EXHIBIT 4.12
INDENTURE
between
ONYX ACCEPTANCE OWNER TRUST 2002-C,
as Issuer,
and
JPMORGAN CHASE BANK
as Indenture Trustee
-----------------
Dated as of July 1, 2002
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................................ 1
Section 1.01 Definitions............................................................. 1
Section 1.02 Incorporation by Reference of Trust Indenture Act....................... 7
Section 1.03 Rules of Construction................................................... 7
Section 1.04 Accounting Terms........................................................ 8
ARTICLE II THE NOTES........................................................................ 8
Section 2.01 Form.................................................................... 8
Section 2.02 Execution, Authentication and Delivery.................................. 8
Section 2.03 Temporary Notes......................................................... 9
Section 2.04 Registration; Registration of Transfer and Exchange..................... 9
Section 2.05 Mutilated, Destroyed, Lost or Stolen Notes..............................10
Section 2.06 Persons Deemed Owner....................................................11
Section 2.07 Payment of Principal and Interest; Defaulted Interest...................11
Section 2.08 Cancellation............................................................12
Section 2.09 Book-Entry Notes........................................................13
Section 2.10 Notices to Clearing Agency..............................................13
Section 2.11 Definitive Notes........................................................14
Section 2.12 Release of Collateral...................................................14
Section 2.13 Tax Treatment...........................................................14
Section 2.14 ERISA...................................................................14
ARTICLE III COVENANTS.......................................................................15
Section 3.01 Payment of Principal and Interest.......................................15
Section 3.02 Maintenance of Office or Agency.........................................15
Section 3.03 Money for Payments to be Held in Trust..................................15
Section 3.04 Existence...............................................................17
Section 3.05 Protection of Collateral................................................17
Section 3.06 Opinions as to Collateral...............................................18
Section 3.07 Performance of Obligations; Servicing of Contracts......................18
Section 3.08 Negative Covenants......................................................20
Section 3.09 Annual Statement as to Compliance.......................................20
Section 3.10 Issuer May Consolidate, etc. Only on Certain Terms......................21
Section 3.11 Successor Transferee....................................................23
Section 3.12 No Other Business.......................................................23
Section 3.13 Servicer's Obligations..................................................23
Section 3.14 Restricted Payments.....................................................23
Section 3.15 Notice of Events of Default.............................................24
Section 3.16 Further Instruments and Acts............................................24
Section 3.17 Compliance with Laws....................................................24
Section 3.18 Amendments of Sale and Servicing Agreement and Trust Agreement..........24
Section 3.19 Representations and Warranties of the Issuer............................24
ARTICLE IV SATISFACTION AND DISCHARGE.......................................................25
Section 4.01 Satisfaction and Discharge of Indenture.................................25
Section 4.02 Application of Trust Money..............................................26
-i-
Section 4.03 Repayment of Monies Held by Paying Agent................................26
ARTICLE V EVENTS OF DEFAULT; REMEDIES.......................................................27
Section 5.01 Events of Default.......................................................27
Section 5.02 Rights Upon Event of Default............................................28
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee.................................................................28
Section 5.04 Remedies................................................................30
Section 5.05 Optional Preservation of the Collateral.................................32
Section 5.06 Priorities..............................................................32
Section 5.07 Limitation of Suits.....................................................33
Section 5.08 Unconditional Rights of Noteholders to Receive Principal and
Interest................................................................34
Section 5.09 Restoration of Rights and Remedies......................................34
Section 5.10 Rights and Remedies Cumulative..........................................34
Section 5.11 Delay or Omission Not a Waiver..........................................34
Section 5.12 Control by Noteholders..................................................34
Section 5.13 Waiver of Past Defaults.................................................35
Section 5.14 Undertaking for Costs...................................................35
Section 5.15 Waiver of Stay or Extension Laws........................................36
Section 5.16 Action on Notes.........................................................36
Section 5.17 Performance and Enforcement of Certain Obligations......................36
ARTICLE VI THE INDENTURE TRUSTEE............................................................37
Section 6.01 Duties of Indenture Trustee.............................................37
Section 6.02 Rights of Indenture Trustee.............................................39
Section 6.03 Individual Rights of Indenture Trustee..................................40
Section 6.04 Indenture Trustee's Disclaimer..........................................40
Section 6.05 Notice of Defaults......................................................41
Section 6.06 Reports by Indenture Trustee to Holders.................................41
Section 6.07 Compensation and Indemnity..............................................41
Section 6.08 Replacement of Indenture Trustee........................................41
Section 6.09 Successor Indenture Trustee by Merger...................................43
Section 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee.......43
Section 6.11 Eligibility; Disqualification...........................................44
Section 6.12 Preferential Collection of Claims Against Issuer........................45
Section 6.13 Representations and Warranties of Indenture Trustee.....................45
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS..................................................45
Section 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders.............................................................45
Section 7.02 Preservation of Information; Communications to Noteholders..............45
Section 7.03 Reports by Issuer.......................................................45
Section 7.04 Reports by Indenture Trustee............................................46
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES...........................................46
Section 8.01 Collection of Money.....................................................46
Section 8.02 Trust Accounts..........................................................47
Section 8.03 [RESERVED]..............................................................48
Section 8.04 Release of Collateral...................................................48
Section 8.05 Opinion of Counsel......................................................48
ARTICLE IX SUPPLEMENTAL INDENTURES..........................................................49
-ii-
Section 9.01 Supplemental Indentures Without Consent of Noteholders..................49
Section 9.02 Supplemental Indentures With Consent of Noteholders.....................50
Section 9.03 Execution of Supplemental Indentures....................................51
Section 9.04 Effect of Supplemental Indenture........................................51
Section 9.05 Conformity With Trust Indenture Act.....................................52
Section 9.06 Reference in Notes to Supplemental Indentures...........................52
ARTICLE X REDEMPTION OF NOTES...............................................................52
Section 10.01 Redemption..............................................................52
Section 10.02 Form of Redemption Notice...............................................52
Section 10.03 Notes Payable on Redemption Date........................................53
ARTICLE XI MISCELLANEOUS....................................................................53
Section 11.01 Compliance Certificates and Opinions, etc...............................53
Section 11.02 Form of Documents Delivered to Indenture Trustee........................55
Section 11.03 Acts of Noteholders.....................................................55
Section 11.04 Notices, etc., to Indenture Trustee, Issuer, Insurer and Rating
Agencies................................................................56
Section 11.05 Notices to Noteholders; Waiver..........................................57
Section 11.06 Alternate Payment and Notice Provisions.................................57
Section 11.07 Conflict With Trust Indenture Act.......................................57
Section 11.08 Effect of Headings and Table of Contents................................57
Section 11.09 Successors and Assigns..................................................58
Section 11.10 Severability............................................................58
Section 11.11 Benefits of Indenture...................................................58
Section 11.12 Legal Holidays..........................................................58
Section 11.13 Governing Law...........................................................58
Section 11.14 Counterparts............................................................58
Section 11.15 Recording of Indenture..................................................58
Section 11.16 Trust Obligation........................................................58
Section 11.17 No Petition.............................................................59
Section 11.18 Inspection..............................................................59
Section 11.19 Limitation of Liability of Owner Trustee................................59
Section 11.20 Certain Matters Regarding the Insurer...................................60
-iii-
EXHIBITS
Schedule A - Schedule of Contracts
Exhibit A - Form of Depository Agreement
Exhibit B - Form of Class A-1 Note
Exhibit C - Form of Class A-2 Note
Exhibit D - Form of Class A-3 Note
Exhibit E - Form of Class A-4 Note
-iv-
This Indenture, dated as of July 1, 2002, is between Onyx Acceptance
Owner Trust 2002-C, a Delaware business trust, as the Issuer, and JPMorgan Chase
Bank, a New York banking association, as the Indenture Trustee.
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the holders of the Issuer's 1.86% Auto Loan
Backed Notes, Class A-1 (the "CLASS A-1 NOTES"), 2.40% Auto Loan Backed Notes,
Class A-2 (the "CLASS A-2 NOTES"), 3.29% Auto Loan Backed Notes, Class A-3 (the
"CLASS A-3 NOTES"), and 4.07% Auto Loan Backed Notes, Class A-4 (the "CLASS A-4
NOTES" and, together with the Class A-1 Notes, the Class A-2 Notes and the Class
A-3 Notes, the "NOTES"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee for the benefit of the
Holders of the Notes and the Insurer on the Closing Date, without recourse, all
of the Issuer's right, title and interest in, to and under the Collateral.
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, and subject to the priorities and
distinctions set forth in this Indenture, and to secure compliance with the
provisions of this Indenture and the Insurance Agreement, all as provided in
this Indenture and the Insurance Agreement.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders of
the Notes and the Insurer, 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 to the best of its ability to the
end that the interests of the Holders of the Notes may be adequately and
effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
(a) Except as otherwise specified herein or as the context may
otherwise require, (i) capitalized terms that are used herein that are not
otherwise defined herein shall have the meanings assigned to them in the Sale
and Servicing Agreement (as defined below) and (ii) the following terms have the
respective meanings set forth below for all purposes of this Indenture.
"ACT" shall have the meaning specified in Section 11.03(a).
"ADMINISTRATION AGREEMENT" means the Administration Agreement, dated as
of the date hereof, among the Administrator, the Issuer, the Seller, the
Indenture Trustee and the Trust Agent.
"ADMINISTRATOR" means the Servicer, or any successor Administrator under
the Administration Agreement.
"AUTHORIZED OFFICER" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee or the Trust
Agent, as the case may be, in matters relating to the Issuer and who is
identified on the list of Authorized Officers delivered by the Owner Trustee or
the Trust Agent, as the case may be, to the Indenture Trustee on the Closing
Date (as such list may be modified or supplemented from time to time thereafter)
and, so long as the Administration Agreement is in effect, any Vice President or
more senior officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified on
a list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"BASIC DOCUMENTS" means the Certificate of Trust, the Trust Agreement,
the Sale and Servicing Agreement, the Administration Agreement, the Depository
Agreement, the Insurance Agreement, the Policy and this Indenture.
"BENEFIT PLAN" shall have the meaning specified in the Trust Agreement.
"BOOK-ENTRY NOTES" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.09.
"CERTIFICATE OF TRUST" means the Certificate of Trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
"CLASS" means all Notes whose form is identical except for variation in
denomination, principal amount or owner.
"CLASS A NOTES" means the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes.
"CLASS A-1 NOTES" means the Class A-1 Notes, substantially in the form
of Exhibit B.
"CLASS A-2 NOTES" means the Class A-2 Notes, substantially in the form
of Exhibit C.
"CLASS A-3 NOTES" means the Class A-3 Notes, substantially in the form
of Exhibit D.
"CLASS A-4 NOTES" means the Class A-4 Notes, substantially in the form
of Exhibit E.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means the Trust Property, together with (i) all amounts on
deposit in the Trust Accounts and all amounts or investment property on deposit
therein or credited thereto from time to time, (ii) all rights of the Issuer
under the Sale and Servicing Agreement and the Administration Agreement and
(iii) all proceeds in any way delivered with respect to the foregoing, all
rights to payments with respect to the foregoing and all rights to enforce the
foregoing..
-2-
"CONTROLLING PARTY" means the Insurer, so long as no Insurer Default
shall have occurred and be continuing, and the Indenture Trustee, for so long as
an Insurer Default shall have occurred and be continuing.
"DEFAULT" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"DEFINITIVE NOTES" shall have the meaning specified in Section 2.09.
"DEPOSITORY AGREEMENT" means the agreement dated July 17, 2002, among
the Issuer, the Indenture Trustee and DTC, as the initial Clearing Agency,
relating to the Notes, substantially in the form attached hereto as Exhibit A.
"DTC" means The Depository Trust Company and its successors and assigns.
"EVENT OF DEFAULT" shall have the meaning specified in Section 5.01.
