EXHIBIT 4.2
----------------------------
UNITED FIDELITY AUTO RECEIVABLES TRUST [____-_]
$[________ ] [__]% Class [A-1] Asset Backed Notes
$[________ ] [__]% Class [A-2] Asset Backed Notes
$[________ ] [__]% Class [A-3] Asset Backed Notes
$[_________] [__]% Class [B] Asset Backed Notes
------------------------------
INDENTURE
between
______________________________,
as Indenture Trustee
and
UNITED FIDELITY AUTO RECEIVABLES TRUST [____-_],
as Issuer
--------------------------------
Dated as of ________, ____
--------------------------------
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE........................3
SECTION 1.1 Definitions............................................3
SECTION 1.2 Rules of Construction..................................8
SECTION 1.3 Directions.............................................8
ARTICLE II. THE NOTES........................................................9
SECTION 2.1 Form...................................................9
SECTION 2.2 Execution, Authentication and Delivery................10
SECTION 2.3 Registration of Transfer and Exchange of Notes........11
SECTION 2.4 Mutilated, Destroyed, Lost, or Stolen Notes...........14
SECTION 2.5 Persons Deemed Owners.................................14
SECTION 2.6 Access to List of Noteholders' Names and Addresses....15
SECTION 2.7 Maintenance of Office or Agency.......................15
SECTION 2.8 Payment of Principal and Interest; Defaulted Interest.15
SECTION 2.9 Cancellation..........................................16
SECTION 2.10 Release of Collateral.................................17
ARTICLE III. COVENANTS......................................................17
SECTION 3.1 Payment of Principal and Interest.....................17
SECTION 3.2 Maintenance of Office or Agency.......................17
SECTION 3.3 Money for Payments to be Held in .....................18
SECTION 3.4 Existence.............................................19
SECTION 3.5 Protection of Trust Property..........................20
SECTION 3.6 Opinions as to Trust Property.........................20
SECTION 3.7 Performance of Obligations; Servicing of Receivables..21
SECTION 3.8 Negative Covenants....................................22
SECTION 3.9 Annual Statement as to Compliance.....................23
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms....24
SECTION 3.11 Successor or Transferee...............................26
SECTION 3.12 No Other Business.....................................26
SECTION 3.13 No Borrowing..........................................26
SECTION 3.14 Servicer's Obligations................................27
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities.....27
SECTION 3.16 Capital Expenditures..................................27
SECTION 3.17 Compliance with Laws..................................27
SECTION 3.18 Restricted Payments...................................27
SECTION 3.19 Notice of Events of Default...........................27
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SECTION 3.20 Further Instruments and Acts..........................28
SECTION 3.21 Income Tax Characterization...........................28
ARTICLE IV. SATISFACTION AND DISCHARGE......................................28
SECTION 4.1 Satisfaction and Discharge of Indenture...............28
SECTION 4.2 Application of Trust Money............................30
SECTION 4.3 Repayment of Moneys Held by Paying Agent..............30
ARTICLE V. REMEDIES.........................................................30
SECTION 5.1 Event of Default......................................30
SECTION 5.2 Rights Upon Event of Default..........................32
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee...............................34
SECTION 5.4 Remedies..............................................36
SECTION 5.5 Optional Preservation of the Trust Property...........38
SECTION 5.6 [RESERVED]............................................38
SECTION 5.7 Limitation of Suits...................................38
SECTION 5.8 Unconditional Rights of Noteholders to Receive
Principal and Interest.............................39
SECTION 5.9 Restoration of Rights and Remedies....................39
SECTION 5.10 Rights and Remedies Cumulative........................39
SECTION 5.11 Delay or Omission Not a Waiver........................40
SECTION 5.12 Control by Controlling Party..........................40
SECTION 5.13 Waiver of Past Defaults...............................41
SECTION 5.14 Undertaking for Costs.................................41
SECTION 5.15 Waiver of Stay or Extension Laws......................41
SECTION 5.16 Action on Notes.......................................41
SECTION 5.17 Performance and Enforcement of Certain Obligations....42
SECTION 5.18 Subrogation...........................................42
SECTION 5.19 Preference Claims; Direction of Proceedings...........43
ARTICLE VI. THE INDENTURE TRUSTEE...........................................44
SECTION 6.1 Duties of Indenture Trustee...........................44
SECTION 6.2 Rights of Indenture Trustee...........................46
SECTION 6.3 Individual Rights of Indenture Trustee................47
SECTION 6.4 Indenture Trustee's Disclaimer........................47
SECTION 6.5 Notice of Defaults....................................47
SECTION 6.6 Reports by Indenture Trustee to Holders...............47
SECTION 6.7 Compensation..........................................48
SECTION 6.8 Replacement of Indenture Trustee......................48
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SECTION 6.9 Successor Indenture Trustee by Merger.................50
SECTION 6.10 Appointment of Trust Collateral Agent.................51
SECTION 6.11 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee..................................51
SECTION 6.12 Eligibility...........................................52
SECTION 6.13 Trust Collateral Agent to Follow Indenture Trustee's
Directions.........................................53
SECTION 6.14 Representations and Warranties of the Indenture
Trustee............................................53
SECTION 6.15 Disqualification of the Indenture Trustee.............53
SECTION 6.16 Waiver of Setoffs.....................................53
SECTION 6.17 Control by the Controlling Party......................54
ARTICLE VII. NOTEHOLDERS' LISTS AND REPORTS.................................54
SECTION 7.1 Issuer To Furnish To Indenture Trustee Names and
Addresses of Noteholders...........................54
SECTION 7.2 Preservation of Information; Communications to
Noteholders........................................54
ARTICLE VIII. ACCOUNTS, DISBURSEMENTS AND RELEASES..........................54
SECTION 8.1 Collection of Money...................................54
SECTION 8.2 Release of Trust Property.............................55
SECTION 8.3 Opinion of Counsel....................................55
ARTICLE IX. SUPPLEMENTAL INDENTURES.........................................56
SECTION 9.1 Supplemental Indentures Without Consent of
Noteholders........................................56
SECTION 9.2 Supplemental Indentures with Consent of Noteholders...57
SECTION 9.3 Execution of Supplemental Indentures..................59
SECTION 9.4 Effect of Supplemental Indenture......................59
SECTION 9.5 Reference in Notes to Supplemental Indentures.........59
ARTICLE X. REDEMPTION AND PREPAYMENT OF NOTES...............................60
SECTION 10.1 Redemption and Prepayment.............................60
SECTION 10.2 Form of Redemption Notice.............................60
SECTION 10.3 Notes Payable on Redemption Date......................61
ARTICLE XI. MISCELLANEOUS...................................................61
SECTION 11.1 Compliance Certificates and Opinions, etc.............61
SECTION 11.2 Form of Documents Delivered to Indenture Trustee......63
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SECTION 11.3 Acts of Noteholders...................................64
SECTION 11.4 Notices, etc. to Indenture Trustee, Note Insurer,
Issuer and Rating Agencies.........................64
SECTION 11.5 Notices to Noteholders; Waiver........................65
SECTION 11.6 [Reserved]............................................66
SECTION 11.7 Effect of Headings and Table of Contents..............66
SECTION 11.8 Successors and Assigns................................66
SECTION 11.9 Separability..........................................66
SECTION 11.10 Benefits of Indenture.................................67
SECTION 11.11 Legal Holidays........................................67
SECTION 11.12 GOVERNING LAW.........................................67
SECTION 11.13 Counterparts..........................................67
SECTION 11.14 Recording of Indenture................................67
SECTION 11.15 Trust Obligation......................................68
SECTION 11.16 No Petition...........................................68
SECTION 11.17 Inspection............................................69
SECTION 11.18 No Legal Title in Holders.............................69
SECTION 11.19 Rights of Note Insurer as Controlling Party...........69
SECTION 11.20 Effect of Termination Date............................69
EXHIBITS AND SCHEDULES
Exhibit A-1 -- Form of Class A Note
Exhibit A-2 -- Form of Class A Note
Exhibit A-3 -- Form of Class A Note
Exhibit B -- Form of Class B Note
Schedule A - Schedule of Receivables
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INDENTURE, dated as of ________, ____, between UNITED FIDELITY AUTO
RECEIVABLES TRUST [____-_], a Delaware business trust (the "Issuer"), and
______________________________, a national banking association, as Indenture
Trustee (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Notes and the Note Insurer.
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 Indenture Trustee for the
benefit of the Noteholders and the Note Insurer.
______________________________ (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 with respect to the Class A Notes, 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 _______________, _____ (as amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, the "Insurance Agreement"), among the parties thereto.
As an additional inducement to the Note Insurer to issue the Note Policy,
and as security for the performance by the Issuer of its obligations under this
Indenture, the Issuer has agreed to assign the Collateral (as defined below) as
collateral to the Indenture Trustee for the benefit of the Holders of the Notes
and the Note Insurer, as their respective interests may appear.
GRANTING CLAUSE
The Issuer hereby grants to the Indenture Trustee for the benefit of the
Note Insurer (so long as the Note Policy has not expired) and the Noteholders a
first-priority perfected security interest in all of the Issuer's right, title
and interest in, to and under the following collateral (the "Collateral") now
owned or hereafter acquired, which Collateral shall be held by the Trust
Collateral Agent on behalf of the Indenture Trustee, subject to the lien of this
Indenture:
(i) the Initial Receivables listed on Schedule A hereto and the
Subsequent Receivables listed on Schedule A to each Transfer Agreement, all
amounts due on or after the applicable Cut-off Date and received after the
applicable Cut-off Date;
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(ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any accessions thereto, and any
other interest of the Issuer in such Financed Vehicles and accessions,
including certificates of title and other evidence of ownership with
respect to such Financed Vehicles;
(iii) any proceeds from claims on any physical damage, credit life or
disability, GAP or other insurance policies thereon covering the Financed
Vehicles or the Obligors relating to the Receivables and any proceeds from
the liquidation of the Receivables or Financed Vehicles;
(iv) all property (including the right to receive Future Liquidation
Proceeds) that secures a contract and that has been acquired by or on
behalf of the Issuer pursuant to the liquidation of such Receivable;
(v) the Purchase Agreement, the Sale and Servicing Agreement and each
Transfer Agreement, insofar as such right, title and interest relates to
the Receivables or the Receivable Files or Financed Vehicles relating
thereto, including the right of the Issuer to cause the Transferor or the
Originator, as applicable, to repurchase the Receivables from the Issuer or
to make the indemnity payments in respect thereof under the circumstances
set forth in the Sale and Servicing Agreement and the Purchase Agreement,
as applicable;
(vi) the Dealer Recourse relating to the Receivables;
(vii) rebates or refunds of premiums and other amounts relating to
insurance policies and other items financed under the Receivables or
otherwise covering an Obligor or a Financed Vehicle;
(viii) all amounts and property from time to time held in or credited
to any of the Trust Accounts and the Lock-Box Account (to the extent such
amounts and property in the Lock-Box Account relate to the Receivables);
(ix) the Receivable Files and all other documents that the Originator
keeps on file in accordance with its customary procedures relating to the
Receivables, or the Obligors or Financed Vehicles relating thereto; and
(x) the proceeds of any and all of the foregoing.
The foregoing grant shall include all rights, powers and options (but none
of the obligations) of the Issuer, 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
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communications, to make waivers or other agreements, to exercise all rights and
options, to bring proceedings in the name of the Issuer or otherwise and
generally to do and receive anything that the Issuer is or may be entitled to do
or receive thereunder or with respect thereto.
The foregoing grant is made in trust to the Indenture Trustee for the
benefit of the Noteholders and the Note Insurer. The Indenture 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 required
in this Indenture in accordance with the provisions hereof to the end that the
interests of the parties and the Holders of the Notes and the Note Insurer,
recognizing the priorities of their respective interests, may be adequately and
effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
(a) Except as otherwise specified herein, the following terms have the
respective meanings set forth below for all purposes of this Indenture.
(b) Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Sale and Servicing Agreement or the
Trust Agreement.
"Act" has the meaning specified in Section 11.3(a).
"Authorized Officer" means, with respect to the Issuer, any officer of the
Originator or the Owner Trustee, as applicable, or agent acting pursuant to a
power of attorney, with respect to the Subservicer, any officer or agent of the
Subservicer, with respect to the Back-up Servicer, any officer or agent of the
Back-up Servicer, with respect to the Master Servicer, any officer or agent of
the Master Servicer, in each case who is identified as such on the list of
Authorized Officers delivered by the Owner Trustee, the Subservicer, the Back-up
Servicer, or the Master Servicer, as the case may be, to the Indenture Trustee
and the Note Insurer on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Certificate of Trust" means the certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
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"Class A Note" means a Class [A-1] Note, a Class [A-2] Note, or a Class [A-
3] Note, as applicable, substantially in the form of Exhibits A-1, A-2 and A-3,
respectively.
["Class B Note " means a Class B Note, substantially in the form of Exhibit
B.]
"Clearing Agency" means the Depository Trust Company or its successor,
which shall be an organization registered as a "clearing agency" pursuant to
Section 17A of the Securities Exchange Act of 1934, as amended.
"Clearing Agency Participant" means the Depository Trust Company, and its
successors, each of which shall be a broker, dealer, bank or 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.
"Collateral" has the meaning set forth in Granting Clause.
"Controlling Party" means the Note Insurer, so long as no Insurer Default
shall have occurred and be continuing, and the Indenture Trustee, at the
direction of the Majority Noteholders, for so long as an Insurer Default shall
have occurred and be continuing.
"Corporate Trust Office" means the principal corporate trust office of the
Indenture Trustee, which at time of execution of this Indenture is
______________________________, Attention: [____________] or at such other
address as the Indenture Trustee may designate from time to time by notice to
the Noteholders, the Subservicer, the Master Servicer, the Back-up Servicer, the
Note Insurer and the Issuer, or the principal corporate trust office of any
successor Indenture Trustee (the address of which the successor Indenture
Trustee will notify the Noteholders, the Note Insurer and the Issuer). With
respect only to the surrender of Notes for registration of transfer or exchange
or payment of the final distribution, "Corporate Trust Office" means, on the
date hereof, the office of the Indenture Trustee or its agent which is
[address].
"Default" means any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Executive Officer" means, with respect to any corporation, the Chairman of
the Board, the Vice Chairman, Chief Financial Officer, President, Executive Vice
President, any Vice President, the Secretary, Assistant Secretary, the
Treasurer, Assistant Treasurer, or Controller of such corporation; and with
respect to any partnership, any general partner xxxxxxx.
"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 have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) 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; provided that the amount of such
indebtedness if not so assumed shall in no event be deemed to be greater than
the fair market value from time to time (as reasonably determined in good faith
by the Issuer) of the property subject to such lien; 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 the terms hereof.
"Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee and the Note Insurer under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1,
prepared by an Independent appraiser or other expert appointed by an Issuer
Order and approved by the Indenture Trustee, and prior to the Termination Date,
the Note Insurer, which opinion or certificate shall state that the signer has
read the definition of "Independent" in the Sale and Servicing Agreement and
that the signer is Independent within the meaning thereof.
"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 Indenture Trustee a copy of which shall be delivered to the Note Insurer.
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"Issuer Secured Obligations" means all amounts and obligations which the
Issuer may at any time owe to or on behalf of the Note Insurer and the Indenture
Trustee for the benefit of the Noteholders under this Indenture or the Notes.
"Note Owner" means, with respect to any Note Registered in the name of the
Clearing Agency or its nominee, the Person who is the beneficial owner of such
Note, as reflected on the books of the 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 Register" and "Note Registrar" mean the register maintained and the
registrar appointed pursuant to Section 2.3.
"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 Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture); and
(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 Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser;
provided, however, that Notes which have been paid with the 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 Indenture 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 Class A Note Balance, Outstanding Class B Note Balance or
Outstanding Note Balance have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, the Subservicer, the Originator, the Transferor, any
other obligor upon the Notes, or any Affiliate of any of the foregoing Persons
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that
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a Responsible Officer of the Indenture 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 Indenture Trustee the pledgee's
right so to act with respect to such Notes and that the pledgee is not the
Issuer, any other obligor upon the Notes, the Transferor, the Originator or any
Affiliate of any of the foregoing Persons.
"Paying Agent" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.12
and is authorized by the Issuer to make the payments to and distributions from
the Trust Accounts including payment of principal of or interest on the Notes on
behalf of the Issuer.
"Plan" means any Person that is (i) an "employee benefit plan" (as defined
in Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(ii) a "plan" (as defined in Section 4975(e)(1) of the Code) that is subject to
Section 4975 of the Code or (iii) an entity whose underlying assets include
assets of a plan described in (i) or (ii) above by reason of such plan's
investment in the entity.
"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 2.4 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.
"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 such Rating Agency) prior notice thereof and that each Rating
Agency shall have notified the Transferor, the Subservicer, the Master Servicer,
the Back-up Servicer, the Indenture Trustee, the Owner Trustee, the Note Insurer
and the Issuer that such action will not result in a reduction or withdrawal of
the then current rating of the Notes (and with respect to the Class A Notes,
without regard to the Note Policy).
"Redemption Date" has the meaning set forth in Section 10.1.
"Redemption Amount" means, in the case of a redemption of the Notes
pursuant to Section 10.1, an amount equal to the amount of the Outstanding Class
A Note Balance and the Outstanding Class B Balance plus accrued and unpaid
interest thereon to but excluding the Redemption Date plus all amounts due to
the Note Insurer, the Indenture
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Trustee, the Trust Collateral Agent, the Collateral Agent, the Master Servicer
and the Back- up Servicer under the Basic Documents.
"Required Long-Term Debt Rating" shall be a rating on long-term unsecured
debt obligations of A2 by Xxxxx'x and A by S&P (or other equivalent rating by a
nationally recognized rating agency) and any requirement that long-term
unsecured debt obligations have the "Required Long-Term Debt Rating" shall mean
that such long-term unsecured debt obligations have the foregoing required
rating.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement dated
as of ________, ____, among the Issuer, the Originator, the Transferor, the
Subservicer, the Master Servicer, the Back-up Servicer and the Trust Collateral
Agent, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with its terms.
"Termination Date" means the latest of (i) the date all of the Notes are
paid in full, (ii) the expiration of the Note Policy and the return of the Note
Policy to the Note Insurer for cancellation, (iii) the date on which the Note
Insurer shall have received payment and performance of all of Insurer Secured
Obligations (as defined in the Spread Account Agreement) and (iv) the date on
which the Indenture Trustee shall have received payment and performance of all
Issuer Secured Obligations.
SECTION 1.2 Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in
effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words in the plural
include the singular.
SECTION 1.3 Directions. Any direction required to be given by the
Noteholders shall be given hereunder by the Note Insurer, unless a Note Insurer
Default shall have occurred and be continuing or the Class A Notes are no longer
Outstanding and the
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Note Insurer has received full payment and performance of all Insured Secured
Obligations, in which case the Majority Noteholders shall be entitled to give
such direction.
SECTION 1.4 Incorporation by Reference to the Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act ("TIA"), the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the ITA,
defined by reference to another statute or defined by Commission rule have the
meaning assigned to them by such definition.
ARTICLE II
THE NOTES
SECTION 2.1 Form. The Class [A-1] Notes, Class [A-2] Notes, Class [A-3]
Notes and Class [B] Notes, in each case together with the Indenture Trustee's
certificate of authentication, shall be in definitive registered form in
substantially the forms set forth in Exhibits A-1, A-2, A-3 and B to this
Indenture with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as
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determined by the officers executing such Notes, as evidenced by their execution
of such Notes.
Each Note shall be dated the date of its authentication. The terms of the
Notes set forth in Exhibits A-1, A-2, A-3 and B are part of the terms of this
Indenture.
SECTION 2.2 Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of the Authorized Officers of the Owner
Trustee. The signature of any such Authorized Officer on the Notes may be manual
or facsimile.
Notes bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon receipt of the Issuer Order authenticate
and deliver the Class [A-1] Notes for original issue in an aggregate principal
amount of $[________ ], the Class [A-2] Notes for original issue in an aggregate
principal amount of $[________ ], the Class [A-3] Notes for original issue in an
aggregate principal amount of $[________ ], and the Class [B] Notes for original
issue in an aggregate principal amount of $[________ ]. The Notes outstanding at
any time may not exceed such amount.
The Class A Notes shall be issuable as registered Notes in the minimum
denomination of $1,000 and integral multiples of $1,000 in excess thereof. The
Class B Notes shall be issuable as registered Notes in the minimum denomination
of [$__________] and integral multiples of [$__________] in excess thereof.
It is intended that the Notes be registered so as to participate in a
book-entry system with the Clearing Agency as set forth herein. Each of the
Class [A-1] Notes, Class [A-2] Notes, Class [A-3] Notes and Class [B] Notes
shall be initially issued in the form of a single fully-registered note with a
denomination equal to the Class [A-1] Initial Note Balance, Class [A-2] Initial
Note Balance, Class [A-3] Initial Note Balance or Class [B] Initial Note
Balance, as applicable. Upon initial issuance, the ownership of such Notes shall
be registered in the Note Register in the name of Cede & Co., or any successor
thereto, as nominee for the Clearing Agency.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its Responsible Officers,
and such certificate upon any Note shall
10
be conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.3 Registration of Transfer and Exchange of Notes.
(a) The Note Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 2.7, a Note Register in which, subject to
such reasonable regulations as it may prescribe, the Indenture Trustee shall
provide for the registration of Notes and of transfers and exchanges of Notes as
herein provided. The Indenture Trustee shall be the initial Note Registrar. In
the event that, subsequent to the Closing Date, the Indenture Trustee notifies
the Transferor and the Note Insurer that it is unable to act as Note Registrar,
the Transferor shall appoint another bank or trust company, having an office or
agency located in the Borough of Manhattan, The City of New York, agreeing to
act in accordance with the provisions of this Indenture applicable to it, and
otherwise acceptable to the Indenture Trustee, and, prior to the Termination
Date, the Note Insurer, to act as successor Note Registrar under this Indenture.
No sale, pledge or other transfer of a Class B Note shall be made unless
such sale, pledge or other transfer is (I)(A) pursuant to an effective
registration statement under the 1933 Act, (B) for so long as the Class B Notes
are eligible for resale pursuant to Rule 144A under the 1933 Act to a Person the
transferor reasonably believes after due inquiry is a "qualified institutional
buyer" as defined in Rule 144A that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
transfer is being made in reliance on Rule 144A, or (C) pursuant to another
available exemption from the registration requirements of the 1933 Act, and (II)
to a Person that satisfies the requirements of paragraph (a)(2)(i) or (a)(2)(ii)
of Rule 3a-7 as then in effect or any successor rule under the Investment
Company Act of 1940, as amended and any applicable state securities and blue sky
laws. The Indenture Trustee may require an opinion of counsel to be delivered to
it in connection with any transfer of the Class B Notes pursuant to clauses (A)
or (C) above.
Under no circumstances may an institutional "accredited investor" within
Regulation D of the Securities Act take delivery in the form of a beneficial
interest in a book- entry Class B Note if such purchaser is not a "qualified
institutional buyer" as defined under Rule 144A under the Securities Act.
If definitive Class B Notes are issued, the Class B Notes may not be
transferred, directly or indirectly, to any Person unless (A) the transferee of
the Class B Note certifies in a certificate to the Issuer and the Indenture
Trustee that such Person is a "qualified institutional buyer" as defined in Rule
144A under the 1933 Act or (B) the transferee of the Class B Note delivers to
the Indenture Trustee and the Issuer an opinion of counsel that such transfer is
permitted pursuant to clause (A) or (C) above.
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All opinions of counsel required in connection with any transfer shall be
by counsel reasonably acceptable to the Indenture Trustee.
No transfer of a Class B Note shall be made to any Person unless the
Indenture Trustee has received a certificate from such transferee, in form and
substance acceptable to the Indenture Trustee, to the effect that such
transferee (a) is not a Plan, and is not acting on behalf of or investing the
assets of a Plan or (b) is acquiring a Class B Note and is entitled to exemptive
relief pursuant to a Department of Labor prohibited transaction class exemption
with respect to its acquisition and continued holding of such Class B Note. The
preparation and delivery of the certificate referred to above shall not be an
expense of the Indenture Trustee, the Issuer or the Transferor but shall be
borne by the transferee. Each transferee of a beneficial ownership interest in a
book-entry Class B Note shall be deemed to have made one of the foregoing
representations by its acquisition of such Class B Note.
Neither the Issuer nor the Indenture Trustee is obligated to register the
Class B Notes under the 1933 Act or any other securities law. Any transfer in
violation of the provisions of this Section 2.3 shall be void ab initio.
The Class B Notes shall bear legends stating that they have not been
registered under the Securities Act and are subject to the restrictions on
transfer described in this Section 2.3(a). By purchasing a Class B Note, each
purchaser shall be deemed to have agreed to such restrictions on transfer.
(b) The Notes shall be held in book-entry form, and with respect thereto:
(i) the Note Registrar, the Note Insurer and the Indenture Trustee
will 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;
(ii) the rights of Note Owners will be exercised only through the
Clearing Agency and will be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Depository Agreement;
(iii) whenever this Indenture or any of the Basic Documents requires
or permits actions to be taken based upon instructions or directions of
Holders of Notes evidencing a specified percentage of the Class A Note
Balance, the Class B Note Balance or the Note Balance, the Clearing Agency
will 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
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representing, respectively, such required percentage of the beneficial
interest in the Notes and has delivered such instructions to the Indenture
Trustee; and
(iv) without the consent of the Indenture Trustee, no such Note may be
transferred by the Clearing Agency except to a successor Clearing Agency
that agrees to hold such Note for the account of the Note Owners or except
upon the election of the Note Owner thereof or a subsequent transferee to
hold such Note in physical form.
None of the Indenture Trustee, the Note Registrar or the Note Insurer shall
have any responsibility to monitor or restrict the transfer of beneficial
ownership in any Note an interest in which is transferable through the
facilities of the Clearing Agency.
If (i)(A) the Issuer advises the Indenture Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Notes as described in the Depository
Agreement and (B) the Issuer is unable to locate a qualified successor with
respect to which (unless a Note Insurer Default shall have occurred and be
continuing) the Note Insurer has provided its prior written consent, (ii) the
Issuer at its option advises the Indenture Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency, or (iii) after the
occurrence of an Event of Default, the Controlling Party advises the Indenture
Trustee and the Clearing Agency through the Clearing Agency Participants in
writing that the continuation of a book-entry system through the Clearing Agency
with respect to the Notes is no longer in the best interests of the related Note
Owners, then the Indenture Trustee shall notify all such Note Owners and the
Note Insurer, through the Clearing Agency, and the Note Insurer of the
occurrence of any such event and of the availability of definitive Notes to such
Note Owners requesting the same. Upon surrender to the Indenture Trustee of the
Notes by the Clearing Agency accompanied by registration instructions from the
Clearing Agency, the Indenture Trustee shall issue definitive Notes and deliver
such definitive Notes in accordance with the instructions of the Clearing
Agency. None of the Issuer, the Note Registrar, the Note Insurer, or the
Indenture Trustee shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of definitive Notes, the Indenture Trustee shall
recognize the Holders of the definitive Notes as Noteholders hereunder.
(c) In order to preserve the exemption for resales and transfers provided
by Rule 144A under the Securities Act, the Issuer shall provide to any Holder of
a Class B Note and any prospective purchaser designated by such Holder, upon
request of such Holder or such prospective purchaser, such information required
by Rule 144A as will enable the resale of such Class B Note to be made pursuant
to Rule 144A. The Servicer and the Indenture Trustee shall cooperate with the
Issuer in providing the Issuer such information
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regarding the Class B Notes, the Trust Property and other matters regarding the
Issuer as the Issuer shall reasonably request to meet its obligations under the
preceding sentence.
(d) Upon surrender for registration of transfer of any Note at the
Corporate Trust Office, the Indenture Trustee shall, subject to Section 2.3(a),
authenticate, and deliver, in the name of the designated transferee or
transferees, one or more new Notes of such Class in authorized denominations of
a like aggregate amount dated the date of authentication by the Indenture
Trustee. At the option of a Holder, Notes may be exchanged for other Notes of
such Class in authorized denominations of a like aggregate amount upon surrender
of the Notes to be exchanged at the Corporate Trust Office.
(e) Every Note presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee and the Note Registrar duly executed by
the Holder or his attorney duly authorized in writing. Each Note surrendered for
registration of transfer or exchange shall be cancelled and subsequently
disposed of by the Indenture Trustee in accordance with its customary practice.
(f) No service charge shall be made for any registration of transfer or
exchange of Notes, but the Indenture Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Notes.
SECTION 2.4 Mutilated, Destroyed, Lost, or Stolen Notes. If (a) any
mutilated Note shall be surrendered to the Note Registrar, or if the Note
Registrar shall receive evidence to its satisfaction of the destruction, loss,
or theft of any Note and (b) there shall be delivered to the Note Insurer, the
Issuer, the Indenture Trustee and the Note Registrar such security or indemnity
as may be required by it to hold the Note Insurer, the Issuer, the Indenture
Trustee, the Note Registrar and the Note Insurer harmless, then in the absence
of notice that such Note shall have been acquired by a bona fide purchaser, the
Owner Trustee on behalf of the Issuer shall execute and the Indenture Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost, or stolen Note, a new Note of the same Class. In
connection with the issuance of any new Note under this Section, the Indenture
Trustee and the Note Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Note issued pursuant to this Section shall constitute
valid obligations of the Issuer, evidencing the same debt and entitled to the
same benefits of this Indenture, as if originally issued, whether or not the
lost, stolen, or destroyed Note shall be found at any time.
SECTION 2.5 Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee, the
Note Registrar and
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any agent of the Issuer, the Indenture Trustee, the Note Insurer, the Note
Insurer or the Note Registrar may treat the Person in whose name any Note shall
be registered (as of the Record Date) as the owner of such Note for the purpose
of receiving distributions pursuant to Section 5.12 of the Sale and Servicing
Agreement and Sections 3.2 and 5.2 hereof and for all other purposes whatsoever,
whether or not such Note be overdue, and none of the Issuer, the Indenture
Trustee, the Note Insurer nor the Note Registrar nor any such agent shall be
bound by any notice to the contrary.
SECTION 2.6 Access to List of Noteholders' Names and Addresses. The
Indenture Trustee shall furnish or cause to be furnished to the Subservicer, the
Master Servicer, the Back-up Servicer or the Note Insurer within 15 days after
receipt by the Indenture Trustee of a request therefor from the Subservicer, the
Master Servicer, the Back- up Servicer or the Note Insurer in writing, a list,
in such form as the Subservicer, the Master Servicer, the Back-up Servicer or
the Note Insurer may reasonably require, of the names and addresses of the
Noteholders as of the most recent Record Date. If three or more Noteholders, or
one or more Holders of Notes aggregating not less than 10% of the Note Balance,
apply in writing to the Indenture Trustee, and such application states that the
applicants desire to communicate with other Noteholders with respect to their
rights under this Indenture or under the Notes and such application shall be
accompanied by a copy of the communication that such applicants propose to
transmit, then the Indenture Trustee shall, within five Business Days after the
receipt of such application, make available to such Noteholders access during
normal business hours to the current list of Noteholders. Each Holder, by
receiving and holding a Note, shall be deemed to have agreed to hold none of the
Subservicer, the Master Servicer, the Back-up Servicer, the Note Insurer nor the
Indenture Trustee accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 2.7 Maintenance of Office or Agency. The Indenture Trustee shall
maintain in _______________, __________, an office or offices or agency or
agencies where Notes may be surrendered for registration of transfer or exchange
and an office in _______________, __________ where notices and demands to or
upon the Indenture Trustee in respect of the Notes and this Indenture may be
served. The Indenture Trustee initially designates the Corporate Trust Office as
specified in this Indenture as its office for such purposes. The Indenture
Trustee shall give prompt written notice to the Subservicer, the Master
Servicer, the Back-up Servicer, the Note Insurer and to Noteholders of any
change in the location of the Note Register or any such office or agency.
SECTION 2.8 Payment of Principal and Interest; Defaulted Interest.
(a) Each Class of Notes shall accrue interest as provided in the form of
the Notes set forth in Exhibits A-1, A-2, A-3 and B and such interest shall be
due and payable on each Distribution Date as specified therein. Any installment
of interest or
15
principal, if any, payable on any Note which is punctually paid or duly provided
for by the Issuer on the applicable Distribution Date shall be paid as set forth
in Section 5.12(a) of the Sale and Servicing Agreement. In furtherance of and in
limitation of the foregoing, each Noteholder, by its acceptance of a Note,
specifically acknowledges that it has no right to or interest in any monies at
any time held pursuant to the Spread Account Agreement prior to the release of
such monies pursuant to Section 3.03(b) of the Spread Account Agreement, such
monies being held in trust for the benefit of the Secured Parties.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the form of the Notes set forth in Exhibits
A-1, A-2, A-3 and B. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes may become due and payable, if not previously paid, upon the
occurrence of an Event of Default in the manner provided in Section 5.2. All
principal payments on the Notes shall be made as provided in Section 5.2 hereof
and in Section 5.12(a) of the Sale and Servicing Agreement, as applicable. Upon
written notice from the Issuer, the Indenture Trustee shall notify the Person in
whose name a Note is registered at the close of business on the Record Date
preceding the Distribution 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 Distribution
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 redemption of the Notes shall be mailed to Noteholders as
provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on any Class of the
Notes, the Issuer shall pay any Class A-1 Interest Carryover Shortfall, Class
A-2 Interest Carryover Shortfall, Class A-3 Interest Carryover Shortfall and
Class B Interest Carryover Shortfall on subsequent Distribution Dates pursuant
to Section 5.12(a) of the Sale and Servicing Agreement.
(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
Indenture Trustee, the Indenture 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 2.9 Cancellation. Subject to Section 2.8(d), all Notes surrendered
for payment, registration of transfer, exchange or redemption shall, if
surrendered to any Person other than the Indenture Trustee, be delivered to the
Indenture Trustee and shall be promptly canceled by the Indenture Trustee.
Subject to Section 2.8(d), the Issuer may at any time deliver to the Indenture
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Issuer may have acquired in any
16
manner whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture 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 2.8(d), all canceled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall timely
direct by an Issuer Order that such Notes be destroyed or returned to it;
provided that such Notes have not been previously disposed of by the Indenture
Trustee prior to its receipt of such Issuer Order.
SECTION 2.10 Release of Collateral. The Indenture Trustee shall, on or
after the Termination Date, release and shall cause the Trust Collateral Agent
to release any remaining portion of the Trust Property from the lien created by
this Indenture and shall cause the Trust Collateral Agent to deposit in the
Collection Account any funds then on deposit in any other Trust Account. The
Indenture Trustee shall release property from the lien created by this Indenture
pursuant to this Section only upon receipt by the Indenture Trustee and the Note
Insurer of an Issuer Request accompanied by an Officer's Certificate and an
Opinion of Counsel meeting the applicable requirements of Section 11.1.
ARTICLE III
COVENANTS
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 to the Noteholders all amounts on deposit in
the Class A Note Distribution Account and Class B Note Distribution Account on a
Distribution Date deposited therein pursuant to the Sale and Servicing Agreement
for the benefit of the Notes. Amounts properly withheld under the Code by any
Person from a payment to any Noteholder of interest and/or principal shall be
considered as having been paid by the Issuer to such Noteholder for all purposes
of the Notes and this Indenture.
SECTION 3.2 Maintenance of Office or Agency. The Issuer will maintain in
_______________, __________, an office or agency where Notes may be surrendered
for registration of transfer or exchange, and an office in _______________,
__________ where notices and demands to or upon the Issuer in respect of the
Notes and this Indenture may be served. The Issuer hereby initially appoints the
Indenture Trustee to serve as its agent for the foregoing purposes. The Issuer
will give prompt written notice to the Indenture Trustee and the Note Insurer of
the location, and of any change in the location, of any such office or agency.
If at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Indenture Trustee or the Note Insurer with the address
thereof, such surrenders, notices and demands may be made or served at the
Corporate Trust
17
Office, and the Issuer hereby appoints the Indenture Trustee as its agent to
receive all such surrenders, notices and demands.
SECTION 3.3 Money for Payments to be Held in Trust. (a) On or before each
Distribution Date and the 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 Paying Agent is the Indenture Trustee) shall promptly notify the
Indenture Trustee of its action or failure so to act.
(b) The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee and the Note Insurer an
instrument in which such Paying Agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee and the Note Insurer notice of any
default by the Issuer of which a Responsible Officer has actual knowledge
(or any other obligor upon the Notes) in the making of any payment required
to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, or, prior to the Termination
Date, the Note Insurer, forthwith pay to the Indenture Trustee all sums so
held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith in each case, as instructed
by the Issuer.
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(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 Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such a payment by any Paying Agent to the Indenture Trustee, such 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 Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request, with the written consent of the
Note Insurer (unless an Insurer Default shall have occurred and be continuing)
if the Termination Date has not occurred; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that if such money or
any portion thereof had been previously deposited by the Note Insurer or the
Trust Collateral Agent with the Indenture 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 the
Indenture Trustee's receipt of a written request by the Note Insurer to such
effect; and provided, further, that the Indenture Trustee or such Paying Agent,
before being required to make any such repayment, shall at the expense of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in [The City of New York], notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee shall also adopt and employ,
at the expense of the Issuer, any other reasonable means of notification of such
repayment (including, but not limited to, mailing notice of such repayment to
Holders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Holder).
SECTION 3.4 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 business trust under the laws of the State of Delaware 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 Property.
19
SECTION 3.5 Protection of Trust Property. The Issuer intends the security
interest granted pursuant to this Indenture in favor of the Indenture Trustee,
the Noteholders and the Note Insurer to be prior to all other Liens in respect
of the Trust Property, and the Issuer shall take all actions necessary to obtain
and maintain, in favor of the Indenture Trustee, the Noteholders and the Note
Insurer, a first Lien on and a first priority, perfected security interest in
the Trust Property. 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 Property or
maintain the Trust Property free and clear of all Liens other than the Lien
created hereby;
(ii) maintain or preserve the Lien and security interest (and the
priority thereof) in favor of the Indenture Trustee, for the benefit of the
Noteholders and the Note Insurer, 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 Property and the rights of
the Indenture Trustee, the Noteholders and the Note Insurer in such Trust
Property against the claims of all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the Trust
Property when due.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute, upon request, any financing statement, continuation
statement or other instrument required to be executed by the Issuer pursuant to
this Section.
SECTION 3.6 Opinions as to Trust Property.
(a) On the Closing Date and on the date of each indenture supplement
hereto, if any, the Issuer shall furnish to the Indenture 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, and indentures supplemental
20
hereto and other requisite documents and with respect to the execution and
filing of any financing statements and continuation statements, as are necessary
to perfect and make effective the first priority Lien and security interest in
favor of the Indenture Trustee for the benefit of the Noteholders and the Note
Insurer, 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 30 days after the beginning of each calendar year, beginning
with the first calendar year beginning more than three months after the Closing
Date, the Issuer shall furnish to the Indenture 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
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as are necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such Lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re- recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until the 30th day
to occur in the following calendar year.
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 Property 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 to assist it in performing its duties under this Indenture, and any
performance of such duties by a Person identified to the Indenture 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
Subservicer, and the Subservicer has agreed 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
21
agreements included in the Trust Property, including, but not limited to,
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 other Basic Documents in accordance with and
within the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without the
consent of the Indenture Trustee or the Note Insurer (unless an Insurer Default
has occurred and is continuing).
(d) The Issuer shall promptly notify the Indenture Trustee, the Note
Insurer and the Rating Agencies of the occurrence of an Event of Default, and,
if the Issuer shall have actual knowledge of the occurrence of a Servicer
Default or Master Servicer Default, a Servicer Default or Master Servicer
Default 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 an Event of
Default, Servicer Default or Master Servicer Default shall arise from the
failure of the Subservicer or the Master Servicer to perform any of its duties
or obligations under the Sale and Servicing Agreement with respect to the
Receivables, the Issuer shall take all reasonable steps available to it to
remedy such failure.
(e) The Issuer agrees that it will not waive timely performance or
observance by the Subservicer, the Servicer or the Master Servicer or the
Transferor of their respective duties under the Basic Documents, prior to the
Termination Date without the prior written consent of the Note Insurer (unless
an Insurer Default shall have occurred and be continuing), or 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
Property, unless directed to do so by the Indenture Trustee with the prior
written consent of the Note Insurer (unless an Insurer Default shall have
occurred and be continuing) the Note Insurer;
(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 Property;
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(iii) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the Lien in favor of the Indenture 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 Property 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
perfected first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Trust Property or (D)
amend, modify or fail to comply with the provisions of the Basic Documents,
prior to the Termination Date, without the prior written consent of the
Note Insurer; or
(iv) engage in any business or activity other than as permitted by the
Trust Agreement;
(v) incur or assume any indebtedness or guarantee any indebtedness of
any Person, except for such indebtedness incurred pursuant to Section 3.10;
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.
SECTION 3.9 Annual Statement as to Compliance. The Issuer will deliver to
the Indenture Trustee, the Rating Agencies, the Note Insurer and the Noteholders
on or before March 31 of each year beginning in the year 2003, an Officer's
Certificate dated as of the previous December 31 stating, as to the Authorized
Officer signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during the preceding 12-
month period (or, for the initial certificate, for such shorter period as
may have elapsed from the initial issuance of the Notes to such December
31st) and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has complied with all conditions and covenants under
this Indenture throughout such year, or, if there has been a default in the
compliance of
23
any such condition or covenant, specifying each such default known to such
Authorized Officer and the nature and status thereof.
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws of the United States of America or any State and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee, and prior
to the Termination Date, the Note Insurer, the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the part of
the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee and the Note
Insurer) to the effect that such transaction will not have any material
adverse tax consequence to the Issuer, the Note Insurer, any Noteholder or
the Certificateholder;
(v) any action as is necessary to maintain the Lien and security
interest created by this Indenture shall have been taken;
(vi) 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 twenty (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; and
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(vii) the Issuer shall have delivered to the Indenture 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 Section 3.10 and that all conditions precedent herein
provided for relating to such transaction have been complied with.
(b) The Issuer shall not convey or transfer all or substantially all of its
properties or assets, including those included in the Trust Property, 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 United States citizen or a Person organized and
existing under the laws of the United States of America or any State, (B)
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee, and prior to the Termination Date, the Note Insurer, 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 and (D) unless otherwise provided in such supplemental indenture,
expressly agree to indemnify, defend and hold harmless the Issuer and the
Note Insurer against and from any loss, liability or expense arising under
or related to this Indenture and the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel and shall
have delivered copies thereof to the Indenture Trustee and the Note Insurer
to the effect that such transaction will not have any material adverse tax
consequence to the Issuer, the Note Insurer, any Noteholder or any
Certificate holder;
(v) any action as is necessary to maintain the Lien and security
interest created by this Indenture shall have been taken;
(vi) so long as no Note 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 twenty (20) Business Days prior to the
consummation
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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;
and
(vii) the Issuer shall have delivered to the Indenture Trustee and the
Note Insurer an Officer's Certificate and an Opinion of Counsel each
stating that such conveyance or transfer and such supplemental indenture
comply with this Section 3.10 and that all conditions precedent herein
provided for relating to such transaction have been complied with.
SECTION 3.11 Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.10(b), the Issuer 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 from the Issuer to the Indenture Trustee and the Note Insurer stating
that the Issuer 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 Pre-Funding Period, the Issuer shall
not fund the acquisition of 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 the other Basic Documents
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 required deposits in the Spread Account,
the Pre-Funding Account and the Capitalized Interest Account and to pay the
Issuer's organizational, transactional and start-up expenses.
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SECTION 3.14 Servicer's Obligations. The Issuer shall cause the Servicer to
comply with Sections 4.12, 4.13, 4.14 and 5.15 of the Sale and Servicing
Agreement.
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by the Sale and Servicing Agreement or this Indenture, the Issuer
shall not make any loan or advance 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. Except as expressly permitted by the
Basic Documents, 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 Subservicer, the Servicer, the Master Servicer or the Back-up 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 Subservicer, the Servicer, the Master
Servicer, the Back-up Servicer, the Owner Trustee, the Indenture Trustee, the
Trust Collateral Agent, the Collateral Agent, the Note Insurer and the
Certificateholder as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement, the Spread Account
Agreement and the Trust Agreement. The Issuer will not, directly or indirectly,
make payments to or distributions from the Collection Account or any other Trust
Account except in accordance with this Indenture and the Basic Documents.
SECTION 3.19 Notice of Events of Default. Upon a Responsible Officer of the
Owner Trustee having actual knowledge or receipt of written notice thereof,
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the Issuer agrees to give the Indenture Trustee, the Trust Collateral Agent, the
Note Insurer and the Rating Agencies prompt written notice of each Event of
Default hereunder and each default on the part of the Subservicer, the Servicer,
the Master Servicer, the Back-up Servicer or the Transferor of its obligations
under the Sale and Servicing Agreement.
SECTION 3.20 Further Instruments and Acts. Upon request of the Indenture
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 Income Tax Characterization. For purposes of federal income,
state and local income and franchise and any other income taxes, the Issuer
will, and each Noteholder by such Noteholder's acceptance thereof agrees to,
treat the Notes as indebtedness of the Issuer and hereby instructs the Indenture
Trustee to treat the Notes as indebtedness of the Issuer for federal and state
tax reporting purposes.
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, 3.7, 3.8, 3.10, 3.12, 3.13, 3.14, 3.15, 3.16, 3.17,
3.19, 3.20 and 3.21, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.7 and the obligations of the Indenture Trustee under Section 4.2), (vi) the
rights of Noteholders as beneficiaries hereof with respect to the property so
deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than (i)
Notes that have been destroyed, lost or stolen and that have been replaced
or paid as provided in Section 2.4 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 Indenture
Trustee for
28
cancellation and the Note Policy has expired and been returned to the Note
Insurer for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation
(i) have become due and payable,
(ii) will become due and payable at the Class A-1 Stated Final
Maturity Date, Class A-2 Stated Final Maturity Date, Class A-3 Stated
Final Maturity Date or Class B Stated Final Maturity Date, as the case
may be, within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in the name, and at the
expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) of this clause (2), has
irrevocably deposited or caused to be irrevocably deposited with the Trust
Collateral Agent cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore delivered to the
Indenture Trustee for cancellation when due to the Class A-1 Stated Final
Maturity Date, Class A-2 Stated Final Maturity Date, Class A-3 Stated Final
Maturity Date or Class B Stated Final Maturity Date, as the case may be, or the
Redemption Date (if Notes shall have been called for redemption pursuant to
Section 10.1), as the case may be;
(B) the Issuer has paid or caused to be paid all Issuer Secured Obligations
and has paid or caused to be paid all of its obligations to the Note Insurer;
(C) the Issuer has delivered to the Indenture Trustee and the Note Insurer
an Officer's Certificate, an Opinion of Counsel and if required by the Indenture
Trustee or the Note Insurer an Independent Certificate from a firm of certified
public accountants, 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; and
(D) Upon the satisfaction and discharge of the Indenture pursuant to this
Section 4.1, the Indenture Trustee shall deliver to the Owner Trustee and the
Note Insurer a certificate of a Responsible Officer stating (i) that the Note
Insurer, Noteholders and the Indenture Trustee have been paid all amounts owed
to them, and
29
(ii) to the best knowledge of such Responsible Officer, either (a)
stating that no claims remain against the Issuer, or (b) that the only
pending or threatened claims known to such Responsible Officer (including
contingent and unliquidated claims) are those listed on a schedule to such
certificate.
SECTION 4.2 Application of Trust Money. All moneys deposited with the
Indenture 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 Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such moneys have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such moneys need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.3 Repayment of Moneys Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
moneys then held by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.3 and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
ARTICLE V
REMEDIES
SECTION 5.1 Event of Default. "Event of Default", wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) default in the payment of any interest on any Note when the same
becomes due and payable and such default shall continue for a period of
five days after notice thereof is given to the Issuer by the Indenture
Trustee, the Note Insurer or the Servicer or the Issuer and the Indenture
Trustee by the Majority Noteholders (solely for purposes of this clause, a
payment on the Notes funded by the Note Insurer or the Collateral Agent
from the Spread Account shall be deemed to be a payment made by the
Issuer);
(ii) default in the payment of the principal of or any installment of
the principal of any Note on the Class A-1 Stated Final Maturity Date,
Class A-2 Stated Final Maturity Date, Class A-3 Stated Final Maturity Date
or Class B Stated
30
Final Maturity Date (solely for purposes of this clause, a payment on the
Notes funded by the Note Insurer or the Collateral Agent from the Spread
Account, shall be deemed to be a payment made by the Issuer);
(iii) so long as an Insurer Default shall not 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 Indenture Trustee and not
rescinded a written notice specifying that such Insurance Agreement
Indenture Cross Default constitutes an Event of Default under this
Indenture;
(iv) so long as an Insurer Default shall have occurred and be
continuing, 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, in any Basic Document or in any
certificate or any other writing delivered pursuant hereto or in connection
herewith or therewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such default
shall (A) materially and adversely affect the Noteholders or the Note
Insurer and (B) continue or not be cured, or the circumstance or condition
in respect of which such misrepresentation or warranty was incorrect shall
not have been eliminated or otherwise cured, for a period of 30 days after
there shall have been given to the Issuer by the Indenture Trustee or to
the Issuer and the Indenture Trustee by the Majority Noteholders or the
Note Insurer, 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;
(v) so long as an Insurer Default shall have occurred and be
continuing, the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Property in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Property, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days;
(vi) so long as an Insurer Default shall have occurred and be
continuing, the commencement by the Issuer of a voluntary case under any
31
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Property, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing;
(vii) the Issuer becoming taxable as an association (or publicly
traded partnership) taxable as a corporation for federal or state income
tax purposes; or
(viii) the Issuer or the Transferor being treated as an investment
company pursuant to the Investment Company Act of 1940.
SECTION 5.2 Rights Upon Event of Default.
(a) If (i) an Event of Default described in clause (iii), (vii) or (viii)
of Section 5.1 shall have occurred, the Note Insurer so declares, the entire
unpaid principal amount of the Notes, all interest accrued and unpaid thereon
and all other amounts payable under this Indenture and the Basic Documents shall
become immediately due and payable, (ii) an Event of Default described in clause
(i) or (ii) of Section 5.1 shall have occurred, the Indenture Trustee, if so
requested in writing by the Note Insurer, or, if an Insurer Default has occurred
and is continuing, the Majority Noteholders, shall declare the entire principal
amount of the Notes, all interest accrued and unpaid thereon and all other
amounts payable under this Indenture and the other Basic Documents to be
immediately due and payable, or (iii) an Event of Default described in clause
(iv), (v) or (vi) of Section 5.1 shall have occurred, the Indenture Trustee, if
so requested in writing by the Majority Noteholders, shall declare the entire
principal amount of the Notes and interest accrued and unpaid thereon and all
other amounts payable under this Indenture and the other Basic Documents to be
immediately due and payable.
(b) If an Event of Default occurs and the Notes have been accelerated, the
Indenture Trustee may exercise any of the remedies specified in Section 5.4(a).
Payments following acceleration of any Notes shall be applied by the Indenture
Trustee:
FIRST: to the Master Servicer, the Master Servicer Fee or the
Successor Servicer Fee, as applicable; to the Subservicer, the Servicing
Fee and to the Back-up Servicer, the Back-up Servicer Fee or Successor
Servicer Fee, as applicable; to the Indenture Trustee, the Collateral Agent
and the Trust Collateral Agent, the Trust Collateral Agent's Fees and the
reasonable out-of-pocket expenses of the Indenture
32
Trustee incurred pursuant to Section 6.7 hereof; and to the Owner Trustee,
the Owner Trustee's Fees, in each case, for such Distribution Date and
together with all such unpaid fees from prior Distribution Dates;
SECOND: to Holders of Class A-1, A-2 and A-3 Notes pro rata to the
Noteholders of such Class for amounts due and unpaid on the Class A-1, A-2
and A- 3 Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class A Notes for
interest;
THIRD: to Holders of Class A-1, A-2 and A-3 Notes pro rata to the
Noteholders of such Class for amounts due and unpaid on the Class A-1, A-2
and A- 3 Notes for principal, according to the amounts due and payable on
the Class A-1 A- 2 and A-3 Notes for principal;
FOURTH: to the Note Insurer, the Premium and all other amounts payable
to it under the Insurance Agreement;
FIFTH: to Holders of Class B Notes for amounts due and unpaid on the
Class B Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class B Notes for
interest;
SIXTH: to Holders of Class B Notes for amounts due and unpaid on the
Class B Notes for principal, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal;
and
SEVENTH: to the Certificateholder, all remaining amounts.
(c) 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 the Class A Notes, in whole or in part, on any date or dates
following such acceleration as the Note Insurer, in its sole discretion, shall
elect.
(d) At any time after declaration of acceleration of maturity has been made
and before a judgment or decree for payment of the money due has been obtained
by the Indenture Trustee as hereinafter in this Article V provided, the Note
Insurer, or, if the Termination Date has occurred or an Insurer Default shall
have occurred and be continuing, the Majority Noteholders, by written notice to
the Issuer and the Indenture Trustee, may rescind and annul such declaration and
its consequences if:
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(i) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(A) all payments of principal of and interest on all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred, which funds shall be deposited into the Note Distribution
Account;
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel, which funds shall
be deposited into the Collection Account; and
(C) all sums paid or advanced by or due to the Note Insurer and
any unpaid Premium, which funds shall be paid to the Note Insurer; and
(ii) all Events of Default, other than the nonpayment of the interest
on or the principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer hereby irrevocably and unconditionally appoints the
Indenture Trustee as the true and lawful attorney-in-fact of the Issuer, with
full power of substitution, to execute, acknowledge and deliver any notice,
document, certificate, paper, pleading or instrument and to do in the name of
the Indenture Trustee as well as in the name, place and stead of the Issuer such
acts, things and deeds for or on behalf of and in the name of the Issuer under
this Indenture (including specifically under Section 5.4) and under the Basic
Documents which the Issuer could or might do or which may be necessary,
desirable or convenient in the Indenture Trustee'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, prior to the
Termination Date, acting at the instruction or with the consent of the Note
Insurer (so long as no Insurer Default shall have occurred and be continuing),
and thereafter acting at the instruction or with the consent of the Majority
Noteholders, 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 Property.
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(b) Notwithstanding anything to the contrary contained in this Indenture
(including, without limitation, Sections 5.4(a), 5.12, 5.13 and 5.16) if an
Event of Default shall have occurred and be continuing, the Indenture Trustee,
prior to the Termination Date, may with the prior written consent of the Note
Insurer or shall at the direction of the Note Insurer (so long as no Insurer
Default shall have occurred and be continuing), and thereafter may at its
discretion, proceed to protect and enforce its rights and the rights of the
Noteholders and the Note Insurer by such appropriate proceedings as the
Indenture Trustee shall deem most effective to protect and enforce any such
rights, whether for specific performance of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy or legal or equitable right vested in the Indenture
Trustee by this Indenture or by law.
(c) 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 Property 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 Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel, and
for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence, 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 the Notes in any election of a trustee, a standby
trustee or person performing similar functions in any such proceedings;
(iii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute all amounts received with
respect to the claims of the Noteholders and of the Indenture Trustee on
their behalf; and
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(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee or the Holders of the Notes allowed in any judicial proceedings
relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence, bad faith or
willful misconduct.
(d) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such Proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes and the Note Insurer.
(f) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture),
the Indenture Trustee shall be held to represent all the Holders of the Notes,
and it shall not be necessary to make any Noteholder a party to any such
proceedings.
SECTION 5.4 Remedies.
(a) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee may (but, prior to the Termination Date, only with the prior
written consent of the Note Insurer (unless an Insurer Default shall have
occurred and be
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continuing)) and shall at the instruction of the Note Insurer (unless an Insurer
Default shall have occurred and be continuing) do any one or more of the
following:
(i) institute Proceedings in its own name and as trustee of an express
trust for the collection of all amounts then payable on the Notes or to the
Note Insurer under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect from
the Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Property;
(iii) exercise any remedies of a secured party under the UCC and take
any other appropriate action to protect and enforce the rights and remedies
of the Indenture Trustee and the Holders of the Notes and the Note Insurer;
and
(iv) direct the Trust Collateral Agent to sell the Trust Property or
any portion thereof or rights or interest therein, at one or more public or
private sales called and conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not direct the Trust
Collateral Agent to sell or otherwise liquidate the Trust Property
following an Event of Default unless
(X) (I) such Event of Default is of the type described in
Section 5.1(i), (ii), (iii), (vii) or, (viii); or
(II) such Event of Default is of the type described in
Section 5.1(iv), (v) or (vi) and the Majority
Noteholders consent thereto;
and
(Y) either (i) the proceeds of such sale or liquidation
would be in an amount sufficient to discharge in
full all amounts then due and unpaid upon such
Notes for principal and interest or (ii); the
Indenture Trustee determines that the Trust
Property will not continue to provide sufficient
funds for the payment of principal of and interest
on the Notes as they would have become due if the
Notes had not been declared due and payable;
provided, however, that, subject to Section 6.1, the Indenture Trustee
shall have the right to decline following any such direction if the Indenture
Trustee, being advised by an Opinion of Counsel, determines that the action may
not lawfully be taken, or if the
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Indenture Trustee in good faith shall, by a Responsible Officer, determine that
the proceedings so directed would be illegal or subject it to personal
liability.
SECTION 5.5 Optional Preservation of the Trust Property. 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 Indenture Trustee may, prior to the Termination Date with the
prior written consent of the Controlling Party, but need not unless directed by
the Controlling Party prior to the Termination Date, elect to direct the Trust
Collateral Agent to maintain possession of the Trust Property. It is the desire
of the parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and interest on the Notes, and the
Indenture Trustee shall take such desire into account when determining whether
or not to direct the Trust Collateral Agent to maintain possession of the Trust
Property. In determining whether to direct the Trust Collateral Agent to
maintain possession of the Trust Property, the Indenture Trustee may, but need
not unless directed by the Controlling Party prior to the Termination Date,
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 Property for such purpose.
SECTION 5.6 [RESERVED]
SECTION 5.7 Limitation of Suits. (a) No Holder of any Note shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(i) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding Amount of the
Notes have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings;
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(v) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the Majority
Noteholders; and
(vi) an Insurer Default shall have occurred and be continuing;
it being understood and intended that no one or more Holders of the 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 the 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.
(b) In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of the
Notes, each representing less than a majority of the Outstanding Note Balance,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.8 Unconditional Rights of Noteholders to Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, on 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 Indenture Trustee,
the Note Insurer or any Noteholder has instituted any Proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Indenture
Trustee, the Note Insurer or to such Noteholder, then and in every such case the
Issuer, the Indenture Trustee, the Note Insurer and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee, the Note Insurer 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 Indenture Trustee, 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,
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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
Indenture Trustee, the Note Insurer or any Holder of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
V or by law to the Indenture Trustee, the Note Insurer or to the Noteholders may
be exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee, by the Note Insurer or by the Noteholders, as the case may
be.
SECTION 5.12 Control by Controlling Party. The Note Insurer, if the Note
Insurer is the Controlling Party, and otherwise the Indenture Trustee, at the
direction of the Majority Noteholders, shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that
(i) such direction shall not be in conflict with any rule of law or
with this Indenture;
(ii) subject to the express terms of Section 5.4, if the Note Insurer
is not the Controlling Party, any direction to the Indenture Trustee to
sell or liquidate the Trust Property shall be by the Holders representing
not less than 100% of the Outstanding Note Balances;
(iii) if the conditions set forth in Section 5.5 have been satisfied
and the Indenture Trustee elects to retain the Trust Property pursuant to
such Section, then any direction to the Indenture Trustee by the Majority
Noteholders to sell or liquidate the Trust Property shall be of no force
and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee shall
have the right to decline to follow any such direction if the Indenture Trustee
being advised by counsel determines that the action so directed may not lawfully
be taken, or if the Indenture Trustee in good faith shall, by a Responsible
Officer, determine that the proceedings so directed would be illegal or subject
it to personal liability or be unduly prejudicial to the rights of Noteholders
not parties to such direction.
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SECTION 5.13 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.4, the Note
Insurer (provided no Insurer Default shall have occurred and be continuing) or
the Majority Noteholders (if an Insurer Default shall have occurred and be
continuing), may waive any past Default or Event of Default and its consequences
except a Default (a) in payment of principal of or interest on any of the Notes
or (b) in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Note. In the case of any such
waiver, such Default shall cease to exist and be deemed to have been cured and
not to have occurred, any Event of Default arising therefrom shall be deemed to
have been cured and not to have occurred and the Issuer, the Indenture Trustee,
the Note Insurer 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.
SECTION 5.14 Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such Xxxxxx's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant.
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 herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 5.16 Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Property or upon any
of the assets of the Issuer.
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SECTION 5.17 Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee or, prior to
the Termination Date, the Note Insurer, to do so and at the Servicer's expense,
the Issuer agrees to take all such lawful action as the Indenture Trustee or the
Note Insurer may request to compel or secure the performance and observance by
the Transferor and the Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Sale and Servicing Agreement in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Sale and Servicing Agreement to the extent and in the manner directed
by the Indenture Trustee, or prior to the Termination Date, the Note Insurer,
including the transmission of notices of default on the part of the Transferor
or the Servicer thereunder and the institution of legal or administrative
actions or Proceedings to compel or secure performance by the Transferor or the
Servicer of each of their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred, the Indenture Trustee may, prior
to the Termination Date with the prior written consent of the Note Insurer (so
long as an Insurer Default shall not have occurred and be continuing), or the
Indenture Trustee shall at the written direction of the Note Insurer, and after
the Termination Date, at the written direction of the Majority Noteholders,
exercise all rights, remedies, powers, privileges and claims of the Issuer
against the Transferor or the Servicer under or in connection with the Sale and
Servicing Agreement, including the right or power to take any action to compel
or secure performance or observance by the Transferor or the Servicer of each of
their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Sale and Servicing
Agreement, and any right of the Issuer to take such action shall be suspended.
SECTION 5.18 Subrogation. The Note Insurer shall, to the extent it makes
any payment with respect to the Class A 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 Class A Notes by or on
behalf of the Note Insurer, each Class A Noteholder shall be deemed, without
further action, to have directed the Indenture 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 Class A 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 5.12(a) of the Sale and
Servicing Agreement shall not be modified by this Section 5.18. 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 Scheduled Payment.
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SECTION 5.19 Preference Claims; Direction of Proceedings.
(a) In the event that the Indenture 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 Indenture 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 Class A Noteholders by mail that, in the event that any
Class A Noteholder's payment is so recoverable, such Class A Noteholder will be
entitled to payment pursuant to the terms of the Note Policy. Pursuant to the
terms of the Note Policy, the Note Insurer will make such payment on behalf of
the Class A Noteholder to the receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order (as defined in the Note Policy) and not
to the Indenture Trustee or any Class A Noteholder directly (unless a Class 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 Indenture Trustee for payment, in accordance with
the instructions to be provided by the Note Insurer, to such Class A Noteholder
upon proof of such payment reasonably satisfactory to the Note Insurer).
(b) Each Notice of Claim shall provide that the Indenture Trustee, on its
behalf and on behalf of the Class A Noteholders, thereby appoints the Note
Insurer as agent and attorney-in-fact for the Indenture Trustee and each
Noteholder in any legal proceeding with respect to the Notes. The Indenture
Trustee shall promptly notify the Note Insurer of any proceeding or the
institution of any action (of which a Responsible Officer of the Indenture
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 Class A
Notes. Each Holder of Class A Notes, by its purchase of Class A Notes, and the
Indenture Trustee hereby agree that so long as an 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, without limitation, (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 reimbursement as
provided in the Insurance Agreement. In addition, and without limitation of the
foregoing, the Note Insurer shall be subrogated to, and each Class A Noteholder
and the Indenture Trustee hereby delegate and assign, to the fullest extent
permitted by law, the rights of the Indenture Trustee and each Class A
Noteholder in the conduct of any proceeding with respect to a Preference Claim,
including, without limitation, all rights of any party to an adversary
proceeding action with respect to any court order issued in connection with any
such Preference Claim.
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the Indenture
Trustee shall follow such instructions and directions as it may receive pursuant
to Section 5.2 hereof and use the same degree of care and skill in its exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and the Basic
Documents and no implied covenants or obligations shall be read into this
Indenture or the Basic Documents against the Indenture Trustee; and
(ii) in the absence of bad faith, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Indenture Trustee and conforming to the requirements of this Indenture
and the Basic Documents; however, the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform on their
face to the requirements of this Indenture and the Basic Documents.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own bad faith or
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Indenture
Trustee unless it is proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.12.
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(d) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture.
(e) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or 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.
(f) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section.
(g) Without limiting the generality of this Section, the Indenture Trustee
shall have no duty (A) to see to any recording, filing or depositing of this
Indenture or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest in the Financed Vehicles,
or to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance on the Financed Vehicles or Obligors or to effect or maintain any such
insurance, (C) to see to the payment or discharge of any tax, assessment or
other governmental charge or any Lien or encumbrance of any kind owing with
respect to, assessed or levied against any part of the Issuer, (D) to confirm or
verify the contents of any reports or certificates delivered to the Indenture
Trustee pursuant to this Indenture or the Sale and Servicing Agreement believed
by the Indenture Trustee to be genuine and to have been signed or presented by
the proper party or parties, or (E) to inspect the Financed Vehicles at any time
or ascertain or inquire as to the performance or observance of any of the
Issuer's, the Transferor's or the Servicer's representations, warranties or
covenants or the Servicer's duties and obligations as Servicer under the Sale
and Servicing Agreement.
(h) In no event shall _______________, in any of its capacities hereunder,
be deemed to have assumed any duties of the Owner Trustee under the Delaware
Business Trust Statute, common law, or the Trust Agreement.
(i) The Indenture Trustee shall, upon reasonable prior notice to the
Indenture Trustee by the Note Insurer, permit any representative of the Note
Insurer, during the Indenture Trustee's normal business hours, to examine all
books of account, records, reports and other papers of the Indenture Trustee
relating to the Notes, to make copies and extracts therefrom and to discuss the
Indenture Trustee's affairs and actions, as such affairs and actions relate to
the Indenture Trustee's duties with respect to the Notes, with the Indenture
Trustee's officers and employees responsible for carrying out the Indenture
Trustee's duties with respect to the Notes.
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(j) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 6.2 Rights of Indenture Trustee.
Except as otherwise provided in Section 6.1,
(a) before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate and/or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(b) the Indenture Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee.
(c) the Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(d) the Indenture Trustee may consult with counsel, and the written advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the written advice or opinion of such counsel.
(e) the Indenture Trustee shall be under no obligation to exercise any of
the rights and powers vested in it by this Indenture or the other Basic
Documents, or to institute, conduct or defend any litigation under this
Indenture or in relation to this Indenture, at the request, order or direction
of any of the Holders of Notes, pursuant to the provisions of this Indenture,
unless such Holders of Notes shall have offered to the Indenture Trustee
reasonable security or indemnity reasonably satisfactory to the Indenture
Trustee against the costs, expenses and liabilities that may be incurred therein
or thereby; provided, however, that the Indenture Trustee shall, upon the
occurrence of an Event of Default (that has not been cured), exercise the rights
and powers vested in it by this Indenture with the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(f) except during the continuance of an Event of Default, the Indenture
Trustee shall not be bound to make any investigation into the facts or matters
stated in any
46
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 Majority Noteholders or the Note Insurer;
provided, however, that if the payment within a reasonable time to the Indenture
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 Indenture Trustee, not
reasonably assured to the Indenture Trustee by the security afforded to it by
the terms of this Indenture, the Indenture Trustee may require indemnity
reasonably satisfactory to the Indenture Trustee against such cost, expense or
liability as a condition to so proceeding; the reasonable expense of every such
examination shall be paid by the requesting Holders, or, if paid by the
Indenture Trustee, shall be reimbursed by the requesting Holders upon demand.
SECTION 6.3 Individual Rights of Indenture Trustee. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Indenture Trustee must comply with Section 6.15.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture Trustee shall not
be responsible for and makes no representation as to the validity or adequacy of
this Indenture, the Trust Property or the Notes, shall not be accountable for
the Issuer's use of the proceeds from the Notes, and shall not be responsible
for any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than, the Indenture
Trustee's certificate of authentication.
SECTION 6.5 Notice of Defaults. If an Event of Default occurs and is
continuing and if written notice of the existence thereof has been delivered to,
a Responsible Officer of the Indenture Trustee or a Responsible Officer of the
Indenture Trustee has actual knowledge thereof, the Indenture Trustee shall mail
to the Note Insurer, the Rating Agencies and each Noteholder notice of the Event
of Default within 5 days after such knowledge or notice occurs.
SECTION 6.6 Reports by Indenture Trustee to Holders. The Indenture Trustee
shall on behalf of the Issuer deliver to each Noteholder such information in its
possession as may be reasonably required to enable such Holder to prepare its
federal and state income tax returns. Within 60 days after each December 31
beginning with the December 31 following the date of this Indenture, the
Indenture Trustee shall mail to each Noteholder a brief report as of such
December 31 that complies with TIA ss. 313(a) if required by said section. The
Indenture Trustee shall also comply with TIA ss. 313(b). A copy of each such
report required pursuant to TIA ss. 313(a) or (b) shall, at the time of such
transmission to Noteholders, be filed by the Indenture Trustee with the
Commission and with each
47
securities exchange, if any, upon which the Notes are listed, provided that the
Issuer has previously notified the Indenture Trustee of such listing.
SECTION 6.7 Compensation.
(a) The Issuer shall, or shall cause the Servicer to, pay to the Indenture
Trustee from time to time compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall or shall cause the Servicer to reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services, except any such expense as may be attributable to its willful
misconduct, negligence or bad faith. Such expenses shall include securities
transaction charges relating to the investment of funds (net of investment
earnings) on behalf of the Indenture Trustee or the Trust Collateral Agent on
deposit in the Trust Accounts (except for the Certificate Distribution Account)
and the reasonable compensation and reasonable expenses, disbursements and
advances of the Indenture Trustee's counsel and of all persons not regularly in
its employ. Such reimbursable expenses may not exceed the aggregate sum of
$[__________] over the term of the Notes.
(b) The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section shall survive the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of an Event of Default specified in
Section 5.1(v) or (vi) 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 Indenture Trustee agrees that the obligations of the Issuer to
the Indenture Trustee hereunder and under the Basic Documents shall not be
recourse to the assets of the Issuer or any Noteholder.
SECTION 6.8 Replacement of Indenture Trustee.
(a) The Indenture Trustee may resign at any time by so notifying the Issuer
and the Note Insurer in writing at least sixty days prior and upon the
appointment and assumption of its obligations by a successor Indenture Trustee
which shall be acceptable to the Note Insurer if such succession occurs prior to
the Termination Date.
(b) The Issuer, with the prior written consent of the Note Insurer (so long
as it is the Controlling Party), may remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.15;
48
(ii) a court having jurisdiction in the premises in respect of the
Indenture Trustee in an involuntary case or proceeding under federal or
state banking or bankruptcy laws, as now or hereafter constituted, or any
other applicable federal or state bankruptcy, insolvency or other similar
law, shall have entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Indenture Trustee or for any
substantial part of the Indenture Trustee's property, or ordering the
winding-up or liquidation of the Indenture Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws, as now or
hereafter in effect, or another present or future federal or state
bankruptcy, insolvency or similar law is commenced with respect to the
Indenture Trustee and such case is not dismissed within 60 days;
(iv) the Indenture Trustee commences a voluntary case under any
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or other similar official) for the Indenture
Trustee or for any substantial part of the Indenture Trustee's property, or
makes any assignment for the benefit of creditors or fails generally to pay
its debts as such debts become due or takes any corporate action in
furtherance of any of the foregoing; or
(v) the Indenture Trustee otherwise becomes legally incapable of
acting.
(c) The Note Insurer may remove the Indenture Trustee for any reason upon
30 days written notice.
(d) If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee) prior to the
Termination Date, the Issuer shall promptly appoint a successor Indenture
Trustee acceptable to the Note Insurer. After the Termination Date, the Issuer
may appoint a successor Indenture Trustee without the consent of the Note
Insurer.
(e) A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee, to the Note Insurer and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the retiring Indenture Trustee under this Indenture
subject to satisfaction of the Rating
49
Agency Condition. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders, the Note Insurer and the Rating Agencies. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee and Trust Collateral Agent to the successor Indenture Trustee
and successor Trust Collateral Agent, respectively.
(f) If a successor Indenture Trustee that is, prior to the Termination
Date, acceptable to the Note Insurer does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Majority Noteholders may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee that
is, prior to the Termination Date, acceptable to the Note Insurer.
(g) If the Indenture Trustee fails to comply with Section 6.15, any
Noteholder, prior to the Termination Date with the prior written consent of the
Note Insurer, may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee
acceptable to the Note Insurer.
(h) Any resignation or removal of the Indenture Trustee and appointment of
a successor Indenture Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Indenture Trustee acceptable to the Note Insurer pursuant to this Section 6.8
and payment of all fees and expenses owed to the outgoing Indenture Trustee by
the Servicer.
(i) Notwithstanding the replacement of the Indenture 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 Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Xxxxxx.
(a) If the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation, provided it meets the eligibility requirements of
Section 6.12, without any further act shall be the successor Indenture Trustee.
The Indenture Trustee shall provide the Rating Agencies and the Note Insurer
prior written notice of any such transaction.
(b) In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes
50
either in the name of any predecessor hereunder or in the name of the successor
to the Indenture Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Notes or in this Indenture provided that
the certificate of the Indenture Trustee shall have.
SECTION 6.10 Appointment of Trust Collateral Agent. The Indenture Trustee
hereby appoints ______________________________ as the Trust Collateral Agent
with respect to the Collateral.
SECTION 6.11 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
the Issuer or any part of the Collateral may at the time be located, the Issuer
and the Indenture Trustee acting jointly, prior to the Termination Date with the
consent of the Note Insurer, 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
Collateral, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders and the Note Insurer, such title to the Collateral,
or any part thereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Issuer and the Indenture
Trustee may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.12 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 Indenture Trustee shall be conferred or imposed upon and exercised
or performed by the Indenture Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Collateral or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
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(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 Indenture Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, 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 Indenture Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
(e) Any and all amounts relating to the fees and expenses of the co-trustee
or separate trustee will be borne by the Trust Property, such fees and expenses
not to exceed the aggregate sum of [$__________] over the term of the Notes.
SECTION 6.12 Eligibility. The Indenture Trustee shall at all times satisfy
the requirements of TIA ss. 310(a). The Indenture Trustee under this Agreement
shall at all times be a corporation or banking association acceptable to the
Note Insurer having an office in the same state as the location of the Corporate
Trust Office as specified in this Indenture; organized and doing business under
the laws of such state or the United States of America; authorized under such
laws to exercise corporate trust powers; having a combined capital and surplus
of at least [$__________]; having long-term unsecured debt obligations which
have at least the Required Long-Term Debt Rating and subject to supervision or
examination by federal or state authorities. If such corporation shall publish
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set
52
forth in its most recent report of condition so published. In case at any time
the Indenture Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Indenture Trustee shall resign immediately.
SECTION 6.13 Trust Collateral Agent to Follow Indenture Trustee's
Directions. The Indenture Trustee hereby authorizes the Trust Collateral Agent
to take such action on its behalf, and to exercise such rights, remedies, powers
and privileges hereunder, as the Indenture Trustee may direct and as are
specifically authorized to be exercised by the Trust Collateral Agent by the
terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto.
SECTION 6.14 Representations and Warranties of the Indenture Trustee.
The Indenture Trustee represents and warrants to the Issuer as follows:
(i) The Indenture Trustee is a national banking association, duly
organized and validly existing under the laws of the United States and is
authorized to conduct and engage in a banking and trust business under such
laws.
(ii) The Indenture Trustee has full corporate power, authority, and
legal right to execute, deliver, and perform this Indenture, and shall have
taken all necessary action to authorize the execution, delivery, and
performance by it of this Indenture.
(iii) This Indenture shall have been duly executed and delivered by
the Indenture Trustee.
(iv) This Indenture is a legal, valid and binding obligation of the
Indenture Trustee enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and to general
principles of equity.
SECTION 6.15 Disqualification of the Indenture Trustee. If the Indenture
Trustee has or shall acquire a conflicting interest within the meaning of the
TIA, the Indenture Trustee shall either eliminate such interest or resign to the
extent in the manner provided by and subject to the provisions of this
Indenture.
SECTION 6.16 Waiver of Setoffs. The Indenture Trustee hereby expressly
waives any and all rights of setoff that the Indenture Trustee may otherwise at
any time have under applicable law with respect to any Trust Account and agrees
that amounts
53
in the Trust Accounts shall at all times be held and applied solely in
accordance with the provisions hereof.
SECTION 6.17 Control by the Controlling Party. The Indenture 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 Indenture 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 Indenture Trustee Names and Addresses of
Noteholders. The Note Registrar, on behalf of the Issuer, will furnish or cause
to be furnished to the Indenture Trustee (a) not more than five days after each
Record Date, a list, in such form as the Indenture Trustee may reasonably
require, of the names and addresses of the Holders as of such Record Date, (b)
at such other times as the Indenture Trustee may request in writing, within 30
days after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.
SECTION 7.2 Preservation of Information; Communications to Noteholders. The
Indenture 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 Indenture Trustee as provided in Section 7.1 and the names
and addresses of Holders received by the Indenture Trustee in its capacity as
Note Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in such Section 7.1 upon receipt of a new list so furnished.
Noteholders may communicate pursuant to TIA ss. 312(b) with other Noteholders
with respect to their rights under this Indenture or under the Notes. The
Issuer, the Indenture Trustee and the Note Registrar shall have the protection
of TIA ss. 312(c).
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to the Indenture or by the Trust
Collateral Agent pursuant to the Sale and Servicing
54
Agreement. The Indenture Trustee shall apply all such money received by it, or
cause the Trust Collateral Agent to apply all 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 Property, the Indenture
Trustee may at the expense of the Transferor 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 Property.
(a) Subject to the payment of its fees and expenses pursuant to Section
6.7, the Indenture Trustee may after the Termination Date, and when required by
the provisions of this Indenture shall, and shall cause the Trust Collateral
Agent to 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 Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.
(b) The Indenture Trustee shall, at such time as there are no Notes
outstanding and all amounts owing to the Note Insurer under the Basic Documents
have been paid and all sums due the Indenture Trustee pursuant to Section 6.7
have been paid, release the Collateral from the lien of this Indenture and
release to the Issuer or any other Person entitled thereto any funds then on
deposit in the Trust Accounts. The Indenture Trustee shall release property from
the lien of this Indenture pursuant to this Section 8.2(b) only upon receipt of
an Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel
and (if required by the TIA) Independent Certificates in accordance with TIA
xx.xx. 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.
SECTION 8.3 Opinion of Counsel. The Indenture Trustee and the Note Insurer
shall receive at least seven days' notice when requested by the Issuer to take
any action pursuant to Section 8.2, accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require as a condition to such
action, an Opinion of Counsel in form and substance satisfactory to the
Indenture Trustee, and prior to the Termination Date the Note Insurer, stating
the legal effect of any such action, outlining the steps required to complete
the same, and concluding that all conditions precedent to the taking of such
action have been complied with and such action will not materially and adversely
impair the security for the Notes or the rights of the Noteholders or the Note
Insurer in contravention of the provisions of this Indenture; provided, however,
that such Opinion of Counsel shall
55
not be required to express an opinion as to the fair value of the Trust
Property. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders. Without
the consent of the Holders of any Notes but with the prior written 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, as
evidenced to the Indenture Trustee, the Issuer, the Note Insurer and the
Indenture Trustee, when authorized by an Issuer Order, at any time and from time
to time, may enter into one or more amendments or indentures supplemental
hereto, in form satisfactory to the Indenture Trustee and the Note Insurer, for
any of the following purposes:
(i) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and
confirm unto the Indenture Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer herein and in the Notes
contained;
(iii) to add to the covenants of the Issuer, for the benefit of the
Holders of the Notes, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture 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 in any material respect the interests of the Holders
of the Notes, as evidenced by satisfaction of the Rating Agency Condition
with respect to such supplemental indenture;
56
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor Indenture Trustee with respect to the Notes and to
add to or change any of the provisions of this Indenture as shall be
necessary to facilitate the administration of the trusts hereunder by more
than one trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter
enacted and to add to this Indenture such other provisions as may be
expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such amendment or supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders. (a) The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to the Rating Agencies, with the prior written consent of the
Note Insurer (or, if an Insurer Default shall have occurred and be continuing,
with the consent of the Majority Noteholders), 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, subject to the express rights of the Note
Insurer under the Basic Documents, no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest
rate thereon or the Redemption Amount with respect to the redemption of the
Notes, change the provision of this Indenture relating to the application
of collections on, or the proceeds of the sale of, the Trust Property 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 the Redemption Date);
(iii) reduce the percentage of the outstanding Note Balance of the
Notes, the consent of the Holders of which is required for any such
supplemental
57
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 Note Balance of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Trust Property 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 Distribution Date (including the
calculation of any of the individual components of such calculation) or to
affect the rights of the Noteholders to the benefit of any provisions for
the mandatory redemption of the Notes contained herein;
(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
Property 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; or
(ix) modify any restrictions on and procedures for resale and other
transfers for resale and other transfers of the Notes to reflect any change
in applicable law or regulations (or the interpretation thereof) or
practices relating to the resale or transfer of restricted securities
generally.
(b) The Indenture Trustee may determine whether or not any Notes would be
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be liable
for any such determination made in good faith.
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(c) 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.
(d) Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Note Insurer and the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the amendments or modifications thereby of the
trusts created by this Indenture, the Note Insurer and the Indenture 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 Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4 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
Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.5 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
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SECTION 9.6 Conformity with Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
ARTICLE X
REDEMPTION AND PREPAYMENT OF NOTES
SECTION 10.1 Redemption and Prepayment. The Notes are subject to redemption
by the Issuer in whole, but not in part, on any Distribution Date on which the
Servicer exercises its option to purchase the Trust Property pursuant to Section
10.01(a) of the Sale and Servicing Agreement (such date, the "Redemption Date");
provided, however, that the Issuer has deposited with the Trust Collateral Agent
funds sufficient to pay the Redemption Amount. The Issuer shall furnish the Note
Insurer, the Indenture Trustee, the Trust Collateral Agent and the Rating
Agencies notice of such redemption. If the Notes are to be redeemed pursuant to
this Section, the Issuer shall furnish notice of such election to the Note
Insurer, the Trust Collateral Agent and the Indenture Trustee not later than 35
days prior to the Redemption Date and promptly upon giving such notice, the
Issuer shall deposit or cause to be deposited with the Trust Collateral Agent in
the Collection Account the Redemption Amount whereupon all the Notes shall be
due and payable on the Redemption Date, together with other amounts due and
owing at such time under the Basic Documents, upon the furnishing of a notice
complying with Section 10.2 to each Holder of Notes and the Note Insurer.
SECTION 10.2 Form of Redemption Notice. Notice of redemption under Section
10.1 shall be given by the Indenture Trustee by facsimile or by first-class
mail, postage prepaid, transmitted or mailed prior to the applicable Redemption
Date to each Noteholder, as of the close of business on the Record Date
preceding the applicable Redemption Date, at such Noteholder's address appearing
in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Amount;
(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 the Notes and the place where the Notes are
to be surrendered for payment of the Redemption Amount (which shall be the
office or agency of the Issuer to be maintained as provided in Section
2.7); and
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(iv) that interest on the Notes shall cease to accrue on the
Redemption Date (unless the Issuer shall default in the payment of the
Redemption Price).
Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Noteholder shall not impair or affect
the validity of the redemption of any other Note.
SECTION 10.3 Notes Payable on Redemption Date. The Notes shall, following
notice of redemption as required by Section 10.2, on the Redemption Date become
due and payable at the Redemption Amount and (unless the Issuer shall default in
the payment of the Redemption Amount) no interest shall accrue on the Redemption
Amount for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Amount.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer or the Note Insurer to
the Indenture Trustee to take any action under any provision of this Indenture,
the Issuer shall furnish to the Indenture Trustee or the Note Insurer, as the
case may be, (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) (if required by the TIA) an Independent Certificate from
of a firm of certified public accountants meeting the applicable requirements of
this Section.
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;
(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 is based;
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(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) Prior to the deposit of any Collateral or other property or securities
with the Trust Collateral Agent 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 Indenture Trustee, the Note Insurer and the Trust
Collateral Agent an Officer's Certificate certifying or stating the opinion of
each person signing such certificate (which may be based upon a certification of
the Servicer) as to the fair value (within 90 days of such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited.
(c) Whenever the Issuer is required to furnish to the Indenture Trustee,
the Note Insurer and the Trust Collateral Agent an Officer's Certificate
certifying or stating the opinion of any signer thereof as to the matters
described in clause (b) above, the Issuer shall also deliver to the Indenture
Trustee, the Note Insurer and the Trust Collateral Agent 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 (b) above and this clause (c), is 10% or more of the Outstanding Note
Balance, 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 $[_____].
(d) Other than with respect to the release of any Purchased Receivables or
Charged-Off Receivables, whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the Trust
Collateral Agent 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.
(e) Whenever the Issuer is required to furnish to the Indenture 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 (d) above, the Issuer
shall also furnish to the Trust Collateral Agent 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
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Receivables and Charged-Off 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 (d) above and this clause (e),
equals 10% or more of the Outstanding Note Balance, 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 $[_____].
(f) Notwithstanding Section 2.10 or any other provision of this Section,
the Issuer may, without delivering any Officer's Certificates or Independent
Certificates (A) collect, liquidate, sell or otherwise dispose of Receivables as
and to the extent required by the Basic Documents and (B) instruct the Trust
Collateral Agent to 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 Indenture 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 Subservicer, the Master Servicer, the Back-up Servicer, the Transferor or
the Issuer, stating that the information with respect to such factual matters is
in the possession of the Subservicer, the Master Servicer, the Back-up Servicer,
the Transferor 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 Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the
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granting of such application or at the effective date of such certificate or
report (as the case may be), of the facts and opinions stated in such document
shall in such case be conditions precedent to the right of the Issuer to have
such application granted or to the sufficiency of such certificate or report.
The foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in Article VI.
SECTION 11.3 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
Indenture Trustee, and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.1) conclusive in favor of
the Indenture Trustee and the Issuer, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any customary manner of the Indenture Trustee.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Note.
SECTION 11.4 Notices, etc. to Indenture Trustee, Note Insurer, Issuer and
Rating Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to or filed with:
(a) The Indenture Trustee by any Noteholder, the Note Insurer or by the
Issuer shall be sufficient for every purpose hereunder if personally delivered,
delivered by overnight courier, mailed certified mail, return receipt requested
or by telecopy to:
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[___________] and shall be deemed to have been duly given upon receipt to the
Indenture Trustee at its principal Corporate Trust Office, or
(b) The Issuer by the Indenture Trustee, the Note Insurer or by any
Noteholder shall be sufficient for every purpose hereunder if personally
delivered, delivered by overnight courier, mailed certified mail, return receipt
requested or by telecopy to: [___________] and shall deemed to have been duly
given upon receipt to the Issuer addressed to: United Fidelity Auto Receivables
Trust [____-_], in care of Owner Trustee, with a copy to the Indenture Trustee
at its principal Corporate Trust Office, or at any other address previously
furnished in writing to the Indenture Trustee by Issuer. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee and the Note Insurer.
(c) Notices required to be given to the Note Insurer by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, delivered by overnight courier, mailed certified mail, return receipt
requested to the following address:
_________________________________
_________________________________
Attention: _____________________
Re: United Fidelity Auto Receivables Trust [____-_]
Telex No.: ____________
Confirmation: ____________
Telecopy Nos.: ____________
(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 marked "URGENT MATERIAL ENCLOSED.")
(d) Notices required to be given to any Rating Agency by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, delivered by overnight courier, or mailed certified mail, return
receipt requested to the following address: (a) in the case of Xxxxx'x, to 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 10007 and (b) in the case of S&P, to 00 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or, in each case, to such other address as
shall be designated by written notice to the other parties.
SECTION 11.5 Notices to Noteholders; Waiver. Where this Indenture provides
for notice to Noteholders of any event, such notice shall be sufficiently given
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(unless otherwise herein expressly provided) 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.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute a Default or Event of
Default.
SECTION 11.6 [Reserved].
SECTION 11.7 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 11.8 Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents of the Indenture
Trustee.
SECTION 11.9 Separability. In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
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SECTION 11.10 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 other 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
Collateral, 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 Indenture Trustee may, but shall not be
required to, exercise such right or power hereunder), but not its duties and
obligations under the Note Policy, upon delivery of a written notice to the
Indenture Trustee.
SECTION 11.11 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 11.12 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF [NEW YORK] AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS AND WITHOUT REFERENCE TO ITS CONFLICT OF LAW PRINCIPLES (EXCEPT WITH
REGARD TO THE UCC).
SECTION 11.13 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 11.14 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 Indenture Trustee or any other counsel reasonably
acceptable to the Indenture 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 Indenture Trustee or the Trust Collateral Agent under this
Indenture or the Sale and Servicing Agreement or the Collateral Agent under the
Spread Account Agreement.
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SECTION 11.15 Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Transferor, the
Servicer, the Owner Trustee, the Trust Collateral Agent, or the Indenture
Trustee on the Notes or under this Indenture or any certificate or other writing
delivered in connection herewith or therewith, against (i) the Transferor, the
Servicer, the Indenture Trustee or the Trust Collateral Agent 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 Issuer, the Transferor, the Servicer, the Indenture
Trustee or the Trust Collateral Agent or the Owner Trustee in its individual
capacity, any holder of a beneficial interest in the Issuer, the Transferor, the
Servicer, the Owner Trustee or the Indenture Trustee or the Trust Collateral
Agent or of any successor or assign of the Transferor, the Servicer, the
Indenture Trustee or the Trust Collateral Agent or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee or the Trust Collateral Agent 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, with respect to 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 the
Trust Agreement.
It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by _______________ not individually or
personally but solely as trustee of the Trust, in the exercise of the powers and
authority conferred and vested in it under the Trust Agreement, (b) each of the
representations, undertakings and agreements herein made on the part of the
Trust is made and intended not as personal representations, undertakings and
agreements by _______________ but is made and intended for the purpose of
binding only the Trust it being acknowledged that _______________ has performed
no investigation of the matters represented and warranted hereunder and is a
passive trustee who will undertake no active management of the Trust and (c)
under no circumstances shall _______________ be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Agreement or the other Basic Documents.
SECTION 11.16 No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time, prior to the date in which is one year and one
day after the Notes and all amounts due to the Note Insurer under the Insurance
Agreement have been paid in full, institute against the Transferor, or the
Issuer, or join in any institution against the Transferor or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States federal or state
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bankruptcy or similar law in connection with any obligations relating to the
Notes, this Indenture or any of the other Basic Documents.
SECTION 11.17 Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or 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 Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law (and all reasonable applications for confidential treatment are
unavailing) or in connection with litigation, and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
SECTION 11.18 No Legal Title in Holders. No Holder of a Note shall have
legal title to any part of the Trust Property. No transfer, by operation of law
or otherwise, of any Note or other right, title and interest of any Holder of a
Note in and to the Trust Property or hereunder shall operate to terminate this
Indenture or the trusts hereunder or entitle any successor or transferee of such
Holder to an accounting or to the transfer to it of legal title to any part of
the Trust Property.
SECTION 11.19 Rights of Note Insurer as Controlling Party. So long as no
Insurer Default shall have occurred and be continuing, except as otherwise
specifically provided herein, whenever Noteholder action, consent or approval is
required under this Indenture, such action, consent or approval shall be deemed
to have been taken or given on behalf of, and shall be binding upon, all Class A
Noteholders if the Note Insurer agrees to take such action or give such consent
or approval. If an Insurer Default has occurred and is continuing, any
provision, including this Section 11.19, which gives the Note Insurer any rights
as Controlling Party shall be inoperative during the period of such Insurer
Default and such rights shall instead vest in the Indenture Trustee acting at
the direction of the Majority Noteholders. If the Class A Notes are no longer
Outstanding and the Note Insurer has received full payment and performance of
all Insurer Secured Obligations, any provision, including this Section 11.19,
which gives the Note Insurer any rights as Controlling Party shall be
inoperative following such time and such rights instead shall vest in the
Indenture Trustee acting at the direction of the Majority Noteholders.
SECTION 11.20 Effect of Termination Date. Notwithstanding anything to the
contrary set forth herein, all references to any right of the Note Insurer to
direct, appoint, consent to, accept, approve of, take or omit to take any action
under this Indenture or any other Basic Document shall be inapplicable at all
times after the earlier of the
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Termination Date or the date on which the Class A Notes are no longer
Outstanding and the Note Insurer has received full payment and performance of
all Insurer Secured Obligations, and (i) if such reference provides for another
party or parties to take or omit to take such action following an Insurer
Default, such party or parties shall also be entitled to take or omit to take
such action following such date and (ii) if such reference does not provide for
another party or parties to take or omit to take such action following an
Insurer Default, then the Indenture Trustee acting at the direction of the
Majority Noteholders shall have the right to take or omit to take any such
action following such date. In addition, any other provision of this Indenture
or any other Basic Document which is operative based in whole or in part on
whether an Insurer Default has or has not occurred shall, at all times on or
after such date, be deemed to refer to whether or not such date has occurred.
SECTION 11.21 Conflict With Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA xx.xx. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
[THIS SPACE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Issuer and the Indenture 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.
UNITED FIDELITY AUTO RECEIVABLES TRUST
[______]
By:______________________________, not in its
individual capacity but solely as Owner Trustee,
By:_______________________________
Name:
Title:
______________________________, not in its
individual capacity but solely as Indenture Trustee,
By:_______________________________
Name:
Title:
[Signature Page to the Indenture]
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