Exhibit 4.5
EXECUTION COPY
AMENDED AND RESTATED TRUST AGREEMENT
Dated as of December 11, 1997
between
CPS RECEIVABLES CORP., as Depositor
and
BANKERS TRUST (DELAWARE), as
Owner Trustee
TABLE OF CONTENTS
Page
ARTICLE I.
Definitions
SECTION 1.1. Capitalized Terms.............................................1
SECTION 1.2. Other Definitional Provisions.................................4
ARTICLE II.
Organization
SECTION 2.1. Name..........................................................4
SECTION 2.2. Office........................................................5
SECTION 2.3. Purposes and Powers...........................................5
SECTION 2.4. Appointment of Owner Trustee..................................5
SECTION 2.5. Initial Capital Contribution of Trust Estate..................5
SECTION 2.6. Declaration of Trust..........................................6
SECTION 2.7. Title to Trust Property.......................................6
SECTION 2.8. Situs of Trust................................................6
SECTION 2.9. Representations and Warranties of the Depositor...............7
SECTION 2.10. Federal Income Tax Allocations................................8
SECTION 2.11. Covenants of the Depositor....................................9
SECTION 2.12. Covenants of the Certificateholders..........................10
ARTICLE III.
Certificates and Transfer of Interests
SECTION 3.1. Initial Ownership............................................11
SECTION 3.2. The Certificates.............................................11
SECTION 3.3. Authentication of Certificates...............................11
SECTION 3.4. Registration of Transfer and Exchange of Certificates........11
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates............15
SECTION 3.6. Persons Deemed Certificateholders............................15
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses..................................................15
SECTION 3.8. Maintenance of Office or Agency..............................16
SECTION 3.9. ERISA Restrictions...........................................16
Page
ARTICLE IV.
Voting Rights and Other Actions
SECTION 4.1. Prior Notice to Holders with Respect to Certain
Matters....................................................16
SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters....................................................17
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy.................................................17
SECTION 4.4. Restrictions on Certificateholders' Power....................17
SECTION 4.5. Majority Control.............................................18
SECTION 4.6. Rights of Insurer............................................18
ARTICLE V.
Certain Duties
SECTION 5.1. Accounting and Records to the Noteholders,
Certificateholders, the Internal Revenue Service and
Others.....................................................19
SECTION 5.2. Signature on Returns; Tax Matters Partner....................19
SECTION 5.3. Underwriting Agreement.......................................19
SECTION 5.4. Trust Accounts...............................................20
SECTION 5.5. Application of Funds in Certificate Distribution
Account....................................................20
ARTICLE VI.
Authority and Duties of Owner Trustee
SECTION 6.1. General Authority............................................22
SECTION 6.2. General Duties...............................................22
SECTION 6.3. Action upon Instruction......................................22
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions...............................................23
SECTION 6.5. No Action Except under Basic Documents or
Instructions...............................................24
SECTION 6.6. Restrictions.................................................24
Page
ARTICLE VII.
Concerning the Owner Trustee
SECTION 7.1. Acceptance of Trusts and Duties..............................24
SECTION 7.2. Furnishing of Documents......................................26
SECTION 7.3. Representations and Warranties...............................26
SECTION 7.4. Reliance; Advice of Counsel..................................26
SECTION 7.5. Not Acting in Individual Capacity............................27
SECTION 7.6. Owner Trustee Not Liable for Certificates or
Receivables................................................27
SECTION 7.7. Owner Trustee May Own Certificates and Notes.................27
SECTION 7.8. Payments from Owner Trust Estate.............................27
SECTION 7.9. Doing Business in other Jurisdictions........................28
ARTICLE VIII.
Compensation of Owner Trustee
SECTION 8.1. Owner Trustee's Fees and Expenses............................28
SECTION 8.2. Indemnification..............................................28
SECTION 8.3. Payments to the Owner Trustee................................29
SECTION 8.4. Non-recourse Obligations.....................................29
ARTICLE IX.
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement...............................29
ARTICLE X.
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.1. Eligibility Requirements for Owner Trustee...................30
SECTION 10.2. Resignation or Removal of Owner Trustee......................31
SECTION 10.3. Successor Owner Trustee......................................31
SECTION 10.4. Merger or Consolidation of Owner Trustee.....................32
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee................32
Page
ARTICLE XI.
Miscellaneous
SECTION 11.1. Supplements and Amendments...................................34
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders.........................................35
SECTION 11.3. Limitations on Rights of Others..............................35
SECTION 11.4. Notices......................................................35
SECTION 11.5. Severability.................................................36
SECTION 11.6. Separate Counterparts........................................36
SECTION 11.7. Assignments; Insurer.........................................36
SECTION 11.8. No Petition..................................................36
SECTION 11.9. No Recourse..................................................36
SECTION 11.10. Headings.....................................................37
SECTION 11.11. GOVERNING LAW................................................37
SECTION 11.12. Servicer.....................................................37
ARTICLE XII.
Amendment and Restatement
SECTION 12.1. Amendment and Restatement....................................37
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Transferee Certificate
AMENDED AND RESTATED TRUST AGREEMENT dated as of December 11, 1997 between
CPS RECEIVABLES CORP., a California corporation (the "Depositor") BANKERS TRUST
(DELAWARE), a Delaware banking corporation as Owner Trustee.
W I T N E S S E T H
WHEREAS , Depositor and Owner Trustee are parties to that certain trust
agreement dated as of December 2, 1997 (the "Original Agreement") and Depositor
and Owner Trustee desire to amend and restate the Original Agreement in its
entirety.
NOW THEREFORE, in consideration of the foregoing, other good and valuable
considerations, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I.
Definitions
SECTION 1.1. Capitalized Terms. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"Agreement" shall mean the Original Agreement as amended and restated by
this Amended and Restated Trust Agreement, as the same may be further amended or
supplemented from time to time.
"Basic Documents" shall mean this Agreement, the Certificate of Trust, the
Sale and Servicing Agreement, the Spread Account Agreement, the Spread Account
Agreement Supplement, the Insurance Agreement, the Indenture and the other
documents and certificates delivered in connection therewith.
"Benefit Plan" shall have the meaning assigned to such term in Section
3.10.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss. 3801 et. seq. as the same may be amended from time to
time.
"Certificate" means a trust certificate evidencing the beneficial interest
of a Certificateholder in the Trust, substantially in the form of Exhibit A
attached hereto.
"Certificate Balance" means, as of any date of determination, the Initial
Certificate Balance reduced by all payments theretofore made on account of
principal of the Certificates.
"Certificate Distribution Account" shall mean the account designated as
such, established and maintained pursuant to Section 5.4.
"Certificate of Trust" shall mean the Certificate of Trust in the form of
Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the register
mentioned and the registrar appointed pursuant to Section 3.4.
"Certificateholders' Interest Distributable Amount" shall have the meaning
assigned to such term in the Sale and Servicing Agreement.
"Certificateholders' Principal Distributable Amount" shall have the meaning
assigned to such term in the Sale and Servicing Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and Treasury Regulations promulgated thereunder.
"Corporate Trust Office" shall mean, with respect to the Owner Trustee, the
principal corporate trust office of the Owner Trustee located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ with a copy of all notices and
other documents to Bankers Trust Company, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust and Agency Group, or at such other
address as the Owner Trustee may designate by notice to the Certificateholders
and the Depositor, or the principal corporate trust office of any successor
Owner Trustee (the address of which the successor owner trustee will notify the
Certificateholders and the Depositor).
"Depositor" shall mean CPS Receivables Corp. in its capacity as Depositor
hereunder.
"ERISA" shall have the meaning assigned to such term in Section 3.10.
"Expenses" shall have the meaning assigned to such term in Section 8.2.
"Holder" or "Certificateholder" shall mean the Person in whose name a
Certificate is registered on the Certificate Register.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.2.
"Indenture" shall mean the Indenture dated as of December 1, 1997, among
the Trust and Norwest Bank Minnesota, National Association, as Trustee, as the
same may be amended and supplemented from time to time.
"Initial Certificate Balance" means $4,781,307.
"Instructing Party" shall have the meaning assigned to such term in Section
6.3(a).
"Insurer" shall mean Financial Security Assurance Inc., or its successor in
interest.
"Original Agreement" shall mean the trust agreement dated as of December 2,
1997 between the Depositor and the Owner Trustee.
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"Owner Trust Estate" shall mean all right, title and interest of the Trust
in and to the property and rights assigned to the Trust pursuant to Article II
of the Sale and Servicing Agreement, all funds on deposit from time to time in
the Trust Accounts and all other property of the Trust from time to time,
including any rights of the Owner Trustee and the Trust pursuant to the Sale and
Servicing Agreement and the Spread Account Agreement.
"Owner Trustee" shall mean Bankers Trust (Delaware), a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
this Agreement, and any successor Owner Trustee hereunder.
"Pass-Through Rate" shall mean 10.55% per annum.
"Paying Agent" shall mean Bankers Trust Company.
"Principal Certificates" means Certificates denominated in dollars.
"Record Date" shall mean with respect to any Payment Date, the close of
business on the 10th day of the calendar month of such Payment Date.
"Responsible Officer" when used with respect to the Owner Trustee, any
officer or agent acting under a power of attorney who is responsible for
administering the transactions contemplated by this Trust Agreement and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Sale and Servicing Agreement" shall mean the Sale and Servicing Agreement
among the Trust, the Depositor, Consumer Portfolio Services, Inc. and the
Trustee, dated as of December 1, 1997 as the same may be amended and
supplemented from time to time.
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Spread Account" shall mean the Spread Account established and maintained
pursuant to the Spread Account Agreement.
"Spread Account Agreement" shall mean the Spread Account Agreement, amended
and restated as of December 1, 1997, among the Depositor, the Insurer, and the
Trustee, as the same may be amended, supplemented or otherwise modified in
accordance with the terms thereof.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
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"Trust" shall mean the trust established by this Agreement.
"Trustee" means the Person acting as Trustee under the Indenture, its
successors in interest and any successor trustee under the Indenture.
SECTION 1.2. Other Definitional Provisions. (a) Capitalized terms used
herein and not otherwise defined have the meanings assigned to them in the Sale
and Servicing Agreement or, if not defined therein, in the Spread Account
Agreement or in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles as in effect on the date of this
Agreement or any such certificate or other document, as applicable. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
ARTICLE II.