"EXECUTIVE OFFICER" means, with respect to any corporation or bank, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation or bank; and with respect to any partnership, any
general partner thereof.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create and xxxxx x xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for payments in
respect of the Collateral and all other monies payable thereunder, to give and
receive notices and other communications, to make waivers or other agreements,
to exercise all rights and options, to bring Proceedings in the name of the
granting party or otherwise and generally to do and receive anything that the
granting party is or may be entitled to do or receive thereunder or with respect
thereto.
"HOLDER" or "NOTEHOLDER" means, with respect to a Note, the Person in
whose name such Note is registered in the Note Register.
"INDEBTEDNESS" means, with respect to any Person at any time, (i)
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); (ii)
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; (iii) current liabilities of such Person in respect of
unfunded vested benefits under plans covered by Title IV of ERISA; (iv)
obligations issued for or liabilities incurred on the account of such Person;
(v) obligations or liabilities of such Person arising under acceptance
facilities; (vi) obligations of such Person under any guaranties, 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; (vii) obligations of such Person secured by any lien on property or assets
of
-3-
such Person, whether or not the obligations have been assumed by such Person; or
(viii) obligations of such Person under any interest rate or currency exchange
agreement.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INDEPENDENT" when used with respect to any specified Person, means such
a Person who (i) is in fact independent of the Issuer, the Seller and any of
their respective Affiliates, (ii) is not a director, officer or employee of the
Issuer, the Seller or any of their respective Affiliates, (iii) is not a person
related to any officer or director of the Issuer, the Seller or any of their
respective Affiliates, (iv) is not a holder (directly or indirectly) of more
than 10% of any voting securities of the Issuer, the Seller or any of their
respective Affiliates, and (v) is not connected with the Issuer, the Seller or
any of their respective Affiliates as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
"INDEPENDENT CERTIFICATE" means a certificate or opinion to be delivered
to the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture 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 an Authorized Officer and delivered to the
Indenture Trustee.
"NOTE OWNER" means, with respect to a Book-Entry Note, the Person who is
the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"NOTE REGISTER" and "Note Registrar" have the respective meanings
specified in Section 2.04.
"OFFICER'S CERTIFICATE" means a certificate signed by an Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to,
the Indenture Trustee.
"ONYX" means Onyx Acceptance Corporation, and its successors.
"OPINION OF COUNSEL" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Depositor or the Issuer and who shall be satisfactory to the
Indenture Trustee and, if addressed to the Insurer, satisfactory to the Insurer,
and which shall comply with any applicable requirements of Section 11.01, and
shall be in form and substance satisfactory to the Indenture Trustee, and if
addressed to the Insurer, satisfactory to the Insurer.
"OUTSTANDING" means, as of the date of determination, all Notes
theretofore authenticated and delivered under this Indenture except:
-4-
(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 or provision for such notice, satisfactory to the
Indenture Trustee, has been made); 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 in determining whether the Holders of the requisite
Outstanding Amount have given any request, demand, authorization, direction,
notice, consent or waiver hereunder or under any other Basic Document, Notes
owned by the Issuer, the Seller or any of their respective Affiliates shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
that the Indenture Trustee knows to be so owned shall be so disregarded. Notes
so owned that have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is not
the Issuer, the Seller or any of their respective Affiliates.
"OUTSTANDING AMOUNT" means the aggregate principal amount of all Notes
of one Class or of all Classes, as the case may be, Outstanding at the date of
determination.
"PAYING AGENT" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 and is authorized by the Issuer to make the distributions from the Note
Distribution Account, including payment of principal of or interest on the Notes
on behalf of the Issuer.
"PREDECESSOR NOTE" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 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.
"PROTECTED PURCHASER" shall have the meaning given such term in the UCC.
"RATING AGENCY CONDITION" means, with respect to any action, that (i)
Standard & Poor's shall have been given ten Business Days (or such shorter
period as is acceptable to Standard & Poor's) prior notice thereof and that
Standard & Poor's shall have notified the Seller, the Servicer, the Insurer and
the Issuer in writing that such action will not result in a qualification,
reduction or withdrawal of its then-current rating of any Class of Notes, (ii)
-5-
Moody's shall have been given ten Business Days (or such shorter period as is
acceptable to Moody's) prior notice thereof and copies of all documentation
relating to the event requiring such Rating Agency Condition and (iii) each
Rating Agency shall have confirmed to the Insurer that the shadow risk of the
Insurer with respect to the Notes is investment grade.
"RATING EVENT" means the qualification, reduction or withdrawal by
either Rating Agency of its then-current rating of any Class of Notes.
"RECORD DATE" means, with respect to a Distribution Date or Redemption
Date, the close of business on the Business Day immediately preceding such
Distribution Date or Redemption Date, or, in the event that Definitive Notes are
issued, the close of business on the last day of the calendar month immediately
preceding the month in which such Distribution Date or Redemption Date occurs.
"REDEMPTION DATE" means the Distribution Date specified by the Servicer
or the Issuer pursuant to Section 10.01.
"REDEMPTION PRICE" means an amount equal to the Outstanding Amount of
the Notes redeemed plus accrued and unpaid interest thereon at the respective
Interest Rates of each Class of Notes being so redeemed to but excluding the
Redemption Date.
"REGISTERED HOLDER" means the Person in whose name a Note is registered
on the Note Register on the applicable Record Date.
"SALE AND SERVICING AGREEMENT" means the Sale and Servicing Agreement,
dated as of the date hereof, between the Issuer, the Seller, the Servicer, the
Indenture Trustee and the Trust Agent.
"STATE" means any one of the 00 xxxxxx xx xxx Xxxxxx Xxxxxx or the
District of Columbia.
"SUCCESSOR SERVICER" shall have the meaning specified in Section
3.07(e).
"TERMINATION DATE" means the latest of (i) the expiration of the Policy
and the return of the Policy to the Insurer for cancellation, (ii) the date on
which the Insurer shall have received payment and performance of all amounts and
obligations which the Issuer may owe to or on behalf of the Insurer under this
Indenture and (iii) the date on which the Indenture Trustee shall have received
payment and performance of all amounts and obligations which the Issuer may owe
to or on behalf of the Indenture Trustee for the benefit of the Noteholders
under this Indenture or the Notes.
"TRUST AGENT" means JPMorgan Chase Bank, as agent of the Owner Trustee
under the Trust Agreement, and any successor Trust Agent thereunder.
"TRUST AGREEMENT" means the Trust Agreement, dated as of July 1, 2002,
among the Seller, the Owner Trustee and the Trust Agent.
"TRUST INDENTURE ACT" or "TIA" means the Trust Indenture Act of 1939, as
amended, as in force on the date hereof, unless otherwise specifically provided.
-6-
"UNITED STATES" means the United States of America.
Section 1.02 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"COMMISSION" means the Securities and Exchange Commission.
"INDENTURE SECURITIES" means the Notes.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Indenture
Trustee.
"OBLIGOR" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
Section 1.03 Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words
in the plural include the singular;
(vi) any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate delivered
in connection herewith means such agreement, instrument or
statute as from time to time amended, modified or supplemented
and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its
permitted successors and assigns; and
(vii) the words "hereof," "herein" and "hereunder" and
words of similar import when used in this Indenture shall refer
to this Indenture as a whole and not to any particular provision
of this Indenture; Section, subsection and Schedule
-7-
references contained in this Indenture are references to
Sections, subsections and Schedules in or to this Indenture
unless otherwise specified.
Section 1.04 Accounting Terms. All accounting terms used but not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles in the United States of America.
ARTICLE II
THE NOTES
Section 2.01 Form. The Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes, in each case together with the
Indenture Trustee's certificate of authentication, shall be in substantially the
forms set forth as Exhibits B, C, D and E 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.
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits B, C, D and E hereto are part of the terms of
this Indenture.
Section 2.02 Execution, Authentication and Delivery. The Notes
shall be executed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee, as provided in the Trust Agreement. 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 an Issuer Order,
authenticate and deliver for original issue the following aggregate principal
amount of Notes: (i) $80,000,000 of Class A-1 Notes, (ii) $105,000,000 of Class
A-2 Notes, (iii) $148,000,000 of Class A-3 Notes, and (iv) $117,000,000 of Class
A-4 Notes. The aggregate principal amount of Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes and Class A-4 Notes outstanding at any time may not exceed such
respective amounts, except as otherwise provided in Section 2.05.
Each Note shall be dated the date of its authentication. The Notes shall
be issuable as registered notes in the minimum denomination of $1,000 and in
integral multiples of $1,000 in excess thereof, except that one Note of each
Class may be issued in a different denomination.
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 in the
forms of Notes attached as exhibits to this Indenture executed by the Indenture
Trustee by the manual signature of one of its authorized signatories, and such
-8-
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
Section 2.03 Temporary Notes. Pending the preparation of
definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order
the Indenture Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten, mimeographed or otherwise produced, of the
tenor of the definitive Notes in lieu of which they are issued and with such
variations not inconsistent with the terms of this Indenture as the officers
executing such Notes may determine, as evidenced by their execution of such
Notes.
If temporary Notes are issued, the Issuer will cause definitive Notes to
be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like tenor and principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
Section 2.04 Registration; Registration of Transfer and
Exchange. The Issuer shall cause to be kept a register (the "NOTE REGISTER") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee shall be "NOTE REGISTRAR" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
If a Person other than the Indenture Trustee is appointed by the Issuer
as Note Registrar, the Issuer will give the Indenture Trustee prompt written
notice of the appointment of such Note Registrar and of the location, and any
change in the location, of the Note Register, and the Indenture Trustee shall
have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Holders of the Notes and
the principal amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, the Issuer
shall execute, and the Indenture Trustee shall authenticate and the Noteholder
shall obtain from the Indenture Trustee, in the name of the designated
transferee or transferees, one or more new Notes of the same Class in any
authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of
the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall
-9-
obtain from the Indenture Trustee, the Notes which the Noteholder making the
exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by a commercial bank or trust company located, or having a
correspondent located, in the city of New York or the city in which the
Corporate Trust Office is located, or by a member firm of a national securities
exchange, and such other documents as the Indenture Trustee may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.03 or 9.06 not
involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
Section 2.05 Mutilated, Destroyed, Lost or Stolen Notes. If (i)
the Indenture Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note and the Indenture Trustee and the Insurer (unless an
Insurer Default shall have occurred and be continuing) receive such security or
indemnity as may be required by them to hold the Issuer, the Indenture Trustee
and the Insurer harmless, or (ii) any mutilated Note is surrendered to the
Indenture Trustee, then, in the absence of notice to the Issuer, the Note
Registrar or the Indenture Trustee that such Note has been acquired by a
Protected Purchaser, and if the requirements of Section 8-406 of the UCC are met
and subject to Section 8-405 of the UCC, the Issuer shall execute and upon its
request the Indenture Trustee shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement
Note of the same Class; provided, however, that if any such destroyed, lost or
stolen Note, but not a mutilated Note, shall have become or within seven days
shall be due and payable, or shall have been called for redemption, instead of
issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a Protected Purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer,
the Insurer and the Indenture Trustee shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a
Protected Purchaser, and shall be entitled to recover upon the
-10-
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer, the Insurer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section, the Issuer
or the Indenture Trustee may require the payment by the Holder of such Note of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee or the Note Registrar) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
Section 2.06 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee, the
Insurer and any of their respective agents may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Insurer, the Indenture Trustee nor any of
their respective agents shall be affected by notice to the contrary.
Section 2.07 Payment of Principal and Interest; Defaulted
Interest.
(a) Each Class of Notes shall accrue interest during each
Interest Accrual Period at the related Interest Rate, and such interest shall be
payable on each Distribution Date as specified in such Notes, subject to Section
3.01 and the priority of payments set forth in Section 8.02(c). Interest accrued
on any Note but not paid on any Distribution Date will be due on the immediately
succeeding Distribution Date, together with, to the extent permitted by
applicable law, interest on such shortfall at the related Interest Rate.
Interest on the Notes shall be calculated on the basis of a 360-day year of
twelve 30-day months, except for the Class A-1 Notes, which shall be calculated
on the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period. Any installment of interest or principal, if any,
payable on any Note which is punctually paid or duly provided for by the Issuer
on the applicable Distribution Date shall be paid to the Person in whose name
such Note (or one or more Predecessor Notes) is registered on the Record Date,
by check mailed first-class, postage prepaid to such Person's address as it
appears on the Note Register on such Record Date, except that, unless Definitive
Notes have been issued pursuant to Section 2.11, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payment will be made by wire
transfer in immediately available funds to the account designated by such
nominee and except for the final installment of principal payable with respect
to such Note on a Distribution Date, a Redemption Date or on the related
-11-
Final Scheduled Distribution Date, as the case may be (and except for the
Redemption Price for any Note called for redemption pursuant to Section 10.01),
which shall be payable as provided below. The funds represented by any such
checks returned undelivered shall be held in accordance with Section 3.03.
(b) The principal of each Note shall be payable on each
Distribution Date to the extent provided in the form of the related Note set
forth as an Exhibit hereto. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes of a Class of Notes shall be due and payable, if
not previously paid, on the earlier of:
(i) the Note Final Scheduled Distribution Date of such
Class;
(ii) the Redemption Date;
(iii) if an Event of Default shall have occurred and be
continuing, so long as an Insurer Default shall not have
occurred and be continuing, the date on which the Insurer shall
have declared the Notes to be immediately due and payable in the
manner provided in Section 5.02; or
(iv) if an Event of Default shall have occurred and be
continuing and if an Insurer Default has occurred and is
continuing, the date on which Holders representing not less than
66 2/3% of the Outstanding Amount of the Notes, acting together
as a single Class, have declared the Notes to be immediately due
and payable in the manner provided in Section 5.02.
All principal payments on each Class of Notes shall be made pro rata to the
Noteholders of such Class entitled thereto. The Indenture Trustee shall notify
the Person in whose name a Note is registered at the close of business on the
Record Date preceding the 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 within five Business Days of such Distribution Date (or,
in the case of Notes registered in the name of Cede & Co., as nominee of DTC,
such notice shall be provided within one Business Day of such Distribution Date)
or receipt of notice of termination of the Trust pursuant to Section 9.01(c) of
the Trust Agreement and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.02. In addition, the Administrator shall
notify the Insurer and the Rating Agencies upon the final payment of interest
and principal of each Class of Notes, and upon the termination of the Trust, in
each case pursuant to the Administration Agreement.
Section 2.08 Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly canceled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly canceled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as
-12-
provided in this Section, except as expressly permitted by this Indenture. 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 direct by an Issuer Order that they be destroyed or returned to
it; provided that such Issuer Order is timely and the Notes have not been
previously disposed of by the Indenture Trustee.
Section 2.09 Book-Entry Notes. The Notes, upon original
issuance, will be issued in the form of a typewritten Note or Notes representing
the Book-Entry Notes, to be delivered to DTC, the initial Depository, by, or on
behalf of, the Issuer. Such Notes shall initially be registered on the Note
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no Note Owner will receive a Definitive Note representing such Note Owner's
interest in such Note, except as provided in Section 2.11. Unless and until
definitive, fully registered Notes (the "DEFINITIVE NOTES") have been issued to
Note Owners pursuant to Section 2.11:
(i) the provisions of this Section shall be in full
force and effect;
(ii) the Note Registrar and the Indenture Trustee shall
be entitled to deal with the Clearing Agency for all purposes of
this Indenture (including the payment of principal of and
interest on the Notes and the giving of instructions or
directions hereunder) as the sole Holder of the Notes, and shall
have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the
provisions of this Section shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Note Owners and
the Clearing Agency and/or the Clearing Agency participants.
Pursuant to the Depository Agreement, unless and until
Definitive Notes are issued pursuant to Section 2.11, the
Clearing Agency will make book-entry transfers among the
Clearing Agency participants and receive and transmit payments
of principal of and interest on the Notes to such Clearing
Agency participants; and
(v) whenever this Indenture requires or permits actions
to be taken based upon instructions or directions of Holders of
Notes evidencing a specified percentage of the Outstanding
Amount, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has received instructions
to such effect from Note Owners and/or Clearing Agency
participants owning or representing, respectively, such required
percentage of the beneficial interest in the Notes and has
delivered such instructions to the Indenture Trustee.
Section 2.10 Notices to Clearing Agency. Whenever a notice or
other communication to the Noteholders is required under this Indenture, unless
and until Definitive Notes shall have been issued to Note Owners pursuant to
Section 2.11, the Indenture Trustee
-13-
shall give all such notices and communications specified herein to be given to
Holders of the Notes to the Clearing Agency, and shall have no obligation to the
Note Owners.
Section 2.11 Definitive Notes. If (i) the Administrator advises
the Indenture Trustee in writing that the Clearing Agency is no longer willing
or able to properly discharge its responsibilities as described in the
Depository Agreement, and the Administrator or the Indenture Trustee is unable
to locate a qualified successor, or (ii) after the occurrence of an Event of
Default or a Servicer Default, Note Owners representing in the aggregate more
than 50% of the Outstanding Amount of all Classes of Notes advise the Indenture
Trustee through the Clearing Agency participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the related Note Owners, then the Indenture Trustee shall
notify all Note Owners, through the Clearing Agency, of the availability of
Definitive Notes to Note Owners requesting the same. Upon surrender to the
Indenture Trustee of the Note or Notes evidencing the Book Entry Notes by the
Clearing Agency, accompanied by registration instructions from the Clearing
Agency, the Issuer shall execute and the Indenture Trustee shall authenticate
the Definitive Notes and deliver such Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Note Registrar or
the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes of a Class, the
Indenture Trustee shall recognize the Holders of the Definitive Notes as
Noteholders hereunder.
The Indenture Trustee shall not be liable if the Indenture Trustee or
the Administrator is unable to locate a qualified successor Clearing Agency. The
Definitive Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
Section 2.12 Release of Collateral. Subject to Section 11.01 and
the terms of the Basic Documents, the Indenture Trustee shall release Collateral
from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with Sections 314(c) and 314(d)(l) of the TIA or an
Opinion of Counsel in lieu of such Independent Certificates to the effect that
the TIA does not require any such Independent Certificates.
Section 2.13 Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes
will qualify as indebtedness of the Issuer secured by the Collateral. The
Issuer, by entering into this Indenture, and each Noteholder, by its acceptance
of its Note (and each Note Owner by its acceptance of an interest in the
applicable Book-Entry Note), agree to treat the Notes for federal, state and
local income, single business and franchise tax purposes as indebtedness of the
Issuer. Notwithstanding such treatment, the Issuer will withhold from amounts
payable to non-U.S. Note Holders pursuant to Section 3.03(a)(v).
Section 2.14 ERISA. Each purchaser or transferee of a Note that
is a Benefit Plan shall be deemed to have represented that the relevant
conditions for exemptive relief under Prohibited Transaction Class Exemption
("PTCE") 84-14, XXXX 00-0, XXXX 00-00, XXXX 95-
-14-
60 or PTCE 96-23 or other applicable exemption providing substantially similar
relief have been satisfied or has provided a written representation to the
Issuer satisfactory to the Issuer in lieu thereof.
ARTICLE III
COVENANTS
Section 3.01 Payment of Principal and Interest. The Issuer will
duly and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, subject to Section 8.02(c), the Issuer will cause to be distributed
all amounts on deposit in the Note Distribution Account on a Distribution Date
deposited therein pursuant to the Sale and Servicing Agreement for the benefit
of (i) the Class A-1 Notes, to the Class A-1 Noteholders, (ii) the Class A-2
Notes, to the Class A-2 Noteholders, (iii) the Class A-3 Notes, to the Class A-3
Noteholders, and (iv) the Class A-4 Notes, to the Class A-4 Noteholders. Amounts
properly withheld under the Code by any Person from a payment to any Noteholder
of interest and/or principal shall be considered as having been paid by the
Issuer to such Noteholder for all purposes of this Indenture.
Section 3.02 Maintenance of Office or Agency. The Issuer will or
will cause the Administrator or the Indenture Trustee to maintain in The City of
New York, an office or agency where Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Indenture Trustee of
the location, and of any change in the location, of any such office or agency.
If at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Indenture Trustee with the address thereof, such
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Issuer hereby appoints the Indenture Trustee as its agent to
receive all such surrenders, notices and demands.
Section 3.03 Money for Payments to be Held in Trust. As provided
in Section 8.02, all payments of amounts due and payable with respect to any
Notes that are to be made from amounts withdrawn from the Note Distribution
Account after required transfers thereto from the other Trust Accounts shall be
made on behalf of the Issuer by the Paying Agent (including the Indenture
Trustee when serving as a Paying Agent), and no amounts so withdrawn from the
Note Distribution Account for payments of Notes shall be paid over to the Issuer
except as provided in this Section.
The Notes shall be non-recourse obligations of the Issuer and shall be
limited in right of payment to amounts available from the Collateral and the
Policy as provided in this Indenture and the Issuer shall not otherwise be
liable for payments on the Notes. No Person shall be personally liable for any
amounts payable under the Notes. If any other provision of this Indenture
conflicts or is deemed to conflict with the provisions of this paragraph, the
provisions of this paragraph shall control.
-15-
On the Business Day immediately preceding each Distribution Date, the
Servicer shall cause funds to be withdrawn from the Collection Account and
deposited into the Payment Account pursuant to Section 4.02(e) of the Sale and
Servicing Agreement, and on each Distribution Date, the Indenture Trustee shall
make the deposits to the Note Distribution Account required by Section 4.03(a)
of the Sale and Servicing Agreement.
The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee and the 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 notice of any default by
the Issuer (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,
forthwith pay to the Indenture Trustee all sums so held in trust
by such Paying Agent;
(iv) immediately resign as 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.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer upon receipt of an Issuer Request; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof, and all liability of the Indenture Trustee or such
Paying Agent with respect to such trust money shall thereupon cease; provided,
however, that the Indenture
-16-
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to or for the account of the
Issuer. The Indenture Trustee may 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 monies due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).
Section 3.04 Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States, in which
case the Issuer will keep in full effect its existence, rights and franchises
under the laws of such other jurisdiction) and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Indenture, the Notes, and the Collateral.
Section 3.05 Protection of Collateral. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Indenture
Trustee on behalf of the Noteholders to be prior to all other liens in respect
of the Collateral, and the Issuer shall take all actions necessary to obtain and
maintain, for the benefit of the Indenture Trustee on behalf of the Noteholders,
a first lien on and a first priority, perfected security interest in the
Collateral. The Issuer will from time to time execute or authorize, as
applicable, and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, all as prepared by the Servicer and delivered to the
Issuer, and will take such other action necessary or advisable to:
(i) Grant more effectively all or any portion of the
Collateral;
(ii) maintain or preserve the lien and security interest
(and the priority thereof) 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 Collateral and the
rights of the Indenture Trustee and the Noteholders in such
Collateral against the claims of all persons and parties; or
(vi) pay all taxes or assessments levied or assessed
upon the Collateral when due.
-17-
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute all financing statements, continuation statements or
other instruments required to be executed pursuant to this Section and the
Indenture Trustee shall execute all financing statements, continuation
statements or other instruments required to be executed pursuant to this section
upon written notice and instructions from the Issuer.
Section 3.06 Opinions as to Contracts.
(a) Promptly after the execution and delivery of this Indenture,
the Issuer shall furnish to the Indenture Trustee and the Insurer an Opinion of
Counsel to the effect that, in the opinion of such counsel, either (i) all
financing statements and continuation statements have been authorized and filed
that are necessary to perfect the Indenture Trustee's first priority perfected
security interest in the Collateral (subject to the rights of the Insurer under
the Insurance Agreement) for the benefit of the Noteholders, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (ii) no such action shall be necessary to perfect such
security interest.
(b) Within 90 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
Insurer an Opinion of Counsel, dated as of a date during such 90-day period, to
the effect that, in the opinion of such counsel, either (i) all financing
statements and continuation statements have been executed and filed that are
necessary to continue the Indenture Trustee's first priority perfected security
interest in the Collateral (subject to the rights of the Insurer under the
Insurance Agreement) for the benefit of the Noteholders, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (ii) no such action shall be necessary to perfect such
security interest.
Section 3.07 Performance of Obligations; Servicing of Contracts.
(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 Collateral or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in the Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the
assistance of other Persons (including, without limitation, the Administrator
under the Administration Agreement) to assist it in performing its duties and
obligations under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee and the Insurer in an Officer's Certificate
shall be deemed to be action taken by the Issuer. The Indenture Trustee shall
not be responsible for the action or inaction of the Servicer or the
Administrator. Initially, the Issuer has contracted with the Servicer and the
Administrator 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 other Basic
Documents and in the instruments and
-18-
agreements included in the Collateral, including but not limited to filing or
causing to be filed all UCC financing statements and continuation statements
required to be filed by the terms of this Indenture and the Sale and Servicing
Agreement in accordance with and within the time periods provided for herein and
therein. Except as otherwise expressly provided therein, the Issuer shall not
waive, amend, modify, supplement or terminate any Basic Document or any
provision thereof without the consent of the Indenture Trustee, the Insurer
(unless an Insurer Default shall have occurred and be continuing) and the
Holders of at least a majority of the Outstanding Amount of the Notes.
(d) If the Issuer shall have actual knowledge of the occurrence
of a Servicer Default, the Issuer shall promptly notify the Indenture Trustee,
the Insurer and each Rating Agency thereof, and shall specify in such notice the
action, if any, the Issuer is taking with respect of such default. If a Servicer
Default shall arise from the failure of the Servicer to perform any of its
duties or obligations under the Sale and Servicing Agreement with respect to the
Contracts, the Issuer shall take all reasonable steps available to it to remedy
such failure.
(e) Upon the termination of the Servicer by the Insurer pursuant
to Section 7.01 of the Sale and Servicing Agreement or upon the resignation of
the Servicer pursuant to Section 6.04 of the Sale and Servicing Agreement, the
Insurer shall appoint a successor servicer ("SUCCESSOR SERVICER"). Upon the
termination of the Servicer by the Indenture Trustee or the Noteholders pursuant
to Section 7.01 of the Sale and Servicing Agreement, or upon the resignation of
the Servicer pursuant to Section 6.04 of the Sale and Servicing Agreement in the
event that the Insurer is not entitled to appoint a successor servicer by
operation of Section 9.08 of the Sale and Servicing Agreement, (i) if the Notes
have not been paid in full, the Indenture Trustee shall be the Successor
Servicer, and (ii) if the Notes have been paid in full, the Owner Trustee,
acting at the direction of the Holders of Residual Interest Instruments
evidencing not less than 51% of the Percentage Interests, shall appoint a
Successor Servicer. The Successor Servicer shall succeed to all the
responsibilities, duties and liabilities of the Servicer under the Sale and
Servicing Agreement. Notwithstanding the foregoing, if the Notes have not been
paid in full, the Indenture Trustee may, if it shall be unwilling to act, or
shall, if it shall be legally unable to so act, appoint, or petition a court of
competent jurisdiction (with any related costs to be at the sole expense of the
Issuer) to appoint, any established financial institution, having a net worth of
not less than $50,000,000 and whose regular business shall include the servicing
of automotive retail installment sales contracts, as the successor to the
Servicer under the Sale and Servicing Agreement. If the Indenture Trustee shall
succeed to the Servicer's duties as servicer of the Contracts as provided
herein, it shall do so in its individual capacity and not in its capacity as
Indenture Trustee and, accordingly, the provisions of Article Six shall be
inapplicable to the Indenture Trustee in its duties as the successor to the
Servicer and the servicing of the Contracts. In case the Indenture Trustee shall
become successor to the Servicer under the Sale and Servicing Agreement, the
Indenture Trustee shall be entitled to appoint as Servicer one of its
Affiliates, provided that it shall not be liable for the actions and omissions
of any such Affiliate in such capacity as Successor Servicer appointed with due
care.
(f) Upon any termination of the Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify
the Indenture Trustee and the Insurer. As soon as a Successor Servicer is
appointed, the Issuer shall notify the Indenture
-19-
Trustee and the Insurer of such appointment, specifying in such notice the name
and address of such Successor Servicer.
(g) The Issuer agrees that it will not waive timely performance
or observance by the Servicer or the Seller of their respective duties under the
Basic Documents: (i) without the prior consent of the Insurer (unless an Insurer
Default shall have occurred and be continuing) or (ii) if the effect thereof
would adversely affect the Holders of the Notes.
Section 3.08 Negative Covenants. Until the Termination Date, the
Issuer shall not:
(i) except as expressly permitted by the Basic
Documents, sell, transfer, exchange or otherwise dispose of any
of the properties or assets of the Issuer, including those
included in the Collateral, unless directed to do so by the
Indenture Trustee with the prior written consent of the 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 applicable state law) 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 Collateral;
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien 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 Collateral 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 created by this Indenture not to constitute a
valid first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Collateral;
or
(iv) dissolve or liquidate in whole or in part.
Section 3.09 Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee and the Insurer, on or before 120 days after
the end of each fiscal year of the Issuer (commencing with the fiscal year ended
December 31, 2002), an Officer's Certificate stating, as to the Authorized
Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such
year and of performance under this Indenture has been made under
such Authorized Officer's supervision; and
-20-
(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 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 or
any State and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture
Trustee and the Insurer, in form and substance satisfactory to
the Indenture Trustee and the Insurer (so long as no Insurer
Default shall have occurred and be continuing), the due and
punctual payment of the principal of and interest on all Notes
and the performance or observance of every agreement and
covenant of this Indenture and each other Basic Document on the
part of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such
consolidation or merger, 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 consolidation or merger;
(iv) the Issuer shall have received an Opinion of
Counsel which shall be delivered to and shall be satisfactory to
the Indenture Trustee and the Insurer to the effect that such
consolidation or merger will not have any material adverse tax
consequence to the Trust, the Insurer or any Noteholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been
taken;
(vi) the Issuer shall have delivered to the Indenture
Trustee and the Insurer an Officer's Certificate and an Opinion
of Counsel (which shall describe the actions taken as required
by clause (v) above or that no such actions will be taken) each
stating that such consolidation or merger and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have
been compiled with (including any filings required by the
Exchange Act); and
(vii) so long as no Insurer Default shall have occurred
and be continuing, the Issuer shall have given the Insurer
written notice of such consolidation or merger at least 20
Business Days prior to the consummation of such action and shall
have received the prior written approval of the Insurer of
-21-
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.
(b) The Issuer shall not convey or transfer all or substantially
all of its properties or assets, including those included in the Collateral, to
any Person (except as expressly permitted by the Basic Documents), unless:
(i) the Person that acquires by conveyance or transfer
the properties and assets of the Issuer shall (A) be a United
States citizen or a Person organized and existing under the laws
of the United States or any State, (B) expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Indenture Trustee and the Insurer, in form and substance
satisfactory to the Indenture Trustee and the Insurer (so long
as no Insurer Default shall have occurred and be continuing),
the due and punctual payment of the principal of and interest on
all Notes and the performance or observance of every agreement
and covenant of this Indenture and each other Basic Document on
the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agree by means of such
supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in
such supplemental indenture, expressly agree to indemnify,
defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture
and the Notes and (E) expressly agree by means of such
supplemental indenture that such Person (or if a group of
Persons, then one specified Person) shall make all filings with
the Commission (and any other appropriate Person) required by
the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such conveyance
or transference, 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 conveyance or transference;
(iv) the Issuer shall have received an Opinion of
Counsel which shall be delivered to and shall be satisfactory to
the Indenture Trustee and the Insurer (so long as no Insurer
Default shall have occurred and be continuing) to the effect
that such conveyance or transference will not have any material
adverse tax consequence to the Trust, the Insurer or any
Noteholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been
taken;
(vi) the Issuer shall have delivered to the Indenture
Trustee and the Insurer an Officer's Certificate and an Opinion
of Counsel (which shall describe
-22-
the actions taken as required by clause (v) above or that no
such actions will be taken) each stating that such conveyance or
transference and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with
(including any filings required by the Exchange Act); and
(vii) so long as no Insurer Default shall have occurred
and be continuing, the Issuer shall have given the Insurer
written notice of such conveyance or transfer of properties or
assets at least 20 Business Days prior to the consummation of
such action and shall have received the prior written approval
of the Insurer of such conveyance or transfer and the Person
acquiring by conveyance or transference the properties or assets
of the Issuer has a net worth, immediately after such conveyance
or transfer, that is (A) greater than zero and (B) not less than
the net worth of the Issuer immediately prior to giving effect
to such conveyance or transfer.
Section 3.11 Successor 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 or substantially all
the assets or 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 to the Indenture Trustee and the
Insurer stating that the Issuer is to be so released.
Section 3.12 No Other Business. The Issuer shall not engage in
(i) any business other than financing, purchasing, owning, selling and managing
the Contracts in the manner contemplated by this Indenture and the other Basic
Documents and activities incidental thereto or (ii) any business or activities
other than those contemplated by Section 2.03 of the Trust Agreement. After the
termination of the Funding Period, the Issuer shall not fund the purchase of any
additional motor vehicle contracts.
Section 3.13 Servicer's Obligations. The Issuer shall cause the
Servicer to comply with the Servicer's obligations under the Sale and Servicing
Agreement.
Section 3.14 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 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, (A) distributions to
-23-
the Servicer, the Indenture Trustee, the Owner Trustee, the Insurer, the
Noteholders and the Holders of Residual Interest Instruments as contemplated by,
and to the extent funds are available for such purpose under, the Sale and
Servicing Agreement or the Trust Agreement and (B) payments to the Indenture
Trustee and the Owner Trustee pursuant to Section 1(a)(ii) of the Administration
Agreement. The Issuer will not, directly or indirectly, make payments to or
distributions from the Collection Account, the Note Distribution Account, the
Capitalized Interest Account, the Prefunding Account, the Spread Account or the
Payahead Account, except in accordance with this Indenture and the other Basic
Documents.
Section 3.15 Notice of Events of Default. The Issuer agrees to
give the Indenture Trustee, the Trust Agent, the Insurer and each Rating Agency
prompt written notice of each Event of Default hereunder and each default on the
part of the Servicer or the Seller of their respective obligations under the
Sale and Servicing Agreement.
Section 3.16 Further Instruments and Acts. Upon request of the
Indenture Trustee or the 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 3.17 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 Amendments of Sale and Servicing Agreement and
Trust Agreement. The Issuer shall not agree to any amendment to Section 9.01 of
the Sale and Servicing Agreement or Section 11.01 of the Trust Agreement to
eliminate the requirements thereunder that the Holders of the Notes consent to
amendments thereto as provided therein.
Section 3.19 Representations and Warranties of the Issuer. The
Issuer hereby makes the following representations and warranties on which the
Indenture Trustee and the Noteholders may rely; provided such representations
and warranties speak as of the execution and delivery of this Indenture, but
shall survive the Grant of the Collateral to the Indenture Trustee pursuant to
this Indenture:
(a) This Indenture creates a valid and continuing security
interest (as defined in the applicable UCC) in the Collateral in favor of the
Indenture Trustee, which security interest is prior to all other liens, and is
enforceable as such against creditors of and purchasers from the Issuer.
(b) Onyx has certified to the Issuer that it has taken all steps
necessary to perfect the Issuer's security interest against the Obligors in the
property securing the Contracts.
(c) The Contracts constitute "tangible chattel paper" within the
meaning of the applicable UCC.
(d) The Issuer owns and has good and marketable title to the
Collateral free and clear of any lien, claim or encumbrance of any Person.
-24-
(e) The Issuer has caused or will have caused, within ten days,
the filing of all appropriate financing statements in the proper filing office
in the appropriate jurisdictions under applicable law in order to perfect the
security interest Granted in the Collateral to the Indenture Trustee hereunder.
(f) Other than the security interest Granted to the Indenture
Trustee pursuant to the Granting Clause of this Indenture, the Issuer has not
Granted a security interest in, or otherwise conveyed any of the Collateral. The
Issuer has not authorized the filing of and is not aware of any financing
statements against the Issuer that include a description of collateral covering
the Collateral other than any financing statement (i) relating to the security
interest Granted to the Indenture Trustee hereunder or (ii) that has been, or
will be within five days of the Closing Date, terminated.
(g) The Issuer has authorized Onyx, in its capacity as Custodian
under the Sale and Servicing Agreement, to maintain possession of all original
copies of the Contracts that constitute or evidence the Collateral and Onyx has
certified to the Issuer that the Contracts that constitute or evidence the
Collateral do not have any marks or notations indicating that they have been
pledged, assigned or otherwise conveyed to any Person other than the Indenture
Trustee. All financing statements filed or to be filed against the Issuer in
favor of the Indenture Trustee in connection herewith describing the Collateral
contain a statement to the following effect: "A purchase of or security interest
in any collateral described in this financing statement will violate the rights
of the Indenture Trustee."
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01 Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.03,
3.04, 3.05, 3.07, 3.08, 3.10, 3.11, 3.12, 3.17 and 3.18, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Section 4.02), (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 (vii) the obligation of the
Indenture Trustee to make claims under the Policy, which shall survive the Class
A-4 Final Scheduled Distribution Date and extend through any preference period
applicable with respect to the Notes or any payments made in respect of the
Notes, and the Indenture Trustee, on demand of and at the expense of the Issuer,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.05 and (ii) Notes for whose
payment money has theretofore been deposited in trust or
-25-
segregated and held in trust by the Issuer and thereafter repaid to the Issuer
or discharged from such trust, as provided in Section 3.03) have been delivered
to the Indenture Trustee for cancellation and the Policy has expired and been
returned to the 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-4
Final Scheduled Distribution Date 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 clauses (i), (ii) or (iii) above, has irrevocably
deposited or caused to be irrevocably deposited with the Indenture Trustee cash
or direct obligations of or obligations guaranteed by the United States (which
will mature prior to the date such amounts are payable), in trust in an Eligible
Account 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-4 Final Scheduled Distribution
Date or Redemption Date (if Notes shall have been called for redemption pursuant
to Section 10.01), as the case may be;
(B) the Issuer has paid or performed or caused to be paid or
performed all amounts and obligations which the Issuer may owe to or on behalf
of (1) the Indenture Trustee for the benefit of the Noteholders under this
Indenture or the Notes and (2) the Insurer under this Indenture and the Basic
Documents; and
(C) the Issuer has delivered to the Indenture Trustee and the
Insurer an Officer's Certificate, an Opinion of Counsel and (if required by the
TIA, the Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of Section 11.01(a)
and, subject to Section 11.02, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with and the Rating Agency Condition has been satisfied.
Section 4.02 Application of Trust Money. All monies deposited
with the Indenture Trustee pursuant to Section 4.01 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 monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
Section 4.03 Repayment of Monies Held by Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all monies then held by
-26-
any Paying Agent other than the Indenture Trustee under the provisions of this
Indenture with respect to such Notes shall, upon demand of the Issuer, be paid
to the Indenture Trustee to be held and applied according to Section 3.03 and
thereupon such Paying Agent shall be released from all further liability with
respect to such monies.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
Section 5.01 Events of Default. "EVENT OF DEFAULT," wherever
used herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) the delivery to the Insurer of a claim for payment under the
Policy;
(b) 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;
(c) default in the payment of any principal due and payable on a
Class of Notes on the Note Final Scheduled Distribution Date for such Class of
Notes;
(d) (i) 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), and such default shall continue or not be
cured for a period of 90 days after notice thereof shall have been given, by
registered or certified mail, to the Issuer by the Indenture Trustee or the
Insurer or to the Issuer and the Indenture Trustee by the Holders of at least
25% of the Outstanding Amount of the Notes, acting together as a single Class or
(ii) any representation or warranty made by the Issuer in this Indenture or in
any certificate delivered pursuant hereto or in connection herewith having been
incorrect in a material respect as of the time made, and such breach not having
been cured within 30 days after notice thereof is given to the Issuer by the
Indenture Trustee or the Insurer, or to the Issuer and the Indenture Trustee by
the Holders of at least 25% of the Outstanding Amount of the Notes acting
together as a single Class;
(e) 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 Collateral 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 Collateral, or
ordering the winding-up or liquidation of the Issuer's affairs, and such decree
or order shall remain unstayed and in effect for a period of 60 consecutive
days; or
(f) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Issuer to the entry of an order for
relief in an involuntary case under any such law,
-27-
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 Collateral, 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;
provided, however that so long as no Insurer Default shall have occurred and be
continuing, neither the Indenture Trustee nor the Noteholders may declare an
Indenture Event of Default under the Indenture. So long as an Insurer Default
shall not have occurred and be continuing, an Indenture Event of Default shall
occur only upon delivery by the Insurer to the Indenture Trustee of notice of
the occurrence of an Indenture Event of Default. The failure to pay principal on
a Class of Notes shall not result in the occurrence of an Indenture Event of
Default until the Note Final Scheduled Distribution Date for such Class of
Notes.
The Issuer shall deliver to the Indenture Trustee and the Insurer,
within five days after obtaining knowledge of the occurrence thereof, written
notice in the form of an Officer's Certificate of any event which with the
giving of notice or the lapse of time would become an Event of Default, its
status and what action the Issuer is taking or proposes to take with respect
thereto.
Section 5.02 Rights Upon Event of Default.
(a) So long as no Insurer Default has occurred and is
continuing, if an Event of Default shall have occurred and be continuing, then
the Insurer shall have the right, but not the obligation, upon prior written
notice to each Rating Agency, to declare by written notice to the Issuer and the
Indenture Trustee that the Notes become immediately due and payable, and upon
any such declaration the unpaid principal amount of the Notes, together with
accrued and unpaid interest thereon, shall become immediately due and payable.
The Indenture Trustee will have no discretion with respect to the acceleration
of the Notes under the foregoing circumstances. In the event of any such
acceleration of the Notes, the Indenture Trustee shall continue to make claims
under the Policy with respect to the Notes.
(b) If an Insurer Default shall have occurred and be continuing
and an Event of Default shall have occurred and be continuing, the Indenture
Trustee shall, if so requested in writing by Holders representing at least 66
2/3% of the aggregate Outstanding Amount of the Notes, acting together as a
single Class, upon prior written notice to each Rating Agency, declare that all
the Notes become immediately due and payable, and upon any such declaration the
unpaid principal amount of the Notes, together with accrued and unpaid interest
thereon, shall become immediately due and payable.
(c) Following any Event of Default, the Insurer may elect to pay
all or any portion of the outstanding amount of the Notes, plus accrued interest
thereon to the date of payment.
Section 5.03 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.
-28-
(a) The Issuer covenants that, if the Notes are accelerated
following the occurrence of an Event of Default, the Issuer will, upon demand of
the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Holders of the Notes, the whole amount then due and payable on such Notes for
principal and interest, with interest upon the overdue principal, and, to the
extent payment at such rate of interest shall be legally enforceable, upon
overdue installments of interest, at the applicable Interest Rate and in
addition thereto such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses and
disbursements of the Indenture Trustee and its agents and counsel.
(b) If an Event of Default shall have occurred and be
continuing, the Indenture Trustee shall (i) if no Insurer Default shall have
occurred and be continuing, at the direction of the Insurer, or (ii) if an
Insurer Default shall have occurred and be continuing, at the direction of
Holders representing at least 66 2/3% of the Outstanding Amount of the Notes,
acting together as a single Class, as more particularly provided in Section
5.04, proceed to protect and enforce the rights of the Noteholders, by such
appropriate Proceedings as the Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Indenture Trustee by this Indenture or by law.
(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 Collateral, 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 by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of
the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of Notes in any
election of a trustee, a standby trustee or Person performing
similar functions in any such Proceedings;
-29-
(iii) to collect and receive any monies or other
property payable or deliverable on any such claims and to
distribute all amounts received with respect to the claims of
the Noteholders and of the Indenture Trustee on their behalf;
and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee or the Holders of Notes allowed
in any 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 by the Indenture Trustee and each predecessor Indenture
Trustee except as a result of negligence or bad faith.
(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.
(f) In any Proceedings brought by the Indenture Trustee
(including any Proceedings involving the interpretation of any provision of this
Indenture), the Indenture Trustee shall be held to represent all the
Noteholders, and it shall not be necessary to make any Noteholder a party to any
such Proceedings.
Section 5.04 Remedies.
(a) If (i) an Event of Default shall have occurred and be
continuing, the Indenture Trustee shall (subject to Section 5.04(b) below and
Section 5.05), if no Insurer Default shall have occurred and be continuing, at
the direction of the Insurer, or (ii) if an Event of Default shall have occurred
and be continuing, the Indenture Trustee shall (subject to Section 5.04(b) below
and Section 5.05), if an Insurer Default shall have occurred and be continuing,
at
-30-
the direction of Holders representing at least 66 2/3% of the Outstanding Amount
of the Notes, acting together as a single Class, take one or more of the
following actions as so directed:
(i) institute Proceedings in its own name and as or on
behalf of a trustee of an express trust for the collection of
all amounts then payable on the Notes or under this Indenture
with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and
any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect
to the Collateral;
(iii) exercise any remedies of a secured party under the
UCC and any other remedy available to the Indenture Trustee and
take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee on behalf of the
Noteholders under this Indenture or the Notes;
(iv) sell or cause the Servicer to otherwise liquidate
the Collateral or any portion thereof or rights or interests
therein, at one or more public or private sales called and
conducted in any manner permitted by law and deliver the
proceeds of such sale or liquidation to the Indenture Trustee
for distribution in accordance with the terms of this Indenture;
and
(v) maintain possession of the Collateral.
(b) Notwithstanding the foregoing,
(i) in the event that the Indenture Trustee is acting at
the direction of the Insurer, so long as an Insurer Default
shall not have occurred and be continuing, if an Event of
Default shall have occurred and be continuing, the Insurer shall
not have the right to cause the Indenture Trustee or the
Servicer to, and neither the Indenture Trustee nor the Servicer
shall, liquidate the Collateral in whole or in part if the
proceeds of such sale or liquidation would not be sufficient to
pay all outstanding principal of and accrued interest on the
Notes; and
(ii) in the event that the Indenture Trustee is acting
at the direction of Holders representing at least 66 2/3% of the
Outstanding Amount of the Notes, acting together as a single
Class, the Noteholders shall not have the right to direct the
Indenture Trustee or the Servicer to, and neither the Indenture
Trustee nor the Servicer shall, liquidate the Collateral in
whole or in part unless (A) an Indenture Event of Default as
specified in Section 5.01(b), (c), (e) or (f) shall have
occurred and be continuing and in any case the Insurer shall
have failed to make a payment required under the Policy in
accordance with its terms or (B) (1) an Indenture Event of
Default as specified in Section 5.01(a) or (d) shall have
occurred and be continuing, (2) the Insurer shall not have
failed to make a payment required under the Policy in accordance
with its terms and (3) the proceeds of such sale or liquidation
would be sufficient to pay all outstanding principal of and
accrued interest on the Notes and all amounts owing to the
Insurer pursuant to the terms of
-31-
the Insurance Agreement and any unreimbursed Insurer Defense
Costs. In the event of a liquidation of the Collateral pursuant
to clause (B), the Policy will not be available to cover losses
to Noteholders resulting from such liquidation, and the Policy
shall be terminated and the Insurer shall have no further
obligation thereunder.
(c) In determining the sufficiency or insufficiency of the
proceeds of a sale or liquidation of the Collateral to pay all amounts required
pursuant to Section 5.04(b)(i) or (ii) above, the Indenture Trustee may, but
need not, at the sole expense of the Issuer 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
Collateral for such purpose.
(d) In the event that the Indenture Trustee is directed to sell
or to cause the Servicer to otherwise liquidate the Collateral or any portion
thereof or rights or interests therein pursuant to Section 5.04(a)(iv) above,
the Indenture Trustee shall, prior to any such public or private sales, notify
all Residual Interestholders of the proposed sale. The Indenture Trustee shall
provide the Residual Interestholders the right to match the highest liquidation
price offered at any such sale.
Section 5.05 Optional Preservation of the Collateral. If the
Notes have been declared to be due and payable under Section 5.02 following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee shall, absent direction to the
contrary from the Insurer or the Noteholders pursuant to Section 5.04, maintain
possession of the Collateral.
Section 5.06 Priorities.
(a) If the Notes have been declared to be due and payable under
Section 5.02 following an Indenture Event of Default and such declaration and
its consequences have not been rescinded and annulled, any money collected by
the Indenture Trustee with respect to the Collateral or the Notes pursuant to
this Article or otherwise and any money that may then be held or thereafter
received by the Indenture Trustee with respect to the Collateral or the Notes
(excluding any payments made under the Policy), shall be applied in the
following order and priority:
first, to the Servicer, to pay any unpaid Servicing Fee;
second, to pay any accrued and unpaid fees and expenses
of the Owner Trustee, the Indenture Trustee and the Trust Agent
without preference or priority of any kind;
third, to the holders of Class A Notes, to pay accrued
interest on each Class of Class A Notes on a pro rata basis
based on the interest accrued (including, to the extent
permitted by applicable law, interest accrued on any interest
accrued but not timely paid) on each Class of Class A Notes at
the related Interest Rate for such Class;
-32-
fourth, to the holders of Class A Notes, to pay
principal on each Class of Class A Notes on a pro rata basis
based on the Outstanding Amount of each Class of Class A Notes,
until the Outstanding Amount of each such Class of Notes is
reduced to zero;
fifth, to the Insurer, to pay amounts owing to the
Insurer under the Insurance Agreement (including the Premium)
and any unreimbursed Insurer Defense Costs; and
sixth, any excess amounts remaining after making the
distributions described in clauses first through fifth to the
Spread Account, to be applied in accordance with the Insurance
Agreement.
(b) The Indenture Trustee may fix a record date and payment date
for any payment to Noteholders pursuant to this Section. At least 15 days before
such record date, the Issuer shall mail to each Noteholder and the Indenture
Trustee a notice that states the record date, the payment date and the amount to
be paid.
Section 5.07 Limitation of Suits. No Holder of any Note shall
have any right to institute any Proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Outstanding
Amount of the Notes, acting together as a single Class, have
made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name
as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the
Indenture Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in complying with such
request;
(iv) the Indenture Trustee for 60 days after its receipt
of such notice, request and offer of indemnity has failed to
institute such Proceedings;
(v) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60-day
period by the Holders of a majority of the Outstanding Amount of
the Notes, acting together as a single Class; and
(vi) an Insurer Default shall have occurred and be
continuing.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
-33-
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Outstanding Amount of the Notes,
the Indenture Trustee shall act at the request of the Holders of the Notes with
the greater Outstanding Amount of Notes; provided, however that if such groups
of Holders of Notes have the same Outstanding Amount of Notes, the Indenture
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture and any such
action shall be binding on all parties.
Section 5.08 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 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 of the Notes, on or after the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder, but in
all cases subject to the priorities of Section 8.02(c) or Section 5.06(a), as
applicable.
Section 5.09 Restoration of Rights and Remedies. If the
Indenture Trustee, the 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 Insurer or to such Noteholder, then and in every such
case the Issuer, the Indenture Trustee, the 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 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 Insurer or to
the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not a Waiver. No delay or
omission of the Indenture Trustee, the 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 Five or by law to the Indenture Trustee, the Insurer or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, the Insurer or by the Noteholders, as the
case may be.
Section 5.12 Control by Noteholders. The Holders of a majority
of the Outstanding Amount of the Notes shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that:
-34-
(i) such direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) any direction to the Indenture Trustee to sell or
liquidate the Collateral shall be subject to the terms of
Section 5.04; and
(iii) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent
with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines,
in its sole discretion, might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
Section 5.13 Waiver of Past Defaults. Prior to the declaration
of the acceleration of the maturity of the Notes as provided in Section 5.02,
the Insurer or the Holders of Notes representing not less than a majority of the
Outstanding Amount of the Notes, acting together as a single Class, with the
consent of the Insurer may waive any past Default or Event of Default and its
consequences except a Default (a) in the payment of or interest on any of the
Notes, (b) in respect of a covenant or provision hereof that cannot be modified
or amended without the consent of the Holder of each Note, as applicable, or (c)
in respect of the breach of a representation or warranty made by the Issuer in
Section 3.19 hereof. In the case of any such waiver, the Issuer, the Indenture
Trustee, the 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 impair any right consequent
thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
Section 5.14 Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Note by such Holder's acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or omitted
by it as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (i) any suit instituted by the
Indenture Trustee, (ii) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (iii) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
-35-
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 advantages 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
Collateral or upon any of the assets of the Issuer. Any money or property
collected by the Indenture Trustee shall be applied in accordance with Section
5.06.
Section 5.17 Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to
do so and at the Administrator's expense, the Issuer shall take all such lawful
action as the Indenture Trustee may request to compel or secure the performance
and observance by the Seller 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, including the transmission of notices
of default on the part of the Seller or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller or the Servicer of each of their obligations
under the Sale and Servicing Agreement.
(b) If the Indenture Trustee is the Controlling Party and if an
Event of Default has occurred and is continuing, the Indenture Trustee may, and
at the direction (which direction shall be given in writing and may include a
facsimile) of the Holders of 66 2/3% of the Outstanding Amount of the Notes
shall, exercise all rights, remedies, powers, privileges and claims of the
Issuer against the Seller 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 Seller 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.
-36-
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, of
which a Responsible Officer of the Indenture Trustee shall have actual
knowledge, the Indenture Trustee shall exercise the rights and powers vested in
it by this Indenture and with the same degree of care and skill in their
exercise as a prudent person would exercise or use under the circumstances in
the conduct of such person's own affairs; provided, however, that if the
Indenture Trustee shall assume the duties of the Servicer pursuant to Section
3.07(e), the Indenture Trustee in performing such duties shall use the degree of
care and skill customarily exercised by a prudent institutional servicer with
respect to automobile retail installment sales contracts that it services for
itself or others.
(b) Except during the continuance of an Event of Default of
which a Responsible Officer of the Indenture Trustee shall have actual knowledge
or written notice:
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in
this Indenture and no implied covenants or obligations shall be
read into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Indenture Trustee and conforming to the requirements of this
Indenture; however, the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture and the other
Basic Documents to which the Indenture Trustee is a party;
provided, however, that the Indenture Trustee shall not be
responsible for the accuracy or content of any of the
aforementioned documents and the Indenture Trustee shall have no
obligation to verify, re-compute or recalculate any numerical
information provided to it pursuant to 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 willful
misconduct, except that:
(i) this paragraph does not limit the effect of Section
6.01(b);
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer
unless it is proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
5.12.
-37-
(d) Every provision of this Indenture that in any way relates to
the Indenture Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Indenture Trustee shall not be liable for interest on
any money received by it.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture 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
repayments of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(h) 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.
(i) The Indenture Trustee shall, and hereby agrees that it will
(i) perform all of the obligations and duties required of it under the Sale and
Servicing Agreement and (ii) hold the Policy in trust, and will hold any
proceeds of any claim on the Policy in trust solely for application as provided
in the Sale and Servicing Agreement.
(j) Except as otherwise required or permitted by the TIA,
nothing contained herein shall be deemed to authorize the Indenture Trustee to
engage in any business operations or any activities other than those set forth
in this Indenture. Specifically, the Indenture Trustee shall have no authority
to engage in any business operations, acquire any assets other than those
specifically included in the Collateral under this Indenture or otherwise vary
the assets held by the Trust. Similarly, the Indenture Trustee shall have no
discretionary duties other than performing those ministerial acts set forth
above necessary to accomplish the purpose of this Trust as set forth in this
Indenture.
(k) The Indenture Trustee shall not be liable in its individual
capacity with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with this Indenture or at the direction of a
majority of the Outstanding Amount of Notes, acting together as a single Class,
relating to the time, method and place of conducting any Proceeding for any
remedy available to the Indenture Trustee, or exercising or omitting to exercise
any trust or power conferred upon the Indenture Trustee, under this Indenture.
(l) The Indenture Trustee shall not be required to take notice
or be deemed to have notice or knowledge of any Default or Event of Default
unless a Responsible Officer of the Indenture Trustee shall have received
written notice thereof. In the absence of receipt of such notice, the Indenture
Trustee may conclusively assume that there is no Default or Event of Default.
-38-
(m) Subject to the other provisions of this Indenture, the
Indenture Trustee shall have no duty (i) to see to any recording, filing, or
depositing of this Agreement or any agreement referred to herein or any
financing statement or continuation statement evidencing a security interest, or
to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof, (ii) to see to any
insurance, (iii) 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 Collateral, or (iv) to
confirm or verify the contents of any reports or certificates delivered to the
Indenture Trustee pursuant to this Indenture believed by the Indenture Trustee
to be genuine and to have been signed or presented by the proper party or
parties.
(n) Anything in this Agreement to the contrary notwithstanding,
in no event shall the Indenture Trustee be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Indenture Trustee has been advised of the
likelihood of such loss or damage regardless of the form of action.
Section 6.02 Rights of Indenture Trustee.
(a) Except as otherwise provided in the second succeeding
sentence, the Indenture Trustee may conclusively rely and shall be protected in
acting upon or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, note,
direction, demand, election or other paper or document believed by it to be
genuine and to have been signed or presented by the proper person. The Indenture
Trustee need not investigate any fact or matter stated in the document.
Notwithstanding the foregoing, the Indenture Trustee, subject to Section
6.01(b)(ii) upon receipt of all resolutions, certificates, statements, opinions,
reports, documents, orders or other instruments furnished to the Indenture
Trustee that shall be specifically required to be furnished pursuant to any
provision of this Indenture, shall examine them to determine whether they comply
as to form to the requirements of this Indenture.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate (with respect to factual matters) or an
Opinion of Counsel, as applicable. The Indenture Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on the Officer's
Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of any
such agent, attorney, custodian or nominee appointed by the Indenture Trustee
with due care.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Indenture Trustee's
conduct does not constitute willful misconduct, negligence or bad faith.
-39-
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Indenture Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this Indenture or to
institute, conduct or defend any litigation hereunder or in relation hereto at
the request, order or direction of any of the Noteholders, pursuant to the
provisions of this Indenture, unless such Noteholders shall have offered to the
Indenture Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Indenture Trustee of the obligation, during
the continuance of an Event of Default of which a Responsible Officer of the
Indenture Trustee shall have actual knowledge, to exercise such of the rights
and powers vested in it by this Indenture, and to use the same degree of care
and skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(g) The Indenture Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or document, unless requested in writing to do so
by a majority of Noteholders; 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 Agreement, the
Indenture Trustee may require reasonable indemnity against such cost, expense or
liability as a condition to taking any such action.
(h) The right of the Indenture Trustee to perform any
discretionary act enumerated in this Indenture shall not be construed as a duty,
and the Indenture Trustee shall not be answerable for other than its willful
misconduct, negligence or bad faith in the performance of such act.
Section 6.03 Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuer 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 is required to comply with Sections 6.11
and 6.12.
Section 6.04 Indenture Trustee's Disclaimer. The Indenture
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, the Collateral or the Notes, it shall
not be accountable for the Issuer's use of the proceeds from the Notes, and it
shall not be responsible for any statement of the Issuer in this 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.
-40-
Section 6.05 Notice of Defaults. If a Default occurs and is
continuing and a Responsible Officer of the Indenture Trustee has actual
knowledge or has received written notice thereof, the Indenture Trustee shall
mail to each Noteholder and the Insurer notice of the Default within 90 days
after it occurs. Except in the case of a Default in payment of principal of or
interest on any Note (including payments pursuant to the redemption of Notes),
the Indenture Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice is
in the interests of Noteholders.
Section 6.06 Reports by Indenture Trustee to Holders. The
Indenture Trustee shall deliver to each Noteholder such information as may be
required to enable such Holder to prepare its federal and state income tax
returns.
Section 6.07 Compensation and Indemnity. The Issuer shall cause
the Administrator to pay to the Indenture Trustee from time to time reasonable
compensation for its services. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall 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. Such expenses shall include the
reasonable compensation and expenses and disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer shall,
or shall cause the Administrator to, indemnify the Indenture Trustee against any
and all loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer and the
Administrator promptly of any claim for which it may seek indemnity. Failure by
the Indenture Trustee to so notify the Issuer and the Administrator shall not
relieve the Issuer or the Administrator of its obligations hereunder. The Issuer
shall, or shall cause the Administrator to, defend any such claim, and the
Indenture Trustee may have separate counsel and the Issuer shall, or shall cause
the Administrator to, pay the fees and expenses of such counsel. Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against any
loss, liability or expense incurred by the Indenture Trustee through the
Indenture Trustee's own willful misconduct, negligence or bad faith.
The Issuer's obligations to the Indenture Trustee pursuant to this
Section shall survive the resignation or removal of the Indenture Trustee and
the discharge of this Indenture. When the Indenture Trustee incurs expenses
after the occurrence of a Default specified in Section 5.01(e) or (f) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
Section 6.08 Replacement of Indenture Trustee. The Indenture
Trustee may resign at any time by so notifying the Issuer, the Servicer and the
Insurer. The Issuer, may, with the consent of the Insurer, and, at the request
of the Insurer shall, remove the Indenture Trustee, unless an Insurer Default
shall have occurred and be continuing, if:
(i) the Indenture Trustee fails to comply with Section
6.11;
-41-
(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, provided any such decree or order shall have
continued unstayed and in effect for a period of 30 consecutive
days;
(iii) 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
(iv) the Indenture Trustee otherwise becomes incapable
of acting.
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), the Issuer
shall promptly appoint a successor Indenture Trustee acceptable to the Insurer.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The Issuer or the successor
Indenture Trustee shall mail a notice of its succession to Noteholders. The
retiring Indenture Trustee shall promptly transfer all property held by it as
Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 30 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of the Outstanding
Amount of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Any resignation or removal of the Indenture Trustee and appointment of a
successor Indenture Trustee pursuant to the provisions of this Section shall not
become effective until
-42-
acceptance of appointment by the successor Indenture Trustee pursuant to this
Section and payment of all fees and expenses owed to the outgoing Indenture
Trustee. Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the retiring Indenture Trustee shall be entitled to payment or
reimbursement of such amounts as such Person is entitled pursuant to Section
6.07.
Section 6.09 Successor Indenture Trustee by Merger. If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11. The Indenture Trustee shall (unless
the Indenture Trustee is JPMorgan Chase Bank) provide the Insurer and each
Rating Agency prompt notice of any such transaction.
In case at the time such successor by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force and effect of the certificate of the Indenture Trustee
pursuant to the Notes or this Indenture.
Section 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.
(a) Notwithstanding any other provision of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Collateral may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, jointly with
the Indenture Trustee, or separate trustee or separate trustees, of all or any
part of the Trust, and to vest in such Person or Persons, in such capacity and
for the benefit of the Noteholders, such title to the Collateral, or any part
hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor Indenture Trustee under
Section 6.11 and no notice to Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 6.08.
(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
-43-
separately without the Indenture Trustee joining in such act),
except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed the
Indenture Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but
solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder;
and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of co-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 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 Indenture on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee. Notwithstanding anything
to the contrary in this Indenture, the appointment of any separate trustee or
co-trustee shall not relieve the Indenture Trustee of its obligations and duties
under this Indenture.
Section 6.11 Eligibility; Disqualification.
(a) The Indenture Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published annual
report of condition. The Indenture Trustee shall provide copies of such reports
to the Insurer upon request. The Indenture Trustee shall comply with TIA Section
310(b); provided, however, that there shall be excluded from the operation of
TIA Section 310(b)(1) any indenture or indentures under which other securities
of the Issuer are outstanding if the requirements for such exclusion set forth
in TIA Section 310(b)(1) are met.
(b) If the long term debt rating of the Indenture Trustee shall
not be at least Baa3 from Moody's and BBB- from Standard & Poor's, the Rating
Agencies shall be given notice of such lower long-term debt rating.
-44-
Section 6.12 Preferential Collection of Claims Against Issuer.
The Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). An Indenture Trustee who has
resigned or been removed shall be subject to Section 311(a) to the extent
indicated.
Section 6.13 Representations and Warranties of Indenture
Trustee. The Indenture Trustee hereby makes the following representations and
warranties on which the Issuer and Noteholders shall rely:
(a) the Indenture Trustee is a corporation duly organized,
validly existing and in good standing under the laws of its place of
incorporation; and
(b) the Indenture Trustee has full 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.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01 Issuer to Furnish Indenture Trustee Names and
Addresses of Noteholders. The Issuer will furnish or cause to be furnished to
the Indenture Trustee (i) not more than five days after the earlier of (a) each
Record Date and (b) three months after the last Record Date, a list, in such
form as the Indenture Trustee may reasonably require, of the names and addresses
of the Holders of Notes as of such Record Date and (ii) at such other times as
the Indenture Trustee may request in writing, within 10 days after receipt by
the Issuer of any such request, a list of similar form and content as of a date
not more than ten 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. The Indenture Trustee or, if the
Indenture Trustee is not the Note Registrar, the Issuer shall furnish to the
Insurer in writing at such times as the Insurer may reasonably request a copy of
the list.
Section 7.02 Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of TIA Section 312(c).
-45-
Section 7.03 Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days
after the Issuer is required to file the same with the
Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any
of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Sections 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission
in accordance with rules and regulations prescribed from time to
time by the Commission such additional information, documents
and reports with respect to compliance by the Issuer with the
conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in
TIA Section 313(c)) such summaries of any information, documents
and reports required to be filed by the Issuer pursuant to
clauses (i) and (ii) of this Section 7.03(a) as may be required
by rules and regulations prescribed from time to time by the
Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.
Section 7.04 Reports by Indenture Trustee. To the extent that
any of the events described in TIA Section 313(a) shall have occurred, the
Indenture Trustee shall, within 60 days after each December 15 beginning with
December 15, 2002, mail to the Issuer, the Insurer and each Noteholder as
required by TIA Section 313(c) a brief report dated as of such date that
complies with TIA Section 313(a). The Indenture Trustee also shall comply with
TIA Section 313(b).
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01 Collection of Money.
(a) General. Except as otherwise expressly provided herein, the
Indenture Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply
all such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of the
Collateral, the Indenture Trustee may take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate Proceedings. Any such
-46-
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 Five.
(b) Claims Under Policy. The Notes will be insured by the Policy
pursuant to the terms set forth therein, notwithstanding any provisions to the
contrary contained in this Indenture or the Sale and Servicing Agreement. All
amounts received under the Policy shall be used solely for the payment to
Noteholders of principal and interest on the Notes.
Section 8.02 Trust Accounts.
(a) On or prior to the Closing Date, the Issuer shall cause the
Servicer to establish in the name of the Indenture Trustee, for the benefit of
the Noteholders and the Insurer, the Trust Accounts as provided in Section 4.01
of the Sale and Servicing Agreement.
(b) On the Business Day immediately preceding each Distribution
Date, based solely on the Distribution Date Statement, the Servicer shall cause
funds to be withdrawn from the Collection Account equal to the amount of Net
Collections available with respect to such Distribution Date and deposited into
the Payment Account, as provided in Section 4.02(e) of the Sale and Servicing
Agreement. On each Distribution Date, based solely on the Distribution Date
Statement, the Indenture Trustee will apply the Net Collections available with
respect to the related Collection Period, together with amounts, if any,
withdrawn from the Spread Account, the Prefunding Account and the Capitalized
Interest Account or representing payment of the Policy Claim Amount, to make the
deposits to the Note Distribution Account required pursuant to Section 4.03(a)
of the Sale and Servicing Agreement.
(c) On each Distribution Date, based solely on the Distribution
Date Statement, the Indenture Trustee shall distribute all available amounts on
deposit in the Note Distribution Account in respect of such Distribution Date to
Noteholders in the following order of priority:
(i) to the Holders of Class A Notes, the Note Interest
Distributable Amount with respect to the Class A Notes for such
Distribution Date, pro rata;
(ii) if such Distribution Date is the Note Final
Scheduled Distribution Date with respect to a Class of Notes, to
the Holders of such Class of Notes, the Note Principal
Distributable Amount to the extent of the remaining Outstanding
Amount of such Class of Notes;
(iii) to the Holders of the Class A-1 Notes, the
remaining Note Principal Distributable Amount (after giving
effect to the payment, if any, described in clause (ii) above),
until the Outstanding Amount of the Class A-1 Notes is reduced
to zero;
(iv) to the Holders of the Class A-2 Notes, the
remaining Note Principal Distributable Amount (after giving
effect to the payments, if any, described in clauses (ii) and
(iii) above), until the Outstanding Amount of the Class A-2
Notes is reduced to zero;
-47-
(v) to the Holders of the Class A-3 Notes, the remaining
Note Principal Distributable Amount (after giving effect to the
payments, if any, described in clauses (ii) through (iv) above),
until the Outstanding Amount of the Class A-3 Notes is reduced
to zero; and
(vi) to the Holders of the Class A-4 Notes, the
remaining Note Principal Distributable Amount (after giving
effect to the payments, if any, described in clauses (ii)
through (v) above), until the Outstanding Amount of the Class
A-4 Notes is reduced to zero.
(d) The Indenture Trustee shall make claims under the Policy
pursuant to Section 4.02(c) of the Sale and Servicing Agreement and in
accordance with the Policy. In making any such claim, the Indenture Trustee
shall comply with all the terms and conditions of the Policy. Upon receipt of
the Policy Claim Amount, the Indenture Trustee shall distribute such Policy
Claim Amount as part of the Note Distributable Amount under this Indenture
Section 8.03 [RESERVED].
Section 8.04 Release of Collateral.
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.07, the Indenture Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property from the lien of
this Indenture, or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances that are not inconsistent with the provisions of
this Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article 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 monies.
(b) The Indenture Trustee shall, at such time as there are no
Notes Outstanding and all sums due the Indenture Trustee pursuant to Section
6.07 have been paid, release any remaining portion of the Collateral that
secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.04(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA Sections
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01.
Section 8.05 Opinion of Counsel. The Indenture Trustee shall
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.04(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee (and not at the expense of the Indenture Trustee), stating the
legal effect of any such action, outlining the steps required to complete the
same, and concluding that all conditions precedent to the taking of such action
have been complied with and such action will not materially and adversely impair
the security for the Notes or the rights of the Noteholders in contravention of
the provisions of this Indenture; provided, however, that such Opinion of
-48-
Counsel shall not be required to express an opinion as to the fair value of the
Collateral. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Notes but with the
consent of the Insurer and with prior notice to each Rating Agency, the Issuer
and the Indenture Trustee, when authorized by an Issuer Order, and the other
parties hereto at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien of this Indenture, or
better to assure, convey and confirm unto the Indenture Trustee
any property subject or required to be subjected to the lien
created by this Indenture, or to subject to the lien created by
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 the Basic Documents or to make any
other provisions with respect to matters or questions arising
under this Indenture or in any supplemental indenture; provided
that such action shall not adversely affect the interests of the
Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the
Notes and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration
of the trusts hereunder by more than one trustee, pursuant to
the requirements of Article Six; or
-49-
(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 he expressly required by
the TIA.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Notes
but with the consent of the Insurer and with prior notice to each Rating Agency,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder.
Section 9.02 Supplemental Indentures With Consent of
Noteholders. The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to each Rating Agency, with the consent of
the Insurer and with the consent of the Holders of not less than 51% of the
Outstanding Amount of the Notes, by Act of such Holders delivered to the Issuer
and the Indenture Trustee, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that, subject to the express rights of the Insurer under the Basic
Documents, no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Note affected thereby:
(a) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof, the interest
rate thereon or the Redemption Price with respect thereto, or change any place
of payment where, or the coin or currency in which, any Note or the interest
thereon is payable;
(b) 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 Five, to the payment of any such amount due on
the Notes on or after the respective due dates thereof (or, in the case of
redemption, on or after the Redemption Date);
(c) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture;
(d) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
-50-
(e) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required to direct the Indenture
Trustee to sell or liquidate the Collateral pursuant to Section 5.04;
(f) decrease the percentage of the Outstanding Amount of the
Notes required to amend this Indenture or the other Basic Documents;
(g) permit the creation of any lien ranking prior to or on a
parity with the lien created by this Indenture with respect to any part of the
Collateral or, except as otherwise permitted or contemplated herein, terminate
the lien created by this Indenture on any property at any time subject hereto or
deprive the Holder of any Note of the security provided by the lien created by
this Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such act shall approve the substance thereof.
Promptly after the execution by the parties hereto of any supplemental
indenture pursuant to this Section, the Indenture Trustee shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of the Indenture Trustee to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture.
Section 9.03 Execution of Supplemental Indentures. In executing,
or permitting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Indenture Trustee shall be entitled to receive, and subject
to Sections 6.01 and 6.02 shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
Section 9.04 Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and 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 parties hereto 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.
-51-
Section 9.05 Conformity With Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
Section 9.06 Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee as to any
matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01 Redemption. In the event that the Servicer
pursuant to Section 8.01(a) of the Sale and Servicing Agreement purchases the
corpus of the Trust, the Notes are subject to redemption in whole, but not in
part, on the Distribution Date on which such repurchase occurs, for a purchase
price equal to the Redemption Price; provided, however, that the Issuer has
available funds sufficient to pay the Redemption Price. The Seller, the Servicer
or the Issuer shall furnish the Insurer and each Rating Agency notice of such
redemption. If the Notes are to be redeemed pursuant to this Section 10.01, the
Servicer or the Issuer shall furnish notice of such election to the Indenture
Trustee not later than 10 days prior to the Redemption Date and the Issuer shall
deposit with the Indenture Trustee in the Note Distribution Account the
Redemption Price of the Notes to be redeemed whereupon the Collateral shall be
released from the lien of this Indenture and all such Notes shall be due and
payable on the Redemption Date upon the furnishing of a notice complying with
Section 10.02 to each Holder of the Notes.
Section 10.02 Form of Redemption Notice. Notice of redemption
under Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than five days prior to the applicable
Redemption Date to each Holder of Notes, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's address
appearing in the Note Register. In addition, the Administrator shall notify the
Insurer and Rating Agencies upon the redemption of any Class of Notes, pursuant
to Section 1(a)(i)(AA) of the Administration Agreement.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
-52-
(iii) the place where such Notes are to be surrendered
for payment of the Redemption Price (which shall be the office
or agency of the Issuer to be maintained as provided in Section
3.02).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
Section 10.03 Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall, following notice of redemption (if any)
as required by Section 10.02, on the Redemption Date become due and payable at
the Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this Indenture, the
Issuer shall furnish to the Indenture Trustee (i) an Officer's Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with, (ii) an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with and (iii) (if required by the TIA) an
Independent Certificate from a firm of certified public accountants meeting the
applicable requirements of this Section. Notwithstanding the foregoing, in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate
or opinion has read or has caused to be read such covenant or
condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable
-53-
such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each
such signatory, such condition or covenant has been complied
with.
(b) (i) Prior to the deposit of any property or securities with the
Indenture Trustee that is to be made the basis for the release of any Collateral
subject to the lien created by this Indenture, the Issuer shall, in addition to
any obligation imposed in Section 11.01(a) or elsewhere in this Indenture,
furnish to the Indenture Trustee and the Insurer an Officer's Certificate
certifying or stating the opinion of the signer thereof as to the fair value
(within 90 days of such deposit) to the Issuer of the property or securities to
be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee and the Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to
the matters described in clause (i) above, the Issuer shall also
deliver to the Indenture Trustee and the Insurer an Independent
Certificate as to the named matters, if the fair value to the
Issuer of the property to be so deposited and of all other such
property 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 Officer's Certificates delivered pursuant to
clause (i) above and this clause (ii), is 10% or more of the
Outstanding Amount of the Notes, but such Officer's Certificate
need not be furnished with respect to any property so deposited,
if the fair value thereof to the Issuer as set forth in the
related Officer's Certificate is less than $25,000 or less than
one percent of the Outstanding Amount of the Notes.
(iii) Whenever any property or securities are to be
released from the lien created by this Indenture, the Issuer
shall also furnish to the Indenture Trustee and the 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 created by this
Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee and the Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to
the matters described in clause (iii) above, the Issuer shall
also furnish to the Indenture Trustee and the Insurer an
Independent Certificate as to the same matters if the fair value
of the property or securities and of all other property or
securities released from the lien created by this Indenture
since the commencement of the then current fiscal year, as set
forth in the Officer's Certificate required by clause (iii)
above and this clause (iv), equals 10% or more of the
Outstanding Amount of the Notes, but such Officer's Certificate
need not be furnished in the case of any release of property or
securities if the fair value thereof as set forth in the related
Officer's Certificate is less than $25,000 or less than one
percent of the then Outstanding Amount of the Notes.
-54-
Section 11.02 Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Servicer, the
Seller or the Issuer, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Seller or the Issuer, unless
such officer or counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 11.03 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.
-55-
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
Section 11.04 Notices, etc., to Indenture Trustee, Issuer,
Insurer and Rating Agencies.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or permitted
by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Act of Noteholders is to be
made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the
Issuer shall be sufficient for every purpose hereunder if in
writing, personally delivered, sent by facsimile transmission
and confirmed or mailed by overnight service, to or with the
Indenture Trustee at its Corporate Trust Office;
(ii) the Issuer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in
writing, personally delivered, sent by facsimile transmission
and confirmed or mailed by overnight service, to the Issuer
addressed to: Onyx Acceptance Owner Trust 2002-C, in care of
Deutsche Bank Trust Company Delaware, as Owner Trustee, 0000
Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000-0000,
Attention: Corporate Trust Administration Department, or at any
other address furnished in writing to the Indenture Trustee by
the Issuer; or
(iii) the Insurer by the Issuer or the Indenture Trustee
shall be sufficient for any purpose hereunder if in writing,
personally delivered, sent by facsimile transmission and
confirmed or mailed by overnight service, to the Insurer
addressed to: MBIA Insurance Corporation, 000 Xxxx Xxxxxx,
Xxxxxx, Xxx Xxxx 00000, Attention: Insured Portfolio Management,
Structured Finance.
(b) Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, sent by facsimile transmission and confirmed or mailed by
overnight service, to (i) in the case of Moody's, at the following address:
Xxxxx'x Investors Service, Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 and (ii) in the case of Standard & Poor's, at the
following address: Standard & Poor's Ratings Services, 00 Xxxxx Xxxxxx (00xx
Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed Surveillance
Department; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
-56-
Section 11.05 Notices to Noteholders; Waiver. Where this
Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at 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 11.06 Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for in
this Indenture for such payments or notices. The Issuer will furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee will
cause payments to be made and notices to be given in accordance with such
agreements.
Section 11.07 Conflict With Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 11.08 Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
-57-
Section 11.09 Successors and Assigns. All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind its
successors and assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture shall bind its successors, co-trustees and
agents.
Section 11.10 Severability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 11.11 Benefits of Indenture. The Insurer and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture so long as no Insurer Default shall have occurred
and be continuing. Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Noteholders, and any other party secured
hereunder, and any other Person with an ownership interest in any part of the
Collateral, any benefit or any legal or equitable right, remedy or claim under
this Indenture. The Insurer may disclaim any of its rights and powers under this
Indenture, but not its duties and obligations under the Policy, upon delivery of
a written notice to the Indenture Trustee.
Section 11.12 Legal Holidays. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 11.13 Governing Law. THIS INDENTURE SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS INDENTURE SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Section 11.14 Counterparts. This Indenture may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
Section 11.15 Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording offices, such recording
is to be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee and the 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 under this Indenture.
Section 11.16 Trust Obligation. The parties hereto, by entering
into this Indenture, and each Noteholder, by accepting a Note (and each Note
Owner, by its acceptance of an interest in the applicable Book-Entry Note),
hereby covenant and agree that no recourse may be taken, directly or indirectly,
with respect to the obligations of the Issuer, the Owner Trustee or
-58-
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee, the Owner Trustee or the Trust Agent, in its individual
capacity, or the Seller or the Administrator, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee, the Owner Trustee or the
Trust Agent, in its individual capacity, or the Seller or the Administrator, any
holder of a beneficial interest in the Issuer, the Owner Trustee, the Indenture
Trustee or the Trust Agent or of any successor or assign of such Persons, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee, the Owner Trustee and the Trust Agent have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
Section 11.17 No Petition. The parties hereto, by entering into
this Indenture, and each Noteholder, by accepting a Note or a beneficial
interest in a Note, hereby covenant and agree that they will not at any time
institute against the Seller or the Issuer, or join in any institution against
the Seller or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, this Indenture or any of the other Basic
Documents.
Section 11.18 Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee or of
the 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 and the Insurer shall and shall cause their
respective representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee or the Insurer may reasonably determine that such disclosure
is consistent with its obligations hereunder.
Section 11.19 Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary, this instrument has
been countersigned by Deutsche Bank Trust Company Delaware not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall Deutsche Bank Trust Company Delaware in its individual capacity or
any beneficial owner of the Issuer have any liability for the representations,
warranties, covenants, agreements or other obligations of the Issuer hereunder,
as to all of which recourse shall be had solely to the assets of the Issuer. For
all purposes of this Agreement, in the performance of any duties or obligations
of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to
the benefits of, the terms and provisions of Articles VI,
-59-
VII and VIII of the Trust Agreement. Notwithstanding anything herein to the
contrary, Section 2.07 of the Trust Agreement shall remain in full force and
effect.
Section 11.20 Certain Matters Regarding the Insurer. So long as
an Insurer Default shall not have occurred and be continuing, the Insurer shall
have the right to exercise all rights, including voting rights, which the
Noteholders or Residual Interestholders are entitled to exercise pursuant to
this Indenture, without any consent of such Noteholders or Residual
Interestholders; provided, however, that without the consent of each Noteholder
or Residual Interestholder affected thereby, the Insurer shall not exercise such
rights to amend this Indenture in any manner that would (i) reduce the amount
of, or delay the timing of, collections of payments on the Contracts or
distributions which are required to be made on any Note or Residual Interest
Instrument, (ii) adversely affect in any material respect the interests of the
Holders of any Notes or Residual Interest Instruments, or (iii) alter the rights
of any such Holder to consent to such amendment.
Notwithstanding any provision in this Indenture to the contrary, in the
event an Insurer Default shall have occurred and be continuing, the Insurer
shall not have the right to take any action under this Agreement or to control
or direct the actions of the Trust, the Seller, the Indenture Trustee, the Owner
Trustee or the Trust Agent pursuant to the terms of this Indenture, nor shall
the consent of the Insurer be required with respect to any action (or waiver of
a right to take action) to be taken by the Trust, the Seller, the Indenture
Trustee, the Owner Trustee, the Trust Agent or the Holders of the Notes or the
Residual Interest Instruments pursuant to the terms of this Indenture; provided,
that the consent of the Insurer shall be required at all times with respect to
any amendment of this Indenture.
-60-
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and delivered as of the day and year first above written.
ONYX ACCEPTANCE OWNER TRUST 2002-C
By: DEUTSCHE BANK TRUST COMPANY DELAWARE
not in its individual capacity but
solely on behalf of the Issuer as Owner
Trustee under the Trust Agreement
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
JPMORGAN CHASE BANK,
not in its individual capacity but solely
as Indenture Trustee
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Indenture -- Signature Page
SCHEDULE A
SCHEDULE OF CONTRACTS
Schedules of Contracts on file at the offices of the Seller, the Servicer, the
Owner Trustee and the Insurer.
EXHIBIT A
FORM OF DEPOSITORY AGREEMENT
EXHIBIT B
FORM OF CLASS A-1 NOTE
[Begins on Next Page]
EXHIBIT C
FORM OF CLASS A-2 NOTE
[Begins on Next Page]
EXHIBIT D
FORM OF CLASS A-3 NOTE
[Begins on Next Page]
EXHIBIT E
FORM OF CLASS A-4 NOTE
[Begins on Next Page]
