- -----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest Event
Reported): August 27, 1997
MORGAN STANLEY ABS CAPITAL II INC.
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-26581 Not Yet Available
- ------------------------------ ------------ ------------------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1585 Broadway
New York, New York 10036
- ------------------ ----------
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code (212) 761-1817
--------------
- ---------------------------------------------------------------------------
(Former Name or Former Address if Changed Since Last Report)
- ---------------------------------------------------------------------------
Item 5. Other Events
------------
Filing of Transaction Documents and Receivables Information.
- -----------------------------------------------------------
On August 27, 1997, BankBoston Marine Asset Backed Trust 1997-2 (the
"Trust"), a Delaware business trust for which Morgan Stanley ABS Capital II
Inc. (the "Company") acted as depositor, issued Recreational Vehicle Asset
Backed Notes (the "Notes") as follows: Class A-1 Notes in aggregate principal
amount of $75,000,787, Class A-2 Notes in an aggregate principal amount of
$70,750,000, Class A-3 Notes in an aggregate principal amount of $50,000,000,
Class A-4 Notes in an aggregate principal amount of $66,500,000 Class A-5
Notes in an aggregate principal amount of $35,000,000, Class A-6 Notes in an
aggregate principal amount of $24,500,000 and Class A-7 Notes in an aggregate
principal amount of $41,520,000. The Trust also issued Marine Asset Backed
Certificates (the "Certificates") in an aggregate principal amount of
$51,898,000.
The Notes and Certificates are described in the Prospectus and
Prospectus Supplement, both dated August 21, 1997 (collectively, the
"Prospectus"). Capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Prospectus. The Company is herewith filing a
description of the Receivables as of the Closing Date as well as copies of
the Indenture, the Trust Agreement and the Sale and Servicing Agreement
pursuant to which the Notes and Certificates were issued, the Trust was
formed and the Receivables were purchased by the Trust.
Item 7. Financial Statements, Pro Forma Financial
-----------------------------------------
Information and Exhibits.
------------------------
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
99.1 Receivables Information.
99.2 Indenture, dated as of August 25, 1997, between the Trust and the
Indenture Trustee.
99.3 Amended and Restated Trust Agreement, dated as of August 25, 1997,
among the Depositor, the Owner Trustee and the Company.
99.4 Sale and Servicing Agreement, dated as of August 25, 1997, among
the Depositor, the Trust and the Servicer.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MORGAN STANLEY ABS CAPITAL II INC.
By: /s/ Murray C. Stoltz
--------------------------
Name: Murray C. Stoltz
Title: Authorized Signatory
Dated: September 11, 1997
Exhibit Index
-------------
Exhibit Page
- ------- ----
99.1 Receivables Information.
99.2 Indenture, dated as of August 25, 1997, between the Trust
and the Indenture Trustee.
99.3 Amended and Restated Trust Agreement, dated as of
August 25, 1997, among the Depositor, the
Owner Trustee and the Company.
99.4 Sale and Servicing Agreement, dated as of August 25, 1997,
among the Depositor, the Trust and the Servicer.
EXHIBIT 99.1
<TABLE>
<CAPTION>
Percent of
Aggregate Aggregate
Number of Principal Principal
Distribution of Current Balanc Receivables Balance Balance
- -------------------------------- ----------- ------------------ ----------
<S> <C> <C> <C>
1 - 5,000 129 406,223.05 0.10
5,001 - 10,000 454 3,570,297.34 0.86
10,001 - 15,000 657 8,258,996.78 1.99
15,001 - 20,000 604 10,521,601.54 2.53
20,001 - 30,000 1,222 30,413,654.04 7.33
30,001 - 40,000 732 25,453,880.41 6.13
40,001 - 50,000 526 23,468,420.60 5.65
50,001 - 60,000 390 21,500,736.67 5.18
60,001 - 70,000 287 18,641,070.11 4.49
70,001 - 80,000 218 16,329,485.27 3.93
80,001 - 90,000 162 13,777,714.44 3.32
90,001 - 100,000 202 19,284,164.72 4.64
100,001 - 125,000 350 39,291,265.96 9.46
125,001 - 150,000 250 34,204,060.04 8.24
150,001 - 175,000 159 25,701,250.56 6.19
175,001 - 200,000 106 19,829,741.40 4.78
200,001 - 225,000 48 10,198,894.47 2.46
225,001 - 250,000 50 11,971,466.37 2.88
250,001 - 300,000 75 20,787,795.68 5.01
300,001 - 350,000 41 13,380,052.19 3.22
350,001 - 400,000 27 10,249,511.62 2.47
400,001 - 450,000 14 5,985,080.12 1.44
450,001 - 500,000 13 6,225,590.18 1.50
500,001 - 600,000 11 6,087,445.02 1.47
600,001 - 700,000 11 7,030,577.29 1.69
700,001 - 800,000 6 4,401,742.78 1.06
800,001 - 900,000 1 895,385.46 0.22
900,001 - 1,000,000 1 967,631.21 0.23
Greater than 1,000,000 4 6,335,052.13 1.53
- -------------------------------- ------ ------------------ ----------
Total: 6,750 415,168,787.45 100.00
- -------------------------------- ------ ------------------ ----------
</TABLE>
Min: 34.99
Max: 1,991,135.99
Average: 61,506.49
<TABLE>
<CAPTION>
- -------------------------------- ---------- --------------- ----------
Percent of
Aggregate Aggregate
Number of Principal Principal
Distibution of Coupon Receivables Balance Balance
- -------------------------------- ----------- --------------- ----------
<S> <C> <C> <C>
6.501 - 7.000 2 206,166.40 0.05
7.001 - 7.500 14 1,787,199.49 0.43
7.501 - 8.000 326 33,404,755.57 8.05
8.001 - 8.500 1,120 133,885,348.21 32.25
8.501 - 9.000 1,676 122,308,354.97 29.46
9.001 - 9.500 1,438 65,828,806.26 15.86
9.501 - 10.000 892 32,732,999.84 7.88
10.001 - 10.500 477 11,570,483.12 2.79
10.501 - 11.000 417 8,608,525.25 2.07
11.001 - 11.500 154 2,128,548.63 0.51
11.501 - 12.000 119 1,380,207.30 0.33
Greater than 12.000 115 1,327,392.41 0.32
- -------------------------------- --------- -------------- ---------
Total: 6,750 415,168,787.45 100.00
- -------------------------------- --------- -------------- ---------
</TABLE>
Non Zero Min: 6.990
Max: 16.500
Non Zero Weighted Average: 8.905
<TABLE>
<CAPTION>
- -------------------------------- ---------- --------------- ----------
Percent of
Aggregate Aggregate
Number of Principal Principal
Distibution of Remaining Term Receivables Balance Balance
- -------------------------------- ----------- --------------- ----------
<S> <C> <C> <C>
0 1 150.02 0.00
1 - 12 23 281,735.21 0.07
13 - 24 36 272,272.01 0.07
25 - 36 108 952,979.22 0.23
37 - 48 150 1,812,481.62 0.44
49 - 60 183 2,903,143.27 0.70
61 - 72 185 2,990,764.77 0.72
73 - 84 297 5,983,897.17 1.44
85 - 96 454 9,539,196.68 2.30
97 - 108 430 11,001,428.65 2.65
109 - 120 485 12,779,604.07 3.08
121 - 132 306 8,602,731.99 2.07
133 - 144 320 14,122,258.90 3.40
145 - 156 920 50,570,875.61 12.18
157 - 168 1,195 70,618,301.25 17.01
169 - 180 793 56,092,068.45 13.51
181 - 192 4 628,380.84 0.15
193 - 204 15 2,385,526.40 0.57
205 - 216 174 28,197,793.69 6.79
217 - 228 300 57,068,366.59 13.75
229 - 240 371 78,364,831.04 18.88
- -------------------------------- ------ -------------- ------
Total: 6,750 415,168,787.45 100.00
- -------------------------------- ------ -------------- ------
</TABLE>
Min: 0
Max: 238
Weighted Average: 178
<TABLE>
<CAPTION>
- -------------------------------- ---------- --------------- ----------
Percent of
Aggregate Aggregate
Number of Principal Principal
Distibution of Months of Seas Receivables Balance Balance
- -------------------------------- ----------- --------------- ----------
<S> <C> <C> <C>
1 - 6 1,202 96,837,987.51 23.32
7 - 12 974 74,052,534.86 17.84
13 - 18 1,678 99,568,552.05 23.98
19 - 24 900 51,365,664.88 12.37
25 - 30 1,212 57,282,586.43 13.80
31 - 36 415 21,972,476.32 5.29
37 - 42 236 7,181,853.96 1.73
43 - 48 123 6,438,046.45 1.55
49 - 54 10 469,084.99 0.11
- -------------------------------- ------ -------------- -------
Total: 6,750 415,168,787.45 100.00
- -------------------------------- ------ -------------- -------
</TABLE>
Min: 1
Max: 50
Weighted Average: 16
<TABLE>
<CAPTION>
- -------------------------------- ---------- --------------- ----------
Percent of
Aggregate Aggregate
Number of Principal Principal
Distibution of Years of Origi Receivables Balance Balance
- -------------------------------- ----------- --------------- ----------
<S> <C> <C> <C>
1993 116 6,119,202.23 1.47
1994 622 27,068,878.84 6.52
1995 2,057 103,811,954.27 25.00
1996 2,648 168,157,778.94 40.50
1997 1,307 110,010,973.17 26.50
- -------------------------------- ------ -------------- -------
Total: 6,750 415,168,787.45 100.00
- -------------------------------- ------ -------------- -------
</TABLE>
Min: 1993-06-15
Max: 1997-06-13
Wgt Avg: 1996-04-14
<TABLE>
<CAPTION>
- -------------------------- ---------- ------------------ ----------
Percent of
Aggregate Aggregate
Number of Principal Principal
Geographic Concentration Receivables Balance Balance
- -------------------------- ----------- ---------------- ----------
<S> <C> <C> <C>
AK 17 1,342,251.70 0.32
AL 79 4,117,027.88 0.99
AR 40 1,571,016.58 0.38
AZ 127 5,858,145.58 1.41
CA 1,657 105,565,604.16 25.43
CO 30 2,605,442.32 0.63
CT 334 15,447,160.88 3.72
DC 3 145,435.38 0.04
DE 19 1,642,979.50 0.40
FL 601 45,898,564.65 11.06
GA 76 5,568,528.05 1.34
HI 33 2,597,911.80 0.63
IA 8 382,923.03 0.09
ID 7 426,075.89 0.10
IL 60 2,930,626.73 0.71
IN 20 2,408,816.50 0.58
KS 20 1,189,045.96 0.29
KY 19 2,256,508.84 0.54
LA 65 4,177,213.54 1.01
MA 230 9,709,389.91 2.34
MD 153 4,158,667.89 1.00
ME 37 1,027,351.75 0.25
MI 25 1,865,901.63 0.45
MN 19 2,201,903.14 0.53
MO 62 3,598,358.38 0.87
MS 32 1,805,792.71 0.43
MT 3 371,709.47 0.09
NC 61 4,134,939.52 1.00
ND 5 286,797.44 0.07
NE 6 352,737.87 0.08
NH 83 2,165,812.83 0.52
NJ 265 14,590,516.48 3.51
NM 35 1,612,129.18 0.39
NV 76 5,471,361.06 1.32
NY 1,073 60,518,933.40 14.58
OH 39 2,517,697.02 0.61
OK 47 4,332,238.04 1.04
OR 35 3,515,447.78 0.85
PA 133 7,480,456.67 1.80
PR 3 461,123.51 0.11
RI 59 3,374,146.55 0.81
SC 47 2,681,483.50 0.65
SD 10 118,684.34 0.03
TN 71 5,159,583.27 1.24
TX 703 49,497,346.48 11.92
UT 18 1,070,964.68 0.26
VA 62 3,172,285.05 0.76
VI 5 1,054,927.23 0.25
VT 11 592,341.30 0.14
WA 106 9,450,591.56 2.28
WI 5 367,548.47 0.09
WV 4 64,794.56 0.02
WY 10 179,675.60 0.04
OTHER 2 73,870.21 0.02
- ---------------------------- ------ -------------- ------
Total: 6,750 415,168,787.45 100.00
- ---------------------------- ------ ------------------ ----------
</TABLE>
Percent of
Aggregate Aggregate
Number of Principal Principal
Adjustment Type Receivables Balance Balance
- -------------------- ----------- ------------------ ----------
Fixed Rate 6,720 393,261,823.19 94.72
Adjustable Rate 30 21,906,964.26 5.28
- -------------------- ------------ ------------------ ----------
Total: 6,750 415,168,787.45 100.00
- -------------------- ------------ ------------------ ----------
Percent of
Aggregate Aggregate
Number of Principal Principal
Index Type Receivables Balance Balance
- ---------------------- ----------- ------------------ ----------
Treasury - 5 Year 27 21,314,602.48 97.30
Libor - 1 Year 3 592,361.78 2.70
- ---------------------- ----------- ------------------ ----------
Total: 30 21,906,964.26 100.00
- ---------------------- ----------- ------------------ ----------
Percent of
Aggregate Aggregate
Number of Principal Principal
Margin Receivables Balance Balance
- -------------- ----------- ------------ -----------
2 2 1,180,498.74 5.39
2.5 20 15,317,840.28 69.92
2.75 4 1,221,106.92 5.57
3 4 4,187,518.32 19.12
- --------------- ----------- -------------- ---------
Total: 30 21,906,964.26 100.00
- --------------- ----------- -------------- ---------
Min: 2.000
Max: 3.000
Wgt Avg: 2.583
<TABLE>
<CAPTION>
Percent of
Aggregate Aggregate
Number of Principal Principal
Next Rate Adjustment Dates Receivables Balance Balance
- -------------------------- ----------- ------------------ ----------
<S> <C> <C> <C>
1998-05 2 465,341.49 2.12
1998-06 1 127,020.29 0.58
2000-11 1 967,631.21 4.42
2000-12 1 516,233.08 2.36
2001-02 1 1,186,971.10 5.42
2001-04 1 546,560.89 2.49
2001-05 2 1,266,795.63 5.78
2001-06 3 2,111,081.59 9.64
2001-08 1 546,183.87 2.49
2001-09 1 510,936.73 2.33
2001-10 2 1,412,726.49 6.45
2001-11 2 1,785,536.33 8.15
2001-12 3 1,938,531.75 8.85
2002-01 2 2,505,814.82 11.44
2002-02 1 1,991,135.99 9.09
2002-03 2 1,236,060.79 5.64
2002-05 3 2,189,312.47 9.99
2002-06 1 603,089.74 2.75
- ---------------------------- ------ ------------------ ----------
Total: 30 21,906,964.26 100.00
- ---------------------------- ------ ------------------ ----------
</TABLE>
EXHIBIT 99.2
INDENTURE
between
BANKBOSTON MARINE ASSET BACKED TRUST 1997-2,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Dated as of August 25, 1997
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act . . . . 2
SECTION 1.03. Rules of Construction . . . . . . . . . . . . . . . . . . 2
ARTICLE II
The Notes
SECTION 2.01. Form . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.02. Execution, Authentication and Delivery . . . . . . . . . . 3
SECTION 2.03. Temporary Notes . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.04. Registration; Registration of Transfer and Exchange . . . 4
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . 6
SECTION 2.06. Persons Deemed Owner . . . . . . . . . . . . . . . . . . . 7
SECTION 2.07. Payment of Principal and Interest; Defaulted
Interest . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.08. Cancellation . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.09. Reserved . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.10. Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.11. Notices to Clearing Agency . . . . . . . . . . . . . . . . 9
SECTION 2.12. Definitive Notes . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.13. Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest . . . . . . . . . . . . 10
SECTION 3.02. Maintenance of Office or Agency . . . . . . . . . . . . . 11
SECTION 3.03. Money for Payments To Be Held in Trust . . . . . . . . . . 11
SECTION 3.04. Existence . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.05. Protection of Trust Estate . . . . . . . . . . . . . . . . 13
SECTION 3.06. Opinions as to Trust Estate . . . . . . . . . . . . . . . 13
SECTION 3.07. Performance of Obligations; Servicing of
Receivables . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.08. Negative Covenants . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.09. Annual Statement as to Compliance . . . . . . . . . . . . 16
SECTION 3.10. Issuer May Consolidate, etc. Only on
Certain Terms . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.11. Successor or Transferee . . . . . . . . . . . . . . . . . 18
SECTION 3.12. No Other Business . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.13. No Borrowing . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.14. Servicer's Obligations . . . . . . . . . . . . . . . . . . 19
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities . . . . 19
SECTION 3.16. Capital Expenditures . . . . . . . . . . . . . . . . . . . 19
SECTION 3.17. (Reserved) . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.18. Restricted Payments . . . . . . . . . . . . . . . . . . . 19
SECTION 3.19. Notice of Events of Default . . . . . . . . . . . . . . . 20
SECTION 3.20. Further Instruments and Acts . . . . . . . . . . . . . . . 20
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture . . . . . . . . . 20
SECTION 4.02. Application of Trust Money . . . . . . . . . . . . . . . . 21
SECTION 4.03. Repayment of Moneys Held by Paying Agent . . . . . . . . . 21
ARTICLE V
Remedies
SECTION 5.01. Events of Default . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment . . . . 23
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee . . . . . . . . . . . . . . . . . . . 24
SECTION 5.04. Remedies; Priorities . . . . . . . . . . . . . . . . . . . 26
SECTION 5.05. Optional Preservation of the Receivables . . . . . . . . . 27
SECTION 5.06. Limitation of Suits . . . . . . . . . . . . . . . . . . . 28
SECTION 5.07. Unconditional Rights of Noteholders To Receive
Principal and Interest . . . . . . . . . . . . . . . . . . 29
SECTION 5.08. Restoration of Rights and Remedies . . . . . . . . . . . . 29
SECTION 5.09. Rights and Remedies Cumulative . . . . . . . . . . . . . . 29
SECTION 5.10. Delay or Omission Not a Waiver . . . . . . . . . . . . . . 29
SECTION 5.11. Control by Noteholders . . . . . . . . . . . . . . . . . . 29
SECTION 5.12. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 30
SECTION 5.13. Undertaking for Costs . . . . . . . . . . . . . . . . . . 30
SECTION 5.14. Waiver of Stay or Extension Laws . . . . . . . . . . . . . 31
SECTION 5.15. Action on Notes . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.16. Performance and Enforcement of Certain Obligations . . . . 31
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee . . . . . . . . . . . . . . . 32
SECTION 6.02. Rights of Indenture Trustee . . . . . . . . . . . . . . . 33
SECTION 6.03. Individual Rights of Indenture Trustee . . . . . . . . . . 34
SECTION 6.04. Indenture Trustee's Disclaimer . . . . . . . . . . . . . . 34
SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . 35
SECTION 6.06. Reports by Indenture Trustee to Holders . . . . . . . . . 35
SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . 35
SECTION 6.08. Replacement of Indenture Trustee . . . . . . . . . . . . . 35
SECTION 6.09. Successor Indenture Trustee by Merger . . . . . . . . . . 37
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee . . . . . . . . . . . . . . . . . . . . 37
SECTION 6.11. Eligibility; Disqualification . . . . . . . . . . . . . . 38
SECTION 6.12. Preferential Collection of Claims Against Issuer . . . . . 39
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders . . . . . . . . . . . . . . . . . 39
SECTION 7.02. Preservation of Information; Communications to
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.03. Reports by Issuer . . . . . . . . . . . . . . . . . . . . 39
SECTION 7.04. Reports by Indenture Trustee . . . . . . . . . . . . . . . 40
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money . . . . . . . . . . . . . . . . . . . 40
SECTION 8.02. Trust Accounts . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.03. General Provisions Regarding Accounts . . . . . . . . . . 43
SECTION 8.04. Release of Trust Estate . . . . . . . . . . . . . . . . . 44
SECTION 8.05. Opinion of Counsel . . . . . . . . . . . . . . . . . . . . 44
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9.02. Supplemental Indentures with Consent of Noteholders . . . 46
SECTION 9.03. Execution of Supplemental Indentures . . . . . . . . . . . 47
SECTION 9.04. Effect of Supplemental Indenture . . . . . . . . . . . . . 48
SECTION 9.05. Conformity with Trust Indenture Act . . . . . . . . . . . 48
SECTION 9.06. Reference in Notes to Supplemental Indentures . . . . . . 48
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.02. Form of Redemption Notice . . . . . . . . . . . . . . . . 49
SECTION 10.03. Notes Payable on Redemption Date . . . . . . . . . . . . . 49
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc. . . . . . . . . 50
SECTION 11.02. Form of Documents Delivered to Indenture Trustee . . . . . 52
SECTION 11.03. Acts of Noteholders . . . . . . . . . . . . . . . . . . . 52
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and
Rating Agencies . . . . . . . . . . . . . . . . . . . . . 53
SECTION 11.05. Notices to Noteholders; Waiver . . . . . . . . . . . . . . 54
SECTION 11.06. Alternate Payment and Notice Provisions . . . . . . . . . 54
SECTION 11.07. Conflict with Trust Indenture Act . . . . . . . . . . . . 55
SECTION 11.08. Effect of Headings and Table of Contents . . . . . . . . . 55
SECTION 11.09. Successors and Assigns . . . . . . . . . . . . . . . . . . 55
SECTION 11.10. Separability . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.11. Benefits of Indenture . . . . . . . . . . . . . . . . . . 55
SECTION 11.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.13. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.14. Counterparts . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.15. Recording of Indenture . . . . . . . . . . . . . . . . . . 56
SECTION 11.16. Trust Obligation . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.17. No Petition . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.18. Inspection . . . . . . . . . . . . . . . . . . . . . . . . 57
SCHEDULE A - Schedule of Receivables
EXHIBIT A - Form of Class A Note
EXHIBIT B - Form of Note Depository Agreement
INDENTURE dated as of August 25, 1997, between BANKBOSTON MARINE ASSET
BACKED TRUST 1997-1, a Delaware business trust (the "Issuer"), and THE CHASE
MANHATTAN BANK, a New York banking corporation, as trustee and not in its
individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's Class A-1 Asset
Backed Notes, Class A-2 Asset Backed Notes, Class A-3 Asset Backed Notes,
Class A-4 Asset Backed Notes, Class A-5 Asset Backed Notes, Class A-6 Asset
Backed Notes and Class A-7 Asset Backed Notes (together, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as Indenture Trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to (a) the Receivables and all
moneys received thereon on and after August 25, 1997; (b) the security
interests in the Financed Boats created pursuant to the Receivables and any
other interest of the Issuer in such Financed Boats; (c) any proceeds with
respect to the Receivables under any Insurance Policies; (d) any proceeds
from recourse to Dealers; (e) any Financed Boat acquired in repossession;
(f) the contents of the Receivables Files and all rights, benefits and
proceeds arising therefrom or in connection therewith; (g) all funds on
deposit from time to time in Trust Accounts, and in all investments and
proceeds thereof (including all income thereon except for Investment Earnings
in the Collection Account); (h) the Sale and Servicing Agreement; and (i) all
present and future claims, demands, causes of action and chooses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to payment
of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the
"Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction (subject to
Section 8.02), and to secure compliance with the provisions of this
Indenture, all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders of
the Notes, acknowledges such Grant and accepts the trusts under this
Indenture in accordance with the provisions of this Indenture.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.01. (a) Definitions. Except as otherwise specified herein
or as the context may otherwise require, capitalized terms used herein have
the respective meanings set forth in Appendix A to the Sale and Servicing
Agreement dated as of August 25, 1997, among BankBoston Marine Asset Backed
Trust 1997-2 (the "Issuer"), Morgan Stanley ABS Capital II Inc. (the
"Depositor") and BankBoston, N.A. (the "Servicer").
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular; and
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
ARTICLE II
The Notes
SECTION 2.01. Form. The Notes, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the form set forth
in Exhibit A, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Notes, as evidenced by their execution of the
Notes. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note.
The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such
Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibit A are part of the terms of this Indenture.
SECTION 2.02. Execution, Authentication and Delivery. The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not
hold such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Order authenticate and deliver
Class A-1 Notes for original issue in an aggregate principal amount of
$75,000,787, Class A-2 Notes for original issue in an aggregate principal
amount of $70,750,000, Class A-3 Notes for original issue in an aggregate
principal amount of $50,000,000, Class A-4 Notes for original issue in an
aggregate principal amount of $66,500,000, Class A-5 Notes for original issue
in an aggregate principal amount of $35,000,000, Class A-6 Notes for original
issue in an aggregate principal amount of $24,500,000 and Class A-7 Notes for
original issue in an aggregate principal amount of $41,520,000. The
aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes, Class A-5 Notes, Class A-6 Notes and Class A-7 Notes
outstanding at any time may not exceed such respective amounts except as
provided in Section 2.05.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000
and in integral multiples thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized officers, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated
and delivered hereunder.
SECTION 2.03. Temporary Notes. Pending the preparation of definitive
Notes, the Issuer may execute, and upon receipt of an Issuer Order the
Indenture Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten, mimeographed or otherwise produced, of
the tenor of the definitive Notes in lieu of which they are issued and with
such variations not inconsistent with the terms of this Indenture as the
officers executing such Notes may determine, as evidenced by their execution
of such Notes.
If temporary Notes are issued, the Issuer shall cause definitive Notes
to be prepared without unreasonable delay. After the preparation of
definitive Notes, the temporary Notes shall be exchangeable for definitive
Notes upon surrender of the temporary Notes at the office or agency of the
Issuer to be maintained as provided in Section 3.02, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Notes,
the Issuer shall execute, and the Indenture Trustee shall authenticate and
deliver in exchange therefor, a like principal amount of definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in
all respects be entitled to the same benefits under this Indenture as
definitive Notes.
SECTION 2.04. Registration; Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee initially shall be the "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon
any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties
of Note Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Holders of the Notes and
the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, the Issuer
shall execute, and the Indenture Trustee shall authenticate and the
Noteholder shall obtain from the Indenture Trustee, in the name of the
designated transferee or transferees, one or more new Notes of the same
Class in any authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of
the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, the Notes which the Noteholder making the
exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by,
the Holder thereof or such Holder's attorney duly authorized in writing, with
such signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements may 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 Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Exchange Act.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Notes, other
than exchanges pursuant to Section 2.03 or 9.06 not involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee such
security or indemnity as may be required by it to hold the Issuer and the
Indenture Trustee harmless, then, in the absence of notice to the Issuer, the
Note Registrar or the Indenture Trustee that such Note has been acquired by a
bona fide purchaser, the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note of
the same Class; provided, however, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall
be due and payable, or shall have been called for redemption, instead of
issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the
Issuer and the Indenture Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or
expense incurred by the Issuer or the Indenture Trustee in connection
therewith.
Upon the issuance of any replacement Note under this Section, the Issuer
may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.06. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in
whose name any Note is registered (as of the day of determination except as
provided in Section 2.07) as the owner of such Note for the purpose of
receiving payments of principal of and interest, if any, on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and none
of the Issuer, the Indenture Trustee or any agent of the Issuer or the
Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest.
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes, the Class A-6 Notes and the Class A-7
Notes shall accrue interest at the Class A-1 Interest Rate, the Class A-2
Interest Rate, the Class A-3 Interest Rate, the Class A-4 Interest Rate, the
Class A-5 Interest Rate, the Class A-6 Interest Rate and the Class A-7
Interest Rate, respectively, as set forth in Exhibit A, and such interest
shall be due and payable on each Monthly Payment Date (or in the case of the
Class A-7 Notes on each Quarterly Payment Date) as specified therein, subject
to Section 3.01. Any installment of interest or principal payable on a Note
that is punctually paid or duly provided for by the Issuer on the applicable
Monthly Payment Date shall be paid to the Person in whose name such Note (or
one or more Predecessor Notes) is registered on the Record Date by check
mailed first-class postage prepaid to such Person's address as it appears on
the Note Register on such Record Date, except that, unless Definitive Notes
have been issued pursuant to Section 2.12, with respect to Notes registered
on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee and except for the final installment of principal payable with
respect to such Note on a Monthly Payment Date or on the applicable class
Stated Maturity Date (and except for the Redemption Price for any Note called
for redemption pursuant to Section 10.01) which shall be payable as provided
below. The funds represented by any such checks returned undelivered shall
be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable in installments on each
Monthly Payment Date (or in the case of the Class A-7 Notes on each Quarterly
Payment Date) (as provided in the forms of the Notes set forth in Exhibit A;
provided, however, that the entire unpaid principal amount of each Note shall
be due and payable on the applicable class Stated Maturity Date.
Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable, if not previously paid, if an Event of
Default shall have occurred and be continuing and if the Indenture Trustee or
Holders of the Notes representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable
in the manner provided in Section 5.02. All principal payments on each
Class of Notes shall be made pro rata to the Noteholders of such
Class entitled thereto. The Indenture Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Monthly Payment Date on which the Issuer expects that the final
installment of principal of and interest on such Note will be paid if the
Issuer or the Servicer has notified the Indenture Trustee of such expectation
at least five Business Days prior to such Record Date. Such notice shall be
mailed or transmitted by facsimile prior to such final Monthly Payment Date
and shall specify that such final installment will be payable to the Holder
of record as of the applicable Record Date only upon presentation and
surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment. Notices in
connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.02.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest
to the extent lawful) at the applicable Interest Rate in any lawful manner.
The Issuer may pay such defaulted interest to the persons who are Noteholders
on a subsequent special record date, which date shall be at least five
Business Days prior to the payment date. The Issuer shall fix or cause to be
fixed any such special record date and payment date, and, at least 15 days
before any such special record date, the Issuer shall mail to each Noteholder
and the Indenture Trustee a notice that states the special record date, the
payment date and the amount of defaulted interest to be paid.
SECTION 2.08. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer
may at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the Indenture Trustee. No Notes shall be authenticated
in lieu of or in exchange for any Notes cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Notes may be held or disposed of by the Indenture Trustee in accordance with
its standard retention or disposal policy as in effect at the time unless the
Issuer shall direct by an Issuer Order that they be destroyed or returned to
it; provided, that such Issuer Order is timely and the Notes have not been
previously disposed of by the Indenture Trustee.
SECTION 2.09. Reserved.
SECTION 2.10. Book-Entry Notes. The Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the
nominee of the initial Clearing Agency, and no Note Owner thereof will
receive a definitive Note representing such Note Owner's interest in such
Note, except as provided in Section 2.12. Unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to such Note
Owners pursuant to Section 2.12:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the sole holder of
the Notes, and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(iv) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreement.
Unless and until Definitive Notes are issued pursuant to Section 2.12,
the initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such effect from
Note Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Notes and has delivered such instructions to the Indenture Trustee.
SECTION 2.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to such Note Owners pursuant to
Section 2.12, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to such Note Owners.
SECTION 2.12. Definitive Notes. If (i) the Depositor advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Book-
Entry Notes and the Depositor is unable to locate a qualified successor
within 90 days of the giving of such advice, (ii) the Depositor at its option
advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or (iii) after the occurrence
of an Event of Default or a Servicer Default, Owners of the Book-Entry Notes
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of such Notes advise the Clearing Agency in writing that
the continuation of a book-entry system through the Clearing Agency is no
longer in the best interests of such Note Owners, then the Clearing Agency
shall notify all Note Owners and the Indenture Trustee of the occurrence of
any such event and of the availability of Definitive Notes to Note Owners
requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with
the instructions of the Clearing Agency. None of the Issuer, the Note
Registrar or the Indenture Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Notes, the
Indenture Trustee shall recognize the Holders of the Definitive Notes as
Noteholders.
SECTION 2.13. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for all
purposes including federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. The Issuer, by entering into this Indenture,
and each Noteholder, by its acceptance of a Note (and each Note Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat
the Notes for all purposes including federal, state and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
ARTICLE III
Covenants
SECTION 3.01. Payment of Principal and Interest. The Issuer will duly
and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting
the foregoing, subject to Section 8.02(c), the Issuer will cause to be
distributed all amounts on deposit in the Note Distribution Account on a
Monthly Payment Date deposited therein pursuant to the Sale and Servicing
Agreement (i) for the benefit of the Class A-1 Notes, to the Class A-1
Noteholders, (ii) for the benefit of the Class A-2 Notes, to the Class A-2
Noteholders, (iii) for the benefit of the Class A-3 Notes, to the Class A-3
Noteholders, (iv) for the benefit of the Class A-4 Notes, to the Class A-4
Noteholders, (v) for the benefit of the Class A-5 Notes, to the Class A-5
Noteholders, (vi) for the benefit of the Class A-6 Notes, to the Class A-6
Noteholders and (vii) for the benefit of the Class A-7 Notes, to the
Class A-7 Noteholders (or on any Nonquarterly Payment Date, to the Class A-7
Interest Account or the Class A-7 Principal Account, as applicable). Amounts
properly withheld under the Code by any Person from a payment to any
Noteholder of interest and/or principal shall be considered as having been
paid by the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will
maintain in the Borough of Manhattan, The City of New York, an office or
agency where Notes may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of
the Notes and this Indenture may be served. The Issuer hereby initially
appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Indenture
Trustee of the location, and of any change in the location, of any such
office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Indenture Trustee with the
address thereof, such surrenders, notices and demands may be made or served
at the Corporate Trust Office, and the Issuer hereby appoints the Indenture
Trustee as its agent to receive all such surrenders, notices and demands.
SECTION 3.03. Money for Payments To Be Held in Trust. As provided in
Section 8.02(a) and (b), all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Collection
Account, the Class A-7 Interest Account, the Class A-7 Principal Account and
the Note Distribution Account pursuant to Section 8.02(c) shall be made on
behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and
no amounts so withdrawn from the Collection Account, the Class A-7 Interest
Account, the Class A-7 Principal Account and the Note Distribution Account
for payments of Notes shall be paid over to the Issuer except as provided in
this Section.
On each Monthly Payment Date and Redemption Date, the Issuer shall
deposit or cause to be deposited in the Note Distribution Account an
aggregate sum sufficient to pay the amounts then becoming due under the Notes
(or with respect to the Class A-7 Notes on any Nonquarterly Payment Date, the
amount required to be deposited into the Class A-7 Interest Account and the
Class A-7 Principal Account), such sum to be held in trust for the benefit of
the Persons entitled thereto, and (unless the Paying Agent is the Indenture
Trustee) shall promptly notify the Indenture Trustee of its action or failure
so to act.
The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee an instrument in which such
Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions
of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and pay such sums to such Persons as
herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer
(or any other obligor upon the Notes) of which it has actual knowledge
in the making of any payment required to be made with respect to the
Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required hereby to be met
by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such
trust and be paid to the Issuer on Issuer Request; and the Holder of such
Note shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease; provided, however,
that the Indenture Trustee or such Paying Agent, before being required to
make any such repayment, shall at the expense and direction of the Issuer
cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer. The Indenture Trustee shall also adopt and employ, at
the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice
of such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States
of America, in which case the Issuer will keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and will
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.05. Protection of Trust Estate. The Issuer will from time
to time execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the
purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the rights
of the Indenture Trustee and the Noteholders in such Trust Estate
against the claims of all persons and parties.
The Issuer hereby designates the Indenture Trustee its agent and attorney-in-
fact to execute any financing statement, continuation statement or other
instrument prepared by the Issuer required to be executed pursuant to this
Section 3.05.
SECTION 3.06. Opinions as to Trust Estate. (a) On the Closing Date,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been
taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and
continuation statements, as are necessary to perfect and make effective the
lien and security interest of this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.
(b) On or before September 15, in each calendar year, beginning in
1998, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, filing, re-recording and refiling
of this Indenture, any indentures supplemental hereto and any other requisite
documents and with respect to the execution and filing of any financing
statements and continuation statements as is necessary to maintain the lien
and security interest created by this Indenture and reciting the details of
such action, or stating that in the opinion of such counsel no such action is
necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling
of this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be
required to maintain the lien and security interest of this Indenture until
September 15 in the following calendar year.
SECTION 3.07. Performance of Obligations; Servicing of Receivables.
(a) The Issuer will not take any action and will use its best efforts not to
permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument
or agreement included in the Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement,
except as expressly provided in this Indenture, the Sale and Servicing
Agreement or such other instrument or agreement.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee in an Officer's
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Servicer to assist the Issuer
in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Estate, including
but not limited to filing or causing to be filed all UCC financing statements
and continuation statements required to be filed by the terms of this
Indenture and the Sale and Servicing Agreement in accordance with and within
the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without
the consent of the Indenture Trustee or the Holders of at least a majority of
the Outstanding Amount of the Notes.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default under the Sale and Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect
to such default. If a Servicer Default shall arise from the failure of the
Servicer to perform any of its duties or obligations under the Sale and
Servicing Agreement with respect to the Receivables, the Issuer shall take
all reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to the Servicer of the Servicer's rights and powers pursuant to Section 8.01
of the Sale and Servicing Agreement, the Indenture Trustee shall appoint a
successor servicer (the "Successor Servicer"), and such Successor Servicer
shall accept its appointment by a written assumption in a form acceptable to
the Indenture Trustee. Any Successor Servicer other than the Indenture
Trustee shall (i) be an established financial institution having a net worth
of not less than $100,000,000 and whose regular business includes the
servicing of Contracts and (ii) enter into a servicing agreement with the
Issuer having substantially the same provisions as the provisions of the Sale
and Servicing Agreement applicable to the Bank. If the Indenture Trustee
shall succeed to the Servicer's duties as servicer of the Receivables as
provided herein and in the Sale and Servicing Agreement, it shall do so in
its individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Receivables. In case the Indenture Trustee shall become
successor to the Servicer under the Sale and Servicing Agreement, the
Indenture Trustee shall be entitled to appoint as Servicer any one of its
affiliates, provided that it shall be fully liable for the actions and
omissions of such affiliate in such capacity as Successor Servicer.
(f) (Reserved.)
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without
the prior written consent of the Indenture Trustee or the Holders of at least
a majority in Outstanding Amount of the Notes, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise provided in the Sale and Servicing Agreement)
or the Basic Documents, or waive timely performance or observance by the
Servicer or the Depositor under the Sale and Servicing Agreement; and (ii)
that any such amendment shall not (A) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, distributions that are
required to be made for the benefit of the Noteholders or (B) reduce the
aforesaid percentage of the Notes that is required to consent to any such
amendment, without the consent of the Holders of all the Outstanding Notes.
If any such amendment, modification, supplement or waiver shall be so
consented to by the Indenture Trustee or such Holders, the Issuer agrees,
promptly following a request by the Indenture Trustee to do so, to execute
and deliver, in its own name and at its own expense, such agreements,
instruments, consents and other documents as the Indenture Trustee may deem
necessary or appropriate in the circumstances.
SECTION 3.08. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture, or any other
Basic Document, sell, transfer, exchange or otherwise dispose of any of
the properties or assets of the Issuer, including those included in the
Trust Estate, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations with respect
to the Notes under this Indenture except as may be expressly permitted
hereby, (B) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the proceeds
thereof (other than tax liens, mechanics' liens and other liens that
arise by operation of law, in each case on any of the Financed Boats and
arising solely as a result of an action or omission of the related
Obligor) or (C) permit the lien of this Indenture not to constitute a
valid first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Trust Estate.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee, within 120 days after the end of each
fiscal year of the Issuer (commencing with the fiscal year 1997), an
Officer's Certificate stating, as to the Authorized Officer signing such
Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year and
of its performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year or, if there has been a
default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and
interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted (A) shall be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any State, (B) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agrees by
means of such supplemental indenture that all right, title and interest
so conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agrees to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Notes and
(E) expressly agrees by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power
of, the Issuer under this Indenture with the same effect as if such Person
had been named as the Issuer herein.
(b) Upon a conveyance or transfer of the assets and properties of the
Issuer including the Trust Estate pursuant to Section 3.10(b), (i) the Person
acquiring such assets and properties shall succeed to, and be substituted
for, and may exercise every right and power of, the Issuer under this
Indenture with the same effect as if such Person had been named as the Issuer
herein and (ii) BankBoston Marine Asset Backed Trust 1997-2 will be released
from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately
upon the delivery of written notice to the Indenture Trustee stating that
BankBoston Marine Asset Backed Trust 1997-2 is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the Basic
Documents and activities incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with Sections 4.09, 4.10, 4.11 and Article IX of the Sale
and Servicing Agreement.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance of credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing
or otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any
stock, obligations, assets or securities of, or any other interest in, or
make any capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. (Reserved)
SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest
or security or (iii) set aside or otherwise segregate any amounts for any
such purpose; provided, however, that the Issuer may make, or cause to be
made, distributions as contemplated by, and to the extent funds are available
for such purpose under, the Sale and Servicing Agreement or the Trust
Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account except in accordance with this
Indenture and the Basic Documents.
SECTION 3.19. Notice of Events of Default. In addition to its
obligations under the last paragraph of Section 5.01, the Issuer shall give
the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and each default on the part of the Servicer or
the Depositor of its obligations under the Sale and Servicing Agreement.