Organization
SECTION 2.1. Name. There is hereby formed a trust to be known as "CPS Auto
Receivables Trust 1997-5", in which name the Owner Trustee may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and ▇▇▇ and be sued.
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SECTION 2.2. Office. The office of the Trust shall be in care of the Owner
Trustee at the Corporate Trust Office or at such other address as the Owner
Trustee may designate by written notice to the Certificateholders and the
Depositor.
SECTION 2.3. Purposes and Powers. (a) The purpose of the Trust is, and the
Trust shall have the power and authority, to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Certificates
pursuant to this Agreement, and to sell the Notes and the Certificates;
(ii) with the proceeds of the sale of the Notes, to fund the Spread
Account and to pay the organizational, start-up and transactional expenses
of the Trust and to pay the balance to the Depositor pursuant to the Sale
and Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Owner Trust Estate to the Trustee pursuant to the Indenture for the benefit
of the Insurer and the Noteholders and to hold, manage and distribute to
the Certificateholders and the Depositor pursuant to the terms of the Sale
and Servicing Agreement any portion of the Owner Trust Estate released from
the Lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is a party;
(v) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or
are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage in such
other activities as may be required in connection with the conservation of
the Owner Trust Estate and the making of distributions to the
Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
SECTION 2.5. Initial Capital Contribution of Trust Estate. The Depositor
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $10.00. The Owner Trustee hereby acknowledges
receipt of the foregoing contribution in trust from the Depositor, as of the
date hereof, which contribution shall
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constitute the initial Owner Trust Estate and shall be deposited in the
Certificate Distribution Account. The Depositor shall pay organizational
expenses of the Trust as they may arise.
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares that
it will hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholders, subject to
the conditions of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a business trust under the Business
Trust Statute and that this Agreement constitute the governing instrument of
such business trust. It is the intention of the parties hereto that (i) so long
as the Depositor is the Holder of 100 percent of the Certificates (either
directly or indirectly through wholly-owned non-corporate subsidiaries), for
federal income tax purposes and to the extent consistent with the laws of any
other jurisdiction for which the characterization of the Trust as an entity is
relevant, the Trust shall be treated solely as a security device and not as a
separate entity, and (ii) if the Depositor is not the direct or indirect Holder
of 100 percent of the Certificates, then for federal income tax purposes and for
purposes of the laws of any other jurisdiction for which the characterization of
the Trust as an entity is relevant, and in all events for California franchise
tax purposes, the Trust shall be treated as a partnership among the
Certificateholders and the Depositor and not as an association (or publicly
traded partnership) taxable as a corporation. The parties agree that, unless
otherwise required by appropriate tax authorities, the Trust will file or cause
to be filed annual or other necessary returns, reports and other forms, if any,
consistent with such characterization of the Trust. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and to the extent not inconsistent herewith, in the Business Trust
Statute with respect to accomplishing the purposes of the Trust. The Owner
Trustee shall file the Certificate of Trust with the Secretary of State.
SECTION 2.7. Title to Trust Property. (a) Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) The Holders shall not have legal title to any part of the Owner Trust
Estate. The Holders shall be entitled to receive distributions in respect of
their undivided ownership interest therein only in accordance with Article IX.
No transfer, by operation of law or otherwise, of any right, title or interest
by any Certificateholder of its ownership interest in the Owner Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or the transfer to it of legal title to any part of
the Owner Trust Estate.
SECTION 2.8. Situs of Trust. The Trust will be located and administered in
the State of Delaware or the State of New York. All bank accounts maintained by
the Owner Trustee on behalf of the Trust shall be located in the State of
Delaware, the State of New York or the State of Minnesota. Payments will be
received by the Trust only in Delaware, New York or
6
Minnesota and Payments will be made by the Trust only from Delaware, New York or
Minnesota. The Trust shall not have any employees in any state other than
Delaware or New York; provided, however, that nothing herein shall restrict or
prohibit the Owner Trustee or the Servicer or any agent of the Trust from having
employees within or without the State of Delaware and New York. The only office
of the Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.9. Representations and Warranties of the Depositor. The Depositor
makes the following representations and warranties on which the Owner Trustee
relies in accepting the Owner Trust Estate in trust and issuing the Certificates
and upon which the Insurer relies in issuing the Note Policy.
(a) Organization and Good Standing. The Depositor is duly organized
and validly existing as a California corporation with power and authority
to own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted and is proposed to
be conducted pursuant to this Agreement and the Basic Documents.
(b) Due Qualification. The Depositor is duly qualified to do business
as a foreign corporation in good standing, and has obtained all necessary
licenses and approvals, in all jurisdictions in which the ownership or
lease of its property, the conduct of its business and the performance of
its obligations under this Agreement and the Basic Documents requires such
qualification.
(c) Power and Authority. The Depositor has the corporate power and
authority to execute and deliver this Agreement and to carry out its terms;
the Depositor has full power and authority to sell and assign the property
to be sold and assigned to, and deposited with, the Trust and the Depositor
has duly authorized such sale and assignment and deposit to the Trust by
all necessary corporate action; and the execution, delivery and performance
of this Agreement has been duly authorized by the Depositor by all
necessary corporate action.
(d) No Consent Required. No consent, license, approval or
authorization or registration or declaration with, any Person or with any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance of this Agreement and the Basic
Documents, except for such as have been obtained, effected or made.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
certificate of incorporation or by-laws of the Depositor, or any material
indenture, agreement or other instrument to which the Depositor is a party
or by which it is bound; nor result in the creation or imposition of
7
any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the Basic
Documents); nor violate any law or, to the best of the Depositor's
knowledge, any order, rule or regulation applicable to the Depositor of any
court or of any Federal or state regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Depositor
or its properties.
(f) No Proceedings. There are no proceedings or investigations pending
or, to its knowledge, threatened against it before any court, regulatory
body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over it or its properties (A) asserting
the invalidity of this Agreement or any of the Basic Documents, (B) seeking
to prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this Agreement or
any of the Basic Documents, (C) seeking any determination or ruling that
might materially and adversely affect its performance of its obligations
under, or the validity or enforceability of, this Agreement or any of the
Basic Documents, or (D) seeking to adversely affect the federal income tax
or other federal, state or local tax attributes of the Certificates.
SECTION 2.10. Federal Income Tax Allocations. (a) For purposes of the laws
of any jurisdiction for which the Trust is characterized as a partnership
(consistent with the characterization of the Trust described in Section 2.6
above), the following allocations shall apply for Federal income tax purposes.
Interest payments on the Certificates at the Pass- Through Rate (including
interest on amounts previously due on the Certificates but not yet distributed)
shall be treated as "guaranteed payments" under Section 707(c) of the Code. To
the extent such characterization is not respected, net income of the Trust for
any month as determined for Federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof) shall be
allocated:
(i) among the Holders of Certificates as of the close of business on
the last day of such month, in proportion to their ownership of the
principal amount of Certificates on such date, an amount of net income up
to the sum of: (x) the portion of the market discount on the Receivables
accrued during such month that is allocable to the excess, if any, of the
Initial Certificate Balance over their initial aggregate issue price, (y)
Certificateholders' Prepayment Premium, if any, payable for such month and
(z) any other amounts of income payable to the Certificateholders for such
month; and such sum of amounts specified in clauses (x) through (z) of this
sentence shall be reduced by any amortization by the Trust of premium on
Receivables that corresponds to any excess of the issue price of Trust
Certificates over their principal amount; and
(ii) to the Depositor, to the extent of any remaining net income, in
accordance with their respective interests therein.
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If the net income of the Trust for any month is insufficient for the
allocations described in clause (i), subsequent net income shall first be
allocated to make up such shortfall before being allocated as provided in
the preceding sentence. Net losses of the Trust, if any, for any month as
determined for Federal income tax purposes (and each item of income, gain,
loss and deduction entering into the computation thereof) shall be
allocated to the Depositor, to the extent it is reasonably expected to bear
the economic burden of such net losses, and any remaining net losses shall
be allocated among the other Holders of Certificates as of the close of
business on the last day of such month in proportion to their ownership of
principal amount of Certificates on such day. The Depositor is authorized
to modify the allocations in this paragraph if necessary or appropriate, in
its sole discretion, for the allocations to fairly reflect the economic
income, gain or loss to the Holders of Certificates, or as otherwise
required by the Code. Notwithstanding anything provided in this Section
2.10(a), if Certificates are held solely by the Depositor, the application
of this Section 2.10(a) shall be disregarded.
(b) One hundred percent of the "excess nonrecourse liabilities" of the
Trust represented by all outstanding Classes of Notes shall be allocated, for
purposes of Treasury Regulations section 1.752-3(3), to the Depositor.
SECTION 2.11. Covenants of the Depositor. The Depositor agrees and
covenants for the benefit of each Certificateholder, the Insurer and the Owner
Trustee, during the term of this Agreement, and to the fullest extent permitted
by applicable law, that:
(a) it shall not create, incur or suffer to exist any indebtedness or
engage in any business, except, in each case, as permitted by its
certificate of incorporation and the Basic Documents;
(b) it shall not, for any reason, institute proceedings for the Trust
to be adjudicated a bankrupt or insolvent, or consent to the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable
federal or state law relating to the bankruptcy of the Trust, or consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator
(or other similar official) of the Trust or a substantial part of the
property of the Trust or cause or permit the Trust to make any assignment
for the benefit of creditors, or admit in writing the inability of the
Trust to pay its debts generally as they become due, or declare or effect a
moratorium on the debt of the Trust or take any action in furtherance of
any such action;
(c) it shall obtain from each counterparty to each Basic Document to
which it or the Trust is a party and each other agreement entered into on
or after the date hereof to which it or the Trust is a party, an agreement
by each such counterparty that prior to the occurrence of the event
specified in Section 9.1(e) such counterparty shall not institute against,
or join any other Person in instituting against, it or the Trust, any
9
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceedings under the laws of the United
States or any state of the United States; and
(d) it shall not, for any reason, withdraw or attempt to withdraw from
this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or
insolvency proceedings against it, or file a petition seeking or consenting
to reorganization or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of
it or a substantial part of its property, or make any assignment for the
benefit of creditors, or admit in writing its inability to pay its debts
generally as they become due, or declare or effect a moratorium on its debt
or take any action in furtherance of any such action.
