EXHIBIT 4.11
INDENTURE dated as of September 1, 2005, between CPS AUTO RECEIVABLES TRUST
2005-C, a Delaware statutory trust (the "Issuer"), and XXXXX FARGO BANK,
NATIONAL ASSOCIATION, a national banking association, as trustee (the
"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 4.52%
Asset-Backed Notes (the "Class A-1 Notes") and Class A-2 4.79% Asset-Backed
Notes (the "Class A-2 Notes" and, together with the Class A-1 Notes, the
"Notes"):
As security for the payment and performance by the Issuer of its
obligations under this Indenture and the Notes, the Issuer has agreed to assign
the Collateral (as defined below) as collateral to the Trustee for the benefit
of the Noteholders.
Financial Security Assurance Inc. (the "Note Insurer") has issued and
delivered a financial guaranty insurance policy, dated the Closing Date (with
endorsements, the "Note Policy"), pursuant to which the Note Insurer guarantees
Scheduled Payments, as defined in the Note Policy.
As an inducement to the Note Insurer to issue and deliver the Note Policy,
the Issuer and the Note Insurer have executed and delivered the Insurance and
Indemnity Agreement, dated as of September 30, 2005 (as amended from time to
time, in accordance with the terms thereof, the "Insurance Agreement") among the
Note Insurer, the Issuer, Consumer Portfolio Services, Inc. and CPS Receivables
Corp.
As an additional inducement to the Note Insurer to issue the Note Policy,
and as security for the performance by the Issuer of the Insurer Secured
Obligations (as defined below) and as security for the performance by the Issuer
of the Trustee Secured Obligations, the Issuer has agreed to assign the
Collateral (as defined below) as collateral to the Trustee for the benefit of
the Issuer Secured Parties, as their respective interests may appear.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee at the Closing Date, for the
benefit of the Issuer Secured Parties, all right, title and interest of the
Issuer, whether now existing or hereafter arising, in and to the following:
(i) the Initial Receivables listed in Schedule A to the Sale and
Servicing Agreement and all monies received thereunder (other than the
Additional Servicing Compensation) after the Initial Cutoff Date and all
Net Liquidation Proceeds and Recoveries received with respect to such
Initial Receivables after the Initial Cutoff Date;
(ii) the Subsequent Receivables listed in Schedule A to the related
Subsequent Transfer Agreement and all monies received thereunder (other
than the Additional Servicing Compensation) after the related Subsequent
Cutoff Date and all Net Liquidation Proceeds and Recoveries received with
respect to such Subsequent Receivables on or after the related Subsequent
Cutoff Date;
(iii) the security interests in the Financed Vehicles granted by the
related Obligors pursuant to the Receivables and any other interest of the
Issuer in such Financed Vehicles, including the certificates of title or,
with respect to such Financed Vehicles in the Non-Certificated Title
States, all other evidence of ownership with respect to such Financed
Vehicles issued by the applicable Department of Motor Vehicles or similar
authority;
(iv) any proceeds from claims on any physical damage, credit life and
credit accident and health insurance policies or certificates relating to
the Financed Vehicles securing the Receivables or the Obligors thereunder;
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(v) all proceeds from recourse against Dealers with respect to the
Receivables;
(vi) the Purchase Agreements, including a direct right to cause CPS to
purchase Receivables from the Issuer and to indemnify the Issuer pursuant
to the Purchase Agreements under the circumstances specified therein;
(vii) the Issuer's rights and benefits, but none of its obligations or
burdens, under the Sale and Servicing Agreement and each Subsequent
Transfer Agreement (including all rights of the Seller under the Purchase
Agreements);
(viii) refunds for the costs of extended service contracts with
respect to Financed Vehicles securing Receivables, refunds of unearned
premiums with respect to credit life and credit accident and health
insurance policies or certificates covering an Obligor or Financed Vehicle
or his or her obligations with respect to a Financed Vehicle and any
recourse to Dealers for any of the foregoing;
(ix) the Receivable File related to each Receivable;
(x) all amounts and property from time to time held in or credited to
the Collection Account, the Pre-Funding Account, the Capitalized Interest
Account, the Note Distribution Account and the Lockbox Account;
(xi) all property (including the right to receive future Net
Liquidation Proceeds) that secures a Receivable that has been acquired by
or on behalf of CPS, the Seller or the Issuer pursuant to a liquidation of
such Receivable; and
(xii) all present and future claims, demands, causes and choses 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,
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 property described in this Granting Clause
the "Collateral").
In addition, the Issuer shall cause the Note Policy to be issued for the
benefit of the Noteholders.
The foregoing Grant is made in trust to the Trustee, for the benefit of the
Holders of the Notes and the Issuer Secured Parties, as their interests may
appear, to secure the payment of the Issuer Secured Obligations and to secure
compliance with this Indenture. The Trustee hereby acknowledges such Grant,
accepts the trusts under this Indenture in accordance with the provisions of
this Indenture and agrees to perform its duties as required in this Indenture to
the end that the interests of such parties, recognizing the priorities of their
respective interests, may be adequately and effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
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SECTION 1.1 Definitions. Except as otherwise specified herein, the
following terms have the respective meanings set forth below for all purposes of
this Indenture and the definitions of such terms are equally applicable to both
the singular and plural forms of such terms and to each gender.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Sale and Servicing Agreement or, if not
defined therein, in the Trust Agreement.
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"Act" has the meaning specified in Section 11.3(a).
"Affiliate" of any Person means any Person who directly or indirectly
controls, is controlled by, or is under direct or indirect common control with
such Person. For purposes of this definition of "Affiliate", the term "control"
(including the terms "controlling", "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause a direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Amount Financed" with respect to a Receivable shall have the meaning
specified in the Sale and Servicing Agreement.
"Annual Percentage Rate" or "APR" of a Receivable means the annual rate of
finance charges stated in the Receivable.
"Authorized Officer" means, with respect to the Issuer and the Servicer,
any officer or agent acting pursuant to a power of attorney of the Owner Trustee
or the Servicer, as applicable, who is authorized to act for the Owner Trustee
or the Servicer, as applicable, in matters relating to the Issuer and who is
identified on the list of Authorized Officers delivered by each of the Owner
Trustee and the Servicer to the Trustee on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
"Basic Documents" means this Indenture, the Certificate of Trust, the Trust
Agreement, the Sale and Servicing Agreement, each Subsequent Transfer Agreement,
the Master Spread Account Agreement, the Spread Account Supplement, the
Insurance Agreement, the Indemnification Agreement, the Lockbox Agreement, the
Purchase Agreements, the Placement Agency Agreement, the Notes, the Residual
Pass-through Certificates, any trust agreement, indenture or other agreement to
which the Seller, CPS or the Trust or any of their respective Affiliates is a
party entered into in connection with a transfer of any interest in the Residual
Pass-through Certificates, any securities representing direct or indirect
interests in the Residual Pass-through Certificates and other documents and
certificates delivered in connection with the foregoing.
"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.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in Wilmington, Delaware, New York, New York,
Minneapolis, Minnesota, the State in which the executive offices of the Servicer
are located and the State in which the principal place of business of the Note
Insurer is located shall be authorized or obligated by law, executive order, or
governmental decree to be closed.
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"Class A-1 Interest Rate" means 4.52% per annum.
"Class A-1 Notes" means the Class A-1 4.52% Asset-Backed Notes,
substantially in the form of Exhibit A-1.
"Class A-2 Interest Rate" means 4.79% per annum.
"Class A-2 Notes" means the Class A-2 4.79% Asset-Backed Notes,
substantially in the form of Exhibit A-2.
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act, or any successor provision thereto.
The initial Clearing Agency shall be The Depository Trust Company.
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"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 September 30, 2005.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and Treasury Regulations promulgated thereunder.
"Collateral" has the meaning specified in the Granting Clause of this
Indenture.
"Commission" means the United State Securities and Exchange Commission.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered which
office at date of the execution of this Agreement is located at Sixth Street and
Marquette Avenue, MAC N9311-161, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Corporate Trust Services/Asset Backed Administration - CPS 2005-C, or at such
other address as the Trustee may designate from time to time by notice to the
Noteholders, the Note Insurer, the Servicer and the Issuer, or the principal
corporate trust office of any successor Trustee (the address of which the
successor Trustee will notify the Noteholders and the Issuer).
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"Definitive Notes" has the meaning specified in Section 2.10.
"Depositor" means the Seller, in its capacity as such under the Trust
Agreement.
"Event of Default" has the meaning specified in Section 5.1.
"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; with respect to any limited liability company, the manager;
and with respect to any partnership, any general partner thereof.
"Grant" means to mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, xxxxx x xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this 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" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should be, in accordance
with generally accepted accounting principles, recorded as capital leases; (c)
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current liabilities of such Person in respect of unfunded vested benefits under
plans covered by Title IV of ERISA; (d) obligations issued for or liabilities
incurred on the account of such Person; (e) obligations or liabilities of such
Person arising under acceptance facilities; (f) obligations of such Person under
any guarantees, endorsements (other than for collection or deposit in the
ordinary course of business) and other contingent obligations to purchase, to
provide funds for payment, to supply funds to invest in any Person or otherwise
to assure a creditor against loss; (g) obligations of such Person secured by any
lien on property or assets of such Person, whether or not the obligations have
been assumed by such Person; or (h) obligations of such Person under any
interest rate or currency exchange agreement.
"Indenture" means this Indenture as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Independent" means, when used with respect to any specified Person, that
the person (a) is in fact independent of the Issuer, any other obligor upon the
Notes, the Seller 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 Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
"Insolvency Event" means, with respect to a specified Person, (a) the
institution of a proceeding or the filing of a petition against such Person
seeking the entry 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 the
appointment of 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 or such Person's
affairs, and such petition, decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or (b) 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 Agreement Indenture Cross Default" has the meaning specified
therefor in the Insurance Agreement.
"Insurer Secured Obligations" means all amounts and obligations which the
Issuer may at any time owe to or on behalf of the Note Insurer under this
Indenture, the Insurance Agreement or any other Basic Document.
"Interest Rate" means, with respect to the (i) Class A-1 Notes, the Class
A-1 Interest Rate and (ii) Class A-2 Notes, the Class A-2 Interest Rate.
"Issuer" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein, each other obligor on the Notes.
"Issuer Order" and "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 Trustee.
"Issuer Secured Obligations" means the Insurer Secured Obligations and the
Trustee Secured Obligations.
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"Issuer Secured Parties" means each of the Trustee, in respect of the
Trustee Secured Obligations, and the Note Insurer, in respect of the Insurer
Secured Obligations.
"Mandatory Redemption Date" means the first Payment Date occurring on or
after the last day of the Funding Period.
"Note" means a Class A-1 Note or a Class A-2 Note.
"Note Insurer" has the meaning specified in the Preamble.
"Note Majority" means the Holders evidencing more than 50% of the Class A-1
Note Balance and Holders evidencing more than 50% of the Class A-2 Note Balance.
"Note Owner" means, with respect to a Book Entry Note, the person who is
the 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 Paying Agent" means the Trustee or any other Person that meets the
eligibility standards for the Trustee specified in Section 6.11 and is
authorized by the Issuer to make the payments to and distributions from the
Collection Account and the Note Distribution Account, including payment of
principal of or interest on the Notes on behalf of the Issuer.
"Note Policy" means the guaranty insurance policy (No. 51676) issued by the
Note Insurer with respect to the Notes, including any endorsements thereto.
"Note Register" and "Note Registrar" have the respective meanings specified
in Section 2.4.
"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Owner Trustee, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1, and
delivered to the Trustee. Unless otherwise specified, any reference in this
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 this Indenture, be employees of or
counsel to the Issuer and who shall be satisfactory to the Trustee and, if
addressed to the Note Insurer, satisfactory to the Note Insurer, and which shall
comply with any applicable requirements of Section 11.1, and shall be in form
and substance satisfactory to the Trustee, and if addressed to the Note Insurer,
satisfactory to the Note Insurer.
"Outstanding" means, as of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled 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 Trustee or
any Note 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 this Indenture,
satisfactory to the Trustee); and
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(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Trustee is presented that any such Notes are
held by a bona fide purchaser; provided, however, that Notes which
have been paid with proceeds of the Note Policy shall continue to
remain Outstanding for purposes of this Indenture until the Note
Insurer has been paid as subrogee hereunder or reimbursed pursuant to
the Insurance Agreement as evidenced by a written notice from the Note
Insurer delivered to the Trustee, and the Note Insurer shall be deemed
to be the Holder thereof to the extent of any payments thereon made by
the Note Insurer; provided, further, 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 Seller or any Affiliate
of any of the foregoing Persons shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall
be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a Responsible
Officer of the Trustee either actually knows to be so owned or has
received written notice thereof 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
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 Seller or any Affiliate of any of the foregoing Persons.
"Outstanding Amount" means, with respect to any date of determination, the
aggregate principal amount of all Notes, or class of Notes, as applicable,
Outstanding at such date of determination.
"Ownership Interest" means, as to any Note, any ownership or security
interest in such Note, including any interest in such Note as the Holder thereof
and any other interest therein, whether direct or indirect, legal or beneficial,
as owner or as pledgee.
"Owner Trustee" means Wilmington Trust Company, and its successors.
"Payment Date" has the meaning specified in the Notes.
"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 2.5 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.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Agreements" means the Receivables Purchase Agreement and each
Subsequent Receivables Purchase Agreement, collectively.
"Rating Agency" means each of Moody's and Standard & Poor's, so long as
such Persons maintain a rating on the Notes; and if either Moody's or Standard &
Poor's no longer maintains a rating on the Notes, such other nationally
recognized statistical rating organization selected by the Seller and (so long
as an Insurer Default shall not have occurred and be continuing) acceptable to
the Note Insurer.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days' (or such shorter period as shall be
acceptable to each Rating Agency) prior notice thereof and that each of the
Rating Agencies shall have notified the Seller, the Servicer, the Note Insurer,
the Trustee, the Owner Trustee and the Issuer in writing that such action will
not result in a reduction or withdrawal of the then current rating of the Notes.
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"Record Date" means, with respect to the first Payment Date, the Closing
Date, and with respect to any subsequent Payment Date or Redemption Date, the
last calendar day of the month preceding the month in which such Payment Date or
Redemption Date occurs.