SECTION 3.20. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper
to carry out more effectively the purpose of this Indenture.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to
(i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon,
(iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12 and 3.13, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them, and the Indenture Trustee,
on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.05 and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuer and thereafter repaid to the Issuer or
discharged from such trust, as provided in Section 3.03) have been
delivered to the Indenture Trustee for cancellation; or
(2) all such Notes not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable,
b. will become due and payable at the applicable Stated
Maturity Date within one year, or
c. are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving
of notice of redemption by the Indenture Trustee in the name, and
at the expense, of the Issuer,
and the Issuer, in the case of a., b. or c. above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture
Trustee cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such
amounts are payable), in trust for such purpose, in an amount sufficient
to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due
to the applicable final scheduled Monthly Payment Date (or in the case
of the Class A-7 Notes the Quarterly Payment Date) or Redemption Date
(if Notes shall have been called for redemption pursuant to
Section 10.01(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or the
Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of
Section 11.01(a) and, subject to Section 11.02, each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with.
SECTION 4.02. Application of Trust Money. All moneys deposited with
the Indenture Trustee pursuant to Section 4.01 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as
the Indenture Trustee may determine, to the Holders of the particular Notes
for the payment or redemption of which such moneys have been deposited with
the Indenture Trustee, of all sums due and to become due thereon for
principal and interest; but such moneys need not be segregated from other
funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.
SECTION 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.03 and thereupon such Paying Agent shall
be released from all further liability with respect to such moneys.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or
governmental body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable, and such default shall continue for a
period of five days; or
(ii) default in the payment of the principal of or any installment
of the principal of any Note when the same becomes due and payable; or
(iii) default in the observance or performance of any covenant or
agreement of the Issuer made in this Indenture (other than a covenant or
agreement, a default in the observance or performance of which is
elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture or in
any certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or condition
in respect of which such misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of
30 days after there shall have been given, by registered or certified
mail, to the Issuer by the Indenture Trustee or to the Issuer and the
Indenture Trustee by the Holders of at least 25% of the Outstanding
Amount of the Notes, a written notice specifying such default or
incorrect representation or warranty and requiring it to be remedied and
stating that such notice is a notice of Default hereunder; or
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or
for any substantial part of the Trust Estate, or ordering the winding-up
or liquidation of the Issuer's affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by the Issuer to the entry of
an order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust
Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of any action by the
Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five days
after the occurrence thereof, written notice in the form of an Officer's
Certificate of any event which with the giving of notice and the lapse of
time would become an Event of Default under clause (iii), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee or the Holders of Notes representing not less than
a majority of the Outstanding Amount of the Notes may declare all the Notes
to be immediately due and payable, by a notice in writing to the Issuer (and
to the Indenture Trustee if given by Noteholders), and upon any such
declaration the unpaid principal amount of such Notes, together with accrued
and unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided,
the Holders of Notes representing a majority of the Outstanding Amount of the
Notes, by written notice to the Issuer and the Indenture Trustee, may rescind
and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay:
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon such
Notes if the Event of Default giving rise to such acceleration had
not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel;
and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in
the payment of any interest on any Note when the same becomes due and
payable, and such default continues for a period of five days, or
(ii) default is made in the payment of the principal of or any installment of
the principal of any Note when the same becomes due and payable, the Issuer
will, upon demand of the Indenture Trustee, pay to it, for the benefit of the
Holders of the Notes, the whole amount then due and payable on such Notes for
principal and interest, with interest on the overdue principal and, to the
extent payment at such rate of interest shall be legally enforceable, on
overdue installments of interest at the rate borne by the Notes and, in
addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and its agents
and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, may institute a Proceeding for the collection of the sums so
due and unpaid, and may prosecute such Proceeding to judgment or final
decree, and may enforce the same against the Issuer or other obligor upon
such Notes and collect in the manner provided by law out of the property of
the Issuer or other obligor upon such Notes, wherever situated, the moneys
adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its
discretion, proceed to protect and enforce its rights and the rights of the
Noteholders, by such appropriate Proceedings as the Indenture Trustee shall
deem most effective to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy or legal or equitable right vested in the Indenture Trustee by this
Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest
in the Trust Estate, Proceedings under Title 11 of the United States Code or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, or liquidator, sequestrator or similar official shall have
been appointed for or taken possession of the Issuer or its property or such
other obligor or Person, or in case of any other comparable judicial
Proceedings relative to the Issuer or other obligor upon the Notes, or to the
creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Notes shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,
by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim
for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee, except as a result of negligence or bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any Proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Noteholders,
to pay to the Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation to the Indenture Trustee, each predecessor Indenture
Trustee and their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf
of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without
the possession of any of the Notes or the production thereof in any trial or
other Proceedings relative thereto, and any such action or Proceedings
instituted by the Indenture Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of the expenses, liabilities, disbursements and compensation of the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall
be held to represent all the Holders of the Notes, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of
the following (subject to Section 5.05):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained and collect from
the Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event
of Default described in Section 5.01(i) or (ii), unless (A) the Holders of
100% of the Outstanding Amount of the Notes consent thereto, (B) the proceeds
of such sale or liquidation distributable to the Noteholders are sufficient
to discharge in full all amounts then due and unpaid upon such Notes for
principal and interest or (C) the Indenture Trustee determines that the Trust
Estate will not continue to provide sufficient funds for the payment of
principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee
obtains the consent of Holders of 662/3% of the Outstanding Amount of the
Notes. In determining such sufficiency or insufficiency with respect to
clause (B) and (C), the Indenture Trustee may, but need not, obtain and rely
upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following
order:
FIRST: to the Indenture Trustee for amounts due under
Section 6.07;
SECOND: to the Servicer for due and unpaid Servicing Fees or any
other amounts due to it by the Issuer pursuant to the Sale and Servicing
Agreement;
THIRD: to Noteholders for amounts due and unpaid on the Notes for
interest (including any premium), ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes for interest (including any premium);
FOURTH: to the Issuer for amounts required to be distributed in
respect of the Trust Agreement in respect of amounts due and unpaid on
the Certificates for interest;
FIFTH: to Holders of the Notes for amounts due and unpaid on the
Notes for principal, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal, until the Outstanding Amount of each Class of the Notes is
reduced to zero; and
SIXTH: to the Issuer for amounts (other than interest due and
unpaid on the Certificates) required to be distributed pursuant to the
Trust Agreement.
The Indenture Trustee may fix a record date and payment date for any payment
to Noteholders pursuant to this Section. At least 15 days before such record
date, the Issuer shall mail to each Noteholder and the Indenture Trustee a
notice that states the record date, the payment date and the amount to be
paid.
SECTION 5.05. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.02 following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Trust Estate. It is the desire of the parties
hereto and the Noteholders that there be at all times sufficient funds for
the payment of principal of and interest on the Notes, and the Indenture
Trustee shall take such desire into account when determining whether or not
to maintain possession of the Trust Estate. In determining whether to
maintain possession of the Trust Estate, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.
SECTION 5.06. Limitation of Suits. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of
the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its own
name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Holders
of a majority of the Outstanding Amount of the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes, each representing less than a majority of the Outstanding Amount of
the Notes, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture.
SECTION 5.07. Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the
Holder of any Note shall have the right, which is absolute and unconditional,
to receive payment of the principal of and interest, if any, on such Note on
or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date)
and to institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder.
SECTION 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right
or remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
SECTION 5.09. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or
remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee or any Holder of any Note to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such
right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this
Article V or by law to the Indenture Trustee or to the Noteholders may be
exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee or by the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. subject to Section 5.16(b) the
Holders of a majority of the Outstanding Amount of the Notes shall have the
right to direct the time, method and place of conducting any Proceeding for
any remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided
that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) subject to the express terms of Section 5.04, any direction to
the Indenture Trustee to sell or liquidate the Trust Estate shall be by
Holders of Notes representing not less than 100% of the Outstanding
Amount of the Notes;
(iii) if the conditions set forth in Section 5.05 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to such Section, then any direction to the Indenture Trustee by
Holders of Notes representing less than 100% of the Outstanding Amount
of the Notes to sell or liquidate the Trust Estate shall be of no force
and effect; and
(iv) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject
to Section 6.01, the Indenture Trustee need not take any action that it
determines might involve it in personal liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Notes as provided in Section 5.02,
the Holders of Notes of not less than a majority of the Outstanding Amount of
the Notes may waive any past Default or Event of Default and its consequences
except a Default (a) in payment of principal of or interest on any of the
Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note. In the
case of any such waiver, the Issuer, the Indenture Trustee and the Holders of
the Notes shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right
consequent thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of a Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to (a) any suit instituted
by the Indenture Trustee, (b) any suit instituted by any Noteholder, or group
of Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on
or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted, now or at any
time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under
or with respect to this Indenture. Neither the lien of this Indenture nor
any rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion
of the Trust Estate or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied in accordance
with Section 5.04(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations.
(a) If an Event of Default has occurred and is continuing, promptly
following a request from the Indenture Trustee to do so, the Issuer shall
take all such lawful action as the Indenture Trustee may request to compel or
secure the performance and observance by the Depositor or the Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement, and to exercise any and all rights,
remedies, powers and privileges lawfully available to the Issuer under or in
connection with the Sale and Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee, including the transmission of
notices of default on the part of the Depositor or the Servicer thereunder
and the institution of legal or administrative actions or proceedings to
compel or secure performance by the Depositor or the Servicer of each of
their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 662/3% of the Outstanding Amount of the Notes shall, subject to
the proviso and last paragraph of Section 5.11, exercise all rights,
remedies, powers, privileges and claims of the Issuer against the Depositor
or the Servicer under or in connection with the Sale and Servicing Agreement,
including the right or power to take any action to compel or secure
performance or observance by the Servicer or the Depositor, as the case may
be, of each of their obligations to the Issuer thereunder and to give any
consent, request, notice, direction, approval, extension or waiver under the
Sale and Servicing Agreement, and any right of the Issuer to take such action
shall be suspended.
ARTICLE VI
The Indenture Trustee
SECTION 6.01. Duties of Indenture Trustee. (a) If an Event of
Default has occurred and is continuing, the Indenture Trustee shall exercise
the rights and powers vested in it by this Indenture and use the same degree
of care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and the
Sale and Servicing Agreement and no implied covenants or obligations
shall be read into this Indenture or the Sale and Servicing Agreement
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture or the Sale and Servicing Agreement;
however, the Indenture Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11 or Section 5.16(b).
(d) Every provision of this Indenture and the Sale and Servicing
Agreement that in any way relates to the Indenture Trustee is subject to
paragraphs (a), (b), (c) and (g) of this Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture or the Sale and Servicing Agreement
shall require the Indenture Trustee to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
hereunder or thereunder or in the exercise of any of its rights or powers, if
it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured
to it.
(h) Every provision of this Indenture or the Sale and Servicing
Agreement relating to the conduct or affecting the liability of or affording
protection to the Indenture Trustee shall be subject to the provisions of
this Section and to the provisions of the TIA.
SECTION 6.02. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed
or presented by the proper person. The Indenture Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of, or
for the supervision of, any such agent, attorney, custodian or nominee
appointed with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within
its rights or powers; provided, that the Indenture Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to the Indenture Trustee reasonable security
or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(g) The Indenture Trustee shall not be charged with knowledge of any
Default, Event of Default or Servicer Default unless (i) a Responsible
Officer of the Indenture Trustee assigned to its Corporate Trust Office shall
have actual knowledge thereof or (ii) written notice thereof shall have been
given to the Indenture Trustee by the Issuer, the Depositor, the Servicer or
any Noteholder.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Issuer, the Depositor, the
Servicer or their respective Affiliates with the same rights it would have if
it were not Indenture Trustee. Any Paying Agent, Note Registrar, co-
registrar or co-paying agent may do the same with like rights. However, the
Indenture Trustee must comply with Sections 6.11 and 6.12.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity
or adequacy of this Indenture, the Collateral or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in the Indenture or in any
document issued in connection with the sale of the Notes or in the Notes
other than the Indenture Trustee's certificate of authentication. The
Indenture Trustee shall have no responsibility for reviewing the contents of
the Receivable Files or for maintaining custody of or protecting same, for
monitoring the servicing of the Receivables by the Servicer or for perfecting
or continuing the perfection of the Indenture Trustee's security interest in
the Collateral, including the filing, re-filing, recording or re-recording of
any notice, instrument or document in any public office at any time or times.
The Indenture Trustee shall have no duty to conduct any affirmative
investigation as to the occurrence of any condition requiring the repurchase
of any Receivable pursuant to the Sale and Servicing Agreement.
SECTION 6.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to each Noteholder notice of the
Default within 90 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant
to the mandatory redemption provisions of such Note), the Indenture Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required
to enable such holder to prepare its federal and state income tax returns,
provided, that, such information shall consist only of Form 1099's or any
successor forms required to be given by Paying Agents to Noteholders pursuant
to the Code.
SECTION 6.07. Compensation and Indemnity. The Issuer shall pay to the
Indenture Trustee from time to time reasonable compensation for its services.
The Indenture Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall reimburse
the Indenture Trustee for all reasonable out-of-pocket expenses incurred or
made by it, including costs of collection, in addition to the compensation
for its services. Such expenses shall include the reasonable compensation
and expenses, disbursements and advances of the Indenture Trustee's agents,
counsel, accountants and experts. The Issuer shall indemnify the Indenture
Trustee against any and all loss, liability or expense (including attorneys'
fees) incurred by it in connection with the administration of this trust and
the performance of its duties hereunder. The Indenture Trustee shall notify
the Issuer promptly of any claim for which it may seek indemnity. Failure by
the Indenture Trustee to so notify the Issuer shall not relieve the Issuer of
its obligations hereunder. The Issuer shall defend any such claim, and the
Indenture Trustee may have separate counsel and the Issuer shall pay the fees
and expenses of such counsel. The Issuer need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. Without
prejudice to any other rights available to the Indenture Trustee under
applicable law, when the Indenture Trustee incurs expenses after the
occurrence of a Default specified in Section 5.01(iv) or (v) with respect to
the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.
SECTION 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer. The Holders of a
majority in Outstanding Amount of the Notes may remove the Indenture Trustee
by so notifying the Indenture Trustee and may appoint a successor Indenture
Trustee. The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed by the Issuer or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture
Trustee in such event being referred to herein as the retiring Indenture
Trustee) or if the Holders of a majority in Outstanding Amount of the Notes
shall not have appointed a successor Indenture Trustee and such successor
Indenture Trustee shall not have accepted its appointment as set forth below
within 30 days after the Indenture Trustee shall have been removed by such
Holders, the Issuer shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights,
powers and duties of the Indenture Trustee under this Indenture. The
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly, upon payment of
its charges, transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture
Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for
the benefit of the retiring Indenture Trustee.
SECTION 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall
provide the Rating Agencies prior written notice of any such transaction.
Such notice shall be deemed given if a description of such transaction is
published in a newspaper of general circulation in The City of New York.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created
by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not
have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the Notes
or in this Indenture provided that the certificate of the Indenture Trustee
shall have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Trust Estate may at the time be
located, the Indenture Trustee shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as a co-trustee
or co-trustees, or separate trustee or separate trustees, of all or any part
of the Trust Estate, and to vest in such Person or Persons, in such capacity
and for the benefit of the Noteholders, such title to the Trust Estate, or
any part hereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Indenture Trustee may
consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee
under Section 6.11 and no notice to Noteholders of the appointment of any co-
trustee or separate trustee shall be required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions
and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture 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
Indenture 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 Indenture 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 Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture 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 VI. 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 Indenture Trustee or separately, as may be provided therein, subject to
all the provisions of this Indenture, specifically including every provision
of this Indenture relating to the conduct of, affecting the liability of, or
affording protection to, the Indenture Trustee. Every such instrument shall
be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture 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 Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition, and the time deposits of the Indenture Trustee shall be rated at
least A-1 by Standard & Poor's and P-1 by Moody's. The Indenture Trustee
shall comply with TIA Section 310(b), subject to the penultimate paragraph
thereof; provided, however, that there shall be excluded from the operation
of TIA Section 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). An Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.01. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after each Record Date, a list,
in such form as the Indenture Trustee may reasonably require, of the names
and addresses of the Holders of Notes as of such Record Date, and (b) at such
other times as the Indenture Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the
Note Registrar, no such list shall be required to be furnished.
SECTION 7.02. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under
the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
SECTION 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) as may be required by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.04. Reports by Indenture Trustee. If required by TIA
Section 313(a), within 60 days after each July 15 beginning with July 15,
1998, the Indenture Trustee shall mail to each Noteholder as required by TIA
Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA
Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall be
filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.01. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable
to or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such money received by it as provided in
this Indenture. Except as otherwise expressly provided in this Indenture, if
any default occurs in the making of any payment or performance under any
agreement or instrument that is part of the Trust Estate, the Indenture
Trustee may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to
claim a Default or Event of Default under this Indenture and any right to
proceed thereafter as provided in Article V. Notwithstanding the foregoing
provisions of this Section 8.01, the Indenture Trustee shall not be empowered
to demand payment of or to enforce payment or performance of any Receivable,
except during the continuance of an Event of Default, and during the pendency
of such an Event of Default, shall be protected in refraining from making any
such demand or instituting any proceeding to enforce such payment or
performance as long as the Servicer shall be servicing the Receivables.
SECTION 8.02. Trust Accounts. (a) On or prior to the Closing Date,
the Issuer shall cause the Servicer or the Indenture Trustee, as applicable,
to establish and maintain, in the name of the Indenture Trustee, for the
benefit of the applicable Noteholders and Certificateholders, the Trust
Accounts as provided in Section 5.01 of the Sale and Servicing Agreement.
(b) Collections with respect to the Receivables and other amounts with
respect to each Collection Period will be deposited in the Collection Account
as provided in Sections 5.02 and 5.05 of the Sale and Servicing Agreement.
On each Monthly Payment Date, all amounts required to be deposited in the
Note Distribution Account with respect to the preceding Collection Period
pursuant to Sections 5.06 and 5.07 of the Sale and Servicing Agreement will
be transferred from the Collection Account to the Note Distribution Account.
(c) On each Monthly Payment Date and Redemption Date, the Indenture
Trustee shall distribute all amounts on deposit in the Note Distribution
Account to Noteholders in respect of the Notes (or in the case of the
Class A-7 Notes on each Nonquarterly Payment Date shall make the deposits
provided for below) to the extent of amounts due and unpaid on the Notes for
principal and interest (including any premium) in the following amounts and
in the following order of priority (except as otherwise provided in
Section 5.04(b)):
(i) the Noteholders Interest Distributable Amount to be
distributed as follows:
for each Nonquarterly Payment Date (other than any Redemption Date), (1)
for each Class of Notes, other than the Class A-7 Notes, accrued and unpaid
interest on each such Class of Notes shall be distributed to the Holders of
Notes of such Class and (2) for the Class A-7 Notes, one-third of the total
amount of accrued and unpaid interest that will be due on the Class A-7 Notes
on the next Quarterly Payment Date will be deposited into the Class A-7
Interest Account, with any shortfall in such amounts to be allocated among
each Class pro rata based on the ratio for each Class of (x) the amount of
interest due to be distributed on (or deposited with respect to) each such
Class to (y) the total of such amounts; and
for each Quarterly Payment Date and each Redemption Date, for each
Class of Notes accrued and unpaid interest on each such Class of Notes shall
be distributed to the Holders of such Class, but for the Class A-7 Notes such
amount as distributed from the Note Distribution Account shall be reduced by
the amount to be distributed to the Class A-7 Noteholders on such Quarterly
Payment Date or Redemption Date from the Class A-7 Interest Account, and with
any shortfall in such amounts to be allocated among each Class pro rata based
on the ratio for each Class of (x) the amount of interest due to be
distributed on each such Class (but in the case of the Class A-7 Notes only
the amount to be distributed from the Note Distribution Account on such
Quarterly Payment Date) to (y) the total of such amounts;
(ii) the Noteholders' Principal Distributable Amount, to be
distributed in the following order of priority in each case to the
extent of the remaining amounts on deposit in the Note Distribution
Account after giving effect to all withdrawals of a higher priority:
(1) to the Holders of the Class A-1 Notes on account of
principal until the Outstanding Amount of the Class A-1 Notes is
reduced to zero;
(2) to the Holders of the Class A-2 Notes on account of
principal until the Outstanding Amount of the Class A-2 Notes is
reduced to zero;
(3) to the Holders of the Class A-3 Notes on account of
principal until the Outstanding Amount of the Class A-3 Notes is
reduced to zero;
(4) to the Holders of the Class A-4 Notes on account of
principal until the Outstanding Amount of the Class A-4 Notes is
reduced to zero;
(5) to the Holders of the Class A-5 Notes on account of
principal until the Outstanding Amount of the Class A-5 Notes is
reduced to zero;
(6) to the Holders of the Class A-6 Notes on account of
principal until the Outstanding Amount of the Class A-6 Notes is
reduced to zero;
(7) to the Holders of the Class A-7 Notes on account of
principal (but in the case of a Nonquarterly Payment Date, by
depositing such amount into the Class A-7 Principal Account) until
the Outstanding Amount of the Class A-7 Notes is reduced to zero,
(such Outstanding Amount to be determined solely for purposes of
this clause (7) by assuming that the Outstanding Amount of the
Class A-7 Notes has been reduced by any deposits to the Class A-7
Principal Account since the preceding Quarterly Payment Date).
(d) On each Quarterly Payment Date and any Redemption Date, (i) the
Indenture Trustee will withdraw the aggregate amount on deposit in the
Class A-7 Interest Account (other than any investment income thereon that is
payable to the Servicer pursuant to Section 5.01(b) of the Sale and Servicing
Agreement) and will distribute such amount as interest to the Class A-7
Noteholders and (ii) the Indenture Trustee will withdraw the aggregate amount
on deposit in the Class A-7 Principal Account and will distribute such
amount, as a distribution on account of principal, to the Class A-7
Noteholders.
SECTION 8.03. General Provisions Regarding Accounts. (a) So long as
no Default or Event of Default shall have occurred and be continuing, all or
a portion of the funds in the Trust Accounts shall be invested or reinvested
in Eligible Investments pursuant to Section 5.01(b) of the Sale and Servicing
Agreement by the Indenture Trustee. The Servicer will not direct the
Indenture Trustee to make any investment of any funds or to sell any
investment held in any of the Trust Accounts unless the security interest
Granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) Subject to Section 6.01(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Trust
Accounts resulting from any loss on any Eligible Investment included therein
except for losses attributable to the Indenture Trustee's failure to make
payments on such Eligible Investments issued by the Indenture Trustee, in its
commercial capacity as principal obligor and not as trustee, in accordance
with their terms.
(c) If (i) the Servicer (pursuant to Section 5.01(b) of the Sale and
Servicing Agreement) shall have failed to give investment directions for any
funds on deposit in the Trust Accounts to the Indenture Trustee by 11:00 a.m.
Eastern Time (or such other time as may be agreed by the Servicer and
Indenture Trustee) on any Business Day or (ii) a Default or Event of Default
shall have occurred and be continuing with respect to the Notes but the Notes
shall not have been declared due and payable pursuant to Section 5.02 or
(iii) if such Notes shall have been declared due and payable following an
Event of Default but amounts collected or receivable from the Trust Estate
are being applied in accordance with Section 5.05 as if there had not been
such a declaration, then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Trusts Accounts (other than the
Note Distribution Account) in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Indenture Trustee or the Owner Trustee or any
of their respective Affiliates is investment manager or advisor).
(d) Nothing in the Section 8.03 shall require the investment of any
funds on deposit in the Note Distribution Account.
SECTION 8.04. Release of Trust Estate. (a) Subject to the payment of
its fees, expenses and indemnities pursuant to Section 6.07, the Indenture
Trustee shall, when required by Section 8.04(b), execute instruments
(prepared by the Issuer) to release (without recourse or warranty) property
from the lien of this Indenture, or convey the Indenture Trustee's interest
in the same, in a manner and under circumstances that are not inconsistent
with the provisions of this Indenture. No party relying upon an instrument
executed by the Indenture Trustee as provided in this Article VIII shall be
bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07
have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer
or any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and
(if required by the TIA) Independent Certificates in accordance with TIA
SectionSection 314(c) and 314(d)(1) meeting the applicable requirements of
Section 11.01.
SECTION 8.05. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.04(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, as a condition to
such action, an Opinion of Counsel, in form satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent
to the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of
the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to
express an opinion as to the fair value of the Trust Estate. Counsel
rendering any such opinion may rely, without independent investigation, on
the accuracy and validity of any certificate or other instrument delivered to
the Indenture Trustee in connection with any such action.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to
the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by
an Issuer Order, at any time and from time to time, may enter into one or
more indentures supplemental hereto (which shall conform to the provisions of
the Trust Indenture Act as in force at the date of the execution thereof), in
form satisfactory to the Indenture Trustee, for any of the following
purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required
to be subjected to the lien of this Indenture, or to subject to the lien
of this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption
by any such successor of the covenants of the Issuer herein and in the
Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be inconsistent with
any other provision herein or in any supplemental indenture or to make
any other provisions with respect to matters or questions arising under
this Indenture or in any supplemental indenture; provided, that such
action shall not adversely affect in any material respect the interests
of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to
or change any of the provisions of this Indenture as shall be necessary
to facilitate the administration of the trusts hereunder by more than
one trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to,
or changing in any manner or eliminating any of the provisions of, this
Indenture or of modifying in any manner the rights of the Holders of the
Notes under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder.
SECTION 9.02. Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order,
also may, with prior notice to the Rating Agencies and with the consent of
the Holders of not less than a majority of the Outstanding Amount of the
Notes, by Act of such Holders delivered to the Issuer and the Indenture
Trustee, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder
of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto,
change the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to
payment of principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or after
the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the Notes,
the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of certain defaults hereunder and their
consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Indenture Trustee pursuant to Sections 5.11 or
5.16(b) or to direct the Indenture Trustee to sell or liquidate the
Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Monthly Payment Date (or in the case of
the Class A-7 Notes any Quarterly Payment Date) (including the
calculation of any of the individual components of such calculation) or
to affect the rights of the Holders of Notes to the benefit of any
provisions for the mandatory redemption of the Notes contained herein;
or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The
Indenture Trustee shall not be liable for any such determination made in good
faith.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.01 and 6.02, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective
rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any
and all purposes.
SECTION 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
Redemption of Notes
SECTION 10.01. Redemption. (a) The Notes are subject to redemption in
whole, but not in part, at the direction of the Servicer pursuant to
Section 9.01(a) of the Sale and Servicing Agreement, on any Monthly Payment
Date on which the Servicer exercises its option to purchase the Trust Estate
pursuant to said Section 9.01(a), for a purchase price equal to the
Redemption Price. The Servicer or the Issuer shall furnish the Rating
Agencies notice of such redemption. If the Notes are to be redeemed pursuant
to this Section 10.01(a), the Servicer or the Issuer shall furnish notice of
such election to the Indenture Trustee not later than 50 days prior to the
Redemption Date and the Issuer shall deposit by 10:00 A.M. New York City time
on the Redemption Date with the Indenture Trustee in the Distribution Account
the Redemption Price of each Class of Notes whereupon all such Notes shall be
due and payable on the Redemption Date upon the furnishing of a notice
complying with Section 10.02 to each Holder of the Notes.
(b) In the event that the assets of the Trust are sold pursuant to
Section 9.02 of the Trust Agreement, all amounts on deposit in the Note
Distribution Account and in the Class A-7 Interest Account and the Class A-7
Principal Account shall be paid to the Noteholders up to the Outstanding
Amount of the Notes and all accrued and unpaid interest thereon as and to the
extent provided for in Section 9.02(b) of the Sale and Servicing Agreement.
If amounts are to be paid to Noteholders pursuant to this Section 10.01(b),
the Servicer or the Issuer shall, to the extent practicable, furnish notice
of such event to the Indenture Trustee not later than 40 days prior to the
Redemption Date, whereupon all such amounts shall be payable on the
Redemption Date.
SECTION 10.02. Form of Redemption Notice. (a) Notice of redemption
under Section 10.01(a) shall be given by the Indenture Trustee by first-class
mail, postage prepaid, or by facsimile mailed or transmitted not later than
30 days prior to the applicable Redemption Date to each Holder of Notes, as
of the close of business on the Record Date preceding the applicable
Redemption Date, at such Holder's address or facsimile number appearing in
the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for payment
of the Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair
or affect the validity of the redemption of any other Note.
(b) Prior notice of redemption under Section 10.01(b) is not required
to be given to Noteholders.
SECTION 10.03. Notes Payable on Redemption Date. The Notes shall,
following notice of redemption as required by Section 10.02 (in the case of
redemption pursuant to Section 10.01(a)), on the Redemption Date become due
and payable at the Redemption Price and (unless the Issuer shall default in
the payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price.
ARTICLE XI
Miscellaneous
SECTION 11.01. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in
the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate
from a firm of certified public accountants meeting the applicable
requirements of this Section, except that, in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property
or securities with the Indenture Trustee that is to be made the basis
for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation imposed
in Section 11.01(a) or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such deposit) to the Issuer of the Collateral or
other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i) above, the
Issuer shall also deliver to the Indenture Trustee an Independent
Certificate as to the same matters, if the fair value to the Issuer of
the securities to be so deposited and of all other such securities made
the basis of any such withdrawal or release since the commencement of
the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount of the Notes, but such a
certificate need not be furnished with respect to any securities so
deposited, if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be released from
the lien of this Indenture, the Issuer shall also furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (iii) above,
the Issuer shall also furnish to the Indenture Trustee an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property, other than property as
contemplated by clause (v) below or securities released from the lien of
this Indenture since the commencement of the then-current calendar year,
as set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the Outstanding Amount of the Notes,
but such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the
related Officer's Certificate is less than $25,000 or less than one
percent of the then Outstanding Amount of the Notes.
(v) Notwithstanding any other provision of this Section, the
Issuer may, without compliance with the requirements of the other
provisions of this Section, (A) collect, liquidate, sell or otherwise
dispose of Receivables or Financed Boats as and to the extent permitted
or required by the Basic Documents and (B) make cash payments out of the
Trust Accounts as and to the extent permitted or required by the Basic
Documents, so long as the Issuer shall deliver to the Indenture Trustee
every six months, commencing February 27, 1998, an Officer's Certificate
of the Issuer stating that all the dispositions of Collateral described
in clauses (A) or (B) above that occurred during the preceding six
calendar months were in the ordinary course of the Issuer's business and
that the proceeds thereof were applied in accordance with the Basic
Documents.
SECTION 11.02. Form of Documents Delivered to Indenture Trustee. In
any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such
matters be certified by, or covered by the opinion of, only one such Person,
or that they be so certified or covered by only one document, but one such
Person may certify or give an opinion with respect to some matters and one or
more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Servicer, the Depositor or the Issuer, stating
that the information with respect to such factual matters is in the
possession of the Servicer, the Depositor or the Issuer, unless such counsel
knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof,
it is intended that the truth and accuracy, at the time of the granting of
such application or at the effective date of such certificate or report (as
the case may be), of the facts and opinions stated in such document shall in
such case be conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or report. The
foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion
contained in any such document as provided in Article VI.
SECTION 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective
when such instrument or instruments are delivered to the Indenture Trustee
and, where it is hereby expressly required, to the Issuer. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Noteholders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Indenture
Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the Issuer shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at its Corporate Trust
Office, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder shall
be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Issuer addressed to: BankBoston
Marine Asset Backed Trust 1997-2, in care of the Owner Trustee at its
Corporate Trust Office, or at any other address previously furnished in
writing to the Indenture Trustee by the Issuer. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered or mailed by certified mail, return receipt requested, to (i) in
the case of Moody's, at the following address: Moody's Investors Service,
Inc., ABS Monitoring Department, 99 Church Street, New York, New York 10007
or (ii) in the case of Standard & Poor's, at the following address: Standard
& Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., 25
Broadway (15th Floor), New York, New York 10004, Attention of Asset Backed
Surveillance Department; or as to each of the foregoing, at such other
address as shall be designated by written notice to the other parties.
SECTION 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Holder's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for
the giving of such notice. In any case where notice to Noteholders is given
by mail, neither the failure to mail such notice nor any defect in any notice
so mailed to any particular Noteholder shall affect the sufficiency of such
notice with respect to other Noteholders, and any notice that is mailed in
the manner herein provided shall conclusively be presumed to have been duly
given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to
mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event
of Default.
SECTION 11.06. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for
in this Indenture for such payments or notices. The Issuer will furnish to
the Indenture Trustee a copy of each such agreement and the Indenture Trustee
will cause payments to be made and notices to be given in accordance with
such agreement if it is administratively acceptable to it.
SECTION 11.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the
Trust Indenture Act, such required provision shall control.
The provisions of TIA SectionSection 310 through 317 that impose duties
on any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience
only and shall not affect the construction hereof.
SECTION 11.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture
Trustee in this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10. Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership
interest in any part of the Trust Estate, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest
shall accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, 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 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for
the enforcement of any right or remedy granted to the Indenture Trustee under
this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director, employee or agent of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or
the Owner Trustee in its individual capacity, except as any such Person may
have expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their individual capacity) and
except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance
of any duties or obligations of the Issuer hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Issuer, or join in
any institution against the Issuer 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 Notes, this Indenture or any
of the Basic Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during
the Issuer's normal business hours, to examine all the books of account,
records, reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with
the Issuer's officers, employees and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall, and shall cause its representatives
to, hold in confidence all such information except to the extent disclosure
may be required by law (and all reasonable applications for confidential
treatment are unavailing) and except to the extent that the Indenture Trustee
may reasonably determine that such disclosure is consistent with its
obligations hereunder.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto
duly authorized, all as of the day and year first above written.
BANKBOSTON MARINE ASSET BACKED TRUST 1997-2,
by: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Owner Trustee,
by: /s/ Emmett R. Harmon
_______________________________
Name: Emmett R. Harmon
Title: Vice President
THE CHASE MANHATTAN BANK,
not in its individual capacity but solely as
Indenture Trustee,
by: /s/ Daniel C. Brown, Jr.
___________________________________
Name: Daniel C. Brown, Jr.
Title: Assistant Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Emmett Harmon, known
to me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of BANKBOSTON
MARINE ASSET BACKED TRUST 1997-1, a Delaware business trust, and that (s)he
executed the same as the act of said business trust for the purpose and
consideration therein expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 27th day of August, 1997.
Daniel F. Mulvihill
-----------------------------------------------
Notary Public in and for the State of New York.
My commission expires:
Aug. 12, 1998
- ------------------------
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared Daniel C. Brown, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of THE CHASE
MANHATTAN BANK, a New York banking corporation, and that (s)he executed the
same as the act of said corporation for the purpose and consideration therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this 27th day of August, 1997.
Daniel F. Mulvihill
-----------------------------------------------
Notary Public in and for the State of New York.
My commission expires:
Aug. 12, 1998
- ------------------------
SCHEDULE A
Provided to the Owner Trustee at Closing
EXHIBIT A
(FORM OF Class A NOTE)
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $____________
Class A-() Interest Rate: __%
No. R-__ CUSIP NO. ____________
BANKBOSTON MARINE ASSET BACKED TRUST 1997-2
Class A-__ ASSET BACKED NOTES
BankBoston Marine Asset Backed Trust 1997-2, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as
the "Issuer"), for value received, hereby promises to pay to __________, or
registered assigns, the principal sum of ____________________ DOLLARS payable
on each (Monthly)(Quarterly) Payment Date in an amount equal to the result
obtained by multiplying (i) a fraction the numerator of which is
$____________ and the denominator of which is $____________ by (ii) the
aggregate amount, if any, payable from the Note Distribution Account (and the
Class A-7 Principal Account) in respect of principal on the Class A-__ Notes
pursuant to Section 3.01 of the Indenture dated as of August 25, 1997 (the
"Indenture"), between the Issuer and The Chase Manhattan Bank, a New York
banking corporation, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the ______________ ______
(Monthly)(Quarterly) Payment Date (the "Class A-__ Stated Maturity") and the
Redemption Date, if any, pursuant to Section 10.01 of the Indenture.
Capitalized terms used but not defined herein are as defined in the
Indenture, which also contains rules as to construction that shall be
applicable herein.
The Issuer will pay interest on this Note at the rate per annum shown
above on each (Monthly)(Quarterly) Payment Date until the principal of this
Note is paid or made available for payment, on the principal amount of this
Note outstanding on the preceding (Monthly)(Quarterly) Payment Date (after
giving effect to all payments of principal made on the preceding (Monthly)
(Quarterly) Payment Date), subject to certain limitations contained in the
last sentence of Section 3.01 of the Indenture. Interest on this Note will
accrue for each (Monthly)(Quarterly) Payment Date from the Closing Date (in
the case of the first (Monthly)(Quarterly) Payment Date) or from the first
day of the (third) calendar month preceding the month of the applicable
(Monthly)(Quarterly) Payment Date to and including the last day of (such)
(the) calendar month (preceding the month of such Quarterly Payment Date).
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. Such principal of and interest on this Note shall be paid in the
manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: BANKBOSTON MARINE ASSET BACKED TRUST 1997-2,
by: WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as Owner Trustee under the
Trust Agreement,
by: _____________________________________
Authorized Signatory
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-
mentioned Indenture.
Date: THE CHASE MANHATTAN BANK, not in its
individual capacity but solely as
Indenture Trustee,
by: ______________________________________________
Authorized Officer
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-__ Asset Backed Notes (herein called the
"Class A-__ Notes"), all issued under the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement
of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Notes. The Class A-__ Notes are
subject to all terms of the Indenture.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes, the Class A-5 Notes, the Class A-6 Notes and the Class A-7
Notes (together, the "Notes"), are and will be equally and ratably secured,
subject to the Indenture, by the collateral pledged as security therefor as
provided in the Indenture.
Principal of this Class A-__ Note will be payable in installments on
each (Monthly)(Quarterly) Payment Date in an aggregate amount described on
the face hereof, provided , that payments of principal of the Class A-__
Notes will be subject to the provisions that are set forth in the Indenture
relating to the allocations of distributions of principal as among the other
Classes of Notes. "(Monthly)(Quarterly) Payment Date" means the ____ day of
each (month) (November, February, May, August), or, if any such date is not a
Business Day, the next succeeding Business Day, commencing ______________ __,
199__.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Class A-__ Stated Maturity
Date and the Redemption Date, if any, pursuant to Section 10.01 of the
Indenture. Notwithstanding the foregoing, the entire unpaid principal amount
of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or
the Holders of Notes representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable
in the manner provided in Section 5.02 of the Indenture. All principal
payments on the Class A-__ Notes shall be made pro rata to the Class A-__
Noteholders entitled thereto.
Payments of interest on this Note due and payable on each
(Monthly)(Quarterly) Payment Date, together with the installment of
principal, if any, to the extent not in full payment of this Note, shall be
made by check mailed to the Person whose name appears as the Registered
Holder of this Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date. Such checks shall be mailed
to the Person entitled thereto at the address of such Person as it appears on
the Note Register as of the applicable Record Date without requiring that
this Note be submitted for notation of payment. Any reduction in the
principal amount of this Note (or any one or more Predecessor Notes) effected
by any payments made on any (Monthly)(Quarterly) Payment Date shall be
binding upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof,
whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a (Monthly)(Quarterly) Payment Date, then
the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Holder hereof as of the Record Date
preceding such (Monthly)(Quarterly) Payment Date by notice mailed or
transmitted by facsimile prior to such (Monthly)(Quarterly) Payment Date, and
the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's principal Corporate Trust
Office or at the office of the Indenture Trustee's agent appointed for such
purposes located in The City of New York.
The Issuer shall pay interest on overdue installments of interest at the
Class A-__ Interest Rate to the extent lawful.
As provided in the Indenture and subject to the limitations set forth
therein and on the face hereof, the transfer of this Note may be registered
on the Note Register upon surrender of this Note for registration of transfer
at the office or agency designated by the Issuer pursuant to the Indenture,
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or
such Holder's attorney duly authorized in writing, with such signature
guaranteed by an "eligible guarantor institution" meeting the requirements of
the Note Registrar, which requirements may 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 Note
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended, and thereupon one or
more new Notes of authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or transferees.
No service charge will be charged for any registration of transfer or
exchange of this Note, but the transferor may be required to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that
no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee
in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner
Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as
any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by
applicable law, for any unpaid consideration for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Depositor or the Issuer, or join
in any institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and
each Note Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day
of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee or any
such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes
representing specified percentages of the Outstanding Amount of the Notes, on
behalf of the Holders of all the Notes, to waive certain past defaults under
the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note (or any one or more Predecessor Notes) shall be
conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Indenture
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances,
to merge or consolidate, subject to the rights of the Indenture Trustee and
the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank in its
individual capacity, Wilmington Trust Company in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors
or assigns shall be personally liable for, nor shall recourse be had to any
of them for, the payment of principal of or interest on this Note or
performance of, or failure to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the Holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; provided, however, that nothing contained herein shall be
taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- --------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
- ---------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably
constitutes and appoints ___________________________________________________
___________________________________, attorney, to transfer said Note on the
books kept for registration thereof, 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 Note 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 Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note 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 Note Depository Agreement)
Letter of Representations
(To be Completed by Issuer and Trustee)
(Name of Issuer)
__________________________________________________
(Name of Trustee)
__________________________________________________
--------------
(Date)
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: ______________________________________________________________
______________________________________________________________
______________________________________________________________
(Issue Description)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Trustee will act
as trustee with respect to the Securities pursuant to an indenture dated as
o f A u g u s t _ _ , 1 9 9 7 ( t h e " D o c u m e n t " ) .