SECTION 2.12. Covenants of the Certificateholders. Each Certificateholder
by its acceptance of a Certificate agrees:
(a) to be bound by the terms and conditions of the Certificates of
which such party is the record or beneficial owner and of this Agreement,
including any supplements or amendments hereto and to perform the
obligations of a Holder as set forth therein or herein, in all respects as
if it were a signatory hereto. This undertaking is made for the benefit of
the Trust, the Owner Trustee, the Insurer and all other Holders present and
future;
(b) to hereby appoint the Depositor as its agent and attorney-in-fact
to sign any federal income tax information return filed on behalf of the
Trust and agree that, if requested by the Trust, it will sign such federal
income tax information return in its capacity as a Holder of an interest in
the Trust. Each Holder also hereby agrees that in its tax returns it will
not take any position inconsistent with those taken in any tax returns
filed by the Trust;
(c) if such Holder is other than an individual or other entity holding
its Certificate through a broker who reports securities sales on Form
1099-B, to notify the Owner Trustee of any transfer by it of a Certificate
or a beneficial interest in a Certificate in a taxable sale or exchange,
within 30 days of the date of the transfer; and
(d) until the completion of the events specified in Section 9.1(e),
not to, for any reason, institute proceedings for the Trust or the
Depositor to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, or
file a petition seeking or consenting to reorganization or relief under any
applicable federal or state law relating to bankruptcy, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Trust or a substantial part of its property,
or cause or permit the
10
Trust to make any assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or
declare or effect a moratorium on its debt or take any action in
furtherance of any such action.
ARTICLE III.
Certificates and Transfer of Interests
SECTION 3.1. Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5 and until the issuance of
the Certificates, the Depositor shall be the sole beneficiary of the Trust.
SECTION 3.2. The Certificates. The Certificates shall be issued initially
to the Depositor with a Certificate Balance of $4,781,307. Certificates shall be
issued in minimum denominations of $1,000. The Certificates shall be executed on
behalf of the Trust by manual or facsimile signature of an authorized officer of
the Owner Trustee. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be validly issued and entitled
to the benefit of this Agreement, notwithstanding that such individuals or any
of them shall have ceased to be so authorized prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of
authentication and delivery of such Certificates. A transferee of a Certificate
shall become a Certificateholder, and shall be entitled to the rights and
subject to the obligations of a Certificateholder hereunder, upon due
registration of such Certificate in such transferee's name pursuant to Section
3.4.
SECTION 3.3. Authentication of Certificates. Concurrently with the initial
sale of the Receivables to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Certificates with an aggregate
Certificate Balance equal to $4,781,307 to be executed on behalf of the Trust,
authenticated and delivered upon the written order of the Depositor, signed by
its chairman of the board, its president or any vice president, its treasurer or
any assistant treasurer without further corporate action by the Depositor, in
authorized denominations. No Certificate shall entitle its holder to any benefit
under this Agreement, or shall be valid for any purpose, unless there shall
appear on such Certificate a certificate of authentication substantially in the
form set forth in Exhibit A, executed by the Owner Trustee or the Owner
Trustee's authentication agent, by manual signature; such authentication shall
constitute conclusive evidence that such Certificate shall have been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. Bankers Trust Company shall be the initial
authentication agent of the Owner Trustee and all references herein to the
authentication of Certificates shall be deemed to include the authentication
agent.
SECTION 3.4. Registration of Transfer and Exchange of Certificates. (a) The
Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained
11
pursuant to Section 3.8, a Certificate Register in which, subject to such
reasonable regulations as it may prescribe, the Owner Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. Bankers Trust Company shall be the initial Certificate
Registrar.
(b) The Certificate Registrar shall provide the Paying Agent with a list of
the names and addresses of the Certificateholders on the Closing Date in the
form in which such information is provided to the Certificate Registrar. Upon
any transfers of Certificates, the Certificate Registrar shall promptly notify
the Paying Agent (if other than the Certificate Registrar) of the name and
address of the transferee in writing, by facsimile.
(c) No transfer of a Certificate shall be made unless (i) the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and any applicable State securities laws are complied with, (ii) such transfer
is exempt from the registration requirements under said Securities Act and laws
or (iii) such transfer is made to a Person who the transferor reasonably
believes is a "qualified institutional buyer" (as defined in Rule 144A of the
Securities Act) that is purchasing such Certificate for its own account or the
account of a qualified institutional buyer to whom notice is given that the
transfer is being made in reliance on said Rule 144A. In the event that a
transfer is to be made in reliance upon clause (ii) above, the Certificateholder
desiring to effect such transfer and such Certificateholder's prospective
transferee must each (x) certify in writing to the Certificate Registrar the
facts surrounding such transfer and (y) provide the Certificate Registrar with a
written opinion of counsel in form and substance satisfactory to the Depositor
and the Certificate Registrar that such transfer may be made pursuant to an
exemption from the Securities Act or laws, which Opinion of Counsel shall not be
an expense of the Depositor or the Certificate Registrar. In the event that a
transfer is to be made in reliance upon clause (iii) above, the prospective
transferee shall have furnished to the Certificate Registrar and the Depositor a
Transferee Certificate, signed by such transferee, in the form of Exhibit C.
Neither the Depositor nor the Certificate Registrar is under any obligation to
register the Certificates under said Securities Act or any other securities law.
The Certificate Registrar may request and shall receive in connection with any
transfer signature guarantees satisfactory to it in its sole discretion.
(d) In no event shall a Certificate be transferred to an employee benefit
plan, trust annuity or account subject to ERISA or a plan described in Section
4975(e)(1) of the Code (any such plan, trust or account including any ▇▇▇▇▇
(HR-10) plans, individual retirement accounts or annuities and other employee
benefit plans subject to Section 406 of ERISA or Section 4975 of the Code being
referred to in this Section 6.3 as an "Employee Plan"), a trustee of any
Employee Plan, or an entity, account or other pooled investment fund the
underlying assets of which include or are deemed to include Employee Plan assets
by reason of an Employee Plan's investment in the entity, account or other
pooled investment fund. The Seller, the Servicer, the Trustee, the Owner
Trustee, the Insurer and the Standby Servicer shall not be responsible for
confirming or otherwise investigating whether a proposed purchaser is an
employee benefit plan, trust or account subject to ERISA, or described in
Section 4975(e)(1) of the Code.
12
(e) Each Holder of a Certificate, by virtue of the acquisition and holding
thereof, will be deemed to have represented and agreed as follows:
(i) It is a qualified institutional buyer as defined in Rule 144A or
an institutional accredited investor as defined in Regulation D promulgated
under the Securities Act and is acquiring the Certificates for its own
institutional account or for the account of a qualified institutional buyer
or an institutional accredited investor.
(ii) It understands that the Certificates have been offered in a
transaction not involving any public offering within the meaning of the
Securities Act, and that, if in the future it decides to resell, pledge or
otherwise transfer any Certificates, such Certificates may be resold,
pledged or transferred only (a) to a person whom the seller reasonably
believes is a qualified institutional buyer (as defined in Rule 144A under
the Securities Act) that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given that the resale,
pledge or transfer is being made in reliance on Rule 144A, (b) pursuant to
an effective registration statement under the Securities Act or (c) in
reliance on another exemption under the Securities Act.
(iii) It understands that the Certificates will bear a legend
substantially to the following effect:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES THAT THIS SECURITY MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON WHOM THE
TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT, PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, AND SUBJECT TO THE
RECEIPT BY THE CERTIFICATE REGISTRAR AND THE DEPOSITOR OF A TRANSFEREE
CERTIFICATE, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (3) IN RELIANCE ON ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUBJECT TO THE
RECEIPT BY THE CERTIFICATE REGISTRAR AND THE DEPOSITOR, OF A
CERTIFICATION OF THE TRANSFEREE (SATISFACTORY TO THE CERTIFICATE
REGISTRAR AND THE DEPOSITOR) AND AN OPINION OF COUNSEL (SATISFACTORY
TO THE CERTIFICATE ▇▇▇▇▇▇▇▇▇
▇▇
AND THE DEPOSITOR) TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND IN
COMPLIANCE WITH THE TRANSFER REQUIREMENTS SET FORTH IN SECTION 3.4 OF
THE TRUST AGREEMENT.
IN NO EVENT SHALL THIS SECURITY BE TRANSFERRED TO AN EMPLOYEE
BENEFIT PLAN, TRUST ANNUITY OR ACCOUNT SUBJECT TO ERISA OR A PLAN
DESCRIBED IN SECTION 4975(E)(1) OF THE CODE, (ANY SUCH PLAN, TRUST OR
ACCOUNT BEING REFERRED TO AS AN "EMPLOYEE PLAN"), A TRUSTEE OF ANY
EMPLOYEE PLAN, OR AN ENTITY, ACCOUNT OR OTHER POOLED INVESTMENT FUND
THE UNDERLYING ASSETS OF WHICH INCLUDE OR ARE DEEMED TO INCLUDE
EMPLOYEE PLAN ASSETS BY REASON OF AN EMPLOYEE PLAN'S INVESTMENT IN THE
ENTITY, ACCOUNT OR OTHER POOLED INVESTMENT FUND. INCLUDED WITHIN THE
DEFINITION OF "EMPLOYEE PLANS" ARE, WITHOUT LIMITATION, ▇▇▇▇▇ (HR-10)
PLANS, IRA's (INDIVIDUAL RETIREMENT ACCOUNTS OR ANNUITIES) AND OTHER
EMPLOYEE BENEFIT PLANS, SUBJECT TO SECTION 406 OF ERISA OR SECTION
4975 OF THE CODE.
(iv) It has not acquired the Certificates with the assets of an
Employee Plan.
(f) Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to Section 3.8, the Owner Trustee shall
execute, authenticate and deliver (or shall cause its authenticating agent to
authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Certificates in authorized denominations of a like
class and aggregate Certificate Balance dated the date of authentication by the
Owner Trustee or any authenticating agent. At the option of a Holder,
Certificates may be exchanged for other Certificates of the same class in
authorized denominations of a like aggregate Certificate Balance upon surrender
of the Certificates to be exchanged at the office or agency maintained pursuant
to Section 3.8.