"Redemption Date" means, in the case of a redemption of the Notes pursuant
to Section 10.1(a), the Payment Date specified by the Servicer or the Issuer
pursuant to Section 10.1(a).
"Redemption Price" means, in the case of a redemption of the Notes pursuant
to Section 10.1(a), an amount equal to the unpaid principal amount of each class
of Notes being redeemed plus accrued and unpaid interest thereon to but
excluding the Redemption Date.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any Vice President,
Assistant Vice President, Assistant Treasurer, Assistant Secretary, or any other
officer of the 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.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement dated
as of September 1, 2005, among the Issuer, the Seller, the Servicer, and the
Trustee, as Backup Servicer and Trustee, as the same may be amended or
supplemented from time to time.
"Scheduled Payments" has the meaning specified in the Note Policy.
"State" means any one of the 50 states of the United States of America or
the District of Columbia.
"Termination Date" means the latest of (i) the expiration of the Note
Policy and the return of the Note Policy to the Note Insurer for cancellation,
(ii) the date on which the Note Insurer shall have received payment and
performance of all Insurer Secured Obligations and (iii) the date on which the
Trustee shall have received payment and performance of all Trustee Secured
Obligations and disbursed such payments in accordance with the Basic Documents.
"Trust Agreement" means the Trust Agreement dated as of February 10, 2005,
between the Seller, as depositor, and the Owner Trustee, as amended and restated
by the Amended and Restated Trust Agreement dated as of September 30, 2005, by
and among the Seller, as depositor, and the Owner Trustee, as the same may be
further amended or supplemented from time to time in accordance with the terms
thereof.
"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 this
Indenture for the benefit of the Issuer Secured Parties (including the
Collateral Granted to the Trustee hereunder), including all proceeds thereof.
"Trustee" means Xxxxx Fargo Bank, National Association, a national banking
association, not in its individual capacity but as trustee under this Indenture,
or any successor trustee under this Indenture.
"Trustee Secured Obligations" means all amounts and obligations which the
Issuer may at any time owe to the Trustee for the benefit of the Noteholders
under this Indenture or the Notes.
"UCC" means, unless the context otherwise requires, the Uniform Commercial
Code, as in effect in the relevant jurisdiction, as amended from time to time.
SECTION 1.2 Reserved.
SECTION 1.3 Other Definitional Provisions. Unless the context otherwise
requires:
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(a) All references in this instrument to designated "Articles,"
"Sections," "Subsections" and other subdivisions are to the designated
Articles, Sections, Subsections and other subdivisions of this instrument
as originally executed.
(b) The words "herein," "hereof," "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section, Subsection or other subdivision.
(c) an accounting term not otherwise defined herein has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(d) "or" is not exclusive; and
(e) "including" means including without limitation.
ARTICLE II
THE NOTES
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SECTION 2.1 Form.
(a) The Class A-1 Notes and the Class A-2 Notes, in each case together
with the Trustee's certificate of authentication, shall be in substantially
the form set forth in Exhibits A-1 and A-2, respectively, 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.
(b) 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.
(c) Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in Exhibits A-1 and A-2 are part of the terms of
this Indenture.
SECTION 2.2 Execution, Authentication and Delivery.
(a) 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.
(b) 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.
(c) The Trustee shall upon receipt of the Note Policy and Issuer Order
authenticate and deliver Class A-1 Notes for original issue in an aggregate
principal amount of $127,465,000 and Class A-2 Notes for original issue in
an aggregate principal amount of $55,835,000. Class A-1 Notes and Class A-2
Notes outstanding at any time may not exceed such amounts except as
provided in Section 2.4.
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(d) Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of
$100,000 and in integral multiples of $1,000 in excess thereof (except for
one Note of each class which may be issued in a lesser denomination and
other than an integral multiple of $1,000).
(e) 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 Trustee by the manual signature of one of its
authorized signatories, 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 2.3 Temporary Notes.
(a) Pending the preparation of Definitive Notes, the Issuer may
execute, and upon receipt of an Issuer Order the Trustee shall authenticate
and deliver, temporary Notes which 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.
(b) If temporary Notes are issued, the Issuer will cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable without charge
to the Holder for Definitive Notes upon surrender of the temporary Notes at
the office or agency of the Issuer to be maintained as provided in Section
3.2. Upon surrender for cancellation of any one or more temporary Notes,
the Issuer shall execute and the 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 2.4 Registration; Registration of Transfer and Exchange.
(a) 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 Trustee is hereby initially appointed "Note
Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation or removal of any Note Registrar, the
Issuer shall promptly appoint a successor or, in the absence of such an
appointment, assume the duties of Note Registrar.
(b) If a Person other than the Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the 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 Trustee shall have the right
to inspect the Note Register at all reasonable times and to obtain copies
thereof, and the 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.
(c) Subject to Sections 2.10 and 2.12 hereof, upon surrender for
registration of transfer of any Note at the office or agency of the Issuer
to be maintained as provided in Section 3.2, if the requirements of Section
8-401(a) of the UCC are met, the Issuer shall execute, and upon request by
the Issuer the Trustee shall authenticate, and the Noteholder shall obtain
from the Trustee, in the name of the designated transferee or transferees,
one or more new Notes in any authorized denominations of the same class and
a like aggregate principal amount.
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(d) At the option of the Holder, Notes may be exchanged for other
Notes in any authorized denominations, of the same class and 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,
subject to Sections 2.10 and 2.12 hereof, if the requirements of Section
8-401(a) of the UCC are met the Issuer shall execute, and upon request by
the Issuer the Trustee shall authenticate, and the Noteholder shall obtain
from the Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
(e) 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.
(f) Every Note presented or surrendered for registration of transfer
or exchange shall be (i) duly endorsed by, or accompanied by a written
instrument of transfer in the form attached to Exhibits A-1 and A-2 and
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 include membership or participation in Securities Transfer
Agents 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 and (ii)
accompanied by such other documents as the Trustee may require.
(g) Each Noteholder by its acquisition of any Notes (or a beneficial
interest therein) shall be deemed to have represented and warranted for the
benefit of the Issuer, the Owner Trustee, the Trustee and the Noteholders,
that either (i) it is not acquiring any Notes with the assets of any
"employee benefit plan" as defined in Section 3(3) of ERISA which is
subject to Title I of ERISA or any "plan" as defined in Section 4975 of the
Internal Revenue Code or (ii) the acquisition and holding of the Notes will
be covered by Prohibited Transaction Class Exemption ("PTCE") 00-00, XXXX
00-0, XXXX 91-38, XXXX 00-00, XXXX 96-23 or a similar U.S. Department of
Labor class exemption.
(h) No service charge shall be made to a Holder for any registration
of transfer or exchange of Notes, but the Note Registrar 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 2.3 or 9.6 not
involving any transfer.
(i) The preceding provisions of this Section 2.4 notwithstanding, the
Issuer shall not be required to make and the Note Registrar shall 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 Notes.
(j) Notwithstanding anything to the contrary in this Indenture or any
other Basic Document, (i) the transfer of a Note, including the right to
receive principal and any stated interest thereon, may be effected only by
surrender of the old Note (or satisfactory evidence of the destruction,
loss or theft of such Note) to the Note Registrar, and the issuance by the
Issuer (through the Note Registrar) of a new Note to the new Holder, and
(ii) each Note must be registered in the name of the Holder thereof as to
both principal and any stated interest with the Note Registrar.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.
(a) If (i) any mutilated Note is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Trustee and the Note
Insurer (unless an Insurer Default shall have occurred and be continuing)
such security or indemnity as may be required by each of the Issuer, the
Trustee and the Note Insurer to hold it harmless, then, in the absence of
notice to the Issuer, the Note Registrar or the Trustee that such Note has
been acquired by a bona fide purchaser, and, provided that the requirements
of Section 8-405 and 8-406 of the UCC are met, the Issuer shall execute,
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and upon request by the Issuer, the Trustee shall authenticate and deliver
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note; 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 direct
the Trustee, in writing, to 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, the
Trustee and the Note Insurer 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 Trustee in connection therewith.
(b) 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 Trustee) connected therewith.
(c) 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.
(d) 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 2.6 Persons Deemed Owner. Prior to due presentment for registration
of transfer of any Note, the Issuer, the Trustee, the Note Insurer and any agent
of the Issuer, the Trustee or the Note Insurer may treat the Person in whose
name any Note is registered (as of the applicable Record Date) as the owner of
such Note for the purpose of receiving payments of principal of and interest, if
any, on such Note, for all other purposes whatsoever and whether or not such
Note be overdue, and none of the Issuer, the Note Insurer, the Trustee nor any
agent of the Issuer, the Note Insurer or the Trustee shall be affected by notice
to the contrary.
SECTION 2.7 Payment of Principal and Interest; Defaulted Interest.
(a) The Notes shall accrue interest as provided in the forms of the
Class A-1 Note and the Class A-2 Note set forth in Exhibits A-1 and A-2,
respectively, and such interest shall be payable on each Payment Date as
specified therein. Any installment of interest or principal, if any,
payable on any Note which is punctually paid or duly provided for by the
Issuer on the applicable Payment Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered on the
related 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, or
by wire transfer in immediately available funds to the account designated
in writing to the Trustee by such Person at least five Business Days prior
to the related Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.12, with respect to Notes registered on the
related 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, except for the final installment of principal payable with respect
to such Note on a Payment Date or on the Final Scheduled Payment Date (and
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except for the Redemption Price for any Note called for redemption pursuant
to Section 10.1), which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in
accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on
each Payment Date as provided in the forms of the Class A-1 Notes and the
Class A-2 Notes set forth in Exhibits A-1 and A-2, respectively.
Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes shall be due and payable, if not previously paid, on the date on
which an Event of Default shall have occurred and be continuing in the
manner and under the circumstances provided in Section 5.2. All principal
payments on each class of Notes shall be made pro rata to the Noteholders
of such class entitled thereto. Upon written notice from the Issuer, the
Trustee shall notify the Person in whose name a Note is registered at the
close of business on the Record Date preceding the Payment Date on which
the Issuer expects that the final installment of principal of and interest
on such Note will be paid. Such notice shall be mailed or transmitted by
facsimile prior to such final Payment Date and shall specify that such
final installment will be payable 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
10.2.
(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 amounts 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 Trustee a notice that states the special record
date, the Payment Date and the amount of defaulted interest to be paid.
(d) Promptly following the date on which all principal of and interest
on the Notes has been paid in full and the Notes have been surrendered to
the Trustee, the Trustee shall, if the Note Insurer has paid any amount in
respect of the Notes under the Note Policy or otherwise which has not been
reimbursed to it, deliver such surrendered Notes to the Note Insurer.
SECTION 2.8 Cancellation. Subject to Section 2.7(d), all Notes surrendered
for payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by the Trustee. Subject to Section 2.7(d), the
Issuer may at any time deliver to the 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
canceled by the Trustee. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. Subject to Section 2.7(d), all canceled Notes may
be held or disposed of by the 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
Trustee.
SECTION 2.9 Release of Collateral. The Trustee shall, on or after the
Termination Date, release any remaining portion of the Trust Estate from the
lien created by this Indenture and deposit in the Collection Account any funds
then on deposit in any other Trust Account. The Trustee shall release property
from the lien created by this Indenture pursuant to this Section 2.9 only upon
receipt of an Issuer Request accompanied by an Officer's Certificate and an
Opinion of Counsel meeting the applicable requirements of Section 11.1.
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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 DTC or to the Trustee as custodian for the initial Clearing Agency,
by, or on behalf of, the Issuer. Such Notes shall initially be registered on the
Note Register in the name of Cede & Co., the nominee of the initial Clearing
Agency, and no Note Owner 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 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 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. Unless and until Definitive Notes
are issued pursuant to Section 2.12, the 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;
(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 Trustee; and
(vi) Note Owners may receive copies of any reports sent to
Noteholders pursuant to this Indenture, upon written request, together
with a certification that they are Note Owners and payment of
reproduction and postage expenses associated with the distribution of
such reports, from the Trustee at the Corporate Trust Office.
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 Note Owners pursuant to Section
2.12, the 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 deliver such notices or communications to the Note Owners.
SECTION 2.12 Definitive Notes. If (i) the Servicer advises the Trustee in
writing that the Clearing Agency is no longer willing or able to properly
discharge its responsibilities with respect to the Notes, and the Servicer is
unable to locate a qualified successor, (ii) the Servicer at its option advises
the 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, Note
Owners representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise the Trustee through 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 the Note Owners, then the Clearing
Agency shall notify all Note Owners and the 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 Trustee of the typewritten Note or Notes
representing the Book-Entry Notes by the Clearing Agency, accompanied by
registration instructions, the Issuer shall execute and the Trustee shall
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authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Trustee shall be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be protected in relying on, such instructions. Upon the issuance
of Definitive Notes, the Trustee shall recognize the Holders of the Definitive
Notes as Noteholders.
SECTION 2.13 Restrictions on Transfer of Notes
(a) The Notes have not been registered or qualified under the
Securities Act of 1933, as amended (the "1933 Act"), or any State
securities laws or "Blue Sky" laws, and the Notes are being offered and
sold in reliance upon exemptions from the registration requirements of the
1933 Act and such Blue Sky or State securities laws. No transfer, sale,
pledge or other disposition of any Note shall be made unless such
disposition is made pursuant to an effective registration statement under
the 1933 Act and effective registration or qualification under applicable
State securities laws or "Blue Sky" laws, or is made in a transaction which
does not require such registration or qualification. In the event that a
transfer of an Ownership Interest in a Book-Entry Note is to be made in
reliance upon an exemption from the 1933 Act, the transferee will be deemed
to have made the same representations and warranties as required of an
initial purchaser of such Ownership Interest, as set forth in Section
2.13(b) below. In the event that a transfer of an Ownership Interest in a
Note which is not a Book-Entry Note is to be made in reliance upon an
exemption from the 1933 Act, the Trustee or the Note Registrar shall
require, in order to assure compliance with the 1933 Act, that the
Noteholder desiring to effect such disposition and such Noteholder's
prospective transferee each (A) certify to the Trustee or the Note
Registrar in writing the facts surrounding such disposition pursuant to a
letter, substantially in the form of Exhibit B hereto, or (B) provide to
the Trustee or the Note Registrar such other evidence satisfactory to the
Transferor, the Trustee and the Note Registrar that the transfer is in
compliance with the 1933 Act. The Trustee may also, unless such transfer
occurs more than three years after the Closing Date or is made pursuant to
Rule 144A promulgated under the 1933 Act, require an opinion of counsel
satisfactory to it that such transfer may be made pursuant to an exemption
from the 1933 Act, which opinion of counsel shall not be an expense of the
Trustee. None of the Seller, the Servicer, the Issuer, the Owner Trustee or
the Trustee is obligated under this Indenture to register the Notes under
the 1933 Act or any other securities law or to take any action not
otherwise required under this Indenture to permit the transfer of such
Notes without such registration or qualification.