______________________________________________ (the "Underwriter") is
distributing the Securities through The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC,
and to act in accordance with its Rules with respect to the Securities,
Issuer and Trustee make the following representations to DTC:
1. Prior to closing on the Securities on _____________________, 199_,
there shall be deposited with DTC one Security certificate registered in the
name of DTC's nominee, Cede & Co., for each stated maturity of the Securities
in the face amounts set forth on Schedule A hereto, the total of which
represents 100% of the principal amount of such Securities. If, however, the
aggregate principal amount of any maturity exceeds $200 million, one
certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount. Each Security certificate shall bear the
following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to Issuer or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of Cede
& Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date
for such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and
receipt of such notices shall be confirmed by telephoning (212) 709-6870.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to DTC's Reorganization Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before the Publication Date. Issuer or Trustee shall forward such notice
either in a separate secure transmission for each CUSIP number or in a secure
transmission for multiple CUSIP numbers (if applicable) which includes a
manifest or list of each CUSIP number submitted in that transmission. (The
party sending such notice shall have a method to verify subsequently the use
of such means and the timeliness of such notice.) The Publication Date shall
be not less than 30 days nor more than 60 days prior to the redemption date
or, in the case of an advance refunding, the date that the proceeds are
deposited in escrow. Notices to DTC pursuant to this Paragraph by telecopy
shall be sent to DTC's Call Notification Department at (516) 227-4039 or
(516) 227-4190. If the party sending the notice does not receive a telecopy
receipt from DTC confirming that the notice has been received, such party
shall telephone (516) 227-4070. Notices to DTC pursuant to this Paragraph by
mail or by any other means shall be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or
Trustee to Security holders specifying the terms of the tender and the
Publication Date of such notice shall be sent to DTC by a secure means in the
manner set forth in the preceding Paragraph. Notices to DTC pursuant to this
Paragraph and notices of other corporate actions by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094, and
receipt of such notices shall be confirmed by telephoning (212) 709-6884.
Notices to DTC pursuant to the above by mail or by any other means shall be
sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably 5, but
not less than 2, business days prior to such payment date. Such notices,
which shall also contain the current pool factor, and special adjustments to
principal/interest rates (e.g., adjustments due to deferred interest or
shortfall), and Trustee contact's name and telephone number, shall be sent by
telecopy to DTC's Dividend Department at (212) 709-1723, or if by mail or by
any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
7. (NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS OUT
THE OTHER:) (The interest accrual period is record date to record date.) (The
interest accrual period is payment date to payment date.)
8. Trustee must provide DTC, no later than noon (Eastern Time) on the
payment date, CUSIP numbers for each issue for which payment is being sent,
as well as the dollar amount of the payment for each issue. Notification of
payment details should be sent using automated communications.
9. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee
of DTC, or its registered assigns in same-day funds, no later than 2:30 p.m.
(Eastern Time) on each payment date (in accordance with existing arrangements
between Issuer or Trustee and DTC). Absent any other arrangements between
Issuer or Trustee and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Trustee shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no
such service exists, Issuer or Trustee shall provide interest payment
information directly to DTC in advance of the interest payment date as soon
as the information is available. This information should be conveyed
directly to DTC electronically. If electronic transmission is not available,
absent any other arrangements between Trustee and DTC, such information
should be sent by telecopy to DTC's Dividend Department at (212) 709-1723 or
(212) 709-1686, and receipt of such notices shall be confirmed by telephoning
(212) 709-1270. Notices to DTC pursuant to the above by mail or by any other
means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
10. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30
p.m. (Eastern Time). Absent any other arrangements between Trustee and DTC,
such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth
in DTC's SDFS Paying Agent Operating Procedures, a copy of which has
previously been furnished to Trustee.
11. DTC shall receive all reorganization payments and CUSIP-level
detail resulting from corporate actions (such as tender offers, remarketings,
or mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between Trustee and DTC, such payments
shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DTC may direct Issuer or Trustee to use any other number or address
as the number or address to which notices or payments of interest or
principal may be sent.
13. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or
Trustee's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity,
in which case the certificate will be presented to Issuer or Trustee prior to
payment, if required.
14. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer
or Trustee shall issue, transfer, and exchange certificates in appropriate
amounts, as required by DTC and others.
15. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Trustee (at which time DTC will confirm with Issuer or Trustee the
aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
16. Issuer: (a) understands that DTC has no obligation to, and will
not, communicate to its Participants or to any person having an interest in
the Securities any information contained in the Security certificate(s); and
(b) acknowledges that neither DTC's Participants nor any person having an
interest in the Securities shall be deemed to have notice of the provisions
of the Security certificates by virtue of submission of such certificate(s)
to DTC.
17. Nothing herein shall be deemed to require Trustee to advance funds
on behalf of Issuer.
Notes: Very truly yours,
A. If there is a Trustee (as
defined in this Letter of ___________________________________
Representations), Trustee as well (Issuer)
as Issuer must sign this Letter.
If there is no Trustee, in signing By: ______________________________
this Letter Issuer itself (Authorized Officer's Signature)
undertakes to perform all of the
obligations set forth herein. ___________________________________
(Trustee)
B. Schedule B contains statements
that DTC believes accurately By: _______________________________
describe DTC, the method of (Authorized Officer's Signature)
effecting book-entry transfers of
securities distributed through
DTC, and certain related matters.
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By: _______________________
cc: Underwriter
Underwriter's Counsel
SCHEDULE A
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Describe Issue)
CUSIP Principal Amount Maturity Date Interest Rate
- ----- ---------------- ------------- -------------
SCHEDULE B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(PREPARED BY DTC--BRACKETED MATERIAL MAY BE APPLICABLE ONLY TO CERTAIN
ISSUES)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities
will be issued as fully-registered securities registered pin the name of Cede
& Co. (DTC's partnership nominee). One fully-registered Security certificate
will be issued for (each issue of the Securities, (each) in the aggregate
principal amount of such issue, and will be deposited with DTC. (If,
however, the aggregate principal amount of (any) issue exceeds $200 million,
one certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount of such issue.)
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with
a Direct Participant, either directly or indirectly ("Indirect
Participants"). The Rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities
on DTC's records. The ownership interest of each actual purchaser of each
Security ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected
to receive written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Securities are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Securities, except in the event that use of the
book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the
Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Securities are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
(6. Redemption notices shall be sent to Cede & Co. If less than all of
the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in
such issue to be redeemed.)
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Securities are credited on the record date (identified in
a listing attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on payable
date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment on payable
date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC,
Trustee, or Issuer, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal and interest to DTC
is the responsibility of the Issuer or Trustee, disbursement of such payments
to Direct Participants shall be the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners shall be the responsibility of
Direct and Indirect Participants.
(9. A Beneficial Owner shall give notice to elect to have its
Securities purchased or tendered, through its Participant, to Trustee (or
Tender/Remarketing Agent), and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trustee (or Tender/Remarketing Agent). The
requirement for physical delivery of Securities in connection with an
optional tender or a mandatory purchase will be deemed satisfied when the
ownership rights in the Securities are transferred by Direct Participants on
DTC's records and followed by a book-entry credit of tendered Securities to
Trustee (or Tender/Remarketing Agent's) DTC account.)
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Agent. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required to
be printed and delivered.
11. The Issuer may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor securities depository). In
that event, Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable,
but Issuer takes no responsibility for the accuracy thereof.
EXHIBIT 99.3
AMENDED AND RESTATED TRUST AGREEMENT
among
MORGAN STANLEY ABS CAPITAL II INC.,
as Depositor,
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
and
RV MARINE FUNDING CORPORATION
Dated as of August 25, 1997
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Capitalized Terms . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitional Provisions . . . . . . . . . . . . 1
ARTICLE II
Organization
SECTION 2.01. Name . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.02. Office . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.03. Purposes and Powers . . . . . . . . . . . . . . . . . 2
SECTION 2.04. Appointment of Owner Trustee . . . . . . . . . . . . 3
SECTION 2.05. Initial Capital Contribution of Owner
Trust Estate . . . . . . . . . . . . . . . . . . 3
SECTION 2.06. Declaration of Trust . . . . . . . . . . . . . . . . 3
SECTION 2.07. Liability of Owners . . . . . . . . . . . . . . . . . 3
SECTION 2.08. Title to Trust Property . . . . . . . . . . . . . . . 4
SECTION 2.09. Situs of Trust . . . . . . . . . . . . . . . . . . . 4
SECTION 2.10. Representations and Warranties of
Depositor and Company . . . . . . . . . . . . . 4
SECTION 2.11. Maintenance of the Demand Note . . . . . . . . . . . 6
SECTION 2.12. Federal Income Tax Allocations . . . . . . . . . . . 6
SECTION 2.13. Administrative Duties. . . . . . . . . . . . . . . . 7
SECTION 2.14. Elimination of Certain Tax Provisions . . . . . . . . 8
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Ownership . . . . . . . . . . . . . . . . . . 9
SECTION 3.02. The Trust Certificates . . . . . . . . . . . . . . . 9
SECTION 3.03. Authentication of Trust Certificates . . . . . . . . 9
SECTION 3.04. Registration of Transfer and Exchange of
Trust Certificates; Limitations on Transfer . . 9
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen
Trust Certificates . . . . . . . . . . . . . . . 10
SECTION 3.06. Persons Deemed Certificateholders . . . . . . . . . . 11
SECTION 3.07. Access to List of Certificateholders'
Names and Addresses . . . . . . . . . . . . . . 11
SECTION 3.08. Maintenance of Office or Agency . . . . . . . . . . . 11
SECTION 3.09. RESERVED . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.10. Ownership by Company of Trust
Certificates . . . . . . . . . . . . . . . . . . 12
SECTION 3.11. Book-Entry Trust Certificates . . . . . . . . . . . . 12
SECTION 3.12. Notices to Clearing Agency . . . . . . . . . . . . . 13
SECTION 3.13. Definitive Trust Certificates . . . . . . . . . . . . 13
ARTICLE IV
Actions by Owner Trustee
SECTION 4.01. Prior Notice to Certificateholders with
Respect to Certain Matters . . . . . . . . . . . 14
SECTION 4.02. Action by Certificateholders with
Respect to Certain Matters . . . . . . . . . . . 14
SECTION 4.03. Action by Certificateholders with
Respect to Bankruptcy . . . . . . . . . . . . . 15
SECTION 4.04. Restrictions on Certificateholders'
Power . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.05. Majority Control . . . . . . . . . . . . . . . . . . 15
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Establishment of Trust Account . . . . . . . . . . . 15
SECTION 5.02. Application of Trust Funds . . . . . . . . . . . . . 16
SECTION 5.03. Method of Payment . . . . . . . . . . . . . . . . . . 16
SECTION 5.04. No Segregation of Moneys; No Interest . . . . . . . . 16
SECTION 5.05. Accounting and Reports to
Certificateholders, Internal Revenue
Service and Others . . . . . . . . . . . . . . . 17
SECTION 5.06. Signature on Returns; Tax Matters
Partner . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.01. General Authority . . . . . . . . . . . . . . . . . . 17
SECTION 6.02. General Duties . . . . . . . . . . . . . . . . . . . 18
SECTION 6.03. Action upon Instruction . . . . . . . . . . . . . . . 18
SECTION 6.04. No Duties Except as Specified in this
Agreement or in Instructions . . . . . . . . . . 19
SECTION 6.05. No Action Except Under Specified
Documents or Instructions . . . . . . . . . . . 19
SECTION 6.06. Restrictions . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VII
Concerning Owner Trustee
SECTION 7.01. Acceptance of Trusts and Duties . . . . . . . . . . . 20
SECTION 7.02. Furnishing of Documents . . . . . . . . . . . . . . . 21
SECTION 7.03. Representations and Warranties . . . . . . . . . . . 21
SECTION 7.04. Reliance; Advice of Counsel . . . . . . . . . . . . . 21
SECTION 7.05. Not Acting in Individual Capacity . . . . . . . . . . 22
SECTION 7.06. Owner Trustee Not Liable for Trust
Certificates or Receivables . . . . . . . . . . 22
SECTION 7.07. Owner Trustee May Own Trust Certificates
and Notes . . . . . . . . . . . . . . . . . . . 23
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.01. Owner Trustee's Fees and Expenses . . . . . . . . . . 23
SECTION 8.02. Indemnification . . . . . . . . . . . . . . . . . . . 23
SECTION 8.03. Payments to Owner Trustee . . . . . . . . . . . . . . 24
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement . . . . . . . . . . . 24
SECTION 9.02. Dissolution upon Bankruptcy of Company . . . . . . . 25
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner
Trustee . . . . . . . . . . . . . . . . . . 26
SECTION 10.02. Resignation or Removal of Owner
Trustee . . . . . . . . . . . . . . . . . . 26
SECTION 10.03. Successor Owner Trustee . . . . . . . . . . . . 27
SECTION 10.04. Merger or Consolidation of Owner
Trustee . . . . . . . . . . . . . . . . . . 27
SECTION 10.05. Appointment of Co-Trustee or
Separate Trustee . . . . . . . . . . . . . 28
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments . . . . . . . . . . . 29
SECTION 11.02. No Legal Title to Owner Trust
Estate in Certificateholders . . . . . . . 31
SECTION 11.03. Limitations on Rights of Others . . . . . . . . 31
SECTION 11.04. Notices . . . . . . . . . . . . . . . . . . . . 31
SECTION 11.05. Severability . . . . . . . . . . . . . . . . . . 31
SECTION 11.06. Separate Counterparts . . . . . . . . . . . . . 32
SECTION 11.07. Successors and Assigns . . . . . . . . . . . . . 32
SECTION 11.08. Covenants of Company . . . . . . . . . . . . . . 32
SECTION 11.09. No Petition . . . . . . . . . . . . . . . . . . 33
SECTION 11.10. No Recourse . . . . . . . . . . . . . . . . . . 33
SECTION 11.11. Headings . . . . . . . . . . . . . . . . . . . . 33
SECTION 11.12. GOVERNING LAW . . . . . . . . . . . . . . . . . 33
SECTION 11.13. Trust Certificate Transfer
Restrictions . . . . . . . . . . . . . . . 33
EXHIBIT A
Form of Trust Certificate
EXHIBIT B
Form of Certificate of Trust of BankBoston Marine Asset Backed Trust 1997-2
B-1
EXHIBIT C
Form of Certificate Depository Agreement . . . . . . . . . . . . . . . . C-1
AMENDED AND RESTATED TRUST AGREEMENT dated as of August 25, 1997, among
MORGAN STANLEY ABS CAPITAL II INC., a Delaware corporation, as depositor
(the "Depositor"), WILMINGTON TRUST COMPANY, a Delaware banking
corporation, as owner trustee (the "Owner Trustee") and RV MARINE
FUNDING CORPORATION (the "Company"), a Delaware corporation and an
affiliate of BankBoston, N.A., a national banking association (the
"Bank").
ARTICLE I
Definitions
SECTION 1.01. Capitalized Terms. For all purposes of this Agreement,
capitalized terms used herein shall have the meanings set forth in Appendix A
to the Sale and Servicing Agreement dated as of August 25, 1997, among
BankBoston Marine Asset Backed Trust 1997-2 (the "Trust"), the Depositor and
the Bank.
SECTION 1.02. Other Definitional Provisions.
(a) 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.
(b) 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. 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.
(c) 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".
(d) 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.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means
such agreement, instrument or statute as from time to time amended, modified
or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
Organization
SECTION 2.01. Name. The Trust created hereby shall be known as
"BankBoston Marine Asset Backed Trust 1997-2," in which name the Owner
Trustee may conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and sue and be sued.
SECTION 2.02. Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the
Certificateholders, the Depositor and the Company.
SECTION 2.03. Purposes and Powers. (a) The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Trust
Certificates pursuant to this Agreement and to sell the Notes and the
Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the Trust
Certificates, to 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 Trust Estate pursuant to the Indenture and to hold, manage and
distribute to the Certificateholders pursuant to the terms of the Sale
and Servicing Agreement any portion of the Trust Estate released from
the Lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation
of the Owner Trust Estate and the making of distributions to the
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 2.04. Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.05. Initial Capital Contribution of Owner Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the
Owner Trustee, as of the date hereof, the sum of $1. The Owner Trustee
hereby acknowledges receipt in trust from the Depositor, as of the date
hereof, of the foregoing contribution, which shall constitute the initial
Owner Trust Estate and shall be deposited in the Certificate Distribution
Account. The Depositor shall pay organizational expenses of the Trust as
they may arise or shall, upon the request of the Owner Trustee, promptly
reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.06. Declaration of 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 obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business trust. It is
the intention of the parties hereto that, solely for income and franchise tax
purposes, the Trust shall be treated as a partnership, with the assets of the
partnership being the Receivables and other assets held by the Trust, the
partners of the partnership being the Certificateholders, and the Notes being
debt of the partnership. The parties agree that, unless otherwise required
by appropriate tax authorities, the Trust will file or cause to be filed
annual or other necessary returns, reports and other forms consistent with
the characterization of the Trust as a partnership for such tax purposes.
Effective as of the date hereof, the Owner Trustee shall have all rights,
powers and duties set forth herein and in the Business Trust Statute with
respect to accomplishing the purposes of the Trust. The Owner Trustee shall
file the Certificate of Trust with the Secretary of State of the State of
Delaware pursuant to Section3801 of the Business Trust Statute on or before
the Closing Date.
SECTION 2.07. Liability of Owners. (a) The Company shall be liable
directly to and will indemnify any injured party for all losses, claims,
damages, liabilities and expenses of the Trust (including Expenses, to the
extent not paid out of the Owner Trust Estate) to the extent that the Company
would be liable if the Trust were a partnership under the Delaware Revised
Uniform Limited Partnership Act in which the Company were a general partner;
provided, however, that the Company shall not be liable for any losses
incurred by a Certificateholder in the capacity of an investor in the Trust
Certificates, or by a Noteholder in the capacity of an investor in the Notes.
In addition, any third party creditors of the Trust (other than in connection
with the obligations described in the preceding sentence for which the
Company shall not be liable) shall be deemed third party beneficiaries of
this paragraph. The obligations of the Company under this paragraph shall be
evidenced by the Trust Certificate described in Section 3.10(a), which for
purposes of the Business Trust Statute shall be deemed to be a separate class
of Trust Certificates from all other Trust Certificates issued by the Trust;
provided that the rights and obligations evidenced by all Trust Certificates,
regardless of class, shall, except as provided in this Section and in Section
3.10(a), be identical.
(b) No Certificateholder, other than to the extent set forth in
paragraph (a), shall have any personal liability for any liability or
obligation of the Trust.
SECTION 2.08. Title to Trust Property. Legal title to all the Owner
Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in
which case title shall be deemed to be vested in the Owner Trustee, a co-
trustee and/or a separate trustee, as the case may be.
SECTION 2.09. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of
Delaware or the State of New York. The Trust shall not have any employees in
any state other than Delaware; provided, however, that nothing herein shall
restrict or prohibit the Owner Trustee from having employees within or
without the State of Delaware. Payments will be received by the Trust only
in Delaware or New York, and payments will be made by the Trust only from
Delaware or New York. The only office of the Trust will be at the Corporate
Trust Office in Delaware.
SECTION 2.10. Representations and Warranties of Depositor and Company.
(a) The Depositor hereby represents and warrants to the Owner Trustee
that:
(i) The Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
(ii) The Depositor is duly qualified to do business as a foreign
corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of its
property or the conduct of its business shall require such
qualifications.
(iii) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms; the Depositor has
full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trust and the Depositor has duly
authorized such sale and assignment and deposit to the Trust by all
necessary corporate action; and the execution, delivery and performance
of this Agreement have been duly authorized by the Depositor by all
necessary corporate action.
(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or bylaws of the Depositor, or any
indenture, agreement or other instrument to which the Depositor is a
party or by which it is bound; nor result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the
Basic Documents); nor violate any law or, to the best of the Depositor's
knowledge, any order, rule or regulation applicable to the Depositor of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
the Depositor or its properties.
(v) To the Depositor's best knowledge, there are no proceedings or
investigations pending or threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties: (A) asserting the
invalidity of this Agreement, (B) seeking to prevent the consummation
of any of the transactions contemplated by this Agreement or (C) seeking
any determination or ruling that might materially and adversely affect
the performance by the Depositor of its obligations under, or the
validity or enforceability of, this Agreement.
(b) The Company hereby represents and warrants to the Owner Trustee
that:
(i)The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
(ii)The Company is duly qualified to do business as a foreign
corporation in good standing and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of its
property or the conduct of its business shall require such
qualifications.
(iii)The Company has the power and authority to execute and deliver
this Agreement and to carry out its terms; the Company has full power
and authority to purchase the Investor Certificates; and the execution,
delivery and performance of this Agreement have been duly authorized by
the Company by all necessary corporate action.
(iv)The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the certificate of incorporation or bylaws of the Company, or any
indenture, agreement or other instrument to which the Company is a party
or by which it is bound; nor result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such
indenture, agreement or other instrument (other than pursuant to the
Basic Documents); nor violate any law or, to the best of the Company's
knowledge, any order, rule or regulation applicable to the Company of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over
the Company or its properties.
(v)There are no proceedings or investigations pending or, to the
Company's best knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Company or its properties: (A) asserting the
invalidity of this Agreement, (B) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or (C) seeking
any determination or ruling that might materially and adversely affect
the performance by the Company of its obligations under, or the validity
or enforceability of, this Agreement.
SECTION 2.11. Maintenance of the Demand Note. To the fullest extent
permitted by applicable law, the Company agrees that it shall not sell,
convey, pledge, transfer or otherwise dispose of the Demand Note.
SECTION 2.12. Federal Income Tax Allocations. 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 to the Certificateholders as of the first day following the end
of such month, in proportion to their ownership of principal amount of Trust
Certificates on such date, to the extent of any net income of the Trust
(including any amounts to be distributed to the Certificateholders pursuant
to the Sale and Servicing Agreement). Net losses of the Trust, if any, for
any month as determined for federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof) shall
be allocated to the Company to the extent the Company is reasonably expected
to bear the economic burden of such net losses, and any remaining net losses
shall be allocated among the Certificateholders as of the first Record Date
following the end of such month in proportion to their ownership of
principal amount of Trust Certificates on such Record Date. The Company
is authorized to modify the allocations in this paragraph if necessary or
appropriate, in its sole discretion, for the allocations to fairly reflect
the economic income, gain or loss to the Company or to the Certificateholders,
or as otherwise required by the Code.
SECTION 2.13. Administrative Duties.
(a) Duties with Respect to the Note Agreements. The Depositor
shall perform the duties of the Trust under the Indenture, the Note
Depository Agreement and the Certificate Depository Agreement
(collectively the "Note Agreement"). In addition, the Depositor shall
consult with the Owner Trustee as the Depositor deems appropriate
regarding the duties of the Trust under the Note Agreements. The
Depositor shall monitor the performance of the Trust's duties and shall
advise the Owner Trustee when action is necessary to comply with the
Trust's duties under the Note Agreements. The Depositor shall prepare
for execution by the Owner Trustee or shall cause the preparation by
other appropriate Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the
Trust to prepare, file or deliver pursuant to the Note Agreements. In
furtherance of the foregoing, the Depositor shall take all necessary
action that is the duty of the Trust to take pursuant to Sections 3.04,
3.05, 3.06, 3.09, 3.14, 3.19 and 7.03 of the Indenture.
(b) Duties with Respect to the Trust.
(i) In addition to the duties of the Depositor set forth in
the Basic Documents, the Depositor shall perform such calculations and
shall prepare for execution by the Trust or the Owner Trustee or shall
cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates and opinions as
it shall be the duty of the Trust or the Owner Trustee to prepare, file
or deliver pursuant to state and federal tax and securities laws and
shall take all other appropriate action that it is the duty of the Trust
or the Owner Trustee to take pursuant to the Basic Documents relating to
the preparation and filing of tax returns, the transfers of
Certificates, the furnishing of documents and with respect to
supplements and amendments of the Note Agreement. In accordance with
the request of the Owner Trustee, the Depositor shall administer,
perform or supervise the performance of such other activities in
connection with the Basic Documents as are not covered by any of the
foregoing provisions and as are expressly requested by the Owner Trustee
and are reasonably within the capability of the Depositor.
(ii) Notwithstanding anything in this Agreement or any of the
other Basic Documents to the contrary, the Depositor shall be
responsible for promptly notifying the Owner Trustee in the event that
any withholding tax is imposed on the Trust's payments (or allocations
of income) to a Certificateholder. Any such notice shall be in writing
and specify the amount of any withholding tax required to be withheld by
the Owner Trustee pursuant to such provision.
(c) Records. The Depositor shall maintain appropriate books of
account, including capital accounts, and records relating to the Trust,
which books of account and records shall be accessible for inspection by
the Owner Trustee and the Certificateholders at any time during normal
business hours.
(d) Additional Information to be Furnished to the Trust. The
Depositor shall furnish to the Owner Trustee from time to time such
additional information regarding the Trust or the Basic Documents as the
Owner Trustee shall reasonably request.
SECTION 2.14. Elimination of Certain Tax Provisions. In the event that
the Company provides the Owner Trustee and the Depositor with an opinion of
counsel acceptable to the Depositor (the cost of which opinion shall not be
an expense of the Depositor, the Owner Trustee or the Trust) that, based on a
change in California law since the Closing Date, for the Trust to be treated
as a partnership for California state income and franchise tax purposes it is
no longer necessary for: (i) the Company to continue to maintain the Demand
Note pursuant to Section 2.11 of this Agreement; (ii) an Insolvency Event of
the Company to cause the dissolution of the Trust pursuant to Section 9.02 of
this Agreement; (iii) the Company's Trust Certificate to be nontransferable
pursuant to Section 3.10(a) of this Agreement; and (iv) the Company to have
liability as and to the extent provided for pursuant to Section 2.07(a), this
Agreement will be deemed to have been amended (subject to any conditions set
forth in such opinion of counsel and effective only after the later of the
date of such opinion or the effective date set forth in such opinion) without
the consent of Noteholders or Certificateholders and without the requirement
of any further action by the Owner Trustee, the Depositor or the Company in
that Section 2.11, Section 9.02 Section 3.10(a) and Section 2.07(a) will be
deemed to have been eliminated from this Agreement and shall be of no further
force or effect.
ARTICLE III
Trust Certificates and Transfer of Interests
SECTION 3.01. Initial Ownership. Upon the formation of the Trust by
the contribution by the Depositor pursuant to Section 2.05 and until the
issuance of the Trust Certificates, the Depositor shall be the sole
beneficiary of the Trust.
SECTION 3.02. The Trust Certificates. The Trust Certificates shall be
issued in definitive, certificated form in minimum denominations of $1,000
and in integral multiples of $1 in excess thereof; provided, however, that
the Trust Certificates issued to the Company pursuant to Section 3.10 may be
issued in such denomination as required to include any residual amount. The
Trust Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee. Trust
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures shall have been affixed, authorized to
sign on behalf of the Trust, shall be validly issued and entitled to the
benefit of this Agreement, notwithstanding that such individuals or any of
them shall have ceased to be so authorized prior to the authentication and
delivery of such Trust Certificates or did not hold such offices at the date
of authentication and delivery of such Trust Certificates.
A transferee of a Trust Certificate shall become a Certificateholder and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Trust
Certificate duly registered in such transferee's name pursuant to Section
3.04.
SECTION 3.03. Authentication of Trust Certificates. On the Closing
Date, the Owner Trustee shall cause the Trust Certificates in an aggregate
principal amount equal to the Initial Certificate Balance to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order
of the Depositor, signed by its chairman of the board, its president, any
vice president, secretary or any assistant treasurer, without further
corporate action by the Depositor, in authorized denominations. No Trust
Certificate shall entitle its Holder to any benefit under this Agreement or
be valid for any purpose unless there shall appear on such Trust Certificate
a certificate of authentication substantially in the form set forth in
Exhibit A, executed by the Owner Trustee by manual signature; such
authentication shall constitute conclusive evidence that such Trust
Certificate shall have been duly authenticated and delivered hereunder. All
Trust Certificates shall be dated the date of their authentication.
SECTION 3.04. Registration of Transfer and Exchange of Trust
Certificates; Limitations on Transfer. The Certificate Registrar shall keep
or cause to be kept, at the office or agency maintained pursuant to
Section 3.08, a Certificate Register in which, subject to such reasonable
regulations as it may prescribe, the Owner Trustee shall provide for the
registration of Trust Certificates and of transfers and exchanges of Trust
Certificates as herein provided. Wilmington Trust Company shall be the
initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate at
the office or agency maintained pursuant to Section 3.08, the Owner Trustee
shall execute, authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Trust Certificates in authorized
denominations of a like aggregate amount dated the date of authentication by
the Owner Trustee. At the option of a Holder, Trust Certificates may be
exchanged for other Trust Certificates of authorized denominations of a like
aggregate amount upon surrender of the Trust Certificates to be exchanged at
the office or agency maintained pursuant to Section 3.08.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Trust Certificate surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Owner Trustee in
accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Trust Certificates.
The preceding provisions of this Section notwithstanding, the Owner
Trustee shall not make, and the Certificate Registrar shall not register
transfers or exchanges of, Trust Certificates for a period of 15 days
preceding the due date for any payment with respect to the Trust
Certificates.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates.
If (a) any mutilated Trust Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust
Certificate and (b) there shall be delivered to the Certificate Registrar and
the Owner Trustee such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Certificate has been acquired by a bona fide purchaser, the Owner Trustee on
behalf of the Trust shall execute and the Owner Trustee shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed,
lost or stolen Trust Certificate, a new Trust Certificate of like tenor and
denomination. In connection with the issuance of any new Trust Certificate
under this Section, the Owner Trustee or the Certificate Registrar may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any
duplicate Trust Certificate issued pursuant to this Section shall constitute
conclusive evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Trust Certificate shall be found
at any time.
SECTION 3.06. Persons Deemed Certificateholders. Prior to due
presentation of a Trust Certificate for registration of transfer, the Owner
Trustee or the Certificate Registrar may treat the Person in whose name any
Trust Certificate is registered in the Certificate Register as the owner of
such Trust Certificate for the purpose of receiving distributions pursuant to
Section 5.02 and for all other purposes whatsoever, and none of the Owner
Trustee, the Certificate Registrar shall be bound by any notice to the
contrary.
SECTION 3.07. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer and the Depositor, within 15 days after receipt by the Owner Trustee
of a written request therefor from the Servicer or the Depositor, a list, in
such form as the Servicer or the Depositor may reasonably require, of the
names and addresses of the Certificateholders as of the most recent Record
Date. If a Certificateholder applies in writing to the Owner Trustee, and
such application states that the applicant desires to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Trust Certificates and such application is accompanied by a copy of the
communication that such applicant proposes to transmit, then the Owner
Trustee shall, within five Business Days after the receipt of such
application, afford such applicant access during normal business hours to the
current list of Certificateholders. Each Holder, by receiving and holding a
Trust Certificate, shall be deemed to have agreed not to hold any of the
Depositor, the Company, the Certificate Registrar or the Owner Trustee
accountable by reason of the disclosure of its name and address, regardless
of the source from which such information was derived.
SECTION 3.08. Maintenance of Office or Agency. The Owner Trustee shall
maintain in the Borough of Manhattan, The City of New York, an office or
offices or agency or agencies where Trust Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Trust Certificates and the Basic
Documents may be served. The Owner Trustee initially designates The Chase
Manhattan Bank as its office for such purposes. The Owner Trustee shall give
prompt written notice to the Company and to the Certificateholders of any
change in the location of the Certificate Register or any such office or
agency.
SECTION 3.09. RESERVED.
SECTION 3.10. Ownership by Company of Trust Certificates.
(a) On the Closing Date, the Company shall retain Trust Certificates
representing at least 1% of the Initial Certificate Balance and shall
thereafter retain beneficial and record ownership of Trust Certificates
representing at least 1% of the Certificate Balance. Any attempted transfer
of the Company's Trust Certificate that would reduce such interest of the
Company below 1% of the Certificate Balance shall be void. The Owner Trustee
shall cause any Trust Certificate issued to the Company to contain a legend
stating "THIS CERTIFICATE IS NON-TRANSFERABLE".
(b) The Trust Certificate issued to the Company as described in Section
3.10(a) shall contain such additional language providing that all amounts to
be distributed pursuant 5.06(b) of the Sale and Servicing Agreement shall be
distributed to the Holder of such Certificate.
SECTION 3.11. Book-Entry Trust Certificates. The Trust Certificates,
upon original issuance, will be issued in the form of a typewritten Trust
Certificate or Trust Certificates representing Book-Entry Trust Certificates,
to be delivered to The Depository Trust Company, the initial Clearing Agency,
by, or on behalf of, the Trust; provided, however, that one Definitive Trust
Certificate may be issued to the Company pursuant to Section 3.10. Such
Trust Certificate or Trust Certificates shall initially be registered on the
Certificate Register in the name of Cede & Co., the nominee of the initial
Clearing Agency, and no Certificate Owner will receive a definitive Trust
Certificate representing such Certificate Owner's interest in such Trust
Certificate, except as provided in Section 3.13. Unless and until
definitive, fully registered Trust Certificates (the "Definitive Trust
Certificates") have been issued to Certificate Owners pursuant to
Section 3.13:
(a) The provisions of this Section shall be in full force and effect;
(b) The Certificate Registrar and the Owner Trustee shall be entitled
to deal with the Clearing Agency for all purposes of this Agreement
(including the payment of principal of and interest on the Trust Certificates
and the giving of instructions or directions hereunder) as the sole Holder of
the Trust Certificates and shall have no obligation to the Certificate
Owners;
(c) To the extent that the provisions of this Section conflict with any
other provisions of this Agreement, the provisions of this Section shall
control;
(d) The rights of Certificate Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency and/or the
Clearing Agency Participants. Pursuant to the Certificate Depository
Agreement, unless and until Definitive Trust Certificates are issued pursuant
to Section 3.13, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Trust Certificates to such Clearing Agency
Participants; and
(e) Whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Trust Certificates
evidencing a specified percentage of the Certificate Balance, the Clearing
Agency shall be deemed to represent such percentage only to the extent that
it has received instructions to such effect from Certificate Owners and/or
Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Trust Certificates and
has delivered such instructions to the Owner Trustee.
SECTION 3.12. Notices to Clearing Agency. Whenever a notice or other
communication to the Certificateholders is required under this Agreement,
unless and until Definitive Trust Certificates shall have been issued to
Certificate Owners pursuant to Section 3.13, the Owner Trustee shall give all
such notices and communications specified herein to be given to
Certificateholders to the Clearing Agency, and shall have no obligations to
the Certificate Owners.
SECTION 3.13. Definitive Trust Certificates. If (i) the Depositor
advises the Owner Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to
the Trust Certificates and the Depositor is unable to locate a qualified
successor, (ii) the Depositor at its option advises the Owner Trustee in
writing that it elects to terminate the book-entry system through the
Clearing Agency or (iii) after the occurrence of an Event of Default or a
Servicer Default, Certificate Owners representing beneficial interests
aggregating at least a majority of the Certificate Balance advise the
Clearing Agency in writing that the continuation of a book-entry system
through the Clearing Agency is no longer in the best interest of the
Certificate Owners, then the Clearing Agency shall notify all Certificate
Owners and the Owner Trustee of the occurrence of any such event and of the
availability of the Definitive Trust Certificates to Certificate Owners
requesting the same. Upon surrender to the Owner Trustee of the typewritten
Trust Certificate or Trust Certificates representing the Book-Entry Trust
Certificates by the Clearing Agency, accompanied by registration
instructions, the Owner Trustee shall execute and authenticate the Definitive
Trust Certificates in accordance with the instructions of the Clearing
Agency. Neither the Certificate Registrar nor the Owner Trustee shall be
liable for any delay in delivery of such instructions and may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of Definitive Trust Certificates, the Owner Trustee shall recognize
the Holders of the Definitive Trust Certificates as Certificateholders. The
Definitive Trust Certificates shall be printed, lithographed or engraved or
may be produced in any other manner as is reasonably acceptable to the Owner
Trustee, as evidenced by its execution thereof.
ARTICLE IV
Actions by Owner Trustee
SECTION 4.01. Prior Notice to Certificateholders 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 initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of the Receivables) and
the compromise of any action, claim or lawsuit brought by or against the
Trust (except with respect to the aforementioned claims or lawsuits for
collection of the Receivables);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business
Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interests of the
Certificateholders;
(e) the amendment, change or modification of the Administration
Agreement, except to cure any ambiguity or to amend or supplement any
provision in a manner or add any provision that would not materially
adversely affect the interests of the Certificateholders; or
(f) the appointment pursuant to the Indenture of a successor Note
Registrar or Indenture Trustee or pursuant to this Agreement of a successor
Certificate Registrar, or the consent to the assignment by the Note Registrar
or Indenture Trustee or Certificate Registrar of its obligations under the
Indenture or this Agreement, as applicable.
SECTION 4.02. Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the
direction of the Certificateholders, to remove the Servicer under the Sale
and Servicing Agreement pursuant to Section 8.01 thereof or 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.
SECTION 4.03. Action by Certificateholders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to commence a voluntary proceeding
in bankruptcy relating to the Trust without the unanimous prior approval of
all Certificateholders and the delivery to the Owner Trustee by each such
Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that the Trust is insolvent.
SECTION 4.04. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or to refrain
from taking any action if such action or inaction would be contrary to any
obligation of the Trust or the Owner Trustee under this Agreement or any of
the Basic Documents or would be contrary to Section 2.03, nor shall the Owner
Trustee be obligated to follow any such direction, if given.
SECTION 4.05. Majority Control. Except as expressly provided herein,
any action that may be taken by the Certificateholders under this Agreement
may be taken by the Holders of Trust Certificates evidencing not less than a
majority of the Certificate Balance. Except as expressly provided herein,
any written notice of the Certificateholders delivered pursuant to this
Agreement shall be effective if signed by Holders of Trust Certificates
evidencing not less than a majority of the Certificate Balance at the time of
the delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
SECTION 5.01. Establishment of Trust Account. The Owner Trustee, for
the benefit of the Certificateholders, shall establish and maintain in the
name of the Trust an Eligible Deposit Account (the "Certificate Distribution
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders.
The Owner Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Certificate Distribution Account
and in all proceeds thereof. Except as otherwise expressly provided herein,
the Certificate Distribution Account shall be under the sole dominion and
control of the Owner Trustee for the benefit of the Certificateholders. If,
at any time, the Certificate Distribution Account ceases to be an Eligible
Deposit Account, the Owner Trustee (or the Depositor on behalf of the Owner
Trustee, if the Certificate Distribution Account is not then held by the
Owner Trustee or an affiliate thereof) shall within 10 Business Days (or such
longer period, not to exceed 30 calendar days, as to which each Rating Agency
may consent) establish a new Certificate Distribution Account as an Eligible
Deposit Account and shall transfer any cash and/or any investments to such
new Certificate Distribution Account.
SECTION 5.02. Application of Trust Funds. (a) On each Monthly Payment
Date, the Owner Trustee will distribute to Certificateholders, on a pro rata
basis, amounts received from the Indenture Trustee for distribution to the
Certificateholders pursuant to Section 5.06(a)(ii) of the Sale and Servicing
Agreement with respect to such Monthly Payment Date. In addition, on each
Monthly Payment Date the Owner Trustee will distribute to the Company,
amounts, if any received from the Indenture Trustee for distribution to the
Company pursuant to Section 5.06(b) of the Sale and Servicing Agreement with
respect to such Monthly Payment Date.
(b) On each Monthly Payment Date, the Owner Trustee shall send to each
Certificateholder the statement or statements provided to the Owner Trustee
by the Servicer pursuant to Section 5.08 of the Sale and Servicing Agreement
with respect to such Monthly Payment Date.
(c) 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 Owner Trustee is hereby authorized and
directed to retain 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 Owner
Trustee from contesting any such tax in appropriate proceedings and
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings). The amount of any withholding tax imposed with respect to
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-U.S. Certificateholder), the Owner Trustee may in its sole discretion
withhold such amounts in accordance with this paragraph (c).
SECTION 5.03. Method of Payment. Subject to Section 9.01(c),
distributions required to be made to Certificateholders on any Monthly
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 such Certificateholder shall have
provided to the Certificate Registrar appropriate written instructions at
least five Business Days prior to such Monthly Payment Date or, if not, by
check mailed to such Certificateholder at the address of such Holder
appearing in the Certificate Register.
SECTION 5.04. No Segregation of Moneys; No Interest. Moneys received
by the Owner Trustee hereunder need not be segregated in any manner except to
the extent required by law or the Sale and Servicing Agreement and may be
deposited under such general conditions as may be prescribed by law, and the
Owner Trustee shall not be liable for any interest thereon.