(g) Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed by
the Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Certificate Registrar, which requirements include membership
or participation in the Securities Transfer Agent's Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act. Each Certificate surrendered for registration
of transfer or exchange shall be
14
canceled and subsequently disposed of by the Owner Trustee in accordance with
its customary practice.
(h) No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate shall be surrendered to the Certificate Registrar, or if
the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar, the Owner Trustee and (unless an Insurer Default
shall have occurred and be continuing) the Insurer, such security or indemnity
as may be required by them to save each of them harmless, then in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee, or
the Owner Trustee's authenticating agent, shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like class, tenor and denomination. In
connection with the issuance of any new Certificate under this Section, the
Owner Trustee or the Certificate Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Certificate issued pursuant to this Section
shall constitute conclusive evidence of an ownership interest in the Trust, as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 3.6. Persons Deemed Certificateholders. Every Person by virtue of
becoming a Certificateholder in accordance with this Agreement and the rules and
regulations of the Clearing Agency shall be deemed to be bound by the terms of
this Agreement. Prior to due presentation of a Certificate for registration of
transfer, the Owner Trustee, the Certificate Registrar and the Insurer and any
agent of the Owner Trustee, the Certificate Registrar and the Insurer, may treat
the Person in whose name any Certificate shall be registered in the Certificate
Register as the owner of such Certificate for the purpose of receiving
distributions pursuant to the Sale and Servicing Agreement and for all other
purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar or
the Insurer nor any agent of the Owner Trustee, the Certificate Registrar or the
Insurer shall be bound by any notice to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and Addresses. The
Certificate Registrar shall furnish or cause to be furnished to the Servicer,
the Depositor or (unless an Insurer Default shall have occurred and be
continuing) the Insurer, within 15 days after receipt by the Certificate
Registrar of a request therefor from such Person in writing, a list, of the
names and addresses of the Certificateholders as of the most recent Record Date.
If three or more Holders of Certificates or one or more Holders of Certificates
evidencing not less than 25% of the Certificate Balance then outstanding apply
in writing to the Certificate Registrar, and such application states that the
applicants desire to communicate with other
15
Certificateholders with respect to their rights under this Agreement or under
the Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Certificate
Registrar shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Each Holder, by receiving and holding a
Certificate or a beneficial interest therein, shall be deemed to have agreed not
to hold any of the Depositor, the Servicer, the Owner Trustee, the Certificate
Registrar or the Insurer or any agent thereof accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 3.8. Maintenance of Office or Agency. The Trust shall maintain in
New York, an office or offices or agency or agencies where Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trust in respect of the Certificates and the Basic
Documents may be served. The Trust initially designates Bankers Trust Company at
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as its principal corporate
trust office for such purposes. The Owner Trustee shall give prompt written
notice to the Depositor, the Certificateholders and (unless an Insurer Default
shall have occurred and be continuing) the Insurer of any change in the location
of the Certificate Register or any such office or agency.
SECTION 3.9. ERISA Restrictions. The Certificates may not be acquired by or
for the account of (i) an employee benefit plan (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that
is subject to the provisions of Title I of ERISA, (ii) a plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended, or (iii)
any entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding its
ownership interest in its Certificate, the Holder thereof shall be deemed to
have represented and warranted that it is not a Benefit Plan.
ARTICLE IV.
Voting Rights and Other Actions
SECTION 4.1. Prior Notice to Holders with Respect to Certain Matters. With
respect to the following matters, the Owner Trustee shall not take action unless
at least 30 days before the taking of such action, the Owner Trustee shall have
notified the Certificateholders in writing of the proposed action and the
Certificateholders shall not have notified the Owner Trustee in writing prior to
the 30th day after such notice is given that such Certificateholders have
withheld consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business
Trust Statute or
16
unless such amendment would not materially and adversely affect the
interests of the Holders);
(b) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the
Certificateholders; or
(d) except pursuant to Section 13.1(b) of the Sale and Servicing
Agreement, the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement
any provision in a manner that would not materially adversely affect the
interests of the Certificateholders.
The Servicer shall notify the Certificateholders in writing of any appointment
of a successor Note Registrar, Trustee or Certificate Registrar within five
Business Days thereof.
SECTION 4.2. Action by Certificateholders with Respect to Certain Matters.
The Owner Trustee shall not have the power, except upon the direction of the
Certificateholders or the Insurer in accordance with the Basic Documents, to (a)
remove the Servicer under the Sale and Servicing Agreement pursuant to Section
10.1 thereof or (b) except as expressly provided in the Basic Documents, sell
the Receivables after the termination of the Indenture. The Owner Trustee shall
take the actions referred to in the preceding sentence only upon written
instructions signed by the Certificateholders and the furnishing of
indemnification satisfactory to the Owner Trustee by the Certificateholders.
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy. The
Owner Trustee shall not have the power to, and shall not, commence any
proceeding or other actions contemplated by Section 2.12(d) relating to the
Trust without the prior written consent of the Insurer (unless an Insurer
Default shall have occurred and be continuing) and the unanimous prior approval
of all Certificateholders and the delivery to the Owner Trustee by each such
Certificateholder of a certificate signed by such Certificateholder, certifying
that such Certificateholder reasonably believes that the Trust is insolvent.
SECTION 4.4. Restrictions on Certificateholders' Power. (a) The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.3 nor shall the Owner Trustee be
obligated to follow any such direction, if given.
(b) No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action, or
proceeding in equity or at law upon or under or with respect to this Agreement
or any Basic Document, unless the
17
Certificateholders are the Instructing Party pursuant to Section 6.3 and unless
a Certificateholder previously shall have given to the Owner Trustee a written
notice of default and of the continuance thereof, as provided in this Agreement,
and also unless Certificateholders evidencing not less than 25% of the
Certificate Balance then outstanding shall have made written request upon the
Owner Trustee to institute such action, suit or proceeding in its own name as
Owner Trustee under this Agreement and shall have offered to the Owner Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Owner Trustee, for 30
days after its receipt of such notice, request, and offer of indemnity, shall
have neglected or refused to institute any such action, suit, or proceeding, and
during such 30-day period no request or waiver inconsistent with such written
request has been given to the Owner Trustee pursuant to and in compliance with
this Section or Section 6.3; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Owner Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.
SECTION 4.5. Majority Control. No Certificateholder shall have any right to
vote or in any manner otherwise control the operation and management of the
Trust except as expressly provided in this Agreement. Except as expressly
provided herein, any action that may be taken by the Certificateholders under
this Agreement may be taken by the Holders of Certificates evidencing not less
than a majority of the aggregate Certificate Balance. Except as expressly
provided herein, any written notice of the Certificateholders delivered pursuant
to this Agreement shall be effective if signed by Certificateholders evidencing
not less than a majority of the Certificate Balance at the time of the delivery
of such notice.
SECTION 4.6. Rights of Insurer. Notwithstanding anything to the contrary in
the Basic Documents, without the prior written consent of the Insurer (so long
as no Insurer Default shall have occurred and be continuing), the Owner Trustee
shall not (i) remove the Servicer, (ii) initiate any claim, suit or proceeding
by the Trust or compromise any claim, suit or proceeding brought by or against
the Trust, other than with respect to the enforcement of any Receivable or any
rights of the Trust thereunder, (iii) authorize the merger or consolidation of
the Trust with or into any other business trust or other entity (other than in
accordance with Section 3.10 of the Indenture) or (iv) amend the Certificate of
Trust.
18
ARTICLE V.
Certain Duties
SECTION 5.1. Accounting and Records to the Noteholders, Certificateholders,
the Internal Revenue Service and Others. Subject to Sections 12.1(b)(iii) and
12.1(c) of the Sale and Servicing Agreement, the Depositor shall (a) maintain
(or cause to be maintained) the books of the Trust on a calendar year basis on
the accrual method of accounting, (b) deliver (or cause to be delivered) to each
Certificateholder, as may be required by the Code and applicable Treasury
Regulations, such information, if any, as may be required (including, if
appropriate consistent with the characterization of the Trust pursuant to
Section 2.6, Schedule K-1) to enable each Certificateholder to prepare its
Federal and state income tax returns, (c) file or cause to be filed such tax
returns, if any, relating to the Trust (including, if appropriate consistent
with the characterization of the Trust pursuant to Section 2.6, a partnership
information return on Internal Revenue Service Form 1065), and direct the
Servicer to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization pursuant to Section
2.6 for Federal income and California franchise tax purposes and for purposes of
any other jurisdiction for which the characterization of the Trust is relevant.
In any period in which the Paying Agent receives written notice that the Trust
is not treated solely as a security device in accordance with the provisions of
Section 2.6, the Paying Agent will, in accordance with Section 1446 of the Code
and Rev. Proc. 89-31, 1989- 1 C.B. 895 thereunder, collect or cause to be
collected any withholding tax as described in and in accordance with Section 5.5
with respect to income or distributions to Certificateholders and the
appropriate forms relating thereto. The Depositor shall make all elections
pursuant to this Section. The Depositor shall have the power to sign all tax
information returns filed pursuant to this Section 5.1 and any other returns as
may be required by law, to the extent it is legally entitled to do so. In the
event the Trust is treated as a partnership for federal income tax purposes, the
Depositor shall elect under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Receivables. None
of the Trust, the Depositor nor any Person on behalf of the Trust or the
Depositor shall make the election provided under Section 754 of the Code.
SECTION 5.2. Signature on Returns; Tax Matters Partner. (a) The Depositor
shall sign on behalf of the Trust the tax returns of the Trust, unless
applicable law requires a Certificateholder to sign such documents.
(b) In the event the Trust is treated as a partnership for federal income
tax purposes, the Depositor shall be the "tax matters partner" of the Trust
pursuant to the Code.
SECTION 5.3. Underwriting Agreement. The Servicer is hereby authorized to
execute and deliver the Underwriting Agreement with respect to the Notes and the
Certificates.
19
SECTION 5.4. Trust Accounts. The Owner Trustee, on behalf of the
Certificateholders, shall establish and maintain in the name of the Trust an
Eligible Account (the "Certificate Distribution Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the benefit of
the Trust on behalf of the Certificateholders. The Certificate Distribution
Account shall initially be established with the Bankers Trust Company.