Notwithstanding the foregoing, any transfer of a Note from a
Noteholder to the Seller or an Affiliate of the Seller shall be deemed to
have been made pursuant to an exemption from the registration requirements
of the 1933 Act, applicable State securities laws and "Blue Sky" laws, and
none of the conditions precedent set forth in this Section 2.13(a) to the
transfer of the Notes shall be applicable to such transfer and such
transferee shall not be deemed to have made the representations and
warranties in Section 2.13(b).
(b) Each Person (other than the Seller or an Affiliate of the Seller)
who has or who acquires an Ownership Interest in a Book-Entry Note in
reliance upon an exemption from the 1933 Act shall be deemed by the
acceptance or acquisition of such Ownership Interest to have represented
and agreed, as follows:
(i) Such Person is a qualified institutional buyer as defined in
Rule 144A under the 1933 Act, is aware that the seller of the Note may
be relying on the exemption from the registration requirements of the
1933 Act provided by Rule 144A and is acquiring such Note for its own
account, for the account of one or more qualified institutional buyers
for whom it is authorized to act.
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(ii) Such Person understands that the Notes have not been and
will not be registered under the 1933 Act and may be offered, sold,
pledged or otherwise transferred only to a person whom the seller
reasonably believes is a qualified institutional buyer in a
transaction meeting the requirements of Rule 144A under the 1933 Act
and in accordance with any applicable securities laws of any State.
(iii) Such Person understands that a single certificate in
respect of each Class of Notes has been registered in the name of the
nominee of DTC, or in the case of Definitive Notes, such Definitive
Notes have been registered in the name of such Person or its nominee,
and bears a legend to the following effect:
"THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES ("BLUE SKY LAWS"), AND THIS NOTE MAY NOT
BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE 1933 ACT IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (B)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE 1933 ACT, (C) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED UNDER THE 1933 ACT (IF
AVAILABLE), OR (D) TO THE SELLER OR AN AFFILIATE OF THE
SELLER, IN EACH CASE IN ACCORDANCE WITH THE INDENTURE
AND ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION. NO
REPRESENTATION IS MADE AS TO THE AVAILABILITY OF THE
EXEMPTION PROVIDED BY RULE 144A FOR RESALES OF THIS
NOTE."
ARTICLE III
COVENANTS
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SECTION 3.1 Payment of Principal and Interest. The Issuer will duly and
punctually pay the principal of and interest on the Notes in accordance with the
terms of the Notes and this Indenture. Without limiting the foregoing, the
Issuer will cause to be distributed on each Payment Date all amounts deposited
in the Note Distribution Account pursuant to the Sale and Servicing Agreement
(i) for the benefit of the Class A-1 Notes, to the Class A-1 Noteholders and
(ii) for the benefit of the Class A-2 Notes, to the Class A-2 Noteholders.
Amounts properly withheld under the Code or any applicable State law 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 3.2 Maintenance of Office or Agency. The Issuer will maintain in
Minneapolis, Minnesota, 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 Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the 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 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 Trustee as its agent to receive all such surrenders, notices
and demands.
SECTION 3.3 Money for Payments to be Held in Trust.
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(a) On or before each Payment Date and Redemption Date, the Issuer
shall deposit or cause to be deposited in the Note Distribution Account
from the Collection Account an aggregate sum sufficient to pay the amounts
then becoming due under the Notes, such sum to be held in trust for the
benefit of the Persons entitled thereto and (unless the Note Paying Agent
is the Trustee) shall promptly notify the Trustee of its action or failure
so to act.
(b) The Issuer shall cause each Note Paying Agent other than the
Trustee to execute and deliver to the Trustee and the Note Insurer an
instrument in which such Note Paying Agent shall agree with the Trustee
(and if the Trustee acts as Note Paying Agent, it hereby so agrees),
subject to the provisions of this Section, that such Note Paying Agent
shall:
(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 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 Trustee, forthwith pay to the Trustee
all sums so held in trust by such Note Paying Agent;
(iv) immediately resign as a Note Paying Agent and forthwith pay
to the Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a
Note 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.
(c) 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 Note Paying Agent to pay to the Trustee all sums
held in trust by such Note Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which the sums were held by such
Note Paying Agent; and upon such a payment by any Note Paying Agent to the
Trustee, such Note Paying Agent shall be released from all further
liability with respect to such money.
(d) Subject to applicable laws with respect to the escheat of funds,
any money held by the Trustee or any Note 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 with
the consent of the Note Insurer (unless an Insurer Default shall have
occurred and be continuing) and shall be deposited by the Trustee in the
Collection Account; 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 Trustee or such Note Paying Agent with respect to such
trust money shall thereupon cease; provided, however, that if such money or
any portion thereof had been previously deposited by the Note Insurer with
the Trustee for the payment of principal or interest on the Notes, to the
extent any amounts are owing to the Note Insurer, such amounts shall be
paid promptly to the Note Insurer upon receipt of a written request by the
Note Insurer to such effect, and provided, further, that the Trustee or
such Note Paying Agent, before being required to make any such repayment,
shall at the expense of the Issuer cause to be published once, in a
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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 Trustee shall also adopt and employ, at the expense of the
Issuer, any other reasonable means of notification of such repayment
(including 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 Trustee or of any Note Paying Agent, at the last address
of record for each such Holder).
SECTION 3.4 Existence. Except as otherwise permitted by the provisions of
Section 3.10, the Issuer will keep in full effect its existence, rights and
franchises as a statutory 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 3.5 Protection of Trust Estate. The Issuer intends the security
interest Granted pursuant to this Indenture in favor of the Issuer Secured
Parties to be prior to all other liens in respect of the Trust Estate, and the
Issuer shall take all actions necessary to obtain and maintain, in favor of the
Trustee, for the benefit of the Issuer Secured Parties, a first lien on and a
first priority, perfected security interest in the Trust Estate. The Issuer will
from time to time prepare (or shall cause to be prepared), 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) Grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Trustee for the benefit of the
Issuer Secured Parties created by this Indenture or carry out more
effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Estate and the rights
of the Trustee in such Trust Estate against the claims of all persons
and parties; and
(vi) pay all taxes or assessments levied or assessed upon the
Trust Estate when due.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required by the Trustee pursuant to this Section.
SECTION 3.6 Opinions as to Trust Estate.
(a) On the Closing Date, and on the date of execution of each
indenture supplemental hereto, the Issuer shall furnish to the Trustee and
the Note Insurer 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 filing of any financing
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statements and continuation statements, as are necessary to perfect and
make effective the first priority lien and security interest in favor of
the Trustee in the Receivables, for the benefit of the Issuer Secured
Parties, 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 make such lien and security interest effective.
(b) Within 90 days after the beginning of each calendar year,
commencing in 2006, the Issuer shall furnish to the Trustee and the Note
Insurer 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 re-filing of this Indenture, any indentures supplemental
hereto and any other requisite documents and with respect to the filing of
any financing statements and continuation statements as are necessary to
maintain the first priority lien and security interest created by this
Indenture in the Receivables 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 any action necessary (as of the date of such opinion) to be
taken in the following year to maintain the lien and security interest of
this Indenture.
SECTION 3.7 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 ordered by any bankruptcy or other court
or as expressly provided in this Indenture, the Basic Documents or such
other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the Note
Insurer (so long as no Insurer Default shall have occurred and be
continuing) to assist it in performing its duties under this Indenture, and
any performance of such duties by a Person identified to the Trustee and
the Note Insurer 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 preparing (or causing to be prepared) and 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 Trustee, the
Note Insurer or a Note Majority.
(d) If a responsible officer of the Owner Trustee shall have written
notice or actual knowledge of the occurrence of a Servicer Termination
Event under the Sale and Servicing Agreement, the Issuer shall promptly
notify the Trustee, the Note Insurer and the Rating Agencies thereof in
accordance with Section 11.4, and shall specify in such notice the action,
if any, the Issuer is taking in respect of such default. If a Servicer
Termination Event 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.
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(e) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under
the Basic Documents (x) without the prior consent of the Note Insurer
(unless an Insurer Default shall have occurred and be continuing) or (y) if
the effect thereof would adversely affect the Holders of the Notes.
SECTION 3.8 Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:
(i) except as expressly permitted by this Indenture or the Basic
Documents, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the
Trust Estate, without the satisfaction of the Rating Agency Condition
and unless directed to do so by the Controlling Party or unless the
Controlling Party has approved such disposition;
(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 in favor of the Trustee created by
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 a Financed Vehicle and arising solely as a result of an
action or omission of the related Obligor), (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 or (D) amend, modify or fail to comply
with the provisions of the Basic Documents without the prior written
consent of the Controlling Party, and if such amendments or
modifications would adversely affect the interests of any Noteholder
in any material respect, the satisfaction of the Rating Agency
Condition; or
(iv) engage in any business or activity other than as permitted
by the Trust Agreement; or
(v) incur or assume any indebtedness or guarantee any
indebtedness of any Person, except for such indebtedness incurred
pursuant to Section 3.15; or
(vi) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person, other than in compliance with
Section 3.10; or
(vii) take any action that would result in the Issuer becoming
taxable as a corporation for federal income tax purposes or for the
purposes of any applicable State tax.
SECTION 3.9 Annual Statement as to Compliance. The Issuer will deliver to
the Trustee and the Note Insurer, on or before March 31 of each year, beginning
March 31, 2006, an Officer's Certificate, dated as of December 31 of the
preceding calendar year, stating, as to the Authorized Officer signing such
Officer's Certificate, that
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(i) a review of the activities of the Issuer during such
preceding year (or such shorter period, in the case of the first such
Officer's Certificate) 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 such shorter period, in
the case of the first such Officer's Certificate), or, if there has
been a default in the compliance of 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 Delaware Statutory Trust or a
similar trust organized and existing under the laws of any other State
and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee and the Note Insurer (so long as no Insurer Default shall have
occurred and be continuing), 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 Trustee and the Note
Insurer (so long as no Insurer Default shall have occurred and be
continuing)) to the effect that such transaction will not have any
material adverse tax consequence to the Trust, the Note Insurer, any
Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Trustee and the Note
Insurer 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; and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Note Insurer written
notice of such consolidation or merger at least 20 Business Days prior
to the consummation of such action and shall have received the prior
written approval of the Note Insurer of such consolidation or merger
and the Issuer or the Person (if other than the Issuer) formed by or
surviving such consolidation or merger has a net worth, immediately
after such consolidation or merger, that is (a) greater than zero and
(b) not less than the net worth of the Issuer immediately prior to
giving effect to such consolidation or merger.
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(b) The Issuer shall not convey or transfer all or substantially all
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 shall (A) be a Delaware Statutory Trust or
a similar trust organized and existing under the laws of any other
State, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the
Trustee, and the Note Insurer (so long as no Insurer Default shall
have occurred and be continuing), 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 and each
of the Basic Documents on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agree 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 agree 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 agree by means of such supplemental indenture that such
Person (or if a group of persons, then one specified Person) shall
prepare (or cause to be prepared) and 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 Trustee and the Note
Insurer (so long as no Insurer Default shall have occurred and be
continuing)) to the effect that such transaction will not have any
material adverse tax consequence to the Trust, the Note Insurer, any
Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Trustee and the Note
Insurer an Officers' 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; and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Note Insurer written
notice of such conveyance or transfer at least 20 Business Days prior
to the consummation of such action and shall have received the prior
written approval of the Note Insurer of such conveyance or transfer
and the Issuer or the Person (if other than the Issuer) formed by or
surviving such conveyance or transfer has a net worth, immediately
after such conveyance or transfer, that is (a) greater than zero and
(b) not less than the net worth of the Issuer immediately prior to
giving effect to such conveyance or transfer.
SECTION 3.11 Successor or Transferee.
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(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 all the assets and properties of
the Issuer pursuant to Section 3.10(b), CPS Auto Receivables Trust 2005-C
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 Trustee stating that
CPS Auto Receivables Trust 2005-C 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. After the end of the Funding Period, the Issuer
will not purchase any additional Receivables.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes (ii) obligations owing from time to time
to the Note Insurer under the Insurance Agreement and (iii) any other
Indebtedness permitted by or arising under the Basic Documents. The proceeds of
the Notes shall be used exclusively to fund the Issuer's purchase of the
Receivables and the other assets specified in the Sale and Servicing Agreement,
to fund the Pre-Funding Account, the Capitalized Interest Account and (on behalf
of the Seller) the Spread Account and to pay the Issuer's organizational,
transactional and start-up expenses.
SECTION 3.14 Servicer's Obligations. The Issuer shall cause the Servicer to
comply with Sections 4.9, 4.10, 4.11 and 5.11 of the Sale and Servicing
Agreement.
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by the Basic Documents, the Issuer shall not make any loan or
advance or 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 Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
other Basic Document.
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
to the Servicer, the Owner Trustee, the Trustee, the Collateral Agent, the
Backup Servicer, the Note Insurer, the Noteholders and the Certificateholders as
permitted by, and to the extent funds are available for such purpose under, the
Sale and Servicing Agreement, the Master Spread Account Agreement, the Trust
Agreement or any other Basic Document. 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.
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SECTION 3.19 Notice of Events of Default. Upon a responsible officer of the
Owner Trustee having notice or actual knowledge thereof, the Issuer agrees to
give the Trustee, the Note Insurer and the Rating Agencies prompt written notice
of each Event of Default hereunder and each default on the part of the Servicer
or the Seller of its obligations under any of the Basic Documents.
SECTION 3.20 Further Instruments and Acts. Upon request of the Trustee or
the Note Insurer, 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.