SECTION 5.05. Accounting and Reports to Certificateholders, Internal
Revenue Service and Others. The Depositor shall (a) maintain (or cause to be
maintained) the books of the Trust on a calendar year basis and the accrual
method of accounting, (b) deliver to each Certificateholder, as may be
required by the Code and applicable Treasury Regulations, such information as
may be required (including Schedule K-1) to enable each Certificateholder to
prepare its federal and state income tax returns, (c) file such tax returns
relating to the Trust (including a partnership information return, IRS
Form 1065) and make such elections as from time to time may be required or
appropriate under any applicable state or federal statute or any rule or
regulation thereunder so as to maintain the Trust's characterization as a
partnership for federal income tax purposes, (d) cause such tax returns to be
signed in the manner required by law and (e) collect or cause to be collected
any withholding tax as described in and in accordance with Section 5.02(c)
with respect to income or distributions to Certificateholders. The Owner
Trustee shall elect under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Receivables.
The Owner Trustee shall not make the election provided under Section 754 of
the Code.
SECTION 5.06. Signature on Returns; Tax Matters Partner. (a) The
Owner Trustee shall sign on behalf of the Trust the tax returns of the Trust,
unless applicable law requires a Certificateholder to sign such documents, in
which case such documents shall be signed by the Company.
(b) The Company shall be designated the "tax matters partner" of the
Trust pursuant to Section 6231(a)(7)(A) of the Code and applicable Treasury
Regulations.
ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to
be a party and each certificate or other document attached as an exhibit to
or contemplated by the Basic Documents to which the Trust is to be a party
and, in each case, in such form as the Depositor shall approve, as evidenced
conclusively by the Owner Trustee's execution thereof. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Basic Documents. The
Owner Trustee is further authorized from time to time to take such action as
the Depositor recommends with respect to the Basic Documents.
SECTION 6.02. General Duties. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and the Basic Documents to which the
Trust is a party and to administer the Trust in the interest of the
Certificateholders, subject to the Basic Documents and in accordance with the
provisions of this Agreement. Notwithstanding the foregoing, the Owner
Trustee will be deemed to have discharged it duties under the Basic Documents
to the extent the Depositor has agreed to perform them pursuant to Section
2.13 of this Agreement.
SECTION 6.03. Action upon Instruction. (a) Subject to Article IV and
in accordance with the terms of the Basic Documents, the Certificateholders
may by written instruction direct the Owner Trustee in the management of the
Trust. Such direction may be exercised at any time by written instruction of
the Certificateholders pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such
action is likely to result in liability on the part of the Owner Trustee or
is contrary to the terms hereof or of any Basic Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or
under any Basic Document, the Owner Trustee shall promptly give notice (in
such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Certificateholders received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within 10 days
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be 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
Certificateholders 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 6.04. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Owner Trustee is a party, except as
expressly provided by the terms of this Agreement or in any document or
written instruction received by the Owner Trustee pursuant to Section 6.03;
and no implied duties or obligations shall be read into this Agreement or any
Basic Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any
public office at any time or to otherwise perfect or maintain the perfection
of any security interest or lien granted to it hereunder or to prepare or
file any Securities and Exchange Commission filing for the Trust or to record
this Agreement or any Basic Document. The Owner Trustee nevertheless agrees
that it will, at its own cost and expense, promptly take all action as may be
necessary to discharge any liens on any part of the Owner Trust Estate that
result from actions by, or claims against, the Owner Trustee that are not
related to the ownership or the administration of the Owner Trust Estate.
SECTION 6.05. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell,
dispose of or otherwise deal with any part of the Owner Trust Estate except
(i) in accordance with the powers granted to and the authority conferred upon
the Owner Trustee pursuant to this Agreement, (ii) in accordance with the
Basic Documents and (iii) in accordance with any document or instruction
delivered to the Owner Trustee pursuant to Section 6.03.
SECTION 6.06. Restrictions. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.03 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for federal income
tax purposes. The Certificateholders shall not direct the Owner Trustee to
take action that would violate the provisions of this Section.
ARTICLE VII
Concerning Owner Trustee
SECTION 7.01. Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts, but only upon the terms of this Agreement. The
Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the Owner Trust Estate upon the terms of the Basic
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own willful misconduct or negligence or (ii) in the case
of the inaccuracy of any representation or warranty contained in Section 7.03
expressly made by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) The Owner Trustee shall not be liable for any error of judgment
made by a Trust Officer of the Owner Trustee;
(b) The Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of 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 the Company or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust Estate, or for or in
respect of the validity or sufficiency of the Basic Documents, other than the
certificate of authentication on the Trust Certificates, and the Owner
Trustee shall in no event assume or incur any liability, duty or obligation
to any Noteholder or to any Certificateholder, other than as expressly
provided for herein or expressly agreed to in the Basic Documents;
(f) The Owner Trustee shall not be liable for the default or misconduct
of the Depositor, the Company, the Indenture 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 of the Trust under this
Agreement or the Basic Documents that are required to be performed by the
Indenture Trustee under the Indenture or the Servicer or Morgan Stanley ABS
Capital II Inc. under the Sale and Servicing Agreement; and
(g) The Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation under this Agreement or otherwise or in relation to
this Agreement or any Basic Document, at the request, order or direction of
any of the Certificateholders, unless such 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 or willful misconduct in the performance of any such act.
SECTION 7.02. 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 7.03. Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Depositor and the Company, for the benefit of
the Certificateholders, that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) Neither the execution or the delivery by it of this Agreement, nor
the consummation by it of the transactions contemplated hereby, nor
compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding
on it, or constitute any default under its charter documents or bylaws or any
indenture, mortgage, contract, agreement or instrument to which it is a party
or by which any of its properties may be bound.
SECTION 7.04. Reliance; Advice of Counsel. (a) The Owner Trustee
shall incur no liability to anyone in acting upon any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion,
bond, or other document or paper believed by it to be genuine and believed by
it to be signed by the proper party or parties. The Owner Trustee may accept
a certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by
the treasurer or other authorized officers of the relevant party, as to such
fact or matter, and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith
in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents
or attorneys pursuant to agreements entered into with any of them, and the
Owner Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys if such agents or attorneys shall have been selected by
the Owner Trustee with reasonable care, and (ii) may consult with counsel,
accountants and other skilled Persons to be selected with reasonable care and
employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the written
opinion or advice of any such counsel, accountants or other such Persons and
not contrary to this Agreement or any Basic Document.
SECTION 7.05. Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created Wilmington Trust
Company acts solely as Owner Trustee hereunder and not in its individual
capacity, and all Persons having any claim against the Owner Trustee by
reason of the transactions contemplated by this Agreement or any Basic
Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates or
Receivables. The recitals contained herein and in the Trust Certificates
(other than the signature and countersignature of the Owner Trustee on the
Trust Certificates) shall be taken as the statements of the Depositor, and
the Owner Trustee assumes no responsibility for the correctness thereof. The
Owner Trustee makes no representations as to the validity or sufficiency of
this Agreement, of any Basic Document or of the Trust Certificates (other
than the signature and countersignature of the Owner Trustee on the Trust
Certificates) or the Notes, or of any Receivable or related documents. The
Owner 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 Boat 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 Boat; 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 Company or the Servicer with any warranty or
representation made under any Basic Document or in any related document or
the accuracy of any such warranty or representation, or any action of the
Indenture Trustee or the Servicer or any subservicer taken in the name of the
Owner Trustee.
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes. The
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Company, the Indenture Trustee and the Servicer in banking transactions with
the same rights as it would have if it were not Owner Trustee.
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have
been separately agreed upon before the date hereof between the Depositor 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.
SECTION 8.02. Indemnification. The Company shall be liable as primary
obligor for, and shall indemnify the Owner Trustee and its successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from
and against, any and all liabilities, obligations, losses, damages, taxes,
claims, actions and suits, and any and all reasonable costs, expenses and
disbursements (including reasonable legal fees and expenses) of any kind and
nature whatsoever (collectively, "Expenses") which may at any time be imposed
on, incurred by, or asserted against the Owner Trustee or any Indemnified
Party in any way relating to or arising 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 Company shall not be liable for or required to indemnify an
Indemnified Party from and against Expenses arising or resulting from any of
the matters described in the third sentence of Section 7.01. The indemnities
contained in this Section shall survive the resignation or termination of the
Owner Trustee or the termination of this Agreement. In any event of any
claim, action or proceeding for which indemnity will be sought pursuant to
this Section, the Owner Trustee's choice of legal counsel shall be subject to
the approval of the Company, which approval shall not be unreasonably
withheld.
SECTION 8.03. Payments to Owner Trustee. Any amounts paid to the Owner
Trustee pursuant to this Article VIII shall be deemed not to be a part of the
Owner Trust Estate immediately after such payment.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.01. Termination of Trust Agreement. (a) This Agreement
(other than Article VIII) and the Trust shall terminate and be of no further
force or effect (i) upon the final distribution by the Owner Trustee of all
moneys or other property or proceeds of the Owner Trust Estate in accordance
with the terms of the Indenture, the Sale and Servicing Agreement and
Article V or (ii) at the time provided in Section 9.02. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder, other
than the Company as described in Section 9.02, shall not (x) operate to
terminate this Agreement or the Trust or (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 or (z) otherwise affect the rights,
obligations and liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), none of the Depositor, the
Company or any Certificateholder shall be entitled to revoke or terminate the
Trust.
(c) Notice of any termination of the Trust, specifying the Monthly
Payment Date upon which Certificateholders shall surrender their Trust
Certificates for payment of the final distribution and cancellation, shall be
given by the Owner Trustee by letter to Certificateholders mailed within five
Business Days of receipt of notice of such termination from the Servicer
given pursuant to Section 9.01(c) of the Sale and Servicing Agreement,
stating (i) the Monthly Payment Date upon or with respect to which final
payment of the Trust Certificates shall be made upon presentation and
surrender of the Trust Certificates at the office of the Owner Trustee,
(ii) the amount of any such final payment and (iii) that the Record Date
otherwise applicable to such Monthly Payment Date is not applicable, payments
being made only upon presentation and surrender of the Trust Certificates at
the office of the Owner Trustee. The Owner Trustee shall give such notice to
the Certificate Registrar (if other than the Owner Trustee) at the time such
notice is given to Certificateholders. Upon presentation and surrender of
the Trust Certificates, the Owner Trustee shall cause to be distributed to
Certificateholders amounts distributable on such Monthly Payment Date
pursuant to Section 5.02.
In the event that all of the Certificateholders shall not surrender
their Trust Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give
a second written notice to the remaining Certificateholders to surrender
their Trust Certificates for cancellation and receive the final distribution
with respect thereto. If within one year after the second notice all the
Trust Certificates shall not have been surrendered for cancellation, the
Owner Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Trust Certificates, and the cost thereof shall be paid out
of the funds and other assets that shall remain subject to this Agreement.
Subject to applicable escheat laws, any funds remaining in the Trust after
exhaustion of such remedies shall be distributed by the Owner Trustee to the
Company.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with
the provisions of Section 3810 of the Business Trust Statute.
SECTION 9.02. Dissolution upon Bankruptcy of Company. In the event
that an Insolvency Event shall occur with respect to the Company, this
Agreement shall be terminated in accordance with Section 9.01 90 days after
the date of such Insolvency Event, unless, before the end of such 90-day
period, the Owner Trustee shall have received written instructions from
(a) Holders of Certificates (other than the Company) representing more than
50% of the Certificate Balance (not including the Certificate Balance of the
Trust Certificates held by the Company) or (b) the (i) Holders (as defined
with respect to the Indenture) of Notes representing more than 50% of the
Outstanding Amount of the Notes, and (ii) Holders (as defined with respect to
the Indenture) of Trust Certificates representing more than 50% of the
Certificate Balance, to the effect that each such party disapproves of the
liquidation of the Receivables and termination of the Trust. Promptly after
the occurrence of any Insolvency Event with respect to the Company, (A) the
Company shall give the Indenture Trustee and the Owner Trustee written notice
of such Insolvency Event, (B) the Owner Trustee shall, upon the receipt of
such written notice from the Company, give prompt written notice to the
Certificateholders, and the Indenture Trustee, of the occurrence of such
event and (C) the Indenture Trustee shall, upon receipt of written notice of
such Insolvency Event from the Owner Trustee or the Company, give prompt
written notice to the Noteholders of the occurrence of such event; provided,
however, that any failure to give a notice required by this sentence shall
not prevent or delay, in any manner, a termination of the Trust pursuant to
the first sentence of this Section 9.02. Upon a termination pursuant to this
Section, the Owner Trustee shall direct the Indenture Trustee promptly to
sell the assets of the Trust (other than the Trust Accounts and the
Certificate Distribution Account) in a commercially reasonable manner and on
commercially reasonable terms. The proceeds of such a sale of the assets of
the Trust shall be treated as collections under the Sale and Servicing
Agreement.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.01. Eligibility Requirements for Owner Trustee. The
Owner Trustee shall at all times be a corporation satisfying the provisions
of Section 3807(a) of the Business Trust Statute; authorized to exercise
corporate trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authorities; and having (or having a parent that has) time deposits that are
rated at least A-1 by Standard & Poor's and P-1 by Moody's. If such
corporation shall publish reports of condition at least annually pursuant to
law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of this Section, the Owner Trustee shall resign
immediately in the manner and with the effect specified in Section 10.02.
SECTION 10.02. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor. 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. If no successor Owner Trustee shall have been
so appointed and have accepted appointment within 30 days after the giving of
such notice of resignation, the resigning Owner Trustee may petition any
court of competent jurisdiction for the appointment of a successor Owner
Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign
after written request therefor by the 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 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
and one copy to the successor Owner Trustee, and shall pay 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
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.03 and payment of all fees and expenses
owed to the outgoing Owner Trustee. The Depositor shall provide notice of
such resignation or removal of the Owner Trustee to each of the Rating
Agencies.
SECTION 10.03. Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 10.02 shall execute, acknowledge and
deliver to the Depositor and to its predecessor Owner Trustee an instrument
accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become
effective, and such successor Owner Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
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 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Depositor shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders and the Rating
Agencies. If the Depositor shall fail to mail such notice within 10 days
after acceptance of such appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense
of the Depositor.
SECTION 10.04. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, without the execution or filing of any instrument or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, that such corporation shall be eligible pursuant
to Section 10.01 and, provided, further, that the Owner Trustee shall mail
notice of such merger or consolidation to the Rating Agencies.
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate or any Financed Boat may at the time be
located, the Depositor 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 Depositor and Owner Trustee to act as co-trustee,
jointly with the Owner Trustee, or as separate trustee or separate trustees,
of all or any part of the Owner Trust Estate, and to vest in such Person, in
such capacity, such title to the Trust or any part thereof and, subject to
the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Depositor and the Owner Trustee may consider
necessary or desirable. If the Depositor shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Owner Trustee alone shall have the power to make such appointment. No co-
trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor Owner Trustee pursuant to
Section 10.01 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by
the Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any particular act or
acts are to be performed, the Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Owner Trust
Estate or any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee, but solely at
the direction of the Owner Trustee;
(b) No trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement; and
(c) The Depositor and the Owner Trustee acting jointly may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-
trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article. Each separate trustee and co-trustee,
upon its acceptance of the trusts conferred, shall be vested with the estates
or property specified in its instrument of appointment, either jointly with
the Owner Trustee or separately, as may be provided therein, subject to all
the provisions of this Agreement, specifically including every provision of
this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Owner Trustee. Each such instrument shall be
filed with the Owner Trustee.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
ARTICLE XI
Miscellaneous
SECTION 11.01. Supplements and Amendments. This Agreement may be
amended by the Depositor, the Company and the Owner Trustee, with prior
written notice to the Rating Agencies, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
in this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Depositor,
the Company and the Owner Trustee, with prior written notice to the Rating
Agencies, with the consent of the Holders (as defined in the Indenture) of
Notes evidencing not less than a majority of the Outstanding Amount of the
Notes and the consent of the Holders of Certificates evidencing not less than
a majority of the Certificate Balance, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Noteholders
or the Certificateholders; provided, however, that no such amendment shall
(a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on Receivables or distributions that
shall be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes or the Certificate Balance required to consent to any
such amendment, without the consent of the Holders of all the outstanding
Notes and Certificates.
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment
or consent to each Certificateholder, the Indenture Trustee and each of the
Rating Agencies.
It shall not be necessary for the consent of the Certificateholders or
the Noteholders pursuant to this Section to approve the particular form of
any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents
(and any other consents of Certificateholders provided for in this Agreement
or in any other Basic Document) and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall
not be obligated to, enter into any such amendment that affects the Owner
Trustee's own rights, duties or immunities under this Agreement or otherwise.
In connection with the execution of any amendment to this Trust
Agreement or any amendment of any other agreement to which the Issuer is a
party, the Owner Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel to the effect that such amendment is authorized or
permitted by the Basic Documents and that all conditions precedent in the
Basic Documents for the execution and delivery thereof by the Issuer or the
Owner Trustee, as the case may be, have been satisfied.
In effecting the amendment described in Section 2.14 of this Agreement,
the parties hereto need not comply with this Section 11.01 so long as the
provisions of Section 2.14 have been complied with.
SECTION 11.02. 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 Articles V and 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 11.03. Limitations on Rights of Others. Except for
Section 2.07, the provisions of this Agreement are solely for the benefit of
the Owner Trustee, the Depositor, the Company, the Certificateholders and, to
the extent expressly provided herein, the Indenture Trustee and the
Noteholders, and nothing in this Agreement (other than Section 2.07 hereof),
whether express or implied, shall be construed to give to any other Person
any legal or equitable right, remedy or claim in the Owner Trust Estate or
under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.04. Notices. (a) Unless otherwise expressly specified
or permitted by the terms hereof, all notices shall be in writing and shall
be deemed given upon receipt by the intended recipient or three Business Days
after mailing if mailed by certified mail, postage prepaid (except that
notice to the Owner Trustee shall be deemed given only upon actual receipt by
the Owner Trustee), if to the Owner Trustee, addressed to Wilmington Trust
Company, 1100 N. Market Street, Wilmington DE 19890, Attention: Emmett R.
Harmon; if to the Depositor, addressed to Morgan Stanley ABS Capital II Inc.,
1585 Broadway, New York, New York 10036, Attention: President; if to the
Company, addressed to RV Marine Funding Corporation, 100 Federal Street,
Boston, Massachusetts 02110, Attention: Paul Mengelsdorf; or, as to each
party, at such other address as shall be designated by such party in a
written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
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 11.05. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 11.06. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when
so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 11.07. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit
of, each of the Depositor, the Company and its permitted assigns, the Owner
Trustee and its successors and each Certificateholder and its successors and
permitted assigns, all as herein provided. Any request, notice, direction,
consent, waiver or other instrument or action by a Certificateholder shall
bind the successors and assigns of such Certificateholder.
SECTION 11.08. Covenants of Company. In the event that (a) the
Certificate Balance shall be reduced by Realized Losses and) (b) any
litigation with claims in excess of $1,000,000 to which the Company is a
party which shall be reasonably likely to result in a material judgment
against the Company that the Company will not be able to satisfy shall be
commenced by a Certificateholder, during the period beginning nine months
following the commencement of such litigation and continuing until such
litigation is dismissed or otherwise terminated (and, if such litigation has
resulted in a final judgment against the Company, such judgment has been
satisfied), the Company shall not decline any dividend or make any other
distribution on or in respect of its shares to any of its equity holders, or
repay the principal amount of any indebtedness of the Company held by
BankBoston Corporation, unless (i) after giving effect to such distribution
or repayment, the Company's liquid assets shall not be less than the amount
of actual damages claimed in such litigation or (ii) the Rating Agency
Condition shall have been satisfied with respect to any such distribution or
repayment. The Company will not at any time institute against the Trust any
bankruptcy proceedings under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Trust
Certificates, the Notes, the Trust Agreement or any of the Basic Documents.
SECTION 11.09. No Petition. The Owner Trustee, by entering into
this Agreement, each Certificateholder, by accepting a Trust Certificate, and
the Indenture Trustee and each Noteholder, by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Company or the Trust, or join in any institution against the
Company or the Trust of, any bankruptcy proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Trust Certificates, the Notes, this Agreement or any of the
Basic Documents.
SECTION 11.10. No Recourse. Each Certificateholder by accepting a
Trust Certificate acknowledges that such Certificateholder's Trust
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Depositor, the Servicer, the
Company, the Owner Trustee, the Indenture Trustee or any Affiliate thereof
and no recourse may be had against such parties or their assets, except as
may be expressly set forth or contemplated in this Agreement, the Trust
Certificates or the Basic Documents.
SECTION 11.11. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.12. GOVERNING 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 11.13. Trust Certificate Transfer Restrictions. The Trust
Certificates may not be acquired by or for the account of (i) an employee
benefit plan (as defined in Section 3(3) of ERISA) that is subject to the
provisions of Title I of ERISA, (ii) a plan described in Section 4975(e)(1)
of the Code or (iii) any entity whose underlying assets include plan assets
by reason of a plan's investment in the entity (each, a "Benefit Plan"). By
accepting and holding a Trust Certificate, the Holder thereof shall be deemed
to have represented and warranted that it is not a Benefit Plan.
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.
MORGAN STANLEY ABS CAPITAL II INC.,
as Depositor
By: /s/ James P. Fadel
------------------------------------
Name: James P. Fadel
Title: Authorized Signatory
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Owner Trustee
By: /s/ Emmett R. Harmon
------------------------------------
Name: Emmett R. Harmon
Title: Vice President
RV MARINE FUNDING CORPORATION
By: /s/ Paul C. Mangelsdorf III
------------------------------------
Name: Paul C. Mangelsdorf III
Title: Chairman
EXHIBIT A
Form of Trust Certificate
(UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.)
(THIS CERTIFICATE IS NON-TRANSFERABLE.)
NUMBER $___________
R-__ CUSIP NO. ___________
BANKBOSTON MARINE ASSET BACKED TRUST 1997-2
______% ASSET BACKED CERTIFICATE
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of retail installment sale
contracts secured by new and used recreational sport and power boats
(including any boat motors and trailers) and yachts (both power and sail).
(This Trust Certificate does not represent an interest in or obligation of
the Depositor or any of its affiliates, except to the extent described
below.)
THIS CERTIFIES THAT _________________ is the registered owner of
__________________________ DOLLARS nonassessable, fully-paid, fractional
undivided interest in BankBoston Marine Asset Backed Trust 1997-2 (the
"Trust"), formed by Morgan Stanley ABS Capital II Inc., a Delaware
corporation (the "Depositor").
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned
Trust Agreement.
(__________________________),(_________________________________),
as Owner Trustee or as Owner Trustee
by: __________________________________
Authorized Signatory
by: ________________________________
Authorized Signatory
The Trust was created pursuant to a Trust Agreement dated as of August
__, 1997, (as may be amended or supplemented from time to time, the "Trust
Agreement"), among the Depositor, Wilmington Trust Company, as owner trustee
(the "Owner Trustee") and RV Marine Funding Corporation (the "Company"), 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 Appendix A to the Sale and Servicing
Agreement dated as of August __, 1997, (as amended and supplemented from time
to time, the "Sale and Servicing Agreement"), among the Trust, the Depositor
and the Servicer.
This Certificate is one of the duly authorized Certificates designated
as "____% Asset Backed Certificates" (herein called the "Trust
Certificates"). Also issued under an Indenture dated as of August __, 1997
(the "Indenture"), between the Trust and The Chase Manhattan Bank, as
indenture trustee, are the ten classes of Notes designated as "Class A-1
Asset Backed Notes", "Class A-2 Asset Backed Notes", "Class A-3 Asset Backed
Notes", "Class A-4 Asset Backed Notes", "Class A-5 Asset Backed Notes",
"Class A-6 Asset Backed Notes" and "Class A-7 Asset Backed Notes"
(collectively, the "Notes"). This Trust Certificate is issued under and is
subject to the terms, provisions and conditions of the Trust Agreement, to
which Trust Agreement the Holder of this Trust Certificate by virtue of its
acceptance hereof assents and by which such Holder is bound. The property of
the Trust consists of a pool of retail installment sale contracts for new and
used recreational sport and power boats (collectively, the "Receivables"),
all monies due under such Receivables on or after August __, 1997, security
interests in the boats financed thereby, certain bank accounts and the
proceeds thereof, proceeds from claims on certain insurance policies and
certain other rights under the Trust Agreement and the Sale and Servicing
Agreement and all proceeds of the foregoing. The rights of the Holders of
the Trust Certificates are subordinated to the rights of the Holders of the
Notes, as set forth in the Sale and Servicing Agreement.
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
(each, a "Monthly Payment Date"), commencing on ______________, 199__, to the
Person in whose name this Trust Certificate is registered at the close of
business on the day immediately preceding such Monthly Payment Date, or if
Definitive Certificates are issued, the last day of the immediately preceding
month (the "Record Date"), such Certificateholder's fractional undivided
interest in the amount to be distributed to Certificateholders on such
Monthly Payment Date. No distributions of principal will be made on any
Certificate until all of the Notes have been paid in full. (The Holder of
this Trust Certificate will also be entitled to receive distributions on each
Monthly Payment Date pursuant to Section 5.06(b) of the Sale and Servicing
Agreement. On the Monthly Payment Date on which the aggregate Certificate
Balance of the Trust Certificates has been reduced to zero, the assets
remaining after payment of all expenses will be distributed to the Holder of
this Trust Certificate.)
The Holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement and the Indenture.
It is the intent of the Depositor, the Company, the Servicer and the
Certificateholders that, for purposes of federal income, state and local
income and single business tax and any other income taxes, the Trust will be
treated as a partnership and the Certificateholders (including the Company)
will be treated as partners in that partnership. The Company and the other
Certificateholders, by acceptance of a Trust Certificate, agree to treat, and
to take no action inconsistent with the treatment of, the Trust Certificates
for such tax purposes as partnership interests in the Trust.
Each Certificateholder or Certificate Owner, by its acceptance of a
Trust Certificate or, in the case of a Certificate Owner, a beneficial
interest in a Trust Certificate, covenants and agrees that such
Certificateholder or Certificate Owner, as the case may be, will not at any
time institute against the Company, or join in any institution against the
Company of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States federal
or state bankruptcy or similar law in connection with any obligations
relating to the Trust Certificates, the Notes, the Trust Agreement or any of
the Basic Documents.
Distributions on this Trust Certificate will be made as provided in the
Trust Agreement by the Owner Trustee by wire transfer or check mailed to the
Certificateholder of record in the Certificate Register without the
presentation or surrender of this Trust Certificate or the making of any
notation hereon, except that with respect to Trust Certificates registered on
the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee.
Except as otherwise provided in the Trust Agreement and notwithstanding the
above, the final distribution on this Trust Certificate will be made after
due notice by the Owner Trustee of the pendency of such distribution and only
upon presentation and surrender of this Trust Certificate at the office or
agency maintained for that purpose by the Owner Trustee in the Borough of
Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Trust
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, by manual signature, this
Trust Certificate shall not entitle the Holder hereof to any benefit under
the Trust Agreement or the Sale and Servicing Agreement or be valid for any
purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Trust Certificate to be duly
executed.
BANKBOSTON MARINE VEHICLE ASSET BACKED TRUST
1997-2
by: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
on behalf of the Trust
Dated: by: _________________________________
Authorized Signatory
(REVERSE OF TRUST CERTIFICATE)
The Trust Certificates do not represent an obligation of, or an interest
in, the Depositor, the Company, the Servicer, the Owner Trustee or any
affiliates of any of them and no recourse may be had against such parties or
their assets, except as expressly set forth or contemplated herein or in the
Trust Agreement or the Basic Documents. In addition, this Trust Certificate
is not guaranteed by any governmental agency or instrumentality and is
limited in right of payment to certain collections and recoveries with
respect to the Receivables (and certain other amounts), all as more
specifically set forth herein and in the Sale and Servicing Agreement. A
copy of each of the Sale and Servicing Agreement and the Trust Agreement may
be examined by any Certificateholder upon written request during normal
business hours at the principal office of the Depositor and at such other
places, if any, designated by the Depositor.
The Trust Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of
the Depositor, the Company and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor, the Company and the Owner
Trustee with the consent of the Holders of the Trust Certificates and the
Notes, each voting as a class, evidencing not less than a majority of the
Certificate Balance and the outstanding principal balance of the Notes of
each such class. Any such consent by the Holder of this Trust Certificate
shall be conclusive and binding on such Holder and on all future Holders of
this Trust Certificate and of any Trust Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of
such consent is made upon this Trust Certificate. The Trust Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in
the Certificate Register upon surrender of this Trust Certificate for
registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Owner Trustee in the Borough of Manhattan, The
City of New York, accompanied by a written instrument of transfer in form
satisfactory to the Owner Trustee and the Certificate Registrar duly executed
by the Holder hereof or such Holder's attorney duly authorized in writing,
and thereupon one or more new Trust Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The initial Certificate Registrar appointed under the
Trust Agreement is Wilmington Trust Company.
Except as provided in the Trust Agreement, the Trust Certificates are
issuable only as registered Trust Certificates without coupons in
denominations of $1,000 and in integral multiples of $1.00 in excess thereof.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, Trust Certificates are exchangeable for new Trust Certificates of
authorized denominations evidencing the same aggregate denomination, as
requested by the Holder surrendering the same. No service charge will be
made for any such registration of transfer or exchange, but the Owner Trustee
or the Certificate Registrar may require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the Owner
Trustee or the Certificate Registrar 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 or any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of
all property held as part of the Owner Trust Estate. The Servicer of the
Receivables may at its option purchase the Owner Trust Estate at a price
specified in the Sale and Servicing Agreement, and such purchase of the
Receivables and other property of the Trust will effect early retirement of
the Trust Certificates; provided, however, such right of purchase is
exercisable only as of the last day of any Collection Period as of which the
Pool Balance is less than or equal to 10% of the Original Pool Balance.
The Trust Certificates may not be acquired by a "foreign person" as
defined in the Code or by (a) an employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(b) a plan described in Section 4975(e)(1) of the Code or (c) any entity
whose underlying assets include plan assets by reason of a plan's investment
in the entity or which uses plan assets to acquire Trust Certificates (each,
a "Benefit Plan"). By accepting and holding this Trust Certificate, the
Holder hereof shall be deemed to have represented and warranted that it is
not a "foreign person" or a Benefit Plan.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
__________________________________________________________________________
(Please print or type name and address, including postal zip code, of
assignee)
the within Trust Certificate, and all rights thereunder, and hereby
irrevocably constitutes and appoints _____________________________, attorney,
to transfer said Trust Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
_________________
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Trust
Certificate in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be determined
by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
EXHIBIT B
Form of Certificate of Trust of BankBoston Marine Asset Backed Trust 1997-2
THIS Certificate of Trust of BankBoston Marine Asset Backed Trust
1997-2 (the "Trust"), dated August ___, 1997, is being duly executed and
filed by _______________________, a Delaware banking corporation, as trustee,
to form a business trust under the Delaware Business Trust Act (12 Del. Code,
Section 3801 et seq.).
1. Name. The name of the business trust formed hereby is
BANKBOSTON MARINE ASSET BACKED TRUST 1997-2.
2. Delaware Trustee. The name and business address of the trustee
of the Trust in the State of Delaware is
____________________________________, Attention: _______________________.
3. Effective Date. This Certificate of Trust shall be effective
upon its filing with the Secretary of State of the State of Delaware.
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.
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
owner trustee under the Trust Agreement dated
as of August ___, 1997
By: ___________________________________________
_____________________________ Name:
Title:
EXHIBIT C
Form of Certificate Depository Agreement
Letter of Representations
(To be Completed by Issuer and Trustee)
____________________________________________
(Name of Issuer)
____________________________________________
(Name of Trustee)
___________
(Date)
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: ________________________________________________________
________________________________________________________
________________________________________________________
(Issue Description)
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain matters
relating to the above-referenced issue (the "Securities"). Trustee will act
as trustee with respect to the Securities pursuant to a trust agreement dated
as of August , 1997 (the "Document").
_____________________________________________________ (the "Underwriter") is
distributing the Securities through The Depository Trust Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit at DTC,
and to act in accordance with its Rules with respect to the Securities,
Issuer and Trustee make the following representations to DTC:
1. Prior to closing on the Securities on August ___, 1997, there shall
be deposited with DTC one Security certificate registered in the name of
DTC's nominee, Cede & Co., for each stated maturity of the Securities in the
face amounts set forth on Schedule A hereto, the total of which represents
100% of the principal amount of such Securities. If, however, the aggregate
principal amount of any maturity exceeds $200 million, one certificate will
be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount. Each Security certificate shall bear the following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to Issuer or its agent for registration of transfer, exchange,
or payment, and any certificate issued is registered in the name of Cede
& Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such
other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede
& Co., has an interest herein.
2. In the event of any solicitation of consents from or voting by
holders of the Securities, Issuer or Trustee shall establish a record date
for such purposes (with no provision for revocation of consents or votes by
subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and
receipt of such notices shall be confirmed by telephoning (212) 709-6870.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to DTC's Reorganization Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or Trustee
shall send a notice to DTC specifying: (a) the amount of the redemption or
refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date.
Issuer or Trustee shall forward such notice either in a separate secure
transmission for each CUSIP number or in a secure transmission for multiple
CUSIP numbers (if applicable) which includes a manifest or list of each CUSIP
number submitted in that transmission. (The party sending such notice shall
have a method to verify subsequently the use of such means and the timeliness
of such notice.) The Publication Date shall be not less than 30 days nor more
than 60 days prior to the redemption date or, in the case of an advance
refunding, the date that the proceeds are deposited in escrow. Notices to
DTC pursuant to this Paragraph by telecopy shall be sent to DTC's Call
Notification Department at (516) 227-4039 or (516) 227-4190. If the party
sending the notice does not receive a telecopy receipt from DTC confirming
that the notice has been received, such party shall telephone (516) 227-4070.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to:
Manager; Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities (including
mandatory tenders, exchanges, and capital changes), notice by Issuer or
Trustee to Security holders specifying the terms of the tender and the
Publication Date of such notice shall be sent to DTC by a secure means in the
manner set forth in the preceding Paragraph. Notices to DTC pursuant to this
Paragraph and notices of other corporate actions by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094, and
receipt of such notices shall be confirmed by telephoning (212) 709-6884.
Notices to DTC pursuant to the above by mail or by any other means shall be
sent to:
Manager; Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall contain the CUSIP
number of the Securities.
6. Trustee shall send DTC written notice with respect to the dollar
amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably 5, but
not less than 2, business days prior to such Monthly Payment Date. Such
notices, which shall also contain the current pool factor, and special
adjustments to principal/interest rates (e.g., adjustments due to deferred
interest or shortfall), and Trustee contact's name and telephone number,
shall be sent by telecopy to DTC's Dividend Department at (212) 709-1723, or
if by mail or by any other means to:
Manager; Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 22nd Floor
New York, NY 10004-2695
7. (NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND CROSS OUT
THE OTHER:) (The interest accrual period is record date to record date.) (The
interest accrual period is payment date to payment date.)
8. Trustee must provide DTC, no later than noon (Eastern Time) on the
payment date, CUSIP numbers for each issue for which payment is being sent,
as well as the dollar amount of the payment for each issue. Notification of
payment details should be sent using automated communications.
9. Interest payments and principal payments that are part of periodic
principal-and-interest payments shall be received by Cede & Co., as nominee
of DTC, or its registered assigns in same-day funds, no later than 2:30 p.m.
(Eastern Time) on each payment date (in accordance with existing arrangements
between Issuer or Trustee and DTC). Absent any other arrangements between
Issuer or Trustee and DTC, such funds shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Dividend Deposit Account 066-026776
Issuer or Trustee shall provide interest payment information to a standard
announcement service subscribed to by DTC. In the unlikely event that no
such service exists, Issuer or Trustee shall provide interest payment
information directly to DTC in advance of the interest payment date as soon
as the information is available. This information should be conveyed
directly to DTC electronically. If electronic transmission is not available,
absent any other arrangements between Trustee and DTC, such information
should be sent by telecopy to DTC's Dividend Department at (212) 709-1723 or
(212) 709-1686, and receipt of such notices shall be confirmed by telephoning
(212) 709-1270. Notices to DTC pursuant to the above by mail or by any other
means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
10. DTC shall receive maturity and redemption payments allocated with
respect to each CUSIP number on the payable date in same-day funds by 2:30
p.m. (Eastern Time). Absent any other arrangements between Trustee and DTC,
such payments shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Redemption Account 066-027306
in accordance with existing SDFS payment procedures in the manner set forth
in DTC's SDFS Paying Agent Operating Procedures, a copy of which has
previously been furnished to Trustee.
11. DTC shall receive all reorganization payments and CUSIP-level
detail resulting from corporate actions (such as tender offers, remarketings,
or mergers) on the first payable date in same-day funds by 2:30 p.m. (Eastern
Time). Absent any other arrangements between Trustee and DTC, such payments
shall be wired as follows:
The Chase Manhattan Bank
ABA 021000021
For credit to A/C The Depository Trust Company
Reorganization Account 066-027608
12. DTC may direct Issuer or Trustee to use any other number or address
as the number or address to which notices or payments of interest or
principal may be sent.
13. In the event of a redemption, acceleration, or any other similar
transaction (e.g., tender made and accepted in response to Issuer's or
Trustee's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity,
in which case the certificate will be presented to Issuer or Trustee prior to
payment, if required.
14. In the event that Issuer determines that beneficial owners of
Securities shall be able to obtain certificated Securities, Issuer or Trustee
shall notify DTC of the availability of certificates. In such event, Issuer
or Trustee shall issue, transfer, and exchange certificates in appropriate
amounts, as required by DTC and others.
15. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Trustee (at which time DTC will confirm with Issuer or Trustee the
aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate action to make available one or more separate
certificates evidencing Securities to any DTC Participant having Securities
credited to its DTC accounts.
16. Issuer: (a) understands that DTC has no obligation to, and will
not, communicate to its Participants or to any person having an interest in
the Securities any information contained in the Security certificate(s); and
(b) acknowledges that neither DTC's Participants nor any person having an
interest in the Securities shall be deemed to have notice of the provisions
of the Security certificates by virtue of submission of such certificate(s)
to DTC.
17. Nothing herein shall be deemed to require Trustee to advance funds
on behalf of Issuer.
Notes: Very truly yours,
A. If there is a Trustee (as
defined in this Letter of ___________________________________
Representations), Trustee as well (Issuer)
as Issuer must sign this Letter.
If there is no Trustee, in signing By: _______________________________
this Letter Issuer itself (Authorized Officer's Signature)
undertakes to perform all of the
obligations set forth herein. ___________________________________
(Trustee)
B. Schedule B contains statements
that DTC believes accurately By:_________________________________
describe DTC, the method of (Authorized Officer's Signature)
effecting book-entry transfers of
securities distributed through
DTC, and certain related matters.
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:__________________________________
cc: Underwriter
Underwriter's Counsel
SCHEDULE A
(Describe Issue)
CUSIP Principal Amount Maturity Date Interest Rate
SCHEDULE B
SAMPLE OFFICIAL STATEMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(PREPARED BY DTC--BRACKETED MATERIAL MAY BE APPLICABLE ONLY TO CERTAIN
ISSUES)
1. The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for the securities (the "Securities"). The Securities
will be issued as fully-registered securities registered pin the name of Cede
& Co. (DTC's partnership nominee). One fully-registered Security certificate
will be issued for (each issue of the Securities, (each) in the aggregate
principal amount of such issue, and will be deposited with DTC. (If,
however, the aggregate principal amount of (any) issue exceeds $200 million,
one certificate will be issued with respect to each $200 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount of such issue.)
2. DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by
the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with
a Direct Participant, either directly or indirectly ("Indirect
Participants"). The Rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be made by or
through Direct Participants, which will receive a credit for the Securities
on DTC's records. The ownership interest of each actual purchaser of each
Security ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected
to receive written confirmations providing details of the transaction, as
well as periodic statements of their holdings, from the Direct or Indirect
Participant through which the Beneficial Owner entered into the transaction.
Transfers of ownership interests in the Securities are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Securities, except in the event that use of the
book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by
Participants with DTC are registered in the name of DTC's partnership
nominee, Cede & Co. The deposit of Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the
Securities; DTC's records reflect only the identity of the Direct
Participants to whose accounts such Securities are credited, which may or may
not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
(6. Redemption notices shall be sent to Cede & Co. If less than all of
the Securities within an issue are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each Direct Participant in
such issue to be redeemed.)
7. Neither DTC nor Cede & Co. will consent or vote with respect to
Securities. Under its usual procedures, DTC mails an Omnibus Proxy to the
Issuer as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to
whose accounts the Securities are credited on the record date (identified in
a listing attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will be made to
DTC. DTC's practice is to credit Direct Participants' accounts on payable
date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payment on payable
date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC,
Trustee, or Issuer, subject to any statutory or regulatory requirements as
may be in effect from time to time. Payment of principal and interest to DTC
is the responsibility of the Issuer or Trustee, disbursement of such payments
to Direct Participants shall be the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners shall be the responsibility of
Direct and Indirect Participants.
(9. A Beneficial Owner shall give notice to elect to have its
Securities purchased or tendered, through its Participant, to Trustee (or
Tender/Remarketing Agent), and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to Trustee (or Tender/Remarketing Agent). The
requirement for physical delivery of Securities in connection with an
optional tender or a mandatory purchase will be deemed satisfied when the
ownership rights in the Securities are transferred by Direct Participants on
DTC's records and followed by a book-entry credit of tendered Securities to
Trustee (or Tender/Remarketing Agent's) DTC account.)
10. DTC may discontinue providing its services as securities depository
with respect to the Securities at any time by giving reasonable notice to
Issuer or Agent. Under such circumstances, in the event that a successor
securities depository is not obtained, Security certificates are required to
be printed and delivered.
11. The Issuer may decide to discontinue use of the system of
book-entry transfers through DTC (or a successor securities depository). In
that event, Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's book-entry
system has been obtained from sources that Issuer believes to be reliable,
but Issuer takes no responsibility for the accuracy thereof.
EXHIBIT 99.4
=================================================================
SALE AND SERVICING AGREEMENT
between
BANKBOSTON MARINE ASSET BACKED TRUST 1997-2,
Issuer,
and
MORGAN STANLEY ABS CAPITAL II INC.,
Depositor
and
BANKBOSTON, N.A.
Seller and Servicer
Dated as of August 25, 1997
=================================================================
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Other Definitional Provisions . . . . . . . . . . . . 1
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables . . . . . . . . . . . . . . 2
SECTION 2.02. Cancellation of Participation
Certificate . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.03. Intent of the Parties . . . . . . . . . . . . . . . . 3
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of the
Bank with Respect to the Receivables . . . . . . . . 4
SECTION 3.02. Representations and Warranties of the
Depositor with Respect to the Receivables . . . . . . 10
SECTION 3.03. Custody of Receivable Files . . . . . . . . . . . . . 12
SECTION 3.04. Duties of Servicer as Custodian . . . . . . . . . . . 13
SECTION 3.05. Instructions; Authority To Act . . . . . . . . . . . 14
SECTION 3.06. Custodian's Indemnification . . . . . . . . . . . . . 14
SECTION 3.07. Effective Period and Termination . . . . . . . . . . 14
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer . . . . . . . . . . . . . . . . . 15
SECTION 4.02. Collection and Allocation of Receivable
Payments . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.03. Realization upon Receivables . . . . . . . . . . . . 16
SECTION 4.04. Physical Damage Insurance . . . . . . . . . . . . . . 16
SECTION 4.05. Maintenance of Security Interests in
Financed Boats . . . . . . . . . . . . . . . . . . . 16
SECTION 4.06. Covenants of Servicer . . . . . . . . . . . . . . . . 17
SECTION 4.07. Purchase of Receivables upon Breach . . . . . . . . . 17
SECTION 4.08. Servicing Fee . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.09. Servicer's Certificate . . . . . . . . . . . . . . . 18
SECTION 4.10. Annual Statement as to Compliance; Notice
of Default . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.11. Annual Independent Certified Public
Accountants' Report . . . . . . . . . . . . . . . . . 19
SECTION 4.12. Access to Certain Documentation and
Information Regarding Receivables; Noteholder's Right to
Examine Bank Records; Access to Certain Documentation 19
SECTION 4.13. Servicer Expenses . . . . . . . . . . . . . . . . . . 20
SECTION 4.14. Appointment of Subservicer . . . . . . . . . . . . . 20
SECTION 4.15. Fidelity Bond; Errors and Omissions
Insurance . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE V
Distributions;
Statements to Noteholders and Certificateholders
SECTION 5.01. Establishment of Trust Accounts . . . . . . . . . . . 21
SECTION 5.02. Collections . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.03. Application of Collections . . . . . . . . . . . . . 24
SECTION 5.04. Advances . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 5.05. Additional Deposits . . . . . . . . . . . . . . . . . 25
SECTION 5.06. Distributions . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.07. Reserve Account . . . . . . . . . . . . . . . . . . . 26
SECTION 5.08. Statements to Noteholders . . . . . . . . . . . . . . 27
SECTION 5.09. Sale of Residual Interest by Bank . . . . . . . . . . 28
ARTICLE VI
The Depositor
SECTION 6.01. Representations of Depositor . . . . . . . . . . . . 28
SECTION 6.02. Corporate Existence . . . . . . . . . . . . . . . . . 30
SECTION 6.03. Liability of the Depositor; Indemnities . . . . . . . 30
SECTION 6.04. Merger or Consolidation of, or Assumption
of the Obligations of, Depositor . . . . . . . . . . 31
SECTION 6.05. Limitation on Liability of Depositor and
Others . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.06. Depositor May Own Notes and
Certificates . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.07. Pennsylvania Motor Vehicle Sales Finance
Act License . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VII
The Servicer
SECTION 7.01. Representations and Warranties of the
Servicer . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 7.02. Indemnities, etc. of Servicer . . . . . . . . . . . . 34
SECTION 7.03. Merger or Consolidation of, or Assumption
of the Obligations of, Servicer . . . . . . . . . . . 35
SECTION 7.04. Limitation on Liability of Servicer and
Others . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 7.05. Bank Not To Resign as Servicer . . . . . . . . . . . 36
ARTICLE VIII
Default
SECTION 8.01. Servicer Default . . . . . . . . . . . . . . . . . . 37
SECTION 8.02. Appointment of Successor . . . . . . . . . . . . . . 38
SECTION 8.03. Repayment of Advances . . . . . . . . . . . . . . . . 39
SECTION 8.04. Notification to Noteholders . . . . . . . . . . . . . 39
SECTION 8.05. Waiver of Past Defaults . . . . . . . . . . . . . . . 39
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables . . . . . . . . 39
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 10.02. Protection of Title to Trust . . . . . . . . . . . . 42
SECTION 10.03. Notices . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 10.04. Assignment by the Depositor or the
Servicer . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 10.05. Limitations on Rights of Others . . . . . . . . . . . 44
SECTION 10.06. Severability . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.07. Separate Counterparts . . . . . . . . . . . . . . . . 45
SECTION 10.08. Headings . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.09. Governing Law . . . . . . . . . . . . . . . . . . . . 45
SECTION 10.10. Assignment by Issuer . . . . . . . . . . . . . . . . 45
SECTION 10.11. Nonpetition Covenants . . . . . . . . . . . . . . . . 45
SECTION 10.12. Limitation of Liability of Owner Trustee
and Indenture Trustee . . . . . . . . . . . . . . . . 46
APPENDIX A Defined Terms
SCHEDULE A Schedule of Receivables
SCHEDULE B Location of the Receivable Files
EXHIBIT A-1 Form of Distribution Statement to Noteholders . . . . . . A-1
EXHIBIT A-2 Form of Distribution Statement to
Certificateholders . . . . . . . . . . . . . . . . . . . . A-2
EXHIBIT B Form of Servicer's Certificate . . . . . . . . . . . . . . B-1
EXHIBIT C Final Certification of custodian . . . . . . . . . . . . . C-1
EXHIBIT D First Trust Exceptions Report. . . . . . . . . . . . . . . D-1
SALE AND SERVICING AGREEMENT dated as of August 25, 1997, between
BANKBOSTON MARINE BACKED TRUST 1997-2, a Delaware business trust (the
"Issuer"), and MORGAN STANLEY ABS CAPITAL II INC., a Delaware
corporation, as Depositor and BANKBOSTON, N.A., a national banking
association, as Servicer and as Seller with respect to certain
representations and warranties related to the assets sold pursuant
hereto.
WHEREAS the Issuer desires to purchase a portfolio of receivables
arising in connection with marine retail installment sale contracts and
retail installment loans;
WHEREAS Morgan Stanley ABS Capital II Inc. is willing to sell such
receivables to the Issuer; and
WHEREAS BankBoston, N.A., previously sold such receivables to the
affiliate of the Depositor and is willing to service such receivables and to
make certain representations and warranties with respect thereto;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Except as otherwise specified herein or as
the context may otherwise require, capitalized terms used herein have the
respective meanings assigned thereto in Appendix A for all purposes of this
Agreement.
SECTION 1.02. Other Definitional Provisions.
(a) All terms defined in Appendix A attached hereto shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) 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. 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.
(c) 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; Article, Section,
Schedule and Exhibit references contained in this Agreement are references to
Articles, Sections, Schedules and Exhibits in or to this Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
(d) 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.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means
such agreement, instrument or statute as from time to time amended, modified
or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
ARTICLE II
Conveyance of Receivables
SECTION 2.01. Conveyance of Receivables. In consideration of the
Issuer's delivery to or upon the order of the Depositor of $414,202,980 on
the Closing Date, the Depositor does hereby sell, transfer, assign, set over
and otherwise convey to the Issuer, without recourse (subject to the
obligations of the Depositor set forth herein), all right, title and interest
of the Depositor in and to:
(a) the Receivables and all moneys received thereon on and after August
25, 1997;
(b) the security interests in the Financed Boats created pursuant to
the Receivables and any other interest of the Depositor in the
Financed Boats;
(c) any proceeds with respect to the Receivables under any Insurance
Policies covering Financed Boats or Obligors;
(d) any proceeds from recourse to Dealers;
(e) any Financed Boat acquired in repossession;
(f) the contents of the Receivables Files and all rights, benefits,
proceeds and obligations arising therefrom or in connection
therewith;
(g) all funds on deposit from time to time in the Trust Accounts, and
in all investments and proceeds thereof (including all income
thereon); and
(h) the proceeds of any and all of the foregoing.
SECTION 2.02. Cancellation of Participation Certificate. The parties
hereto acknowledge that the Depositor holds all of its interest in the items
set forth in clauses (a) through (f) of Section 2.01 (together with all
proceeds thereof, the "Conveyed Property") in the form of and pursuant to the
Participation Certificate. Therefore, concurrently with and in order to
effect the transfer of the Conveyed Property pursuant to Section 2.01, the
Depositor does hereby sell, transfer, assign, set over and otherwise convey
to the Issuer all of the right, title and interest of the Depositor in and to
the Participation Certificate. In addition, the Bank, for good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
does hereby, sell, transfer, assign, set over and otherwise convey to the
Issuer legal title with respect to each Receivable the Obligor on which
resides in the State of New York and any other interest that the Bank may
have retained in the Receivables and the other Conveyed Property.
The parties further acknowledge that Issuer will not hold the Conveyed
Property through the Participation Certificate. Therefore, immediately upon
giving effect to the transfer pursuant to Section 2.01 and the first
paragraph of this Section 2.02, the Participation Certificate is hereby
deemed cancelled and the respective obligations and responsibilities of the
Bank under the PSA solely as they related to the Participation Certificate
are hereby terminated. The Bank hereby acknowledges receipt of the Participa-
tion Certificate for cancellation, and the parties further acknowledge that
the Issuer holds the Conveyed Property directly.
SECTION 2.03. Intent of the Parties. The Depositor and the Issuer
intend that the conveyance of the Depositor's right, title and interest in
and to the Receivables and the other Conveyed Property pursuant to this
Agreement shall constitute a purchase and sale and not a loan. If such
conveyance is deemed to be a transfer for security and not a sale, then the
parties also intend and agree that the Depositor shall be deemed to have
granted, and in such event does hereby grant, to the Issuer, a first priority
security interest in all of its right, title and interest, in, to and under
the Conveyed Property and that this Agreement shall constitute a security
agreement under applicable law. If such conveyance is deemed to be a
transfer for security and not a sale, the Depositor consents to the Issuer
hypothecating and transferring such security interest in favor of any
assignee or assignees and transferring the obligation secured thereby to such
assignee or assignees. Neither the Bank nor the Depositor shall take any
action that is inconsistent with the ownership of the Conveyed Property by
the Issuer and shall inform any Person inquiring about the Receivables that
the Issuer owns the Conveyed Property.
ARTICLE III
The Receivables
SECTION 3.01. Representations and Warranties of the Bank with Respect
to the Receivables. The Bank makes the following representations and
warranties as to the Receivables on which the Issuer is deemed to have relied
in acquiring the Receivables. Such representations and warranties speak as
of the execution and delivery of this Agreement and as of the Closing Date
but shall survive (1) the sale, transfer and assignment of the Receivables to
the Issuer and the pledge thereof to the Indenture Trustee pursuant to the
Indenture and (2) any removal of the Bank as Servicer.
(i) Characteristics of Receivables. Each Receivable (A) was fully
and properly executed by the parties thereto, (B) contains customary and
enforceable provisions such as to render the rights and remedies of the
holder thereof adequate for realization against the collateral security,
(C) is fully amortizing and provides for level monthly payments except for
one adjustable rate receivable (provided that the first payment and the final
payment of the Receivable may be minimally different from the level payment)
which, if made when due, shall fully amortize the Amount Financed over the
original term and (D) provides for, in the event that such Receivable is
prepaid in full, payment of an amount that fully pays the Principal Balance
and includes accrued but unpaid interest at least through the date of
prepayment in an amount at least equal to its Annual Percentage Rate. Each
Receivable provides that payments thereon are to be applied in accordance
with the Simple Interest Method. If such Receivable was originated by a
Dealer, such Receivable, to the knowledge of the Bank, was originated by the
Dealer for the retail sale of a Financed Boat in the ordinary course of such
Dealer's business, was purchased by Ganis from such Dealer for new value
under a Dealer Agreement and was validly assigned by the Dealer to Ganis and
by Ganis to the Bank. To the knowledge of the Bank, such Dealer had all
necessary licenses and permits to originate Receivables in the state where
such Dealer was located. If such Receivable was originated by Ganis, such
Receivable was originated for value by Ganis in the ordinary course of its
business to finance the purchase of, or refinance, the related Financed Boat
by the related Obligor and was validly assigned by Ganis to the Bank. Ganis
had all necessary licenses and permits to originate or purchase such
Receivable. At origination, each Financed Boat was represented by the
Obligor to be used for recreational purposes and neither the Bank or Ganis
has received notice subsequently that any Financed Boat is being used for
commercial purposes.
(ii) No Fraud or Misrepresentation. To the knowledge of the Bank,
each Receivable was originated by a Dealer or Ganis and was sold by the
Dealer to Ganis (if applicable) and by Ganis to the Bank without any fraud or
misrepresentation on the part of such Dealer in either case.
(iii) Compliance with Law. To the knowledge of the Bank, all
requirements of applicable federal, state and local laws, and regulations
thereunder (including, without limitation, usury laws, the Federal Truth-in-
Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act,
the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the
Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal
Reserve Board's Regulations "B" and "Z", the Soldiers' and Sailors' Civil
Relief Act of 1940, the state motor vehicle retail installment sales act, and
state adaptations of the National Consumer Act and of the Uniform Consumer
Credit Code and other consumer credit laws and equal credit opportunity and
disclosure laws) in respect of all of the Receivables and each and every sale
of Financed Boats, have been complied with in all material respects, and each
Receivable and the sale of the Financed Boat evidenced by each Receivable
complied at the time it was originated or made and now complies in all
material respects with all applicable legal requirements.
(iv) Origination. Each Receivable was originated in the United
States.
(v) Binding Obligation. Each Receivable represents the genuine,
legal, valid and binding payment obligation of the Obligor thereon,
enforceable by the holder thereof in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the enforcement of creditors' rights generally and by
equitable limitations on the availability of specific remedies, regardless of
whether such enforceability is considered in a proceeding in equity or at
law; and all parties to each Receivable had full legal capacity to execute
and deliver such Receivable and all other documents related thereto and to
grant the security interest purported to be granted thereby.
(vi) No Government Obligor. No Obligor is the United States of
America or any State or any agency, department, subdivision or
instrumentality thereof.
(vii) Obligor Bankruptcy. At the Closing Date, no Obligor had been
identified on the records of the Bank as being the subject of a current
bankruptcy proceeding.
(viii) Schedule of Receivables. The information set forth in the
Schedule of Receivables is true and correct in all material respects as of
the close of business on the Cutoff Date.
(ix) Marking Records. By the Closing Date, the Bank will have
caused the portions of its electronic ledger relating to the Receivables to
be clearly and unambiguously marked to show that the Receivables have been
sold absolutely to the Trust.
(x) Computer Tape. The Computer Tape was complete and accurate as
of the Cutoff Date and includes a description of the same Receivables that
are described in the Schedule of Receivables.
(xi) Chattel Paper. The Receivables constitute chattel paper
within the meaning of the UCC as in effect in the states in which the
Obligors reside.
(xii) One Original. There is only one original executed copy of
each Receivable.
(xiii) Receivable Files Complete. There exists a Receivable File
pertaining to each Receivable and, to the knowledge of the Bank, such
Receivable file contains (a) a fully executed original of the Receivable
(provided that no more than 100 Receivables Files in the aggregate may
contain, in lieu of a fully executed original, a copy of the fully executed
Receivable certified by the Bank as being true and correct), with a fully
executed assignment thereof in blank or from the related Dealer to Ganis if
such Receivable was acquired by Ganis from a Dealer and either a fully
executed assignment thereof or bill of sale therefor (which may cover more
than one Receivable) from Ganis to the Bank, (b) a certificate of physical
damage insurance, application form for such insurance signed by the Obligor
or a signed representation letter from the Obligor named in the Receivable
pursuant to which the Obligor has agreed to obtain physical damage insurance
for the Financed Boat, or copies thereof, (c) the Title Document or
application therefor or, except with respect to Financed Boats that are
Federally Documented Vessels, a certification from the Bank that it has
received confirmation from an authorized official of the appropriate
governmental office of the existence of the first lien of the Bank or Ganis
with respect to the related Financed Boat and (d) a credit application signed
by the Obligor, or a copy thereof. Each of such documents which is required
to be signed by the Obligor has been signed by the Obligor in the appropriate
spaces. All blanks on any form have been properly filled in and each form
has otherwise been correctly prepared. The complete file for each Receivable
currently is in the possession of Ganis, in its capacity as subservicer to
the Servicer's custodial duties hereunder.
(xiv) Receivables in Force. No Receivable has been satisfied,
subordinated or rescinded, and the Financed Boat securing each such
Receivable has not been released from the lien of the related Receivable in
whole or in part. No provisions of any Receivable have been waived, altered
or modified (except that the Bank as servicer may have, for administrative
purposes, modified the due date of a Receivable to a different date in the
month, which modification is reflected in its servicing records) in any
respect since its origination, except by instruments or documents identified
in the Receivable File. No Receivable has been modified as a result of
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
(xv) Lawful Assignment. No Receivable was originated in, or is
subject to the laws of, any jurisdiction the laws of which (a) would make
unlawful, void or voidable the sale, transfer and assignment of such
Receivable under this Agreement or the pledge of such Receivable under the
Indenture or (b) would impair the validity or enforceability of any
Receivable because of any such sale, transfer or assignment.
(xvi) Good Title. No Receivable has been sold, transferred,
assigned or pledged by the Bank to any Person except to MSCMC pursuant to the
PSA; immediately prior to the conveyance of the Receivables to MSCMC pursuant
to the PSA, the Bank had good and indefeasible title thereto, free and clear
of any Lien and immediately upon the transfer thereof pursuant to the PSA,
the MSCMC had good and indefeasible title to and was the sole owner of each
Receivable, free of any Lien and such title is freely assignable pursuant to
the PSA pursuant to the terms thereof. Neither Ganis nor any Dealer has a
participation in, or other right to receive, payments or proceeds in respect
of any Receivable. The Bank has not taken any action to convey any right to
any Person that would result in such Person having a right to payments
received under the related Insurance Policies or the related Dealer
Agreements or to payments due under such Receivables.
(xvii) Security Interest in Financed Boat. Each Receivable has
created a valid, binding and enforceable first priority security interest in
favor of the Bank in the related Financed Boat, which is in full force and
effect. Each Title Document contained in the Receivables Files shows the
Bank or Ganis named as the original secured party under each Receivable and
as the holder of a first priority security interest in such Financed Boat.
With respect to each Receivable for which the Title Document is not contained
in the related Receivable File, the Bank has either received written evidence
that such Title Document showing the Bank or Ganis as first lienholder has
been applied for or, except with respect to Financed Boats that are Federally
Documented Vessels, has certified in writing in the related Receivable File
that it has received confirmation from the appropriate governmental office of
the existence of the first lien of the Bank or Ganis with respect to the
related Financed Boat. Ganis's security interest in any Financed Boat has
been validly assigned by Ganis to the Bank, and the Bank's security interest
in each Financed Boat has been validly assigned by the Bank to the Issuer
pursuant to this Agreement. Immediately after the sale, transfer and
assignment thereof by the Bank to MSCMC, each Receivable will be secured by
an enforceable and perfected first priority security interest in the Financed
Boat in the name of Ganis or the Bank, as applicable, as secured party, which
security interest is prior to all other Liens upon and security interests in
such Financed Boat which now exist or may hereafter arise or be created
(except, as to priority, for any lien for taxes, labor or materials affecting
a Financed Boat). As of the Cutoff Date, there were no Liens affecting a
Financed Boat which are or may be Liens prior or equal to the Lien of the
related Receivable. With respect to each Financed Boat that has been
documented under the Ship Mortgage Statutes, a recorded and fully effective
Preferred Mortgage has been placed in favor of the Bank or Ganis as security
for the Receivable with respect to such vessel.
(xviii) All Filings Made; Valid Security Interest. All filings
(including, without limitation, UCC filings) required to be made by any
Person and actions required to be taken or performed by any Person in any
jurisdiction to give the Trust a first priority perfected security interest
or ownership interest in the Receivables and the proceeds thereof have been
made, taken or performed. At the Closing Date the Issuer will have a valid,
subsisting and enforceable first priority security interest or ownership
interest in each Receivable and the proceeds thereof.
(xix) No Impairment. The Bank has not done and will not do anything
to convey any right to any Person that would result in such Person having a
right to payments due under a Receivable or otherwise to impair the rights of
the Trust in any Receivable or the proceeds thereof.
(xx) No Release. No Receivable is assumable by another Person in a
manner which would release the Obligor thereof from such Obligor's
obligations to the Bank with respect to such Receivable.
(xxi) No Defenses. No Receivable is subject to any right of
rescission, setoff, counterclaim or defense and, to the knowledge of the
Bank, no such right has been asserted or threatened with respect to any
Receivable. The operation of the terms of any Receivable or the exercise of
any right thereunder will not render the Receivable unenforceable in whole or
in part or subject to any right of rescission, setoff, counterclaim or
defense, and to the knowledge of the Bank, no such right of rescission,
setoff, counterclaim or defense has been asserted with respect thereto.
(xxii) No Default. To the knowledge of the Bank, there has been no
default, breach, violation or event permitting acceleration under the terms
of any Receivable (other than payment delinquencies of not more than 59
days), and no condition exists or event has occurred and is continuing that
with notice, the lapse of time or both would constitute a default, breach,
violation or event permitting acceleration under the terms of any Receivable,
and there has been no waiver of any of the foregoing. As of the Cutoff Date,
no Financed Boat had been repossessed.
(xxiii) Insurance. As of the Closing Date, each Financed Boat is, to
the knowledge of the Bank, covered by a vendor's single interest insurance
policy (i) that provides coverage as to such Financed Boat in an amount at
least equal to the lesser of (a) its maximum insurable value or (b) the
principal amount due from the Obligor under the related Receivable,
(ii) naming the Bank or Ganis and its successors and assigns as loss payees
and (iii) insuring against loss and damage due to fire, theft,
transportation, collision and other risks generally covered by comprehensive
and collision coverage. Each Receivable requires the Obligor to maintain
physical loss and damage insurance, naming the Bank or Ganis and their
respective successors and assigns as additional insured parties, and each
Receivable permits the holder thereof to obtain physical loss and damage
insurance at the expense of the Obligor if the Obligor fails to do so. No
Financed Boat was or had previously been insured under a policy of force-
placed insurance on the Cutoff Date.
(xxiv) Past Due. At the Closing Date, no Receivable was more than 59
days past due.
(xxv) No Liens. There are no Liens or claims which have been filed,
and, to the knowledge of the Bank, none pending or threatened to be filed,
for work, labor, materials or unpaid state or federal taxes affecting the
vehicle securing any Receivable which are or may become liens prior or equal
to the lien of the Receivable.
(xxvi) Remaining Principal Balance. At the Cutoff Date, the
Principal Balance of each Receivable set forth in the Schedule of Receivables
is true and accurate in all material respects.
(xxvii) Final Scheduled Maturity Date. No Receivable has a final
maturity later than June 17, 2017.
(xxviii) Certain Characteristics. (A) Each Receivable had a remaining
maturity, as of the Cutoff Date, of not more than 238 months; (B) each
Receivable had an original maturity of at least 12 months but not more than
262 months; (C) each Receivable had an original principal balance of at least
$3,544.02 and not more than $2,000,000.00; (D) each Receivable had a
Principal Balance as of the Cutoff Date of not more than $1,991,135.99;
(E) each Receivable has an Annual Percentage Rate of at least 6.99% and not
more than 16.50% (provided that for the adjustable rate Receivables such
representation is solely with respect to its current APR as of the Cutoff
Date) and no adjustable rate Receivable bears interest based on an index
other than the one based on the "5-year Treasury" rate or "1-year LIBOR";
(F) 36.85% of the Receivables were secured by new Financed Boats; (G) no
funds have been advanced by the Bank or, any Dealer, or anyone acting on
behalf of any of them in order to cause any Receivable to qualify under
paragraph (xxv) above; (H) no Receivable has a Final Scheduled Maturity Date
on or before August 27, 1997 or later than June 17, 2017; (I) as of the
Cutoff Date, other than California (25.43%), New York (14.58%), Texas
(11.92%), and Florida (11.06%), no state represented more than 5% by
outstanding Pool Balance with respect to the location of the Financed Boats;
and (J) the Principal Balance of each Receivable set forth in Schedule of
Receivables is true and accurate in all material respects as of the Cutoff
Date.
For purposes of determining whether the Bank is obligated to cure a
breach of a representation and warranty in this Section 3.01, repurchase a
Receivable on account of such breach pursuant to this Section 3.01 or
indemnify in respect of such breach pursuant to the last paragraph of this
Section 3.01, the determination as to whether a representation or warranty
that is made to the knowledge of the Bank has been breached shall be made
without regard to such knowledge of the Bank as if such representation and
warranty were not qualified by the knowledge of the Bank. Upon discovery by
either the Bank, the Issuer, the Depositor, the Owner Trustee or the
Indenture Trustee of a breach of any of the representations and warranties of
the Bank set forth in this Section 3.01 which materially and adversely
affects the value of the Receivables or the interest therein of the Issuer or
the Indenture Trustee (or which materially and adversely affects the interest
of the Issuer or the Indenture Trustee in the related Receivable in the case
of a representation and warranty relating to a particular Receivable), the
party discovering such breach shall give prompt written notice to the other.
Any Receivable affected by such breach is referred to as a "Bank Defective
Receivable". On or prior to the last day of the Collection Period following
the Collection Period during which the Bank discovers or receives notice of
any such breach of a representation or warranty, the Bank shall cure such
breach in all material respects or shall repurchase such Bank Defective
Receivable as of the last day of such Collection Period at a price equal to
the Purchase Amount of the Bank Defective Receivable, which price the Bank
shall remit in the manner specified in Section 5.05; provided, that, with
respect to the representation set forth in paragraph (xiii) above, such
repurchase will be required with respect to a Receivable only if any
resulting breach is not cured (subject to receipt of any required documents
that have been duly applied for from applicable governmental offices) within
90 days after completion of the review and examination of the Receivables
File for such Receivable pursuant to Section 3.03. Subject to the
indemnification provisions contained in the last paragraph of this Section,
the sole remedy of the Issuer, the Owner Trustee or the Indenture Trustee
with respect to a breach of representations and warranties pursuant to the
agreement contained in this Section shall be to require the Bank to
repurchase Receivables pursuant to this Section, subject to the conditions
contained herein.
In addition to such obligation, subject to the terms of this Section
3.01, to cure a breach of a representation and warranty or to repurchase a
Bank Defective Receivable, the Bank shall indemnify the Depositor, the
Issuer, the Owner Trustee and the Indenture Trustee and hold each harmless
against any loss, damages, penalties, fines, forfeitures, legal fees and
related costs, judgments, and other costs and expenses resulting from any
claim, demand, defense or assertion based on or grounded upon, or resulting
from, a breach of the Bank's representations and warranties contained in this
Agreement; provided that the Bank shall not be liable for any indirect
damages or for any loss, damage, penalty, fine, forfeiture, legal fees and
related costs, judgments and other costs and expenses caused by the wilful
misconduct of the Depositor, the Issuer, the Owner Trustee or the Indenture
Trustee.
SECTION 3.02. Representations and Warranties of the Depositor with
Respect to the Receivables. The Depositor makes the following
representations and warranties as to the Receivables on which the Issuer is
deemed to have relied in acquiring the Receivables. Such representations and
warranties speak as of the execution and delivery of this Agreement and as of
the Closing Date, but shall survive the sale, transfer and assignment of the
Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture.
(a) Title. No Receivable has been sold, transferred, assigned or
pledged by the Depositor to any Person other than the Issuer.
Immediately prior to the transfer and assignment herein contemplated,
the Depositor had good and marketable title to each Receivable, free and
clear of all Liens and rights of others and, immediately upon the
transfer thereof, the Issuer shall have good and marketable title to
each Receivable, free and clear of all Liens and rights of others; and
the transfer has been perfected under the UCC.
(b) All Filings Made. All filings (including UCC filings)
necessary in any jurisdiction to give (i) the Issuer a first perfected
ownership interest in the Receivables and (ii) the Indenture Trustee a
first perfected security interest in the Receivables shall have been
made.
Upon discovery by either the Bank, the Issuer, the Depositor, the Owner
Trustee or the Indenture Trustee of a breach of any of the representations
and warranties of the Depositor set forth in this Section 3.02 which
materially and adversely affects the value of the Receivables or the interest
therein of the Issuer or the Indenture Trustee (or which materially and
adversely affects the interest of the Issuer or the Indenture Trustee in the
related Receivable in the case of a representation and warranty relating to a
particular Receivable), the party discovering such breach shall give prompt
written notice to the other. Any Receivable affected by such breach is
referred to as a "Depositor Defective Receivable". On or prior to the last
day of the Collection Period following the Collection Period during which the
Depositor discovers or receives notice of any such breach of a representation
or warranty, the Depositor shall cure such breach in all material respects or
shall repurchase such Depositor Defective Receivable as of the last day of
such Collection Period at a price equal to the Purchase Amount of the
Depositor Defective Receivable, which price the Depositor shall remit in the
manner specified in Section 5.05; provided, however, that the obligation of
the Depositor to repurchase any receivable that arises solely as a result of
a breach of the Bank's representations and warranties under Section 3.01 is
subject to the receipt by the Depositor of the Purchase Amount from the Bank.
Subject to the indemnification provisions contained in the last paragraph of
this Section, the sole remedy of the Issuer, the Owner Trustee or the
Indenture Trustee with respect to a breach of representations and warranties
pursuant to the agreement contained in this Section shall be to require the
Depositor to repurchase Receivables pursuant to this Section, subject to the
conditions contained herein.
In addition to such obligation, subject to the terms of this Section
3.02, to cure a breach of a representation and warranty or to repurchase a
Depositor Defective Receivable, the Depositor shall indemnify the Issuer, the
Owner Trustee and the Indenture Trustee and hold each harmless against any
loss, damages, penalties, fines, forfeitures, legal fees and related costs,
judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach
of the Depositor's representations and warranties contained in this
Agreement; provided that the Depositor shall not be liable for any indirect
damages or for any loss, damage, penalty, fine, forfeiture, legal fees and
related costs, judgments and other costs and expenses caused by the wilful
misconduct of the Issuer, the Owner Trustee or the Indenture Trustee.
SECTION 3.03. Custody of Receivable Files. To assure uniform quality
in servicing the Receivables and to reduce administrative costs, the Issuer
hereby revocably appoints the Servicer, and the Servicer hereby accepts such
appointment, to act for the benefit of the Issuer and the Indenture Trustee
as custodian of the following documents or instruments which are hereby or
will hereby be constructively delivered to the Indenture Trustee, as pledgee
of the Issuer, as of the Closing Date with respect to each Receivable:
(a) the fully executed original Receivable (provided that no more
than 100 Receivables Files in the aggregate may contain, in lieu of a
fully executed original, a copy of the fully executed Receivable
certified by the Bank as being true and correct);
(b) a fully executed assignment of the Receivable in blank or from
the related Dealer to Ganis if such Receivable was acquired by Ganis
from a Dealer and either a fully executed assignment thereof or bill of
sale therefor (which may cover more than one Receivable) from Ganis to
the Bank;
(c) a certificate of physical damage insurance, application form
for such insurance signed by the Obligor or a signed representation
letter from the Obligor named in the Receivable pursuant to which the
Obligor has agreed to obtain physical damage insurance for the Financed
Boat, or copies thereof;
(d) the Title Document or application therefor or, except with
respect to Financed Boats that are Federally Documented Vessels, a
certification from the Bank that it has received confirmation from an
authorized official of the appropriate governmental office of the
existence of the first lien of the Bank or Ganis with respect to the
related Financed Boat; and
(e) a credit application signed by the Obligor, or a copy thereof.
Within 90 days of the Closing Date with respect to the Listed
Receivables, and within 120 days of the Closing Date with respect to all
other Receivables, the Servicer, as custodian shall ascertain that all
documents required to be delivered to it are in its possession, and shall
deliver to the Indenture Trustee a certification ("Final Certification") in
the form attached hereto as Exhibit C to the effect that, as to each Listed
Receivable in the case of the Final Certification delivered within 90 days of
the Closing Date, and as to each other Receivable listed in the Schedule of
Receivables (other than any Receivable paid in full or any Receivable
specifically identified in such certification as not covered by such
certification) in the case of the Final Certification delivered within 120
days of the Closing Date, (i) all documents required to be delivered to it
pursuant to this Agreement are in its possession, (ii) such documents have
been reviewed by it and appear regular on their face and relate to such
Receivable (and setting forth the Receivables Files which contain either a
certified copy of the original Receivable or certified confirmation of the
lien for purposes of clause (a) or (d), above, respectively, and indicating
each Receivable that relates to a Federally Documented Vessel) and (iii) based
on its examination and only as to the foregoing documents, the information
set forth in the Schedule of Receivables respecting such Receivable is
correct. During the term of this Agreement, in the event the custodian
discovers any defect with respect to the Receivable File, the custodian shall
give written specification of such defect to the Indenture Trustee. The
parties hereto acknowledge that the Final Certification shall be executed and
delivered to the Indenture Trustee by Ganis acting in its capacity as
subservicer.
SECTION 3.04. Duties of Servicer as Custodian. (a) Safekeeping. The
Servicer shall hold the Receivable Files as custodian for the benefit of the
Issuer and the Indenture Trustee and maintain such accurate and complete
accounts, records and computer systems pertaining to each Receivable File as
shall enable the Issuer to comply with this Agreement. In performing its
duties as custodian the Servicer shall act with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to the
receivable files relating to all comparable marine receivables that the
Servicer services for itself or others. The Servicer shall conduct, or cause
to be conducted, periodic audits of the Receivable Files held by it under
this Agreement and of the related accounts, records and computer systems, in
such a manner as shall enable the Issuer or the Indenture Trustee to verify
the accuracy of the Servicer's record keeping. The Servicer shall promptly
report to the Issuer and the Indenture Trustee any failure on its part to
hold the Receivable Files and maintain its accounts, records and computer
systems as herein provided and shall promptly take appropriate action to
remedy any such failure.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B or at such
other office as shall be specified to the Issuer and the Indenture Trustee by
written notice not later than 90 days after any change in location. The
Servicer shall make available to the Issuer and the Indenture Trustee or
their respective duly authorized representatives, attorneys or auditors a
list of locations of the Receivable Files and the related accounts, records
and computer systems maintained by the Servicer at such times during normal
business hours as the Issuer or the Indenture Trustee shall instruct.
(c) Release of Documents. Upon instruction from the Indenture Trustee,
the Servicer shall release any Receivable File to the Indenture Trustee, the
Indenture Trustee's agent or the Indenture Trustee's designee, as the case
may be, at such place or places as the Indenture Trustee may designate, as
soon as practicable.
SECTION 3.05. Instructions; Authority To Act. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable
Files upon its receipt of written instructions signed by a Trust Officer of
the Indenture Trustee.
SECTION 3.06. Custodian's Indemnification. The Servicer as custodian
shall indemnify the Trust, the Owner Trustee and the Indenture Trustee and
each of their respective officers, directors, employees and agents for any
and all liabilities, obligations, losses, compensatory damages, payments,
costs or expenses of any kind whatsoever that may be imposed on, incurred by
or asserted against the Trust, the Owner Trustee or the Indenture Trustee or
any of their respective officers, directors, employees and agents as the
result of any improper act or omission in any way relating to the maintenance
and custody by the Servicer as custodian of the Receivable Files; provided,
however, that the Servicer shall not be liable to the Owner Trustee for any
portion of any such amount resulting from the willful misfeasance, bad faith
or negligence of the Owner Trustee, and the Servicer shall not be liable to
the Indenture Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith or negligence of the Indenture Trustee.
SECTION 3.07. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and
shall continue in full force and effect until terminated pursuant to this
Section. If the Bank shall resign as Servicer in accordance with the
provisions of this Agreement or if all of the rights and obligations of any
Servicer shall have been terminated under Section 8.01, the appointment of
such Servicer as custodian shall be terminated by the Indenture Trustee or by
the Holders of Notes evidencing not less than 25% of the Outstanding Amount
of the Notes or, if Notes have been paid in full, by the Owner Trustee or by
Certificateholders evidencing not less than 25% of the Certificate Balance,
in the same manner as the Indenture Trustee or such Holders may terminate the
rights and obligations of the Servicer under Section 8.01. The Indenture
Trustee or, with the consent of the Indenture Trustee, the Owner Trustee may
terminate the Servicer's appointment as custodian, with cause, at any time
upon written notification to the Servicer and, without cause, upon 30 days'
prior written notification to the Servicer. As soon as practicable after any
termination of such appointment, the Servicer shall deliver the Receivable
Files to the Indenture Trustee or the Indenture Trustee's agent at such place
or places as the Indenture Trustee may reasonably designate.
ARTICLE IV
Administration and Servicing of Receivables
SECTION 4.01. Duties of Servicer. The Servicer, for the benefit of the
Issuer (to the extent provided herein), shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables) with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable marine receivables that it services
for itself or others. The Servicer's duties shall include collection and
posting of all payments, responding to inquiries of Obligors on such
Receivables, investigating delinquencies, sending payment coupons to
Obligors, reporting tax information to Obligors, accounting for collections,
furnishing monthly and annual statements to the Owner Trustee and the
Indenture Trustee with respect to distributions and making Advances pursuant
to Section 5.04. Subject to the provisions of Section 4.02, the Servicer
shall follow its customary standards, policies and procedures in performing
its duties as Servicer. Without limiting the generality of the foregoing,
the Servicer is authorized and empowered to execute and deliver, on behalf of
itself, the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders, the Certificateholders or any of them, any and all instruments
of satisfaction or cancellation, or partial or full release or discharge, and
all other comparable instruments, with respect to such Receivables or to the
Financed Boats securing such Receivables. If the Servicer shall commence a
legal proceeding to enforce a Receivable, the Issuer (in the case of a
Receivable other than a Purchased Receivable) shall thereupon be deemed to
have automatically assigned, solely for the purpose of collection, such
Receivable to the Servicer. If in any enforcement suit or legal proceeding
it shall be held that the Servicer may not enforce a Receivable on the ground
that it shall not be a real party in interest or a holder entitled to enforce
such Receivable, the Owner Trustee shall, at the Servicer's expense and
direction, take steps to enforce such Receivable, including bringing suit in
its name or the name of the Owner Trustee, the Indenture Trustee, the
Certificateholders or the Noteholders. The Owner Trustee shall upon the
written request of the Servicer furnish the Servicer with any powers of
attorney and other documents reasonably necessary or appropriate to enable
the Servicer to carry out its servicing and administrative duties hereunder.
SECTION 4.02. Collection and Allocation of Receivable Payments. The
Servicer shall make reasonable efforts to collect all payments called for
under the terms and provisions of the Receivables as and when the same shall
become due and shall follow such collection procedures as it follows with
respect to all comparable marine receivables that it services for itself or
others. The Servicer may allocate collections between principal and interest
in accordance with the customary servicing procedures it follows with respect
to all comparable marine receivables that it services for itself or others.
The Servicer may grant extensions, rebates or adjustments on a Receivable,
which shall not, for the purposes of this Agreement, modify the original due
dates or amounts of the originally scheduled payments of interest on Simple
Interest Receivables; provided, however, that if the Servicer extends the
date for final payment by the Obligor of any Receivable beyond the Final
Scheduled Maturity Date, it shall promptly repurchase the Receivable from the
Issuer in accordance with the terms of Section 4.07. The Servicer may in its
discretion waive any late payment charge or any other fees that may be
collected in the ordinary course of servicing a Receivable. The Servicer
shall not agree to any alteration of the interest rate or the originally
scheduled payments on any Receivable.
SECTION 4.03. Realization upon Receivables. On behalf of the Issuer,
the Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Boats securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary
or advisable in its servicing of the Receivables, which may include
reasonable efforts to realize upon any recourse to Dealers and selling the
Financed Boat at public or private sale. The Servicer shall be entitled to
reimbursement out of recoveries on such Defaulted Receivable for its
reasonable, out-of-pocket costs and expenses incurred in realizing upon any
Financed Boat securing any Receivable that becomes a Defaulted Receivable or
in attempting to repossess any Financed Boat and in prosecuting legal action
against any Obligor in respect of any Receivable. The foregoing shall be
subject to the provision that, in any case in which the Financed Boat shall
have suffered damage, the Servicer shall not expend funds in connection with
the repair or the repossession of such Financed Boat unless it shall
determine in its discretion that such repair and/or repossession will
increase the Liquidation Proceeds by an amount greater than the amount of
such expenses.
SECTION 4.04. Physical Damage Insurance. The Servicer shall, in
accordance with its customary servicing procedures, require that each Obligor
shall have obtained physical damage insurance covering the Financed Boat as
of the execution of the Receivable. So long as a Receivable is outstanding,
the Servicer shall keep in place a vendor's single interest policy that
satisfies paragraph (xxiii) of Section 3.01 and covers each Financed Boat and
as to which the Issuer is endorsed thereunder as an additional loss payee.
SECTION 4.05. Maintenance of Security Interests in Financed Boats. The
Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Boat. The Servicer is
hereby authorized to take such steps as are necessary to re-perfect such
security interest on behalf of the Issuer and the Indenture Trustee in the
event of the relocation of a Financed Boat or for any other reason.
With respect to each Financed Boat that is a Federally Documented
Vessel, the Servicer shall cause an Assignment to be duly filed with the
Secretary of Transportation, in each case no later than February 23, 1998,
evidencing the assignment of the related Preferred Mortgage (i) from the
Ganis to the Bank (unless the mortgagee with respect thereto is the Bank),
(ii) from the Bank to MSCMC pursuant to the PSA, (iii) from MSCMC to the
Depositor pursuant to the Bill of Sale, (iv) from the Depositor to the Trust
pursuant to the Sale and Servicing Agreement and (v) from the Trust to the
Indenture Trustee pursuant to the Indenture, with a separate Assignment to be
filed for each assignment set forth in clauses (i) through (v) above.
SECTION 4.06. Covenants of Servicer. The Servicer shall not release
the Financed Boat securing any Receivable from the security interest granted
by such Receivable in whole or in part except in the event of payment in full
by the Obligor thereunder or repossession, nor shall the Servicer impair the
rights of the Issuer, the Indenture Trustee, the Certificateholders or the
Noteholders in such Receivable, nor shall the Servicer increase the number of
scheduled payments due under a Receivable.
SECTION 4.07. Purchase of Receivables upon Breach. The Servicer or the
Owner Trustee shall inform the other party and the Indenture Trustee and the
Depositor promptly, in writing, upon the discovery of any breach pursuant to
Section 4.02, 4.05 or 4.06. Unless the breach shall have been cured by the
last day of the second Collection Period following such discovery (or, at the
Servicer's election, the last day of the first following Collection Period),
the Servicer shall purchase any Receivable materially and adversely affected
by such breach as of such last day; provided, that, with respect to any
Financed Boat for which the Servicer has not duly filed each Assignment in
the manner and to the extent required pursuant to Section 4.05, the Servicer
shall, on February 23, 1998, repurchase the related Receivable, with the
Purchase Amount thereof to be calculated as of the last day of the related
Collection Period. If the Servicer takes any action during any Collection
Period pursuant to Section 4.02 that impairs the rights of the Issuer, the
Indenture Trustee, the Noteholders or the Certificateholders in any
Receivable or as otherwise provided in Section 4.02, the Servicer shall
purchase such Receivable as of the last day of such Collection Period. In
consideration of the purchase of any such Receivable pursuant to either of
the two preceding sentences, the Servicer shall remit the Purchase Amount in
the manner specified in Section 5.05. Subject to Section 7.02, the sole
remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders or the Certificateholders with respect to a breach pursuant to
Section 4.02, 4.05 or 4.06 shall be to require the Servicer to purchase
Receivables pursuant to this Section. The Owner Trustee and the Indenture
Trustee shall have no duty to conduct any affirmative investigation as to the
occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section.
SECTION 4.08. Servicing Fee. The Servicing Fee for each Monthly
Payment Date shall equal the product of (a) one-twelfth, (b) the Servicing
Fee Rate and (c) the Pool Balance as of the first day of the preceding
Collection Period. The Servicer shall also be entitled to all late fees,
prepayment charges and other administrative fees or similar charges allowed
by applicable law with respect to the Receivables, collected (from whatever
source) on the Receivables, plus any reimbursement pursuant to the last
paragraph of Section 7.02 and plus investment earnings on amounts on deposit
in the Collection Account to the extent specified in Section 5.01(b).
SECTION 4.09. Servicer's Certificate. At least two Business Days prior
to each Determination Date the Servicer will provide to the Indenture Trustee
sufficient information relating to the Receivables for the applicable
Collection Period to enable the Indenture Trustee to prepare Section VII of
the Servicer's Certificate. Not later than 11:00 A.M. (New York time) on
each Determination Date, the Servicer shall deliver to the Owner Trustee,
each Paying Agent, the Indenture Trustee and the Depositor, with a copy to
the Rating Agencies, a Servicer's Certificate containing all information
necessary to make the distributions to be made on the related Monthly Payment
Date pursuant to Sections 5.05 and 5.06 for the related Collection Period.
Receivables to be purchased by the Servicer or to be repurchased by the
Depositor or the Bank shall be identified by the Servicer by account number
with respect to such Receivable (as specified in Schedule A).
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee, on or before March 31 of each year beginning March 31, 1998, an
Officers' Certificate, dated as of December 31 of the preceding year, stating
that (i) a review of the activities of the Servicer during the preceding 12-
month period (or such shorter period as shall have elapsed since the Closing
Date) and of its performance under this Agreement has been made under such
officers' supervision and (ii) to the best of such officers' knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to
such officers and the nature and status thereof. The Indenture Trustee shall
send a copy of such certificate and the report referred to in Section 4.11 to
the Rating Agencies. A copy of such certificate and the report referred to
in Section 4.11 may be obtained by any Noteholder, Note Owner,
Certificateholder or Certificate Owner by a request in writing to the Owner
Trustee addressed to the Corporate Trust Office. Upon the telephone request
of the Owner Trustee, the Indenture Trustee will promptly furnish the Owner
Trustee a list of Noteholders as of the date specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter,
written notice in an Officers' Certificate of any event which with the giving
of notice or lapse of time, or both, would become a Servicer Default under
Section 8.01(a) or (b).
SECTION 4.11. Annual Independent Certified Public Accountants' Report.
The Servicer shall cause a firm of independent certified public accountants,
which may also render other services to the Servicer, the Depositor or their
Affiliates, to deliver to the Owner Trustee and the Indenture Trustee on or
before March 31 of each year beginning March, 1998, a report addressed to the
Board of Directors of the Servicer, to the effect that such firm has examined
the financial statements of the Servicer and issued its report thereon and
that such examination (a) was made in accordance with generally accepted
auditing standards and accordingly included such tests of the accounting
records and such other auditing procedures as such firm considered necessary
in the circumstances; (b) included tests relating to marine loans serviced
for others in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers (the "Program"), to the extent the
procedures in such Program are applicable to the servicing obligations set
forth in this Agreement; and (c) except as described in the report, disclosed
no exceptions or errors in the records relating to marine loans serviced for
others that, in the firm's opinion, paragraph four of such Program requires
such firm to report.
Such report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables; Noteholder's Right to Examine Bank Records; Access to Certain
Documentation. The Servicer shall provide to the Noteholders, Note Owners,
Certificateholders and Certificate Owners access to the Receivable Files in
such cases where the Noteholders, Note Owners, Certificateholders, or
Certificate Owners, as applicable, shall be required by applicable statutes
or regulations to review such documentation. Access shall be afforded
without charge, but only upon reasonable request and during the normal
business hours at the offices of the Servicer. Nothing in this Section shall
affect the obligation of the Servicer to observe any applicable law
prohibiting disclosure of information regarding the Obligors and the failure
of the Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section.
The Bank shall provide to the Noteholders, Note Owners,
Certificateholders and Certificate Owners and any supervisory agents or
examiners which may relate to the Noteholders, Note Owners,
Certificateholders or Certificate Owners, including the Office of Thrift
Supervision, the Office of the Comptroller of the Currency or the FDIC and
other similar entities, access to any documentation regarding the Receivables
which may be required by any applicable regulations. Such access shall be
afforded without charge, upon reasonable request, during normal business
hours and at the offices of the Bank, all in accordance with federal
government, the FDIC, the Office of Thrift Supervision, the Office of the
Comptroller of the Currency or any other similar regulations.
SECTION 4.13. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of independent accountants, taxes imposed on
the Servicer and expenses incurred in connection with distributions and
reports to Noteholders.
SECTION 4.14. Appointment of Subservicer. The Servicer may at any time
appoint a subservicer to perform all or any portion of its obligations as
Servicer hereunder including but not limited to its obligations as custodian
as set forth in Sections 3.04 through 3.07 hereof. The parties hereto
acknowledge and agree that the Servicer will appoint Ganis as subservicer,
and that Ganis will perform substantially all of the obligations of the
Servicer in such capacity including but not limited to the Servicer's
obligations as custodian herein. Prior to the appointment of any subservicer
other than Ganis, the Servicer shall cause the Rating Agency Condition to
have been satisfied in connection therewith. Notwithstanding the appointment
of any subservicer (including but not limited to Ganis), the Servicer shall
remain obligated and be liable to the Issuer, the Owner Trustee, the
Indenture Trustee, the Noteholders and Certificateholders for the servicing,
administering and custodianship of the Receivables in accordance with the
provisions hereof without diminution of such obligation and liability by
virtue of the appointment of such subservicer and to the same extent and
under the same terms and conditions as if the Servicer alone were servicing
and administering and acting as custodian of the Receivables. The fees and
expenses of the subservicer shall be as agreed between the Servicer and its
subservicer from time to time, and none of the Issuer, the Owner Trustee, the
Indenture Trustee, the Noteholders or Certificateholders shall have any
responsibility therefor.
SECTION 4.15. Fidelity Bond; Errors and Omissions Insurance. The
Servicer shall maintain, at its own expense, a blanket fidelity bond and an
errors and omissions insurance policy, with broad coverage with responsible
companies on all officers, employees or other persons acting in any capacity
with regard to the Receivables to handle funds, money, documents and papers
relating to the Receivables. Any such fidelity bond and errors and omissions
insurance shall protect and insure the Servicer against losses, including
forgery, theft, embezzlement, fraud, errors and omissions and negligent acts
of such persons. Such fidelity bond shall also protect and insure the
Servicer against losses in connection with any failure to maintain insurance
policies required pursuant to this Agreement and the release or satisfaction
of a Receivable without having obtained payment in full of the indebtedness
secured thereby. No provision of this Section 4.15 requiring such fidelity
bond and errors and omissions insurance shall diminish or relieve the
Servicer from its duties and obligations as set forth in this Agreement. The
coverage under any such bond and insurance policy shall be in such amounts as
are customary for the business of servicing marine receivables.
ARTICLE V
Distributions;
Statements to Noteholders and Certificateholders
SECTION 5.01. Establishment of Trust Accounts. (a) (i) The Servicer,
for the benefit of the Noteholders and Certificateholders shall
establish and maintain in the name of the Indenture Trustee an Eligible
Deposit Account (the "Collection Account"), bearing a designation
clearly indicating that the funds deposited therein are held for the
benefit of the Noteholders and Certificateholders.
(ii) The Indenture Trustee, for the benefit of the Noteholders,
shall establish and maintain in the name of the Indenture Trustee an
Eligible Deposit Account (the "Note Distribution Account"), bearing a
designation clearly indicating that the funds deposited therein are held
for the benefit of the Noteholders.
(iii) The Servicer, for the benefit of the Noteholders and
Certificateholders, shall establish and maintain in the name of the
Indenture Trustee an Eligible Deposit Account (the "Reserve Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Noteholders and
Certificateholders.
(iv) The Indenture Trustee, for the benefit of the Class A-7
Noteholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Class A-7 Interest Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Class A-7 Noteholders.
(v) The Indenture Trustee, for the benefit of the Class A-7
Noteholders, shall establish and maintain in the name of the Indenture
Trustee an Eligible Deposit Account (the "Class A-7 Principal Account"),
bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Class A-7 Noteholders.
(b) Subject to Section 8.03 of the Indenture, funds on deposit in the
Collection Account, the Class A-7 Interest Account, the Class A-7 Principal
Account and the Reserve Account (collectively, with the Note Distribution
Account, the "Trust Accounts") shall be invested by the Indenture Trustee in
Eligible Investments selected in writing by the Servicer, in each case
pursuant to a direction of the Servicer which shall contain a certification
that the requested investment constitutes an Eligible Investment and is
permitted to be made hereby by the Indenture Trustee. It is understood and
agreed that the Indenture Trustee shall not be liable for any loss arising
from an investment in Eligible Investments made in accordance with this
Section 5.01(b). All such Eligible Investments shall be held by the
Indenture Trustee for the benefit of the Noteholders and Certificateholders
(or for such of such holders for whose benefit the applicable account is
maintained); provided, that on each date on which amounts on deposit in such
accounts mature as provided below in this Section 5.01(b), all realized
interest and other investment income (net of losses and investment expenses)
on funds on deposit in the Collection Account shall be paid to the Servicer
as additional servicing compensation. Investment Earnings on amounts on
deposit in the Reserve Account, the Class A-7 Principal Account and the Class
A-7 Interest Account shall be added to the balance of the respective account
as realized. Other than as permitted by the Rating Agencies, funds on
deposit in the Collection Account, the Class A-7 Interest Account, the Class
A-7 Principal Account and the Reserve Account shall be invested in Eligible
Investments that will mature (A) not later than the Business Day immediately
preceding the next Monthly Payment Date or (B) on such next Monthly Payment
Date if either (x) such investment is held in the trust department of the
institution with which the Collection Account, the Class A-7 Interest
Account, the Class A-7 Principal Account and the Reserve Account is then
maintained and is invested in a time deposit of such institution that is
rated at least A-1 by Standard & Poor's and P-1 by Moody's or (y) the Bank
(so long as the short-term unsecured debt obligations of the Bank are either
(i) rated at least P-1 by Moody's and A-1 by Standard & Poor's on the date
such investment is made or (ii) guaranteed by an entity whose short-term
unsecured debt obligations are rated at least P-1 by Moody's and A-1 by
Standard & Poor's on the date such investment is made) has agreed to advance
funds on such Monthly Payment Date to the Note Distribution Account in the
amount payable on such investment on such Monthly Payment Date pending
receipt thereof to the extent necessary to make distributions on such Monthly
Payment Date. The guarantee referred to in clause (y) of the preceding
sentence shall be subject to the Rating Agency Condition. For the purpose of
the foregoing, unless the Bank affirmatively agrees in writing to make such
advance with respect to such investment prior to the time an investment is
made, it shall not be deemed to have agreed to make such advance. Funds
deposited in a Trust Account on a day which immediately precedes a Monthly
Payment Date upon the maturity of any Eligible Investments are not required
to be invested overnight. Funds on deposit in the Note Distribution Account
shall not be invested.
(c) (i) The Indenture Trustee shall possess all right, title and
interest in all funds on deposit from time to time in the Trust Accounts
and in all proceeds thereof (including all income thereon) and all such
funds, investments, proceeds and income shall be part of the Trust
Estate. The Trust Accounts shall be under the sole dominion and control
of the Indenture Trustee for the benefit of the Noteholders and
Certificateholders (or for such of such holders for whose benefit the
applicable account is maintained). If, at any time, any of the Trust
Accounts ceases to be an Eligible Deposit Account, the Indenture Trustee
(or the Servicer on its behalf) shall within 10 Business Days (or such
longer period, not to exceed 30 calendar days, as to which each Rating
Agency may consent) establish a new Trust Account as an Eligible Deposit
Account and shall transfer any cash and/or any investments to such new
Trust Account.
(ii) With respect to the Trust Account Property, the Indenture
Trustee agrees, by its acceptance hereof, that:
(A) any Trust Account Property that is held in deposit
accounts shall be held solely in the Eligible Deposit Accounts,
subject to the last sentence of Section 5.01(c)(i); and each such
Eligible Deposit Account shall be subject to the exclusive custody
and control of the Indenture Trustee, and the Indenture Trustee
shall have sole signature authority with respect thereto;
(B) any Trust Account Property that constitutes Physical
Property shall be delivered to the Indenture Trustee in accordance
with paragraph (1) of the definition of "Delivery" and shall be
held, pending maturity or disposition, solely by the Indenture
Trustee or a financial intermediary (as such term is defined in
Section 8-313(4) of the UCC) acting solely for the Indenture
Trustee;
(C) any Trust Account Property that is a book-entry security
held through the Federal Reserve System pursuant to federal book-
entry regulations shall be delivered in accordance with
paragraph (2) of the definition of "Delivery" and shall be
maintained by the Indenture Trustee, pending maturity or
disposition, through continued book-entry registration of such
Trust Account Property as described in such paragraph; and
(D) any Trust Account Property that is an "uncertificated
security" under Article VIII of the UCC and that is not governed by
clause (C) above shall be delivered to the Indenture Trustee in
accordance with paragraph (3) of the definition of "Delivery" and
shall be maintained by the Indenture Trustee, pending maturity or
disposition, through continued registration of the Indenture
Trustee's (or its nominee's) ownership of such security.
(iii) The Servicer shall have the power, revocable by the
Indenture Trustee or by the Owner Trustee with the consent of the
Indenture Trustee, to make withdrawals and payments from the Trust
Accounts (other than the Note Distribution Account, the Class A-7
Principal Account and the Class A-7 Interest Account) for the purpose of
permitting the Servicer or the Owner Trustee to carry out its respective
duties hereunder or permitting the Indenture Trustee to carry out its
duties under the Indenture.
SECTION 5.02. Collections. The Servicer shall remit within two
Business Days of receipt thereof to the Collection Account all payments by or
on behalf of the Obligors with respect to the Receivables (other than
Purchased Receivables) and all Liquidation Proceeds, both as collected during
the Collection Period. Notwithstanding the foregoing, subject to the Rating
Agency Condition, if at any time (i) the Bank remains the Servicer, (ii) no
Servicer Default shall have occurred and be continuing and (iii) the Bank
maintains a short-term rating of at least the level specified by each of
Standard & Poor's and Moody's, then for so long as each of the conditions
set forth in clauses (i), (ii) and (iii) continues to be met, the Servicer
shall remit such collections with respect to the preceding calendar month to
the Collection Account on the Business Day immediately preceding the related
Monthly Payment Date. In the event that the Servicer is remitting
collections to the Collection Account pursuant to the preceding sentence, it
shall notify the Indenture Trustee promptly if at any time the Bank's short-
term rating drops below the level specified by either Rating Agency. For
purposes of this Article V the phrase "payments by or on behalf of Obligors"
shall mean payments made with respect to the Receivables by Persons other
than the Servicer or the Depositor.
SECTION 5.03. Application of Collections. All collections for the
Collection Period shall be applied by the Servicer as follows: With respect
to each Receivable (other than a Purchased Receivable), payments by or on
behalf of the Obligor shall be applied first to reduce Outstanding Simple
Interest Advances to the extent described in Section 5.04. Next, any excess
shall be applied to interest and principal in accordance with the Simple
Interest Method.
SECTION 5.04. Advances. As of the close of business on the last day of
each Collection Period, the Servicer shall advance an amount equal to the
amount of interest due on the Simple Interest Receivables at their respective
APR's for the related Collection Period (assuming the Simple Interest
Receivables pay on their respective due dates) minus the amount of interest
actually received on the Simple Interest Receivables during the related
Collection Period (such amount, a "Simple Interest Advance"). With respect
to each Simple Interest Receivable, the Simple Interest Advance shall
increase Outstanding Simple Interest Advances. If such calculation (i.e.,
the subtraction of the amount of interest due on the Simple Interest
Receivables at their respective APR's for the related Collection Period
(assuming the Simple Interest Receivables pay on their respective due dates)
from the amount of interest actually received on the Simple Interest
Receivables during the related Collection Period) results in a negative
number, an amount equal to the absolute value of such negative number shall
be paid to the Servicer and the amount of Outstanding Simple Interest
Advances shall be reduced by such amount. In addition, in the event that a
Simple Interest Receivable becomes a Defaulted Receivable, Liquidation
Proceeds with respect to such Simple Interest Receivable attributable to
accrued and unpaid interest thereon (but not including interest for the then
current Collection Period) shall be paid to the Servicer to reduce
Outstanding Simple Interest Advances, but only to the extent of any
Outstanding Simple Interest Advances with respect to such Receivable. The
Servicer shall not make any advance in respect of principal of the
Receivables, nor shall the Servicer make any advance in respect of a
Defaulted Receivable.
SECTION 5.05. Additional Deposits. The Servicer shall deposit in the
Collection Account on the Determination Date for the related Collection
Period the aggregate Advances pursuant to Section 5.04. The Servicer, the
Bank and the Depositor shall deposit or cause to be deposited in the
Collection Account the aggregate Purchase Amount with respect to Purchased
Receivables and the Servicer shall deposit therein all amounts to be paid
under Section 9.01, in each case on or prior to the Determination Date
following the Collection Period as of which such purchase is made by the
Servicer, the Bank or the Depositor, as the case may be. In addition, any
other deposits required to be made by the Depositor or the Servicer to the
Collection Account and which are not otherwise provided for by Section 5.02
or by the other provisions of this Section 5.05 shall be made on or prior to
the Determination Date for the related Collection Period.
SECTION 5.06. Distributions.
(a) (i) On each Determination Date, the Servicer shall calculate
all amounts required to be deposited in the Note Distribution Account
and the Certificate Distribution Account.
(ii) On each Monthly Payment Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on the related Determination Date pursuant to
Section 4.09) to make the following deposits and distributions for
receipt by the Servicer or deposit in the applicable account by 11:00
A.M. (New York time), to the extent of the Total Distribution Amount, in
the following order of priority:
(A) to the Servicer, from the Interest Distribution Amount,
the Servicing Fee (and all unpaid Servicing Fees from prior
Collection Periods);
(B) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clause (A),
the Noteholders' Interest Distributable Amount;
(C) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clause (A)
and (B), the Certificateholders' Interest Distributable Amount;
(D) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (A)
through (C), the Noteholders' Regular Principal Distributable
Amount;
(E) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (A)
through (D), the Certificateholders' Regular Principal
Distributable Amount;
(F) to the Reserve Account, from the Total Distribution
Amount remaining after the application of clauses (A) through (E),
the amount, if any, by which the Specified Reserve Account Balance
for such Monthly Payment Date, exceeds the amount then on deposit
in the Reserve Account; and
(G) to the Note Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (A)
through (F), the Noteholders' Excess Distributable Amount, if any,
and after the Notes have been paid in full, after the application
of clauses (A), (C), (E) and (F), to the Certificate Distribution
Account, the Certificateholders' Excess Distributable Amount until
the Certificate Balance has been reduced to zero.
(b) On each Monthly Payment Date, the portion of the Total
Distribution Amount, if any, remaining after making in full each of the
allocations set forth in Section 5.06(a)(ii), shall be distributed to
the Owner Trustee for distribution by the Owner Trustee to the Company
pursuant to Section 5.02(a) of the Trust Agreement.
SECTION 5.07. Reserve Account. (a) On the Closing Date the Depositor
shall deposit an amount equal to the Reserve Account Initial Deposit into the
Reserve Account. If the amount on deposit in the Reserve Account on any
Monthly Payment Date (after giving effect to all deposits thereto or
withdrawals therefrom on such Monthly Payment Date) is greater than the
Specified Reserve Account Balance for such Monthly Payment Date and the
Overcollateralization Amount for such Monthly Payment Date is not less than
the Targeted Overcollateralization Amount, the Servicer shall instruct the
Indenture Trustee to distribute the amount of such excess to the Owner
Trustee for distribution by the Owner Trustee to the Company.
(b) (i) In the event that the Noteholders' Interest Distributable
Amount for a Monthly Payment Date exceeds the amount deposited into the Note
Distribution Account pursuant to Section 5.06(a)(ii)(B) on such Monthly
Payment Date, the Servicer shall instruct the Indenture Trustee to withdraw
from the Reserve Account on such Monthly Payment Date an amount equal to such
excess, to the extent of funds available therein, and deposit such amount
into the Note Distribution Account.
(ii) In the event that the Certificateholders' Interest
Distributable Amount for a Monthly Payment Date exceeds the amount deposited
into the Certificate Distribution Account pursuant to Section 5.06(a)(ii)(C)
on such Monthly Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Monthly Payment Date an
amount equal to such excess, to the extent of funds available therein after
giving effect to paragraph (b)(i) above, and deposit such amount into the
Certificate Distribution Account.
(iii) In the event that the Noteholders' Regular Principal
Distributable Amount for a Monthly Payment Date exceeds the amount deposited
into the Note Distribution Account pursuant to Section 5.06(a)(ii)(D) on such
Monthly Payment Date, the Servicer shall instruct the Indenture Trustee to
withdraw from the Reserve Account on such Monthly Payment Date an amount
equal to such excess, to the extent of funds available therein after giving
effect to paragraphs (b)(i) and (b)(ii) above, and deposit such amount into
the Note Distribution Account.
(iv) In the event that the Certificateholders' Regular
Distributable Amount for a Monthly Payment Date exceeds the amount deposited
into the Certificate Distribution Account pursuant to Section 5.06(a)(ii)(E)
on such Monthly Payment Date, the Servicer shall instruct the Indenture
Trustee to withdraw from the Reserve Account on such Monthly Payment Date an
amount equal to such excess, to the extent of funds available therein after
giving effect to paragraphs (b)(i), (b)(ii) and (b)(iii) above, and deposit
such amount into the Certificate Distribution Account.
SECTION 5.08. Statements to Noteholders and Certificateholders. At
least three Business Days prior to each Monthly Payment Date, the Servicer
shall provide to the Indenture Trustee (with a copy to each Paying Agent)
information relating to the Receivables for the applicable Collection Period
in order that the Indenture Trustee may perform the requisite calculations
and forward to each Noteholder and Certificateholder of record as of the most
recent Record Date a statement substantially in the forms of Exhibit A-1 and
Exhibit A-2 setting forth at least the following information as to the Notes
and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal
allocable to each Class of Notes and to the Certificates;
(ii) the amount of such distribution allocable to interest
allocable to each Class of Notes and to the Certificates;
(iii) the outstanding principal balance of each Class of Notes, the
Note Pool Factor for each such Class, the Certificate Balance and the
Certificate Pool Factor as of the close of business on the last day of
the preceding Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above;
(iv) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period;
(v) the amount of Realized Losses, if any, with respect to the
related Collection Period;
(vi) the balance of the Reserve Account on such Monthly Payment
Date after giving effect to deposits and withdrawals to be made on such
Monthly Payment Date, if any; and
(vii) the Pool Balance as of the close of business on the last day
of the related Collection Period, after giving effect to payments
allocated to principal reported under clause (i) above.
Each amount set forth on the Monthly Payment Date statement under
clauses (i), (ii) or (iv) above shall be expressed as a dollar amount per
$1,000 of original principal balance of a Note or Certificate, as applicable.
SECTION 5.09. Sale of Residual Interest by Bank. The Bank and the
Depositor acknowledge, that pursuant to the Call Option Agreement between the
Bank and MSCMC, the Bank has the right to those distributions on the
Receivables distributable pursuant to Section 5.06(b). The Bank has sold its
right, title and interest in and to such distributions to the Company, and
directs the Depositor to cause the Trust Agreement to provide for such
distributions to be made to the Company pursuant to the Trust Agreement and
to cause a Certificate to be issued to the Company evidencing the entitlement
to such distributions, and the Depositor confirms that the Trust Agreement so
provides and that such Certificate has been issued pursuant thereto.
ARTICLE VI
The Depositor
SECTION 6.01. Representations of Depositor. The Depositor makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Receivables. The representations speak as of the execution and
delivery of this Agreement and as of the Closing Date, in the case of the
Receivables, and shall survive the sale of the Receivables to the Issuer and
the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Depositor is duly
organized and validly existing as a corporation in good standing under
the laws of the State of Delaware, with the corporate 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 had at all relevant times, and has, the corporate power, authority
and legal right to acquire and own the Receivables.
(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 property or the conduct of its business shall
require such qualifications.
(c) Power and Authority. The Depositor has the corporate power
and authority to execute and deliver this Agreement and to carry out its
respective terms; the Depositor has full power and authority to sell and
assign the property to be sold and assigned to and deposited with the
Issuer, and the Depositor shall have duly authorized such sale and
assignment to the Issuer 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) Binding Obligation. This Agreement constitutes, a legal,
valid and binding obligation of the Depositor enforceable in accordance
with its terms.
(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 articles of incorporation or bylaws of the Depositor,
or any indenture, agreement or other instrument to which the Depositor
is a party or by which it is bound; or result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms
of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); or 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. To the Depositor's best knowledge, there are
no proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or its
properties: (i) asserting the invalidity of this Agreement, the
Indenture or any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated
by this Agreement, the Indenture or any of the other Basic Documents,
(iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Depositor of its obligations
under, or the validity or enforceability of, this Agreement, the
Indenture, any of the other Basic Documents, the Notes or the
Certificates or (iv) which might adversely affect the federal or state
income tax attributes of the Notes or the Certificates.
(g) Chief Executive Office. The chief executive office of the
Depositor is located at 1585 Broadway, New York, New York 10036.
SECTION 6.02. Corporate Existence. During the term of this Agreement,
the Depositor will keep in full force and effect its existence, rights and
franchises as a corporation under the laws of the jurisdiction of its
incorporation and will obtain and preserve its qualification to do business
in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement, the Basic
Documents and each other instrument or agreement necessary or appropriate to
the proper administration of this Agreement and the transactions contemplated
hereby. In addition, all transactions and dealings between the Depositor and
its Affiliates will be conducted on an arm's-length basis.
SECTION 6.03. Liability of the Depositor; Indemnities. The Depositor
shall be liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Depositor under this Agreement:
(a) The Depositor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee and any of the
officers, directors, employees and agents of the Issuer, the Owner
Trustee and the Indenture Trustee from and against any taxes that may at
any time be asserted against any such Person with respect to the
transactions contemplated herein and in the Basic Documents (except any
income taxes arising out of fees paid to the Owner Trustee and the
Indenture Trustee), including any sales, gross receipts, general
corporation, tangible personal property, privilege or license taxes
(but, in the case of the Issuer, not including any taxes asserted with
respect to, and as of the date of, the sale of the Receivables to the
Issuer or the issuance and original sale of the Notes and the
Certificates, or asserted with respect to ownership of the Receivables,
or federal or other income taxes arising out of distributions on the
Notes and the Certificates) and costs and expenses in defending against
the same.
(b) The Depositor shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders and
Certificateholders and any of the officers, directors, employees and
agents of the Issuer, the Owner Trustee and the Indenture Trustee from
and against any loss, liability or expense incurred by reason of (i) the
Depositor's willful misfeasance, bad faith or negligence in the
performance of its duties under this Agreement, or by reason of reckless
disregard of its obligations and duties under this Agreement and
(ii) the Depositor's or the Issuer's violation of federal or state
securities laws in connection with the offering and sale of the Notes or
the Certificates.
(c) The Depositor shall indemnify, defend and hold harmless the
Owner Trustee and the Indenture Trustee and their respective officers,
directors, employees and agents from and against all costs, expenses,
losses, claims, damages and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties
herein and in the Trust Agreement contained, in the case of the Owner
Trustee, and herein and in the Indenture contained, in the case of the
Indenture Trustee, except to the extent that such cost, expense, loss,
claim, damage or liability: (i) in the case of the Owner Trustee, shall
be due to the willful misfeasance, bad faith or negligence (except for
errors in judgment) of the Owner Trustee or, in the case of the
Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of the Indenture Trustee; or
(ii) in the case of the Owner Trustee, shall arise from the breach by
the Owner Trustee of any of its representations or warranties set forth
in Section 7.03 of the Trust Agreement.
(d) The Depositor shall pay any and all taxes levied or assessed
upon all or any part of the Owner Trust Estate (other than any taxes
expressly excluded from the Depositor's responsibilities pursuant to the
parentheticals in paragraph (a) above).
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and the Indenture and shall include reasonable fees and
expenses of counsel and expenses of litigation. If the Depositor shall have
made any indemnity payments pursuant to this Section and the Person to or on
behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to the
Depositor, without interest.
SECTION 6.04. Merger or Consolidation of, or Assumption of the
Obligations of, Depositor. Any Person (a) into which the Depositor may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Depositor shall be a party or (c) which may succeed to the
properties and assets of the Depositor substantially as a whole, which person
in any of the foregoing cases executes an agreement of assumption to perform
every obligation of the Depositor under this Agreement, shall be the
successor to the Depositor hereunder without the execution or filing of any
document or any further act by any of the parties to this Agreement;
provided, however, that (i) immediately after giving effect to such
transaction, no representation or warranty made pursuant to Section 3.02
shall have been breached, (ii) the Depositor shall have delivered to the
Owner Trustee and the Indenture Trustee an Officers' Certificate and an
Opinion of Counsel each stating that such consolidation, merger or succession
and such agreement of assumption comply with this Section and that all
conditions precedent, if any, provided for in this Agreement relating to such
transaction have been complied with, (iii) the Rating Agency Condition shall
have been satisfied with respect to such transaction and (iv) the Depositor
shall have delivered to the Owner Trustee and the Indenture Trustee an
Opinion of Counsel either (A) stating that, in the opinion of such counsel,
all financing statements and continuation statements and amendments thereto
have been executed and filed that are necessary fully to preserve and protect
the interest of the Owner Trustee and Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve
and protect such interests. Notwithstanding anything herein to the contrary,
the execution of the foregoing agreement of assumption and compliance with
clauses (i), (ii), (iii) and (iv) above shall be conditions to the
consummation of the transactions referred to in clauses (a), (b) or (c)
above.
SECTION 6.05. Limitation on Liability of Depositor and Others. The
Depositor and any director, officer, employee or agent of the Depositor may
rely in good faith on the advice of counsel or on any document of any kind,
prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Depositor shall not be under any obligation
to appear in, prosecute or defend any legal action that shall not be
incidental to its obligations under this Agreement, and that in its opinion
may involve it in any expense or liability.
SECTION 6.06. Depositor May Own Notes and Certificates. The Depositor
and any Affiliate thereof may in its individual or any other capacity become
the owner or pledgee of Notes and Certificates with the same rights as it
would have if it were not the Depositor or an Affiliate thereof, except as
expressly provided herein or in any Basic Document.
SECTION 6.07. Pennsylvania Motor Vehicle Sales Finance Act License.
The Depositor shall use its best efforts to maintain, and shall cause the
Trust to use its best efforts to maintain the effectiveness of all licenses
required under the Pennsylvania Motor Vehicle Sales Finance Act in connection
with this Agreement and the Basic Documents and the transactions contemplated
hereby and thereby until such time as the Trust shall terminate in accordance
with the terms hereof.
ARTICLE VII
The Servicer
SECTION 7.01. Representations and Warranties of the Servicer. The Bank
makes the following representations and warranties on which the Issuer is
deemed to have relied in acquiring the Receivables. Such representations and
warranties speak as of the execution and delivery of this Agreement and as of
the Closing Date but shall survive (1) the sale, transfer and assignment of
the Receivables to the Issuer and the pledge thereof to the Indenture Trustee
pursuant to the Indenture and (2) the removal of the Bank as Servicer.
(i) The Bank is a national banking association duly organized,
validly existing and in good standing under the laws of the United States of
America with the full power and authority to own and conduct its business as
it is presently conducted by the Bank. The Bank is or will be in compliance
with the laws of any such state to the extent necessary to insure the
enforceability of each Receivable and the servicing of the Receivables in
accordance with the terms of this Agreement;
(ii) The Bank has the full power and authority to consummate all
transactions contemplated by this Agreement. The Bank has duly authorized
the execution, delivery and performance of this Agreement, has duly executed
and delivered this Agreement and this Agreement constitutes a legal, valid
and binding obligation of the Bank, enforceable against it in accordance with
its terms;
(iii) Neither the execution and delivery of this Agreement, the
acquisition or origination of the Receivables by the Bank, the sale of the
Receivables to MSCMC, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the terms and conditions of
this Agreement will conflict with or result in a breach of any of the terms
of the Bank's charter or by-laws or any legal restriction or any agreement or
instrument to which the Bank is now a party or by which it is bound, or
constitute a default or result in an acceleration under any of the foregoing,
or result in the violation of any law, rule, regulation, order, judgment or
decree to which the Bank or its property is subject;
(iv) The Bank's deposits are insured by the FDIC;
(v) The Bank does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in
this Agreement;
(vi) There is no litigation pending or, to the Bank's knowledge,
threatened, which if determined adversely to the Bank would adversely affect
the execution, delivery or enforceability of this Agreement, or the ability
of the Bank to service the Receivables hereunder in accordance with the terms
hereof or which would have a material adverse effect on the financial
condition of the Bank;
(vii) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Bank of or compliance by the Bank with this Agreement or
the consummation of the transactions contemplated by this Agreement;
(viii) The collection practices used by the Bank with respect to each
Receivable have been in all respects legal, proper, prudent and customary in
the origination and servicing of receivables similar to the Receivables;
(ix) The chief executive office of the Bank is located in Boston,
Massachusetts; and
(x) Neither this Agreement nor any statement, report or other
document furnished or to be furnished in connection with the sale of the
Receivables to MSCMC or pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of fact or
omits to state a fact necessary to make the statements contained therein not
misleading;
SECTION 7.02. Indemnities, etc. of Servicer. The Servicer shall be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Servicer under this Agreement:
(a) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Depositor and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee and the Indenture
Trustee from and against any and all costs, expenses, losses, damages,
claims and liabilities arising out of or resulting from the use,
ownership or operation by the Servicer or any Affiliate thereof of a
Financed Boat.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Depositor, the
Noteholders, the Certificateholders and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee and the Indenture
Trustee from and against any and all costs, expenses, losses, claims,
damages and liabilities to the extent that such cost, expense, loss,
claim, damage or liability arose out of, or was imposed upon any such
Person through, the negligence, willful misfeasance or bad faith of the
Servicer in the performance of its duties under this Agreement or by
reason of reckless disregard of its obligations and duties under this
Agreement.
(c) The Servicer agrees to pay when due the compensation and any
other amounts due to the Indenture Trustee and the Owner Trustee
pursuant to Section 6.07 of the Indenture and Section of 8.02 of the
Trust Agreement (in the event the Company cannot fully indemnify the
Owner Trustee), as applicable.
For purposes of this Section, in the event of the termination of the
rights and obligations of the Bank (or any successor thereto pursuant to
Section 7.03) as Servicer pursuant to Section 8.01, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to be the
Servicer pending appointment of a successor Servicer (other than the
Indenture Trustee) pursuant to Section 8.02.
Indemnification and other payments under this Section shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee or the
termination of this Agreement and the Indenture and shall include reasonable
fees and expenses of counsel and expenses of litigation. If the Servicer
shall have made any indemnity payments pursuant to this Section and the
Person to or on behalf of whom such payments are made thereafter collects any
of such amounts from others, such Person shall promptly repay such amounts to
the Servicer, without interest.
SECTION 7.03. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (a) into which the Servicer may be
merged or consolidated, (b) which may result from any merger or consolidation
to which the Servicer shall be a party, (c) which may succeed to the
properties and assets of the Servicer substantially as a whole or (d) with
respect to the Servicer's obligations hereunder, which is a corporation 50%
or more of the voting stock of which is owned, directly or indirectly, by the
Bank, which Person executed an agreement of assumption to perform every
obligation of the Servicer hereunder, shall be the successor to the Servicer
under this Agreement without further act on the part of any of the parties to
this Agreement; provided, however, that (i) immediately after giving effect
to such transaction, no Servicer Default and no event which, after notice or
lapse of time, or both, would become a Servicer Default shall have occurred
and be continuing, (ii) the Servicer shall have delivered to the Owner
Trustee and the Indenture Trustee an Officers' Certificate and an Opinion of
Counsel each stating that such consolidation, merger or succession and such
agreement of assumption comply with this Section and that all conditions
precedent provided for in this Agreement relating to such transaction have
been complied with, (iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction and (iv) the Servicer shall have
delivered to the Owner Trustee and the Indenture Trustee an Opinion of
Counsel stating that, in the opinion of such counsel, either (A) all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Owner Trustee and the Indenture Trustee, respectively, in the
Receivables and reciting the details of such filings or (B) no such action
shall be necessary to preserve and protect such interests. Notwithstanding
anything herein to the contrary, the execution of the foregoing agreement of
assumption and compliance with clauses (i), (ii), (iii) and (iv) above shall
be conditions to the consummation of the transactions referred to in
clause (a), (b), (c) or (d) above.
SECTION 7.04. Limitation on Liability of Servicer and Others. Neither
the Servicer nor any of the directors, officers, employees or agents of the
Servicer shall be under any liability to the Issuer, the Noteholders or
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such person against any liability that
would otherwise be imposed by reason of willful misfeasance, bad faith or
negligence in the performance of duties or by reason of reckless disregard of
obligations and duties under this Agreement. The Servicer and any director,
officer, employee or agent of the Servicer may rely in good faith on any
document of any kind prima facie properly executed and submitted by any
person respecting any matters arising under this Agreement.
Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement
and the Basic Documents and the rights and duties of the parties to this
Agreement and the Basic Documents and the interests of the Noteholders under
the Indenture and of the Certificateholders under the Trust Agreement.
SECTION 7.05. Bank Not To Resign as Servicer. Subject to the
provisions of Section 7.03, the Bank shall not resign from the obligations
and duties hereby imposed on it as Servicer under this Agreement except upon
a determination that the performance of its duties under this Agreement shall
no longer be permissible under applicable law. Notice of any such
determination permitting the resignation of the Bank shall be communicated to
the Owner Trustee and the Indenture Trustee at the earliest practicable time
(and, if such communication is not in writing, shall be confirmed in writing
at the earliest practicable time) and any such determination shall be
evidenced by an Opinion of Counsel to such effect delivered to the Owner
Trustee and the Indenture Trustee concurrently with or promptly after such
notice. No such resignation shall become effective until the Indenture
Trustee or a successor Servicer shall have assumed the responsibilities and
obligations of the Bank in accordance with Section 8.02. In addition, in
effecting such resignation, the Bank shall cooperate with the successor
Servicer, the Indenture Trustee and the Owner Trustee in effecting the
termination of its responsibilities and rights as Servicer under this
Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by it
for deposit, or shall thereafter be received by it with respect to any
Receivable. The Bank shall also give the successor Servicer access to the
its records, software, systems, facilities and employees in order to
facilitate the servicing transfer. All reasonable costs and expenses
(including attorneys' fees) incurred in connection with transferring the
Receivable Files and the Servicer's duties to the successor Servicer and
amending this Agreement to reflect such succession as Servicer shall be paid
by the Bank upon presentation of reasonable documentation of such costs and
expenses. Upon receipt of notice of the occurrence of any such resignation,
the Owner Trustee shall give notice thereof to the Rating Agencies.
ARTICLE VIII
Default
SECTION 8.01. Servicer Default. If any one of the following events (a
"Servicer Default") shall occur and be continuing:
(a) any failure by the Servicer to deliver to the Indenture
Trustee for deposit in any of the Trust Accounts or the Certificate
Distribution Account any required payment or to direct the Indenture
Trustee to make any required distributions therefrom, which failure
continues unremedied for a period of three Business Days after written
notice of such failure is received by the Servicer from the Owner
Trustee or the Indenture Trustee (with a copy to the Indenture Trustee,
if given by the Owner Trustee) or after discovery of such failure by an
officer of the Servicer; or
(b) failure by the Servicer duly to observe or to perform in any
material respect any other covenants or agreements of the Servicer set
forth in this Agreement or any other Basic Document, which failure shall
(i) materially and adversely affect the rights of Noteholders and
(ii) continue unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given (A) to the Servicer by the Owner Trustee or the
Indenture Trustee (with a copy to the Indenture Trustee, if given by the
Owner Trustee) or (B) to the Servicer, and to the Owner Trustee and the
Indenture Trustee by the Noteholders or Certificateholders evidencing
not less than 25% of the Outstanding Amount of the Notes or 25% of the
Certificate Balance, respectively; or
(c) the occurrence of an Insolvency Event with respect to the
Servicer;
then, and in each and every case, so long as the Servicer Default shall not
have been remedied, either the Indenture Trustee or the Holders of Notes
evidencing not less than 25% of the Outstanding Amount of the Notes, by
notice then given in writing to the Servicer (and to the Indenture Trustee
and the Owner Trustee if given by the Noteholders) may terminate all the
rights and obligations (other than the obligations set forth in Section 7.02
hereof) of the Servicer under this Agreement. On or after the latest of
receipt by the Servicer of such written notice or the date of termination
specified in such notice or deemed specified pursuant to Section 8.02(d), all
authority and power of the Servicer under this Agreement, whether with
respect to the Notes or the Receivables or otherwise, shall, without further
action, pass to and be vested in the Indenture Trustee or such successor
Servicer as may be appointed under Section 8.02; and, without limitation, the
Indenture Trustee and the Owner Trustee are hereby authorized and empowered
to execute and deliver, for the benefit of the predecessor Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments,
and to do or accomplish all other acts or things necessary or appropriate to
effect the purposes of such notice of termination, whether to complete the
transfer and endorsement of the Receivables and related documents, or
otherwise. The predecessor Servicer shall cooperate with the successor
Servicer, the Indenture Trustee and the Owner Trustee in effecting the
termination of the responsibilities and rights of the predecessor Servicer
under this Agreement, including the transfer to the successor Servicer for
administration by it of all cash amounts that shall at the time be held by
the predecessor Servicer for deposit, or shall thereafter be received by it
with respect to any Receivable. The predecessor servicer shall also give the
successor Servicer access to the its records, software, systems, facilities
and employees in order to facilitate the servicing transfer. All reasonable
costs and expenses (including attorneys' fees) incurred in connection with
transferring the Receivable Files and the Servicer's duties to the successor
Servicer and amending this Agreement to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Default, the Owner Trustee
shall give notice thereof to the Rating Agencies.
SECTION 8.02. Appointment of Successor. (a) Upon the Servicer's
receipt of notice of termination pursuant to Section 8.01 or the Servicer's
resignation in accordance with the terms of this Agreement, the predecessor
Servicer shall continue to perform its functions as Servicer under this
Agreement, in the case of termination, only until the date specified in such
termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice (subject in each case to Section
8.02(d)) and, in the case of resignation, until the later of (i) the date
45 days from the delivery to the Owner Trustee and the Indenture Trustee of
written notice of such resignation (or written confirmation of such notice)
in accordance with the terms of this Agreement and (ii) the date upon which
the predecessor Servicer shall become unable to act as Servicer, as specified
in the notice of resignation and accompanying Opinion of Counsel. In the
event of the Servicer's termination hereunder, the Indenture Trustee shall
appoint a successor Servicer, and the successor Servicer shall accept its
appointment by a written assumption in form acceptable to the Owner Trustee
and the Indenture Trustee. In the event that a successor Servicer has not
been appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section, the Indenture Trustee without
further action shall automatically be appointed the successor Servicer and
the Indenture Trustee shall be entitled to the Servicing Fee.
Notwithstanding the above, the Indenture Trustee shall, if it shall be
legally unable so to act, appoint or petition a court of competent
jurisdiction to appoint any established institution, having a net worth of
not less than $100,000,000 and whose regular business shall include the
servicing of marine receivables, as the successor to the Servicer under this
Agreement.
(b) Upon appointment, the successor Servicer (including the Indenture
Trustee acting as successor Servicer) shall be the successor in all respects
to the predecessor Servicer and shall be subject to all the responsibilities,
duties and liabilities arising thereafter relating thereto placed on the
predecessor Servicer and shall be entitled to the Servicing Fee and all the
rights granted to the predecessor Servicer by the terms and provisions of
this Agreement.
(c) The Servicer may not resign unless it is prohibited from serving as
such by law.
(d) Notwithstanding anything herein to the contrary, any notice of
termination delivered by Noteholders pursuant to Section 8.01 that (i) does
not contain therein a date as of which such termination shall take effect or
(ii) contains such a date of termination, shall be deemed, in the case of
clauses (i) and (ii) to contain a date of termination which is no sooner than
the date, established by the Indenture Trustee by notice to the Servicer,
which shall be the earliest date practicable by which the Indenture Trustee
is capable of assuming the functions of Servicer hereunder.
SECTION 8.03. Repayment of Advances. If the Servicer shall change, the
predecessor Servicer shall be entitled to receive reimbursement for
Outstanding Advances pursuant to Section 5.04 with respect to all Advances
made by the predecessor Servicer.
SECTION 8.04. Notification to Noteholders. Upon any termination of, or
appointment of a successor to, the Servicer pursuant to this Article VIII,
the Indenture Trustee shall give prompt written notice thereof to Noteholders
and the Rating Agencies.
SECTION 8.05. Waiver of Past Defaults. The Holders of Notes evidencing
not less than a majority of the Outstanding Amount of the Notes may, on
behalf of all Noteholders, waive in writing any default by the Servicer in
the performance of its obligations hereunder and its consequences, except a
default in making any required deposits to or payments from any of the Trust
Accounts in accordance with this Agreement. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicer Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereto.
ARTICLE IX
Termination
SECTION 9.01. Optional Purchase of All Receivables. (a) As of the
last day of any Collection Period immediately preceding a Monthly Payment
Date as of which the then outstanding Pool Balance is 10% or less of the
Initial Pool Balance, the Servicer shall have the option to purchase the
Owner Trust Estate, other than the Trust Accounts. To exercise such option,
the Servicer shall deposit pursuant to Section 5.05 in the Collection Account
an amount equal to the aggregate Purchase Amount for the Receivables
(including Defaulted Receivables), plus the appraised value of any such other
property held by the Trust other than the Trust Accounts, such value to be
determined by an appraiser mutually agreed upon by the Servicer, the Owner
Trustee and the Indenture Trustee, and shall succeed to all interests in and
to the Trust. Notwithstanding the foregoing, the Servicer shall not be
permitted to exercise such option unless the resulting distribution to
Noteholders on the applicable Monthly Payment Date would be sufficient to pay
the sum of the outstanding principal balance of the Notes and the Certificate
Balance and all accrued but unpaid interest thereon.
(b) Upon any sale of the assets of the Trust pursuant to Section 9.02
of the Trust Agreement, the Servicer shall instruct the Indenture Trustee to
deposit the proceeds from such sale after all payments and reserves therefrom
have been made (the "Insolvency Proceeds") in the Collection Account. On the
Monthly Payment Date on which the Insolvency Proceeds are deposited in the
Collection Account (or, if such proceeds are not so deposited on a Monthly
Payment Date, on the Monthly Payment Date immediately following such
deposit), the Servicer shall instruct the Indenture Trustee to make the
following deposits (after the application on such Monthly Payment Date of the
Total Distribution Amount) from the Insolvency Proceeds and any funds
remaining in the Reserve Account, the Class A-7 Interest Account and the
Class A-7 Principal Account (including the proceeds of any sale of
investments therein as described in the following sentence):
(i) to the Note Distribution Account, any portion of the
Noteholders' Interest Distributable Amount not otherwise deposited into
the Note Distribution Account on such Monthly Payment Date;
(ii) to the Certificate Distribution Account, any portion of the
Certificateholders' Interest Distributable Amount not otherwise
deposited into the Certificate Distribution Account on such Monthly
Payment Date;
(iii) to the Note Distribution Account, the outstanding
principal balance of the Notes (after giving effect to the reduction in
the outstanding principal balance of the Notes to result from the
deposits made in the Note Distribution Account on such Monthly Payment
Date and on prior Monthly Payment Dates);
(iv) to the Certificate Distribution Account, the outstanding
principal balance of the Certificates (after giving effect to the
reduction in the outstanding principal balance of the Certificates to
result from the deposits made in the Certificate Distribution Account on
such Monthly Payment Date and on prior Monthly Payment Dates); and
(v) any remaining amount to the Owner Trustee for distribution to
the Company.
Any investments on deposit in the Trust Accounts, which will not mature on or
before such Monthly Payment Date, shall be sold by the Indenture Trustee at
such time as will result in the Indenture Trustee receiving the proceeds from
such sale not later than the Determination Date preceding such Monthly
Payment Date.
(c) As described in Article IX of the Trust Agreement, notice of any
termination of the Issuer shall be given by the Servicer to the Owner Trustee
and the Indenture Trustee as soon as practicable after the Servicer has
received notice thereof.
(d) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes the
Certificateholders will succeed to the rights of the Noteholders hereunder
and the Owner Trustee will succeed to the rights of, and assume the
obligations of, the Indenture Trustee pursuant to this Agreement.
ARTICLE X
Miscellaneous
SECTION 10.01. Amendment. This Agreement may be amended by the
Depositor, the Servicer and the Issuer, with the consent of the Indenture
Trustee, but without the consent of any of the Noteholders or
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders or
Certificateholders; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel delivered to the Owner Trustee and the
Indenture Trustee, adversely affect in any material respect the interests of
any Noteholder or Certificateholder.
This Agreement may also be amended from time to time by the Depositor,
the Servicer and the Issuer, with the consent of the Indenture Trustee and
the consent of the Holders of Notes evidencing not less than a majority of
the Outstanding Amount of the Notes and the consent of the Holders of
outstanding Certificates evidencing not less than a majority of the
outstanding Certificate Balance, for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Noteholders or
Certificateholders; provided, however, that no such amendment shall
(a) increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on Receivables or distributions that
shall be required to be made for the benefit of the Noteholders or
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Certificate Balance, the Holders of which are
required to consent to any such amendment, without the consent of the Holders
of all the outstanding Notes and Certificates.
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment
or consent to the Indenture Trustee and each of the Rating Agencies.
It shall not be necessary for the consent of Noteholders or
Certificateholders 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.
Prior to the execution of or the consent to any amendment to this
Agreement, the Owner Trustee and the Indenture 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 the Opinion
of Counsel referred to in Section 10.02(i)(1). The Owner Trustee and the
Indenture Trustee may, but shall not be obligated to, enter into or consent
to any such amendment which affects the Owner Trustee's or the Indenture
Trustee's, as applicable, own rights, duties or immunities under this
Agreement or otherwise.
SECTION 10.02. Protection of Title to Trust. (a) The Depositor shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of the
Issuer and of the Indenture Trustee in the Receivables and in the proceeds
thereof. The Depositor shall deliver (or cause to be delivered) to the Owner
Trustee and the Indenture Trustee file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available following
such filing.
(b) Neither the Depositor nor the Servicer shall change its name,
identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with
paragraph (a) above seriously misleading within the meaning of Section 9-
402(7) of the UCC, unless it shall have given the Owner Trustee and the
Indenture Trustee at least five days' prior written notice thereof and shall
have promptly filed appropriate amendments to all previously filed financing
statements or continuation statements.
(c) Each of the Depositor and the Servicer shall have an obligation to
give the Owner Trustee and the Indenture Trustee at least 60 days' prior
written notice of any relocation of its principal executive office if, as a
result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly file any such
amendment or new financing statement. The Servicer shall at all times
maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and
(ii) reconciliation between payments or recoveries on (or with respect to)
each Receivable and the amounts from time to time deposited in the Collection
Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables, the
Servicer's master computer records (including any backup archives) that refer
to a Receivable shall indicate clearly the interest of the Issuer and the
Indenture Trustee in such Receivable and that such Receivable is owned by the
Issuer and has been pledged to the Indenture Trustee. Indication of the
Issuer's and the Indenture Trustee's interest in a Receivable shall be
deleted from or modified on the Servicer's computer systems when, and only
when, the related Receivable shall have been paid in full or repurchased.
(f) If at any time the Depositor or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in marine
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or printouts (including any restored from backup
archives) that, if they shall refer in any manner whatsoever to any
Receivable, shall indicate clearly that such Receivable has been sold and is
owned by the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Indenture Trustee and its agents at
any time during normal business hours to inspect, audit and make copies of
and abstracts from the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee or to
the Indenture Trustee, within five Business Days, a list of all Receivables
(by contract number and name of Obligor) then held as part of the Trust,
together with a reconciliation of such list to the Schedule of Receivables
and to each of the Servicer's Certificates furnished before such request
indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee, promptly after the execution and delivery of this Agreement, and of
each amendment hereto and on each Monthly Payment Date occurring in
September, an Opinion of Counsel (which may be an employee of the Servicer)
stating that, in the opinion of such counsel, either (A) all financing
statements and continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Owner Trustee and
the Indenture Trustee in the Receivables, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (B) no such action shall be necessary to preserve and protect such
interest. Each such Opinion of Counsel shall specify any action necessary
(as of the date of such opinion) to be taken in the following year to
preserve and protect such interest.
(j) The Depositor shall, to the extent required by applicable law,
cause the Notes and Certificates to be registered with the Commission
pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the
time periods specified in such sections.
SECTION 10.03. Notices. All demands, notices, directions,
communications and instructions upon, to, or by the Depositor, the Servicer,
the Owner Trustee, the Indenture Trustee or the Rating Agencies under this
Agreement shall be in writing, personally delivered or mailed by certified
mail, return receipt requested, and shall be deemed to have been duly given
upon receipt (a) in the case of the Depositor, to Morgan Stanley ABS Capital
II Inc. 1585 Broadway, New York, NY 10036 , Attention of General Counsel
(212-761-4000) or the Servicer, to BankBoston, N.A., Attention of Director of
Portfolio Management, (b) in the case of the Issuer or the Owner Trustee, at
the Corporate Trust Office (as defined in the Trust Agreement), (c) in the
case of the Indenture Trustee, at the Corporate Trust Office, (d) in the case
of Moody's, to Moody's Investors Service, Inc., ABS Monitoring Department,
99 Church Street, New York, New York 10007, (e) in the case of Standard &
Poor's, to Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc., 25 Broadway (15th Floor), New York, New York 10004,
Attention of Asset Backed Surveillance Department, (f) in the case of Fitch
Investors Service, L.P., to One State Street Plaza, New York, N.Y. 10004, and
(g) in the case of Duff & Phelps Credit Rating Co., to 17 State Street, 12th
Floor, New York, New York 10004; or, as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
SECTION 10.04. Assignment by the Depositor or the Servicer.
Notwithstanding anything to the contrary contained herein, except as provided
in Sections 6.04 and 7.03 herein and as provided in the provisions of this
Agreement concerning the resignation of the Servicer, this Agreement may not
be assigned by the Depositor or the Servicer.
SECTION 10.05. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Depositor, the Servicer, the
Issuer, the Owner Trustee, the Indenture 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 10.06. 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 10.07. 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 10.08. 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 10.09. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York, 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 10.10. Assignment by Issuer. The Depositor and the Servicer
hereby acknowledge and consent to any mortgage, pledge, assignment and grant
of a security interest by the Issuer to the Indenture Trustee pursuant to the
Indenture for the benefit of the Noteholders of all right, title and interest
of the Issuer in, to and under the Receivables and/or the assignment of any
or all of the Issuer's rights and obligations hereunder to the Indenture
Trustee.
SECTION 10.11. Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the Servicer and the Depositor shall not,
prior to the date which is one year and one day after the termination of this
Agreement with respect to the Issuer, acquiesce, petition or otherwise invoke
or cause the Issuer to invoke the process of any court or government
authority for the purpose of commencing or sustaining a case against the
Issuer under any federal or state bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Issuer or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the
Issuer.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary,
this Agreement has been countersigned by Wilmington Trust Company not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall Wilmington Trust Company in its individual capacity or,
except as expressly provided in the Trust Agreement, as beneficial owner of
the Issuer have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer. For all
purposes of this Agreement, in the performance of its duties or obligations
hereunder or in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Articles VI, VII and VIII of the
Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Chase Manhattan Bank, not in its
individual capacity but solely as Indenture Trustee and in no event shall The
Chase Manhattan Bank have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any
of the certificates, notices or agreements delivered pursuant hereto, as to
all of which recourse shall be had solely to the assets of the Issuer.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
BANKBOSTON MARINE
ASSET BACKED TRUST 1997-2
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee on behalf of the Trust
By: /s/ Emmett R. Harmon
------------------------------------
Name: Emmett R. Harmon
Title: Vice President
Morgan Stanley ABS Capital II Inc.
Depositor
By: /s/ James P. Fadel
---------------------------------------
Name: James P. Fadel
Title: Authorized Signatory
BankBoston, N.A.,
Seller and Servicer
By: /s/ Paul C. Mangelsdorf III
-------------------------------------
Name: Paul C. Mangelsdorf III
Title: Director, National Lending
Acknowledged and accepted
as of the day and year
first above written:
The Chase Manhattan Bank,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Daniel C. Brown, Jr.
-------------------------------
Name: Daniel C. Brown, Jr.
Title: Assistant Vice President
APPENDIX A
DEFINITIONS LIST
"Accelerated Principal Distribution Amount" means, with respect to any
Monthly Payment Date, the portion, if any, of the Total Distribution Amount
for the related Collection Period that remains after payment of (a) the
Servicing Fee, (b) the interest due on the Notes (including deposits to the
Class A-7 Interest Account), (c) the amount of interest due on the
Certificates, (d) the Regular Principal Distribution Amount and (e) the
amount, if any, required to be deposited into the Reserve Account pursuant to
the Sale and Servicing Agreement.
"Act" has the meaning specified in Section 11.03(a) of the Indenture.
"Advance" means a Simple Interest Advance.
"Affiliate" means, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used
with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Amount Financed" means with respect to a Receivable, the amount
advanced toward the purchase price of the Financed Boats and any related
costs, exclusive of any amount allocable to the premium of force-placed
physical damage insurance covering the Financed Boats.
"Assignment" shall mean with respect to each Financed Boat that is a
Federally Documented Vessel, an assignment of the related Preferred Mortgage
in compliance with the requirements of the Ship Mortgage Statutes, including,
without limitation, that each such assignment shall:
(a) contain effective language of assignment from the relevant assignor
to the relevant assignee;
(b) be duly signed by or on behalf of the assignor and assignee and
shall be duly delivered to the assignee, by duly authorized individuals;
(c) state the name and address of each assignor, the interest in the
Preferred Mortgage held by such assignor, the name and address of each
assignee, and the interest in the Preferred Mortgage assigned to the
assignee;
(d) contain the name and official number of the relevant Financed Boat
as it appears in the records of the Secretary of Transportation, or contain a
unique qualifier that is sufficient to identify the Financed Boat to which
the assignment relates, as the Secretary of Transportation may require;
(e) fully identify the related Preferred Mortgage, at a minimum
identifying the book and page, and the date and time of filing;
(f) bear the date of its execution, shall not have been materially
altered, and shall contain a proper notarial acknowledgment; and
(g) be filed in duplicate with the Secretary of Transportation at the
National Vessel Documentation Center, at least one copy bearing the original
signature of the assignor and assignee and original notarial acknowledgments
there/or, together with the requisite filing fee, and a Declaration of
Citizenship for Vessel Recordation Purposes (Form MA-899), that is duly
executed by the relevant assignee.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate
of finance charges stated in the related Contract.
"Authorized Officer" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter).
"Bank" means BankBoston, N.A., a national banking association or its
successors in interest.
"Bank Defective Receivable": has the meaning given in Section 3.01 of
the Sale and Servicing Agreement.
"Bank Information": With respect to any offering materials or
computational materials, the information included therein regarding the Bank,
its servicing procedures, the Receivables and the underwriting guidelines and
procedures used to originate the Receivables, including such information used
in calculating such computational materials.
"Basic Documents" means the Sale and Servicing Agreement, the Indenture,
the Trust Agreement, the Note Depository Agreement and the Certificate
Depository Agreement and the other documents and certificates delivered in
connection therewith.
"Benefit Plan" has the meaning assigned to such term in Section 11.13 of
the Trust Agreement.
"Book-Entry Notes" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing
Agency as described in Section 2.10 of the Indenture.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in the Commonwealth of
Massachusetts and the State of New York are authorized or obligated by law,
regulation or executive order to remain closed.
"Business Trust Statute" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as the same may be amended from time
to time.
"Certificate Balance" equals, initially, $52,898,000 and, thereafter,
equals the Initial Certificate Balance reduced by all amounts allocable to
principal previously distributed to Certificateholders.
"Certificate Depository Agreement" means the agreement dated August 27,
1997, among the Trust, the Owner Trustee, and The Depository Trust Company,
as the initial Clearing Agency, relating to the Certificates, as the same may
be amended and supplemented from time to time.
"Certificate Distribution Account" has the meaning assigned to such term
in the Trust Agreement.
"Certificate Owner" means, with respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate, as
reflected on the books of the Clearing Agency or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Certificate Register" and "Certificate Registrar" means the register
mentioned in and the registrar appointed pursuant to Section 3.04 of the
Trust Agreement.
"Certificate of Trust" means the Certificate of Trust in the form of
Exhibit B filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.
"Certificate Pool Factor" means, as of the close of business on the last
day of a Collection Period, a seven-digit decimal figure equal to the
Certificate Balance (after giving effect to any reductions therein to be made
on the immediately following Monthly Payment Date) divided by the Initial
Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of the
Closing Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
"Certificateholder" has the meaning assigned to such term in the Trust
Agreement.
"Certificateholders' Distributable Amount" means, with respect to any
Monthly Payment Date, the sum of the Certificateholders' Principal
Distributable Amount and the Certificateholders' Interest Distributable
Amount for such date.
"Certificateholders' Excess Distributable Amount" means, with respect to
each Monthly Payment Date, the lesser of (i) the Accelerated Principal
Distribution Amount and (ii) the amount, if any, necessary after application
of the Certificateholders' Regular Principal Distribution amount for such
Monthly Payment Date, to reduce the aggregate principal amount of the
Certificates so that the Overcollateralization Amount will equal the Targeted
Overcollateralization amount after application of principal payments for such
Monthly Payment Date.
"Certificateholders' Interest Carryover Shortfall" means, with respect
to any Monthly Payment Date, the excess of the sum of the Certificateholders'
Monthly Interest Distributable Amount for the preceding Monthly Payment Date
and any outstanding Certificateholders' Interest Carryover Shortfall on such
preceding Monthly Payment Date, over the amount in respect of interest that
is actually deposited in the Certificate Distribution Account on such
preceding Monthly Payment Date, plus 30 days' interest on such excess, to the
extent permitted by law, at the Pass-Through Rate.
"Certificateholders' Interest Distributable Amount" means, with respect
to any Monthly Payment Date, the sum of the Certificateholders' Monthly
Interest Distributable Amount for such Monthly Payment Date and the
Certificateholders' Interest Carryover Shortfall for such Monthly Payment
Date. Interest with respect to the Certificates shall be computed on the
basis of a 360-day year consisting of twelve 30-day months for all purposes
of the Sale and Servicing Agreement and the Basic Documents.
"Certificateholders' Monthly Interest Distributable Amount" means, with
respect to any Monthly Payment Date, 30 days of interest (or, in the case of
the first Monthly Payment Date, interest accrued from and including the
Closing Date) at the Pass-Through Rate on the Certificate Balance on the last
day of the preceding Collection Period (or, in the case of the first Monthly
Payment Date, on the Closing Date).
"Certificateholders' Monthly Principal Distributable Amount" means, with
respect to any Monthly Payment Date prior to the Monthly Payment Date on
which the Notes are paid in full, zero; and with respect to any Monthly
Payment Date on or after the Monthly Payment Date on which the Notes are paid
in full, the lesser of (i) the sum of the Regular Principal Distribution
Amount plus the Accelerated Principal Distribution Amount for such Monthly
Payment Date and (ii) the amount, if any, necessary to reduce the aggregate
principal amount of the Certificates so that the Overcollateralization Amount
will equal the Targeted Overcollateralization Amount after application of
principal payments for such Monthly Payment Date (less, on the Monthly
Payment Date on which the Notes are paid in full, the portion thereof payable
as the Noteholders' Monthly Principal Distributable Amount on the Notes).
"Certificateholders' Principal Carryover Shortfall" means, as of the
close of any Monthly Payment Date, the excess of the Certificateholders'
Monthly Principal Distributable Amount and any outstanding
Certificateholders' Principal Carryover Shortfall from the preceding Monthly
Payment Date, over the amount in respect of principal that is actually
deposited in the Certificate Distribution Account on such current Monthly
Payment Date.
"Certificateholders' Principal Distributable Amount" means, with respect
to any Monthly Payment Date, the sum of the Certificateholders' Monthly
Principal Distributable Amount for such Monthly Payment Date and the
Certificateholders' Principal Carryover Shortfall as of the close of the
preceding Monthly Payment Date; provided, however, that the
Certificateholders' Principal Distributable Amount shall not exceed the
Certificate Balance. In addition, on the Final Scheduled Payment Date, the
principal required to be included in the Certificateholders' Principal
Distributable Amount will include the lesser of (a) any principal due and
remaining unpaid on each Simple Interest Receivable, in each case, in the
Trust as of the Final Stated Maturity Date or (b) the amount that is
necessary (after giving effect to the other amounts to be deposited in the
Certificate Distribution Account on such Monthly Payment Date and allocable
to principal) to reduce the Certificate Balance to zero.
"Certificateholders' Regular Principal Distributable Amount" means, with
respect to each Monthly Payment Date, the lesser of (i) the Regular Principal
Distribution Amount and (ii) the amount, if any, necessary to reduce the
aggregate principal amount of the Certificates so that the
Overcollateralization Amount will equal the Targeted Overcollateralization
amount after application of principal payments for such Monthly Payment Date.
"Certificates" means the Trust Certificates (as defined in the Trust
Agreement).
"Class" means any one of the classes of Notes.
"Class A-7 Interest Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a)(iv) of the Sale and
Servicing Agreement.
"Class A-1 Interest Rate" means 6.43% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-2 Interest Rate" means 6.27% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-3 Interest Rate" means 6.32% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-4 Interest Rate" means 6.41% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-5 Interest Rate" means 6.57% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-6 Interest Rate" means 6.64% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-7 Interest Rate" means 6.82% per annum (computed on the basis
of a 360-day year consisting of twelve 30-day months).
"Class A-1 Noteholder" means the Person in whose name a Class A-1 Note
is registered in the Note Register.
"Class A-2 Noteholder" means the Person in whose name a Class A-2 Note
is registered in the Note Register.
"Class A-3 Noteholder" means the Person in whose name a Class A-3 Note
is registered in the Note Register.
"Class A-4 Noteholder" means the Person in whose name a Class A-4 Note
is registered in the Note Register.
"Class A-5 Noteholder" means the Person in whose name a Class A-5 Note
is registered in the Note Register.
"Class A-6 Noteholder" means the Person in whose name a Class A-6 Note
is registered in the Note Register.
"Class A-7 Noteholder" means the Person in whose name a Class A-7 Note
is registered in the Note Register.
"Class A Notes" means the Class A-1 Notes, Class A-2 Notes, Class A-3
Notes, Class A-4 Notes, Class A-5 Notes, Class A-6 Notes and Class A-7 Notes.
"Class A-1 Notes" means the 6.43% Asset Backed Notes, Class A-1,
substantially in the form of Exhibit A to the Indenture.
"Class A-2 Notes" means the 6.27% Asset Backed Notes, Class A-2,
substantially in the form of Exhibit A to the Indenture.
"Class A-3 Notes" means the 6.32% Asset Backed Notes, Class A-3,
substantially in the form of Exhibit A to the Indenture.
"Class A-4 Notes" means the 6.41% Asset Backed Notes, Class A-4,
substantially in the form of Exhibit A to the Indenture.
"Class A-5 Notes" means the 6.57% Asset Backed Notes, Class A-5,
substantially in the form of Exhibit A to the Indenture.
"Class A-6 Notes" means the 6.64% Asset Backed Notes, Class A-6,
substantially in the form of Exhibit A to the Indenture.
"Class A-7 Notes" means the 6.82% Asset Backed Notes, Class A-7,
substantially in the form of Exhibit A to the Indenture.
"Class A-7 Principal Account" means the account designated as such,
established and maintained pursuant to Section 5.01(a)(v) of the Sale and
Servicing Agreement.
"Class A-1 Stated Maturity Date" means July 15, 2001.
"Class A-2 Stated Maturity Date" means June 15, 2004.
"Class A-3 Stated Maturity Date" means March 15, 2006.
"Class A-4 Stated Maturity Date" means October 15, 2008.
"Class A-5 Stated Maturity Date" means November 15, 2009.
"Class A-6 Stated Maturity Date" means August 15, 2010.
"Class A-7 Stated Maturity Date" means April 15, 2013.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means August 27, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, and Treasury
Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of the
Indenture.
"Collection Account" means the account designated as such, established
and maintained pursuant to Section 5.01(a)(i) of the Sale and Servicing
Agreement.
"Collection Period" means a calendar month. Any amount stated as of the
last day of a Collection Period or as of the first day of a Collection Period
shall give effect to the following calculations as determined as of the close
of business on such last day: (1) all applications of collections (2) all
Advances and reductions of Outstanding Simple Interest Advances and (3) all
distributions to be made on the following Monthly Payment Date.
"Company" means RV Marine Funding Corporation, a Delaware Corporation
and an affiliate of the Bank, or its successors in interest thereto.
"Computer Tape" means the computer tape containing information on the
Bank's and its subsidiaries' entire portfolio of marine receivables delivered
by the Bank to the Issuer.
"Contract" means a retail installment boat sale contract or installment
boat loan.
"Conveyed Property" has the meaning specified in Section 2.02 of the
Sale and Servicing Agreement.
"Corporate Trust Office" means (i) the office of the Indenture Trustee
at which at any particular time its corporate trust business shall be
principally administered, which office at the date of the execution of the
Indenture is located at 450 West 33rd Street (15th Floor), New York, New York
10001; or at such other address as the Indenture Trustee may designate from
time to time by notice to the Noteholders and the Depositor, or the principal
corporate trust office of any successor Indenture Trustee (of which address
such successor Indenture Trustee will notify the Noteholders and the
Depositor) and (ii) with respect to the Owner Trustee, the principal
corporate trust office of the Owner Trustee located at Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890 or at such other address
as the Owner Trustee may designate by notice to the Certificate Owners, the
Indenture Trustee, the Noteholders, the Certificateholders and the Depositor,
or the principal corporate trust office of any successor Owner Trustee (of
which address such successor Owner Trustee will notify the
Certificateholders, the Indenture Trustee and the Depositor).
"Cutoff Date" means August 25, 1997
"Dealer" means the dealer who sold a Financed Boat to an Obligor and who
originated and assigned the related Receivable to the Seller.
"Dealer Agreement": An agreement between a Dealer and Ganis pursuant to
which Ganis purchased one or more Receivables.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Defaulted Receivable" means a Receivable as to which (a) all or any
part of a scheduled payment is 120 days past due and the Servicer has not
repossessed the related Financed Boat or (b) the Servicer has repossessed and
liquidated the related Financed Boat, whichever occurs first.
"Definitive Notes" has the meaning specified in Section 2.10 of the
Indenture.
"Definitive Certificates" shall have the meaning set forth in
Section 3.11 of the Trust Agreement.
"Delivery" when used with respect to Trust Account Property means:
(1) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that constitute
"instruments" within the meaning of Section 9-105(1)(i) of the UCC and
are susceptible of physical delivery, transfer thereof to the Indenture
Trustee or its nominee or custodian by physical delivery to the
Indenture Trustee or its nominee or custodian endorsed to, or registered
in the name of, the Indenture Trustee or its nominee or custodian or
endorsed in blank, and, with respect to a certificated security (as
defined in Section 8-102 of the UCC) transfer thereof (i) by delivery of
such certificated security endorsed to, or registered in the name of,
the Indenture Trustee or its nominee or custodian or endorsed in blank
to a financial intermediary (as defined in Section 8-313 of the UCC) and
the making by such financial intermediary of entries on its books and
records identifying such certificated securities as belonging to the
Indenture Trustee or its nominee or custodian and the sending by such
financial intermediary of a confirmation of the purchase of such
certificated security by the Indenture Trustee or its nominee or
custodian, or (ii) by delivery thereof to a "clearing corporation" (as
defined in Section 8-102(3) of the UCC) and the making by such clearing
corporation of appropriate entries on its books reducing the appropriate
securities account of the transferor and increasing the appropriate
securities account of a financial intermediary by the amount of such
certificated security, the identification by the clearing corporation of
the certificated securities for the sole and exclusive account of the
financial intermediary, the maintenance of such certificated securities
by such clearing corporation or a "custodian bank" (as defined in
Section 8-102(4) of the UCC) or the nominee of either subject to the
clearing corporation's exclusive control, the sending of a confirmation
by the financial intermediary of the purchase by the Indenture Trustee
or its nominee or custodian of such securities and the making by such
financial intermediary of entries on its books and records identifying
such certificated securities as belonging to the Indenture Trustee or
its nominee or custodian (all of the foregoing, "Physical Property"),
and, in any event, any such Physical Property in registered form shall
be in the name of the Indenture Trustee or its nominee or custodian; and
such additional or alternative procedures as may hereafter become
appropriate to effect the complete transfer of ownership of any such
Trust Account Property (as defined herein) to the Indenture Trustee or
its nominee or custodian, consistent with changes in applicable law or
regulations or the interpretation thereof;
(2) with respect to any securities issued by the U.S. Treasury,
the Federal Home Loan Mortgage Corporation or by the Federal National
Mortgage Association that is a book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations, the
following procedures, all in accordance with applicable law, including
applicable Federal regulations and Articles 8 and 9 of the UCC: book-
entry registration of such Trust Account Property to an appropriate
book-entry account maintained with a Federal Reserve Bank by a financial
intermediary which is also a "depository" pursuant to applicable Federal
regulations and issuance by such financial intermediary of a deposit
advice or other written confirmation of such book-entry registration to
the Indenture Trustee or its nominee or custodian of the purchase by the
Indenture Trustee or its nominee or custodian of such book-entry
securities; the making by such financial intermediary of entries in its
books and records identifying such book-entry security held through the
Federal Reserve System pursuant to Federal book-entry regulations as
belonging to the Indenture Trustee or its nominee or custodian and
indicating that such custodian holds such Trust Account Property solely
as agent for the Indenture Trustee or its nominee or custodian; and such
additional or alternative procedures as may hereafter become appropriate
to effect complete transfer of ownership of any such Trust Account
Property to the Indenture Trustee or its nominee or custodian,
consistent with changes in applicable law or regulations or the
interpretation thereof; and
(3) with respect to any item of Trust Account Property that is an
uncertificated security under Article 8 of the UCC and that is not
governed by clause (b) above, registration on the books and records of
the issuer thereof in the name of the financial intermediary, the
sending of a confirmation by the financial intermediary of the purchase
by the Indenture Trustee or its nominee or custodian of such
uncertificated security and the making by such financial intermediary of
entries on its books and records identifying such uncertificated
certificates as belonging to the Indenture Trustee or its nominee or
custodian.
"Demand Note" means, in the case of the Company, the Demand Note dated
August 18, 1997, from BankBoston Corporation to the Company.
"Depositor" means Morgan Stanley ABS Capital II Inc., in its capacity as
depositor under the Sale and Servicing Agreement, and its successor in
interest.
"Depositor Defective Receivable": has the meaning given in Section 3.02
of the Sale and Servicing Agreement.
"Determination Date" means, with respect to any Monthly Payment Date,
the Business Day immediately preceding such Monthly Payment Date.
"Eligible Deposit Account" means either (1) a segregated account with an
Eligible Institution or (2) a segregated trust account with the corporate
trust department of a depository institution organized under the laws of the
United States of America or any one of the states thereof or the District of
Columbia (or any domestic branch of a foreign bank), having corporate trust
powers and acting as trustee for funds deposited in such account, so long as
any of the securities of such depository institution shall have a credit
rating from each Rating Agency in one of its generic rating categories that
signifies investment grade.
"Eligible Institution" means (1) the corporate trust department of the
Indenture Trustee, the Owner Trustee or (2) a depository institution
organized under the laws of the United States of America or any one of the
states thereof or the District of Columbia (or any domestic branch of a
foreign bank), (i) which has either i)a long-term unsecured debt rating of
AAA or better by Standard & Poor's and A1 or better by Moody's or ii) a
certificate of deposit rating of A-1+ by Standard & Poor's and P-1 or better
by Moody's, or any other long-term, short-term or certificate of deposit
rating acceptable to the Rating Agencies and (ii) whose deposits are insured
by the FDIC. If so qualified, the Indenture Trustee or, the Owner Trustee
may be considered an Eligible Institution for the purposes of clause (2) of
this definition.
"Eligible Investments" means book-entry securities, negotiable
instruments or securities represented by instruments in bearer or registered
form which evidence:
(1) direct obligations of, and obligations fully guaranteed as to
the full and timely payment by, the United States of America;
(2) demand deposits, time deposits or certificates of deposit of
any depository institution or trust company incorporated under the laws
of the United States of America or any state thereof (or any domestic
branch of a foreign bank) and subject to supervision and examination by
Federal or State banking or depository institution authorities;
provided, however, that at the time of the investment or contractual
commitment to invest therein, the commercial paper or other short-term
unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository
institution or trust company) thereof shall have a credit rating from
each of the Rating Agencies in the highest investment category granted
thereby;
(3) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the
Rating Agencies in the highest investment category granted thereby;
(4) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Indenture Trustee or the Owner Trustee or
any of their respective Affiliates is investment manager or advisor);
(5) bankers' acceptances issued by any depository institution or
trust company referred to in clause (2) above;
(6) repurchase obligations with respect to any security that is a
direct obligation of, or fully guaranteed by, the United States of
America or any agency or instrumentality thereof the obligations of
which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (2);
(7) repurchase obligations with respect to any security or whole
loan, entered into with (i) a depository institution or trust company
(acting as principal) described in clause (2) above (except that the
rating referred to in the proviso in such clause (b) shall be A-1 or
higher in the case of Standard & Poor's) (such depository institution or
trust company being referred to in this definition as a "financial
institution"), (ii) a broker/dealer (acting as principal) registered as
a broker or dealer under Section 15 of the Exchange Act (a
"broker/dealer") the unsecured short-term debt obligations of which are
rated P-1 by Moody's and at least A-1 by Standard & Poor's at the time
of entering into such repurchase obligation (a "rated broker/dealer"),
(iii) an unrated broker/dealer (an "unrated broker/dealer"), acting as
principal, that is a wholly-owned subsidiary of a non-bank holding
company the unsecured short-term debt obligations of which are rated P-1
by Moody's and at least A-1 by Standard & Poor's at the time of entering
into such repurchase obligation (a "Rated Holding Company") or (iv) an
unrated subsidiary (a "Guaranteed Counterparty"), acting as principal,
that is a wholly-owned subsidiary of a direct or indirect parent Rated
Holding Company, which guarantees such subsidiary's obligations under
such repurchase agreement; provided that the following conditions are
satisfied:
(A) the aggregate amount of funds invested in repurchase
obligations of a financial institution, a rated broker/dealer, an
unrated broker/dealer or Guaranteed Counterparty in respect of
which the Standard & Poor's unsecured short-term ratings are A-1
(in the case of an unrated broker/dealer or Guaranteed
Counterparty, such rating being that of the related Rated Holding
Company) shall not exceed 20% of the sum of the then outstanding
principal balance of the Notes and the Certificate Balance (there
being no limit on the amount of funds that may be invested in
repurchase obligations in respect of which such Standard & Poor's
rating is A-1+ (in the case of an unrated broker/dealer or
Guaranteed Counterparty, such rating being that of the related
Rated Holding Company));
(B) in the case of the Reserve Account, the rating from
Standard & Poor's in respect of the unsecured short-term debt
obligations of the financial institution, rated broker/dealer,
unrated broker/dealer or Guaranteed Counterparty (in the case of an
unrated broker/dealer or Guaranteed Counterparty, such rating being
that of the related Rated Holding Company) shall be A-1+;
(C) the repurchase obligation must mature within 30 days of
the date on which the Indenture Trustee or the Issuer, as
applicable, enters into such repurchase obligation;
(D) the repurchase obligation shall not be subordinated to
any other obligation of the related financial institution, rated
broker/dealer, unrated broker/dealer or Guaranteed Counterparty;
(E) the collateral subject to the repurchase obligation is
held, in the appropriate form, by a custodial bank on behalf of the
Indenture Trustee or the Issuer, as applicable;
(F) the repurchase obligation shall require that the
collateral subject thereto shall be marked to market daily;
(G) in the case of a repurchase obligation of a Guaranteed
Counterparty, the following conditions shall also be satisfied:
(i) the Indenture Trustee or the Issuer, as applicable,
shall have received an opinion of counsel (which may be in-
house counsel) to the effect that the guarantee of the related
Rated Holding Company is a legal, valid and binding agreement
of the Rated Holding Company, enforceable in accordance with
its terms, subject as to enforceability to bankruptcy,
insolvency, reorganization and moratorium or other similar
laws affecting creditors' rights generally and to general
equitable principles;
(ii) the Indenture Trustee or the Issuer, as applicable,
shall have received (x) an incumbency certificate for the
signer of such guarantee, certified by an officer of such
Rated Holding Company and (y) a resolution, certified by an
officer of the Rated Holding Company, of the board of
directors (or applicable committee thereof) of the Rated
Holding Company authorizing the execution, delivery and
performance of such guarantee by the Rated Holding Company;
(iii) the only conditions to the obligation of such
Rated Holding Company to pay on behalf of the Guaranteed
Counterparty shall be that the Guaranteed Counterparty shall
not have paid under such repurchase obligation when required
(it being understood that no notice to, demand on or other
action in respect of the Guaranteed Counterparty is necessary)
and that the Indenture Trustee or the Issuer shall make a
demand on the Rated Holding Company to make the payment due
under such guarantee;
(iv) the guarantee of the Rated Holding Company shall be
irrevocable with respect to such repurchase obligation and
shall not be subordinated to any other obligation of the Rated
Holding Company; and
(v) each of Standard & Poor's and Moody's has confirmed
in writing to the Indenture Trustee or Issuer, as applicable,
that it has reviewed the form of the guarantee of the Rated
Holding Company and has determined that the issuance of such
guarantee will not result in the downgrade or withdrawal of
the ratings assigned to the Notes.
(H) the repurchase obligation shall require that the
repurchase obligation be overcollateralized and shall provide that,
upon any failure to maintain such overcollateralization, the
repurchase obligation shall become due and payable, and unless the
repurchase obligation is satisfied immediately, the collateral
subject to the repurchase agreement shall be liquidated and the
proceeds applied to satisfy the unsatisfied portion of the
repurchase obligation;
(8) any other investment with respect to which the Issuer or the
Servicer has received written notification from the Rating Agencies that
the acquisition of such investment as an Eligible Investment will not
result in a withdrawal or downgrading of the ratings on the Notes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" has the meaning specified in Section 5.01 of the
Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Executive Officer" means, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any
general partner thereof.
"Expenses" shall have the meaning assigned to such term in Section 8.02
of the Trust Agreement.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
organization.
"Federally Documented Vessel" means a documented "vessel of the United
States" as such term is used in the Ship Mortgage Statutes.
"Fidelity Bond": A fidelity bond to be maintained by the Servicer
pursuant to Section 4.15 of the Sale and Servicing Agreement.
"Final Scheduled Maturity Date" means the Monthly Payment Date
immediately following the scheduled maturity date of the Receivables.
"Final Scheduled Payment Date" means November 15, 2017.
"Financed Boat" means a new or used sport or power boat (including any
boat motors and accompanying trailers) or yacht (both power and sail),
together with all accessions thereto, securing an Obligor's indebtedness
under the respective Receivable.
"Ganis" means Ganis Credit Corporation, a Delaware corporation or its
successors in interest.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and grant a lien upon and
a security interest in and a right of set-off against, deposit, set over and
confirm pursuant to the Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but
none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give
receipt for principal and interest payments in respect of the Collateral and
all other moneys payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights
and options, to bring Proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party
is or may be entitled to do or receive thereunder or with respect thereto.
"Holder" means the Person in whose name is registered on the Note
Register or Certificate Register, as applicable.
"Indemnified Parties" shall have the meaning assigned to such term in
Section 8.02. of the Trust Agreement.
"Indenture" means the Indenture dated as of August 25, 1997, between the
Issuer and the Indenture Trustee.
"Indenture Trustee" means The Chase Manhattan Bank, a New York
corporation, as Indenture Trustee under the Indenture, or any successor
Indenture Trustee under the Indenture.
"Independent" means, when used with respect to any specified Person,
that the Person (a) is in fact independent of the Issuer, any other obligor
on the Notes, the Depositor and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the
Depositor or any Affiliate of any of the foregoing Persons and (c) is not
connected with the Issuer, any such other obligor, the Depositor or any
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar
functions.
"Independent Certificate" means a certificate or opinion to be delivered
to the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order, and such opinion or certificate shall state that the signer has
read the definition of "Independent" in the Indenture and that the signer is
Independent within the meaning thereof.
"Initial Certificate Balance" means $51,898,000.
"Initial Pool Balance" means $415,168,787.45.
"Insolvency Event" means, with respect to a specified Person, (1) the
filing of a decree or order for relief by a court having jurisdiction in the
premises in respect of such Person or any substantial part of its property in
an involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or
ordering the winding-up or liquidation of such Person's affairs, and such
decree or order shall remain unstayed and in effect for a period of
60 consecutive days; or (2) the commencement by such Person of a voluntary
case under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by such Person to the
entry of an order for relief in an involuntary case under any such law, or
the consent by such Person to the appointment of or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official for such Person or for any substantial part of its property, or the
making by such Person of any general assignment for the benefit of creditors,
or the failure by such Person generally to pay its debts as such debts become
due, or the taking of action by such Person in furtherance of any of the
foregoing.
"Insurance Policy" With respect to a Receivable, any insurance policy
benefiting the holder of the Receivable providing loss or physical damage,
credit life, credit disability, theft, mechanical breakdown or similar
coverage with respect to the Financed Boat or the Obligor.
"Interest Accrual Period" means the calendar month preceding each
Monthly Payment Date (or in the case of the first Monthly Payment Date, the
period from the Cutoff Date until August 31, 1997).
"Interest Rate" means the interest rate for any one or more of the
Classes of Notes, or collectively for all Classes of Notes, in each case as
the context requires.
"Investment Earnings" means, with respect to any Monthly Payment Date,
the realized investment earnings (net of losses and investment expenses) on
amounts on deposit in the Trust Accounts to be distributed on such Monthly
Payment Date pursuant to Section 5.01(b) of the Sale and Servicing Agreement.
"Issuer" means BankBoston Marine Asset Backed Trust 1997-2 until a
successor replaces it and, thereafter, means the successor and, for purposes
of any provision contained herein and required by the TIA, each other obligor
on the Notes.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Lien" means a security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and any liens
that attach to the respective Receivable by operation of law as a result of
any act or omission by the related Obligor.
"Liquidation Proceeds" means, with respect to any Defaulted Receivable,
the monies collected in respect thereof, from whatever source, on a Defaulted
Receivable during the Collection Period in which such Receivable became a
Defaulted Receivable, net of the sum of any amounts of expenses incurred by
the Servicer in connection with such liquidation and any amounts required by
law to be remitted to the Obligor on such Defaulted Receivable.
"Listed Receivable" means any Receivable listed on the Exceptions Report
prepared by First Trust National Association and attached to the Sale and
Servicing Agreement as Exhibit D.
"Monthly Payment Date" means, with respect to each Collection Period,
the 15th day of the following month or, if such day is not a Business Day,
the immediately following Business Day, commencing on September 15, 1997.
"Moody's" means Moody's Investors Service, Inc., or its successor.
"MSCMC" means Morgan Stanley Commercial Mortgage Capital, Inc., a
Delaware Corporation and an affiliate of the Depositor.
"Nonquarterly Payment Date" means a Monthly Payment Date that is not a
Quarterly Payment Date.
"Note" means any Class A Note.
"Note Depository Agreement" means the agreement dated August 27, 1997,
among the Trust, the Indenture Trustee, and The Depository Trust Company, as
the initial Clearing Agency, relating to the Notes, as the same may be
amended and supplemented from time to time.
"Note Distribution Account" means the account designated as such,
established and maintained pursuant to Section 5.01 of the Sale and Servicing
Agreement.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Note Pool Factor" means, with respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit
decimal figure equal to the outstanding principal balance of such Class of
Notes (after giving effect to any reductions thereof to be made on the
immediately following Monthly Payment Date) divided by the original
outstanding principal balance of such Class of Notes. The Note Pool Factor
will be 1.0000000 as of the Closing Date; thereafter, the Note Pool Factor
will decline to reflect reductions in the outstanding principal balance of
such Class of Notes.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.04 of the Indenture.
"Noteholder" means the Person in whose name a Note is registered on the
Note Register.
"Noteholders' Distributable Amount" means, with respect to any Monthly
Payment Date, the sum of the Noteholders' Principal Distributable Amount and
the Noteholders' Interest Distributable Amount for such Monthly Payment Date.
"Noteholders' Excess Distributable Amount" means, with respect to each
Monthly Payment Date, the lesser of (i) the Accelerated Principal
Distribution Amount and (ii) the amount, if any, necessary after application
of the Noteholders' Regular Principal Distribution amount for such Monthly
Payment Date, to reduce the aggregate principal amount of the Notes so that
the Overcollateralization Amount will equal the Targeted
Overcollateralization Amount after application of principal payments for such
Monthly Payment Date.
"Noteholders' Interest Carryover Shortfall" means, with respect to any
Monthly Payment Date, the excess of the sum of the Noteholders' Monthly
Interest Distributable Amount for the preceding Monthly Payment Date and any
outstanding Noteholders' Interest Carryover Shortfall on such preceding
Monthly Payment Date, over the amount in respect of interest that is actually
deposited in the Note Distribution Account on such preceding Monthly Payment
Date, plus interest on the amount of interest due but not paid to Noteholders
on the preceding Monthly Payment Date, to the extent permitted by law, at the
respective Interest Rates borne by each Class of the Notes for the related
Interest Period.
"Noteholders' Interest Distributable Amount" means, with respect to any
Monthly Payment Date, the sum of the Noteholders' Monthly Interest
Distributable Amount for such Monthly Payment Date and the Noteholders'
Interest Carryover Shortfall for such Monthly Payment Date. For all purposes
of the Sale and Servicing Agreement and the Basic Documents, interest with
respect to the Notes shall be computed on the basis of twelve 30-day months
in a 360-day year.
"Noteholders' Monthly Interest Distributable Amount" means, with respect
to any Monthly Payment Date, interest accrued for the related Interest
Accrual Period on each Class of Notes at the respective Interest Rate for
such Class on the outstanding principal balance of the Notes of such Class on
the immediately preceding Monthly Payment Date (or, in the case of the first
Monthly Payment Date, the Closing Date), after giving effect to all
distributions of principal to the Noteholders of such Class on or prior to
such Monthly Payment Date (or, in the case of the first Monthly Payment Date,
on the Closing Date).
"Noteholders' Monthly Principal Distributable Amount" means, with
respect to any Monthly Payment Date, the lesser of (i) the sum of the Regular
Principal Distribution Amount plus the Accelerated Principal Distribution
Amount for such Monthly Payment Date and (ii) the amount, if any, necessary
to reduce the aggregate principal amount of the Notes so that the
Overcollateralization Amount will equal the Targeted Overcollateralization
Amount after application of principal payments for such Monthly Payment Date.
"Noteholders' Principal Carryover Shortfall" means, as of the close of
any Monthly Payment Date, the excess of the Noteholders' Monthly Principal
Distributable Amount and any outstanding Noteholders' Principal Carryover
Shortfall from the preceding Monthly Payment Date, over the amount in respect
of principal that is actually deposited in the Note Distribution Account on
such current Monthly Payment Date.
"Noteholders' Principal Distributable Amount" means, with respect to any
Monthly Payment Date, the sum of the Noteholders' Monthly Principal
Distributable Amount for such Monthly Payment Date and the Noteholders'
Principal Carryover Shortfall as of the close of the preceding Monthly
Payment Date; provided, however, that the Noteholders' Principal
Distributable Amount shall not exceed the outstanding principal balance of
the Notes. In addition, (a) on the Class A-1 Stated Maturity Date, the
principal required to be deposited in the Note Distribution Account will
include the amount necessary (after giving effect to the other amounts to be
deposited in the Note Distribution Account on such Monthly Payment Date and
allocable to principal) to reduce the Outstanding Amount of the Class A-1
Notes to zero; (b) on the Class A-2 Stated Maturity Date, the principal
required to be deposited in the Note Distribution Account will include the
amount necessary (after giving effect to the other amounts to be deposited in
the Note Distribution Account on such Monthly Payment Date and allocable to
principal) to reduce the Outstanding Amount of the Class A-2 Notes to zero;
(c) on the Class A-3 Stated Maturity Date, the principal required to be
deposited in the Note Distribution Account will include the amount necessary
(after giving effect to the other amounts to be deposited in the Note
Distribution Account on such Monthly Payment Date and allocable to principal)
to reduce the Outstanding Amount of the Class A-3 Notes to zero; (d) on the
Class A-4 Stated Maturity Date, the principal required to be deposited in the
Note Distribution Account will include the amount necessary (after giving
effect to the other amounts to be deposited in the Note Distribution Account
on such Monthly Payment Date and allocable to principal) to reduce the
Outstanding Amount of the Class A-4 Notes to zero; (e) on the Class A-5
Stated Maturity Date, the principal required to be deposited in the Note
Distribution Account will include the amount necessary (after giving effect
to the other amounts to be deposited in the Note Distribution Account on such
Monthly Payment Date and allocable to principal) to reduce the Outstanding
Amount of the Class A-5 Notes to zero; (f) on the Class A-6 Stated Maturity
Date, the principal required to be deposited in the Note Distribution Account
will include the amount necessary (after giving effect to the other amounts
to be deposited in the Note Distribution Account on such Monthly Payment Date
and allocable to principal) to reduce the Outstanding Amount of the Class A-6
Notes to zero; and (g) on the Class A-7 Stated Maturity Date, the principal
required to be deposited in the Note Distribution Account will include the
amount necessary (after giving effect to the other amounts to be deposited in
the Note Distribution Account on such Monthly Payment Date and allocable to
principal and all amounts available in the Class A-7 Principal Account) to
reduce the Outstanding Amount of the Class A-7 Notes to zero.
"Noteholders' Regular Principal Distributable Amount" means, with
respect to each Monthly Payment Date, the lesser of (i) the Regular Principal
Distribution Amount and (ii) the amount, if any, necessary to reduce the
aggregate principal amount of the Notes so that the Overcollateralization
Amount will equal the Targeted Overcollateralization amount after application
of principal payments for such Monthly Payment Date.
"Notes" means the Class A Notes.
"Obligor" on a Receivable means the purchaser or co-purchasers of the
Financed Boat and any other Person who owes payments under the Receivable.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01 of the
Indenture, and delivered to the Indenture Trustee and, with respect to any
other Basic Document, means a certificate signed by any vice president, and
the president, treasurer, assistant treasurer, secretary or assistant
secretary of the Servicer or any other party specified in any such Basic
Document as delivering an Officer's Certificate. Unless otherwise specified,
any reference in the Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in the Indenture, be an employee
of or counsel to the Issuer, the Servicer or the Depositor and who shall be
satisfactory to the Indenture Trustee, and which opinion or opinions shall be
addressed to the Indenture Trustee as Indenture Trustee, shall comply with
any applicable requirements of Section 11.01 of the Indenture and shall be in
form satisfactory to the Indenture Trustee.
"Outstanding" means, as of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to the Indenture or
provision for such notice has been made, satisfactory to the Indenture
Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes
are held by a bona fide purchaser;
provided, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any
Basic Document, Notes owned by the Issuer, any other obligor upon the Notes,
the Depositor or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so
disregarded. Notes so owned that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such Notes
and that the pledgee is not the Issuer, any other obligor upon the Notes, the
Depositor or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means the aggregate principal amount of all Notes,
or Class of Notes, as applicable, Outstanding at the
date of determination.
"Outstanding Simple Interest Advances" on the Simple Interest
Receivables means the sum, as of the close of business on the last day of a
Collection Period, of all Simple Interest Advances as reduced as provided in
Section 5.04 of the Sale and Servicing Agreement.
"Overcollateralization Amount" means the amount which shall equal zero
as of the Closing Date and for any Monthly Payment Date shall equal the
amount, if any, by which the Pool Balance as of the end of the related
Collection Period exceeds the sum of the (i) aggregate principal amount of
the Notes, (ii) the aggregate amount on deposit in the Class A-7 Principal
Account and (iii) the Certificate Balance, after giving effect to all
distributions made in respect of principal on such Monthly Payment Date.
"Owner Trust Estate" means 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.
"Owner Trustee" means Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
the Trust Agreement, and any successor Owner Trustee hereunder.
"Participation Certificate" means participation certificate No. 6
issued by the Bank pursuant to the Participation and Servicing Agreement
representing 100% undivided ownership interest in each Receivable.
"Participation and Servicing Agreement" or "PSA" means the participation
and servicing agreement dated as of March 31, 1997, as amended, between the
Bank, as seller and MSCMC, as purchaser and initial certificateholder.
"Pass-Through Rate" means 7.18%.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to make
payments to and distributions from the Collection Account, the Note
Distribution Account, the Class A-7 Interest Account and the Class A-7
Principal Account, including payments of principal of or interest on the
Notes on behalf of the Issuer.
"Percentage Interest" means, as to any Certificate, the percentage
interest, specified on the face thereof, in the distributions on the
Certificates pursuant to the Trust Agreement.
"Person" means any individual, corporation, estate, partnership, joint
venture, association, joint stock company, trust (including any beneficiary
thereof), unincorporated organization or government or any agency or
political subdivision thereof.
"Physical Property" has the meaning assigned to such term in the
definition of "Delivery" above.
"Pool Balance" means, as of the close of business on the last day of a
Collection Period, the aggregate Principal Balance of the Receivables as of
such day (excluding Purchased Receivables and Defaulted Receivables).
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced
by such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the
same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Mortgage" means "preferred mortgage" of a vessel of the
United States as defined in the Ship Mortgage Statutes.
"Principal Balance" means as of the close of business on the last day of
a Collection Period the Amount Financed minus the sum of (i) the portion of
all payments made by or on behalf of the related Obligor on or prior to such
date and allocable to principal using the Simple Interest Method and (ii) any
payment of the Purchase Amount for such Receivable allocable to principal.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Purchase Amount" means the amount, as of the close of business on the
last day of a Collection Period, required to prepay in full a Receivable
under the terms thereof including interest to the end of the month of
purchase.
"Purchased Receivable" means a Receivable purchased as of the close of
business on the last day of a Collection Period by the Servicer pursuant to
Section 4.07 of the Sale and Servicing Agreement, by the Bank pursuant to
Section 3.01 of the Sale and Servicing Agreement or the Depositor pursuant to
Section 3.02 of the Sale and Servicing Agreement.
"Quarterly Payment Date" means the 15th day of November, February, May
and August or if such day is not a Business Day, the immediately following
Business Day, commencing November 17, 1997.
"Rating Agency" means Moody's and Standard & Poor's or, if no such
organization or successor is any longer in existence, a nationally recognized
statistical rating organization or other comparable Person designated by the
Depositor, notice of which designation shall be given to the Indenture
Trustee, the Owner Trustee and the Servicer. Any notice required to be given
to a Rating Agency pursuant to the Sale and Servicing Agreement shall also be
given to Fitch Investors Service, L.P. and Duff & Phelps Credit Rating Co.,
although, except as set forth above, neither shall be deemed to be a Rating
Agency for any purposes of the Sale and Servicing Agreement.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 Business Days (or such shorter period
as is acceptable to each Rating Agency) prior notice thereof and that each of
the Rating Agencies shall have notified the Depositor, the Servicer and the
Issuer in writing that such action will not result in a reduction or
withdrawal of the then current rating of the Notes.
"Realized Losses" means, with respect to any Receivable that becomes a
Defaulted Receivable during any Collection Period, the excess of the
Principal Balance of such Defaulted Receivable over all Liquidation Proceeds
or other amounts to the extent allocable to principal during such Collection
Period.
"Receivable" means any retail installment sales contract or installment
loan for boats listed on Schedule A to the Sale and Servicing Agreement
(which Schedule may be in the form of microfiche).
"Receivable Files" means the documents specified in Section 3.03 of the
Sale and Servicing Agreement.
"Record Date" shall mean, with respect to any Monthly Payment Date or
Redemption Date, the close of business on the day immediately preceding such
Monthly Payment Date or, if Definitive Certificates are issued pursuant to
Section 3.13 of the Trust Agreement, the last day of the month preceding such
Monthly Payment Date and if Definitive Notes have been issued pursuant to
Section 2.12 of the Indenture, the last day of the month preceding such
Monthly Payment Date.
"Recoveries" means, with respect to any Receivable that becomes a
Defaulted Receivable, monies collected in respect thereof, from whatever
source, during any Collection Period following the Collection Period in which
such Receivable became a Defaulted Receivable, net of the sum of any amounts
expended by the Servicer for the account of the Obligor and any amounts
required by law to be remitted to the Obligor.
"Redemption Date" means, in the case of a redemption of the Notes
pursuant to Section 10.01(a) of the Indenture or a payment to Noteholders
pursuant to Section 10.01(b) of the Indenture, the Monthly Payment Date
specified by the Servicer or the Issuer pursuant to Section 10.01(a) or (b),
as applicable.
"Redemption Price" means (a) in the case of a redemption of the Notes
pursuant to Section 10.01(a) of the Indenture, an amount equal to the unpaid
principal amount of the Notes redeemed plus accrued and unpaid interest
thereon at the respective Interest Rates for each Class of Notes being so
redeemed, or (b) in the case of a payment made to Noteholders pursuant to
Section 10.01(b) of the Indenture, the amount on deposit in the Note
Distribution Account, but not in excess of the amount specified in clause (a)
above.
"Registered Holder" means the Person in whose name a Note is registered
on the Note Register on the applicable Record Date.
"Registrar of Titles": With respect to any state, the governmental
agency or body responsible for the registration of, and the issuance of
certificates of title relating to, boats and liens thereon.
"Regular Principal Distribution Amount" means, with respect to any
Monthly Payment Date, the sum of the following amounts, without duplication,
with respect to the Receivables in respect of the Collection Period preceding
such Monthly Payment Date: (i) that portion of all collections on Receivables
allocable to principal, (ii) all Liquidation Proceeds or other collections
attributable to the principal amount of Receivables that became Defaulted
Receivables during such Collection Period, plus the amount of Realized Losses
with respect to the Defaulted Receivables, (iii) to the extent attributable
to principal, the Purchase Amount of each Receivables that became a Purchased
Receivable during such Collection Period and (iv) partial payments relating
to refunds of extended warranty protection plan costs or of physical damage,
credit life or disability insurance policy premiums, but only if such costs
or premiums were financed by the respective Obligors thereon as of the date
of the original contract and only to the extent not included under clause (i)
above.
"Reserve Account Initial Deposit" means an amount equal to
$12,455,063.62.
"Reserve Account" means the account designated as such, established and
maintained pursuant to Section 5.01(a)(iii) of the Sale and Servicing
Agreement.
"Responsible Officer" means, with respect to the Indenture Trustee, any
Trust Officer thereof.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement dated as of August 25, 1997, among the Issuer, the Depositor, and
BankBoston, N.A., as servicer as the same may be amended or supplemented from
time to time.
"Schedule of Receivables" means the list of the Receivables set forth in
Schedule A to the Sale and Servicing Agreement (which Schedule may be in the
form of microfiche).
"Secretary of State" shall mean the Secretary of State of the State of
Delaware.
"Secretary of Transportation" means the United States Secretary of
Transportation or any successor thereto.
"Securities" means the Notes and the Certificates.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller" means BankBoston, N.A., a national banking association, or its
successors in interest.
"Servicer" means BankBoston, N.A., as the servicer of the Receivables,
and each successor to BankBoston, N.A. (in the same capacity).
"Servicer Default" means an event specified in Section 8.01 of the Sale
and Servicing Agreement.
"Servicer's Certificate" means a certificate of the Servicer delivered
pursuant to Section 4.09 of the Sale and Servicing Agreement, substantially
in the form of Exhibit B.
"Servicing Fee" means the fee payable to the Servicer for services
rendered during each Collection Period, determined pursuant to Section 4.08
of the Sale and Servicing Agreement.
"Servicing Fee Rate" means .50% per annum.
"Ship Mortgage Statutes" means Chapter 313 of Title 46 of the United
State Code, as amended from time to time.
"Simple Interest Advance" means the amount of interest, as of the close
of business on the last day of a Collection Period, which the Servicer is
required to advance on the Simple Interest Receivables pursuant to
Section 5.04 of the Sale and Servicing Agreement.
"Simple Interest Method" means the method of allocating a fixed level
payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed
rate of interest multiplied by the unpaid principal balance multiplied by the
period of time elapsed since the preceding payment of interest was made and
the remainder of such payment is allocable to principal.
"Simple Interest Receivable" means any Receivable under which the
portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Reserve Account Balance" means, with respect to any Monthly
Payment Date, the lesser of (i) 3% of the Initial Pool Balance and (ii) the
outstanding principal balance of the Securities.
"Standard & Poor's" means Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc., or its successor.
"State" means any one of the 50 States of the United States of America
or the District of Columbia.
"Stated Maturity Date" means, with respect to any class of Notes, the
Monthly Payment Date set forth below opposite such class of Notes on which,
to the extent not previously paid, the outstanding principal amount of such
Class of Notes will be payable.
CLASS OF NOTES STATED MATURITY DATE
Class A-1 July 15, 2001
Class A-2 June 15, 2004
Class A-3 March 15, 2006
Class A-4 October 15, 2008
Class A-5 November 15, 2009
Class A-6 August 15, 2010
Class A-7 April 15, 2013
"Successor Servicer" has the meaning specified in Section 3.07(e) of the
Indenture.
"Targeted Overcollateralization Amount" means, for any Monthly Payment
Date, will be an Overcollateralization Amount equal to 2% of the Pool Balance
as of the end of the related Collection Period after giving effect to all
distributions in respect of principal to be made on such Monthly Payment
Date.
"Title Document" means with respect to any Financed Boat subject to the
Ship Mortgage Statutes, the documents evidencing that a Preferred Mortgage
has been duly recorded with the Secretary of Transportation; with respect to
any Financed Boat not subject to the Ship Mortgage Statutes, the certificate
of title for or other evidence of ownership of such Financed Boat issued by
the Registrar of Titles in the jurisdiction in which such Financed Boat is
registered.
"Total Distribution Amount" means, with respect to any Monthly Payment
Date, the sum of the following amounts, without duplication, with respect to
the Receivables in respect of the Collection Period preceding such Monthly
Payment Date: (1) all collections on Receivables allocable to interest and
principal (2) all Liquidation Proceeds or other collections attributable to
accrued interest on or the principal amount of Receivables that became
Defaulted Receivables during such Collection Period, plus the amount of
Realized Losses with respect to the Defaulted Receivables, (3) all Advances
made by the Servicer on the Receivables, (4) the Purchase Amount of each
Receivable that became a Purchased Receivable during such Collection Period,
(5) all Recoveries and (6) partial payments relating to refunds of extended
warranty protection plan costs or of physical damage, credit life or
disability insurance policy premiums, but only if such costs or premiums were
financed by the respective Obligors thereon as of the date of the original
contract and only to the extent not included under clause (1) above;
provided, however, that in calculating the Total Distribution Amount the
following will be excluded: (i) all payments and proceeds (including
Liquidation Proceeds) of any Purchased Receivables, the Purchase Amount of
which has been included in the Total Distribution Amount in a prior
Collection Period; (ii) amounts received in respect of interest on the
Receivables (which amounts will be determined based on the Simple Interest
Method) during such preceding Collection Period in excess of the amount of
interest that would be due on the aggregate Principal Balance of the
Receivables during such Collection Period at their respective APRs if a
payment were received on each Receivable during such Collection Period on the
date payment is due under the terms of such Receivable; and (iii) Liquidation
Proceeds with respect to a Receivable attributable to accrued and unpaid
interest thereon (but not including interest for the then current Collection
Period) but only to the extent of any unreimbursed Advances.
"Treasury Regulations" shall mean regulations, including proposed or
temporary Regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor
Treasury Regulations.
"Trust" means the Issuer.
"Trust Account Property" means the Trust Accounts, all amounts and
investments held from time to time in any Trust Account (whether in the form
of deposit accounts, Physical Property, book-entry securities, uncertificated
securities or otherwise), and all proceeds of the foregoing.
"Trust Accounts" has the meaning assigned thereto in Section 5.01 in the
Sale and Servicing Agreement.
"Trust Agreement" means the Amended and Restated Trust Agreement dated
as of August 25, 1997, among the Depositor, the Owner Trustee and the
Company.
"Trust Estate" means all money, instruments, rights and other property
that are subject or intended to be subject to the lien and security interest
of the Indenture for the benefit of the Noteholders (including, without
limitation, all property and interests Granted to the Indenture Trustee),
including all proceeds thereof.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939 as
in force on the date hereof, unless otherwise specifically provided.
"Trust Officer" means, in the case of the Indenture Trustee, any officer
within the Corporate Trust Office of the Indenture Trustee, including any
Vice President, Assistant Vice President, Senior Trust Officer, Trust
Officer, Secretary, Assistant Secretary or any other officer of the Indenture
Trustee customarily performing functions similar to those performed by any of
the above designated officers 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 and, with respect to
the Owner Trustee, any officer in the Corporate Trust Administration
Department of the Owner Trustee with direct responsibility for the
administration of the Trust Agreement and the Basic Documents on behalf of
the Owner Trustee.
"UCC" means, unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from
time to time.
SCHEDULE A
Schedule of Receivables
Delivered to the Owner Trustee at Closing
SCHEDULE B
Location of Receivable Files
Ganis Credit Corporation
660 Newport Center Drive
Newport Beach, CA 92660
EXHIBIT A-1
Form of Distribution Statement to Noteholders
BankBoston Marine Asset Backed Trust 1997-2
Monthly Payment Date Statement to Noteholders
Pool Balance
Principal Distributable Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Class A-5 Notes: ($ per $1,000 original principal amount)
Class A-6 Notes: ($ per $1,000 original principal amount)
Class A-7 Notes: ($ per $1,000 original principal amount)
Interest Distributable Amount
Class A-1 Notes: ($ per $1,000 original principal amount)
Class A-2 Notes: ($ per $1,000 original principal amount)
Class A-3 Notes: ($ per $1,000 original principal amount)
Class A-4 Notes: ($ per $1,000 original principal amount)
Class A-5 Notes: ($ per $1,000 original principal amount)
Class A-6 Notes: ($ per $1,000 original principal amount)
Class A-7 Notes: ($ per $1,000 original principal amount)
Note Balance
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class A-5 Notes
Class A-6 Notes
Class A-7 Notes
Note Pool Factor
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class A-5 Notes
Class A-6 Notes
Class A-7 Notes
Certificate Balance
Servicing Fee
Servicing Fee Per $1,000 Note
Realized Losses
Reserve Account Balance
EXHIBIT A-2
Form of Distribution Statement to Certificateholders
BankBoston Marine Asset Backed Trust 1997-2 Monthly Payment Date Statement to
Certificateholders
Pool Balance
Principal Distributable Amount
Principal Per $1000 Certificate
Interest Distributable Amount
Interest Per $1,000 Certificate
Note Balance
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class A-5 Notes
Class A-6 Notes
Class A-7 Notes
Note Pool Factor
Class A-1 Notes
Class A-2 Notes
Class A-3 Notes
Class A-4 Notes
Class A-5 Notes
Class A-6 Notes
Class A-7 Notes
Certificate Balance
Certificate Pool Factor
Servicing Fee
Servicing Fee Per $1,000 Note
Realized Losses
Reserve Account Balance
EXHIBIT B
Form of Servicer's Certificate
------------------------------
S E R V I C E R S M O N T H L Y C E R T I F I C A T E
BANKBOSTON MARINE ASSET BACKED SERIES 1997-2
Accounting Date:
Determination Date:
Monthly Payment Date:
Collection Period Ending:
I. Collection Account Summary
Total Available Funds:
Principal and Interest Payments Received (including Prepayments):
Net Liquidation Proceeds (including Rebates/Insurance Amounts):
Current Monthly Interest Advance:
Amount of Withdrawal, if any, from Reserve Account:
Purchase Amounts for Purchased Receivables:
Total Distribution Amount Sent to Trustee:
II. Simple Interest Excess or Shortfalls
Amount of Interest Payments Due During the Collection Period for
Receivables:
Amount of Interest Payments Received During the Collection Period for
Receivables:
Amount of Current Month Simple Interest Excess/Shortfall:
III. Calculation of Reserve Account Deposit/Withdrawals
Specified Reserve Account Balance (lesser of 3% of the Initial Pool
Balance and the outstanding Principal Balance of the Notes and
Certificates):
Deposits to Reserve Account (only if Reserve Account less than the
specified Reserve Account Balance):
Withdrawals from Reserve Account (to the extent there are shortfalls on
payments of Interest or Principal):
Amount in Reserve Account as of Determination Date (excluding amount to
be paid on next Payment Date):
IV. Collections on Receivables
(a) Interest and Principal Payments Received:
Interest Payments Received:
Scheduled Principal Payments Received:
Principal Prepayments Received:
Total Interest and Principal Payments Received:
(b) Liquidation Proceeds:
Gross Proceeds of Defaulted Receivables (including
Rebates/Insurance):
minus: Reasonable Expenses:
Net Liquidation Proceeds:
Allocation of Liquidation Proceeds:
Amount Allocable to Interest Payments:
Amount Allocable to Principal Payments:
(c) Purchase Amount--Loans Repurchased from Trust:
Amount Allocable to Interest:
Amount Allocable to Principal:
Total Collected Funds:
V. Calculation of Servicing and Trustee Fees:
Pool Balance of Receivables as of First Day of Collection Period:
multiplied by Servicer Fee Rate:
divided by Months per Year:
Servicing Fee Amount:
Pool Balance of Receivables as of First Day of Collection Period:
multiplied by Trustee Fee Rate:
divided by Months per Year:
Trustee Fee Amount:
VI. Pool Balance and Portfolio Performance
(a) Pool Balance
Initial Pool Balance:
Pool Balance as of Preceding Accounting Date:
Pool Balance as of Current Accounting Date
Age of Pool in Months:
(b) Default and Delinquency Performance (Includes Repossessions and
Bankruptcies):
<TABLE>
<CAPTION>
Current Month Number of Loans Principal Balance Percentage
<S> <C> <C> <C>
30 - 59 Days Delinquent
60 - 89 Days Delinquent
90+ Days Delinquent
Defaults
Cumulative Defaults Number of Loans Principal Balance Percentage
Cumulative Default
</TABLE>
Schedule of Liquidated Loans
Description of Boat
Account Number
Original Principal Balance of the Liquidated Loan
Outstanding Principal Balance of the Liquidated Loan
Gross Recovery
Recovery Net of Expenses
Realized Loss
Chargeoff Date
Repossession Date
Liquidation Date
Current Period Defaulted Receivables:
Description of Boat
Account Number
Original Principal Balance of the Defaulted Loan
Outstanding Principal Balance of the Defaulted Loan
Recovery Net of Expenses
Realized Loss
Chargeoff Date
Schedule of Repossession Inventory
Description of Boat
Account Number
Original Principal Balance of the Defaulted Loan
Outstanding Principal Balance of the Defaulted Loan
Recovery Net of Expenses
Realized Loss
Chargeoff Date
Repossession Date
Current Period Realized Losses
Current Months Realized Losses as Percentage of Initial Pool Balance
(Annualized):
Preceding Realized Losses as Percentage of Initial Pool Balance
(Annualized):
Second Preceding Realized Losses as Percentage of Initial Pool Balance
(Annualized):
VII. Distributions of the Total Distributable Amount
Total Pool Factor:
Note Pool Factor:
Certificate Pool Factor:
Class A-7 Interest and Principal Account:
A. Monthly Servicing Fee and any unpaid servicing fees from prior
monthly payment dates:
Servicer Reimbursements for Mistaken Deposits or Postings of Checks
Returned for Insufficient Funds (not Otherwise Reimbursed to
Servicer):
B. Noteholders Interest Distributable Amount:
Class A-1
Class A-2
Class A-3
Class A-4
Class A-5
Class A-6
Class A-7
Noteholders Principal Distributable Amount:
Class A-1
Class A-2
Class A-3
Class A-4
Class A-5
Class A-6
Class A-7
C. Certificateholders Interest Distributable Amount:
Certificateholders' Principal Distributable Amount:
EXHIBIT C
(to be addressed to the
Indenture Trustee)
Re: Sale and Servicing Agreement dated as of
August 25, 1997, among Morgan Stanley ABS
Capital II, Inc., BankBoston Marine Asset
Backed Trust 1997-2 and the BankBoston, N.A.
as Servicer (the "Agreement")
--------------------------------------------
Gentlemen:
In accordance with the provisions of Section 3.03 of the above-
referenced Agreement, the undersigned, as Custodian, hereby certifies that as
to each (Listed Receivable) (Receivable listed in the Schedule of Receivables
other than the Listed Receivables) (other than any Receivable paid in full or
any Receivable listed on the attachment hereto), it has reviewed the
Receivable File and has determined that (i) all documents required to be
delivered to it pursuant to the Agreement are in its possession, (ii) such
documents have been reviewed by it and appear regular on their face and
relate to such Receivable (for each of the Receivables so indicated on the
attachment hereto a certified copy of the original Receivable or certified
confirmation of the lien is included in the Receivables File in lieu of a
fully executed original Receivable or Title Document or application therefor,
respectively and each Receivable to the extent so indicated relates to a
Federally Documented Vessel), and (iii) based on its examination and only as
to the foregoing documents, the information set forth in the Schedule of
Receivables respecting such Receivable is correct. Capitalized terms used
but not defined herein shall have the meanings provided by the Agreement.
(GANIS CREDIT CORPORATION,
as subservicer on behalf of
the Servicer)
By:
---------------------------
Name:
-------------------------
Title:
------------------------
EXHIBIT D
Delivered to the Servicer At Closing