Funds on deposit in the Certificate Distribution Account shall be invested
at the direction of the Servicer in Eligible Investments selected in writing by
the Servicer (pursuant to standing instructions or otherwise). All such Eligible
Investments shall be held by or on behalf of the Trust for the benefit of the
Certificateholders. Other than as permitted by the Rating Agencies and the
Insurer, funds on deposit in the Certificate Distribution Account shall be
invested in Eligible Investments that will mature so that such funds will be
available at the close of business on the Business Day immediately preceding the
following Payment Date. Funds deposited in the Certificate Distribution Account
on the day immediately preceding a Payment Date upon the maturity of any
Eligible Investments are not required to be invested overnight. All Eligible
investments will be held to maturity. All interest, dividends, gains upon sale
and other income from, or earnings on investment of funds in the Certificate
Distribution Account shall be distributed on the next Payment Date pursuant to
Section 5.7 of the Sale and Servicing Agreement and Section 5.5 hereof.
The Trust shall possess all right, title and interest in all funds on
deposit from time to time in the Certificate Distribution Account and in all
proceeds thereof. Except as otherwise provided herein, the Certificate
Distribution Account shall be under the sole dominion and control of the Trust
for the benefit of the Certificateholders. If at any time the Certificate
Distribution Account ceases to be an Eligible Account, the Trust shall within
five Business Days establish a new Certificate Distribution Account as an
Eligible Account and shall transfer any cash and/or any investments to such new
Certificate Distribution Account. The Servicer shall promptly notify the Rating
Agencies of any change in the location of the Certificate Distribution Account.
SECTION 5.5. Application of Funds in Certificate Distribution Account. On
each Payment Date, the Paying Agent shall distribute or cause to be distributed
all amounts on deposit in the Certificate Distribution Account to
Certificateholders in respect of the Certificates to the extent of amounts due
and unpaid on the Certificates for principal and interest in the following
amounts and in the following order of priority:
(a) to the Holders of the Certificates, the Certificateholders'
Interest Distributable Amount; provided that if there are not sufficient
funds in the Certificate Distribution Account to pay the entire amount of
the Certificateholders' Interest Distributable Amount, the amount in the
Certificate Distribution Account shall be applied to the payment of such
interest on the Certificates pro rata on the basis of the amount of accrued
and unpaid interest due on the Certificates;
20
(b) to the Holders of the Certificates, the Certificateholders'
Principal Distributable Amount until the outstanding principal balance of
the Certificates is reduced to zero.
(c) On each Payment Date, the Owner Trustee shall send or cause to be
sent to each Certificateholder the statement provided to the Owner Trustee
by the Servicer pursuant to Section 5.11 of the Sale and Servicing
Agreement on such Payment Date.
(d) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section. The Paying Agent is hereby authorized and
directed to retain or cause to be retained from amounts otherwise
distributable to the Certificateholders sufficient funds for the payment of
any tax that is legally owed by the Trust (but such authorization shall not
prevent the Paying Agent from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law,
pending the outcome of such proceedings). The amount of any withholding tax
imposed with respect to a Certificateholder shall be treated as cash
distributed to such Certificateholder at the time it is withheld by the
Trust and remitted to the appropriate taxing authority. If there is a
possibility that withholding tax is payable with respect to a distribution
(such as a distribution to a non-US Certificateholder), the Paying Agent
may in its sole discretion withhold such amounts in accordance with this
clause (d). In the event that a Certificateholder wishes to apply for a
refund of any such withholding tax, the Paying Agent shall reasonably
cooperate with such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Paying Agent for any
out-of-pocket expenses incurred.
(e) Any funds remaining in the Certificate Distribution Account after
distribution of all amounts specified in this Section and after payment of
all amounts owed to the Owner Trustee hereunder, shall be distributed to
the Seller.
(f) Distributions required to be made to Certificateholders on any
Payment Date shall be made to each Certificateholder of record on the
preceding Record Date either by wire transfer, in immediately available
funds, to the account of such Holder at a bank or other entity having
appropriate facilities therefor, if (i) such Certificateholder shall have
provided to the Certificate Registrar appropriate written instructions at
least five Business Days prior to such Payment Date and such Holder's
certificates in the aggregate evidence a denomination of not less than
$1,000,000 or (ii) such Certificateholder is the Seller, or an Affiliate
thereof, or, if not, by check mailed to such Certificateholder at the
address of such holder appearing in the Certificate Register.
Notwithstanding the foregoing, the final distribution in respect of any
Certificate (whether on the Final Scheduled Payment Date or otherwise) will
be payable only upon presentation and surrender of such Certificate at the
office or agency maintained for that purpose by the Certificate Registrar
pursuant to Section 3.8.
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(g) Subject to Section 5.1 and this Section, monies received by the
Owner Trustee hereunder need not be segregated in any manner except to the
extent required by law and may be deposited under such general conditions
as may be prescribed by law, and the Owner Trustee shall not be liable for
any interest thereon.
ARTICLE VI.
Authority and Duties of Owner Trustee
SECTION 6.1. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is named as a party and
any amendment thereto, in each case, in such form as the Depositor shall approve
as evidenced conclusively by the Owner Trustee's execution thereof, and on
behalf of the Trust, to direct the Trustee to authenticate and deliver Class A-1
Notes in the aggregate principal amount of $55,750,000 and Class A-2 Notes in
the aggregate principal amount of $35,175,000. In addition to the foregoing, the
Owner Trustee is authorized but shall not be obligated, to take all actions
required of the Trust pursuant to the Basic Documents. The Owner Trustee is
further authorized from time to time to take such action as the Instructing
Party recommends with respect to the Basic Documents so long as such activities
are consistent with the terms of the Basic Documents.
SECTION 6.2. General Duties. It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the Sale and Servicing Agreement and to
administer the Trust in the interest of the Holders, subject to the Basic
Documents and in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Servicer has agreed in the Sale and Servicing
Agreement to perform any act or to discharge any duty of the Trust or the Owner
Trustee hereunder or under any Basic Document, and the Owner Trustee shall not
be liable for the default or failure of the Servicer to carry out its
obligations under the Sale and Servicing Agreement.
SECTION 6.3. Action upon Instruction. (a) Subject to Article IV and the
terms of the Spread Account Agreement, the Insurer (so long as an Insurer
Default shall not have occurred and be continuing) or the Certificateholders (if
an Insurer Default shall have occurred and be continuing) (the "Instructing
Party") shall have the exclusive right to direct the actions of the Owner
Trustee in the management of the Trust, so long as such instructions are not
inconsistent with the express terms set forth herein or in any Basic Document.
The Instructing Party shall not instruct the Owner Trustee in a manner
inconsistent with this Agreement or the Basic Documents.
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(b) The Owner Trustee shall not be required to take any action hereunder or
under any Basic Document if the Owner Trustee shall have reasonably determined,
or shall have been advised by counsel, that such action is likely to result in
liability on the part of the Owner Trustee or is contrary to the terms hereof or
of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or any
Basic Document, the Owner Trustee shall promptly give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction received from the Instructing Party, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within ten days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action, not inconsistent with this Agreement or
the Basic Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Owner Trustee is unsure as to the application of
any provision of this Agreement or any Basic Document or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to the Instructing Party
requesting instruction and, to the extent that the Owner Trustee acts or
refrains from acting in good faith in accordance with any such instruction
received, the Owner Trustee shall not be liable, on account of such action or
inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 10 days of such notice (or within such shorter
period of time as reasonably may be specified in such notice or may be necessary
under the circumstances) it may but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Agreement or the Basic
Documents as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any
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public office at any time or to otherwise perfect or maintain the perfection of
any security interest or lien granted to it hereunder or to prepare or file any
United States Securities and Exchange Commission filing for the Trust or to
record this Agreement or any Basic Document.
SECTION 6.5. No Action Except under Basic Documents or Instructions. The
Owner Trustee shall not manage, control, use, sell, dispose of or otherwise deal
with any part of the Owner Trust Estate except (i) in accordance with the powers
granted to and the authority conferred upon the Owner Trustee pursuant to this
Agreement, (ii) in accordance with the Basic Documents and (iii) in accordance
with any document or instruction delivered to the Owner Trustee pursuant to
Section 6.3.
SECTION 6.6. Restrictions. The Owner Trustee shall not take any action (a)
that is inconsistent with the purposes of the Trust set forth in Section 2.3 or
(b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes or for
the purposes of any applicable state tax on corporations. The Certificateholders
shall not direct the Owner Trustee to take action that would violate the
provisions of this Section.
ARTICLE VII.
Concerning the Owner Trustee
SECTION 7.1. Acceptance of Trusts and Duties. The Owner Trustee accepts the
trusts hereby created and agrees to perform its duties hereunder with respect to
such trusts but only upon the terms of this Agreement. The Owner Trustee also
agrees to disburse all moneys actually received by it constituting part of the
Owner Trust Estate upon the terms of the Basic Documents and this Agreement. The
Owner Trustee shall not be answerable or accountable hereunder or under any
Basic Document under any circumstances, except (i) for its own willful
misconduct, bad faith or negligence, (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 7.3 expressly made by the Owner
Trustee, (iii) for liabilities arising from the failure of the Owner Trustee to
perform obligations expressly undertaken by it in the last sentence of Section
6.4 hereof, (iv) for any investments issued by the Owner Trustee or any branch
or affiliate thereof in its commercial capacity or (v) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
made by a Responsible Officer of the Owner Trustee;
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(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of
the Instructing Party, the Servicer or any Certificateholder;
(c) no provision of this Agreement or any Basic Document shall require
the Owner Trustee to expend or risk funds or otherwise incur any financial
liability in the performance of any of its rights or powers hereunder or
under any Basic Document if the Owner Trustee shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution
hereof by the Depositor or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate or for or
in respect of the validity or sufficiency of the Basic Documents, other
than the certificate of authentication on the Certificates, and the Owner
Trustee shall in no event assume or incur any liability, duty or obligation
to the Insurer, Trustee, the Collateral Agent, any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in the
Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Depositor, the Insurer, the Trustee or the Servicer under
any of the Basic Documents or otherwise and the Owner Trustee shall have no
obligation or liability to perform the obligations under this Agreement or
the Basic Documents that are required to be performed by the Depositor
under this Agreement, the Insurer or the Trustee under the Note Policy, by
the Trustee under the Indenture or the Trustee or the Servicer under the
Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of the Instructing Party or any of the Certificateholders, unless
such Instructing Party or Certificateholders have offered to the Owner
Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Owner Trustee therein
or thereby. The right of the Owner Trustee to perform any discretionary act
enumerated in this Agreement or in any Basic Document shall not be
construed as a duty, and the Owner Trustee shall not be answerable for
other than its negligence, bad faith or willful misconduct in the
performance of any such act.