SECTION 3.21 Amendments of Sale and Servicing Agreement and Trust
Agreement. The Issuer shall not agree to any amendment to Section 13.1 of the
Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate
the requirements thereunder that the Trustee or the Holders of the Notes consent
to amendments thereto as provided therein.
SECTION 3.22 Income Tax Characterization. For purposes of federal income
tax, State and local income tax franchise tax and any other income taxes, the
Issuer and each Noteholder, by its acceptance of its Note or in the case of a
Note Owner, by its acceptance of a beneficial interest in a Note, will treat the
Notes as indebtedness of the Issuer and hereby instructs the Trustee to treat
the Notes as indebtedness of the Issuer for federal and State tax reporting
purposes.
SECTION 3.23 Separate Existence of the Issuer. During the term of this
Indenture, the Issuer shall observe the applicable legal requirements for the
recognition of the Issuer as a legal entity separate and apart from its
Affiliates, including as follows:
(a) The Issuer shall maintain business records and books of account
separate from those of its Affiliates;
(b) Except as otherwise provided in the Basic Documents, the Issuer
shall not commingle its assets and funds with those of its Affiliates;
(c) The Issuer shall at all times hold itself out to the public under
the Issuer's own name as a legal entity separate and distinct from its
Affiliates; and
(d) All transactions and dealings between the Issuer and its
Affiliates will be conducted on an arm's-length basis.
SECTION 3.24 Representations and Warranties of the Issuer.
The Issuer hereby makes the following representations and warranties as to
the Trust Estate to the Note Insurer and the Trustee for the benefit of the
Noteholders:
(i) Creation of Security Interest. This Indenture creates a valid
and continuing security interest (as defined in the UCC) in the Trust
Estate in favor of the Trustee for the benefit of the Noteholders and
the Note Insurer, which security interest is prior to all other Liens
(except, as to priority, for any tax liens or mechanics' lien which
may arise after the Closing Date or as a result of an Obligor's
failure to pay its obligations, as applicable) and is enforceable as
such as against creditors of and purchasers from the Issuer.
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(ii) Perfection of Security Interest in Trust Property. The
Issuer has caused, on or prior to the Closing Date, the filing of all
appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the
security interest in the Trust Estate Granted to the Trustee for the
benefit of the Noteholders and the Note Insurer hereunder.
(iii) No other Security Interests. Other than the security
interest Granted to the Trustee for the benefit of the Noteholders and
the Note Insurer hereunder, the Issuer has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Trust Estate. The Issuer has not authorized the filing of and is not
aware of any financing statements filed against the Issuer that
include a description of collateral covering the Trust Estate other
than any financing statement relating to the security interest Granted
to the Trustee for the benefit of the Noteholders and the Note Insurer
hereunder or that has been terminated. The Issuer is not aware of any
judgment or tax lien filings against the Issuer.
(iv) Notations on Contracts; Financing Statement Disclosure. The
Servicer has in its possession copies of all the original Contracts
that constitute or evidence the Initial Receivables and, from and
after each Subsequent Transfer Date, will have in its possession
copies of all the original Contracts that constitute or evidence the
related Subsequent Receivables. The Contracts that constitute or
evidence the Receivables do not and will not have any marks or
notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Issuer and/or the
Trustee for the benefit of the Noteholders and the Note Insurer. All
financing statements filed or to be filed against the Issuer in favor
of the Trustee in connection herewith describing the Trust Estate
contain a statement to the following effect: "A purchase of or
security interest in any collateral described in this financing
statement will violate the rights of Xxxxx Fargo Bank, National
Association, as Trustee and secured party."
(v) Title. Immediately prior to the Grant herein contemplated,
the Issuer had good and marketable title to each Receivable and the
other property Granted hereunder and was the sole owner thereof, free
and clear of all liens, claims, encumbrances, security interests, and
rights of others, and, immediately upon the transfer thereof, the
Trustee for the benefit of the Noteholders and the Note Insurer shall
have good and marketable title to each such Receivable and other
property and will be the sole owner thereof, free and clear of all
liens, encumbrances, security interests, and rights of others, and the
transfer has been perfected under the UCC.
The representations and warranties of the Issuer in this Section 3.24 may
not be waived, modified or amended in any material respect without the prior
written consent of the Trustee, the Note Insurer and the Rating Agencies, and
shall survive the satisfaction and discharge of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
--------------------------
SECTION 4.1 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 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13, 3.20, 3.21, 3.22 and 11.17, (v) the rights, obligations and
immunities of the Trustee hereunder (including the rights of the Trustee under
Section 6.7 and the obligations of the Trustee under Section 4.2) and (vi) the
rights of Noteholders as beneficiaries hereof with respect to the property so
deposited with the Trustee payable to all or any of them, and the 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
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(a) 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 2.5 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 3.3) have been delivered to the Trustee for
cancellation and the Note Policy has expired and been returned to the Note
Insurer for cancellation;
(b) the Issuer has paid or caused to be paid all Insurer Secured
Obligations and all Trustee Secured Obligations; and
(c) the Issuer has delivered to the Trustee and the Note Insurer an
Officer's Certificate and an Opinion of Counsel, each meeting the
applicable requirements of Section 11.1(a) and each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
SECTION 4.2 Application of Trust Money. All moneys deposited with the
Trustee pursuant to Section 4.1 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 Note Paying Agent, as the Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such moneys have been deposited with the 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 4.3 Repayment of Moneys Held by Note Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Note Paying Agent other than the Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Trustee to be held and applied according to Section
3.3 and thereupon such Note Paying Agent shall be released from all further
liability with respect to such moneys.
ARTICLE V
REMEDIES
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SECTION 5.1 Events of Default.
(a) "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 (solely for purposes of this clause, a payment on
the Notes funded by the Note Insurer or the Collateral Agent pursuant
to the Master Spread Account Agreement shall be deemed to be a payment
made by the Issuer); 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 and such default shall continue for a period of five days
(solely for purposes of this clause, a payment on the Notes funded by
the Note Insurer or the Collateral Agent pursuant to the Master Spread
Account Agreement shall be deemed to be a payment made by the Issuer);
or
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(iii) so long as no Insurer Default shall have occurred and be
continuing, an Insurance Agreement Indenture Cross Default shall have
occurred; provided, however, that the occurrence of an Insurance
Agreement Indenture Cross Default may not form the basis of an Event
of Default unless the Note Insurer shall, upon prior written notice to
the Rating Agencies, have delivered to the Issuer and the Trustee and
not rescinded a written notice specifying that such Insurance
Agreement Indenture Cross Default constitutes an Event of Default
under this Indenture; or
(iv) so long as an Insurer Default shall have occurred and be
continuing, a 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 (or for such longer period, not in excess of 90
days, as may be reasonably necessary to remedy such default; provided
that such default is capable of remedy within 90 days or less and the
Servicer on behalf of the Owner Trustee delivers an Officer's
Certificate to the Trustee to the effect that the Issuer has
commenced, or will promptly commence and diligently pursue, all
reasonable efforts to remedy such default) after there shall have been
given, by registered or certified mail, to the Issuer by the Trustee
or to the Issuer and the Trustee by the Holders of at least 25% of the
Outstanding Amount of each class of 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
(v) so long as an Insurer Default shall have occurred and be
continuing, the occurrence of an Insolvency Event with respect to the
Issuer, the Servicer or the Seller (or, so long as CPS is Servicer,
any of the Servicer's Specified Affiliates).
(b) The Issuer shall deliver to the Trustee and the Note Insurer,
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 5.2 Rights Upon Event of Default.
(a) So long as no Insurer Default has occurred and is continuing, if
an Event of Default shall have occurred and be continuing, then the
Controlling Party shall have the right, but not the obligation, upon prior
written notice to each Rating Agency, to declare by written notice to the
Issuer and the Trustee that the Notes become immediately due and payable,
and upon any such declaration the unpaid principal amount of the Notes,
together with accrued and unpaid interest thereon, shall become immediately
due and payable. The Trustee will have no discretion with respect to the
acceleration of the Notes under the foregoing circumstances. If an Event of
Default shall have occurred and be continuing, the Controlling Party may
exercise any of the remedies specified in Section 5.4. In the event of any
acceleration of the Notes, the Trustee shall continue to make claims under
the Note Policy pursuant to the Sale and Servicing Agreement for Scheduled
Payments on the Notes. Subject to the terms of the Note Policy, payments
under the Note Policy following acceleration of any Notes shall be applied
by the Trustee:
FIRST: to Noteholders for amounts due and unpaid on the
Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes
for interest;
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SECOND: to the Noteholders for amounts due and unpaid on the
Notes for principal, ratably and without preference or priority
of any kind, according to the amounts then due and payable on the
Notes for principal.
(b) In the event any Notes are accelerated due to an Event of Default,
the Note Insurer shall have the right (in addition to its obligation to pay
Scheduled Payments on the Notes in accordance with the Note Policy), but
not the obligation, to make payments under the Note Policy or otherwise of
interest and principal due on such Notes, in whole or in part, on any date
or dates following such acceleration as the Note Insurer, in its sole
discretion, shall elect.
(c) If an Insurer Default shall have occurred and be continuing and an
Event of Default shall have occurred and be continuing, the Trustee in its
discretion may, or if so requested in writing by a Note Majority, shall
declare by written notice to the Issuer that the Notes become, whereupon
they shall become, immediately due and payable at par, together with
accrued interest thereon.
(d) If an Insurer Default shall have occurred and be continuing, then
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 Trustee as hereinafter in this Article V provided, a Note
Majority, by written notice to the Issuer and the Trustee, may rescind and
annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the 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 Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the 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 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
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 and such default continues for a
period of five days, the Issuer will, upon demand of the 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 upon
the overdue principal, and, to the extent payment at such rate of interest
shall be legally enforceable, upon overdue installments of interest, at the
applicable Interest Rate 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 Trustee and its agents and counsel.
(b) Each Issuer Secured Party hereby irrevocably and unconditionally
appoints the Controlling Party as the true and lawful attorney-in-fact of
such Issuer Secured Party for so long as such Issuer Secured Party is not
the Controlling Party, with full power of substitution, to execute,
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acknowledge and deliver any notice, document, certificate, paper, pleading
or instrument and to do in the name of the Controlling Party as well as in
the name, place and stead of such Issuer Secured Party such acts, things
and deeds for or on behalf of and in the name of such Issuer Secured Party
under this Indenture (including specifically under Section 5.4) and under
the Basic Documents which such Issuer Secured Party could or might do or
which may be necessary, desirable or convenient in such Controlling Party's
sole discretion to effect the purposes contemplated hereunder and under the
Basic Documents and, without limitation, following the occurrence of an
Event of Default, exercise full right, power and authority to take, or
defer from taking, any and all acts with respect to the administration,
maintenance or disposition of the Trust Estate.
(c) If an Event of Default occurs and is continuing, the Trustee may
in its discretion subject to the consent of the Controlling Party and
shall, at the direction of the Controlling Party (except as provided in
Section 5.3(d) below), proceed to protect and enforce its rights and the
rights of the Noteholders by such appropriate Proceedings as the Trustee or
the Controlling Party 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 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, 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 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 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 Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee, except as
a result of negligence, bad faith or willful misconduct) 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
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
Trustee or the Holders of Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
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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 Trustee, and, in the event that the
Trustee shall consent to the making of payments directly to such
Noteholders, to pay to the Trustee such amounts as shall be sufficient to
cover reasonable compensation to the Trustee, each predecessor Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the 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 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 the Master Spread Account Agreement or under any of the Notes, may be
enforced by the 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 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, disbursements and
compensation of the Trustee, each predecessor 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 Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture
or the Master Spread Account Agreement), the 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 5.4 Remedies. If an Event of Default shall have occurred and be
continuing, the Controlling Party may do one or more of the following (subject
to Section 5.5):
(i) institute or direct the Trustee to 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 or direct the Trustee to institute Proceedings
from time to time for the complete or partial foreclosure of this
Indenture with respect to the Trust Estate;
(iii) exercise or direct the Trustee to 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 Trustee and the
Issuer Secured Parties; and
(iv) sell or direct the Trustee to 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 if the Trustee is the Controlling Party, the
Trustee may not sell or otherwise liquidate the Trust Estate following
an Event of Default unless either (x) the Holders of 100% of the
Outstanding Amount of the Notes consent thereto, or (y) 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.
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In determining such sufficiency or insufficiency with respect to clause
(y), the 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 5.5 Optional Preservation of the Receivables. If the Trustee is the
Controlling Party and if the Notes have been declared to be due and payable
under Section 5.2 following an Event of Default and such declaration and its
consequences have not been rescinded and annulled, the 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 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 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 5.6 Priorities.
(a) Following (1) the acceleration of the Notes pursuant to Section
5.2 or (2) if an Insurer Default shall have occurred and be continuing, the
occurrence of an Event of Default pursuant to Section 5.1(a)(i), 5.1(a)(ii)
or 5.1(a)(v) of this Indenture, the Total Distribution Amount, including
any money or property collected pursuant to Section 5.4 of this Indenture
shall be applied by the Trustee on the related Payment Date in the
following order of priority:
FIRST: amounts due and owing and required to be distributed
pursuant to priorities (i) through (iv) of Section 5.7(a) of the
Sale and Servicing Agreement and not previously distributed to
the Persons set forth therein, in the order of such priorities
and without preference or priority of any kind within such
priorities, and, if applicable, subject to the monetary
limitations set forth therein;
SECOND: to Noteholders for amounts due and unpaid on the
Notes for interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes
for interest;
THIRD: to the Noteholders for amounts due and unpaid on the
Notes for principal, ratably and without preference of priority
of any kind, to the Class A-1 Noteholders and the Class A-2
Noteholders, according to the amounts due and payable on the
Notes, until the outstanding principal amount of the Notes has
been reduced to zero;
FOURTH: amounts due and owing and required to be distributed
to the Note Insurer pursuant to priority (viii) of Section 5.7(a)
of the Sale and Servicing Agreement and not previously
distributed;
FIFTH: amounts due and owing and required to be distributed
to the Residual Certificateholders, pro rata, pursuant to
priorities (vi) and (xiii) of the Sale and Servicing Agreement
and not previously distributed;
SIXTH: in the event any Person other than the Backup
Servicer becomes the successor Servicer, to such successor
Servicer, to the extent not previously paid by the predecessor
Servicer pursuant to the Sale and Servicing Agreement, or
pursuant to priority FIRST hereof, reasonable transition expenses
(up to a maximum of $50,000 for all such expenses during the term
of this Indenture) incurred in becoming the successor Servicer
and all other amounts due and owing to the Backup Servicer
pursuant to Section 5.7(a)(xii) of the Sale and Servicing
Agreement;
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SEVENTH: to the Residual Certificateholders, pro rata, in
reduction of the Residual Certificate Notional Balance until the
Residual Certificate Notional Balance equals zero; and
EIGHTH: to the Residual Certificateholders, pro rata, any
remaining amount;
provided that any amounts collected from the Pre-Funding Account or the
Capitalized Interest Account shall be applied solely to the payment of
amounts due and unpaid on the Notes FIRST, in accordance with Section
10.1(b) and SECOND, in accordance with Section 5.8(a)(ii) of the Sale and
Servicing Agreement and THIRD, in accordance with priorities FIRST through
EIGHTH above.
