Ineligible Loans..............11
SECTION 2.06. Affirmative Covenants of the Company.................12
SECTION 2.07. Negative Covenants of the Company....................16
ARTICLE III
RIGHTS OF HOLDERS AND ALLOCATION AND
APPLICATION OF COLLECTIONS............................................19
SECTION 3.01. Establishment of Collection Account;
Certain Allocations..................................19
ARTICLE IV
ARTICLE IV IS RESERVED AND MAY BE SPECIFIED IN
ANY SUPPLEMENT WITH RESPECT TO THE SERIES
RELATING THERETO......................................................25
ARTICLE V
THE INVESTOR CERTIFICATES AND EXCHANGEABLE
COMPANY INTEREST......................................................25
SECTION 5.01. The Investor Certificates............................25
SECTION 5.02. Authentication of Certificates.......................26
SECTION 5.03. Registration of Transfer and Exchange of
Investor Certificates................................26
SECTION 5.04. Mutilated, Destroyed, Lost or Stolen Investor
Certificates.........................................28
SECTION 5.05. Persons Deemed Owners................................28
SECTION 5.06. Appointment of Paying Agent..........................29
SECTION 5.07. Access to List of Investor Certificateholders'
Names and Addresses..................................30
SECTION 5.08. Authenticating Agent.................................30
SECTION 5.09. Tax Treatment........................................32
SECTION 5.10. Exchangeable Company Interest........................32
SECTION 5.11. Book-Entry Certificates..............................35
SECTION 5.12. Notices to Clearing Agency...........................36
SECTION 5.13. Definitive Certificates..............................36
ARTICLE VI
OTHER MATTERS RELATING TO THE COMPANY.................................36
SECTION 6.01. Liability of the Company.............................36
SECTION 6.02. Limitation on Liability of the Company...............37
ARTICLE VII
EARLY AMORTIZATION EVENTS.............................................37
SECTION 7.01. Early Amortization Events............................37
SECTION 7.02. Additional Rights upon the Occurrence of
Certain Events.......................................38
ARTICLE VIII
THE TRUSTEE...........................................................40
SECTION 8.01. Duties of Trustee....................................40
SECTION 8.02. Rights of the Trustee................................42
SECTION 8.03. Trustee Not Liable for Recitals......................43
SECTION 8.04. Trustee May Own Investor Certificates................44
SECTION 8.05. Trustee's Fees and Expenses..........................44
SECTION 8.06. Eligibility Recitals.................................44
SECTION 8.07. Resignation or Removal of Trustee....................45
SECTION 8.08. Successor Trustee....................................46
SECTION 8.09. Merger or Consolidation of Trustee...................46
SECTION 8.10. Appointment of Co-Trustee or Separate
Trustee..............................................46
SECTION 8.11. Tax Returns..........................................48
SECTION 8.12. Trustee May Enforce Claims Without
Possession of Investor Certificates..................48
SECTION 8.13. Suits for Enforcement................................49
SECTION 8.14. Rights of Investor Certificateholders To Direct
Trustee..............................................49
ii
SECTION 8.15. Representations and Warranties of Trustee............49
SECTION 8.16. Maintenance of Office or Agency......................50
SECTION 8.17. Limitation of Liability..............................50
SECTION 8.18. Consequential Damages................................50
ARTICLE IX
TERMINATION...........................................................50
SECTION 9.01. Termination of Trust.................................50
SECTION 9.02. Optional Purchase and Final Termination Date
of Investor Certificates of Any Series...............51
SECTION 9.03. Final Payment with Respect to Any Series.............53
SECTION 9.04. Company's Termination Rights.........................54
ARTICLE X
MISCELLANEOUS PROVISIONS..............................................54
SECTION 10.01. Amendment............................................54
SECTION 10.02. Protection of Right, Title and Interest to
Trust................................................56
SECTION 10.03. Limitation on Rights of Holders......................57
SECTION 10.04. Governing Law........................................58
SECTION 10.05. Notices..............................................58
SECTION 10.06. Severability of Provisions...........................58
SECTION 10.07. Assignment...........................................58
SECTION 10.08. Investor Certificates Nonassessable and Fully
Paid.................................................58
SECTION 10.09. Further Assurances...................................59
SECTION 10.10. No Waiver; Cumulative Remedies.......................59
SECTION 10.11. Counterparts.........................................59
SECTION 10.12. Third-Party Beneficiaries............................59
SECTION 10.13. Actions by Investor Certificateholders...............59
SECTION 10.14. Merger and Integration...............................60
SECTION 10.15. Headings.............................................60
SECTION 10.16. No Setoff............................................60
SECTION 10.17. No Bankruptcy Petition...............................60
SECTION 10.18. Limitation of Liability..............................60
SECTION 10.19. Certain Information..................................61
SECTION 10.20. Responsible Officer Certificates; No Recourse........61
SECTION 10.21. Chase Conflict Waiver................................61
EXHIBITS
Exhibit A Internal Operating Procedures Memorandum
iii
SCHEDULES
Schedule 1 Daily Report
Schedule 2 Identification of the Trust Accounts
Schedule 3 Location of Chief Executive Office and Jurisdiction of Formation of
the Company
ANNEX
Annex X Definitions
iv
POOLING AGREEMENT dated as of August 25, 2000 among BUNGE FUNDING,
INC., a Delaware corporation (the "COMPANY"), BUNGE MANAGEMENT SERVICES, INC., a
Delaware corporation (in its capacity as servicer, the "SERVICER"), and THE
CHASE MANHATTAN BANK, a New York banking corporation, not in its individual
capacity, but solely as trustee (in such capacity, the "TRUSTEE").
W I T N E S S E T H:
WHEREAS, as of the date of this Pooling Agreement, (i) the Company
and Bunge Finance and Bunge Finance North America, each as Sellers, have entered
into a Sale Agreement (as amended, supplemented or otherwise modified from time
to time, the "SALE AGREEMENT") and (ii) the Company, the Servicer and the
Trustee have entered into a Servicing Agreement (as amended, supplemented or
otherwise modified from time to time, the "SERVICING AGREEMENT");
WHEREAS, the parties hereto have entered into this Pooling Agreement
in order to create a master trust to which the Company will transfer all its
right, title and interest in, to and under the Purchased Loans and other Trust
Assets now or hereafter owned by the Company and such master trust shall, from
time to time at the direction of the Company (or the Servicer on its behalf),
issue one or more Series of Investor Certificates, representing interests in the
Purchased Loans and such other Trust Assets as specified in the Supplement
related to such Series;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. Capitalized terms used herein shall,
unless otherwise defined or referenced herein, have the meanings assigned to
such terms in Annex X attached hereto which Annex X is incorporated by reference
herein.
SECTION 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined or incorporated by reference in this
Agreement, the Servicing Agreement or in any Supplement shall have such
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used herein and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined
herein or incorporated by reference herein, and accounting terms partly
defined herein or incorporated by reference herein to the extent not
defined, shall have the respective meanings given to them under GAAP. To
the extent that the definitions of accounting terms herein or
incorporated by reference herein are inconsistent with the meanings of
such terms under GAAP, the definitions contained herein or incorporated
by reference herein shall control.
(c) The words "hereof", "herein" and "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; and
Section, subsection, Schedule, Exhibit and Appendix references contained
in this Agreement are references to Sections, subsections, Schedules,
Exhibits and Appendices in or to this Agreement unless otherwise
specified.
(d) The definitions contained herein or incorporated by
reference herein are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and
neuter genders of such terms.
(e) Where a definition contained herein or incorporated by
reference herein specifies that such term shall have the meaning set
forth in the related Supplement, the definition of such term set forth
in the related Supplement may be preceded by a prefix indicating the
specific Series or Class to which such definition shall apply.
(f) Where reference is made in this Agreement or any related
Supplement to the principal amount of Purchased Loans, such reference
shall, unless explicitly stated otherwise, be deemed a reference to the
Principal Amount (as such term is defined in Annex X attached hereto) of
such Purchased Loans.
(g) Any reference herein or in any other Transaction Document to
a provision of the Bankruptcy Code, Code, ERISA, 1940 Act or the UCC
shall be deemed a reference to any successor provision thereto.
(h) Any reference herein to a Schedule, Exhibit or Appendix to
this Agreement shall be deemed to be a reference to such Schedule,
Exhibit or Appendix as it may be amended, modified or supplemented from
time to time to the extent that such Schedule, Exhibit or Appendix may
be amended, modified or supplemented (or any term or provision of any
Transaction Document may be amended that would have the effect of
amending, modifying or supplementing information contained in such
Schedule, Exhibit or Appendix) in compliance with the terms of the
Transaction Documents.
(i) Any reference herein to any representation, warranty or
covenant "deemed" to have been made is intended to encompass only
representations, warranties or covenants that are expressly stated to be
repeated on or as of dates following the execution and delivery of this
Agreement, and no such reference shall be interpreted as a
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reference to any implicit, inferred, tacit or otherwise unexpressed
representation, warranty or covenant.
(j) The words "include", "includes" or "including" shall be
interpreted as if followed, in each case, by the phrase "without limitation".
ARTICLE II
CONVEYANCE OF
LOANS; REPRESENTATIONS,
WARRANTIES AND COVENANTS
SECTION 2.01. CONVEYANCE OF LOANS.
(a) By execution and delivery of this Agreement, the Company
does hereby assign, set over and otherwise convey to the Trust on the
Effective Date and from time to time on any Business Day on which the
Servicer delivers a Daily Report to the Trustee, for the benefit of the
Holders, without recourse (except as specifically provided herein), all
its present and future right, title and interest in, to and under:
(i) the Purchased Loans acquired by the Company from the
Sellers from time to time prior to but not including the Trust
Termination Date as indicated in the Daily Report delivered to
the Trustee on the Effective Date or such Business Day;
(ii) the Related Property;
(iii) all Collections;
(iv) all rights (including rescission, replevin or
reclamation) relating to any Purchased Loan or arising
therefrom;
(v) each of the Sale Agreement and the Servicing
Agreement, including in respect of each agreement, (A) all
rights of the Company to receive monies due and to become due
under or pursuant to such agreement, whether payable as fees,
expenses, costs or otherwise, (B) all rights of the Company to
receive proceeds of any insurance, indemnity, warranty or
guaranty with respect to such agreement, (C) claims of the
Company for damages arising out of or for breach of or default
under such agreement, (D) the right of the Company to amend,
waive or terminate such agreement, to perform thereunder and to
compel performance and otherwise exercise all remedies
thereunder and (E) all other rights, remedies, powers,
privileges and claims of the Company under or in connection with
such agreement (whether arising pursuant to such agreement or
otherwise available to the Company at law or in equity),
including the rights of
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the Company to enforce such agreement and to give or withhold
any and all consents, requests, notices, directions, approvals,
extensions or waivers under or in connection therewith (all of
the foregoing set forth in subclauses (v) (A) through (E),
inclusive, the "TRANSFERRED AGREEMENTS");
(vi) the Collection Account, including (A) all funds and
other evidences of payment held therein and all certificates and
instruments, if any, from time to time representing or
evidencing the Collection Account or any funds and other
evidences of payment held therein, (B) all investments of such
funds held in the Collection Account and all certificates and
instruments from time to time representing or evidencing such
investments, (C) all notes, certificates of deposit and other
instruments from time to time hereafter delivered or transferred
to, or otherwise possessed by, the Trustee for and on behalf of
the Company in substitution for the then existing Collection
Account and (D) all interest, dividends, cash, instruments and
other property from time to time received, or otherwise
distributed in respect of or in exchange for the then existing
Collection Account; and
(vii) all proceeds of or payments in respect of any and
all of the foregoing clauses (i) through (vi) (including
proceeds that constitute property of the types described in
clause (vi) above and including Collections).
Such property described in the foregoing clauses (i) through (vii), together
with all investments and all monies on deposit in any other bank account or
accounts maintained for the benefit of any Holders for payment to the Holders
shall constitute the assets of the Trust (collectively, the "TRUST ASSETS").
Subject to SECTION 5.09, although it is the intent of the parties to
this Agreement that the conveyance of the Company's right, title and interest
in, to and under the Purchased Loans and the other Trust Assets pursuant to this
Agreement shall constitute a purchase and sale and not a loan, in the event that
such conveyance is deemed to be a loan, the Company hereby grants to the Trustee
for the benefit of the Holders to secure the Company Obligations a perfected
first priority security interest in all of the Company's present and future
right, title and interest in, to and under the Purchased Loans and the other
Trust Assets, and that this Agreement shall be deemed to constitute a security
agreement under applicable law in favor of the Trustee, for the benefit of the
Investor Certificateholders.
(b) The assignment, setover and conveyance to the Trust pursuant
to SUBSECTION 2.01(A) shall be made to the Trustee, on behalf of the
Trust, and each reference in this Agreement to such assignment, setover
and conveyance shall be construed accordingly. In connection with the
foregoing assignment, the Company and the Servicer agree to deliver to
the Trustee each Trust Asset evidencing a Purchased Loan or any Related
Property with respect thereto (including any original document or
instrument necessary to effect or to perfect such assignment) in which
the transfer of an interest is being perfected under the relevant UCC or
otherwise by possession and not by filing a
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financing statement or similar document. Without limiting the generality
of the foregoing sentence, the Company and the Servicer agree to deliver
or cause to be delivered to the Trustee an original of (i) any
promissory note or other instrument, including but not limited to each
Loan Note, evidencing a Purchased Loan sold to the Trust (endorsed to
the order of the Trustee for the benefit of the Holders) and (ii) any
chattel paper evidencing a Purchased Loan sold to the Trust (endorsed to
the order of the Trustee for the benefit of the Holders).
Notwithstanding the assignment of the Transferred Agreements set
forth in SUBSECTION 2.01(A), the Company does not hereby assign or delegate any
of its duties or obligations under the Sale Agreement to the Trust or the
Trustee, and neither the Trust nor the Trustee accepts such duties or
obligations, and the Company shall continue to have the right and the obligation
to purchase Eligible Loans sold by the Sellers thereunder from time to time and
to consummate the other transactions and take any actions contemplated thereby.
The foregoing assignment, set-over and conveyance does not constitute and is not
intended to result in a creation or an assumption by the Trust, the Trustee, any
Investor Certificateholder or the Company, in its capacity as a Holder, of any
obligation of the Servicer, the Company, the Sellers, or any other Person in
connection with the Purchased Loans or under any agreement or instrument
relating thereto, including, without limitation, any obligation to any Obligor.
In connection with such assignment, the Company agrees to record and
file, or cause to be recorded or filed, at its own expense, any financing
statements or other similar filings (and continuation statements with respect to
such financing statements or other similar filings when applicable), (i) with
respect to the Purchased Loans and (ii) with respect to any other Trust Assets
for which a security interest may be perfected under the relevant UCC or other
applicable laws, legislation or similar statute by such filing, in each case
meeting the requirements of applicable law in such manner and in such
jurisdictions as are necessary to perfect and maintain perfection of the
assignment of the Purchased Loans and such other Trust Assets (excluding
returned merchandise) to the Trust, and to deliver a file-stamped copy or
certified statement of such financing statement (or other similar filing) or
other evidence of such filing to the Trustee on or prior to the date of issuance
of any Investor Certificates or the Exchangeable Company Interest. Until the
termination of this Agreement, the Company and the Servicer hereby irrevocably
authorizes the Trustee to file one or more financing or continuation statements
(or other similar filing), and amendments thereto, relative to all or any part
of the Purchased Loans and the other Loan Assets sold or to be sold by the
Company without the signature of the Company to the extent permitted by
applicable law. Notwithstanding the immediately preceding sentence, the Trustee
shall be under no obligation whatsoever to file such financing statement (or
other similar filing), or a continuation statement to such financing statement
(or other similar filing), or to make any other filing under the UCC or other
applicable laws, legislation or similar statute in connection with such
transfer. The Trustee shall be entitled to conclusively rely on the filings (or
other similar filings) made by or on behalf of the Company without any
independent investigation and the Company's obligation to make such filings as
evidence that such filings have been made.
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In connection with such assignment, the Company further agrees, at
its own expense, on each Loan Purchase Date, (a) to cause the Servicer to
indicate, in the Servicer's computer files maintained on behalf of the Company
containing the master database of Purchased Loans and to cause (or cause the
Servicer to cause) each Seller to indicate in its records containing its master
database of Purchased Loans, that Purchased Loans have been conveyed to the
Company or the Trust, as the case may be, pursuant to the Sale Agreement or this
Agreement, respectively, for the benefit of the Holders and (b) to deliver or
transmit or cause the Servicer on behalf of the Company to deliver or transmit
to the Trustee a Daily Report containing at least the information specified in
Schedule 1 as to all Purchased Loans, as of each related Loan Purchase Date.
SECTION 2.02. ACCEPTANCE BY TRUSTEE.
(a) The Trustee hereby acknowledges its acceptance on behalf of
the Trust of all right, title and interest in, to and under the
property, now existing and hereafter created, assigned to the Trust
pursuant to SECTION 2.01 and declares that it shall maintain such right,
title and interest, upon the trust herein set forth, for the benefit of
all Holders. The Trustee shall maintain a copy of each Monthly
Settlement Statement and Daily Report, as delivered from time to time,
at the Corporate Trust Office.
(b) The Trustee shall have no power to create, assume or incur
indebtedness or other liabilities in the name of the Trust other than as
contemplated in this Agreement.
SECTION 2.03. REPRESENTATIONS AND WARRANTIES OF THE COMPANY RELATING
TO THE COMPANY. The Company hereby represents and warrants to the Trustee and
the Trust, for the benefit of the Holders, as of the Effective Date and as of
the Issuance Date of each Series, that:
(a) ORGANIZATION; POWERS. The Company (i) is a company duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its organization, (ii) has all requisite power and
authority to own its property and assets and to carry on its business as
now conducted and as proposed to be conducted, (iii) is qualified to do
business in, and is in good standing in, every jurisdiction where the
nature of its business so requires, except where the failure so to
qualify could not reasonably be expected to result in a Material Adverse
Effect and (iv) has the corporate power and authority to execute,
deliver and perform its obligations under each of the Transaction
Documents and each other agreement or instrument contemplated hereby to
which it is or will be a party.
(b) AUTHORIZATION. The execution, delivery and performance by
the Company of each of the Transaction Documents to which it is a party
and the performance of the Transactions (i) have been duly authorized by
all requisite corporate and, if required, stockholder action and (ii)
will not (A) violate (1) any Requirement of Law or (2) any provision of
any Transaction Document or any other material Contractual Obligation to
which the Company is a party or by which it or any of its property is or
6
may be bound, (B) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default
under, or give rise to any right to accelerate or to require the
prepayment, repurchase or redemption of any obligation under any
Transaction Document or any other material Contractual Obligation or (C)
result in the creation or imposition of any Lien upon or with respect to
any property or assets now owned or hereafter acquired by the Company
(other than any Lien created hereunder or contemplated or permitted
hereby).
(c) ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Company and constitutes, and each other Transaction
Document to which the Company is a party when executed and delivered by
the Company will constitute, a legal, valid and binding obligation of
the Company enforceable against it in accordance with its respective
terms, subject (a) to applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the enforcement of creditors
rights generally, from time to time in effect and (b) to general
principles of equity (whether enforcement is sought by a proceeding in
equity or at law).
(d) GOVERNMENTAL APPROVALS. No action, consent or approval of,
registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions,
except for (i) the filing of UCC financing statements (or similar
filings) in any applicable jurisdictions necessary to perfect the
Trust's ownership or security interest in the Purchased Loans, and (ii)
such as have been made or obtained and are in full force and effect;
PROVIDED, that the Company makes no representation or warranty as to
whether any action, consent, or approval of, registration or filing with
or any other action by any Governmental Authority is or will be required
in connection with the distribution of the Certificates and Interests.
(e) LITIGATION; COMPLIANCE WITH LAWS.
(i) There are no actions, suits or proceedings at law or
in equity or by or before any Governmental Authority now pending
or, to the knowledge of the Company, threatened against the
Company or affecting the Company or any properties, revenues or
rights of the Company (i) which involve this Agreement or any of
the other Transaction Documents or any of the Transactions, (ii)
which could reasonably be expected to affect adversely the
income tax or franchise tax attributes of the Trust under the
United States federal or any state or franchise tax systems or
(iii) for which there exists a reasonable possibility of an
outcome that would result in a Material Adverse Effect.
(ii) The Company is not in default with respect to any
judgment, writ, injunction, decree or order of any Governmental
Authority, which would reasonably be expected to have a Material
Adverse Effect.
(iii) The Company has complied with all applicable
provisions of its organizational or governing documents and, in
all material respects, any
7
other Requirements of Law with respect to the Company, its
business and properties and the Trust Assets.
(f) AGREEMENTS.
(i) The Company has no Contractual Obligations other
than (A) the Transaction Documents to which it is a party and
(B) any other agreements or instruments that the Company is not
prohibited from entering into by SUBSECTION 2.07(F) and that, in
the aggregate, neither contain payment obligations or other
liabilities on the part of the Company in excess of $100,000 nor
would upon default result in a Material Adverse Effect. Other
than the restrictions created by the Transaction Documents, the
Company is not subject to any corporate restriction that could
reasonably be expected to have a Material Adverse Effect.
(ii) The Company is not in default in any material
respect under any provision of any Transaction Document or any
other material Contractual Obligation to which it is a party or
by which it or any of its properties or assets are or may be
bound.
(g) FEDERAL RESERVE REGULATIONS.
(i) The Company is not engaged principally, or as one of
its important activities, in the business of extending credit
for the purpose of buying or carrying Margin Stock.
(ii) No part of the proceeds from the issuance of any
Investor Certificates will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately,
for any purpose that entails a violation of, or that is
inconsistent with, the provisions of the Regulations of the
Board, including Regulation U or X.
(h) INVESTMENT COMPANY ACT. Neither the Company nor the Trust is
an "investment company", or a company "controlled" by an "investment
company" as defined in, or subject to regulation under, the 1940 Act.
(i) NO EARLY AMORTIZATION EVENT. No Early Amortization Event or
Potential Early Amortization Event has occurred and is continuing.
(j) TAX RETURNS. The Company has filed or caused to be filed all
material tax returns and has paid or caused to be paid or made adequate
provision for all taxes due and payable by it and all assessments
received by it except to the extent that any failure to file or
nonpayment (i) is being contested in good faith in appropriate
proceedings and for which adequate reserves are maintained in accordance
with GAAP or (ii) could not reasonably be expected to result in a
Material Adverse Effect.
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(k) LOCATION OF RECORDS; CHIEF EXECUTIVE OFFICE; JURISDICTION OF
FORMATION. The offices at which the Company keeps its records concerning
the Purchased Loans either (x) are located at the addresses set forth
for the Sellers on Schedule 3 of the Sale Agreement or (y) the Company
has notified the Trustee of the location thereof in accordance with the
provisions of SUBSECTION 2.07(G) of this Agreement. The chief executive
office of the Company is located at the address set forth on Schedule 3
and is the place where the Company is "located" for the purposes of
Section 9-103(3)(d) of the UCC as in effect in the State of New York (or
analogous provision of any other similar applicable statute or
legislation). As of the Effective Date, the state and county where the
chief executive office of the Company is "located" for the purposes of
Section 9-103(3)(d) of the UCC as in effect in the State of New York (or
analogous provision of any other similar applicable statute or
legislation) has not changed in the past four months. The Company was
formed in the State of Delaware.
(l) SOLVENCY. No Insolvency Event with respect to the Company
has occurred and the transfer of the Purchased Loans by the Company to
the Trust has not been made in contemplation of the occurrence thereof.
Both prior to and after giving effect to the transactions occurring on
the Effective Date and each Issuance Date, the Company is and will be
Solvent. The Company does not intend to, nor does it believe that it
will, incur debts beyond its ability to pay such debts as they mature,
taking into account the timing of and amounts of cash to be received by
it and the timing of and amounts of cash to be payable in respect of its
Indebtedness.
(m) SUBSIDIARIES. The Company has no Subsidiaries.
(n) NAMES. The legal name of the Company is as set forth in this
Agreement. The Company has no trade names, fictitious names, assumed
names or "doing business as" names.
(o) LIABILITIES. Other than, (i) the liabilities, commitments or
obligations (whether absolute, accrued, contingent or otherwise) arising
under or in respect of the Transaction Documents and (ii) immaterial
amounts due and payable in the ordinary course of business of a
special-purpose company, the Company does not have any liabilities,
commitments or obligations (whether absolute, accrued, contingent or
otherwise), whether due or to become due.
(p) COLLECTION ACCOUNT. Except to the extent otherwise permitted
under the terms of this Agreement, the Collection Account is free and
clear of any Lien (except for Trustee Liens).
(q) COMPANY MATERIAL ADVERSE EFFECT. Since the Effective Date no
event has occurred which has had a Material Adverse Effect.
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(r) BULK SALES. The execution, delivery and performance of this
Agreement do not require compliance with any "bulk sales" law by the
Company in the United States.
The representations and warranties as of the date made set forth in
this SECTION 2.03 shall survive the transfer and assignment of the Trust Assets
to the Trust. Upon discovery by a Responsible Officer of the Company or the
Servicer or by a Responsible Officer of the Trustee of a breach of any of the
foregoing representations and warranties with respect to any Outstanding Series
as of the Issuance Date of such Series, the party discovering such breach shall
give prompt written notice to the other parties and to the Letter of Credit
Agent and the Administrative Agent. The Trustee's obligations in respect of any
breach are limited as provided in SUBSECTION 8.02(G).
SECTION 2.04. REPRESENTATIONS AND WARRANTIES OF THE COMPANY RELATING
TO THE PURCHASED LOANS. The Company hereby represents and warrants to the
Trustee and the Trust, for the benefit of the Holders, with respect to each
Purchased Loan transferred to the Trust as of the related Loan Purchase Date,
unless, in either case, otherwise stated in the applicable Supplement or unless
such representation or warranty expressly relates only to a prior date, that:
(a) LOAN DESCRIPTION. As of the related Loan Purchase Date, the
Daily Report delivered or transmitted pursuant to SUBSECTION 2.01(B)
sets forth in all material respects a complete listing of all Purchased
Loans, aggregated by Obligor, to be sold to the Trust on the related
Loan Purchase Date and the information contained therein in accordance
with Schedule 1 with respect to each such Purchased Loan is true and
correct (except for any errors or omissions that do not result in
material impairment of the interests, rights or remedies of the Trustee
or the Investor Certificateholders with respect to any Purchased Loan)
as of the related Loan Purchase Date.
(b) NO LIENS. Each Purchased Loan existing on the Effective Date
or, in the case of Purchased Loans transferred to the Trust after the
Effective Date, on the related Loan Purchase Date has been conveyed to
the Trust free and clear of any Lien, except for Permitted Liens and
Trustee Liens.
(c) ELIGIBLE LOAN. To the best of the Company's knowledge, on
the Effective Date, each Purchased Loan transferred to the Trust that is
included in the calculation of the initial Aggregate Loan Amount is an
Eligible Loan and, in the case of Purchased Loans transferred to the
Trust after the Effective Date, on the related Loan Purchase Date, each
such Purchased Loan that is included in the calculation of the Aggregate
Loan Amount on such related Loan Purchase Date is an Eligible Loan.
(d) FILINGS. All filings and other acts (including but not
limited to the acts required by SUBSECTION 2.01(B) and notifying related
Obligors of the assignment of a Purchased Loan, except to the extent
that the relevant UCC and other similar laws (to the extent applicable)
permit the Company (or its assignees) to provide such notification
subsequent to the applicable Loan Purchase Date without materially
impairing the Trust's
10
ownership or security interest in the Trust Assets and without incurring
material expenses in connection with such notification) necessary or
advisable under the relevant UCC or under other applicable laws of
jurisdictions outside the United States (to the extent applicable) shall
have been made or performed in order to grant the Trust on the
applicable Loan Purchase Date a full legal and beneficial ownership or
first priority perfected security interest in respect of all Purchased
Loans.
The representations and warranties as of the date made set forth in
this SECTION 2.04 shall survive the transfer and assignment of the Trust Assets
to the Trust. Upon discovery by a Responsible Officer of the Company or the
Servicer or a Responsible Officer of the Trustee of a breach of any of the
representations and warranties (or of any Purchased Loan encompassed by the
representation and warranty in SUBSECTION 2.04(C) not being an Eligible Loan as
of the relevant Loan Purchase Date), the party discovering such breach shall
give prompt written notice to the other parties and to the Letter of Credit
Agent and the Administrative Agent. The Trustee's obligations in respect of any
breach are limited as provided in SUBSECTION 8.02(G).
SECTION 2.05. ADJUSTMENT PAYMENT FOR INELIGIBLE LOANS.
(a) ADJUSTMENT PAYMENT OBLIGATION. If (i) any representation or
warranty under SUBSECTIONS 2.04(A) or (B) is not true and correct as of
the date specified therein with respect to any Purchased Loan
transferred to the Trust, or any Purchased Loan encompassed by the
representation and warranty in SUBSECTION 2.04(C) is determined not to
have been an Eligible Loan as of the relevant Loan Purchase Date, (ii)
there is a breach of any covenant under SUBSECTION 2.07(B) with respect
to any Purchased Loan or (iii) the Trust's interest in any Purchased
Loan is not a first priority perfected ownership or security interest at
any time as a result of any action taken by, or the failure to take
action by, the Company (any Purchased Loan as to which the conditions
specified in any of clause (i), (ii) or (iii) of this SUBSECTION 2.05(A)
exists is referred to herein as an "INELIGIBLE PURCHASED LOAN") then,
after the earlier (the date on which such earlier event occurs, the
"INELIGIBILITY DETERMINATION DATE") to occur of the discovery by the
Company of any such event that continues unremedied or receipt by the
Company of written notice given by the Trustee or the Servicer of any
such event that continues unremedied, the Company shall make an
adjustment payment with respect to such Ineligible Purchased Loan on the
terms and conditions set forth in SUBSECTION 2.05(B).
(b) ADJUSTMENT PAYMENT AMOUNT. Subject to the last sentence of
this SUBSECTION 2.05(B), the Company shall make an adjustment payment
with respect to each Ineligible Purchased Loan as required pursuant to
SUBSECTION 2.05(A) by depositing in the Collection Account in
immediately available funds on the related Ineligibility Determination
Date an amount equal to the lesser of (x) the amount by which the
Aggregate Target Loan Amount exceeds the Aggregate Loan Amount (after
giving effect to the reduction thereof by the Principal Amount of such
Ineligible Purchased Loan) and (y) the aggregate outstanding Principal
Amount of all such Ineligible Purchased Loans (the "TRANSFER DEPOSIT
AMOUNT").
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Upon transfer or deposit of the Transfer Deposit Amount, the Trust shall
automatically and without further action be deemed to have agreed to pay to the
Company, without recourse, representation or warranty, all Collections in
respect of each such Ineligible Purchased Loan. Except as otherwise specified in
any Supplement, the obligation of the Company to pay such Transfer Deposit
Amount with respect to any Ineligible Purchased Loan shall constitute the sole
remedy respecting the event giving rise to such obligation available to Investor
Certificateholders (or the Trustee on behalf of Investor Certificateholders)
unless such obligation is not satisfied in full in accordance with the terms of
this Agreement.
SECTION 2.06. AFFIRMATIVE COVENANTS OF THE COMPANY. The Company
hereby covenants that, until the Trust Termination Date occurs, the Company
shall:
(a) FINANCIAL STATEMENTS, REPORTS, ETC.
(i) Furnish to the Trustee, the Letter of Credit Agent,
the Administrative Agent and the Rating Agencies, within 90 days
after the end of each fiscal year, the balance sheet and related
statements of income, stockholders' equity and cash flows
showing the financial condition of the Company as of the close
of such fiscal year and the results of its operations during
such year, all audited by the Company's Independent Public
Accountants and accompanied by an opinion of such accountants
(which shall not be qualified in any material respect) to the
effect that such financial statements fairly present in all
material respects the financial condition and results of
operations of the Company in accordance with GAAP consistently
applied;
(ii) Furnish to the Trustee, the Letter of Credit Agent,
the Administrative Agent and the Rating Agencies, within 45 days
after the end of each of the first three fiscal quarters of each
fiscal year, the Company's unaudited balance sheet and related
statements of income, stockholders' equity and cash flows for
the period from the beginning of such fiscal year to the end of
such quarter, all certified by a Responsible Officer of the
Company;
(iii) Furnish to the Trustee, the Letter of Credit Agent
and the Administrative Agent, together with the financial
statements required pursuant to clauses (i) and (ii) above, a
compliance certificate signed by a Responsible Officer of the
Company stating that (x) the attached financial statements have
been prepared in accordance with GAAP and accurately reflect the
financial condition of the Company and (y) to the best of such
Person's knowledge, no Early Amortization Event or Potential
Early Amortization Event exists, or if any Early Amortization
Event or Potential Early Amortization Event exists, stating the
nature and status thereof;
(iv) Furnish to the Trustee, the Letter of Credit Agent
and the Administrative Agent, promptly upon the furnishing
thereof to the shareholders of
12
the Company, copies of all financial statements, financial
reports and proxy statements so furnished;
(v) Furnish to the Trustee, the Letter of Credit Agent
and the Administrative Agent, promptly, all information,
documents, records, reports, certificates, opinions and notices
received by the Company from the Sellers under the Sale
Agreement; and
(vi) Furnish to the Trustee, the Letter of Credit Agent
and the Administrative Agent, promptly, from time to time, such
other information regarding the operations, business affairs and
financial condition of the Company, or compliance with the terms
of any Transaction Document, in each case as the Letter of
Credit Agent, the Administrative Agent or the Trustee may
reasonably request.
(b) PAYMENT OF OBLIGATIONS; COMPLIANCE WITH OBLIGATIONS. Pay,
discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all its obligations of whatever
nature (including, without limitation, all taxes, assessments, levies
and other governmental charges imposed on it), except where the amount
or validity thereof is currently being contested in good faith by
appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Company. The
Company shall defend the right, title and interest of Trustee and the
Holders in, to and under the Purchased Loans and the other Trust Assets,
whether now existing or hereafter created, against all claims of third
parties claiming through or under the Company, the Sellers or the
Servicer. The Company will duly fulfill all material obligations on its
part to be fulfilled under or in connection with each Purchased Loan and
will do nothing to impair the rights of the Holders in such Purchased
Loan.
(c) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of records and account in which entries in conformity with
GAAP shall be made of all dealings and transactions in relation to its
business and activities; and permit representatives of the Trustee, the
Letter of Credit Agent and the Administrative Agent upon reasonable
advance notice to visit and inspect any of its properties, examine and
make copies and abstracts from any of its books and records during
normal business hours on any Business Day and as often as may reasonably
be requested, subject to the Company's security and confidentiality
requirements, and to discuss the business, operations and financial
condition of the Company with officers and employees of the Company and
with its Independent Public Accountants. The first such examination or
visit during each fiscal year of the Company and any such examination or
visit following an Early Amortization Event or Potential Early
Amortization Event shall be at the cost and expense of the Company; all
other such examinations or visits shall be at the cost and expense of
the party or parties making such examination or visit.
13
(d) COMPLIANCE WITH LAW. Comply with all Requirements of Law,
the provisions of the Transaction Documents and all other material
Contractual Obligations applicable to the Company except where the
failure to so comply would not reasonably be expected to have a Material
Adverse Effect.
(e) PURCHASE OF LOANS. Purchase Loans solely in accordance with
the Sale Agreement or this Agreement.
(f) DELIVERY OF COLLECTIONS. In the event that the Company
receives Collections directly from Obligors, deliver or deposit such
Collections into the Collection Account within one Business Day after
its receipt thereof.
(g) NOTICES. Promptly (and, in any event, within five Business
Days after a Responsible Officer of the Company becomes aware of such
event) give written notice to the Trustee, each Rating Agency, the
Letter of Credit Agent and the Administrative Agent for any Outstanding
Series of:
(i) the occurrence of any Early Amortization Event or
Potential Early Amortization Event, the statement of a
Responsible Officer of the Company setting forth the details of
such Early Amortization Event or Potential Early Amortization
Event and the action taken, or which the Company proposes to
take, with respect thereto; and
(ii) any Lien not permitted by SUBSECTION 2.07(B)(I) on
Purchased Loans or any other Trust Assets.
(h) COLLECTION ACCOUNT. Take all reasonable actions necessary to
ensure that the Collection Account shall be free and clear of, and
defend the Collection Account against, any writ, order, stay, judgment,
warrant of attachment or execution or similar process.
(i) SEPARATE CORPORATE EXISTENCE.
(i) Except as set forth in the Transaction Documents,
maintain its own deposit account or accounts, separate from
those of any Affiliate, with commercial banking institutions and
ensure that the funds of the Company will not be diverted to any
other Person or for other than corporate uses of the Company,
nor will such funds be commingled with the funds of a Seller or
any Subsidiary or Affiliate of a Seller provided that the
foregoing restriction shall not preclude the Company from
lending its excess cash balances to a Seller or any Subsidiary
or Affiliate of the Seller for investment (which may include
inter-Affiliate loans made by the Seller or any Subsidiary or
Affiliate of the Seller) on a pooled basis as part of the cash
management system maintained by a Seller for its consolidated
group so long as all such transactions are properly reflected on
the
14
books and records of the Company and the Sellers (and any
Subsidiary or Affiliate of the Sellers, if applicable);
(ii) To the extent that it shares the same officers or
other employees as any of its stockholders or Affiliates, the
salaries of and the expenses related to providing benefits to
such officers and other employees shall be fairly allocated
among such entities, and each such entity shall bear its fair
share of the salary and benefit costs associated with all such
common officers and employees;
(iii) To the extent that it jointly contracts with any
of its stockholders or Affiliates to do business with vendors or
service providers or to share overhead expenses, the costs
incurred in so doing shall be allocated fairly among such
entities, and each such entity shall bear its fair share of such
costs. To the extent that the Company contracts or does business
with vendors or service providers where the goods and services
provided are partially for the benefit of any other Person, the
costs incurred in so doing shall be fairly allocated to or among
such entities for whose benefit the goods or services are
provided, and each such entity shall bear its fair share of such
costs. All material transactions between the Company and any of
its Affiliates, whether currently existing or hereafter entered
into, shall be only on an arm's length basis;
(iv) Maintain office space separate from the office
space of the Sellers and their Affiliates (but which may be
located at the same address as a Seller or one of a Seller's
Affiliates). To the extent that the Company and any of its
stockholders or Affiliates have offices in the same location,
there shall be a fair and appropriate allocation of overhead
costs among them, and each such entity shall bear its fair share
of such expenses;
(v) Issue separate financial statements prepared not
less frequently than annually and prepared in accordance with
GAAP;
(vi) Conduct its affairs strictly in accordance with its
organizational documents and observe all necessary, appropriate
and customary corporate formalities, including, but not limited
to, holding regular and special stockholders' and directors,
meetings appropriate to authorize all corporate action, keeping
separate minutes of its meetings, passing all resolutions or
consents necessary to authorize actions taken or to be taken,
and maintaining separate books, records and accounts, including,
but not limited to, payroll and intercompany transaction
accounts;
(vii) Not assume or guarantee any of the liabilities of
the Sellers, the Servicer or any Affiliate thereof; and
(viii) Take, or refrain from taking, as the case may be,
all other actions that are necessary to be taken or not to be
taken in order to (x) ensure that
15
the assumptions and factual recitations set forth in the
Specified Bankruptcy Opinion Provisions remain true and correct
with respect to the Company and (y) comply with those procedures
described in such provisions which are applicable to the
Company.
(j) PRESERVATION OF CORPORATE EXISTENCE. (i) Except as otherwise
permitted by the Transaction Documents, preserve, renew and keep in full
force and effect its corporate existence and (ii) take all reasonable
action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business, except where the
failure to maintain the same would not have a Material Adverse Effect.
(k) ASSESSMENTS. Promptly pay and discharge all taxes,
assessments, levies and other governmental charges imposed on it except
such taxes, assessments, levies and other governmental charges that (i)
are being contested in good faith by appropriate proceedings and for
which the Company shall have set aside on its books adequate reserves or
(ii) the failure to pay, satisfy or discharge would not reasonably be
expected to result in a Material Adverse Effect.
(l) OBLIGATIONS. Defend the right, title and interest of the
Trust in, to and under the Purchased Loans and the other Trust Assets,
whether now existing or hereafter created, against all claims of third
parties claiming through the Company. The Company will duly fulfill all
obligations on its part to be fulfilled under or in connection with each
Purchased Loan and will do nothing to materially impair the rights of
the Company in such Purchased Loan.
(m) ENFORCEMENT OF SALE AGREEMENT. The Company shall use its
best efforts to enforce all rights held by it under the Sale Agreement.
(n) MAINTENANCE OF PROPERTY. Keep or request the Servicer to
keep all property and assets useful and necessary to permit the
monitoring and collection of Purchased Loans.
SECTION 2.07. NEGATIVE COVENANTS OF THE COMPANY. The Company hereby
covenants that, until the Trust Termination Date occurs, it shall not directly
or indirectly:
(a) LIMITATION ON LIABILITIES. Create, incur, assume or suffer
to exist any Indebtedness, except (i) liabilities or obligations
representing fees, expenses and indemnities payable pursuant to and in
accordance with the Transaction Documents and (ii) liabilities or
obligations for services supplied or furnished to the Company in an
amount not to exceed $100,000 at any time outstanding; PROVIDED that any
Indebtedness permitted hereunder and described in clauses (i) and (iii)
shall be payable by the Company solely from funds available to the
Company which are not otherwise required to be applied to the payment of
any amounts by the Company pursuant to any Pooling and Servicing
Agreement.
16
(b) LIMITATION ON TRANSFERS OF PURCHASED LOANS, ETC. Except as
otherwise permitted by the Transaction Documents, at any time sell,
transfer or otherwise dispose of any of the Purchased Loans, Related
Property or the proceeds thereof pursuant to:
(i) any Lien Creation except for Permitted Liens; or
(ii) any Investment except in respect of or in
connection with (A) the purchase of Purchased Loans and Related
Property from a Seller or its Affiliates, (B) an advance or loan
made to a Seller or (C) investments of proceeds as contemplated
in any Pooling and Servicing Agreement.
(c) LIMITATION ON GUARANTEE OBLIGATIONS. Become or remain
liable, directly or contingently, in connection with any Indebtedness or
other liability of any other Person, whether by guarantee, endorsement
(other than endorsements of negotiable instruments for deposit or
collection in the ordinary course of business), agreement to purchase or
repurchase, agreement to supply or advance funds, or otherwise other
than under or in connection with any Pooling and Servicing Agreement.
(d) LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation or dissolution), or make any material change
in its present method of conducting business, or convey, sell, lease,
assign, transfer or otherwise dispose of, all or substantially all of
its property, business or assets other than the assignments and
transfers contemplated hereby.
(e) BUSINESS OF THE COMPANY. Engage at any time in any business
or business activity other than the acquisition of Loans pursuant to the
Sale Agreement, the assignments and transfers hereunder, the other
transactions contemplated by the Transaction Documents and any activity
incidental to the foregoing and necessary or convenient to accomplish
the foregoing, or enter into or be a party to any agreement or
instrument other than in connection with the foregoing.
(f) AGREEMENTS. Become a party to any indenture, mortgage,
instrument, contract, agreement, lease or other undertaking, except the
Transaction Documents, leases of office space, equipment or other
facilities for use by the Company in its ordinary course of business,
employment agreements, service agreements, agreements relating to shared
employees and the other Transaction Documents, and agreements necessary
to perform its obligations under the Transaction Documents, (ii) issue
any power of attorney (except to the Trustee or the Servicer or except
for the purpose of permitting any Person to perform any ministerial
functions on behalf of the Company that are not prohibited by or
inconsistent with the terms of the Transaction Documents), or (iii)
amend, supplement, modify or waive any of the provisions of the Sale
Agreement or request, consent or agree to or suffer to exist or permit
any such amendment, supplement, modification or waiver or exercise any
consent rights granted to
17
it thereunder unless such amendment, supplement, modification or waiver
or such exercise of consent rights would not have a Material Adverse
Effect and the Rating Agency Condition shall have been satisfied with
respect to any such amendments, supplements, modifications or waivers.
(g) OFFICES. Change the state of its incorporation or move the
location of its chief executive office or of any of the offices where it
keeps its records with respect to the Purchased Loans, or its legal head
office to a new location within or outside the jurisdiction where such
office is now located, without (i) thirty (30) days prior written notice
to the Trustee, the Letter of Credit Agent, the Administrative Agent and
each Rating Agency and (ii) taking all actions reasonably requested by
the Trustee (including but not limited to all filings and other acts
necessary or advisable under the UCC or other applicable laws or similar
statute of each relevant jurisdiction) in order to continue the Trust's
first priority perfected ownership or security interest in all Purchased
Loans now owned or hereafter created.
(h) CHANGE IN NAME. Change its name, identity or corporate
structure in any manner that would or is likely (i) to make any
financing statement or continuation statement (or other similar
instrument) relating to this Agreement seriously misleading within the
meaning of Section 9-402(7) of the New York UCC (or analogous provision
of any other similar applicable statute or legislation) or (ii) to
impair the perfection of the Trust's interest in any Purchased Loan
under any other similar law, without thirty (30) days' prior written
notice to the Trustee, the Letter of Credit Agent, the Administrative
Agent and each Rating Agency.
(i) CHARTER. Amend or make any change or modification to its
certificate of incorporation or its by-laws without first satisfying the
Rating Agency Condition and obtaining the consent of the Letter of
Credit Agent and the Administrative Agent (PROVIDED that,
notwithstanding anything to the contrary in this SECTION 2.07, the
Company may make amendments, changes or modifications pursuant to
changes in law of the jurisdiction of its incorporation or amendments to
change the Company's name (subject to compliance with clause (h) above),
registered agent or address of registered office).
(j) ACCOUNTING FOR PURCHASES. Except as otherwise required by
law, prepare any financial statements which shall account for the
transactions contemplated under the Sale Agreement or hereunder in any
manner other than as a sale of the Purchased Loans from the Sellers to
the Company and from the Company to the Trust, respectively, or in any
other respect account for or treat the transactions contemplated under
the Sale Agreement or hereunder (including for financial accounting
purposes, except as required by law) in any manner other than as sales
of the Purchased Loans from the Sellers to the Company and from the
Company to the Trust, respectively; PROVIDED, HOWEVER, that this
subsection shall not apply for any tax or tax accounting purposes.
18
(k) EXTENSION OR AMENDMENT OF PURCHASED LOANS. Extend, rescind,
cancel, amend or otherwise modify, or attempt or purport to extend,
amend or otherwise modify, the terms of any Purchased Loans, except (a)
as required by any Requirement of Law and (b) the Company may extend,
amend or otherwise modify the terms of any Purchased Loans so long as
the affected Purchased Loan constitutes an Eligible Loan after taking
into account such extension, amendment or modification; PROVIDED,
HOWEVER, that the Company shall not extend any Purchased Loan to the
extent Collections on such Purchased Loan are necessary to repay (i) the
aggregate principal and interest due and owing with respect to any
Exiting Loans made by Exiting Banks pursuant to SUBSECTION 4.03(C)(II)
of the Liquidity Agreement or (ii) the Invested Amount plus accrued and
unpaid interest with respect to any Series as to which the Amortization
Period shall have occurred and be continuing.
(l) SALE AGREEMENT. Take any action under the Sale Agreement
that shall have a Material Adverse Effect.
(m) LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or
purchase any stock, bonds, notes, debentures or other securities of or
any assets constituting a business unit of, or make any other investment
in, any Person, except for any Exchangeable Company Interest, the
Purchased Loans and the other Trust Assets.
ARTICLE III
RIGHTS OF HOLDERS AND ALLOCATION
AND APPLICATION OF COLLECTIONS
THE FOLLOWING PORTION OF THIS ARTICLE III
IS APPLICABLE TO ALL SERIES.
SECTION 3.01. ESTABLISHMENT OF COLLECTION ACCOUNT; CERTAIN
ALLOCATIONS.
(a) The Trustee, for the benefit of the Investor
Certificateholders, as their interests appear in this Agreement, shall
cause to be established and maintained in the name of the Trustee as
trustee of the Trust with an Eligible Institution or with the corporate
trust department of the Trustee or an Eligible Institution or an
affiliate of the Trustee or an Eligible Institution, a segregated trust
account (the "COLLECTION ACCOUNT"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of
the Investor Certificateholders. Schedule 2, which is hereby
incorporated into and made a part of this Agreement, identifies the
Collection Account by setting forth the account number of such account,
the account designation of such account and the name of the institution
with which such account has been established. The Collection Account
shall be divided into individual subaccounts for each Outstanding Series
(each,
19
respectively, a "SERIES COLLECTION SUBACCOUNT" and, collectively, the
"SERIES COLLECTION SUBACCOUNTS") and for the Company (the "COMPANY
COLLECTION SUBACCOUNT"). For administrative purposes only, the Trustee
may establish or cause to be established for a Series, so long as such
Series is an Outstanding Series, sub-subaccounts of the Series
Collection Subaccounts with respect to such Series (respectively, the
"SERIES PRINCIPAL COLLECTION SUB-SUBACCOUNT" and "SERIES NON-PRINCIPAL
COLLECTION Sub-subaccount" and, collectively, the "SERIES COLLECTION
SUB-SUBACCOUNTS").
(b) AUTHORITY OF THE TRUSTEE IN RESPECT OF THE COLLECTION
ACCOUNT.
(i) The Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the
Collection Account and in all proceeds thereof. The Collection
Account shall be under the sole dominion and control of the
Trustee for the benefit of the Investor Certificateholders. If,
at any time, the Servicer has actual notice or knowledge that
any institution holding the Collection Account has ceased to be
an Eligible Institution, the Servicer shall direct the Trustee
to establish within thirty (30) days a substitute account
therefor with an Eligible Institution, transfer any cash and/or
any Eligible Investments to such new account and from the date
any such substitute accounts are established, such account shall
be the Collection Account. Neither the Company, the Servicer nor
any person or entity claiming by, through or under the Company
or the Servicer, shall have any right, title or interest in,
except to the extent expressly provided under the Transaction
Documents, or any right to withdraw any amount from, the
Collection Account. Pursuant to the authority granted to the
Servicer in SUBSECTION 2.02(A) of the Servicing Agreement, the
Servicer shall have the power to instruct the Trustee in writing
to make withdrawals from and payments to the Collection Account
for the purposes of carrying out the Servicer's or Trustee's
duties hereunder.
(ii) The Servicer agrees to give written direction
(which may be included within any Monthly Settlement Statement
or Daily Report) in a timely manner to the Trustee to apply all
Collections with respect to the Purchased Loans and to make all
other applications, allocations and distributions described in
Article III and in the Supplement with respect to each
Outstanding Series.
(iii) Each Series of Investor Certificates shall
represent Fractional Undivided Interests as indicated in the
Supplement relating to such Series and the right to receive
Collections and other amounts at the times and in the amounts
specified in this Article III (as supplemented by the Supplement
related to such Series) to be deposited in the Collection
Account and any other accounts maintained for the benefit of the
Investor Certificateholders or paid to the Investor
Certificateholders (with respect to each outstanding Series, the
"INVESTOR CERTIFICATEHOLDERS' INTEREST"). The Exchangeable
Company Interest shall represent the interest in the Trust not
represented by any Series of Investor
20
Certificates then outstanding, including the right to receive
Collections and other amounts at the times and in the amounts
specified in this Article III to be paid to the Company (the
"EXCHANGEABLE COMPANY Interest"); PROVIDED, HOWEVER, that no
such Exchangeable Company Interest shall represent any interest
in any Trust Account and any other accounts maintained for the
benefit of the Investor Certificateholders, except as
specifically provided in this Article III.
(c) ADMINISTRATION OF THE COLLECTION ACCOUNT. At the written
direction of the Company (or the Servicer on behalf of the Company),
funds on deposit in the Collection Account and any Series Collection
Subaccount available for investment, shall be invested by the Trustee in
Eligible Investments selected by the Company (or the Servicer on behalf
of the Company). All such Eligible Investments shall be held by the
Trustee for the benefit of the Investor Certificateholders. The Trustee
may liquidate any Eligible Investment when required to make a transfer
of funds or an application pursuant to this Agreement or any related
Supplement. The Company (or the Servicer on behalf of the Company)
agrees to use its reasonable efforts to schedule the maturity of such
Eligible Investments so as to avoid the necessity of liquidating the
same. The Company shall bear the expense of any cost incurred in respect
of liquidation of an investment hereunder. Amounts on deposit in any
sub-subaccounts as specified in the related Supplement shall be invested
in Eligible Investments that mature, or that are payable or redeemable
upon demand of the holder thereof, so that such funds will be available
not later than the date which is specified in any Supplement. The
Trustee, or its nominee or custodian, shall maintain possession of the
negotiable instruments or securities, if any, evidencing any Eligible
Investments from the time of purchase thereof until the time of sale or
maturity. Any earnings (net of losses and investment expenses) (the
"INVESTMENT EARNINGS") on such invested funds in a Series Collection
Subaccount and any other sub-subaccounts as specified in the related
Supplement will be deposited by the Trustee in the Series Collection
Subaccount or in such other sub-subaccount specified in the related
supplement. It is expressly acknowledged and agreed that the Company (or
the Servicer on its behalf) is authorized to direct the purchase of, and
the Trustee may, to the extent permitted by applicable banking laws and
regulations, purchase investments constituting Eligible Investments (i)
from Chase or any other Affiliate of Chase, including securities that
are underwritten, placed or dealt in by Chase or any other Affiliate of
Chase, or (ii) from money market funds or management investment
companies for which Chase or any Affiliate is investment manager,
advisor, administrator, shareholder, servicing agent and/or custodian or
(iii) that involve Chase or an Affiliate of Chase as a participant or
counterparty. It is further acknowledged and agreed that Chase and/or
such Affiliates of Chase may receive advisory fees, referral fees and
other compensation in connection with such services that are distinct
from the fees, charges and expenses of Chase in its various capacities
hereunder.
21
(d) COLLECTIONS.
(i) Promptly following the receipt of Collections in the
form of available funds in a Lock-Box Account, but in no event
later than 12:00 (Noon), New York City time, on the Business Day
following the Business Day Received, the Servicer shall
transfer, or cause to be transferred, all Collections on deposit
in the form of available funds in the Lock-Box Accounts directly
to the Collection Account.
(ii) If the Daily Report specified in SUBSECTION
3.01(B)(II) is received by the Trustee at or before 12:00
(Noon), New York City time, on any Business Day, the Trustee
shall transfer, within a reasonable time on such Business Day,
from aggregate Collections deposited in the Collection Account,
to the respective Series Collection Subaccount, an amount equal
to the product of (x) the applicable Invested Percentage for
such Outstanding Series and (y) such aggregate Collections
deposited in the Collection Account in accordance with the Daily
Report.
(iii) If the Daily Report specified in SUBSECTION
3.01(B)(II) is received by the Trustee at or before 12:00
(Noon), New York City time, on any Business Day, the Trustee
shall, if required by the related Supplement, allocate, within a
reasonable time on such Business Day, funds transferred to the
Series Collection Subaccount for each Outstanding Series
pursuant to the preceding SUBSECTION 3.01(D)(II) to the Series
Non-Principal Collection Sub-subaccount and the Series Principal
Collection Sub-subaccount of each such Series in accordance with
the Daily Report and the related Supplement for such Series.
(iv) Except as otherwise provided in a Supplement, if
the Daily Report specified in SUBSECTION 3.01(B)(II) is received
by the Trustee at or before 12:00 (Noon), New York City time, on
such Business Day, the Trustee shall transfer in accordance with
such Daily Report, within a reasonable time on such Business
Day, to the Company Collection Subaccount the remaining funds,
if any, on deposit in the Collection Account on such day after
giving effect to transfers to be made pursuant to SUBSECTION
3.01(D)(II).
(e) CERTAIN ALLOCATIONS FOLLOWING AN AMORTIZATION PERIOD.
(i) If, on any Settlement Report Date, an Amortization
Period has occurred and is continuing with respect to any
Outstanding Series and at such Settlement Report Date, a
Revolving Period is still in effect with respect to any other
Outstanding Series (a "SPECIAL ALLOCATION SETTLEMENT REPORT
DATE"), then the Servicer shall make the following calculations:
(A) the amount (the "ALLOCABLE CHARGED-OFF
AMOUNT") equal to the excess, if any, of (I) the
aggregate Principal Amount of
22
Defaulted Loans for the related Settlement Period over
(II) the aggregate Principal Amount of Recoveries
received during the related Settlement Period; and
(B) the amount (the "ALLOCABLE RECOVERIES
AMOUNT") equal to the excess, if any, of (I) the
aggregate Principal Amount of Recoveries received during
the related Settlement Period over (II) the aggregate
Principal Amount of Defaulted Loans for the related
Settlement Period.
(ii) If, on any Special Allocation Settlement Report
Date, either of the Allocable Charged-off Amount or the
Allocable Recoveries Amount is greater than zero for the related
Settlement Period, the Trustee shall (in accordance with written
directions received pursuant to subsection (b)(ii) above) make
(A) a pro rata allocation to each Outstanding Series (based on
the Invested Percentage for such Series) of a portion (as
determined in clause (iii) below) of each such positive amount
and (B) an allocation to the Exchangeable Company Interest of
the remaining portion of each such positive amount.
(iii) With respect to each portion of the Allocable
Charged-off Amount and the Allocable Recoveries Amount which is
allocated to an Outstanding Series pursuant to SUBSECTION
3.01(E)(II), the Trustee shall (in accordance with the written
direction of the Servicer) apply each such amount to such Series
in accordance with the related Supplement for such Series.
(f) ALLOCATIONS FOR THE EXCHANGEABLE COMPANY INTEREST. On each
Business Day on which the Servicer delivers a Daily Report to the
Trustee, after making all allocations required pursuant to SUBSECTION
3.01(D), the Trustee shall (in accordance with the written direction of
the Servicer, upon which the Trustee may conclusively rely) transfer,
using its best efforts to transfer within two hours of receipt of
Collections and the Daily Report, and, if the Collections and the Daily
Report are received by the Trustee no later than 12:00 (Noon), New York
City time, making such transfer no later than 4:30 p.m., New York City
time, on such Business Day, the amounts on deposit in the Company
Collection Subaccount to the holder of the Exchangeable Company Interest
or to such accounts or such Persons as the holder of the Exchangeable
Company Interest may direct in writing (which direction may consist of
standing instructions provided by the holder of the Exchangeable Company
Interest that shall remain in effect until changed by the holder of the
Exchangeable Company Interest in writing); PROVIDED, HOWEVER, that a
transfer for purposes of this SUBSECTION 3.01(F) shall be deemed to have
occurred at such time as the Trustee instructs the applicable Federal
Reserve Bank, as clearing bank for the Trustee, to debit the Trustee's
account in the amount of the outgoing amount; PROVIDED FURTHER that a
failure of the Trustee to transfer funds by 4:30 p.m., New York City
time, shall not be a breach of this SUBSECTION 3.01(F) if (i) the same
bank wire transfer program is not used by both the Company and the
Trustee to make such transfers
23
or (ii) a Trustee Force Majeure Delay occurs, and in either such event
the Trustee shall use its best efforts to transfer funds within a
reasonable time.
(g) SETOFF. In addition to the provisions of SECTION 8.05, (i)
if the Company shall fail to make a payment as provided in this
Agreement or any Supplement, the Servicer or the Trustee may set off and
apply any amounts otherwise payable to the Company under any Pooling and
Servicing Agreement. The Company hereby waives demand, notice or
declaration of such setoff and application; PROVIDED that notice will
promptly be given to the Company of such setoff and application;
PROVIDED FURTHER that failure to give such notice shall not affect the
validity of such setoff; and (ii) in the event the Servicer shall fail
to make a payment as provided in any Pooling and Servicing Agreement,
the Trustee may set off and apply any amounts otherwise payable to the
Servicer in its capacity as Servicer under the Transaction Documents on
account of such obligation. The Servicer hereby waives demand, notice or
declaration of such setoff and application; PROVIDED that notice will
promptly be given to the Servicer of such setoff; PROVIDED FURTHER that
failure to give such notice shall not affect the validity of such
setoff.
(h) ALLOCATION AND APPLICATION OF FUNDS. The Servicer shall
direct the Trustee in writing (which may be given in the form of the
Monthly Settlement Statements or the Daily Reports) to apply all
Collections with respect to the Purchased Loans as described in this
Article III and in the Supplement with respect to each Outstanding
Series. The Servicer shall direct the Trustee in writing to pay
Collections to the holder of the Exchangeable Company Interest to the
extent such Collections are allocated to the Exchangeable Company
Interest under SUBSECTION 3.01(F) and as otherwise provided in Article
III. Unless otherwise provided in one or more Supplements, if the
Trustee receives any Monthly Settlement Statement or Daily Report at or
before 12:00 (Noon), New York City time, on any Business Day, the
Trustee shall make any applications of funds required thereby on the
same Business Day and otherwise on the next succeeding Business Day.
THE REMAINDER OF ARTICLE III SHALL BE SPECIFIED
IN THE SUPPLEMENT WITH RESPECT TO EACH SERIES.
SUCH REMAINDER SHALL BE APPLICABLE ONLY TO THE
SERIES RELATING TO THE SUPPLEMENT IN WHICH
SUCH REMAINDER APPEARS.
24
ARTICLE IV
ARTICLE IV IS RESERVED
AND MAY BE SPECIFIED IN ANY SUPPLEMENT
WITH RESPECT TO THE SERIES RELATING THERETO.
ARTICLE V
THE INVESTOR CERTIFICATES AND
EXCHANGEABLE COMPANY INTEREST
SECTION 5.01. THE INVESTOR CERTIFICATES. The Investor Certificates
of each Series and any Class thereof shall be in fully registered form and shall
be substantially in the form of the exhibits with respect thereto attached to
the applicable Supplement. The Investor Certificates shall, upon issue, be
executed by the Company (on behalf of the Trustee of the Trust and without the
Company incurring any personal liability in respect of the Investor
Certificates) and delivered to the Trustee for authentication and redelivery as
provided in SECTION 5.02. Except as otherwise set forth as to any Series or
Class in the related Supplement, the Investor Certificates shall be issued by
the Trust in minimum denominations of $1,000,000 and in integral multiples of
$100,000 in excess thereof. Unless otherwise specified in any Supplement for any
Series, the Investor Certificates shall be issued upon initial issuance as a
Book-Entry Certificate pursuant to SECTION 5.11 in an original principal amount
equal to the Initial Invested Amount with respect to such Series. The Company is
hereby authorized by the Trust to execute and deliver each Investor Certificate
and any documents related thereto on behalf of the Trust. In so doing, the
Company acts as agent of the Trust and shall incur no personal liability in
respect of the Investor Certificates. Each Investor Certificate shall be
executed by manual or facsimile signature on behalf of the Company, as agent of
the Trust, by a Responsible Officer. Investor Certificates bearing the manual or
facsimile signature of the individual who was, at the time when such signature
was affixed, authorized to sign on behalf of the Company, as agent of the Trust,
shall not be rendered invalid, notwithstanding that such individual has ceased
to be so authorized prior to or on the date of the authentication and delivery
of such Investor Certificates or does not hold such office at the date of the
authentication and delivery of such Investor Certificates. No Investor
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Investor Certificate a certificate
of authentication substantially in the form provided for herein executed by or
on behalf of the Trustee by the manual signature of a duly authorized signatory,
and such certificate of authentication upon any Investor Certificate shall be
conclusive evidence, and the only evidence, that such Investor Certificate has
been duly authenticated and delivered hereunder. All Investor Certificates shall
be dated the date of their authentication but failure to do so shall not render
them invalid.
25
SECTION 5.02. AUTHENTICATION OF CERTIFICATES.
(a) The Trustee shall authenticate and deliver the initial
Series of Investor Certificates that is issued upon the written order of
the Company (or the Servicer on behalf of the Company) in a form
reasonably satisfactory to the Trustee, to the holders of the initial
Series of Investor Certificates, against payment to the Company of the
Initial Invested Amount. The Investor Certificates shall be duly
authenticated by or on behalf of the Trustee in authorized denominations
equal to (in the aggregate) the Initial Invested Amount. Upon a Company
Exchange as provided in SECTION 5.10 and the satisfaction of certain
other conditions specified therein, the Trustee shall authenticate and
deliver the Investor Certificates of additional Series (with the
designation provided in the applicable Supplement) (or, if provided in
any Supplement, the additional Investor Certificates of an existing
Series), upon the written order of the Company, to the Persons
designated in such Supplement. Upon the written order of the Company (or
the Servicer on behalf of the Company), the Investor Certificates of any
Series shall be duly authenticated by or on behalf of the Trustee, in
authorized denominations equal to (in the aggregate) the Initial
Invested Amount of such Series of Investor Certificates.
(b) COMPANY CERTIFICATES. Upon written request of the Company,
the Trustee shall authenticate and deliver to the Company one or more
certificates representing the Exchangeable Company Interest in a form
reasonably satisfactory to the Trustee. Such certificates shall be duly
authenticated by or on behalf of the Trustee in denominations as
requested by the Company. The Company shall pay all costs associated
with such issuance of certificates.
SECTION 5.03. REGISTRATION OF TRANSFER AND EXCHANGE OF INVESTOR
CERTIFICATES.
(a) The Trustee shall cause to be kept at the office or agency
to be maintained by a transfer agent and registrar (which may be the
Trustee) (the "TRANSFER AGENT AND REGISTRAR") in accordance with the
provisions of SECTION 8.16 a register (the "CERTIFICATE REGISTER") in
which, subject to such reasonable regulations as the Trustee may
prescribe, the Transfer Agent and Registrar shall provide for the
registration of the Investor Certificates and of transfers and exchanges
of the Investor Certificates as herein provided. The Company hereby
appoints The Chase Manhattan Bank as Transfer Agent and Registrar for
the purpose of registering the Investor Certificates and transfers and
exchanges of the Investor Certificates as herein provided. The Chase
Manhattan Bank shall be permitted to resign as Transfer Agent and
Registrar upon 30 days prior written notice to the Company, the Trustee
and the Servicer; PROVIDED, HOWEVER, that such resignation shall not be
effective and The Chase Manhattan Bank shall continue to perform its
duties as Transfer Agent and Registrar until the Trustee has appointed a
successor Transfer Agent and Registrar reasonably acceptable to the
Company and such successor Transfer Agent and Registrar has accepted
such appointment. The provisions of SECTIONS 8.01, 8.02, 8.03, 8.05 and
10.19 shall apply to The Chase Manhattan Bank (or the Trustee to the
extent it is so acting) also in its role as Transfer Agent or Registrar,
as
26
the case may be, for so long as The Chase Manhattan Bank (or the Trustee
to the extent it is so acting) shall act as Transfer Agent or Registrar,
as the case may be.
The Company hereby agrees to provide the Trustee from time to time
sufficient funds, on a timely basis and in accordance with and subject to
SECTION 8.05, for the payment of any reasonable compensation payable to the
Transfer Agent and Registrar for its services under this SECTION 5.03 and under
SECTION 5.10. The Trustee hereby agrees that, upon the receipt of such funds
from the Company, it shall pay the Transfer Agent and Registrar such amounts.
Upon surrender for registration of transfer of any Investor
Certificate at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, the Company shall execute (on behalf of the Trust),
and the Trustee shall, upon the written order of the Company, and satisfaction
of any transfer restrictions set forth herein or in the related Supplement,
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Investor Certificates in authorized denominations
of the same Series (and Class) representing like aggregate Fractional Undivided
Interests and which bear numbers that are not contemporaneously outstanding.
At the option of an Investor Certificateholder, Investor
Certificates may be exchanged for other Investor Certificates of the same Series
(and Class) in authorized denominations of like aggregate Fractional Undivided
Interests, bearing numbers that are not contemporaneously outstanding, upon
surrender of the Investor Certificates to be exchanged at any such office or
agency of the Transfer Agent and Registrar maintained for such purpose.
Whenever any Investor Certificates of any Series are so surrendered
for exchange, the Company shall execute (on behalf of the Trust), and the
Trustee shall, upon the written order of the Company, and satisfaction of any
transfer restrictions set forth herein or in the related Supplement,
authenticate and (unless the Transfer Agent and Registrar is different from the
Trustee, in which case the Transfer Agent and Registrar shall) deliver, the
Investor Certificates of such Series which the Investor Certificateholder making
the exchange is entitled to receive. Every Investor Certificate presented or
surrendered for registration of transfer or exchange shall be accompanied by a
written instrument of transfer, with sufficient instructions, duly executed by
the Investor Certificateholder thereof or his attorney-in-fact duly authorized
in writing delivered to the Trustee (unless the Transfer Agent and Registrar is
different from the Trustee, in which case to the Transfer Agent and Registrar)
and complying with any requirements set forth in the applicable Supplement.
No service charge shall be made for any registration of transfer or
exchange of Investor Certificates, but the Transfer Agent and Registrar may
require any Investor Certificateholder that is transferring or exchanging one or
more Investor Certificates to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Investor Certificates.
All Investor Certificates surrendered for registration of transfer
and exchange shall be canceled and disposed of in a customary manner
satisfactory to the Trustee.
27
The Company shall, as agent of the Trust and without incurring
personal liability with respect to the Investor Certificates, execute and
deliver Investor Certificates to the Trustee or the Transfer Agent and Registrar
in such amounts and at such times as are necessary to enable the Trustee and the
Transfer Agent and Registrar to fulfill their respective responsibilities under
this Agreement and the Investor Certificates.
(b) The Transfer Agent and Registrar will maintain at its
expense in Houston, Texas and, subject to SUBSECTION 5.03(A), if
specified in the related Supplement for any Series, any other city
designated in such Supplement, an office or offices or agency or
agencies where Investor Certificates may be surrendered for registration
or transfer or exchange.
(c) Unless otherwise stated in any related Supplement,
registration of transfer of Investor Certificates containing a legend
relating to restrictions on transfer of such Investor Certificates
(which legend shall be set forth in the Supplement relating to such
Investor Certificates) shall be effected only if the conditions set
forth in the related Supplement are complied with.
Investor Certificates issued upon registration or transfer of, or in
exchange for, Investor Certificates bearing the legend referred to above shall
also bear such legend unless the Company, the Servicer, the Trustee and the
Transfer Agent and Registrar receive an Opinion of Counsel satisfactory to each
of them, to the effect that such legend may be removed.
SECTION 5.04. MUTILATED, DESTROYED, LOST OR STOLEN INVESTOR
CERTIFICATES. If (a) any mutilated Investor Certificate is surrendered to the
Transfer Agent and Registrar, or the Transfer Agent and Registrar receives
evidence to its satisfaction of the destruction, loss or theft of any Investor
Certificate and (b) there is delivered to the Transfer Agent and Registrar and
the Trustee such security or indemnity as may be required by them to save the
Trust, each of them and the Company harmless, then, in the absence of actual
notice to the Trustee or Transfer Agent and Registrar that such Investor
Certificate has been acquired by a bona fide purchaser, the Company shall
execute on behalf of the Trust and, upon the written request of the Company, the
Trustee shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Investor Certificate, a new Investor
Certificate of like tenor and aggregate Fractional Undivided Interest and
bearing a number that is not contemporaneously outstanding. In connection with
the issuance of any new Investor Certificate under this SECTION 5.04, the
Trustee or the Transfer Agent and Registrar may require the payment by the
Investor Certificateholder of a sum sufficient to cover any tax or other
governmental expenses (including the fees and expenses of the Trustee and
Transfer Agent and Registrar) connected therewith. Any duplicate Investor
Certificate issued pursuant to this SECTION 5.04 shall constitute complete and
indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Investor Certificate shall be found
at any time.
SECTION 5.05. PERSONS DEEMED OWNERS. At all times prior to due
presentation of an Investor Certificate for registration of transfer, the
Company, the Trustee, the Paying Agent, the Transfer Agent and Registrar and any
agent of any of them may treat the
28
Person in whose name any Investor Certificate is registered as the owner of such
Investor Certificate for the purpose of receiving distributions pursuant to
Article IV of the related Supplement and for all other purposes whatsoever, and
neither the Trustee, the Paying Agent, the Transfer Agent and Registrar nor any
agent of any of them shall be affected by any notice to the contrary.
Notwithstanding the foregoing provisions of this SECTION 5.05, in determining
whether the Investor Certificateholders of the requisite Fractional Undivided
Interests have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Investor Certificates owned by the Company, the
Servicer or any Affiliate thereof, shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Investor Certificates which a Responsible Officer of the
Trustee actually knows to be so owned shall be so disregarded. Investor
Certificates so owned by the Company, the Servicer or any Affiliate thereof
which have been pledged in good faith shall not be disregarded and may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Investor Certificates
and that the pledgee is not the Company, the Servicer or any Affiliate thereof.
SECTION 5.06. APPOINTMENT OF PAYING AGENT. The Paying Agent shall
make distributions to Investor Certificateholders from the Collection Account
(and/or any other account or accounts maintained for the benefit of Investor
Certificateholders as specified in the related Supplement for any Series)
pursuant to Articles III and IV. The Trustee may revoke such power and remove
the Paying Agent if the Trustee determines in its sole discretion that the
Paying Agent shall have failed to perform its obligations under this Agreement
in any material respect. Unless otherwise specified in the related Supplement
for any Series and with respect to such Series, the Paying Agent shall initially
be The Chase Manhattan Bank and any co-paying agent chosen by The Chase
Manhattan Bank. Each Paying Agent shall have a combined capital and surplus of
at least $100,000,000. The Paying Agent shall be permitted to resign upon 30
days' prior written notice to the Trustee. In the event that the Paying Agent
shall so resign, the Trustee shall appoint a successor to act as Paying Agent
(which shall be a depositary institution or trust company) reasonably acceptable
to the Company which appointment shall be effective on the date on which the
Person so appointed gives the Trustee written notice that it accepts the
appointment. Any resignation or removal of the Paying Agent and appointment of
successor Paying Agent pursuant to this SECTION 5.06 shall not become effective
until acceptance of appointment by the successor Paying Agent, as provided in
this SECTION 5.06. The Trustee shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Trustee to execute and deliver to the
Trustee an instrument in which such successor Paying Agent or additional Paying
Agent shall agree with the 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 Investor Certificateholders in trust for the benefit of the
Investor Certificateholders entitled thereto until such sums shall be paid to
such Investor Certificateholders. The Paying Agent shall return all unclaimed
funds to the Trustee and upon removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Trustee. The provisions of
SECTIONS 8.01, 8.02, 8.03, 8.05 and 10.18 shall apply to The Chase Manhattan
Bank (or the Trustee to the extent it is so acting) also in its role as Paying
Agent, for so long as The Chase Manhattan Bank (or the
29
Trustee to the extent it is so acting) shall act as Paying Agent. Any reference
in this Agreement to the Paying Agent shall include any co-paying agent unless
the context requires otherwise.
The Company hereby agrees to provide the Trustee from time to time
sufficient funds, on a timely basis and in accordance with and subject to
SECTION 8.05, for the payment of any reasonable compensation payable to the
Paying Agent for its services under this SECTION 5.06. The Trustee hereby agrees
that, upon the receipt of such funds from the Company, it shall pay the Paying
Agent such amounts.
SECTION 5.07. ACCESS TO LIST OF INVESTOR CERTIFICATEHOLDERS' NAMES
AND ADDRESSES. The Trustee will furnish or cause to be furnished by the Transfer
Agent and Registrar to the Company, the Servicer or the Paying Agent, within 10
Business Days after receipt by the Trustee of a request therefor from the
Company, the Servicer or the Paying Agent, respectively, in writing, a list of
the names and addresses of the Investor Certificateholders as then recorded by
or on behalf of the Trustee. The costs and expenses incurred in connection with
the provision of such list shall constitute Program Costs under the Supplement
for the applicable Series. If three or more Investor Certificateholders of
record or any Investor Certificateholder of any Series or a group of Investor
Certificateholders of record representing Fractional Undivided Interests
aggregating not less than 10% of the Invested Amount of the related Outstanding
Series (the "APPLICANTS") apply in writing to the Trustee, and such application
states that the Applicants desire to communicate with other Investor
Certificateholders of any Series with respect to their rights under this
Agreement or under the Investor Certificates and is accompanied by a copy of the
communication which such Applicants propose to transmit, then the Trustee, after
having been adequately indemnified by such Applicants for its costs and
expenses, shall transmit or shall cause the Transfer Agent and Registrar to
transmit, such communication to the Investor Certificateholders reasonably
promptly after the receipt of such application.
Every Investor Certificateholder, by receiving and holding an
Investor Certificate, agrees with the Trustee that neither the Trustee, the
Transfer Agent and Registrar, nor any of their respective agents, officers,
directors or employees shall be held accountable by reason of the disclosure or
mailing of any such information as to the names and addresses of the Investor
Certificateholders hereunder, regardless of the sources from which such
information was derived.
As soon as practicable following each Record Date, the Trustee shall
provide to the Paying Agent or its designee, a list of Investor
Certificateholders in such form as the Paying Agent may reasonably request.
SECTION 5.08. AUTHENTICATING AGENT.
(a) The Trustee may appoint one or more authenticating agents
with respect to the Investor Certificates which shall be authorized to
act on behalf of the Trustee in authenticating the Investor Certificates
in connection with the issuance, delivery, registration of transfer,
exchange or repayment of the Investor Certificates; PROVIDED, that each
such authenticating agent shall satisfy the conditions set forth in
30
SECTION 8.06. Whenever reference is made in this Agreement to the
authentication of Investor Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an authenticating agent and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent.
(b) Any institution succeeding to the corporate trust business
of an authenticating agent shall continue to be an authenticating agent
without the execution or filing of any paper or any further act on the
part of the Trustee or such authenticating agent; PROVIDED such
institution satisfies the conditions set forth in SECTION 8.06.
(c) An authenticating agent may at any time resign by giving
written notice of resignation to the Trustee. Upon the receipt by the
Trustee of any such notice of resignation and upon the giving of any
such notice of termination by the Trustee, the Trustee shall immediately
give notice of such resignation or termination to the Company. Any
resignation of an authenticating agent shall not become effective until
acceptance of appointment by the successor authenticating agent as
provided in this SECTION 5.08. The Trustee may at any time terminate the
agency of an authenticating agent by giving notice of termination to
such authenticating agent. Upon receiving such a notice of resignation
or upon such a termination, or in case at any time an authenticating
agent shall cease to be acceptable to the Trustee or fail to satisfy the
conditions set forth in SECTION 8.06, the Trustee promptly may appoint a
successor authenticating agent. Any successor authenticating agent upon
acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect
as if originally named as an authenticating agent. No successor
authenticating agent (other than an Affiliate of the Trustee) shall be
appointed unless such authenticating agent (i) is reasonably acceptable
to the Trustee and the Company and (ii) satisfies the conditions set
forth in SECTION 8.06.
(d) The Company hereby agrees to provide the Trustee from time
to time sufficient funds, on a timely basis and in accordance with and
subject to SECTION 8.05, for the payment of any reasonable compensation
payable to each authenticating agent for its services under this SECTION
5.08. The Trustee hereby agrees that, upon the receipt of such funds
from the Company it shall pay each authenticating agent such amounts.
(e) The provisions of SECTIONS 8.01, 8.02, 8.03, 8.05 and 10.18
shall be applicable to any authenticating agent.
(f) Pursuant to an appointment made under this SECTION 5.08, the
Investor Certificates may have endorsed thereon, in lieu of the
Trustee's certificate of authentication, an alternate certificate of
authentication in substantially the following form:
31
"This is one of the Investor Certificates
referred to in the Pooling Agreement
dated as of August 25, 2000, among Bunge Funding, Inc.,
Bunge Management Services, Inc., as Servicer and The Chase Manhattan Bank,
as Trustee.
THE CHASE MANHATTAN BANK
as Authenticating Agent
for the Trustee
By _________________________
Authorized Signatory
SECTION 5.09. TAX TREATMENT. It is the intent of the Servicer, the
Company, the Investor Certificateholders and the Trustee that, under applicable
U.S. Federal, State and local income and franchise tax laws (but for no other
purpose), the Investor Certificates will qualify as indebtedness of the Company
secured by the Trust Assets and that the Trust will not be characterized as an
association or publicly traded partnership taxable as a corporation. The
Company, the Servicer and the Trustee, by entering into this Agreement, and each
Investor Certificateholder, by its acceptance of its Investor Certificate, agree
to treat, except as otherwise required by law, the Investor Certificates for
applicable U.S. Federal, State and local income and franchise tax purposes (but
for no other purpose) as indebtedness of the Company. The provisions of this
Agreement and all related Transaction Documents shall be construed to further
these intentions of the parties; PROVIDED, FURTHER that nothing in this SECTION
5.09 shall impose on the Company any personal liability in respect of the
Investor Certificates. This SECTION 5.09 shall survive the termination of this
Agreement and shall be binding on all transferees of any of the foregoing
persons.
SECTION 5.10. EXCHANGEABLE COMPANY INTEREST.
(a) The Company may decrease the amount of the Exchangeable
Company Interest in exchange for (i) an increase in the Invested Amount
of a Class of Investor Certificates of an Outstanding Series or (ii) one
or more newly issued Series of Investor Certificates (any such decrease
a "COMPANY EXCHANGE"). (A Company Exchange shall not be necessary in
connection with an increase in the Invested Amount of any Investor
Certificates issued in a Series with an Invested Amount that may
increase or decrease from time to time. Such Investor Certificates are
expected to be designated as "VARIABLE FUNDING CERTIFICATES" or "VFC
CERTIFICATES"). The Company may perform a Company Exchange by notifying
the Trustee, in writing at least five Business Days in advance (an
"EXCHANGE NOTICE") of the date upon which the Company Exchange is to
occur (an "EXCHANGE DATE"). Any Exchange Notice shall state the
designation of any Series to be issued on the Exchange Date and, with
respect to each such Series: (a) its additional or Initial Invested
Amount, as the case may be, if any, which in the aggregate
32
at any time may not be greater than the current principal amount of the
Exchangeable Company Interest, if any, at such time and (b) its
Certificate Rate (or the method for allocating interest payments or
other cash flow to such Series), if any. On the Exchange Date, the
Trustee shall only authenticate and deliver any Investor Certificates
evidencing an increase in the Invested Amount of a Class of Investor
Certificates or a newly issued Series upon delivery by the Company (as
agent of the Trust with respect to clause (g) below) to the Trustee of
the following (together with the delivery by the Company to the Trustee
of any additional agreements, instruments or other documents as are
specified in the related Supplement): (a) a Supplement executed by the
Company and specifying the Principal Terms of such Series (PROVIDED that
no such Supplement shall be required for any increase in the Invested
Amount of a Class of Investor Certificates unless it is so required by
the related Supplement), (b) a Tax Opinion addressed to the Trustee and
the Trust, (c) a General Opinion addressed to the Trustee and the Trust,
(d) a Responsible Officer's certificate certifying that all conditions
precedent to the authentication and delivery of such Investor
Certificates have been satisfied and upon which Responsible Officer's
certificate the Trustee may conclusively rely, (e) written confirmation
from each Rating Agency that the Company Exchange will not result in the
Rating Agency reducing or withdrawing its rating on the Commercial Paper
or any then Outstanding Series or any Class of any such Outstanding
Series rated by it, (f) written instructions of an officer of the
Company specifying the amount, Series, Investor Certificates, other
Interests to be issued with respect to such Company Exchange and the
Exchangeable Company Interest following any such Company Exchange and
(g) the applicable Investor Certificates if necessary. Upon delivery of
the items listed in clauses (a) through (g) above and satisfaction of
any conditions set forth in any Supplement for an Outstanding Series,
the existing Exchangeable Company Interest, shall be deemed adjusted as
of the Exchange Date as provided above. The Trustee shall cause to be
kept at the office or agency to be maintained by the Transfer Agent and
Registrar in accordance with the provisions of SECTION 8.16 a register
(the "EXCHANGE REGISTER") in which, subject to such reasonable
regulations as the Trustee may prescribe, the Transfer Agent and
Registrar shall record all Company Exchanges and the amount of the
Exchangeable Company Interest following any such Company Exchange. There
is no limit to the number of Company Exchanges that the Company may
perform under this Agreement. If the Company shall, on any Exchange
Date, retain any Investor Certificates issued on such Exchange Date, it
shall, prior to transferring any such Investor Certificates to another
Person, obtain a Tax Opinion. Additional restrictions relating to a
Company Exchange may be set forth in any Supplement.
(b) Upon any Company Exchange, the Trustee, in accordance with
the written directions of the Company, shall issue to the Company under
SECTION 5.01, for execution, as agent of the Trust, and redelivery to
the Trustee for authentication under SECTION 5.02, (i) one or more
Investor Certificates representing an increase in the Invested Amount of
an Outstanding Series, or (ii) one or more new Series of Investor
Certificates. Any such Investor Certificates shall be substantially in
the form specified in the
33
applicable Supplement and each shall bear, upon its face, the
designation for such Series to which each such Certificate belongs so
selected by the Company.
(c) In conjunction with a Company Exchange, the parties hereto
shall, except as otherwise provided in subsection (a) above, execute a
Supplement to this Agreement, which shall define, with respect to any
additional Investor Certificates or newly issued Series, as the case may
be: (i) its name or designation, (ii) its additional or initial
principal amount, as the case may be, (or method for calculating such
amount), (iii) its coupon rate (or formula for the determination
thereof), (iv) the interest payment date or dates and the date or dates
from which interest shall accrue, (v) the method for allocating
Collections to Holders, (vi) the names of any accounts to be used by
such Series and the terms governing the operation of any such accounts,
(vii) the issue and terms of a letter of credit or other form of
Enhancement, if any, with respect thereto, (viii) the terms on which the
Certificates of such Series may be repurchased by the Company or may be
remarketed to other investors, (ix) the Series Termination Date, (x) any
deposit account maintained for the benefit of Holders, (xi) the number
of classes of such Series, and if more than one class, the rights and
priorities of each such Class, (xii) the rights of the holder of the
Exchangeable Company Interest that have been transferred to the holders
of such Series, (xiii) the designation of any Series Accounts and the
terms governing the operation of any such Series Accounts, (xiv)
provisions acceptable to the Trustee concerning the payment of the
Trustee's fees and expenses and (xv) other relevant terms (all such
terms, the "PRINCIPAL TERMS" of such Series). The Supplement executed in
connection with the Company Exchange shall contain administrative
provisions which are reasonably acceptable to the Trustee.
(d) The Company shall not transfer, assign, exchange or
otherwise dispose of the Exchangeable Company Interest without (i) the
prior satisfaction of the Rating Agency Condition and (ii) delivery of a
Tax Opinion. If the Company shall transfer, assign, exchange or
otherwise dispose of all or any portion of the Exchangeable Company
Interest in accordance with the preceding sentence, the Transfer Agent
and Registrar shall record the transfer, assignment, exchange or other
disposition of the Exchangeable Company Interest in the Exchange
Register. Any Holder who wishes to transfer, assign, exchange or
otherwise dispose of all or any portion of the Exchangeable Company
Interest held by it shall deliver instructions and a written instrument
of transfer, with sufficient instructions, duly executed by the Holder
or his attorney-in-fact duly authorized in writing delivered to the
Trustee (unless the Transfer Agent and Registrar is different from the
Trustee, in which case to the Transfer Agent and Registrar) and
complying with any requirements set forth in the applicable Supplement.
No service charge shall be made for any registration of transfer or
exchange of all or any portion of the Exchangeable Company Interest, but
the Transfer Agent and Registrar may require any Holder that is
transferring or exchanging all or any portion of the Exchangeable
Company Interest to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer
or exchange of all or any portion of the Exchangeable Company Interest.
34
(e) Except as specified in any Supplement for a related Series,
all Investor Certificates of any Series shall be equally and ratably
entitled as provided herein to the benefits hereof without preference,
priority or distinction on account of the actual time or times of
authentication and delivery, all in accordance with the terms and
provisions of this Agreement and the applicable Supplement.
SECTION 5.11. BOOK-ENTRY CERTIFICATES. If specified in any related
Supplement, the Investor Certificates, or any portion thereof, upon original
issuance, shall be issued in the form of one or more typewritten Investor
Certificates representing the Book-Entry Certificates, to be delivered to the
Depository specified in such Supplement which shall be the Clearing Agency,
specified by, or on behalf of, the Company for such Series. The Investor
Certificates shall initially be registered on the Certificate Register in the
name of the nominee of such Clearing Agency, and no Certificate Book-Entry
Holder will receive a definitive certificate representing such Certificate
Book-Entry Holder's interest in the Investor Certificates, except as provided in
SECTION 5.13. Unless and until definitive, fully registered Investor
Certificates ("DEFINITIVE CERTIFICATES") have been issued to Investor
Certificateholders pursuant to SECTION 5.13 or the related Supplement:
(a) the provisions of this SECTION 5.11 shall be in full force
and effect;
(b) the Company, the Servicer and the Trustee may deal with each
Clearing Agency for all purposes (including the making of distributions
on the Investor Certificates) as the Investor Certificateholder without
respect to whether there has been any actual authorization of such
actions by the Certificate Book-Entry Holders with respect to such
actions;
(c) to the extent that the provisions of this SECTION 5.11
conflict with any other provisions of this Agreement, the provisions of
this SECTION 5.11 shall control; and
(d) the rights of Certificate Book-Entry Holders shall be
exercised only through the Clearing Agency and the related Clearing
Agency Participants and shall be limited to those established by law and
agreements between such related Certificate Book-Entry Holders and the
Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Depository Agreement, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and
transmit distributions of principal and interest on the Investor
Certificates to such Clearing Agency Participants.
Notwithstanding the foregoing, no Class or Series of Investor
Certificates may be issued as Book-Entry Certificates (but, instead, shall be
issued as Definitive Certificates) unless at the time of issuance of such Class
or Series, the Company and the Trustee receive a Tax Opinion.
35
SECTION 5.12. NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Investor Certificateholders is required under this
Agreement, unless and until Definitive Certificates shall have been issued to
Certificate Book-Entry Holders pursuant to SECTION 5.13, the Trustee shall give
all such notices and communications specified herein to be given to the Investor
Certificateholders to the Clearing Agencies.
SECTION 5.13. DEFINITIVE CERTIFICATES. If (a)(i) the Company advises
the Trustee in writing that any Clearing Agency is no longer willing or able to
properly discharge its responsibilities under the applicable Depository
Agreement, and (ii) the Company is unable to locate a qualified successor, (b)
the Company, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (c) after the
occurrence of a Servicer Default or an Early Amortization Event, Certificate
Book-Entry Holders representing Fractional Undivided Interests aggregating more
than 50% of the Invested Amount held by such Certificate Book-Entry Holders of
each affected Series then issued and outstanding (and, if applicable, the
Majority Letter of Credit Banks and the Majority Liquidity Banks) advise the
Clearing Agency through the Clearing Agency Participants in writing, and the
Clearing Agency shall so notify the Trustee, that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of the Certificate Book-Entry Holders, the Trustee shall notify the Clearing
Agency, which shall be responsible to notify the Certificate Book-Entry Holders,
of the occurrence of any such event and of the availability of Definitive
Certificates to Certificate Book-Entry Holders requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Clearing Agency,
accompanied by registration instructions from the Clearing Agency for
registration, the Trustee shall issue the Definitive Certificates. Neither the
Company nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions.
ARTICLE VI
OTHER MATTERS RELATING TO THE COMPANY
SECTION 6.01. LIABILITY OF THE COMPANY. Except as set forth below in
this SECTION 6.01, the Company shall be liable for all obligations, covenants,
representations and warranties of the Company arising under or related to this
Agreement or any Supplement. Except as provided in the preceding sentence and
otherwise herein, the Company shall be liable only to the extent of the
obligations specifically undertaken by it in its capacity as Company hereunder
and shall not be liable for any act or omission of the Paying Agent, an
authenticating agent, the Transfer Agent and Registrar or the Trustee.
Notwithstanding any other provision hereof or of any Supplement, the sole remedy
of the Trust, the Trustee (in its individual capacity or as Trustee), the
Holders or any other Person in respect of any obligation, covenant,
representation, warranty or agreement of the Company under or related to this
Agreement or any Supplement shall be against the assets of the Company. Neither
the Trust, the Trustee, the Holders nor any other Person shall have any claim
against the Company to the extent that such
36
assets are insufficient to meet such obligations, covenant, representation,
warranty or agreement (the difference being referred to herein as a "SHORTFALL")
and all claims in respect of the shortfall shall be extinguished.
SECTION 6.02. LIMITATION ON LIABILITY OF THE COMPANY. Subject to
SECTIONS 6.01 and 10.19, neither the Company nor any of its directors or
officers or employees or agents shall be under any liability to the Trust, the
Trustee, the Holders or any other Person for any action taken or for refraining
from the taking of any action pursuant to this Agreement whether or not such
action or inaction arises from express or implied duties under any Transaction
Document; PROVIDED, HOWEVER, that this provision shall not protect the Company
against any liability which would otherwise be imposed by reason of willful
misconduct, bad faith or gross negligence in the performance of any duties or by
reason of reckless disregard of any obligations and duties hereunder. The
Company and any director or officer or employee or agent of the Company may rely
in good faith on any document of any kind PRIMA FACIE properly executed and
submitted by any Person (other than, in the case of the Company, the Company or
the Servicer) respecting any matters arising hereunder.
ARTICLE VII
EARLY AMORTIZATION EVENTS
SECTION 7.01. EARLY AMORTIZATION EVENTS. Unless modified with
respect to any Series of Investor Certificates by any related Supplement, if any
one of the following events (each, an "EARLY AMORTIZATION EVENT") shall occur:
(a) an Insolvency Event shall have occurred with respect to the
Company;
(b) the Trust or the Company shall become an "investment
company" within the meaning of the 1940 Act;
(c) the Trust shall receive a written notice from the Internal
Revenue Service taking the position that the Trust should be
characterized for United States federal income tax purposes as a
"publicly traded partnership" or as an association taxable as a
corporation and counsel to the Company cannot provide an opinion
addressed to the Trustee and reasonably acceptable to the Letter of
Credit Agent and the Administrative Agent that such claim is without
merit; or
(d) the Trustee shall be appointed Successor Servicer pursuant
to the Servicing Agreement;
then, an "Early Amortization Period" with respect to all Outstanding Series
shall commence without any notice or other action on the part of the Trustee,
any Investor Certificateholder, the Letter of Credit Agent, any Letter of Credit
Bank, the Administrative Agent or any Liquidity
37
Bank immediately upon the occurrence of such event. The Servicer shall notify
each Rating Agency, the Letter of Credit Agent, the Administrative Agent and the
Trustee in writing of the occurrence of any Early Amortization Period,
specifying the cause thereof. Upon the commencement against the Company of a
case, proceeding or other action described in clause (ii) of the definition of
"Insolvency Event", the Company shall cease to purchase Loans from any Seller
and cease to transfer Purchased Loans to the Trust, until such time, if any, as
such case, proceeding or other action is vacated, discharged, or stayed or
bonded pending appeal. If an Insolvency Event with respect to the Company
occurs, the Company shall immediately cease to transfer Purchased Loans to the
Trust (or, if the Company has previously suspended the transfer of Purchased
Loans to the Trust to comply with the preceding sentence, such suspension shall
become a permanent cessation of the transfer of Purchased Loans to the Trust)
and shall promptly give written notice to the Trustee of such occurrence.
Notwithstanding any cessation of the transfer to the Trust of additional
Purchased Loans, Purchased Loans transferred to the Trust prior to the
occurrence of such Insolvency Event and Collections in respect of such Purchased
Loans and interest, whenever created, accrued in respect of such Purchased
Loans, shall continue to be a part of the Trust.
Additional Early Amortization Events and the consequences thereof
may be set forth in each Supplement with respect to the Series relating thereto.
SECTION 7.02. ADDITIONAL RIGHTS UPON THE OCCURRENCE OF CERTAIN
EVENTS.
(a) If after the occurrence of an Insolvency Event with respect
to the Company, the Aggregate Invested Amount and all accrued and unpaid
interest thereon have not been paid to the Investor Certificateholders,
the Trustee in accordance with the written direction of the Servicer
shall (i) publish a notice in the Wall Street Journal (the "AUTHORIZED
NEWSPAPER") that an Insolvency Event has occurred and that the Trustee
intends to sell, dispose of or otherwise liquidate the Purchased Loans
in a commercially reasonable manner and (ii) send written notice to the
Investor Certificateholders, the Letter of Credit Agent and the
Administrative Agent and request instructions from such Persons, which
notice shall request each Certificateholder, the Letter of Credit Agent
and the Administrative Agent to advise the Trustee in writing that it
elects one of the following options: (A) the Investor Certificateholder,
the Letter of Credit Agent and the Administrative Agent wishes the
Trustee not to sell, dispose of or otherwise liquidate the Purchased
Loans; (B) the Investor Certificateholder, the Letter of Credit Agent
and the Administrative Agent wishes the Trustee to sell, dispose of or
otherwise liquidate the Purchased Loans; or (C) the Investor
Certificateholder, the Letter of Credit Agent and the Administrative
Agent refuses to advise the Trustee as to the specific action the
Trustee should take. If after 60 days from the day notice pursuant to
clause (i) above is first published (the "PUBLICATION DATE"), the
Trustee shall not have received written instructions selecting option
(A) above from (x) except as otherwise provided in a Supplement with
respect to any Series, Investor Certificateholders representing more
than 50% of the Invested Amount of each Series (or, in the case of a
Series having more than one Class of Investor Certificates, Investor
Certificateholders representing more than
38
50% of the Invested Amount of each Class of such Series) and, if
applicable, the Majority Letter of Credit Banks and the Majority
Liquidity Banks and (y) if there are any Holders of the Exchangeable
Company Interest other than the Company, the Holders of the Exchangeable
Company Interest representing more than 50% of the Company Interest not
held by the Company, the Trustee shall proceed to sell, dispose of, or
otherwise liquidate the Purchased Loans in a commercially reasonable
manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids and the Trustee shall proceed to
consummate the sale, liquidation or disposition of the Purchased Loans
as provided above with the highest bidder for the Purchased Loans. The
Company or any of its Affiliates shall be permitted to bid for the
Purchased Loans. In addition, the Company or any of its Affiliates shall
have the right to match any bid by a third person and be granted the
right to purchase the Purchased Loans at such matched bid price. All
reasonable costs and expenses incurred by the Trustee in such sale shall
be reimbursable to the Trustee as provided in SECTION 8.05. After the
appointment of the Trustee as Successor Servicer pursuant to the
Servicing Agreement, the Trustee shall proceed to sell, dispose of, or
otherwise liquidate the Purchased Loans in a commercially reasonable
manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids and the Trustee shall proceed to
consummate the sale, liquidation or disposition of the Purchased Loans
as provided above with the highest bidder for the Purchased Loans. The
Company or any of its Affiliates shall be permitted to bid for the
Purchased Loans. In addition, the Company or any of its Affiliates shall
have the right to match any bid by a third person and be granted the
right to purchase the Purchased Loans at such matched bid price. The
provisions of SECTIONS 7.01 and 7.02 shall be cumulative. All reasonable
costs and expenses incurred by the Trustee in such sale shall be
reimbursable to the Trustee as provided in SECTION 8.05.
(b) The proceeds from the sale, disposition or liquidation of
the Purchased Loans pursuant to subsection (a) above shall be treated as
Collections on the Purchased Loans and such proceeds shall be released
to the Trustee in an amount equal to the amount of any expenses incurred
by the Trustee acting in its capacity either as Trustee or as
liquidating agent under this SECTION 7.02 that have not otherwise been
reimbursed and the remainder, if any, will be distributed to Investor
Certificateholders of each Series after immediately being deposited in
the Collection Account, in accordance with the provisions of SUBSECTION
3.01(D) and the related Supplement for such Series. After giving effect
to all such distributions, the remainder, if any, shall be allocated to
the Exchangeable Company Interest and shall be released to the Holders
of the Exchangeable Company Interest pro-rata based on the amount of the
Exchangeable Company Interest held by each Holder thereof.
39
ARTICLE VIII
THE TRUSTEE
SECTION 8.01. DUTIES OF TRUSTEE.
(a) The Trustee, prior to the occurrence of a Servicer Default
or Early Amortization Event of which a Responsible Officer of the
Trustee has actual knowledge and after the curing of all Servicer
Defaults and Early Amortization Events which may have occurred,
undertakes to perform such duties and only such duties as are
specifically set forth in the Pooling and Servicing Agreements or any
Supplement and no implied covenants or obligations shall be read into
such Pooling and Servicing Agreements against the Trustee. If a Servicer
Default or Early Amortization Event of which a Responsible Officer of
the Trustee has actual knowledge occurred (which has not been cured or
waived), the Trustee shall exercise the rights and powers vested in it
by any Pooling and Servicing Agreement or any Supplement and shall use
the same degree of care and skill in their exercise as a prudent person
would exercise or use under the circumstances in the conduct of such
person's own affairs.
(b) The Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein upon
resolutions, certificates, statements, opinions, reports (including the
Daily Report and the Monthly Settlement Statement), documents, orders or
other instruments furnished to the Trustee; PROVIDED, that (i) in the
case of any of the above which are specifically required to be furnished
to the Trustee pursuant to any provision of the Pooling and Servicing
Agreements, the Trustee shall, subject to SECTION 8.02, examine them to
determine whether they appear on their face to conform to the
requirements of this Agreement and (ii) in the case of any of the above
as to which the Trustee is required to perform procedures pursuant to
the Internal Operating Procedures Memorandum, the Trustee shall perform
said procedures in accordance with the Internal Operating Procedures
Memorandum.
(c) Subject to SUBSECTION 8.01(A), no provision of this
Agreement or any Supplement shall be construed to relieve the Trustee
from liability for its own grossly negligent action, its own grossly
negligent failure to act or its own willful misconduct; PROVIDED,
HOWEVER, that:
(i) the Trustee shall not be liable for an error of
judgment unless it shall be proved that the Trustee was grossly
negligent, or acted in bad faith, in ascertaining the pertinent
facts;
(ii) the Trustee shall not be liable with respect to any
action taken, suffered or omitted to be taken by it in good
faith;
(iii) the Trustee shall not be charged with knowledge of
any failure by the Servicer to comply with any of its
obligations or any other Potential
40
Servicer Default, unless a Responsible Officer of the Trustee
obtains actual knowledge of such failure or the Trustee receives
written notice of such failure from the Servicer, the Letter of
Credit Agent, the Administrative Agent or any Investor
Certificateholder;
(iv) the Trustee shall not be charged with knowledge of
a Servicer Default, Early Amortization Event, Purchase
Termination Event, Potential Purchase Termination Event or
Potential Early Amortization Event unless a Responsible Officer
of the Trustee obtains actual knowledge of such event or the
Trustee receives written notice of such default or event from
the Servicer, the Letter of Credit Agent, the Administrative
Agent or any Holder of Investor Certificates;
(v) the Trustee shall not be liable for any investment
losses resulting from any investments of funds on deposit in the
Collection Account or any subaccounts thereof (PROVIDED that
such investments are Eligible Investments); and
(vi) the Trustee shall have no duty to monitor the
performance of the Servicer, nor shall it have any liability in
connection with malfeasance or nonfeasance by the Servicer; the
Trustee shall have no liability in connection with compliance of
the Servicer or the Company with statutory or regulatory
requirements related to the Purchased Loans; and the Trustee
shall have no duty to perform, except as otherwise required
pursuant to the Internal Operating Procedures Memorandum, any
recalculation or verification of any calculation with respect to
data provided to the Trustee by the Servicer.
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of
any of its duties under any Pooling and Servicing Agreement or in the
exercise of any of its rights or powers, if there is reasonable ground
for believing that the repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it, and none
of the provisions contained in any Pooling and Servicing Agreement shall
in any event require the Trustee to perform, or be responsible for the
manner of performance of, any obligations of the Servicer under such
Agreement except during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties, powers and
privileges of, the Servicer in accordance with the terms of such
Agreement.
(e) Except as expressly provided in any Pooling and Servicing
Agreement, the Trustee shall have no power to vary the corpus of the
Trust.
(f) The Trustee shall take such actions as are set forth in the
Internal Operating Procedures Memorandum set forth in Exhibit A unless
prevented from doing so through no fault of the Trustee.
41
SECTION 8.02. RIGHTS OF THE TRUSTEE. Except as otherwise provided in
SECTION 8.01 and in the Internal Operating Procedures Memorandum:
(a) The Trustee may conclusively rely on and shall be protected
in acting on, or in refraining from acting in accord with, any
resolution, Responsible Officer's certificate, certificate of auditors
or any other certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, appraisal, bond, note or
other paper or document believed by it to be genuine and to have been
signed or presented to it pursuant to any Pooling and Servicing
Agreement by the proper party or parties.
(b) The Trustee may consult with counsel, and any Opinion of
Counsel and any advice of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered
or omitted by it hereunder in good faith and in accordance with such
Opinion of Counsel.
(c) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by any Pooling and Servicing
Agreement, or to institute, conduct or defend any litigation hereunder
or in relation hereto, at the request, order or direction of any of the
Holders, pursuant to the provisions of any Pooling and Servicing
Agreement, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; PROVIDED, HOWEVER,
that nothing contained herein shall relieve the Trustee of the
obligations, upon the occurrence of a Servicer Default or Early
Amortization Event (which has not been cured), to exercise such of the
rights and powers vested in it by any Pooling and Servicing Agreement,
and to use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs. The right of the Trustee to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trustee shall not be answerable for other
than its gross negligence or willful misconduct in the performance of
any such act.
(d) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by any Pooling and Servicing Agreement; PROVIDED that the Trustee
shall be liable for its gross negligence or willful misconduct.
(e) The Trustee shall not be bound to make any investigation
into the facts of matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
direction, order, approval, bond, note or other paper or document,
unless requested in writing so to do by, except as otherwise provided in
a Supplement to any Series, the Holders of Investor Certificates
evidencing Fractional Undivided Interests aggregating more than 50% of
the Invested Amount of any Series (and, if applicable, the Majority
Letter of Credit Banks and the Majority Liquidity Banks) which could be
materially and adversely affected if the Trustee does not perform such
acts; PROVIDED, HOWEVER, that such Holders of Investor Certificates
shall indemnify and
42
reimburse the Trustee for any liability or expense resulting from any
such investigation requested by them; PROVIDED FURTHER that the Trustee
shall be entitled to make such further inquiry or investigation into
such facts or matters as it may reasonably see fit, and if the Trustee
shall determine to make such further inquiry or investigation, it shall
be entitled to examine the books and records of the Company, personally
or by agent or attorney, at the sole cost and expense of the Company.
(f) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through affiliates, agents or attorneys or a custodian or nominee, and
the Trustee shall not be responsible for any misconduct or negligence on
the part of, or for the supervision of, any such affiliate, agent,
attorney, custodian or nominee appointed with due care by it hereunder.
(g) The Trustee shall not be required to make any initial or
periodic examination of any documents or records related to the
Purchased Loans or the Collection Account for the purpose of
establishing the presence or absence of defects, the compliance by the
Company with its representations and warranties or for any other
purpose.
(h) In the event that the Trustee is also acting as Paying Agent
or Transfer Agent and Registrar hereunder, the rights and protections
afforded to the Trustee pursuant to this Article VIII shall also be
afforded to such Paying Agent or Transfer Agent and Registrar.
SECTION 8.03. TRUSTEE NOT LIABLE FOR RECITALS. The Trustee assumes
no responsibility for the correctness of the recitals contained herein and in
the Investor Certificates (other than the certificate of authentication on the
Investor Certificates). Except as set forth in SECTION 8.15, the Trustee makes
no representations as to the validity or sufficiency of any Pooling and
Servicing Agreement, of the Investor Certificates (other than the certificate of
authentication on the Investor Certificates), of the Exchangeable Company
Interest, of any Purchased Loan or of any related document or interest. The
Trustee shall not be accountable for the use or application by the Company of
any of the Investor Certificates or the Exchangeable Company Interest or of the
proceeds of such Investor Certificates, or the Exchangeable Company Interest or
for the use or application of any funds paid to the Company in respect of the
Purchased Loans or deposited in or withdrawn from the Collection Account or
other accounts hereafter established to effectuate the transactions contemplated
herein and in accordance with the terms of any Pooling and Servicing Agreement.
The Trustee shall not be accountable for the use or application by
the Servicer of any of the Investor Certificates or of the proceeds of such
Investor Certificates, or for the use or application of any funds paid to the
Servicer in respect of the Purchased Loans or deposited in or withdrawn from the
Collection Account by or at the direction of the Servicer. The Trustee shall at
no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Purchased Loan.
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SECTION 8.04. TRUSTEE MAY OWN INVESTOR CERTIFICATES. The Trustee in
its individual or any other capacity (a) may become the owner or pledgee of
Investor Certificates with the same rights as it would have if it were not the
Trustee and (b) may transact any banking and trust business with the Company,
the Servicer or the Sellers as it would were it not the Trustee.
SECTION 8.05. TRUSTEE'S FEES AND EXPENSES. The Trustee shall be
entitled to a fee (which shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust) for all services rendered
by the Trustee in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of the Trustee. The
Servicer covenants and agrees to pay to the Trustee annually in advance on the
Effective Date and on or about each one year anniversary thereof, a fee agreed
upon in writing between the Trustee and the Servicer. The Trustee shall also be
entitled to reimbursement from the Servicer or the Company upon its request for
all reasonable expenses (including, without limitation, expenses incurred in
connection with notices, requests for documentation or other communications to
Holders), disbursements, losses, liabilities, damages and advances incurred or
made by the Trustee in accordance with any of the provisions of any Pooling and
Servicing Agreement or by reason of its status as Trustee under any Pooling and
Servicing Agreement (including the reasonable fees and expenses of its agents,
any co-trustee and counsel) except any such expense, disbursement, loss,
liability, damage or advance as may arise from its gross negligence or bad
faith; PROVIDED, that any obligation of the Company to make payments under this
SECTION 8.05 shall be Company Subordinated Obligations. To the extent the fees
and expenses of the Trustee are not paid on a current basis (including pursuant
to the first sentence of this SECTION 8.05), the Trustee shall be entitled to be
paid such items from amounts that would be distributable to the Company under
Article III of this Agreement or payable to the Servicer pursuant to SUBSECTION
2.05(B) of the Servicing Agreement. The Trustee shall be entitled to
reimbursement for any reasonable out-of-pocket costs or expenses incurred in
connection with the review, negotiation, preparation, execution and delivery of
any of the Transaction Documents or in connection with the issuance of any
Investor Certificates on the Effective Date. If the Trustee is appointed
Successor Servicer in accordance with the Servicing Agreement, the Trustee, in
its capacity as Successor Servicer, shall also be entitled to be paid the
Servicing Fee and any other compensation to which the Servicer is expressly
entitled under any Pooling and Servicing Agreement. The provisions of this
SECTION 8.05 shall apply to the reasonable expenses, disbursements and advances
made or incurred by the Trustee, or any other Person, in its capacity as
liquidating agent, to the extent not otherwise paid. The covenants to pay the
expenses, disbursements, losses, liabilities, damages and advances provided for
in this Section shall survive the termination of any Pooling and Servicing
Agreement or the resignation or removal of the Trustee and shall be binding on
the Company, the Servicer and any Successor Servicer.
SECTION 8.06. ELIGIBILITY RECITALS. The Trustee hereunder shall at
all times be a corporation organized and doing business under the laws of the
United States of America or any State thereof authorized under such laws to
exercise corporate trust powers, having (or having a holding company parent
with) a combined capital and surplus of at least $100,000,000
44
and subject to supervision or examination by federal or state authority. If such
corporation publishes 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 8.06, 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
Trustee shall cease to be eligible in accordance with the provisions of this
SECTION 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in SECTION 8.07.
SECTION 8.07. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) Subject to paragraph (c) below, the Trustee may at any time
resign and be discharged from the trust hereby created by giving written
notice thereof to the Company, the Servicer, the Letter of Credit Agent,
the Administrative Agent and the Rating Agencies. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so
appointed and have accepted such appointment within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of SECTION 8.06 hereof and shall fail to
resign after written request therefor by the Servicer, or if at any time
the Trustee shall be legally unable to act, or shall be adjudged a
bankrupt or insolvent, or if a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then the Company may remove
the Trustee and promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor
trustee.
(c) Any resignation or removal of the Trustee and appointment of
successor trustee pursuant to any of the provisions of this SECTION 8.07
shall not become effective until acceptance of appointment by the
successor trustee as provided in SECTION 8.08.
(d) The obligations of the Company described in SECTION 8.05
hereof and the obligations of the Servicer described in SECTION 8.05
hereof and SECTION 5.02 of the Servicing Agreement shall survive the
termination of this Agreement or the removal or resignation of the
Trustee as provided in this Agreement.
(e) No Trustee under this Agreement shall be personally liable
for any action or omission of any successor trustee.
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SECTION 8.08. SUCCESSOR TRUSTEE.
(a) Any successor trustee appointed as provided in SECTION 8.07
shall execute, acknowledge and deliver to the Company and to its
predecessor Trustee an instrument accepting such appointment hereunder,
and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as Trustee herein. The predecessor Trustee
shall deliver to the successor trustee all documents or copies thereof,
at the expense of the Servicer, and statements held by it hereunder; and
the Company and the predecessor 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 trustee all
such rights, power, duties and obligations. The Servicer shall
immediately give notice, but in no event less than 10 days prior to any
such resignation or removal, to each Rating Agency upon the appointment
of a successor trustee.
(b) No successor trustee shall accept appointment as provided in
this SECTION 8.08 unless at the time of such acceptance such successor
trustee shall be eligible under the provisions of SECTION 8.06.
(c) Upon acceptance of appointment by a successor trustee as
provided in this SECTION 8.08, such successor trustee shall mail notice
of such succession hereunder to all Holders at their addresses as shown
in the Certificate Register or the Exchange Register, as applicable.
SECTION 8.09. MERGER OR CONSOLIDATION OF TRUSTEE. Any Person into
which the Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any Person succeeding to
the corporate trust business of the Trustee, shall be the successor of the
Trustee hereunder, PROVIDED such corporation shall be eligible under the
provisions of SECTION 8.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee shall promptly give notice (except to the
extent prohibited under any Requirement of Law or Contractual Obligation), but
in no event less than 10 days prior to any such merger or consolidation, to the
Company, the Servicer, the Letter of Credit Agent, the Administrative Agent and
the Rating Agencies upon any such merger or consolidation of the Trustee.
Information as to such merger or consolidation that is made publicly available
by the Trustee in the Authorized Newspaper shall be deemed to satisfy the notice
requirement of this SECTION 8.09.
SECTION 8.10. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provisions of any Pooling and
Servicing Agreement, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the Trust may at
the time be located, the Trustee shall
46
have the power and may execute and deliver all instruments to appoint
one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to
vest in such Person or Persons, in such capacity and for the benefit of
the Holders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this SECTION 8.10, such powers, duties,
obligations, rights and trusts as the Trustee may consider necessary. No
co-trustee or separate trustee hereunder shall be required to meet the
terms of eligibility as a successor trustee under SECTION 8.06 and no
notice to Holders of the appointment of any co-trustee or separate
trustee shall be required under SECTION 8.08. The Trustee shall promptly
notify each Rating Agency of the appointment of any co-trustee.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following
provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon
and exercised or performed by the 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 Trustee joining in such act), except to
the extent that under any statute of any jurisdiction in which
any particular act or acts are to be performed (whether as
Trustee hereunder or as successor to the Servicer hereunder),
the Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
(ii) neither the Trustee nor any separate trustee or
co-trustee shall be personally liable by reason of any act or
omission of any other trustee, separate trustee or co-trustee
hereunder so long as such trustee, separate trustee or
co-trustee is appointed with due care in accordance with the
terms of this Agreement; and
(iii) the Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the 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 VIII. 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 Trustee or separately, as may be
provided therein, subject to all the provisions of any Pooling and
Servicing Agreement, specifically including every provision of any
Pooling and Servicing Agreement relating to the conduct of, affecting
the liability of, or affording
47
protection to, the Trustee. Every such instrument shall be filed with
the Trustee and a copy thereof given to the Servicer and the Company.
(d) Any separate trustee or co-trustee may at any time
constitute the Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act
under or in respect to any Pooling and Servicing 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 Trustee, to the extent permitted by law, without the appointment
of a new or successor trustee.
SECTION 8.11. TAX RETURNS. In the event the Trust shall be required
to file U.S. Federal, state, local or foreign income tax returns, the Company
(or the Servicer on behalf of the Company) shall prepare and file or shall cause
to be prepared and filed any such tax returns required to be filed by the Trust
and shall remit such tax returns to the Trustee for signature at least five
Business Days before such tax returns are due to be filed (including
extensions). The Company (or the Servicer on behalf of the Company) shall also
prepare or shall cause to be prepared all U.S. Federal tax information in
connection with this Agreement required by law to be distributed to Holders and
shall deliver such information to the Trustee at least five Business Days prior
to the date it is required by law to be distributed to the Holders. The Trustee,
upon request, will furnish the Company or the Servicer with all such information
known to the Trustee as may be reasonably determined by the Company or the
Servicer to be required in connection with the preparation of all U.S. Federal,
state, local or foreign income tax returns of the Trust, and shall, upon the
Company's (or the Servicer's on behalf of the Company) written request, execute
such tax returns. In no event shall the Trustee in its individual capacity be
liable for any liabilities, costs or expenses of the Trust, the Holders, the
Company (or the Servicer on behalf of the Company), arising under any U.S.
Federal, state, local or foreign income tax law or regulation, including,
without limitation, excise taxes or any other tax imposed by a Governmental
Authority on or measured by income (or any interest or penalty with respect
thereto or arising from any failure to comply therewith). The Trustee shall not
be required to determine whether any filing of tax returns is required.
SECTION 8.12. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
INVESTOR CERTIFICATES. All rights of action and claims under any Pooling and
Servicing Agreement or the Investor Certificates may be prosecuted and enforced
by the Trustee without the possession of any of the Investor Certificates or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee. Any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders in respect of which such
judgment has been obtained. When the Trustee incurs expenses after the
occurrence of an Insolvency Event with respect to the Servicer, the Company or
the Trust, such expenses are intended to constitute expenses of administration
under Title 11 of the United States Code or any other applicable bankruptcy,
insolvency, receivership or similar law.
48
SECTION 8.13. SUITS FOR ENFORCEMENT. If a Servicer Default shall
occur and be continuing, the Trustee may, as provided in SECTION 6.01 of the
Servicing Agreement, proceed to protect and enforce its rights and the rights of
the Holders under this Agreement or any other Transaction Document by suit,
action or proceeding (including any suit, action or proceeding on behalf of the
Holders against any third party) in equity or at law or otherwise, whether for
the specific performance of any covenant or agreement contained in this
Agreement or any other Transaction Document or in aid of the execution of any
power granted in this Agreement or any other Transaction Document or for the
enforcement of any other legal, equitable or other remedy as the Trustee, being
advised by counsel, shall deem most effective to protect and enforce any of the
rights of the Trustee or the Holders. In furtherance of and without limiting the
generality of SUBSECTION 8.01(D), the Trustee shall have the right to obtain,
before initiating any such action, such reasonable indemnity from the Holders as
the Trustee may require against the costs, expenses and liabilities that may be
incurred therein or thereby. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Investor Certificates or the Exchangeable Company Interest or the
rights of any holder thereof, or authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 8.14. RIGHTS OF INVESTOR CERTIFICATEHOLDERS TO DIRECT
TRUSTEE. Except as otherwise set forth in a Supplement to any Series, Investor
Certificateholders evidencing more than 50% of the Invested Amount of any Series
(and, if applicable, the Majority Letter of Credit Banks and the Majority
Liquidity Banks) affected by the conduct of any proceeding or the exercise of
any right conferred on the Trustee shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee; PROVIDED,
HOWEVER, that nothing in any Pooling and Servicing Agreement shall impair the
right of the Trustee to take any action deemed proper by the Trustee and which
is not inconsistent with such direction of the Investor Certificateholders (and,
if applicable, the Letter of Credit Banks and the Liquidity Banks); PROVIDED
FURTHER that in furtherance and without limiting the generality of SUBSECTION
8.01(D), the Trustee shall have the right to obtain, before acting in accordance
with any such direction of the Investor Certificateholders (and, if applicable,
the Letter of Credit Banks and the Liquidity Banks), such reasonable indemnity
from the Investor Certificateholders (and, if applicable, the Letter of Credit
Banks and the Liquidity Banks) as the Trustee may require against the costs,
expenses and liabilities that may be incurred in so acting.
SECTION 8.15. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee
represents and warrants that:
(a) the Trustee is a banking corporation organized, existing and
in good standing under the laws of the State of New York and is duly
authorized to exercise trust powers under applicable law;
49
(b) the Trustee has the power and authority to enter into this
Agreement and any Supplement, and has taken all necessary action to
authorize the execution, delivery and performance by it of this
Agreement and any Supplement; and
(c) each Pooling and Servicing Agreement and each of the
Transaction Documents executed by it have been duly executed and
delivered by the Trustee and, in the case of all such Transaction
Documents, are legal, valid and binding obligations of the Trustee,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect affecting the enforcement of creditors rights generally and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity).
SECTION 8.16. MAINTENANCE OF OFFICE OR AGENCY. The Trustee will
maintain at its expense in Houston, Texas, an office or offices or agency or
agencies where notices and demands to or upon the Trustee in respect of the
Investor Certificates or any other Interests and the Pooling and Servicing
Agreements may be served. The Trustee will give prompt written notice to the
Company, the Servicer and the Holders of any change in the location of the
Certificate Register, the Exchange Register, or any such office or agency.
SECTION 8.17. LIMITATION OF LIABILITY. The Investor Certificates are
executed by the Trustee, not in its individual capacity but solely as Trustee of
the Trust, in the exercise of the powers and authority conferred and vested in
it by the Trust Agreement. Each of the undertakings and agreements made on the
part of the Trustee in the Investor Certificates is made and intended not as a
personal undertaking or agreement by the Trustee but is made and intended for
the purpose of binding only the Trust.
SECTION 8.18. CONSEQUENTIAL DAMAGES. In no event shall The Chase
Manhattan Bank, in its capacity as Trustee, be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including, but not limited
to, lost profits), even if it has been advised of the likelihood of such loss or
damage and regardless of the form of action.
ARTICLE IX
TERMINATION
SECTION 9.01. TERMINATION OF TRUST.
(a) The Trust and the respective obligations and
responsibilities of the Company, the Servicer and the Trustee created
hereby (other than the obligation of the Trustee to make payments to
Holders as hereafter set forth and any indemnification obligations
hereunder) shall terminate, except with respect to any such obligations
or responsibilities expressly stated to survive such termination, on the
earliest of (i) the last
50
day of the August, 2020 Settlement Period, (ii) at the option of the
Company, at any time when the Aggregate Invested Amount is zero, (iii)
following the occurrence of any of the Early Amortization Events
specified in SECTION 7.01 of this Agreement, at any time when the
Aggregate Invested Amount is zero and (iv) upon completion of
distribution of the amounts referred to in SUBSECTION 7.02(B) (the
"TRUST TERMINATION DATE").
(b) If on the Distribution Date in the month immediately
preceding the month in which the Trust Termination Date occurs (after
giving effect to all transfers, withdrawals, deposits and drawings to
occur on such date) the Invested Amount of any Series would be greater
than zero (as certified in writing by the Servicer), the Trustee, at the
written direction of the Servicer, shall make reasonable efforts to sell
within 30 days of such Distribution Date all of the Purchased Loans. The
proceeds of such sale shall be treated as Collections on the Purchased
Loans and shall be allocated in accordance with Article III. During such
30-day period, the Servicer shall continue to collect Collections on the
Purchased Loans and allocate Collections in accordance with the
provisions of Article III. The reasonable costs and expenses incurred by
the Trustee in such sale shall be reimbursable to the Trustee as
provided in SECTION 8.05.
SECTION 9.02. OPTIONAL PURCHASE AND FINAL TERMINATION DATE OF
INVESTOR CERTIFICATES OF ANY SERIES.
(a) On any Business Day during the Amortization Period with
respect to any Series on which the Invested Amount (or such other amount
as may be set forth in the related Supplement) of such Series is reduced
to an amount equal to or less than the Optional Repurchase Percentage of
the Initial Invested Amount (or such other amount as may be set forth in
the related Supplement) for such Series as of the day preceding the
beginning of such Amortization Period, the Company shall have the option
to repurchase the entire Investor Certificateholders' Interest of such
Series, at a purchase price equal to (i) the outstanding Invested Amount
of the Investor Certificates of such Series PLUS (ii) accrued and unpaid
interest through such Business Day (after giving effect to any payment
of principal and monthly interest on such date of purchase) PLUS (iii)
all other amounts payable to all Investor Certificateholders of such
Series under the related Supplement (such purchase price, the "CLEAN-UP
CALL REPURCHASE PRICE"). The amount of the Clean-Up Call Repurchase
Price will be deposited into the Collection Account for credit to the
Series Collection Subaccount for such Series on such Business Day in
immediately available funds and will be passed through in full to the
applicable Investor Certificateholders. Following any such repurchase,
such Investor Certificateholders' Interest in the Purchased Loans shall
terminate and such interest therein will be allocated to the
Exchangeable Company Interest and such Investor Certificateholders will
have no further rights with respect thereto. In the event that the
Company fails for any reason to deposit the Clean-Up Call Repurchase
Price for such Purchased Loans, the Investor Certificateholders'
Interest in the Purchased Loans will continue and monthly payments will
continue to be made to the Investor Certificateholders.
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(b) The amount deposited pursuant to SUBSECTION 9.02(A) shall be
paid to the Investor Certificateholders of the related Series pursuant
to Article III on the Business Day following the date of such deposit.
All Investor Certificates of a Series which are purchased by the Company
pursuant to SUBSECTION 9.02(A) shall be delivered by the Company upon
such purchase to, and be canceled by (in accordance with the written
directions of the Company), the Transfer Agent and Registrar and be
disposed of in a manner satisfactory to the Trustee and the Company.
(c) All principal or interest with respect to any Series of
Investor Certificates shall be due and payable no later than the Series
Termination Date with respect to such Series. Unless otherwise provided
in a Supplement, in the event that the Invested Amount of any Series of
Investor Certificates is greater than zero on its Series Termination
Date (after giving effect to all transfers, withdrawals, deposits and
drawings to occur on such date and the payment of principal to be made
on such Series on such date), the Trustee will sell or cause to be sold,
in accordance with the directions of, except as otherwise set forth in a
Supplement for any Series, the Investor Certificateholders representing
more than 50% of the Invested Amount of such Series (and, if applicable,
the Majority Letter of Credit Banks and the Majority Liquidity Banks)
(upon which the Trustee may conclusively rely) and pay the proceeds to
all Investor Certificateholders of such Series pro rata (except that
unless expressly provided to the contrary in the related Supplement, no
payment shall be made to Investor Certificateholders of any Class of any
Series that is by its terms subordinated to any other Class until such
senior Class of Investor Certificates have been paid in full) in final
payment of all principal of and accrued interest on such Series of
Investor Certificates, an amount of Purchased Loans or interests in
Purchased Loans up to the Invested Amount of such Series at the close of
business on such date; PROVIDED, HOWEVER, in furtherance and without
limiting the generality of SUBSECTION 8.01(D), the Trustee shall have
the right to obtain, before acting in accordance with any such direction
of the Investor Certificateholders (and, if applicable, the Letter of
Credit Banks and the Liquidity Banks), such reasonable indemnity from
the Investor Certificateholders (and, if applicable, the Letter of
Credit Banks and the Liquidity Banks) as the Trustee may require against
the costs, expenses and liabilities that may be incurred in so acting.
Absent such direction from, except as otherwise set forth in a
Supplement for any Series, Investor Certificateholders representing more
than 50% of the Invested Amount of such Series (and, if applicable, the
Majority Letter of Credit Banks and the Majority Liquidity Banks) or
absent such reasonable indemnity as the Trustee may require in
connection with such direction, the Trustee shall continue to hold the
Trust Assets in respect of such Series in accordance with the terms of
the Pooling and Servicing Agreements until the Trust Termination Date
(or until a majority of the Investor Certificateholders (and, if
applicable, the Majority Letter of Credit Banks and the Majority
Liquidity Banks) shall otherwise direct the Trustee); PROVIDED that the
terms of this Agreement, the related Supplement and the Servicing
Agreement shall be deemed to remain in full force and effect, except
that no additional Purchased Loans shall be allocated with respect to
such Series. The reasonable costs and expenses incurred by the Trustee
in such sale shall be
52
reimbursable to the Trustee as provided in SECTION 8.05. Any proceeds of
such sale in excess of such principal and interest paid shall be paid to
the holder of the Exchangeable Company Interest, unless and to the
extent otherwise specified in any applicable Supplement. Upon such
Series Termination Date with respect to the applicable Series, final
payment of all amounts allocable to any Investor Certificates of such
Series shall be made in the manner provided in this SECTION 9.02.
SECTION 9.03. FINAL PAYMENT WITH RESPECT TO ANY SERIES.
(a) Written notice of any termination, specifying the Business
Day upon which the Investor Certificateholders of any Series may
surrender their Investor Certificates for payment of the final
distribution with respect to such Series and cancellation, shall be
given (subject to at least 30 days' prior written notice from the
Servicer to the Trustee containing all information required for the
Trustee's notice or such shorter period as is acceptable to the Trustee)
by the Trustee to Investor Certificateholders of such Series mailed not
later than ten days prior to such final distribution specifying (i) the
Business Day upon which final payment of the Investor Certificates will
be made upon presentation and surrender of Investor Certificates at the
office or offices therein designated and (ii) the amount of any such
final payment, payments being made only upon presentation and surrender
of the Investor Certificates at the office or offices therein specified.
The Servicer's notice to the Trustee in accordance with the preceding
sentence shall be accompanied by a Responsible Officer's certificate
setting forth the information specified in SECTION 4.03 of the Servicing
Agreement covering the period during the then current calendar year
through the date of such notice. The Trustee shall give such notice to
the Transfer Agent and Registrar and the Paying Agent at the time such
notice is given to such Investor Certificateholders.
(b) Notwithstanding the termination of the Trust pursuant to
SUBSECTION 9.01(A) or the occurrence of the Series Termination Date with
respect to any Series pursuant to SECTION 9.02, all funds then on
deposit in the Collection Account (but only to the extent necessary to
pay all outstanding and unpaid amounts to Holders) shall continue to be
held in trust for the benefit of the Holders and the Paying Agent or the
Trustee shall pay such funds to the Investor Certificateholders upon
surrender of their Investor Certificates in accordance with the terms
hereof. Any Investor Certificate not surrendered on the date specified
in SUBSECTION 9.03(A)(I) shall cease to accrue any interest provided for
such Investor Certificate from and after such date. In the event that
all of the Investor Certificateholders shall not surrender their
Investor Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Trustee shall give
a second written notice to the remaining Investor Certificateholders of
such Series to surrender their Investor Certificates for cancellation
and receive the final distribution with respect thereto. If within one
year after the second notice all the Investor Certificates of such
Series shall not have been surrendered for cancellation, the Trustee may
take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Investor Certificateholders of such
Series
53
concerning surrender of their Investor Certificates, and the cost
thereof shall be paid out of the funds in the Collection Account held
for the benefit of such Investor Certificateholders. The Trustee and the
Paying Agent shall pay to the Company upon request any monies held by
them for the payment of principal or interest that remains unclaimed for
two years and neither the Trustee nor the Paying Agent shall be liable
to any Investor Certificateholder for such payment to the Company upon
its request. After payment to the Company, Holders entitled to the money
must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person.
(c) All Investor Certificates surrendered for payment of the
final distribution with respect to such Investor Certificates and
cancellation shall be canceled by the Transfer Agent and Registrar and
be disposed of in a customary manner satisfactory to the Trustee.
SECTION 9.04. COMPANY'S TERMINATION RIGHTS. Upon the termination of
the Trust pursuant to SECTION 9.01 and payment to the Trustee (in its capacity
as such and/or in its capacity as Successor Servicer) of all amounts owed to it
under any Pooling and Servicing Agreement, the Trustee shall assign and convey
to the Company (without recourse, representation or warranty) in exchange for
the Exchangeable Company Interest all right, title and interest of the Trust in
the Trust Assets, whether then existing or thereafter created, and all proceeds
thereof except for amounts held by the Trustee pursuant to SUBSECTION 9.03(B).
The Trustee shall execute and deliver such instruments of transfer and
assignment, in each case without recourse, representation or warranty (except
with respect to the Trustee Liens as set forth below), as shall be reasonably
requested by the Company to vest in the Company all right, title and interest
which the Trust had in the Trust Assets free and clear of all Trustee Liens.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.01. AMENDMENT.
(a) This Agreement, the Servicing Agreement and each Supplement
in respect of an outstanding Series (collectively, the "POOLING AND
SERVICING AGREEMENTS") may be amended in writing from time to time by
the Servicer, the Company and the Trustee, without the consent of any
Holder (or the Letter of Credit Agent, the Letter of Credit Banks, the
Administrative Agent or the Liquidity Banks), to cure any ambiguity, to
correct or supplement any provisions herein or therein which may be
inconsistent with any other provisions herein or therein or to add any
other provisions hereof to change in any manner or eliminate any of the
provisions with respect to matters or questions raised under any Pooling
and Servicing Agreement which shall not be inconsistent with the
provisions of any Pooling and Servicing Agreement, and solely with
respect to this
54
Agreement and the Servicing Agreement, pursuant to SUBSECTION 6.02(C)
and (D) of the Servicing Agreement; PROVIDED, HOWEVER, that such action
shall not, as evidenced by a Responsible Officer's certificate of the
Company delivered to the Trustee, have a Material Adverse Effect (but,
to the extent that the determination of whether such action would have a
Material Adverse Effect requires a conclusion as to a question of law,
an Opinion of Counsel shall be delivered to the Trustee in addition to
such Responsible Officer's certificate); PROVIDED FURTHER any amendment
that is entered into to provide additional Enhancement for any
Outstanding Series or to conform to regulations issued by the Internal
Revenue Service shall be deemed to have no Material Adverse Effect. The
Trustee may, but shall not be obligated to, enter into any such
amendment pursuant to this paragraph or paragraph (b) below which
affects the Trustee's rights, duties or immunities under any Pooling and
Servicing Agreement or otherwise.
(b) Any Pooling and Servicing Agreement and, to the extent
provided in any Pooling and Servicing Agreement, any other agreement
relating to the Purchased Loans may also be amended (other than in the
circumstances referred to in the preceding paragraph (a)) in writing
from time to time by the Servicer, the Company and the Trustee with the
consent of, except as otherwise set forth in a Supplement for any
Series, Investor Certificateholders evidencing more than 50% of the
Invested Amount of any Series (and, if applicable, the Majority Letter
of Credit Banks and the Majority Liquidity Banks) adversely affected in
any material respect by the amendment (or, if any such Series shall have
more than one Class of Investor Certificates adversely affected in any
material respect by the amendment, more than 50% of the Invested Amount
of each such Class) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of such
Pooling and Servicing Agreement or such other agreement or of modifying
in any manner the rights of Holders of any Series then issued and
outstanding; PROVIDED, HOWEVER, that no such amendment shall (i) reduce
in any manner the amount of, or delay the timing of, distributions which
are required to be made on any Investor Certificate of such Series
without the consent of such Investor Certificateholder of such Series
(and, if applicable, each Letter of Credit Bank and each Liquidity
Bank); (ii) change the definition of or the manner of calculating the
interest of any Investor Certificateholder of such Series without the
consent of such Investor Certificateholder (and, if applicable, each
Letter of Credit Bank and each Liquidity Bank); or (iii) reduce the
aforesaid percentage of the Invested Amount of any adversely affected
Series or Class the Holders of which are required to consent to any such
amendment without the consent of all Investor Certificateholders of each
Series (and, if applicable, each Letter of Credit Bank and each
Liquidity Bank) adversely affected in any material respect.
(c) Notwithstanding anything in this SECTION 10.01 to the
contrary, the Supplement with respect to any Series may be amended on
the terms and with the procedures provided in such Supplement.
(d) Promptly after the execution of any such amendment or
consent, the Trustee shall furnish written notification of the substance
of such amendment to each
55
Investor Certificateholder of each Outstanding Series (or with respect
to an amendment of a Supplement, to each Investor Certificateholder of
the applicable Series), and the Servicer shall furnish written
notification of the substance of such amendment to the Letter of Credit
Agent, each Letter of Credit Bank, the Administrative Agent, each
Liquidity Bank and each Rating Agency. No such material amendment
(including without limitation, the amendment of any Supplement
notwithstanding anything to the contrary contained in any Supplement)
shall be effective until the Rating Agency Condition has been satisfied.
(e) It shall not be necessary for the consent of Investor
Certificateholders (and, if applicable, the Letter of Credit Banks and
the Liquidity Banks) under this SECTION 10.01 to approve the particular
form of any proposed amendment, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining
such consents and of evidencing the authorization of the execution
thereof by Investor Certificateholders (and, if applicable, the Letter
of Credit Banks and the Liquidity Banks) shall be subject to such
reasonable requirements as the Trustee may prescribe.
(f) In executing or accepting any amendment pursuant to this
SECTION 10.01, the Trustee shall, upon request, be entitled to receive
and rely upon (i) an Opinion of Counsel stating that such amendment is
authorized pursuant to a specific provision of a Pooling and Servicing
Agreement and complies with such provision, (ii) a certificate from a
Responsible Officer of the Company stating that such (A) amendment shall
not adversely affect the interests of the Holders of any outstanding
Investor Certificates (and, if applicable, the Letter of Credit Banks
and the Liquidity Banks) in any material respect except for Holders
(and, if applicable, the Letter of Credit Banks and the Liquidity Banks)
of the Series whose consent to such amendment has been obtained in
accordance with clause (b) of this SECTION 10.01 and (B) all conditions
precedent to the execution and delivery of such amendment shall have
been satisfied in full and (iii) a Tax Opinion.
SECTION 10.02. PROTECTION OF RIGHT, TITLE AND INTEREST TO TRUST. The
Company (or the Servicer on behalf of the Company) shall cause each Pooling and
Servicing Agreement, all amendments thereto and/or all financing statements and
continuation statements and any other necessary documents covering the Holders'
and the Trustee's right, title and interest to the Trust and the Trust Assets to
be promptly recorded, registered and filed, and at all times to be kept
recorded, registered and filed, all in such manner and in such places as may be
required by law fully to preserve and protect the right, title and interest of
the Trustee hereunder to all property comprising the Trust. The Company (or the
Servicer on behalf of the Company) shall deliver to the Trustee copies of, or
filing receipts for, any document recorded, registered or filed as provided
above, as soon as available following such recording, registration or filing. In
the event that the Servicer fails to file such financing or continuation
statements and the Trustee has received an Opinion of Counsel, at the expense of
the Company, that such filing is necessary to fully preserve and to protect the
Trustee's right, title and interest in any Trust Asset then the Trustee shall
have the right to file the same on behalf of the Servicer and the Company and
the
56
Trustee shall be reimbursed and indemnified by the Company for making such
filing. The Company shall cooperate fully with the Servicer in connection with
the obligations set forth above and will execute any and all documents
reasonably required to fulfill the intent of this SECTION 10.02.
SECTION 10.03. LIMITATION ON RIGHTS OF HOLDERS.
(a) The death or incapacity of any Holder shall not operate to
terminate this Agreement or the Trust, nor shall such death or
incapacity entitle such Holder's legal representatives or heirs to claim
an accounting or to take any action or commence any proceeding in any
court for a partition or winding up of the Trust, nor otherwise affect
the rights, obligations and liabilities of the parties hereto or any of
them.
(b) Except with respect to the Investor Certificateholders (and,
if applicable, the Letter of Credit Banks and the Liquidity Banks) as
expressly provided in any Pooling and Servicing Agreement, no Holder
(nor the Letter of Credit Banks nor the Liquidity Banks) shall have any
right to vote or in any manner otherwise control the operation and
management of the Trust, or the obligations of the parties hereto; nor
shall any Holder (nor the Letter of Credit Banks nor the Liquidity
Banks) be under any liability to any third person by reason of any
action taken by the parties to this Agreement pursuant to any provision
hereof.
(c) No Holder (nor the Letter of Credit Banks nor the Liquidity
Banks) shall have any right by virtue of any provisions of this
Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
(and, if applicable, the Letter of Credit Banks and the Liquidity Banks)
previously shall have given to the Trustee written request to institute
such action, suit or proceeding in its own name as Trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred
therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or
refused to initiate any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each Holder
(and, if applicable, the Letter of Credit Banks and the Liquidity Banks)
with every other Holder (and, if applicable, the Letter of Credit Banks
and the Liquidity Banks) and the Trustee, that no one or more Holder(s)
(nor the Letter of Credit Banks nor the Liquidity Banks) shall have any
right in any manner whatever by virtue or by availing itself or
themselves of any provisions of the Pooling and Servicing Agreements to
affect, disturb or prejudice the rights of any other of the Interests,
or to obtain or seek to obtain priority over or preference to any other
such Holder (and, if applicable, the Letter of Credit Banks and the
Liquidity Banks), or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common
benefit of all Holders (and, if applicable, the Letter of Credit Banks
and the Liquidity Banks). For the protection and enforcement of the
provisions of this SECTION 10.03, each and every Holder (and, if
applicable, the Letter of Credit Banks and the
57
Liquidity Banks) and the Trustee shall be entitled to such relief as can
be given either at law or in equity.
(d) By their acceptance of Interests pursuant to this Agreement
and the applicable Supplement, the Holders (and, if applicable, the
Letter of Credit Banks and the Liquidity Banks) agree to the provisions
of this SECTION 10.03.
SECTION 10.04. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO
THE EXTENT THAT ISSUES OF PERFECTION ARE GOVERNED BY THE LAWS OF ANOTHER
JURISDICTION.
SECTION 10.05. NOTICES. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed to the Company, the Servicer and the Trustee at their
respective Notice Addresses, or to such other address as may be hereafter
notified by the respective parties hereto.
Any notice required or permitted to be mailed to a Holder shall be given by
first-class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register or the Exchange Register, as the case may be. Any notice so
mailed within the time prescribed in any Pooling and Servicing Agreement shall
be conclusively presumed to have been duly given, whether or not the Holder
receives such notice.
SECTION 10.06. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of any Pooling and Servicing
Agreement shall for any reason whatsoever be held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of such Pooling and Servicing
Agreement and shall in no way affect the validity or enforceability of the other
provisions of any Pooling and Servicing Agreement or of the Investor
Certificates or rights of the Holders.
SECTION 10.07. ASSIGNMENT. Notwithstanding anything to the contrary
contained herein, except as provided in SECTION 5.03 of the Servicing Agreement,
no Pooling and Servicing Agreement, nor any rights or interests thereunder, may
be assigned by the Company or the Servicer without the prior written consent of
the Trustee acting on behalf of the Holders of 66-2/3% of the Invested Amount of
each Outstanding Series (and, if applicable, the Letter of Credit Banks holding
at least 66-2/3% of the Letter of Credit Commitment and the Liquidity Banks
holding at least 66-2/3% of the Liquidity Commitment) and without the Rating
Agency Condition having been satisfied with respect to such assignment.
SECTION 10.08. INVESTOR CERTIFICATES NONASSESSABLE AND FULLY PAID.
It is the intention of the parties to each Pooling and Servicing Agreement that
the Investor
58
Certificateholders (and, if applicable, the Letter of Credit Banks and the
Liquidity Banks) shall not be personally liable for obligations of the Trust,
that the interests in the Trust represented by the Investor Certificates shall
be nonassessable for any losses or expenses of the Trust or for any reason
whatsoever and that Investor Certificates upon authentication thereof by the
Trustee pursuant to SECTION 5.02 are and shall be deemed fully paid.
SECTION 10.09. FURTHER ASSURANCES. The Company and the Servicer
agree to do and perform, from time to time, any and all acts (including but not
limited to the acts required by SUBSECTION 2.01(B) and notifying related
Obligors to the extent necessary to perfect the assignment of any Purchased Loan
from the Company to the Trust, except to the extent that the relevant UCC and
other similar laws (to the extent applicable) permit the Company (or its
assignees) to provide such notification subsequent to the applicable Loan
Purchase Date without materially impairing the Trust's ownership or security
interest in the Trust Assets and without incurring material expenses in
connection with such notification) and to execute any and all further
instruments required or reasonably requested by the Trustee more fully to effect
the purposes of each Pooling and Servicing Agreement, including, without
limitation, the execution of any financing statements or continuation statements
relating to the Purchased Loans for filing under the provisions of the UCC (or
other applicable laws) of any applicable jurisdiction.
SECTION 10.10. NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of the Trustee or the Investor
Certificateholders (or, if applicable, the Letter of Credit Agent, any Letter of
Credit Banks, the Administrative Agent or any Liquidity Bank), any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
SECTION 10.11. COUNTERPARTS. This Agreement may be executed in two
or more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
SECTION 10.12. THIRD-PARTY BENEFICIARIES. This Agreement will inure
to the benefit of and be binding upon the parties hereto and the Holders and
their respective successors and permitted assigns. Except as otherwise provided
in this SECTION 10.12 and in any Supplement, no other Person will have any right
or obligation hereunder.
SECTION 10.13. ACTIONS BY INVESTOR CERTIFICATEHOLDERS.
(a) Wherever in any Pooling and Servicing Agreement a provision
is made that an action may be taken or a notice, demand or instruction
given by Investor Certificateholders, such action, notice or instruction
may be taken or given by any Investor Certificateholders of any Series,
unless such provision requires a specific percentage of Investor
Certificateholders of a certain Series or all Series.
59
(b) Any request, demand, authorization, direction, notice,
consent, waiver or other act by an Investor Certificateholder shall bind
such Investor Certificateholder and every subsequent Holder of such
Investor Certificate issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done or
omitted to be done by the Trustee, the Company, the Servicer in reliance
thereon, whether or not notation of such action is made upon such
Investor Certificate.
SECTION 10.14. MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement and the Servicing Agreement.
This Agreement and the Servicing Agreement may not be modified, amended, waived,
or supplemented except as provided herein.
SECTION 10.15. HEADINGS. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
SECTION 10.16. NO SETOFF. Except as expressly provided in this
Agreement or any other Transaction Document, the Trustee agrees that it shall
have no right of setoff or banker's lien against, and no right to otherwise
deduct from, any funds held in the Collection Account for any amount owed to it
by the Company, the Servicer, any Holder, the Letter of Credit Agent, any Letter
of Credit Bank, the Administrative Agent or any Liquidity Bank.
SECTION 10.17. NO BANKRUPTCY PETITION. Each of the Trustee (for
itself and on behalf of the Holders) and the Servicer hereby covenant and agree
that it will not institute against, or join with or assist other Person in
instituting against, the Company any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any Applicable
Insolvency Laws.
SECTION 10.18. LIMITATION OF LIABILITY. It is expressly understood
and agreed by the parties hereto that (a) each Pooling and Servicing Agreement
is executed and delivered by the Trustee, not individually or personally but
solely as Trustee of the Trust, in the exercise of the powers and authority
conferred and vested in it, (b) except with respect to SECTION 8.15 hereof the
representations, undertakings and agreements herein made on the part of the
Trust are made and intended not as personal representations, undertakings and
agreements by the Trustee, but are made and intended for the purpose of binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on the Trustee, individually or personally, to perform any covenant
either expressed or implied contained herein, all such liability, if any, being
expressly waived by the parties who are signatories to this Agreement and by any
Person claiming by, through or under such parties; PROVIDED, HOWEVER, the
Trustee shall be liable in its individual capacity for its own willful
misconduct or gross negligence and for any tax assessed against the Trustee
based on or measured by any fees, commission or compensation received by it for
acting as Trustee and (d) under no circumstances shall the Trustee be personally
liable for the payment of any indebtedness or expenses of the Trust or be liable
for the breach or failure of any obligation, representation, warranty or
covenant made or undertaken by the Trust under any
60
Pooling and Servicing Agreement; PROVIDED FURTHER that this SECTION 10.18 shall
survive the resignation or removal of the Trustee.
Except as otherwise provided hereunder, the Company hereby agrees to
indemnify and hold harmless the Trustee, the Trust (for the benefit of the
Holders), the Holders, the Letter of Credit Agent, the Letter of Credit Banks,
the Administrative Agent and the Liquidity Banks (each, an "INDEMNIFIED PERSON")
from and against any loss, liability, expense, damage or injury suffered or
sustained by reason of any acts, omissions or alleged acts or omissions arising
out of, or relating to, activities of the Company pursuant to any Pooling and
Servicing Agreement to which it is a party, including but not limited to any
judgment, award, settlement, reasonable attorneys' fees and other reasonable
costs or expenses incurred in connection with the defense of any actual or
threatened action, proceeding or claim, except to the extent such loss,
liability, expense, damage or injury resulted from the gross negligence, bad
faith or willful misconduct of an Indemnified Person or resulted from the
performance of any Purchased Loan, market fluctuations or other market or
investment risk not attributable to acts or omissions or alleged acts or
omissions of the Company; PROVIDED, HOWEVER, that any payments to be made by the
Company pursuant to this subsection shall be Company Subordinated Obligations.
The indemnification obligations of the Company hereunder shall survive the
termination of any Pooling and Servicing Agreement or the resignation or removal
of the Trustee and shall be binding upon the Company, the Servicer and any
Successor Servicer.
SECTION 10.19. CERTAIN INFORMATION. The Servicer and the Company
shall promptly provide to the Trustee such information in computer tape, hard
copy or other form regarding the Purchased Loans as the Trustee may reasonably
determine to be necessary to perform its obligations hereunder.
SECTION 10.20. RESPONSIBLE OFFICER CERTIFICATES; NO RECOURSE. Any
certificate executed and delivered by a Responsible Officer of the Company, the
Servicer or the Trustee pursuant to the terms of the Transaction Documents shall
be executed by such Responsible Officer not in an individual capacity but solely
in his or her capacity as an officer of the Company, the Servicer or the
Trustee, as applicable, and such Responsible Officer will not be subject to
personal liability as to matters contained in the certificate. A director,
officer, employee or shareholder, as such, of the Servicer or the Company shall
not have liability for any obligation of the Servicer or the Company hereunder
or under any Transaction Document or for any claim based on, in respect of, or
by reason of, any Transaction Document, unless such claim results from the gross
negligence, fraudulent acts or willful misconduct of such director, officer,
employee or shareholder.
SECTION 10.21. CHASE CONFLICT WAIVER. Chase acts as Trustee,
Collateral Agent, Depositary, Administrative Agent, Liquidity Bank and may
provide other services or facilities from time to time (the "CHASE ROLES"). Each
of the parties hereto (including the holders of the Certificates by purchase
thereof) and each Liquidity Bank acknowledges and consents to any and all Chase
Roles, waives any objections it may have to any actual or potential conflict of
interest caused by Chase's acting as Trustee, Collateral Agent, Administrative
Agent, Depositary
61
or as Liquidity Bank hereunder and acting as or maintaining any of the Chase
Roles, and agrees that in connection with any Chase Role, Chase may take, or
refrain from taking, any action which it in its discretion deems appropriate.
62
IN WITNESS WHEREOF, the Company, the Servicer and the Trustee have
caused this Agreement to be duly executed by their respective officers as of the
day and year first above written.
BUNGE FUNDING, INC.
By: ▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
BUNGE MANAGEMENT SERVICES, INC.,
as Servicer
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as Trustee
By: ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
EXHIBIT A
BUNGE MASTER TRUST, INTERNAL OPERATING PROCEDURES MEMORANDUM
The purpose of this memo is to set forth the standard operating procedures to be
taken by The Chase Manhattan Bank, as Trustee under the Bunge Master Trust
Pooling Agreement (the "POOLING AGREEMENT"), the Servicing Agreement (the
"SERVICING AGREEMENT"), and each Supplement (the "SUPPLEMENT"), (together, the
"AGREEMENTS") with respect to the Monthly Settlement Statement and Daily Report
which are required to be provided to the Trustee by the Servicer pursuant to the
Agreements.
All defined terms used herein and not otherwise defined herein have the meanings
assigned to them under the Agreements.
1. PROCEDURES TO BE FOLLOWED WITH RESPECT TO THE DAILY REPORT DELIVERED TO
THE TRUSTEE BY THE SERVICER.
a) The following procedures are to be performed with respect to each
Daily Report delivered to the Trustee by the Servicer:
(i) COMPARE THE DEPOSITS AS REPORTED ON THAT DAY BY THE
SERVICER IN THE DAILY REPORT TO THE ACTUAL AMOUNTS
DEPOSITED TO THE COLLECTION ACCOUNT ON SUCH DATE;
(ii) WITH RESPECT TO THE RECONCILEMENT OF EACH OF THE TRUST
ACCOUNTS SET FORTH IN THE DAILY REPORT, COMPARE THE
BEGINNING BALANCE AS REPORTED BY THE SERVICER IN THE
DAILY REPORT TO THE AMOUNT ON DEPOSIT IN THE TRUST
ACCOUNTS PER THE ACCOUNTING RECORDS OF THE CHASE
MANHATTAN BANK;
(iii) COMPARE THE ALLOCATED LOAN AMOUNT TO THE TARGET LOAN
AMOUNT, AS INDICATED IN THE DAILY REPORT,
(iv) PERFORM EACH OF THE ACCOUNT TRANSFERS SET FORTH IN THE
DAILY REPORT, AS DIRECTED BY THE SERVICER.
b) Through the use of an Excel spread sheet prepared in a format which
mirrors the Daily Report, the following procedure shall be performed
once per each week with respect to the Daily Report delivered by the
Servicer:
FOLLOWING THE INPUT OF REQUIRED VARIABLES AND SPREAD SHEET EXECUTION,
COMPARE THE RESULTING FIGURES AGAINST THOSE SPECIFIED IN THE DAILY
REPORT PROVIDED BY THE SERVICER.
A-1
2. PROCEDURES TO BE FOLLOWED WITH RESPECT TO EACH MONTHLY SETTLEMENT
STATEMENT DELIVERED BY THE SERVICER.
a) Through the use of an Excel spread sheet prepared in a format which
mirrors the Monthly Settlement Statement, the following procedure shall
be performed with respect to the Monthly Settlement Statement delivered
by the Servicer:
FOLLOWING THE INPUT OF REQUIRED VARIABLES AND SPREAD SHEET EXECUTION,
COMPARE THE RESULTING FIGURES AGAINST THOSE SPECIFIED IN THE MONTHLY
SETTLEMENT STATEMENT PROVIDED BY THE SERVICER.
(b) With respect to the reconcilement of each of the Trust Accounts set
forth on the Monthly Settlement Statement, we will compare the beginning
and ending balances as reported by the Servicer on the Monthly
Settlement Statement to the amounts which were on deposit in the Trust
Accounts per the accounting records of The Chase Manhattan Bank as of
the applicable date.
3. ACTIONS TO BE TAKEN WITH RESPECT TO THE DISCOVERY OF A DISCREPANCY.
Upon discovery of any material discrepancy between the amounts reported
by the Servicer and the amounts calculated as provided above, the
Trustee shall notify the Servicer. The Servicer shall then have ten
business days to resolve such discrepancy before the Trustee shall be
obligated to give notice to the Certificateholders (and, if applicable,
the Letter of Credit Agent and the Administrative Agent) and each Rating
Agency.
THIS INTERNAL OPERATING PROCEDURES MEMORANDUM CONSTITUTES CONFIDENTIAL AND
PROPRIETARY INFORMATION OF THE CHASE MANHATTAN BANK. THIS MEMORANDUM SHALL NOT
BE DISTRIBUTED OR IN ANY WAY COMMUNICATED TO ANY PERSON NOT A PARTY TO THE
AGREEMENT OR THE SUPPLEMENT OR A RATING AGENCY WITHOUT THE PRIOR WRITTEN CONSENT
OF THE CHASE MANHATTAN BANK.
A-2
Schedule 2
IDENTIFICATION OF TRUST ACCOUNTS
Collection Account #23526-00
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
S2-1
Schedule 3
LOCATION OF CHIEF EXECUTIVE OFFICE AND JURISDICTION
OF FORMATION OF THE COMPANY
CHIEF EXECUTIVE OFFICE: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
JURISDICTION OF FORMATION: Delaware
S3-1