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SECTION 7.2. Furnishing of Documents. The Owner Trustee shall furnish to
the Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to the Owner Trustee
under the Basic Documents.
SECTION 7.3. Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Depositor, the Holders and the Insurer (which
shall have relied on such representations and warranties in issuing the Note
Policy), that:
(a) It is a banking corporation, duly organized and validly existing
in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene
or constitute any default under its charter documents or by-laws.
SECTION 7.4. Reliance; Advice of Counsel. (a) The Owner Trustee shall incur
no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. The Owner Trustee may accept a certified copy of
a resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein, the
Owner Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to the Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the written
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opinion or advice of any such counsel, accountants or other such persons and
according to such opinion not contrary to this Agreement or any Basic Document.
SECTION 7.5. Not Acting in Individual Capacity. Except as provided in this
Article VII, in accepting the trusts hereby created Bankers Trust (Delaware)
acts solely as Owner Trustee hereunder and not in its individual capacity and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.6. Owner Trustee Not Liable for Certificates or Receivables. The
recitals contained herein and in the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates) shall be taken as the
statements of the Depositor and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, of any Basic Document or of the
Certificates (other than the signature and countersignature of the Owner Trustee
on the Certificates) or the Notes, or of any Receivable or related documents.
The Owner Trustee shall at no time have any responsibility or liability for or
with respect to the legality, validity and enforceability of any Receivable, or
the perfection and priority of any security interest created by any Receivable
in any Financed Vehicle or the maintenance of any such perfection and priority,
or for or with respect to the sufficiency of the Owner Trust Estate or its
ability to generate the payments to be distributed to Certificateholders under
this Agreement or the Noteholders under the Indenture, including, without
limitation: the existence, condition and ownership of any Financed Vehicle; the
existence and enforceability of any insurance thereon; the existence and
contents of any Receivable on any computer or other record thereof; the validity
of the assignment of any Receivable to the Trust or of any intervening
assignment; the completeness of any Receivable; the performance or enforcement
of any Receivable; the compliance by the Depositor, the Servicer or any other
Person with any warranty or representation made under any Basic Document or in
any related document or the accuracy of any such warranty or representation or
any action of the Trustee or the Servicer or any subservicer taken in the name
of the Owner Trustee.
SECTION 7.7. Owner Trustee May Own Certificates and Notes. The Owner
Trustee in its individual or any other capacity may become the owner or pledgee
of Certificates or Notes and may deal with the Depositor, the Trustee and the
Servicer in banking transactions with the same rights as it would have if it
were not Owner Trustee.
SECTION 7.8. Payments from Owner Trust Estate. All payments to be made by
the Owner Trustee under this Agreement or any of the Basic Documents to which
the Trust or the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate and only to the extent that the Owner Trust
shall have received income or proceeds from the Owner Trust Estate to make such
payments in accordance with the terms hereof. Bankers Trust (Delaware), or any
successor thereto, in its individual capacity, will not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.
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SECTION 7.9. Doing Business in other Jurisdictions. Notwithstanding
anything herein contained to the contrary, neither Bankers Trust (Delaware) nor
any successor thereto, nor the Owner Trustee shall be required to take any
action in any jurisdiction other than in the State of Delaware if the taking of
such action will, even after the appointment of a co-trustee or separate trustee
in accordance with Section 10.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by Bankers Trust (Delaware) (or any successor
thereto); or (iii) subject Bankers Trust (Delaware) (or any successor thereto)
to personal jurisdiction in any jurisdiction other than the State of Delaware
for causes of action arising from acts unrelated to the consummation of the
transactions by Bankers Trust (Delaware) (or any successor thereto) or the Owner
Trustee, as the case may be, contemplated hereby.
ARTICLE VIII.
Compensation of Owner Trustee
SECTION 8.1. Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive at the direction of the Depositor as compensation for its services
hereunder such fees as have been separately agreed upon before the date hereof
between CPS and the Owner Trustee, and the Owner Trustee shall be entitled to be
reimbursed by the Depositor for its other reasonable expenses hereunder,
including the reasonable compensation expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder and under the Basic Documents.
SECTION 8.2. Indemnification. The Depositor shall be liable as primary
obligor for, and shall indemnify the Owner Trustee and its officers, directors,
successors, assigns, agents and servants (collectively, the "Indemnified
Parties") from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever (collectively, "Expenses") which may at any time be
imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
Basic Documents, the Owner Trust Estate, the administration of the Owner Trust
Estate or the action or inaction of the Owner Trustee hereunder, except only
that the Depositor shall not be liable for or required to indemnify the Owner
Trustee from and against Expenses arising or resulting from any of the matters
described in the third sentence of Section 7.1. The indemnities contained in
this Section 8.2 and the rights under Section 8.1 shall survive the resignation
or termination of the Owner Trustee or the termination of this Agreement.
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SECTION 8.3. Payments to the Owner Trustee. Any amounts paid to the Owner
Trustee pursuant to this Article VIII shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment.
SECTION 8.4. Non-recourse Obligations. Notwithstanding anything in this
Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of any Certificateholder.
ARTICLE IX.
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement. (a) This Agreement and the
Trust shall terminate and be of no further force or effect upon the latest of
(i) the maturity or other liquidation of the last Receivable (including the
purchase by the Servicer at its option of the corpus of the Trust as described
in Section 11.1 of the Sale and Servicing Agreement) and the subsequent
distribution of amounts in respect of such Receivables as provided in the Basic
Documents, or (ii) the payment to Certificateholders of all amounts required to
be paid to them pursuant to this Agreement and the Sale and Servicing Agreement
and the payment to the Insurer of all amounts payable or reimbursable to it
pursuant to the Sale and Servicing Agreement; provided, however, that the rights
to indemnification under Section 8.2 and the rights under Section 8.1 shall
survive the termination of the Trust. The Servicer shall promptly notify the
Owner Trustee and the Insurer of any prospective termination pursuant to this
Section 9.1. The bankruptcy, liquidation, dissolution, death or incapacity of
any Certificateholder shall not (x) operate to terminate this Agreement or the
Trust, nor (y) entitle such Certificateholder's legal representatives or heirs
to claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or Owner Trust Estate
nor (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) Except as provided in clause (a), neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which the Certificateholders shall surrender their Certificates to the
Paying Agent for payment of the final distribution and cancellation, shall be
given by the Paying Agent by letter to Certificateholders mailed within five
Business Days of receipt of notice of such termination from the Servicer given
pursuant to Section 11.1(c) of the Sale and Servicing Agreement, stating (i) the
Payment Date upon or with respect to which final payment of the Certificates
shall be made upon presentation and surrender of the Certificates at the office
of the Paying Agent therein designated (ii) the amount of any such final payment
and (iii) that the Record
29
Date otherwise applicable to such Payment Date is not applicable, payments being
made only upon presentation and surrender of the Certificates at the office of
the Paying Agent therein specified. The Paying Agent shall give such notice to
the Certificate Registrar (if other than the Paying Agent) at the time such
notice is given to Certificateholders. Upon presentation and surrender of the
Certificates, if any, the Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Payment Date pursuant to
Section 5.7 of the Sale and Servicing Agreement and Section 5.5 hereof.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Paying Agent shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, the Paying Agent may take appropriate steps, or
may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement. Any funds remaining in the Trust after exhaustion of
such remedies shall be distributed, subject to applicable escheat laws, by the
Paying Agent to the Depositor and Holders shall look solely to the Depositor for
payment.
(d) Any funds remaining in the Trust after funds for final distribution
have been distributed or set aside for distribution and all amounts owed to the
Owner Trustee pursuant to this Agreement have been paid shall be distributed by
the Paying Agent to the Depositor.
(e) Upon the winding up of the Trust and its termination, the Owner Trustee
shall cause the Certificate of Trust to be canceled by filing a certificate of
cancellation presented to the Owner Trustee in execution form by the Servicer
with the Secretary of State in accordance with the provisions of Section 3810 of
the Business Trust Statute.
ARTICLE X.
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.1. Eligibility Requirements for Owner Trustee. The Owner Trustee
shall at all times be a corporation (i) satisfying the provisions of Section
3807(a) of the Business Trust Statute; (ii) authorized to exercise corporate
trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; and (iv) acceptable to the Insurer in its sole discretion, so long
as an Insurer Default shall not have occurred and be continuing. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section 10.1, 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.
30
In case at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of this Section 10.1, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 10.2.
SECTION 10.2. Resignation or Removal of Owner Trustee. The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Depositor, the Insurer and the Servicer.
Upon receiving such notice of resignation, the Depositor shall promptly appoint
a successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee, provided that the Depositor shall have received written
confirmation from each of the Rating Agencies that the proposed appointment will
not result in an increased capital charge to the Insurer by either of the Rating
Agencies. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Insurer may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 10.1 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Owner Trustee shall be
legally unable to act or shall be adjudged bankrupt or insolvent, or a receiver
of the Owner Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Owner Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor with the consent of the Insurer (so long as an Insurer Default shall
not have occurred and be continuing) may remove the Owner Trustee. If the
Depositor shall remove the Owner Trustee under the authority of the immediately
preceding sentence, the Depositor shall promptly appoint a successor Owner
Trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the outgoing Owner Trustee so removed, one copy to the Insurer
and one copy to the successor Owner Trustee and payment of all fees owed to the
outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section 10.2
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.3 and payment of all fees and expenses owed
to the outgoing Owner Trustee. The Depositor shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Depositor, the Servicer, the Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers,
31
duties and obligations of its predecessor under this Agreement, with like effect
as if originally named as Owner Trustee. The predecessor Owner Trustee shall
upon payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Depositor and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Certificateholders, the Trustee, the Noteholders and the Rating
Agencies. If the Servicer shall fail to mail such notice within 10 days after
acceptance of appointment by the successor Owner Trustee, the successor Owner
Trustee shall cause such notice to be mailed at the expense of the Servicer.