(b) The 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 Trustee a
notice that states such record date, the payment date and the amount to be
paid.
SECTION 5.7 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
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount
of each class of Notes have made written request to the Trustee to
institute such proceeding in respect of such Event of Default in its
own name as Trustee hereunder;
(iii) such Holder or Holders have offered to the Trustee
indemnity reasonably satisfactory to it against the costs, expenses
and liabilities to be incurred in complying with such request;
(iv) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute such
proceedings;
(v) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by a Note Majority; and
(vi) an Insurer Default shall have occurred and be continuing;
it being 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 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 each class of Notes, the
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.
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SECTION 5.8 Unconditional Rights of Noteholders To Receive Principal and
Interest. Notwithstanding any other provisions of 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 5.9 Restoration of Rights and Remedies. If the Controlling Party 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 Trustee or to such
Noteholder, then and in every such case the Issuer, the 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 Trustee and the Noteholders shall continue as
though no such proceeding had been instituted.
SECTION 5.10 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Controlling Party 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 5.11 Delay or Omission Not a Waiver. No delay or omission of the
Controlling Party 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 Trustee or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Noteholders, as the
case may be.
SECTION 5.12 Control by Noteholders. If the Trustee is the Controlling
Party, a Note Majority shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee with
respect to the Notes or exercising any trust or power conferred on the 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 5.4, any direction
to the Trustee to sell or liquidate the Trust Estate shall be by the
Holders of Notes representing not less than 100% of the of the Notes;
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Trustee elects to retain the Trust Estate pursuant
to such Section, then any direction to the Trustee by Holders of Notes
representing less than 100% of the Outstanding Amount of each class of
Notes to sell or liquidate the Trust Estate shall be of no force and
effect; and
(iv) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.1, the Trustee need not take
any action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
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SECTION 5.13 Waiver of Past Defaults. If an Insurer Default shall have
occurred and be continuing, prior to the declaration of the acceleration of the
maturity of the Notes as provided in Section 5.4, a Note Majority may waive any
past Default or Event of Default and its consequences except a Default or Event
of Default (i) in payment of principal of or interest on any of the Notes or
(ii) 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 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 Event of Default or impair
any right consequent thereto.
Upon any such waiver, such Default or Event of 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 5.14 Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any 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 Trustee for any action taken, suffered or omitted by it as 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 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 each class of 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 5.15 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 and any right of the Issuer to take
such action shall be suspended.
SECTION 5.16 Subrogation. The Note Insurer shall, to the extent it makes
any payment with respect to the Notes, become subrogated to the rights of the
recipients of such payments to the extent of such payments. Subject to and
conditioned upon any payment with respect to the Notes by or on behalf of the
Note Insurer, each Noteholder shall be deemed, without further action to have
directed the Trustee to assign to the Note Insurer all rights to the payment of
interest or principal with respect to the Notes which are then due for payment
to the extent of all payments made by the Note Insurer and the Note Insurer may
exercise any option, vote, right, power or the like with respect to the Notes to
the extent that it has made payment pursuant to the Note Policy. Notwithstanding
the foregoing, the order of priority of payments to be made pursuant to Section
5.7(a) of the Sale and Servicing Agreement shall not be modified by this clause.
To evidence such subrogation, the Note Registrar shall note the Note Insurer's
rights as subrogee upon the register of Noteholders upon receipt from the Note
Insurer of proof of payment by the Note Insurer of any Class A Noteholders'
Interest Distributable Amount or Class A Noteholders' Principal Distributable
Amount.
SECTION 5.17 Preference Claims; Direction of Proceedings. (a) In the event
that the Trustee has received a certified copy of an order of the appropriate
court that any Scheduled Payment paid on a Note has been avoided in whole or in
part as a preference payment under applicable bankruptcy law, the Trustee shall
so notify the Note Insurer, shall comply with the provisions of the Note Policy
to obtain payment by the Note Insurer of such avoided payment, and shall, at the
time it provides notice to the Note Insurer, notify Holders of the Notes by mail
that, in the event that any Noteholder's payment is so recoverable, such
Noteholder will be entitled to payment pursuant to the terms of the Note Policy.
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Pursuant to the terms of the Note Policy, the Note Insurer will make such
payment on behalf of the Noteholder to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Final Order (as
defined in the Note Policy) and not to the Trustee or any Noteholder directly
(unless a Noteholder has previously paid such payment to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy, in which case the
Note Insurer will make such payment to the Trustee for payment, in accordance
with the instructions to be provided by the Note Insurer, to such Noteholder
upon proof of such payment reasonably satisfactory to the Note Insurer).
(b) Each Notice of Claim (as defined in the Note Policy) shall provide that
the Trustee, on its behalf and on behalf of the Noteholders, thereby appoints
the Note Insurer as agent and attorney-in-fact for the Trustee and each
Noteholder in any legal proceeding with respect to the Notes. The Trustee shall
promptly notify the Note Insurer of any proceeding or the institution of any
action (of which a Responsible Officer of the Trustee has actual knowledge)
seeking the avoidance as a preferential transfer under applicable bankruptcy,
insolvency, receivership, rehabilitation or similar law (a "Preference Claim")
of any payment made with respect to the Notes. Each Holder of the Notes, by its
purchase of Notes, and the Trustee hereby agree that so long as a Note Insurer
Default shall not have occurred and be continuing, the Note Insurer may at any
time during the continuation of any proceeding relating to a Preference Claim
direct all matters relating to such Preference Claim including (i) the direction
of any appeal of any order relating to any Preference Claim and (ii) the posting
of any surety, supersedeas or performance bond pending any such appeal at the
expense of the Note Insurer, but subject to the reimbursement as provided in the
Insurance Agreement. In addition, and without limitation of the foregoing, the
Note Insurer shall be subrogated to, and each Noteholder and the Trustee hereby
delegate and assign, to the fullest extent permitted by law, the rights of the
Trustee and each Noteholder in the conduct of any proceeding with respect to a
Preference Claim, including all rights of any party to an adversary proceeding
action with respect to any court order issued in connection with any such
Preference Claim.
ARTICLE VI
THE TRUSTEE
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SECTION 6.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and the
Basic Documents 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 Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the 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 Trustee and conforming to the requirements
of this Indenture; however, the Trustee shall examine the certificates
and opinions to determine whether or not they conform on their face to
the requirements of this Indenture.
(c) The 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;
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(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the 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 5.12.
(d) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Issuer.
(e) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law or the terms of the Basic
Documents.
(f) No provision of this Indenture shall require the Trustee in any of
its capacities to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder 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.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
(h) The Trustee shall permit any representative of the Note Insurer,
during the Trustee's normal business hours, to examine all books of
account, records, reports and other papers of the Trustee relating to the
Notes, to make copies and extracts therefrom and to discuss the Trustee's
affairs and actions, as such affairs and actions relate to the Trustee's
duties with respect to the Notes, with the Trustee's officers and employees
responsible for carrying out the Trustee's duties with respect to the
Notes.
(i) The Trustee shall, and hereby agrees that it will, perform all of
the obligations and duties required of it under the Basic Documents.
(j) The Trustee shall, and hereby agrees that it will, hold the Note
Policy in trust, and will hold any proceeds of any claim on the Note Policy
in trust solely for the use and benefit of the Noteholders.
(k) In no event shall Xxxxx Fargo Bank, National Association, in any
of its capacities hereunder, be deemed to have assumed any duties of the
Owner Trustee under the Delaware Statutory Trust Statute, common law, or
the Trust Agreement.
(l) Except for actions expressly authorized by this Indenture, the
Trustee shall take no action reasonably likely to impair the security
interests created or existing under any Receivable or Financed Vehicle or
to impair the value of any Receivable or Financed Vehicle.
(m) All information obtained by the Trustee regarding the Obligors and
the Receivables, whether upon the exercise of its rights under this
Indenture or otherwise, shall be maintained by the Trustee in confidence
and shall not be disclosed to any other Person, other than the Trustee's
attorneys, accountants and agents unless such disclosure is required by
this Indenture or any applicable law or regulation.
SECTION 6.2 Rights of Trustee.
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(a) Subject to Sections 6.1 and 6.2, the Trustee shall be protected
and shall incur no liability to the Issuer or any Issuer Secured Party in
relying upon the accuracy, acting in reliance upon the contents, and
assuming the genuineness of any notice, demand, certificate, signature,
instrument or other document reasonably believed by the Trustee to be
genuine and to have been duly executed by the appropriate signatory, and,
except to the extent the Trustee has actual knowledge to the contrary or as
required pursuant to Section 6.1 or Section 6.2(g) the Trustee shall not be
required to make any independent investigation with respect thereto.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate. Subject to Section 6.1(c), the Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on the Officer's Certificate.
(c) The 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 Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of Consumer Portfolio Services, Inc., or any other such agent,
attorney, custodian or nominee appointed with due care by it hereunder.
(d) The 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, however, that the Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.
(e) The Trustee may consult with counsel, and the advice of such
counsel or any opinion of counsel with respect to legal matters relating to
the Basic Documents 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 Trustee shall be under no obligation to institute, conduct or
defend any litigation under this Indenture or in relation to this Indenture
or any of the Basic Documents, at the request, order or direction of any of
the Holders of Notes or the Controlling Party, pursuant to the provisions
of this Indenture, unless such Holders of Notes or the Controlling Party
shall have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities that may be incurred therein or
thereby; provided, however, that the Trustee shall, upon the occurrence of
an Event of Default (that has not been cured or waived), exercise the
rights and powers vested in it by this Indenture in accordance with Section
6.1.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
the Note Insurer (so long as no Insurer Default shall have occurred and be
continuing) or (if an Insurer Default shall have occurred and be
continuing) by the Holders of Notes evidencing not less than 25% of the
Outstanding Amount of each class thereof; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation
is, in the opinion of the Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Indenture or the Sale and
Servicing Agreement, the Trustee may require reasonable indemnity against
such cost, expense or liability as a condition to so proceeding; the
reasonable expense of every such examination shall be paid by the Person
making such request, or, if paid by the Trustee, shall be reimbursed by the
Person making such request upon demand.
SECTION 6.3 Individual Rights of Trustee. The Trustee in its individual or
any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Issuer or its Affiliates with the same rights it would have if it
were not the Trustee. Any Note Paying Agent, Note Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Section 6.11.
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SECTION 6.4 Trustee's Disclaimer. The Trustee shall not be responsible for
and makes no representation as to the validity or adequacy of this Indenture,
any Basic Documents, the Trust Estate, 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 this Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Trustee's certificate of authentication.
SECTION 6.5 Notice of Defaults. If an Event of Default occurs and is
continuing and if it is either known by, or written notice of the existence
thereof has been delivered to, a Responsible Officer of the Trustee, the Trustee
shall mail to each Noteholder notice of the Default within 30 days after such
knowledge or notice 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, if any), the 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 6.6 Reports by Trustee to Holders. The Trustee shall on behalf of
the Issuer deliver to each Noteholder such information as may be reasonably
required to enable such Holder to prepare its Federal and State income tax
returns.
SECTION 6.7 Compensation and Indemnity.
(a) Pursuant to Section 5.7(a) of the Sale and Servicing Agreement,
the Issuer shall pay to the Trustee from time to time compensation for its
services, as separately agreed. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Issuer shall reimburse the Trustee, pursuant to Section 5.7(a) of the Sale
and Servicing Agreement, 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 Trustee's
agents, counsel, accountants and experts. The Issuer shall or shall cause
the Servicer to indemnify the Trustee against any and all loss, liability
or expense incurred by the Trustee without willful misfeasance, negligence
or bad faith on the Trustee's part arising out of or in connection with the
acceptance or the administration of this trust and the performance of its
duties hereunder, including the costs and expenses of defending itself
against any claim or liability in connection therewith and including any
loss, liability or expense directly or indirectly incurred (regardless of
negligence on the part of the Trustee or the Issuer) by the Trustee as a
result of any penalty or other cost imposed by the Internal Revenue Service
or other taxing authority (except any penalties arising out of fees paid to
the Trustee or as a result of any action taken contrary to the Indenture)
related to the tax status of the Issuer or the Notes. The Trustee shall
notify the Issuer and the Servicer promptly of any claim for which it may
seek indemnity. Failure by the Trustee to so notify the Issuer and the
Servicer shall not relieve the Issuer of its obligations hereunder or the
Servicer of its obligations under Article XII of the Sale and Servicing
Agreement. The Trustee may have separate counsel and the Issuer shall or
shall cause the Servicer to pay the fees and expenses of such counsel.
Neither the Issuer nor the Servicer need reimburse any expense or indemnify
against any loss, liability or expense incurred by the Trustee through the
Trustee's own willful misconduct, negligence or bad faith.
(b) The Issuer's payment obligations to the Trustee pursuant to this
Section shall survive the discharge of this Indenture. When the Trustee
incurs expenses after the occurrence of a Default specified in Section
5.1(a)(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. Notwithstanding anything else set forth in this Indenture or
the Basic Documents, the recourse of the Trustee hereunder and under the
Basic Documents shall be to the Trust Estate only and specifically shall
not be recourse to the assets of the Seller, the Depositor, any Noteholder
or any Residual Certificateholder. In addition, the Trustee agrees that its
recourse to the Trust Estate and amounts held pursuant to the Master Spread
Account Agreement shall be limited to the right to receive the
distributions referred to in Section 5.7(a) of the Sale and Servicing
Agreement.
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SECTION 6.8 Replacement of Trustee. The Issuer may, with the consent of the
Note Insurer, and at the request of the Note Insurer (unless an Insurer Default
shall have occurred and be continuing), shall, remove the Trustee if:
(i) the Trustee fails to comply with Section 6.11;
(ii) an Insolvency Event with respect to the Trustee occurs; or
(iii) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of the Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Issuer shall promptly appoint a successor
Trustee acceptable to the Note Insurer (so long as an Insurer Default shall not
have occurred and be continuing). If the Issuer fails to appoint such a
successor Trustee, the Note Insurer may appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee, the Note Insurer (provided that no Insurer Default
shall have occurred and be continuing) and the Issuer, whereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the retiring
Trustee under this Indenture, subject to satisfaction of the Rating Agency
Condition. The successor Trustee shall mail a notice of its succession to each
Noteholder. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, the
Note Insurer or a Note Majority may petition any court of competent jurisdiction
for the appointment of a successor Trustee.
Any resignation or removal of the Trustee and appointment of a successor
Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Trustee pursuant to
Section 6.8.
Notwithstanding the replacement of the Trustee pursuant to this Section,
the Issuer's and the Servicer's obligations under Section 6.7 shall continue for
the benefit of the retiring Trustee.
SECTION 6.9 Successor Trustee by Merger.
(a) If the 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
Trustee. The Trustee shall provide the Rating Agencies and the Note Insurer
with written notice of any such transaction.
(b) In case at the time such successor or successors to the Trustee by
merger, conversion or consolidation 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 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 Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the 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 Trustee shall have.
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SECTION 6.10 Appointment of Co-Trustee or Separate 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 may at the time be located, the Trustee with
the consent of the Note Insurer (so long as an Insurer Default shall not
have occurred and be continuing) 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, and to vest in such Person or Persons, in such
capacity and for the benefit of the Noteholders, such title to the Trust,
or any part hereof, and, subject to the other provisions of this Section,
such powers, duties, obligations, rights and trusts as the 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 6.8
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 Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
the Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder, including acts or
omissions of predecessor or successor trustees; and
(iii) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement
and the conditions of this Article 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 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 Trustee. Every such
instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Trustee, its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, dissolve, become insolvent, become incapable of
acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Trustee, to the
extent permitted by law, without the appointment of a new or successor
trustee.
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SECTION 6.11 Eligibility: Disqualification. The Trustee, and any successor
thereto, shall at all times 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 subject to supervision or examination by federal or State authorities and
satisfactory to the Note Insurer; and having a rating, both with respect to
long-term and short-term unsecured obligations, of not less than investment
grade by the Rating Agencies. The Trustee shall provide copies of such reports
to the Note Insurer upon request.
SECTION 6.12 Reserved.
SECTION 6.13 Appointment and Powers. Subject to the terms and conditions
hereof, each of the Issuer Secured Parties hereby appoints Xxxxx Fargo Bank,
National Association as the Trustee with respect to the Collateral, and Xxxxx
Fargo Bank, National Association hereby accepts such appointment and agrees to
act as Trustee with respect to the Collateral for the Issuer Secured Parties, to
maintain custody and possession of such Collateral (except as otherwise provided
hereunder) and to perform the other duties of the Trustee in accordance with the
provisions of this Indenture and the other Basic Documents. Each Issuer Secured
Party hereby authorizes the Trustee to take such action on its behalf, and to
exercise such rights, remedies, powers and privileges hereunder, as the
Controlling Party may direct and as are specifically authorized to be exercised
by the Trustee by the terms hereof, together with such actions, rights,
remedies, powers and privileges as are reasonably incidental thereto. The
Trustee shall act upon and in compliance with the written instructions of the
Controlling Party delivered pursuant to this Indenture promptly following
receipt of such written instructions; provided that the Trustee shall not act in
accordance with any instructions (i) which are not authorized by, or in
violation of the provisions of, this Indenture, (ii) which are in violation of
any applicable law, rule or regulation or (iii) for which the Trustee has not
received reasonable indemnity. Receipt of such instructions shall not be a
condition to the exercise by the Trustee of its express duties hereunder, except
where this Indenture provides that the Trustee is permitted to act only
following and in accordance with such instructions.
SECTION 6.14 Performance of Duties. The Trustee shall have no duties or
responsibilities except those expressly set forth in this Indenture and the
other Basic Documents to which the Trustee is a party or as directed by the
Controlling Party in accordance with this Indenture. The Trustee shall not be
required to take any discretionary actions hereunder except at the written
direction and with the indemnification of the Controlling Party and as provided
in Section 5.12. The Trustee shall, and hereby agrees that it will, perform all
of the duties and obligations required of it under the Sale and Servicing
Agreement.
SECTION 6.15 Limitation on Liability. Neither the Trustee nor any of its
directors, officers or employees shall be liable for any action taken or omitted
to be taken by it or them in good faith hereunder, or in connection herewith,
except that the Trustee shall be liable for its negligence, bad faith or willful
misconduct. Notwithstanding any term or provision of this Indenture, the Trustee
shall incur no liability to the Issuer or the Issuer Secured Parties for any
action taken or omitted by the Trustee in connection with the Collateral, except
for the negligence, bad faith or willful misconduct on the part of the Trustee,
and, further, shall incur no liability to the Issuer Secured Parties except for
negligence, bad faith or willful misconduct in carrying out its duties to the
Issuer Secured Parties. The Trustee shall at all times be free independently to
establish to its reasonable satisfaction, but shall have no duty to
independently verify, the existence or nonexistence of facts that are a
condition to the exercise or enforcement of any right or remedy hereunder or
under any of the Basic Documents. The Trustee may consult with counsel, and
shall not be liable for any action taken or omitted to be taken by it hereunder
in good faith and in accordance with the written advice of such counsel. The
Trustee shall not be under any obligation to exercise any of the remedial rights
or powers vested in it by this Indenture or to follow any direction from the
Controlling Party unless it shall have received reasonable security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred by it.
SECTION 6.16 Reserved.
SECTION 6.17 Successor Trustee.
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(a) Merger. Any Person into which the Trustee may be converted or
merged, or with which it may be consolidated, or to which it may sell or
transfer its trust business and assets as a whole or substantially as a
whole, or any Person resulting from any such conversion, merger,
consolidation, sale or transfer to which the Trustee is a party, shall
(provided it is otherwise qualified to serve as the Trustee hereunder) be
and become a successor Trustee hereunder and be vested with all of the
title to and interest in the Collateral and all of the trusts, powers,
discretions, immunities, privileges and other matters as was its
predecessor without the execution or filing of any instrument or any
further act, deed or conveyance on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, except to the extent, if
any, that any such action is necessary to perfect, or continue the
perfection of, the security interest of the Issuer Secured Parties in the
Collateral; provided that any such successor shall also be the successor
Trustee under Section 6.9.
(b) Removal. The Trustee may be removed by the Note Insurer (or, if an
Insurer Default has occurred and is continuing, by a Note Majority) at any
time, with or without cause, by an instrument or concurrent instruments in
writing delivered to the Trustee, the other Issuer Secured Party and the
Issuer. A temporary successor may be removed at any time to allow a
successor Trustee to be appointed pursuant to subsection (c) below. Any
removal pursuant to the provisions of this subsection (b) shall take effect
only upon the date which is the latest of (i) the effective date of the
appointment of a successor Trustee and the acceptance in writing by such
successor Trustee of such appointment and of its obligation to perform its
duties hereunder in accordance with the provisions hereof, and (ii) receipt
by the Controlling Party of an Opinion of Counsel to the effect described
in Section 3.6.
(c) Acceptance by Successor. The Controlling Party shall have the sole
right to appoint each successor Trustee. Every temporary or permanent
successor Trustee appointed hereunder shall execute, acknowledge and
deliver to its predecessor and to the Trustee, each Issuer Secured Party
and the Issuer an instrument in writing accepting such appointment
hereunder and the relevant predecessor shall execute, acknowledge and
deliver such other documents and instruments as will effectuate the
delivery of all Collateral to the successor Trustee, whereupon such
successor, without any further act, deed or conveyance, shall become fully
vested with all the estates, properties, rights, powers, duties and
obligations of its predecessor. Such predecessor shall, nevertheless, on
the written request of either Issuer Secured Party or the Issuer, execute
and deliver an instrument transferring to such successor all the estates,
properties, rights and powers of such predecessor hereunder. In the event
that any instrument in writing from the Issuer or an Issuer Secured Party
is reasonably required by a successor Trustee to more fully and certainly
vest in such successor the estates, properties, rights, powers, duties and
obligations vested or intended to be vested hereunder in the Trustee, any
and all such written instruments shall at the request of the temporary or
permanent successor Trustee, be forthwith executed, acknowledged and
delivered by the Trustee or the Issuer, as the case may be. The designation
of any successor Trustee and the instrument or instruments removing any
Trustee and appointing a successor hereunder, together with all other
instruments provided for herein, shall be maintained with the records
relating to the Collateral and, to the extent required by applicable law,
filed or recorded by the successor Trustee in each place where such filing
or recording is necessary to effect the transfer of the Collateral to the
successor Trustee or to protect or continue the perfection of the security
interests granted hereunder.
SECTION 6.18 Reserved.
SECTION 6.19 Representations and Warranties of the Trustee. The Trustee
represents and warrants to the Issuer and to each Issuer Secured Party as
follows:
(a) Due Organization. The Trustee is a national banking association,
duly organized, validly existing and in good standing under the laws of the
United States and is duly authorized and licensed under applicable law to
conduct its business as presently conducted.
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(b) Corporate Power. The Trustee has all requisite right, power and
authority to execute and deliver this Indenture and to perform all of its
duties as Trustee hereunder.
(c) Due Authorization. The execution and delivery by the Trustee of
this Indenture and the other Basic Documents to which it is a party, and
the performance by the Trustee of its duties hereunder and thereunder, have
been duly authorized by all necessary corporate proceedings and no further
approvals or filings, including any governmental approvals, are required
for the valid execution and delivery by the Trustee, or the performance by
the Trustee, of this Indenture and such other Basic Documents.
(d) Valid and Binding Indenture. The Trustee has duly executed and
delivered this Indenture and each other Basic Document to which it is a
party, and each of this Indenture and each such other Basic Document
constitutes the legal, valid and binding obligation of the Trustee,
enforceable against the Trustee in accordance with its terms, except as (i)
such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies
may be limited by equitable principles of general applicability.
SECTION 6.20 Waiver of Setoffs. The Trustee hereby expressly waives any and
all rights of setoff that the Trustee may otherwise at any time have under
applicable law with respect to any Trust Account and agrees that amounts in the
Trust Accounts shall at all times be held and applied solely in accordance with
the provisions hereof.
SECTION 6.21 Control by the Controlling Party. The Trustee shall comply
with notices and instructions given by the Issuer only if accompanied by the
written consent of the Controlling Party, except that if any Event of Default
shall have occurred and be continuing, the Trustee shall act upon and comply
with notices and instructions given by the Controlling Party alone in the place
and stead of the Issuer.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
------------------------------
SECTION 7.1 Issuer To Furnish To Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Trustee (a)
not more than five days after the earlier of (i) each Record Date and (ii) three
months after the last Record Date, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of such Record
Date, (b) at such other times as the 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 Trustee is the Note Registrar,
no such list shall be required to be furnished. If the Notes are Definitive
Notes, the Trustee or, if the Trustee is not the Note Registrar, the Issuer
shall furnish to the Note Insurer in writing on an annual basis on each March 31
and at such other times as the Note Insurer may request a copy of the list.
SECTION 7.2 Preservation of Information; Communications to Noteholders. The
Trustee shall preserve, in as current a form as is reasonably practicable, the
names and addresses of the Holders contained in the most recent list furnished
to the Trustee as provided in Section 7.1 and the names and addresses of Holders
received by the Trustee in its capacity as Note Registrar. The Trustee may
destroy any list furnished to it as provided in such Section 7.1 upon receipt of
a new list so furnished.
ARTICLE VIII
COLLECTION OF MONEY AND RELEASES OF TRUST ESTATE
------------------------------------------------
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SECTION 8.1 Collection of Money. Except as otherwise expressly provided
herein, the 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
Trustee pursuant to this Indenture and the Sale and Servicing Agreement. The
Trustee shall apply all such money received by it as provided in this Indenture
and the Sale and Servicing Agreement. Except as otherwise expressly provided in
this Indenture or in the Sale and Servicing Agreement, 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 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.
SECTION 8.2 Release of Trust Estate.
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.7, the Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the lien of
this Indenture, 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 Trustee as provided in this Article VIII
shall be bound to ascertain the Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.
(b) The Trustee shall, at such time as there are no Notes outstanding
and all sums due the Trustee pursuant to Section 6.7 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 Trustee shall release property from the lien of this Indenture pursuant
to this Section 8.2(b) only upon receipt of an Issuer Request accompanied
by an Officer's Certificate and an Opinion of Counsel meeting the
applicable requirements of Section 11.1.
SECTION 8.3 Opinion of Counsel. The Trustee shall receive at least seven
days' notice when requested by the Issuer to take any action pursuant to Section
8.2(a), accompanied by copies of any instruments involved, and the Trustee shall
also require as a condition to such action, an Opinion of Counsel in form and
substance satisfactory to the 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 affect the security for the
Notes or the rights of the Issuer Secured Parties 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 Trustee in connection with any such action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with the
consent of the Note Insurer (unless an Insurer Default shall have occurred
and be continuing) and with prior notice to the Rating Agencies by the
Issuer, the Issuer and the 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 Trustee, for any of the following purposes; provided,
however, if any party to this Indenture is unable to sign any supplemental
indenture due to its dissolution, winding up or comparable circumstances,
then the consent of the Note Insurer or a Note Majority shall be sufficient
to amend this Indenture without such party's signature:
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(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 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 Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which 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 the interests of the Holders of
the Notes or the rating of the Notes; or
(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.
The 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 not inconsistent with the foregoing.
(b) The Issuer and the 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 by the Issuer with the prior written
consent of the Note Insurer (unless an Insurer Default shall have occurred
and be continuing), 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 adversely affect
the interests of any Noteholder in any material respect. Any such action
shall not be deemed to adversely affect in any material respect the
interests of any Noteholder if the Rating Agency Condition has been
satisfied.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders. The Issuer
and the Trustee, when authorized by an Issuer Order, also may, with prior notice
to the Rating Agencies and with the consent of the Note Insurer (unless an
Insurer Default shall have occurred and be continuing) or, if an Insurer Default
shall have occurred and be continuing, with the consent of a Note Majority, by
Act of such Holders delivered to the Issuer and the 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, if any party to this
Indenture is unable to sign any supplemental indenture due to its dissolution,
winding up or comparable circumstances, then the consent of the Note Insurer
(unless an Insurer Default shall have occurred and be continuing) or, if an
Insurer Default shall have occurred and be continuing, the consent of a Note
Majority shall be sufficient to amend this Indenture without such party's
signature; provided, further however, that, subject to the express rights of the
Note Insurer under the Basic Documents and notwithstanding Section 11.20, no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
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(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 provision 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;
(ii) 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);
(iii) 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 compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences
provided for in this Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the Notes
required to direct the Trustee to direct the Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.4;
(vi) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vii) 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 Payment Date (including
the calculation of any of the individual components of such
calculation) or as 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
(viii) 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
or in any of the Basic Documents, 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.
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 Trustee of any
supplemental indenture pursuant to this Section, the 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 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.
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SECTION 9.3 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and subject to
Sections 6.1 and 6.2, 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 Trustee may, but shall not be obligated to,
enter into any such supplemental indenture that affects the Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and 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
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 9.5 Reserved.
SECTION 9.6 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 Issuer shall, bear a
notation in form approved by the Issuer as to any matter provided for in such
supplemental indenture. If the Issuer shall so determine, new Notes so modified
as to conform, in the opinion of the Issuer, to any such supplemental indenture
may be prepared and executed by the Issuer and authenticated and delivered by
the Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
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SECTION 10.1 Redemption.
(a) The Notes are subject to redemption in whole, but not in part, at
the direction of the Servicer pursuant to Section 11.1(a) of the Sale and
Servicing Agreement, on any Payment Date on which the Servicer exercises
its option to purchase the Trust Estate pursuant to said Section 11.1(a),
for a purchase price at least equal to the Redemption Price; provided,
however, that the Issuer has available funds sufficient to pay the
Redemption Price. The Servicer or the Issuer shall furnish the Note Insurer
and the Rating Agencies notice of such redemption. If the Notes are to be
redeemed pursuant to this Section 10.1(a), the Servicer or the Issuer shall
furnish notice of such election to the Trustee not later than 35 days prior
to the Redemption Date and the Servicer shall deposit with the Trustee in
the Note Distribution Account the Redemption Price of the Notes to be
redeemed at least one Business Day prior to the Redemption Date. If the
Servicer fails to so deposit the Redemption Price with the Trustee at least
one Business Day prior to the Redemption Date, such redemption shall be
deemed to be automatically rescinded and the Noteholders shall receive the
payments of interest and principal that would be due to the Noteholders on
such Payment Date as if such option to redeem the Notes had never been
exercised. For the avoidance of any doubt, no Event of Default shall occur
solely as a result of such rescission.
(b) If, on the Mandatory Redemption Date, the Pre-Funded Amount is
greater than zero after giving effect to the purchase of all Subsequent
Receivables during the Funding Period, including any such purchase on the
last day of the Funding Period, the Class A-1 and Class A-2 Notes will be
redeemed in part pursuant to Section 5.8(a)(ii) of the Sale and Servicing
Agreement in an amount equal to the Note Prepayment Amount.
SECTION 10.2 Form of Redemption Notice.
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(a) Notice of redemption under Section 10.1 shall be given by the
Trustee by facsimile or by first-class mail, postage prepaid, transmitted
or mailed 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 appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such
Redemption Date is not applicable and that payments shall be made only
upon presentation and surrender of such Notes and 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 3.2); and
(iv) that interest on the Notes shall cease to accrue on the
Redemption Date.
Notice of redemption of the Notes shall be given by the 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 10.1(b) is not required
to be given to Noteholders.
SECTION 10.3 Notes Payable on Redemption Date. The Notes to be redeemed
shall, following notice of redemption as required by Section 10.2 (in the case
of redemption pursuant to Section 10.1), 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
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SECTION 11.1 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Trustee to
take any action under any provision of this Indenture, the Issuer shall
furnish to the Trustee and to the Note Insurer (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, and (ii)
an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with 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:
(i) 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;
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(ii) 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;
(iii) 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
(iv) 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 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 11.1(a) or
elsewhere in this Indenture, furnish to the Trustee and the Note Insurer an
Officer's Certificate certifying or stating the opinion of each person
signing such certificate as to the fair value (on the date 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 Trustee
and the Note Insurer 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 Trustee and the
Note Insurer 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 1% of the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any Purchased
Receivables or Liquidated Receivables, whenever any property or
securities are to be released from the lien of this Indenture, the
Issuer shall also furnish to the Trustee and the Note Insurer 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 Trustee
and the Note Insurer 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 Trustee and
the Note Insurer an Independent Certificate as to the same matters if
the fair value of the property or securities and of all other property
other than Purchased Receivables and Defaulted Receivables, 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 1% of
the then Outstanding Amount of the Notes.
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(v) Notwithstanding Section 2.9 or any provision of this Section,
the Issuer may (A) collect, liquidate, sell or otherwise dispose of
Receivables 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.
SECTION 11.2 Form of Documents Delivered to Trustee.
(a) 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.
(b) 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 his or
her 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 Seller or
the Issuer, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller 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.
(c) 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.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the 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 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 11.3 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 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 6.1) conclusive in favor of the 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 customary manner of the Trustee.
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(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 Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.4 Notices, etc., to Trustee, Issuer, Note Insurer and Rating
Agencies.
(a) 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 Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if personally delivered,
delivered by overnight courier or mailed certified mail, return
receipt requested and shall be deemed to have been duly given upon
receipt to the Trustee at its Corporate Trust Office;
(ii) the Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if personally delivered,
delivered by overnight courier or mailed certified mail, return
receipt requested and shall deemed to have been duly given upon
receipt to the Issuer addressed to: CPS Auto Receivables Trust 2005-C,
in care of Wilmington Trust Company, Xxxxxx Square North, 0000 X.
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000, or at such other
address previously furnished in writing to the Trustee by the Issuer.
The Issuer shall promptly transmit any notice received by it from the
Noteholders to the Trustee; or
(iii) the Note Insurer by the Issuer or the Trustee shall be
sufficient for any purpose hereunder if in writing and mailed by
registered mail or personally delivered or telexed or telecopied to
the recipient as follows:
To the Note Insurer:
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Senior Vice President - Transaction
Oversight Department Re: Policy
No. 51676-N
Telex No.: (000) 000-0000
Confirmation: (000) 000-0000
Telecopy Nos.: (000) 000-0000 or (000) 000-0000
(In each case in which notice or other communication to the Note Insurer
refers to an Event of Default, a claim on the Note Policy or with respect to
which failure on the part of the Note Insurer to respond shall be deemed to
constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and
the Head - Financial Guaranty Group "URGENT MATERIAL ENCLOSED" at the foregoing
address.)
(b) Notices required to be given to the Rating Agencies by the Issuer,
the Trustee or the Owner Trustee shall be in writing, personally delivered,
electronically delivered, delivered by overnight courier or mailed
certified mail, return receipt requested to (i) in the case of Moody's, at
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the following address: Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx,
Xxx Xxxx Xxx Xxxx 00000 and (ii) in the case of S&P, via electronic
delivery to Xxxxxxxx_xxxxxxx@xxxxx.xxx; for any information not available
in electronic format, send hard copies to: Standard & Poor's Ratings
Services, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Attention: ABS Surveillance Group; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other
parties.
SECTION 11.5 Notices to Noteholders; Waiver.
(a) Where this Indenture provides for notice to Noteholders of any
event, such notice shall be sufficiently given (unless otherwise expressly
provided herein) if in writing and mailed, first-class, postage prepaid to
each Noteholder affected by such event, at his 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.
(b) 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 Trustee but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such a waiver.
(c) 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 Trustee shall
be deemed to be a sufficient giving of such notice.
(d) 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 11.6 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 Trustee or any Note Paying Agent to such Holder, that
is different from the methods provided for in this Indenture for such payments
or notices, provided that such methods are reasonable and consented to by the
Trustee (which consent shall not be unreasonably withheld). The Issuer will
furnish to the Trustee a copy of each such agreement and the Trustee will cause
payments to be made and notices to be given in accordance with such agreements.
SECTION 11.7 Reserved.
SECTION 11.8 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 11.9 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 Trustee in this Indenture
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
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SECTION 11.10 Severability. 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. The Note Insurer and its successors
and assigns shall be third-party beneficiaries to the provisions of this
Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture so long as no Insurer Default shall have occurred
and be continuing. 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. The Note Insurer may disclaim any of its rights and powers under
this Indenture (in which case the Trustee may exercise such right or power
hereunder), but not its duties and obligations under the Note Policy, upon
delivery of a written notice to the Trustee.
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, AND THIS INDENTURE AND ALL MATTERS ARISING OUT OF OR RELATING
IN ANY WAY TO THIS INDENTURE SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
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
(which may be counsel to the Trustee or any other counsel reasonably acceptable
to the Trustee and the Note Insurer) 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
Trustee under this Indenture or to the Collateral Agent under the Master Spread
Account Agreement.
SECTION 11.16 Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Seller, the
Servicer, the Depositor, the Owner Trustee or the Trustee on the Notes or under
this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) the Seller, the Servicer, the Depositor, the
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 Seller, the Servicer, the
Depositor, the Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Seller, the Servicer, the
Depositor, the Owner Trustee or the Trustee or of any successor or assign of the
Seller, the Servicer, the Depositor, the Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the 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 Articles VI, VII and VIII of the Trust
Agreement.
-53-
SECTION 11.17 No Petition. The Trustee, by entering into this Indenture,
and each Noteholder and Note Owner, by accepting a Note or a beneficial interest
therein, hereby covenant and agree that they will not at any time institute
against the Seller, the Depositor, or the Issuer, or join in any institution
against the Seller, the Depositor, or 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 Trustee or of the Note Insurer,
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
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 Trustee may reasonably determine that such disclosure is
consistent with its Obligations hereunder.
SECTION 11.19 Action Upon Direction of Noteholders. Except where this
Indenture specifically states otherwise, the Trustee, provided it has sent out
notices in accordance with this Indenture, may act as directed by a Note
Majority responding in writing to such request for amendment or written
direction, provided however, that a Note Majority as of the time such voting
response is due back to the Trustee must have responded in writing to the
Trustee's notice to amend or for written direction. In addition, the Trustee
shall not have any liability to any Noteholder or Note Owner with respect to any
action taken pursuant to such notice if the Noteholder or Note Owner does not
respond to such notice within the time period set forth in such notice. By
acceptance of a Note, each Noteholder and Note Owner agree to the foregoing
provisions.
SECTION 11.20 Note Insurer as Controlling Party. Each Noteholder by
purchase of the Notes held by it acknowledges that the Trustee, as partial
consideration of the issuance of the Note Policy, has agreed that the Note
Insurer shall have certain rights hereunder for so long as no Insurer Default
shall have occurred and be continuing. So long as no Insurer Default has
occurred and is continuing, except as otherwise provided herein, whenever
Noteholder action, consent or approval is required under this Indenture, such
action, consent or approval shall be deemed taken or given on behalf of, and
shall be binding upon, all Noteholders if the Note Insurer agrees to take such
action or give such consent or approval. So long as an Insurer Default has
occurred and is continuing, any provision giving the Note Insurer the right to
direct, appoint or consent to, approve of, or take any action as Controlling
Party under this Indenture shall be inoperative during the period of such
Insurer Default and such right shall instead vest in the Trustee acting, unless
otherwise specified, at the direction of a Note Majority. The Note Insurer may
disclaim any of its rights and powers under this Indenture (but not its duties
and obligations under the Note Policy) upon delivery of a written notice to the
Trustee. The Note Insurer may give or withhold any consent hereunder in its sole
and absolute discretion.
-54-
IN WITNESS WHEREOF, the Issuer and the Trustee have caused this Indenture
to be duly executed by their respective officers, hereunto duly authorized, all
as of the day and year first above written.
CPS AUTO RECEIVABLES TRUST 2005-C,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity, but
solely as Owner Trustee
By: ___________________________________________
Name: ___________________________________________
Title: ___________________________________________
XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Trustee
By: ___________________________________________
Name: ___________________________________________
Title: ___________________________________________
EXHIBIT A-1
FORM OF CLASS A-1 NOTE
REGISTERED $___________________
NO. R-A-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 12615W CF6
[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.]
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES ("BLUE SKY LAWS"), AND THIS NOTE MAY NOT BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE 1933 ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT,
(C) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE 1933 ACT (IF
AVAILABLE) OR (D) TO THE SELLER OR AN AFFILIATE OF THE SELLER, IN EACH CASE IN
ACCORDANCE WITH THE INDENTURE AND ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION. NO REPRESENTATION IS
MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144A FOR RESALES
OF THIS NOTE.
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.
CPS AUTO RECEIVABLES TRUST 2005-C
CLASS A-1 4.52% ASSET-BACKED NOTES
CPS Auto Receivables Trust 2005-C, a statutory 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 [CEDE & CO.], or registered
assigns, the principal sum of __________________________________________ AND
NO/100 DOLLARS payable on each Payment Date in an amount equal to the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-1 Notes pursuant to Section 3.1 of the Indenture and
Section 5.7 of the Sale and Servicing Agreement; provided, however, that the
entire unpaid principal amount of this Note shall be due and payable on the
Payment Date occurring in March 2010 (the "Class A-1 Final Scheduled Payment
Date"). The Issuer will pay interest on this Note at the rate per annum shown
above on each 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 Payment Date (after giving effect to all payments of principal made on
the preceding Payment Date). Interest on this Note will accrue for each Payment
A-1-1
Date from the most recent Payment Date on which interest has been paid to but
excluding such current Payment Date; provided that for the October 2005 Payment
Date interest will accrue for the number of days from and including the Closing
Date to and including October 14, 2005. 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.
The Notes are entitled to the benefits of a financial guaranty insurance
policy (the "Policy") issued by Financial Security Assurance Inc. (the "Note
Insurer"), pursuant to which the Note Insurer has unconditionally guaranteed
payments of the Class A Noteholders' Interest Distributable Amount and the
Noteholders' Parity Deficit Amount on each Payment Date and the Note Balance,
together with any accrued and unpaid interest on a class of Notes, on the Final
Scheduled Payment Date for such class of Notes, all as more fully set forth in
the Indenture.
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
Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
or be valid or obligatory for any purpose.
A-1-2
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.
CPS AUTO RECEIVABLES TRUST 2005-C
By: WILMINGTON TRUST COMPANY,
not in its individual capacity,
but solely as Owner Trustee
By: _____________________________________
Name: _____________________________________
Title: _____________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
XXXXX FARGO BANK, NATIONAL ASSOCIATION, not
in its individual capacity, but solely as
Trustee
By: ________________________________________
Authorized Signatory
Date: ____________, 20__
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 4.52% Asset-Backed Notes (herein called the "Class
A-1 Notes"), all issued under an Indenture dated as of September 1, 2005 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Xxxxx Fargo Bank, National Association, as trustee (the
"Trustee", which term includes any successor Trustee 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 Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, supplemented or amended, shall have the meanings assigned to them in
or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes and the Class A-2 Notes (together, the "Notes") are and
will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the fifteenth day of
each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing October 17, 2005.
A-1-3
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Class A-1 Final Scheduled Payment Date
and the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture.
In addition, a portion of the unpaid principal balance of this Note shall be due
and payable on the Mandatory Redemption Date, if any, pursuant to Section
10.1(b) of the Indenture. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable (i) on the date on which
an Event of Default shall have occurred and be continuing so long as an Insurer
Default shall not have occurred and be continuing and the Note Insurer has
declared the Notes to be immediately due and payable in the manner provided in
Section 5.2 of the Indenture, or (ii) if an Insurer Default shall have occurred
and be continuing, on the date on which an Event of Default shall have occurred
and be continuing and the Trustee or a Note Majority has declared the Notes to
be immediately due and payable in the manner provided in Section 5.2 of the
Indenture. All principal payments on the Class A-1 Notes shall be made pro rata
to the Class A-1 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each 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 Holder of this Note (or one or more Predecessor Notes) in the
Note Register as of the close of business on each Record Date or by wire
transfer of immediately available funds to the account designated in writing to
the Trustee by such Person at least five Business Days prior to the related
Record Date, except that 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.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. 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 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 Payment Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Payment Date by
notice mailed prior to such Payment Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office.
The Issuer shall pay interest on overdue installments of interest at the
Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a) pursuant to
Section 10.1(a) of the Indenture, in whole, but not in part, at the option of
the Servicer, on any Payment Date on or after the date on which the Collateral
Balance is less than or equal to 10% of the Original Collateral Balance; and (b)
pursuant to Section 10.1(b) of the Indenture, in part, on a pro rata basis, on
the Mandatory Redemption Date if any Pre-Funded Amount remains on deposit in the
Pre-Funding Account after giving effect to the purchase of all Subsequent
Receivables during the Funding Period.
As provided in the Indenture and subject to certain limitations set forth
therein, 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, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents 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, and (ii) accompanied by such other documents
as the Trustee may require, 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
A-1-4
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. Notwithstanding anything to the contrary in the Indenture or any other
Basic Document, (i) the transfer of a Note, including the right to receive
principal and any stated interest thereon, may be effected only by surrender of
the old Note (or satisfactory evidence of the destruction, loss or theft of such
Note) to the Note Registrar, and the issuance by the Issuer (through the Note
Registrar) of a new Note to the new Holder, and (ii) each Note must be
registered in the name of the Holder thereof as to both principal and any stated
interest with the Note Registrar.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note agrees to treat the Notes as
indebtedness of the Issuer for Federal and State income tax reporting purposes
and further 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 Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Seller, the Servicer,
the Depositor, the 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 Issuer, the Seller, the
Servicer, the Depositor, the Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Depositor, the Owner Trustee or the Trustee or of any successor or
assign of the Issuer, the Seller, the Servicer, the Depositor, the Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the 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.
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 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, or other 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.
Each Noteholder by its acquisition of any Notes (or a beneficial interest
therein) shall be deemed to have represented and warranted for the benefit of
the Issuer, the Trustee, the Owner Trustee and the Noteholders, that either (i)
it is not acquiring any Notes with the assets of any "employee benefit plan" as
defined in Section 3(3) of ERISA which is subject to Title I of ERISA or any
"plan" as defined in Section 4975 of the Internal Revenue Code or (ii) the
acquisition and holding of the Notes will be covered by Prohibited Transaction
Class Exemption ("PTCE") 00-00, XXXX 00-0, XXXX 91-38, XXXX 00-00, XXXX 96-23 or
a similar U.S. Department of Labor class exemption.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Trustee and the Note Insurer and any agent of the Issuer, the
Trustee or the Note Insurer 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 neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, subject to certain limitations and 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 Note Insurer (unless
an Insurer Default has occurred and is continuing) but without the consent of
Noteholders. The Indenture also contains provisions permitting the Note Insurer
and/or the Holders of Notes representing specified percentages of the
Outstanding Amount of each class of Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of 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
A-1-5
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
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 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 Indenture or the Basic Documents, neither the Owner Trustee in
its individual capacity, any owner of a beneficial interest in the Issuer, nor
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,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee for the sole purposes of binding the interests of the Owner
Trustee in the assets of the Issuer. The Holder of this Note by the acceptance
hereof agrees that except as expressly provided in the Indenture or 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.
A-1-6
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: _________________________
1/ Signature Guaranteed:________________________
1/ NOTE: 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 whatsoever.
X-0-0
XXXXXXX X-0
[Form of Class A-2 Note]
REGISTERED $_______________
NO. R-A-1
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. 12615W CG4
[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.]
THIS NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES ("BLUE SKY LAWS"), AND THIS NOTE MAY NOT BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A UNDER THE 1933 ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT,
(C) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE 1933 ACT (IF
AVAILABLE) OR (D) TO THE SELLER OR AN AFFILIATE OF THE SELLER, IN EACH CASE IN
ACCORDANCE WITH THE INDENTURE AND ALL APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION. NO REPRESENTATION IS
MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144A FOR RESALES
OF THIS NOTE.
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.
CPS AUTO RECEIVABLES TRUST 2005-C
CLASS A-2 4.79% ASSET-BACKED NOTES
CPS Auto Receivables Trust 2005-C, a statutory 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 [CEDE & CO.], or registered
assigns, the principal sum of ___________________________________ AND NO/100
DOLLARS payable on each Payment Date in an amount equal to the aggregate amount,
if any, payable from the Note Distribution Account in respect of principal on
the Class A-2 Notes pursuant to Section 3.1 of the Indenture and Section 5.7 of
the Sale and Servicing Agreement provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the Payment Date
occurring in May 2012 (the "Class A-2 Final Scheduled Payment Date"). The Issuer
will pay interest on this Note at the rate per annum shown above on each 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 Payment Date
(after giving effect to all payments of principal made on the preceding Payment
Date). Interest on this Note will accrue for each Payment Date from the most
A-2-1
recent Payment Date on which interest has been paid to but excluding such
current Payment Date; provided that for the October 2005 Payment Date interest
will accrue for the number of days from and including the Closing Date to and
including October 14, 2005. 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.
The Notes are entitled to the benefits of a financial guaranty insurance
policy (the "Policy") issued by Financial Security Assurance Inc. (the "Note
Insurer"), pursuant to which the Note Insurer has unconditionally guaranteed
payments of the Class A Noteholders' Interest Distributable Amount and the
Noteholders' Parity Deficit Amount on each Payment Date and the Note Balance,
together with any accrued and unpaid interest on a class of Notes, on the Final
Scheduled Payment Date for such class of Notes, all as more fully set forth in
the Indenture.
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
Trustee whose name appears below by manual signature, this Note shall not be
entitled to any benefit under the Indenture referred to on the reverse hereof,
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.
CPS AUTO RECEIVABLES TRUST 2005-C
By: WILMINGTON TRUST COMPANY,
not in its individual capacity, but
solely as Owner Trustee
By: ______________________________________
Name: ______________________________________
Title: ______________________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but solely
as Trustee
By: ___________________________________________
Authorized Signatory___________________________
Date: ___________, 20__
A-2-2
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 4.79% Asset-Backed Notes (herein called the "Class
A-2 Notes"), all issued under an Indenture dated as of September 1, 2005 (such
indenture, as supplemented or amended, is herein called the "Indenture"),
between the Issuer and Xxxxx Fargo Bank, National Association, as trustee (the
"Trustee", which term includes any successor Trustee 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 Trustee and the Holders of the Notes. The Notes are subject to all
terms of the Indenture. All terms used in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.
The Class A-1 Notes and the Class A-2 Notes (together, the "Notes") are and
will be equally and ratably secured by the collateral pledged as security
therefor as provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the fifteenth day of
each month, or, if any such date is not a Business Day, the next succeeding
Business Day, commencing October 17, 2005.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Class A-2 Final Scheduled Payment Date
and the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture.
In addition, a portion of the unpaid principal balance of this Note shall be due
and payable on the Mandatory Redemption Date, if any, pursuant to Section
10.1(b) of the Indenture. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes shall be due and payable (i) on the date on which
an Event of Default shall have occurred and be continuing so long as an Insurer
Default shall not have occurred and be continuing and the Note Insurer has
declared the Notes to be immediately due and payable in the manner provided in
Section 5.2 of the Indenture, or (ii) if an Insurer Default shall have occurred
and be continuing, on the date on which an Event of Default shall have occurred
and be continuing and the Trustee or a Note Majority has declared the Notes to
be immediately due and payable in the manner provided in Section 5.2 of the
Indenture. All principal payments on the Class A-2 Notes shall be made pro rata
to the Class A-2 Noteholders entitled thereto.
Payments of interest on this Note due and payable on each 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 Holder of this Note (or one or more Predecessor Notes) in the
Note Register as of the close of business on each Record Date or by wire
transfer of immediately available funds to the account designated in writing to
the Trustee by such Person at least five Business Days prior to the related
Record Date, except that 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.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. 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 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 Payment Date, then the
Trustee, in the name of and on behalf of the Issuer, will notify the Person who
was the Holder hereof as of the Record Date preceding such Payment Date by
notice mailed prior to such Payment Date and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Trustee's principal Corporate Trust Office.
A-2-3
The Issuer shall pay interest on overdue installments of interest at the
Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed (a) pursuant to
Section 10.1(a) of the Indenture, in whole, but not in part, at the option of
the Servicer, on any Payment Date on or after the date on which the Collateral
Balance is less than or equal to 10% of the Original Collateral Balance; and (b)
pursuant to Section 10.1(b) of the Indenture, in part, on a pro rata basis, on
the Mandatory Redemption Date if any Pre-Funded Amount remains on deposit in the
Pre-Funding Account after giving effect to the purchase of all Subsequent
Receivables during the Funding Period.
As provided in the Indenture and subject to certain limitations set forth
therein, 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, (i) duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar which requirements include
membership or participation in Securities Transfer Agents 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, and (ii) accompanied by such other documents
as the Trustee may require, 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. Notwithstanding anything to the contrary in the Indenture or any other
Basic Document, (i) the transfer of a Note, including the right to receive
principal and any stated interest thereon, may be effected only by surrender of
the old Note (or satisfactory evidence of the destruction, loss or theft of such
Note) to the Note Registrar, and the issuance by the Issuer (through the Note
Registrar) of a new Note to the new Holder, and (ii) each Note must be
registered in the name of the Holder thereof as to both principal and any stated
interest with the Note Registrar.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note agrees to treat the Notes as
indebtedness of the Issuer for federal and State income tax reporting purposes
and further 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 Trustee on the Notes or under the Indenture or any certificate or other
writing delivered in connection therewith, against (i) the Seller, the Servicer,
the Depositor, the 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 Issuer, the Seller, the
Servicer, the Depositor, the Trustee or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Seller, the
Servicer, the Depositor, the Owner Trustee or the Trustee or of any successor or
assign of the Issuer, the Seller, the Servicer, the Depositor, the Trustee or
the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the 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.
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 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, or other 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.
A-2-4
Each Noteholder by its acquisition of any Notes (or a beneficial interest
therein) shall be deemed to have represented and warranted for the benefit of
the Issuer, the Trustee, the Owner Trustee and the Noteholders, that either (i)
it is not acquiring any Notes with the assets of any "employee benefit plan" as
defined in Section 3(3) of ERISA which is subject to Title I of ERISA or any
"plan" as defined in Section 4975 of the Internal Revenue Code or (ii) the
acquisition and holding of the Notes will be covered by Prohibited Transaction
Class Exemption ("PTCE") 00-00, XXXX 00-0, XXXX 91-38, XXXX 00-00, XXXX 96-23 or
a similar U.S. Department of Labor class exemption.
Prior to the due presentment for registration of transfer of this Note, the
Issuer, the Trustee and the Note Insurer and any agent of the Issuer, the
Trustee or the Note Insurer 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 neither the Issuer, the Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, subject to certain limitations and 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 Note Insurer (unless
an Insurer Default has occurred and is continuing) but without the consent of
Noteholders. The Indenture also contains provisions permitting the Note Insurer
and/or the Holders of Notes representing specified percentages of the
Outstanding Amount of each class of Notes, on behalf of the Holders of all the
Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one of 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
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 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 Indenture or the Basic Documents, neither the Owner Trustee in
its individual capacity, any owner of a beneficial interest in the Issuer, nor
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,
or performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in this Note or the Indenture, it being expressly
understood that said covenants, obligations and indemnifications have been made
by the Owner Trustee for the sole purposes of binding the interests of the Owner
Trustee in the assets of the Issuer. The Holder of this Note by the acceptance
hereof agrees that except as expressly provided in the Indenture or 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.
A-2-5
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: _________________________
1/ Signature Guaranteed:________________________
1/ NOTE: 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 whatsoever.
A-2-6