SECTION 10.4. Merger or Consolidation of Owner Trustee. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided
such corporation shall be eligible pursuant to Section 10.1, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided
further that the Owner Trustee shall mail notice of such merger or consolidation
to the Rating Agencies.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Servicer and the Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Owner Trustee and the Insurer to act as co-trustee, jointly with the Owner
Trustee, or separate trustee or separate trustees, of all or any part of the
owner Trust Estate, and to vest in such Person, in such capacity, such title to
the Trust, or any part thereof, and, subject to the other provisions of this
Section, such powers, duties, obligations, rights and trusts as the Servicer and
the Owner Trustee may consider necessary or desirable. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request so to do, the Owner Trustee subject, unless an Insurer Default shall
have occurred and be continuing, to the approval of the Insurer (which approval
shall not be unreasonably withheld) shall have the power to make such
appointment. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee
32
pursuant to Section 10.1 and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not authorized
to act separately without the Owner Trustee joining in such act), except to
the extent that under any law of any jurisdiction in which any particular
act or acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
or any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
(iii) the Servicer and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article X. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Owner Trustee or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Owner Trustee. Each such instrument shall be filed with the Owner Trustee and a
copy thereof given to the Servicer and the Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee, its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
33
ARTICLE XI.
Miscellaneous
SECTION 11.1. Supplements and Amendments. (a) This Agreement may be amended
by the Depositor and the Owner Trustee, with the prior written consent of the
Insurer (so long as an Insurer Default shall not have occurred and be
continuing) and with prior written notice to the Rating Agencies, without the
consent of any of the Noteholders or the Certificateholders, (i) to cure any
ambiguity or defect or (ii) to correct, supplement or modify any provisions in
this Agreement; provided, however, that such action shall not, as evidenced by
an Opinion of Counsel which may be based upon a certificate of the Servicer,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder.
(b) This Agreement may also be amended from time to time, with the prior
written consent of the Insurer (so long as an Insurer Default shall not have
occurred and be continuing) by the Depositor and the Owner Trustee, with prior
written notice to the Rating Agencies, to the extent such amendment materially
and adversely affects the interests of the Noteholders, with the consent of the
Noteholders evidencing not less than a majority of the aggregate outstanding
principal amount of the Notes and, the consent of the Certificateholders
evidencing not less than a majority by aggregate Certificate Balance (which
consent of any Holder of a Certificate or Note given pursuant to this Section or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Holder and on all future Holders of such Certificate or Note and
of any Certificate or Note issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
the Certificate or Note) for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that, subject to the express rights of the Insurer under the
Basic Documents, no such amendment shall (a) increase or reduce in any manner
the amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made for the benefit
of the Noteholders or the Certificateholders or (b) reduce the aforesaid
percentage of the aggregate outstanding principal amount of the Notes and the
Certificate Balance required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes and Holders of all
outstanding Certificates.
Promptly after the execution of any such amendment or consent, the Servicer
shall furnish written notification of the substance of such amendment or consent
to each Certificateholder, the Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Certificateholders, the
Noteholders or the Trustee pursuant to this Section to approve the particular
form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of Certificateholders provided for in this
Agreement or in any other Basic Document) and of evidencing the authorization of
the
34
execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe. Promptly after the execution of
any amendment to the Certificate of Trust, the Owner Trustee shall cause the
filing of such amendment with the Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 11.2. No Legal Title to Owner Trust Estate in Certificateholders.
The Certificateholders shall not have legal title to any part of the Owner Trust
Estate. The Certificateholders shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Article IX. No transfer, by operation of law or otherwise, of any right, title
or interest of the Certificateholders to and in their ownership interest in the
Owner Trust Estate shall operate to terminate this Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of the Owner Trust Estate.
SECTION 11.3. Limitations on Rights of Others. Except for Section 2.7, the
provisions of this Agreement are solely for the benefit of the Owner Trustee,
the Depositor, the Certificateholders, the Servicer and, to the extent expressly
provided herein, the Insurer, the Trustee and the Noteholders, and nothing in
this Agreement, whether express or implied, shall be construed to give to any
other Person any legal or equitable right, remedy or claim in the Owner Trust
Estate or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.4. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed first class mail or certified mail, in each case return receipt
requested, and shall be deemed to have been duly given upon receipt, if to the
Owner Trustee, addressed to the Corporate Trust Office; if to the Depositor,
addressed to CPS Receivables Corp., 2 ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; if to the
Insurer, addressed to Financial Security Assurance Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Senior Vice President Surveillance (Telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇); (in each case in which notice or other communication to the
Insurer refers to an Event of Default, a claim on the Note Policy or with
respect to which failure on the part of the Insurer to respond shall be deemed
to constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and
the Head- Financial Guaranty Group "URGENT MATERIAL ENCLOSED"); or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party.
35
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Certificateholder receives such notice.
SECTION 11.5. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.6. Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7. Assignments; Insurer. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns. Upon issuance of the Note Policy, this
Agreement shall also inure to the benefit of the Insurer for so long as an
Insurer Default shall not have occurred and be continuing. Without limiting the
generality of the foregoing, all covenants and agreements in this Agreement
which confer rights upon the Insurer shall be for the benefit of and run
directly to the Insurer, and the Insurer shall be entitled to rely on and
enforce such covenants, subject, however, to the limitations on such rights
provided in this Agreement and the Basic Documents. The Insurer may disclaim any
of its rights and powers under this Agreement (but not its duties and
obligations under the Policies) upon delivery of a written notice to the Owner
Trustee.
SECTION 11.8. No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder, by accepting a Certificate, and the Trustee and each
Noteholder by accepting the benefits of this Agreement, hereby covenants and
agrees that it will not at any time institute against the Depositor, or join in
any institution against the Depositor of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Certificates, the Notes, this Agreement or any
of the Basic Documents.
SECTION 11.9. No Recourse. Each Certificateholder, by accepting a
Certificate, acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Depositor, the Servicer, the Depositor, the Owner Trustee,
the Trustee, the Insurer or any Affiliate thereof and no recourse may be had
against such parties or their assets, except as may be expressly set forth or
contemplated in this Agreement, the Certificates or the Basic Documents.
36
SECTION 11.10. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 11.11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.12. Servicer. The Servicer is authorized to prepare, or cause to
be prepared, execute and deliver on behalf of the Trust all such documents,
reports, filings, instruments, certificates and opinions as it shall be the duty
of the Trust or Owner Trustee to prepare, file or deliver pursuant to the Basic
Documents. Upon written request, the Owner Trustee shall execute and deliver to
the Servicer a limited power of attorney appointing the Servicer the Trust's
agent and attorney-in-fact to prepare, or cause to be prepared, execute and
deliver all such documents, reports, filings, instruments, certificates and
opinions.
ARTICLE XII.
Amendment and Restatement
SECTION 12.1. Amendment and Restatement. The parties hereby agree that this
Amended and Restated Trust Agreement replaces and supersedes the Original
Agreement.
37
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed by their respective officers hereunto duly authorized as of the
day and year first above written.
BANKERS TRUST (DELAWARE), as
Owner Trustee
By:________________________
Name:
Title:
CPS RECEIVABLES CORP., as
Depositor
By:________________________
Name:
Title:
38
EXHIBIT A
NUMBER Initial Certificate Balance:
R- $______________
SEE REVERSE FOR CERTAIN DEFINITIONS
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES THAT THIS SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY
(1) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT, PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, AND SUBJECT TO THE RECEIPT BY THE CERTIFICATE REGISTRAR
AND THE DEPOSITOR OF A TRANSFEREE CERTIFICATE, (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (3) IN RELIANCE ON ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUBJECT
TO THE RECEIPT BY THE CERTIFICATE REGISTRAR AND THE DEPOSITOR, OF A
CERTIFICATION OF THE TRANSFEREE (SATISFACTORY TO THE CERTIFICATE REGISTRAR AND
THE DEPOSITOR) AND AN OPINION OF COUNSEL (SATISFACTORY TO THE CERTIFICATE
REGISTRAR AND THE DEPOSITOR) TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND IN COMPLIANCE WITH THE
TRANSFER REQUIREMENTS SET FORTH IN SECTION 3.4 OF THE TRUST AGREEMENT.
IN NO EVENT SHALL THIS SECURITY BE TRANSFERRED TO AN EMPLOYEE BENEFIT PLAN,
TRUST ANNUITY OR ACCOUNT SUBJECT TO ERISA OR A PLAN DESCRIBED IN SECTION
4975(E)(1) OF THE CODE, (ANY SUCH PLAN, TRUST OR ACCOUNT BEING REFERRED TO AS AN
"EMPLOYEE PLAN"), A TRUSTEE OF ANY EMPLOYEE PLAN, OR AN ENTITY, ACCOUNT OR OTHER
POOLED INVESTMENT FUND THE UNDERLYING ASSETS OF WHICH INCLUDE OR ARE DEEMED TO
INCLUDE EMPLOYEE PLAN ASSETS BY REASON OF AN EMPLOYEE PLAN'S INVESTMENT IN THE
ENTITY, ACCOUNT OR OTHER POOLED INVESTMENT FUND. INCLUDED WITHIN THE DEFINITION
OF "EMPLOYEE PLANS" ARE, WITHOUT LIMITATION, ▇▇▇▇▇ (HR-10) PLANS, IRA's
(INDIVIDUAL RETIREMENT ACCOUNTS OR ANNUITIES) AND OTHER EMPLOYEE BENEFIT PLANS,
SUBJECT TO SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE.
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE IN INSTALLMENTS AS SET
FORTH IN THE TRUST AGREEMENT. ACCORDINGLY,
1
THE OUTSTANDING PRINCIPAL OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
------------------------------
10.55% ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of the
Trust, as defined below, the property of which includes a pool of retail
installment sale contracts secured by new or used automobiles, vans or light
duty trucks and sold to the Trust by CPS Receivables Corp.
(This Certificate does not represent an interest in or obligation of CPS
Receivables Corp. or any of its Affiliates, except to the extent described
below.)
2
THIS CERTIFIES THAT ___________________ is the registered owner of [ ]
Dollars nonassessable, fully-paid, beneficial interest in certain distributions
of CPS Auto Receivables Trust 1997-5 (the "Trust") formed by CPS Receivables
Corp., a California corporation.
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
BANKERS TRUST (DELAWARE) BANKERS TRUST (DELAWARE)
not in its individual not in its individual
capacity but solely or capacity but solely as
as Owner Trustee Owner Trustee
By:_______________________ By: Bankers Trust Company
Authenticating Agent
By:_________________________
Date:_______________________
The Trust was created pursuant to a Trust Agreement dated as of December 2,
1997, between the Depositor and Bankers Trust (Delaware), as Owner Trustee (the
"Owner Trustee") as amended by an amendment, dated as of December 11, 1997,
between the Depositor and the Owner Trustee (the "Trust Agreement"), a summary
of certain of the pertinent provisions of which is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates designated as
"Asset Backed Certificates" (herein called the "Certificates"). Issued under the
Indenture, dated as of August 1, between the Trust and Norwest Bank Minnesota,
National Association, as Trustee and collateral agent, are three classes of
Notes designated as "Class A-1 6.26% Asset Backed Notes" (the "Class A-1 Notes")
and "Class A-2 6.40% Asset Backed Notes" (the "Class A-2 Notes", together with
the Class A-1 Notes, the "Class A Notes" or the "Notes"). This Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the holder of this Certificate by virtue of
the acceptance hereof assents and by which such holder is bound. The property of
the Trust includes a pool of retail installment sale contracts secured by new
and used automobiles, vans or light duty trucks (the "Receivables"), all monies
due thereunder on or after the Initial Cutoff Date, security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof,
proceeds from claims on certain insurance policies and certain other rights
under the Trust Agreement and the Sale and Servicing Agreement, all right, to
and interest of the Depositor in and to the Purchase Agreement dated as of
December 1, 1997 between
3
Consumer Portfolio Services, Inc. and the Depositor, all right to and interest
of the Depositor in and to the Purchase Agreement dated as of December 1, 1997
between Samco Acceptance Corp. and the Depositor, all right to and interest of
the Depositor in and to the Purchase Agreement dated as of December 1, 1997
between Linc Acceptance Company LLC and the Depositor, and all proceeds of the
foregoing.
Under the Trust Agreement, there will be distributed on the 15th day of
each month or, if such 15th day is not a Business Day, the next Business Day
(the "Payment Date"), commencing on January 15, 1998, to the Person in whose
name this Certificate is registered at the close of business on the 10th day of
the calendar month of such Payment Date (the "Record Date") such
Certificateholder's fractional undivided interest in the amount to be
distributed to Certificateholders on such Payment Date.
The holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Sale and Servicing Agreement, the
Indenture and the Trust Agreement, as applicable.
It is the intent of the Depositor, Servicer, and Certificateholders that,
for purposes of Federal income taxes, the Trust will be treated as a partnership
and the Certificateholders (including the Depositor) will be treated as partners
in that partnership. The Depositor and the other Certificateholders by
acceptance of a Certificate, agree to treat, and to take no action inconsistent
with the treatment of, the Certificates for such tax purposes as partnership
interests in the Trust. Each Certificateholder, by its acceptance of a
Certificate, covenants and agrees that such Certificateholder will not at any
time institute against the Trust or the Depositor, or join in any institution
against the Trust or the Depositor of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Certificates, the Notes, the Trust Agreement or
any of the Basic Documents.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Owner Trustee or its agent by wire transfer or check mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Owner Trustee of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency
maintained for the purpose by the Owner Trustee in the Borough of Manhattan, The
City of New York.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
4
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Owner Trustee or its agent, by manual signature,
this Certificate shall not entitle the holder hereof to any benefit under the
Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE IN ACCORDANCE
WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Certificate to be duly executed.
CPS AUTO RECEIVABLES TRUST 1997-5
By: BANKERS TRUST (DELAWARE), not in
its individual capacity, but solely as
Owner Trustee
By: _______________________________
Name:
Title:
Date: ______________________
5
(Reverse of Certificate)
The Certificates do not represent an obligation of, or an interest in the
Servicer, the Depositor, the Owner Trustee or any Affiliates of any of them and
no recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein or in the Trust Agreement, the
Indenture or the Basic Documents. In addition, this Certificate is not
guaranteed by any governmental agency or instrumentality and is limited in right
of payment to certain collections with respect to the Receivables, all as more
specifically set forth herein and in the Sale and Servicing Agreement. A copy of
each of the Sale and Servicing Agreement and the Trust Agreement may be examined
during normal business hours at the principal office of the Depositor, and at
such other places, if any, designated by the Depositor, by any Certificateholder
upon written request.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Owner Trustee with the consent of the holders
of the Notes and the Certificates evidencing not less than a majority of the
outstanding principal balance of the Notes and the Certificate Balance. Any such
consent by the holder of this Certificate shall be conclusive and binding on
such holder and on all future holders of this Certificate and of any Certificate
issued upon the transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent is made upon this Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the holders of any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Owner Trustee in the Borough of Manhattan, The City of New York, accompanied
by a written instrument of transfer in form satisfactory to the Owner Trustee
and the Certificate Registrar duly executed by the holder hereof or such
holder's attorney duly authorized in writing, and thereupon one or more new
Certificates in authorized denominations evidencing the same aggregate interest
in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is Bankers Trust
Company.
Except for Certificates issued to the Depositor, the Certificates are
issuable only as registered Certificates without coupons in denominations of
$1,000 or integral multiples thereof. As provided in the Trust Agreement and
subject to certain limitations therein set forth, Certificates are exchangeable
for new Certificates in authorized denominations evidencing the same aggregate
denomination as requested by the holder surrendering the same. No service charge
will be made for any such registration of transfer or exchange, but the Owner
Trustee or the Certificate Registrar may require payment of a sum sufficient to
cover any tax or governmental charge payable in connection therewith.
6
The Owner Trustee, the Certificate Registrar, the Insurer and any agent of
the Owner Trustee, the Certificate Registrar or the Insurer may treat the person
in whose name this Certificate is registered as the owner hereof for all
purposes, and none of the Owner Trustee, the Certificate Registrar, the Insurer
nor any such agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Trust Agreement and the
Sale and Servicing Agreement and the disposition of all property held as part of
the Trust. The Servicer of the Receivables may at its option purchase all
remaining Receivables from the Trust on or after the last day of any month as of
which the then outstanding Pool Balance is equal to 10% or less of the Original
Pool Balance.
The Certificates may not be acquired by (a) an employee benefit plan (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (b) a plan described in Section 4975(e) (1) of the Code or (c) any
entity whose underlying assets include plan assets by reason of a plan's
investment in the entity (each, a "Benefit Plan"). By accepting and holding this
Certificate, the Holder hereof shall be deemed to have represented and warranted
that it is not a Benefit Plan.
The recitals contained herein shall be taken as the statements of the
Depositor or the Servicer, as the case may be, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Certificate or of any
Receivable or related document.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Owner Trustee or its agent, by manual or facsimile
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
7
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
-------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
-------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________ Attorney to transfer said Certificate on the
books of the Certificate Registrar, with full power of substitution in the
premises.
Dated:
_______________*
Signature
Guaranteed:
_______________*
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Certificate Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
CPS AUTO RECEIVABLES TRUST 1997-5
This Certificate of Trust of CPS Auto Receivables Trust 1997-5 (the
"Trust"), dated as of ___________, 199_, is being duly executed and filed by
_______________________________, a ____________, and ______________, an
individual, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. Code, ss. 3801 et seq.).
1. Name. The name of the business trust formed hereby is CPS Auto
Receivables Trust 1997-5.
2. This Certificate of Trust will be effective ______ __, 199_.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
BANKERS TRUST (DELAWARE),
not in its individual
capacity, but solely as
Owner Trustee of the Trust.
By:____________________________
Name:
Title:
Exhibit C to
Trust Agreement
Transferee Certificate
Pursuant to Section 3.4 of
the Trust Agreement
In connection with the transfer of $________________ aggregate principal
amount of CPS Auto Receivables Trust 1997-5 10.55% Asset Backed Certificates
(the "Transferred Certificates"), __________________________, the undersigned
transferee (the "Transferee"), pursuant to Section 3.4 of the Trust Agreement
(as defined below), hereby notifies the Trustee and the Seller and certifies,
represents and warrants to each of them that it is a "qualified institutional
buyer" (as defined in Rule 144A promulgated under the Securities Act of 1933, as
amended), that it is purchasing such Transferred Certificates for its own
account or the account of a qualified institutional buyer to whom notice has
been given that the transfer is to be made in reliance of Rule 144A, and
acknowledges that it has received such information regarding the Trust and the
Transferred Certificates as it has requested and that it is aware that the
transferor is relying upon the foregoing certification to claim the exemption
from registration provided by Rule 144A and the Transferee represents and
warrants that it has delivered an executed copy of this certificate to the
Trustee and the Seller prior to the transfer of any Transferred Certificates
discussed herein.
In no event shall a Certificate be transferred to an employee benefit plan,
trust annuity or account subject to ERISA or a plan described in Section
4975(e)(1) of the Code (any such plan, trust or account including any ▇▇▇▇▇
(HR-10) plans, individual retirement accounts or annuities and other employee
benefit plans subject to Section 406 of ERISA or Section 4975 of the Code being
referred to herein as an "Employee Plan"), a trustee of any Employee Plan, or an
entity, account or other pooled investment fund, the underlying assets of which
include or are deemed to include Employee Plan assets by reason of an Employee
Plan's investment in the entity, account or other pooled investment fund. The
Seller, Servicer, Trustee and Standby Servicer shall not be responsible for
confirming or otherwise investigating whether a proposed transferee is an
employee benefit plan, trust or account subject to ERISA, or described in
Section 4975(e)(1) of the Code.
Terms used herein and not otherwise defined have the meanings assigned to
them in the Trust Agreement amended and restated as of December 11, 1997,
between CPS Receivables Corp. and Bankers Trust (Delaware), as Owner Trustee.
[TRANSFEREE]
By:____________________________
Name:
Title: