EXHIBIT 4.2
INDENTURE
BETWEEN
BAY VIEW 2002-LJ-1 OWNER TRUST
AS ISSUER
AND
DEUTSCHE BANK TRUST COMPANY AMERICAS
AS INDENTURE TRUSTEE
DATED AS OF SEPTEMBER 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 11
SECTION 1.03. Rules of Construction 11
SECTION 1.04. Directions 12
ARTICLE II
THE NOTES 12
SECTION 2.01. Form 12
SECTION 2.02. Execution, Authentication and Delivery 12
SECTION 2.03. Temporary Notes 12
SECTION 2.04. Registration; Registration of Transfer and Exchange 13
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes 14
SECTION 2.06. Intentionally Blank 14
SECTION 2.07. Payment of Principal and Interest; Defaulted Interest 14
SECTION 2.08. Cancellation 15
SECTION 2.09. Book-Entry Notes 15
SECTION 2.10. Notices to Clearing Agency 16
SECTION 2.11. Definitive Notes 16
SECTION 2.12. Release of Pledged Assets 17
SECTION 2.13. Tax Treatment 17
SECTION 2.14. ERISA 17
SECTION 2.15. CUSIP Numbers. 17
ARTICLE III
COVENANTS 17
SECTION 3.01. Payment of Principal and Interest 17
SECTION 3.02. Maintenance of Office or Agency 17
SECTION 3.03. Money for Payments to be Held in Trust 17
SECTION 3.04. Existence 19
SECTION 3.05. Protection of Trust Estate 19
SECTION 3.06. Opinions as to Pledged Assets. 19
SECTION 3.07. Performance of Obligations; Servicing of Receivables. 20
SECTION 3.08. Negative Covenants 20
SECTION 3.09. Annual Statement as to Compliance 21
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Conditions 21
SECTION 3.11. Successor Transferee 23
SECTION 3.12. No Other Business 23
SECTION 3.13. No Borrowing 23
SECTION 3.14. Servicer's Obligations 23
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities 23
SECTION 3.16. Capital Expenditures 23
SECTION 3.17. Restricted Payments 23
SECTION 3.18. Notice of Events of Default 24
SECTION 3.19. Further Instruments and Acts 24
SECTION 3.20. Compliance with Laws 24
SECTION 3.21. Amendments of Trust Agreement 24
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ARTICLE IV
SATISFACTION AND DISCHARGE 24
SECTION 4.01. Satisfaction and Discharge of Indenture 24
SECTION 4.02. Application of Trust Money 25
SECTION 4.03. Repayment of Monies Held by Paying Agent 25
ARTICLE V
EVENTS OF DEFAULT; REMEDIES 25
SECTION 5.01. Events of Default 25
SECTION 5.02. Rights Upon Event of Default 27
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee 28
SECTION 5.04. Remedies 29
SECTION 5.05. Optional Preservation of the Receivables 30
SECTION 5.06. Priorities 30
SECTION 5.07. Limitation of Suits 31
SECTION 5.08. Unconditional Rights of Noteholders to Receive Principal
and Interest 31
SECTION 5.09. Restoration of Rights and Remedies 31
SECTION 5.10. Rights and Remedies Cumulative 31
SECTION 5.11. Delay or Omission Not a Waiver 32
SECTION 5.12. Control by Controlling Party 32
SECTION 5.13. Waiver of Past Defaults 32
SECTION 5.14. Undertaking for Costs 32
SECTION 5.15. Waiver of Stay or Extension Laws 33
SECTION 5.16. Action on Notes 33
SECTION 5.17. Performance and Enforcement of Certain Obligations 33
SECTION 5.18. Intentionally Left Blank 33
ARTICLE VI
THE INDENTURE TRUSTEE 33
SECTION 6.01. Duties of Indenture Trustee 33
SECTION 6.02. Rights of Indenture Trustee 35
SECTION 6.03. Individual Rights of Indenture Trustee 36
SECTION 6.04. Indenture Trustee's Disclaimer 36
SECTION 6.05. Notice of Defaults 36
SECTION 6.06. Reports by Indenture Trustee to Holders 36
SECTION 6.07. Compensation and Indemnity 36
SECTION 6.08. Replacement of Indenture Trustee 37
SECTION 6.09. Successor Indenture Trustee by Merger 38
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee 38
SECTION 6.11. Eligibility 39
SECTION 6.12. Collateral Agent to Follow Indenture Trustee's Directions 39
SECTION 6.13. Intentionally Blank 39
SECTION 6.14. Preferential Collection of Claims Against Issuer 39
SECTION 6.15. Representations and Warranties of Indenture Trustee 39
SECTION 6.16. Disqualification of the Indenture Trustee 40
SECTION 6.17. Waiver of Setoffs 40
SECTION 6.18. Control by the Controlling Party 40
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS 40
SECTION 7.01. Issuer to Furnish Indenture Trustee Names and Addresses
of Noteholders 40
SECTION 7.02. Preservation of Information; Communications to Noteholders 40
SECTION 7.03. Reports by Issuer 40
SECTION 7.04. Reports by Indenture Trustee 41
ARTICLE VIII
INTENTIONALLY BLANK 41
ARTICLE IX
DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS 41
SECTION 9.01. Lock-Box Account. 41
SECTION 9.02. Collection Account 41
SECTION 9.03. Collections 41
SECTION 9.04. Purchase Amounts 42
SECTION 9.05. Distributions to Parties 42
SECTION 9.06. Servicer Advances 44
SECTION 9.07. Intentionally Blank 44
SECTION 9.08. Intentionally Blank 44
SECTION 9.09. Intentionally Blank 44
SECTION 9.10. Payahead Account 44
SECTION 9.11. Release of Pledged Assets 44
SECTION 9.12. Opinion of Counsel 44
SECTION 9.13. Calculation of Notional Principal Amount 45
ARTICLE X
CREDIT ENHANCEMENT 45
SECTION 10.01. Subordination 45
SECTION 10.02. Spread Account 45
SECTION 10.03. Claims under the Policy 45
SECTION 10.04. Preference Claims; Direction of Proceedings 46
ARTICLE XI
SUPPLEMENTAL INDENTURES 47
SECTION 11.01. Supplemental Indentures Without Consent of Noteholders 47
SECTION 11.02. Supplemental Indentures With Consent of Noteholders 48
SECTION 11.03. Execution of Supplemental Indentures 49
SECTION 11.04. Effect of Supplemental Indenture 49
SECTION 11.05. Conformity With Trust Indenture Act 49
SECTION 11.06. Reference in Notes to Supplemental Indentures 49
ARTICLE XII
REDEMPTION OF NOTES 50
SECTION 12.01. Redemption 50
SECTION 12.02. Form of Redemption Notice 50
SECTION 12.03. Notes Payable on Redemption Date 50
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ARTICLE XIII
MISCELLANEOUS 50
SECTION 13.01. Compliance Certificates and Opinions, etc 50
SECTION 13.02. Form of Documents Delivered to Indenture Trustee 51
SECTION 13.03. Acts of Noteholders 52
SECTION 13.04. Notices, etc., to Indenture Trustee, Issuer, Insurer
and Rating Agencies 52
SECTION 13.05. Notices to Noteholders; Waiver 53
SECTION 13.06. Alternate Payment and Notice Provisions 54
SECTION 13.07. Conflict With Trust Indenture Act 54
SECTION 13.08. Effect of Headings and Table of Contents 54
SECTION 13.09. Successors and Assigns 54
SECTION 13.10. Separability 54
SECTION 13.11. Benefits of Indenture 54
SECTION 13.12. Legal Holidays 54
SECTION 13.13. Governing Law 55
SECTION 13.14. Counterparts 55
SECTION 13.15. Recording of Indenture 55
SECTION 13.16. Trust Obligation 55
SECTION 13.17. No Petition 55
SECTION 13.18. Inspection 55
SECTION 13.19. Limitation of Liability of Owner Trustee 55
SECTION 13.20. Certain Matters Regarding the Insurer 56
SECTION 13.21. No Legal Title in Holders 56
SECTION 13.22. Effect of Termination Date 56
SECTION 13.23. Xxxxxxxx-Xxxxx Certifications 56
EXHIBITS
Schedule A Form of Depository Agreement
Exhibit A-1 Form of Class A-1 Note
Exhibit A-2 Form of Class A-2 Note
Exhibit A-3 Form of Class A-3 Note
Exhibit A-4 Form of Class A-4 Note
Exhibit A-5 Form of Class I Note
Schedule B Planned Notional Principal Amount Schedule
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CROSS-REFERENCE TABLE
Trust Indenture Indenture
Act Section Section
--------------- ---------
310(a) 6.11
310(b) 6.11
310(c) .N/A
311(a) 6.12
311(b) 6.12
311(c) .N/A
312(a) 7.01, 7.02
312(b) 7.02
312(c) 7.02
313(a) 7.04
313(b) 7.04
313(c) 7.03
314(a) 7.03
314(b) 3.06
314(c) 3.06, 4.01, 13.01
314(d) 13.01
314(e) 13.01
314(f) N/A
315(a) 6.01
315(b) 6.05
315(c) 6.01
315(d) 6.01
315(e) 5.14
316(a) 5.04
316(b) 11.02
316(c) 13.03
317(a) 5.03
317(b) 3.03
318(a) 1.02
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This INDENTURE, dated as of September 1, 2002, is entered into between
BAY VIEW 2002-LJ-1 OWNER TRUST, a Delaware business trust, as issuer (the
"Issuer"), and Deutsche Bank Trust Company Americas, a New York banking
corporation, as indenture trustee (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other parties and
for the benefit of the Noteholders and the Insurer:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee on the Closing Date,
on behalf of and for the benefit of the Noteholders and the Insurer, without
recourse, all of the Issuer's right, title and interest in, to and under, (i)
the Receivables listed on Schedule A to the Trust Agreement, (ii) the security
interests in the Financed Vehicles or in any other property granted by Obligors
pursuant to the Receivables, (iii) any proceeds from claims and other amounts
relating to Insurance Policies and other items financed under the Receivables or
otherwise covering an Obligor or a Financed Vehicle, (iv) any Liquidation
Proceeds, (v) all property (including the right to receive future Liquidation
Proceeds) that secures a Receivable and that has been or may be acquired
pursuant to the liquidation of the Receivable, (vi) the interest of the Issuer
in any proceeds from recourse to Dealers relating to the Receivables, (vii) all
documents contained in the Receivable Files relating to the Receivables, (viii)
all monies paid on the Receivables, and all monies due thereon after the Cut-off
Date; (ix) the rights of the Transferor pursuant to the Purchase Agreement, the
Trust Agreement and the Transfer and Contribution Agreement, including, without
limitation, a direct right to cause BVAC to purchase Receivables from the
Transferor upon the occurrence of a breach of any of the representations and
warranties contained in Section 3.02(b) of the Purchase Agreement or the failure
of BVAC to timely comply with its obligations pursuant to Section 5.05 of the
Purchase Agreement and (x) all proceeds (including, without limitation,
"proceeds" as defined in the UCC of the jurisdiction the law of which governs
the perfection of the interest in such Receivables and such other property so
transferred) of any of the foregoing. Such property described in the preceding
sentence, together with and such other property (a) any and all other right,
title and interest, including any beneficial interest the Issuer may have in the
Collection Account, the Payahead Account, the Reserve Account and the Lock-Box
Account (to the extent such amounts and property in the Lock-Box Account relate
to the Receivables), (b) the funds deposited in and financial assets credited to
and from time to time on deposit in such accounts (to the extent such amounts
and property in the Lock-Box account relate to the Receivables), and all
Eligible Investments and other securities, instruments and other investments
purchased from such funds, shall hereinafter be referred to as the "Pledged
Assets."
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, 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 on behalf of the Noteholders and the Insurer,
acknowledges such Xxxxx, accepts the trust 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 Noteholders and the Insurer 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 Trust 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 13.03(a).
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"Authorized Officer" means, with respect to the Issuer and the Spread
Account Depositor, any officer of the Servicer or the Owner Trustee or the
Spread Account Depositor Owner Trustee, as applicable, or agent acting pursuant
to a power of attorney, with respect to the Back-up Servicer, any officer or
agent of the Back-up Servicer, with respect to the Standby Servicer, any officer
or agent of the Standby Servicer, in each case who is identified on the list of
Authorized Officers delivered 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).
"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.
"BVAC" means Bay View Acceptance Corporation, a Nevada corporation, and
its successors.
"Certificateholders" mean the owners or holders of the Certificates
pursuant to the Trust Agreement.
"Class" means all Notes whose form is identical except for variation in
denomination, principal amount or owner.
"Class A Monthly Interest" means, for any Payment Date, the sum of Class
A-1 Monthly Interest, Class A-2 Monthly Interest, Class A-3 Monthly Interest and
Class A-4 Monthly Interest.
"Class A Monthly Principal" means the sum of Class A-1 Monthly
Principal, Class A-2 Monthly Principal, Class A-3 Monthly Principal and Class
A-4 Monthly Principal.
"Class A Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3
Note or a Class A-4 Note.
"Class A Note Balance" means, for any date of determination, the
aggregate of the Class A-1 Note Balance, Class A-2 Note Balance, Class A-3 Note
Balance and Class A-4 Note Balance for such date of determination.
"Class A Noteholder" means a Class A-1 Noteholder, a Class A-2
Noteholder, a Class A-3 Noteholder or a Class A-4 Noteholder.
"Class A-1 Interest Rate" means 1.84511% per annum.
"Class A-1 Monthly Interest" means, (i) for the first Payment Date, the
product of (x) one-three hundred sixtieth (1/360th) of the Class A-1 Interest
Rate, (y) the actual number of days from and including the Closing Date through
and including the day before the first Payment Date and (z) the Initial Class
A-1 Note Balance and (ii) for any subsequent Payment Date, the product of (x)
one-three hundred sixtieth (1/360th) of the Class A-1 Interest Rate, (y) the
actual number of days from and including the previous Payment Date through and
including the day before the related Payment Date and (z) the Class A-1 Note
Balance as of the immediately preceding Payment Date (after giving effect to any
payment of Monthly Principal made on such immediately preceding Payment Date).
"Class A-1 Monthly Principal" means that portion of Monthly Principal to
be paid to Class A-1 Noteholders on each Payment Date in accordance with Section
9.05.
"Class A-1 Note" means a promissory note executed on behalf of the Trust
and authenticated by the Indenture Trustee substantially in the form attached
hereto as Exhibit A-1.
"Class A-1 Note Balance" means, as of any date of determination, the
Initial Class A-1 Note Balance minus all payments of Monthly Principal actually
distributed to Class A-1 Noteholders as of such date of determination.
"Class A-1 Noteholder" means the Person in whose name the respective
Class A-1 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-1 Note registered in the name
of the Issuer, the Transferor,
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the Servicer or BVAC, or any Person controlling, controlled by, or under common
control with the Issuer, the Transferor or the Servicer, shall not be taken into
account in determining whether the requisite percentage necessary to effect any
such consent, waiver, request, or demand shall have been obtained.
"Class A-2 Interest Rate" means 2.41000% per annum.
"Class A-2 Monthly Interest" means, (i) for the first Payment Date, the
product of one-twelfth of the Class A-2 Interest Rate and the Initial Class A-2
Note Balance and (ii) for any subsequent Payment Date, the product of
one-twelfth of the Class A-2 Interest Rate and the Class A-2 Note Balance as of
the immediately preceding Payment Date (after giving effect to any payment of
Monthly Principal made on such immediately preceding Payment Date).
"Class A-2 Monthly Principal" means that portion of Monthly Principal to
be paid to Class A-2 Noteholders on each Payment Date in accordance with Section
9.05.
"Class A-2 Note" means a promissory note executed on behalf of the Trust
and authenticated by the Indenture Trustee substantially in the form attached
hereto as Exhibit A-2.
"Class A-2 Note Balance" means, as of any date of determination, the
Initial Class A-2 Note Balance minus all payments of Monthly Principal actually
distributed to Class A-2 Noteholders as of such date of determination.
"Class A-2 Noteholder" means the Person in whose name the respective
Class A-2 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-2 Note registered in the name
of the Issuer, the Transferor, the Servicer or BVAC, or any Person controlling,
controlled by, or under common control with the Issuer, the Transferor or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request, or demand
shall have been obtained.
"Class A-3 Interest Rate" means 2.92000% per annum.
"Class A-3 Monthly Interest" means, (i) for the first Payment Date, the
product of one-twelfth of the Class A-3 Interest Rate and the Initial Class A-3
Note Balance and (ii) for any subsequent Payment Date, the product of
one-twelfth of the Class A-3 Interest Rate and the Class A-3 Note Balance as of
the immediately preceding Payment Date (after giving effect to any payment of
Monthly Principal made on such immediately preceding Payment Date).
"Class A-3 Monthly Principal" means that portion of Monthly Principal to
be paid to Class A-3 Noteholders on each Payment Date in accordance with Section
9.05.
"Class A-3 Note" means a promissory note executed on behalf of the Trust
and authenticated by the Indenture Trustee substantially in the form attached
hereto as Exhibit A-3.
"Class A-3 Note Balance" means, as of any date of determination, the
Initial Class A-3 Note Balance minus all payments of Monthly Principal actually
distributed to Class A-3 Noteholders as of such date of determination.
"Class A-3 Noteholder" means the Person in whose name the respective
Class A-3 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-3 Note registered in the name
of the Issuer, the Transferor, the Servicer or BVAC, or any Person controlling,
controlled by, or under common control with the Issuer, the Transferor or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request, or demand
shall have been obtained.
"Class A-4 Interest Rate" means, for any Payment Date, the lesser of (i)
3.60000% per annum and (ii) the Net WAC Cap calculated with respect to such
Payment Date.
"Class A-4 Monthly Interest" means, (i) for the first Payment Date, the
product of one twelfth of the Class A-4 Interest Rate and the Initial Class A-4
Note Balance and (ii) for any subsequent Payment Date, the product of
one-twelfth of the Class A-4 Interest Rate and the Class A-4 Note Balance as of
the immediately preceding Payment Date (after giving effect to any payment of
Monthly Principal made on such immediately preceding Payment Date).
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"Class A-4 Monthly Principal" means that portion of Monthly Principal to
be paid to Class A-4 Noteholders on each Payment Date in accordance with Section
9.05.
"Class A-4 Note" means a promissory note executed on behalf of the Trust
and authenticated by the Indenture Trustee substantially in the form attached
hereto as Exhibit A-4.
"Class A-4 Note Balance" means, as of any date of determination, the
Initial Class A-4 Note Balance minus all payments of Monthly Principal actually
distributed to Class A-4 Noteholders as of such date of determination.
"Class A-4 Noteholder" means the Person in whose name the respective
Class A-4 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-4 Note registered in the name
of the Issuer, the Transferor, the Servicer or BVAC, or any Person controlling,
controlled by, or under common control with the Issuer, the Transferor or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request, or demand
shall have been obtained.
"Class I Final Scheduled Payment Date" means May 25, 2011.
"Class I Monthly Interest" means (i) for the first Payment Date, the
product of the following: one-twelfth of the Class I Note Rate multiplied by the
Original Notional Principal Amount, and (ii) for any subsequent Payment Date,
one-twelfth of the product of the Class I Note Rate and the Notional Principal
Amount as of the immediately preceding Payment Date (after giving effect to any
reduction of the Notional Principal Amount due to allocations of principal on
such preceding Payment Date); provided, however, that after the Class I Final
Scheduled Payment Date, the Class I Monthly Interest shall be zero; provided,
further, that in the event the Notes are accelerated pursuant to Section 5.02(a)
following an Event of Default, the Class I Monthly Interest for any remaining
Payment Date will be due to the Class I Noteholders based on the Planned
Notional Principal Amount for that Payment Date as set forth in the Planned
Notional Principal Amount Schedule.
"Class I Note" means a promissory note executed on behalf of the Trust
and authenticated by the Indenture Trustee substantially in the form attached
hereto as Exhibit A-5.
"Class I Noteholder" means the Person in whose name the respective Class
I Note shall be registered in the Note Register, except that, solely for the
purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class I Note registered in the name of
the Issuer, the Transferor, the Servicer or BVAC, or any Person controlling,
controlled by, or under common control with the Issuer, the Transferor or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request, or demand
shall have been obtained.
"Class I Note Rate" means 2.50% per annum.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means Deutsche Bank Trust Company Americas, in its
capacity as collateral agent under the Spread Account Agreement.
"Companion Component" shall have the meaning specified in Section 9.13.
"Controlling Party" means the Insurer, so long as no Insurer Default
shall have occurred and be continuing and the Insurance Agreement has not
terminated, and the Indenture Trustee, at the direction of the Majority
Noteholders, for so long as an Insurer Default shall have occurred and be
continuing or if the Insurance Agreement has terminated.
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"Corporate Trust Office" means the principal corporate trust office of
the Indenture Trustee, which at time of execution of this Indenture is 000 Xxxxx
Xxx, XX XXX00-0000, Xxxxxx Xxxx, Xxx Xxxxxx 00000, Attention: Corporate Trust
and Agency Services - Structured Finance Group or at such other address as the
Indenture Trustee may designate from time to time by notice the Noteholders, the
Servicer, the Back-up Servicer, the Standby Servicer, the Insurer and the
Issuer, or the principal corporate trust office of any successor Indenture
Trustee (the address of which the successor Indenture Trustee will notify the
Noteholders, the Insurer and the Issuer). With respect only to the surrender of
Notes for registration of transfer or exchange or payment of the final
distribution, "Corporate Trust Office" means, on the date hereof, the office of
the Indenture Trustee or its agent which is DTC Transfer Agent Services, 00
Xxxxx Xxxxxx -- Xxxxxxxx Xxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Cram Down Loss" means, for any Receivable (other than a Charged-Off
Receivable), if a court of appropriate jurisdiction in an insolvency proceeding
issues a ruling that reduces the amount owed on the Receivable or otherwise
modifies or restructures the scheduled payments to be made on the Receivable, an
amount equal to: (1) the Principal Balance of the Receivable immediately prior
to the order minus the Principal Balance of the Receivable as so reduced,
modified or restructured; plus (2) if the court issued an order reducing the
effective interest rate on the Receivable, the excess of (a) the net present
value (using a discount rate equal to the adjusted APR on such receivable) of
the Scheduled Receivable Payments as so modified or restructured over (b) the
net present value (using a discount rate equal to the original APR on such
receivable) of the Scheduled Receivable Payments as so modified or restructured.
"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 the Closing Date, among
the Issuer, the Indenture Trustee and DTC, as the initial Clearing Agency,
relating to the Notes, substantially in the form of Schedule A hereto.
"Determination Date" means, for each Collection Period, the fifteenth
calendar day prior to the related Payment Date, of if the fifteenth day is not a
Business Day, the next following Business Day.
"Draw Date" means a date no later than the third Business Day (as
defined in the Policy) prior to each Payment Date.
"DTC" means The Depository Trust Company, a New York corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" shall have the meaning specified in Section 5.01(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"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 xxxxxxx.
"Final Maturity Date" means October 25, 2003 with respect to the Class
A-1 Notes, August 25, 2005 with respect to the Class A-2 Notes, December 25,
2007 with respect to the Class A-3 Notes, and May 25, 2011 with respect to the
Class A-4 Notes.
"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 Pledged Assets or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Pledged Assets 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
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granting party or otherwise and generally to do and receive anything that the
granting party is or may be entitled to do or receive thereunder or with respect
thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Issuer" means Bay View 2002-LJ-1 Owner Trust as the issuer of the Notes
under this Indenture and its permitted successors and assigns.
"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 guarantees, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds to invest in any Person or otherwise to assure a creditor against
loss; (vii) obligations of such Person secured by any lien on property or assets
of such Person, whether or not the obligations have been assumed by such Person;
provided that the amount of such indebtedness if not so assumed shall in no
event be deemed to be greater than the fair market value from time to time (as
reasonably determined in good faith by the Issuer) of the property subject to
such lien; or (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.
"Indenture Trustee" means Deutsche Bank Trust Company Americas, a New
York banking corporation, as the Indenture Trustee under this Indenture and its
permitted successors and assigns.
"Independent" when used with respect to any specified Person, means that
Person who (i) is in fact independent of the Issuer, the Transferor and any of
their respective Affiliates, (ii) is not a director, officer or employee of the
Issuer, the Transferor or any of their respective Affiliates, (iii) is not a
person related to any officer or director of the Issuer, the Transferor 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 Transferor or any of
their respective Affiliates, and (v) is not connected with the Issuer, the
Transferor 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 and the Insurer, so long as it is the Controlling
Party, under the circumstances described in, and otherwise complying with, the
applicable requirements of Section 13.01, made by an Independent appraiser or
other expert appointed by an Issuer Order and approved by the Indenture Trustee,
and , so long as it is the Controlling Party, the Insurer, 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.
"Initial Class A-1 Note Balance" means $65,800,000.
"Initial Class A-2 Note Balance" means $129,000,000.
"Initial Class A-3 Note Balance" means $171,000,000.
"Initial Class A-4 Note Balance" means $87,410,907.
"Initial Note Balances" means $453,210,907.
"Insurance Premium" means Premium as defined in the Premium Letter.
"Insurance Policies" means any physical damage, credit life and credit
accident and health insurance policies or certificates or any vendor's single
interest physical damage insurance policy relating to the Receivables, the
Financed Vehicles or the Obligors.
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"Insurer Optional Deposit" has the meaning given to such term in Section
5.19 of this Indenture.
"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 (a copy of which shall be delivered to the Insurer).
"Monthly Interest" means, with respect to any Payment Date, the sum of
Class A Monthly Interest and Class I Monthly Interest with respect to such
Payment Date.
"Monthly Principal" for any Payment Date will equal the sum of the
following: (i) the portion of Available Funds relating to principal for the
Collection Period immediately preceding such Payment Date; (ii) an amount equal
to (x) the aggregate Principal Balances of all Receivables that became
Charged-off Receivables during the related Collection Period, in each case
immediately prior to the charge-off of such Receivable minus (y) any Liquidation
Proceeds allocable to principal with respect to such Charged-off Receivables
received during such Collection Period; (iii) the aggregate amount of Cram Down
Losses on the Receivables incurred during the Collection Period immediately
preceding such Payment Date; and (iv) any portion refunded to Obligors during
the related Collection Period of extended warranty protection plan costs, or of
physical damage, credit life, or disability insurance premiums included in the
Amount Financed.
"Net WAC Cap" means for any Payment Date, the per annum weighted average
APR for the Receivables based on their respective Principal Balances as of the
beginning of the related Collection Period (prior to giving effect to any
collections of principal made during such Collection Period or writedowns due to
losses) minus the sum of (x) the per annum rates at which the Insurance Premium
and Servicing Fee are calculated, (y) (i) the product of (A) the sum of the
Standby Servicer Fee, Indenture Trustee Fee and Owner Trustee Fee due to be paid
on the related Payment Date and (B) twelve, divided by (ii) the outstanding
Principal Balance of the Receivables as of the beginning of the Collection
Period (prior to giving effect to any collections of principal during such
Collection Period or writedowns due to losses) and (z) (i) the product of the
interest due to be paid on the related Payment Date on the Class I Notes and
twelve, divided by (ii) the outstanding Principal Balance of the Receivables as
of the beginning of the Collection Period (prior to giving effect to any
collections of principal during such Collection Period or writedowns due to
losses).
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a
Class A-4 Note or a Class I Note.
"Note Balance" means the Class A-1 Note Balance, the Class A-2 Note
Balance, the Class A-3 Note Balance or the Class A-4 Note Balance, depending
upon the context. When the term "Note Balances" is used herein with respect to
an issue relating to the consent of or voting of Noteholders, such term shall
refer only to the classes of Class A Notes then Outstanding such that the Class
A Noteholders will vote as a single class. The Class I Notes shall have no
voting rights.
"Noteholder" has the meaning provided in the definition of Holder.
"Note Owner" means, with respect to a Book-Entry Note, the Person who is
the beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.04.
"Notional Principal Amount" means, as of any date of determination, for
the purpose of calculating the Class I Monthly Interest, the Original Notional
Principal Amount minus all allocations of Monthly Principal to the PAC Component
as of such date of determination pursuant to Section 9.13 of this Indenture.
"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 13.01, and delivered to
the Indenture Trustee or the Insurer, as applicable.
"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 Transferor and who shall be satisfactory to
7
the Indenture Trustee and, if addressed to the Insurer, satisfactory to the
Insurer (so long as it is the Controlling Party), and which shall comply with
any applicable requirements of Section 13.01.
"Original Notional Principal Amount" means $339,622,444.
"Original Pool Balance" means $453,210,906.56.
"Outstanding" or "Outstanding Notes" means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Notes are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture 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 Notes which
have been paid with the proceeds of the Policy shall continue to remain
Outstanding for purposes of this Indenture until the Insurer has been
paid as subrogee hereunder or reimbursed pursuant to the Insurance
Agreement as evidenced by a written notice from the Insurer delivered to
the Indenture Trustee, and the Insurer shall be deemed to be the Holder
thereof to the extent of any payments thereon made by the Insurer;
provided, further, that in determining whether the Holders of the
requisite Outstanding Class A Note Balance have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or
under any Basic Document, Notes owned by the Issuer, the Transferor,
BVAC, any other obligor upon the Notes, or any Affiliate of any of the
foregoing Persons shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that a Responsible
Officer of the Indenture Trustee either actually knows to be so owned or
has received written notice thereof shall be so disregarded. Notes so
owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the
Indenture Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Transferor, BVAC or any Affiliate of any of the foregoing
Persons.
"Owner Trustee" means Wilmington Trust Company, acting not in its
individual capacity but solely as owner trustee under the Trust Agreement on
behalf of the Trust.
"PAC Component" shall have the meaning specified in Section 9.13.
"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
Collection Account, including payment of principal of or interest on the Notes
on behalf of the Issuer.
"Plan" means any Person that is (i) an "employee benefit plan" (as
defined in Section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a "plan" (as defined in Section 4975(e)(1) of the Code) that is
subject to Section 4975 of the Code or (iii) an entity whose underlying assets
include assets of a plan described in (i) or (ii) above by reason of such plan's
investment in the entity.
"Planned Notional Principal Amount" means, for each respective Payment
Date, the corresponding amount specified in the Planned Notional Principal
Amount Schedule.
"Planned Notional Principal Amount Schedule" means the amortization
schedule of Planned Notional Principal Amount for each respective Payment Date,
attached hereto as Schedule B.
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"Pledged Assets" has the meaning provided in the Granting Clause of this
Indenture.
"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.
"Premium Letter" means the letter dated the Closing Date as defined in
the Insurance Agreement.
"Principal Balance" means, for any Receivable as of any date,
(1) the Amount Financed
minus
(2) the sum, without duplication, of
(a) that portion of all Scheduled Receivable Payments
received on or prior to such day allocable to
principal;
plus
(b) any portion refunded to obligors of extended
warranty protection plan costs, or of physical
damage, credit life, or disability insurance
premiums included in the Amount Financed;
plus
(c) any prepayment in full or any partial prepayments
applied to reduce the principal balance of the
Receivable;
plus
(d) the amount of any Cram Down Loss;
provided, however, that any Charged-off Receivable or Purchased
Receivable will have a Principal Balance of zero as of the last day of the
Collection Period in which such Receivable was charged-off or repurchased, as
applicable.
"Principal Payment Sequence" means the order in which Monthly Principal
shall be distributed among the Noteholders. The order of distribution of Monthly
Principal is:
(1) to the Class A-1 Noteholders until the Class A-1 Note Balance has
been reduced to zero;
(2) to the Class A-2 Noteholders until the Class A-2 Note Balance has
been reduced to zero;
(3) to the Class A-3 Noteholders until the Class A-3 Note Balance has
been reduced to zero; and
(4) to the Class A-4 Noteholders until the Class A-4 Note Balance has
been reduced to zero,
provided, however, in the event that the amount of Available Funds (together
with amounts withdrawn from the Spread Account) are not sufficient on any
Payment Date to pay the required payment of Class A Monthly Principal to Class A
Noteholders in full on any Payment Date at any time after the occurrence and
during the continuance of an Insurer Default, the amount of such funds available
to pay Class A Monthly Principal to Class A Noteholders will be distributed pro
rata to the Class A Noteholders based upon the relative Note Balance of each
Class of Class A Notes.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Rating Agency Condition" means, with respect to any action, that (i)
Moody's shall have been given ten Business Days (or such shorter period as is
acceptable to Moody's) prior notice thereof and that Moody's shall have
9
notified the Transferor, 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) 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 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 Payment Date or Redemption Date,
the close of business on the last day of the related Collection Period.
"Recoveries of Advances" means, for any Collection Period, all payments
received by the Servicer by or on behalf of Obligors (other than Obligors with
respect to Defaulted Receivables and excluding reimbursements of Outstanding
Advances on Defaulted Receivables pursuant to Section 9.05(a)(ii) hereof) during
such Collection Period representing recoveries of Interest Shortfalls for which
Advances were made for prior Collection Periods.
"Redemption Date" means the Payment Date specified by the Servicer or
the Issuer pursuant to Section 12.01.
"Redemption Price" means an amount equal to the fair market value of the
Receivables but not less than the sum of: (i) the unpaid principal amount of the
Class A Notes redeemed plus (ii) accrued and unpaid interest on the Class A
Notes and Class I Notes at the respective interest rates of each Class of Notes
being so redeemed through the end of the related Collection Period plus (iii)
all amounts then due and owing to the Insurer, the Servicer, the Back-Up
Servicer, the Standby Servicer, the Collateral Agent, the Indenture Trustee and
the Owner Trustee.
"Responsible Officer" means, when used with respect to the Indenture
Trustee, any officer within the corporate trust department of the Indenture
Trustee including any director, managing director, vice president, assistant
vice president, assistant treasurer, assistant secretary or any other officer of
the Indenture Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of his knowledge of
and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, as amended.
"Servicer Default" means an Event of Servicer Default under the Trust
Agreement.
"State" means any one of the 50 states of the United States or the
District of Columbia.
"Termination Date" means the latest of (i) the expiration of the Policy
in accordance with its terms, (ii) the date on which the Insurer shall have
received payment and performance of all amounts and obligations owed to or on
behalf of the Insurer under this Indenture or the Insurance Agreement 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.
"Transferor" means Bay View Securitization Corporation, a Delaware
corporation, in its capacity as the seller of the Receivables under the Trust
Agreement.
"Trigger Event" has the meaning provided in the Spread Account
Agreement.
"Trust Agreement" means the Trust and Servicing Agreement, dated as of
the date hereof, between the Transferor, the Servicer, the Standby Servicer, the
Indenture Trustee, the Back-up Servicer and the Owner Trustee.
"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.
"Underwriter" means UBS Warburg LLC.
10
"Underwriter Exemption" means the exemption granted to each Underwriter
by the U.S. Department of Labor, as amended by Prohibited Transaction Exemption
("PTE") 97-34, PTE 2000-58 and PTE 2002-41.
"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 Security Holder" means a Noteholder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Indenture
Trustee.
"Obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular;
(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 references contained in this Indenture
are references to Sections, subsections and Schedules in or to this
Indenture unless otherwise specified.
SECTION 1.04. DIRECTIONS. Any direction required to be given by the
Noteholders shall be given hereunder by the Insurer, unless an Insurer Default
shall have occurred and be continuing or if the Insurance Agreement has
terminated, in which case the Majority Noteholders shall be entitled to give
such direction.
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ARTICLE II
THE NOTES
SECTION 2.01. FORM.
(a) The Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes and Class I Notes, in each case together with the Indenture Trustee's
certificate of authentication, shall be in substantially the forms set forth as
Exhibits A-1, A-2, A-3, A-4 and A-5 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.
(b) The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
(c) Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in the exhibits hereto are part of the terms of this
Indenture.
SECTION 2.02. EXECUTION, AUTHENTICATION AND DELIVERY.
(a) The Notes shall be executed on behalf of the Issuer by the Owner
Trustee, as provided herein. 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.
(b) The Indenture Trustee shall, upon receipt of an Issuer Order,
authenticate and deliver for original issue Notes in the amount of the Initial
Class A-1 Note Balance, the Initial Class A-2 Note Balance, the Initial Class
A-3 Note Balance and the Initial Class A-4 Note Balance and in the case of the
Class I Note, the Original Notional Principal Amount. The aggregate principal
amount of the Class A 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 ($1,000 Notional Principal Amount in the case of the Class I Notes) in
excess thereof, except that one Note of each Class may be issued in a different
denomination.
(c) 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
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.
(a) 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.
(b) If temporary Notes are issued, the Issuer will cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable 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
12
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.
(a) The Issuer shall cause to be kept a register (the "Note Register")
in which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The 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.
(b) If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee and the
Insurer 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 and the Insurer 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 Noteholders and
the principal amounts and number of such Notes.
(c) 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.
(d) At the option of the Holder, Notes may be exchanged for other Notes
of the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
(e) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of transfer or
exchange shall be 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 Xxxxxx'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.
(g) 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 11.06 not
involving any transfer.
(h) 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.
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SECTION 2.05. MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
(a) If (i) any mutilated Note is surrendered to the Indenture Trustee,
or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Indenture Trustee and the Insurer (unless an Insurer Default shall have occurred
and be continuing) such security or indemnity as may be required by them to hold
the Issuer, the Indenture Trustee and the Insurer harmless, then, in the absence
of notice to the Issuer, the Note Registrar or the Indenture Trustee that such
Note has been acquired by a bona fide purchaser, the Issuer shall execute and
upon its request the Indenture Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a
replacement Note of the same Class; provided, however, that if any such
destroyed, lost or stolen Note, but not a mutilated Note, shall have become or
within seven days shall be due and payable, or shall have been called for
redemption, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or payable or upon the Redemption
Date without surrender thereof. If, after the delivery of such replacement Note
or payment of a destroyed, lost or stolen Note pursuant to the proviso to the
preceding sentence, a bona fide purchaser of the original Note in lieu of which
such replacement Note was issued presents for payment such original Note, the
Issuer, 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 bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer, the Insurer or the Indenture Trustee in connection therewith.
(b) 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 and/or the Note Registrar) connected
therewith.
(c) Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes. In the case of the
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.
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SECTION 2.06. INTENTIONALLY BLANK.
SECTION 2.07. PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
(a) Each Class of Notes shall accrue interest as provided in this
Indenture at the related interest rate for such Class, and such interest shall
be payable on each Payment Date as specified herein, subject to Section 3.01.
Interest accrued on any Note but not paid on any Payment Date will be due on the
immediately succeeding Payment Date, together with, to the extent permitted by
applicable law, interest on such shortfall at the related interest rate. Any
installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the 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 Payment
Date, a Redemption Date or on the related Final Maturity Date, as the case may
be (and except for the Redemption Price for any Note called for redemption
pursuant to Section 12.01), 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 Class A Note shall be payable on each Payment
Date to the extent provided in this Indenture and 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 Class A Notes shall be due
and payable, if not previously paid, on the earlier of:
(i) the Final Maturity Date of such Class;
(ii) the Redemption Date;
(iii) if (A) an Event of Default shall have occurred and be
continuing, and (B) 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 (A) an Event of Default shall have occurred and be
continuing and (B) an Insurer Default shall have occurred and be
continuing or the Policy shall have expired in accordance with its
terms, the date on which the Majority Noteholders shall 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 Class A 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 Payment Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed within five Business Days of such Payment 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 Payment Date) or
receipt of notice of termination of the Trust pursuant to Section 16.01 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 12.02. In addition, the Administrator shall
notify the Insurer and the Rating Agencies upon the final payment of interest on
and principal of each Class of Notes, and upon the termination of the Trust, in
each case pursuant to the Administration Agreement.
(c) In furtherance of and in limitation of the foregoing, each
Noteholder, by its acceptance of a Note, specifically acknowledges that it has
no right to or interest in any monies at any time held pursuant to the Spread
Account Agreement prior to the release of such monies pursuant to Section
3.03(b) of the Spread Account Agreement, such monies being held in trust for the
benefit of the Secured Parties (as defined therein).
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(d) Promptly following the date on which all principal of and interest
on the Notes has been paid in full and the Notes have been surrendered to the
Indenture Trustee, the Indenture Trustee shall, if the Insurer has paid any
amount in respect of the Notes under the Policy or otherwise which has not been
reimbursed to it, deliver such surrendered Notes to the Insurer.
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 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 typewritten Notes representing the Book-Entry Notes, to
be delivered to DTC, the initial Clearing Agency, by, or on behalf of, the
Issuer (except for any fractional units which cannot be accepted by DTC). 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 Noteholders evidencing a
specified percentage of the Note Balances, 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 shall give all such notices and communications
specified herein to be given to Noteholders to the Clearing Agency, and shall
have no obligation to the Note Owners.
SECTION 2.11. DEFINITIVE NOTES.
(a) 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 to which the
Insurer (unless an
16
Insurer Default has occurred and is continuing or if the Insurance Agreement has
terminated) has provided its prior written consent, or (ii) after the occurrence
of an Event of Default or a Servicer Default, the Controlling Party advises 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, and the Insurer 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, the Insurer or the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Notes of a Class, the Indenture Trustee shall recognize the Holders of the
Definitive Notes as Noteholders hereunder.
(b) 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 PLEDGED ASSETS. Subject to Section 13.01 and
the terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt by the Indenture Trustee and
the Insurer 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 Pledged Assets. The Issuer and the
Indenture Trustee, 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.
SECTION 2.14. ERISA. Each purchaser or transferee of a Note that is a
Benefit Plan (as such term is defined in ERISA) shall be deemed to have
represented that the relevant conditions for exemptive relief under Prohibited
Transaction Class Exemption ("PTCE") 84-14, PTCE 90-1, PTCE 91-38, PTCE 95-60 or
PTCE 96-23, the Underwriter Exemption or other applicable exemption providing
substantially similar relief have been satisfied.
SECTION 2.15. CUSIP NUMBERS. The Issuer in issuing the notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Indenture Trustee
may use such "CUSIP" numbers in notices of redemption as a convenience to the
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Issuer
will promptly notify the Indenture Trustee of any change in the "CUSIP" numbers.
ARTICLE III
COVENANTS
SECTION 3.01. PAYMENT OF PRINCIPAL AND INTEREST. The Issuer will duly
and punctually pay Monthly Interest on and Monthly Principal of the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, subject to Section 9.05(a), the Issuer will cause to be distributed
the amount of Available Funds on each Payment Date. The Issuer will cause the
deposits received on Receivables to be deposited into the Collection Account
pursuant to the Trust Agreement for the benefit of the Noteholders and the
Insurer to the extent expressly set forth herein or the other Basic Documents.
Amounts properly withheld under the Code by any Person from a payment of
interest and/or principal to any Noteholder shall be considered as having been
paid by the Issuer to such Noteholder for all purposes of this Indenture.
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SECTION 3.02. MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
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 CT Corporation System, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, to serve as its agent for the foregoing purposes. The Issuer will give
prompt written notice to the Indenture Trustee and the Insurer of the location,
and of any change in the location, of any such office or agency. If at any time
the Issuer shall fail to maintain any such office or agency or shall fail to
furnish the Indenture Trustee with the address thereof, surrenders 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.
SECTION 3.03. MONEY FOR PAYMENTS TO BE HELD IN TRUST.
(a) As provided in Section 9.02 of the Trust Agreement, all payments of
amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Collection Account and the Payahead Account shall be
made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Collection Account and the Payahead
Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section.
(b) The Notes shall be non-recourse obligations of the Issuer and shall
be limited in right of payment to amounts available from the Pledged Assets, the
Spread Account and the Policy as provided in this Indenture, the Spread Account
Agreement and the Policy 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.
(c) 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 by the Paying
Agent or otherwise disposed of as herein provided;
(ii) give the Indenture Trustee and the Insurer 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, or, so long as it is
the Controlling Party, the Insurer, 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.
(d) 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 sums.
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, with the prior
written consent of the Insurer (unless an Insurer Default shall have
18
occurred and be continuing or if the Insurance Agreement has terminated), 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 if such money or any portion thereof had been
previously deposited by the Insurer or the Indenture Trustee for the payment of
principal or interest on the Notes, to the extent any amounts are owing to the
Insurer in accordance with the terms of the Insurance Agreement, such amounts
shall be paid promptly to the Insurer upon the Indenture Trustee's receipt of a
written request by the Insurer to such effect; and provided, further, that the
Indenture Trustee or such Paying Agent, before being required to make any such
repayment, shall at the expense 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 Pledged Assets.
SECTION 3.05. PROTECTION OF TRUST ESTATE. 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 Pledged Assets, and the Issuer shall take all actions necessary to obtain
and maintain, for the benefit of the Indenture Trustee on behalf of the
Noteholders and, to the extent expressly set forth herein or in the other Basic
Documents, the Insurer, a first lien on and a first priority, perfected security
interest in the Pledged Assets. The Issuer will from time to time execute and
deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, 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 Pledged
Assets;
(ii) maintain or preserve the lien and security interest (and
the priority thereof) created by this Indenture in favor of the
Indenture Trustee for the benefit of the Noteholders to the extent
expressly set forth herein or the other Basic Documents and, to the
extent expressly set forth herein and so long as it is the Controlling
Party, the Insurer 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 Pledged Assets;
(v) preserve and defend title to the Pledged Assets and the
rights of the Indenture Trustee, the Noteholders and, to the extent
expressly set forth herein and so long as it is the Controlling Party,
the Insurer in such Pledged Assets against the claims of all persons and
parties; or
(vi) pay all taxes or assessments levied or assessed upon the
Pledged Assets when due.
The Issuer hereby designates the Indenture Trustee (without any obligation) its
agent and attorney-in-fact to execute all financing statements, continuation
statements or other instruments required to be executed pursuant to this
Section.
SECTION 3.06. OPINIONS AS TO PLEDGED ASSETS.
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(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 UCC
financing statements and continuation statements have been filed that are
necessary to create and continue the Indenture Trustee's first priority
perfected security interest in the Pledged Assets for the benefit of the
Noteholders and, to the extent expressly set forth herein or the other Basic
Documents, the Insurer, 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 Cutoff
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 UCC financing statements
and continuation statements have been filed that are necessary to create and
continue the Indenture Trustee's first priority perfected security interest in
the Pledged Assets for the benefit of the Noteholders and, to the extent
expressly set forth herein or the other Basic Documents, the Insurer, 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 RECEIVABLES.
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in the Pledged Assets 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) acceptable to the Insurer 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 BVAC as
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 agreements included in the Pledged Assets,
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 Trust 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
and the Insurer, so long as the Insurer is the Controlling Party.
(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 to such default. If a Servicer
Default shall arise from the failure of the Servicer to perform any of its
duties or obligations under the Trust Agreement with respect to the Receivables,
the Issuer shall take all reasonable steps available to it to remedy such
failure.
(e) Upon the resignation or termination of the Servicer pursuant to
Section 13.05 or 14.03 of the Trust Agreement, the Standby Servicer shall
automatically become Servicer, unless the Controlling Party directs otherwise,
as provided in Section 14.03 of the Trust Agreement. If the Backup Servicer
shall succeed to the Servicer's duties as servicer of the Receivables as
provided in Section 14.03 of the Trust Agreement, 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 Receivables. In case the Back-up Servicer shall become
successor to the Servicer under the Trust Agreement, the Back-up Servicer shall
be entitled to appoint as Servicer one of its Affiliates or with the consent of
the Insurer (so long as it is the Controlling Party), which consent shall not be
unreasonably withheld, any other agent designated by the Back-up Servicer,
provided that the Back-up Servicer shall not be liable for the actions and
omissions of any such Affiliate or agent in such capacity as successor Xxxxxxxx
appointed with due care.
20
(f) Upon any termination of the Servicer's rights and powers pursuant to
the Trust Agreement, the Issuer shall promptly notify the Indenture Trustee and
the Insurer. As soon as a successor Xxxxxxxx is appointed, the Issuer shall
notify the Indenture 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 Transferor of their respective duties under
the Basic Documents: (i) without the prior consent of the Insurer (so long as it
is the Controlling Party) or (ii) if the effect thereof would adversely affect
the Noteholders.
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 Pledged Assets,
unless directed to do so by the Indenture Trustee with the prior written
consent of the Insurer (so long as it is the Controlling Party);
(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 Pledged Assets;
(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 Pledged
Assets 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 security interest (other than with
respect to any such tax, mechanics' or other lien) in the Pledged Assets
or (D) amend, modify or fail to comply with the provisions of the Basic
Documents, prior to the Termination Date, without the prior written
consent of the Insurer, so long as the Insurer is the Controlling Party;
(iv) engage in any business or activity other than as permitted
by the Trust Agreement;
(v) incur or assume any indebtedness or guarantee any
indebtedness of any Person, except for such indebtedness incurred
pursuant to Section 3.10; or
(vi) dissolve or liquidate in whole or in part or merge or
consolidate with any other Person, other than in compliance with Section
3.10.
SECTION 3.09. ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Indenture Trustee, the Rating Agencies and the Insurer, on or before
March 15 of each year, beginning on the first March 15 that is at least six
months after the Closing Date, an Officer's Certificate dated as of December 31
of the preceding year 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 the Issuer's performance under this Indenture has been made under
such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
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SECTION 3.10. ISSUER MAY CONSOLIDATE, ETC. ONLY ON CERTAIN CONDITIONS.
(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 (A) be a Person organized and
existing under the laws of the United States or any State, (B) 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 it is the Controlling Party), 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; and (C) 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 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 Controlling Party
(with a copy to the Insurer so long as the Insurance Agreement has not
terminated) to the effect that such consolidation or merger will not
have any material adverse tax consequence to the Trust, the Insurer, any
Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee
and the Insurer (so long as the Insurance Agreement has not terminated)
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 and the Insurance Agreement has not terminated, 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 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 Pledged Assets, 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 and the
Insurance Agreement has not terminated), 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
Noteholders, (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
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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
transfer, 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 transfer;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Controlling Party
(with a copy to the Insurer so long as the Insurance Agreement has not
terminated) to the effect that such conveyance or transfer will not have
any material adverse tax consequence to the Trust, the Insurer, any
Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee
and the Insurer (so long as the Insurance Agreement has not terminated)
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 conveyance or transfer and
such supplemental indenture comply with this Article Three 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 and the Insurance Agreement has not terminated, 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 transfer 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
Receivables in the manner contemplated by this Indenture and the other Basic
Documents and activities incidental thereto or (ii) any other business or
activities as contemplated by Section 1.03 of the Trust Agreement.
SECTION 3.13. NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Insurer under the Insurance Agreement and the other Basic Documents and
(iii) any other Indebtedness permitted by or arising under the Basic Documents.
The proceeds of the Notes shall be used exclusively to fund the Issuer's
purchase of the Receivables and the other assets specified in the Trust
Agreement, to fund the required deposit in the Spread Account, and to pay the
Issuer's organizational, transactional and start-up expenses.
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SECTION 3.14. SERVICER'S OBLIGATIONS. The Issuer shall cause the
Servicer to comply with the Servicer's obligations under the Trust Agreement.
SECTION 3.15. GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by the Trust Agreement or this Indenture, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.
SECTION 3.16. CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. 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 distributions to the Servicer, the
Back-up Servicer, the Standby Servicer, the Indenture Trustee, the Owner
Trustee, the Collateral Agent, the Insurer, the Noteholders and the
Certificateholder as contemplated by, and to the extent funds are available for
such purpose under, the Trust Agreement and Spread Account Agreement. The Issuer
will not, directly or indirectly, make payments to or distributions from the
Collection Account or any other Trust Account except in accordance with this
Indenture and the other Basic Documents.
SECTION 3.18. NOTICE OF EVENTS OF DEFAULT. The Issuer agrees to give the
Indenture Trustee, the Insurer and each Rating Agency prompt written notice of
each Event of Default hereunder (but no later than five (5) days after the
Issuer obtains actual knowledge of such Event of Default) and each default on
the part of the Servicer, the Back-up Servicer, the Standby Servicer or the
Transferor of their respective obligations under the Trust Agreement.
SECTION 3.19. FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee or, so long as it is the Controlling Party, 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 3.20. 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 3.21. AMENDMENTS OF TRUST AGREEMENT. The Issuer shall not agree
to any amendment to Section 17.01 of the Trust Agreement to eliminate the
requirements thereunder that the Insurer (so long as it is the Controlling
Party) and/or the Noteholders, as applicable, consent to any amendment to the
Trust Agreement to the extent provided therein.
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
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obligation of the Indenture Trustee to make claims under the Policy, which shall
survive the Final Maturity Date of the Class A Notes 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
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, or
(ii) will become due and payable at the respective Final
Maturity Date of the Class A Notes 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 Eligible Investments 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 Final Maturity Date of the
Class A-4 Notes or Redemption Date (if Notes shall have been called for
redemption pursuant to Section 12.01), 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 to the extent expressly set forth under this Indenture
or the Basic Documents;
(C) the Issuer has delivered to the Indenture Trustee and the Insurer
(so long as the Insurance Agreement has not terminated) an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA) an Independent
Certificate from a firm of certified public accountants, each meeting the
applicable requirements of Section 13.01(a) and, subject to Section 13.02, each
stating that all conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been complied with; and
(D) upon the satisfaction and discharge of the Indenture pursuant to
this Section 4.01, the Indenture Trustee shall deliver to the Owner Trustee and
the Insurer (so long as the Insurance Agreement has not terminated) a
certificate of a Responsible Officer stating (i) that the Insurer (based on a
certificate delivered to the Indenture Trustee by the Issuer), Noteholders and
the Indenture Trustee have been paid all amounts owed to them, and (ii) either
(a) stating that to the actual knowledge of such Responsible Officer, no claims
remain against the Issuer, or (b) stating that the only pending or threatened
claims actually known to such Responsible Officer (including contingent and
unliquidated claims) are those listed on a schedule to such certificate.
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 Trust Agreement or required by law.
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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 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.
(a) "Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable (solely for purposes of this clause, a
payment on the Notes funded by the Insurer or the Collateral Agent from
the Spread Account shall be deemed to be a payment made by the Issuer);
(ii) default in the payment of any principal of or any
installment of the principal of the Class A Notes on the Final Maturity
Date for such Class of Notes (solely for purposes of this clause, a
payment on the Class A Notes funded by the Insurer or the Collateral
Agent from the Spread Account shall be deemed to be a payment made by
the Issuer);
(iii) so long as an Insurer Default shall not have occurred and
be continuing and the Insurance Agreement has not terminated, an
Insurance Agreement Indenture Cross Default shall have occurred;
provided, however, that the occurrence of an Insurance Agreement
Indenture Cross Default may not form the basis of an Event of Default
unless the Insurer shall, upon prior written notice to the Rating
Agencies, have delivered to the Issuer and the Indenture Trustee and not
rescinded a written notice specifying that such Insurance Agreement
Indenture Cross Default constitutes an Event of Default under this
Indenture;
(iv) so long as an Insurer Default shall have occurred and be
continuing or if the Insurance Agreement has terminated, default in the
observance or performance of any covenant or agreement of the Issuer
made in this Indenture (other than a covenant or agreement, a default in
the observance or performance of which is elsewhere in this Section
specifically dealt with), or any representation or warranty of the
Issuer made in this Indenture, in any Basic Document or in any
certificate or any other writing delivered pursuant hereto or in
connection herewith or therewith proving to have been incorrect in any
material respect as of the time when the same shall have been made, and
such default shall (A) materially and adversely affect the Noteholders
or the Insurer and (B) continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 60 days after there shall have been given to the Issuer by the
Indenture Trustee or to the Issuer and the Indenture Trustee by the
Majority Noteholders or the Insurer, a written notice by registered or
certified mail, specifying such default or incorrect representation or
warranty and requiring it to be remedied and stating that such notice is
a "Notice of Default" hereunder;
(v) so long as an Insurer Default shall have occurred and be
continuing or if the Insurance Agreement has terminated, 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 Pledged
Assets 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 Pledged Assets, 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;
26
(vi) so long as an Insurer Default shall have occurred and be
continuing or if the Insurance Agreement has terminated, the
commencement by the Issuer of a voluntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the
consent by the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the
Pledged Assets, or the making by the Issuer of any general assignment
for the benefit of creditors, or the failure by the Issuer generally to
pay its debts as such debts become due, or the taking of action by the
Issuer in furtherance of any of the foregoing;
(vii) the Issuer becoming taxable as an association (or publicly
traded partnership) taxable as a corporation for federal or state income
tax purposes; or
(viii) the Issuer or BVSC being treated as an investment company
pursuant to the Investment Company Act of 1940, as amended.
(b) The Issuer shall deliver to the Indenture Trustee, the Rating
Agencies and the Insurer (so long as the Insurance Agreement has not
terminated), 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 the Insurer is the Controlling Party, if an Event of
Default shall have occurred and is 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, the Servicer and the Indenture
Trustee that the entire principal amount of the Class A Notes, together with
interest accrued on the Class A and Class I Notes, become immediately due and
payable, and upon any such declaration the unpaid principal amount of the Class
A Notes, together with accrued and unpaid interest on the Class A and Class I
Notes, 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 the Insurer is no longer the Controlling Party and an Event of
Default shall have occurred and be continuing, the Indenture Trustee shall, if
so requested in writing by the Majority Noteholders, upon prior written notice
to each Rating Agency, declare that the entire principal amount of the Class A
Notes, together with interest accrued on the Class A and Class I Notes, become
immediately due and payable, and upon any such declaration the unpaid principal
amount of the Class A Notes, together with accrued and unpaid interest on the
Class A and Class I Notes, shall become immediately due and payable.
(c) If an Event of Default occurs and the Notes have been accelerated,
the Indenture Trustee may exercise any of the remedies specified in Section
5.04(a). Payments following acceleration of any Notes shall be applied by the
Indenture Trustee:
(i) first, to pay any unpaid monthly Indenture Trustee Fee and
expense reimbursements and indemnities owed to the Indenture Trustee in
its capacities as Indenture Trustee, Back-up Servicer and Collateral
Agent;
(ii) second, pro rata, to pay any unpaid monthly Servicing Fee,
Standby Servicing Fee and Owner Trustee Fee, as well as expense
reimbursements and indemnities owed to the Servicer, Standby Servicer
and Owner Trustee;
27
(iii) third, to pay accrued interest on each class of Class A
and Class I Notes on a pro rata basis based on the interest accrued
(including interest accrued on past due interest) on each class of Class
A Notes and on the Class I Notes based on the interest accrued on the
Class I Notes;
(iv) fourth, to pay principal on each class of Class A Notes, on
a pro rata basis based on the Class A Note Balance, until the
Outstanding Note Balance of each Class of Class A Notes is reduced to
zero;
(v) fifth, to pay the Insurance Premium and all other amounts
owing the Insurer under the Insurance Agreement; and
(vi) sixth, to the Spread Account, to be applied in accordance
with the Spread Account Agreement;
provided, however, that in no event shall any amounts received pursuant to the
Policy be paid to any party other than pursuant to clauses (iii) and (iv) above.
(d) In the event any Notes are accelerated due to an Event of Default,
the Insurer shall have the right (in addition to its obligation to pay Scheduled
Payments on the Notes in accordance with the Policy), but not the obligation, to
make payments under the Policy or otherwise of interest and principal due on
such Notes, in whole or in part, on any date or dates following such
acceleration as the Insurer, in its sole discretion, shall elect. In addition,
if an Event of Default occurs and the Insurer accelerates the Notes whether in
full or in part (including, without limitation, as a result of the sale of any
Receivable), the Insurer will from and after such acceleration guarantee
pursuant to the Policy the continued payment of Class I Monthly Interest to the
Class I Noteholders based on the Planned Notional Principal Amount Schedule for
all remaining Payment Dates included in the Planned Notional Principal Amount
Schedule.
(e) At any time after declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Section V provided, the
Insurer, so long as it is the Controlling Party, and otherwise, the Majority
Noteholders, by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee
a sum sufficient to pay:
(A) all payments of principal on the Class A Notes and
interest on all Notes and all other amounts that would then be
due hereunder or upon such Notes if the Event of Default giving
rise to such acceleration had not occurred, which funds shall be
deposited into the Collection Account;
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses and
disbursements of the Indenture Trustee and its agents and
counsel, which funds shall be deposited into the Collection
Account; and
(C) all sums paid or advanced by or due to the Insurer
and any unpaid Insurance Premium, which funds shall be paid to
the Insurer; and
(ii) all Events of Default, other than the nonpayment of the
interest on or the principal of the Notes that has become due solely by
such acceleration, have been cured or waived as provided in Section
5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(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
Noteholders, 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 rates 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 Insurer and the Indenture Trustee and their respective
agents and counsel. In furtherance of
28
the foregoing, the Issuer hereby irrevocably and unconditionally appoints the
Indenture Trustee as the true and lawful attorney-in-fact of the Issuer, with
full power of substitution, to execute, acknowledge and deliver any notice,
document, certificate, paper, pleading or instrument and to do in the name of
the Indenture Trustee as well as in the name, place and stead of the Issuer such
acts, things and deeds for or on behalf of and in the name of the Issuer under
this Indenture (including specifically under Section 5.04) and under the Basic
Documents which the Issuer could or might do or which may be necessary,
desirable or convenient in the Indenture Trustee's sole discretion to effect the
purposes contemplated hereunder and under the Basic Documents and, without
limitation, following the occurrence of an Event of Default, so long as the
Insurer is the Controlling Party, acting at the instruction or with the consent
of the Insurer, and thereafter acting at the instruction or with the consent of
the Majority Noteholders, exercise full right, power and authority to take, or
defer from taking, any and all acts with respect to the administration,
maintenance or disposition of the Pledged Assets.
(b) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall (i) if the Insurer is the Controlling Party, at the
direction of the Insurer, or (ii) if the Insurer is not the Controlling Party,
at the direction of the Majority Noteholders 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 Pledged Assets, 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,
Insurer or Servicer 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 Noteholders in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(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 Noteholders allowed in any judicial Proceedings
relative to the Issuer, Insurer or Servicer 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,
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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 Noteholders.
(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 and
the Notes have been declared due and payable under Section 5.02, the Indenture
Trustee shall (subject to Section 5.04(b) below and Section 5.05), if the
Insurer is the Controlling Party, at the direction of the Insurer, or (ii) if an
Event of Default shall have occurred and be continuing and the Notes have been
declared due and payable under Section 5.02, 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 or if the Insurance Agreement has terminated, at
the direction of the Majority Noteholders, 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 to the Insurer under this Indenture or any other
Basic Document 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 Pledged
Assets;
(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 and the Insurer under
this Indenture or the Notes;
(iv) sell or cause the Servicer to otherwise liquidate the
Pledged Assets 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 Pledged Assets.
(b) Notwithstanding the foregoing,
(i) in the event that the Indenture Trustee is acting at the
direction of the Insurer, so long as the Insurer is the Controlling
Party, if an Event of Default specified in Section 5.01(a)(i), (ii) or
(iii) 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 Pledged
Assets in whole or in part if the proceeds of such sale or liquidation
would not be sufficient to pay, subject to Section 5.02(d), 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 the Majority Noteholders (so long as an Insurer Default
shall have occurred and be continuing or the Insurance Agreement has
terminated), 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 Pledged Assets in whole or in part
unless an Event of Default as specified in Section 5.01(a)(v) or (vi)
shall have occurred and be continuing.
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(c) In determining the sufficiency or insufficiency of the proceeds of a
sale or liquidation of the Pledged Assets to pay all amounts required pursuant
to Section 5.04(b)(i) 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 Pledged
Assets for such purpose.
SECTION 5.05. OPTIONAL PRESERVATION OF THE RECEIVABLES. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences shall 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 Pledged Assets.
SECTION 5.06. PRIORITIES.
(a) 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, any money collected by the Indenture
Trustee with respect to the Pledged Assets, the Notes or the Certificates
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 Pledged Assets,
the Notes or the Certificates (excluding any payments made under the Policy),
shall be applied pursuant to Section 5.02(c).
(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.
(a) No Holder of any Note shall have any right to institute any
Proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder shall have previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Note Balances shall
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 shall 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 shall have failed to institute
such Proceedings;
(v) no direction inconsistent with such written request shall
have been given to the Indenture Trustee during such 60-day period by
the Holders of a majority of the Note Balances; and
(vi) an Insurer Default shall have occurred and be continuing or
the Insurance Agreement has terminated.
It is understood and intended that no one or more Noteholders 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
Noteholders or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the manner
herein provided.
(b) In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the Note Balances of the Notes, the
Indenture Trustee in its sole discretion may determine that action, if any,
shall be taken, notwithstanding any other provisions of this Indenture and any
such action shall be binding on all parties.
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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 payments of Monthly Interest and (in the case of Class A Notes) Monthly
Principal on such Note on or after the respective due dates thereof expressed in
such Note or in this Indenture (or, in the case of redemption, on or after the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
SECTION 5.09. RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee, the Insurer or any Noteholder shall have instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding shall have
been discontinued or abandoned for any reason or shall have 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 CONTROLLING PARTY. The Insurer, if the Insurer
is the Controlling Party, and otherwise the Indenture Trustee at the direction
of the Majority Noteholders shall have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or exercising any trust or power conferred on
the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) any direction to the Indenture Trustee to sell or liquidate
the Pledged Assets shall be subject to the terms of Section 5.04; and
(iii) the Indenture Trustee shall have been provided with
indemnification satisfactory to it in connection 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.
(a) Prior to the declaration of the acceleration of the maturity of the
Notes as provided in Section 5.02, the Insurer so long as it is the Controlling
Party and otherwise the Indenture Trustee, at the direction of the Holders
holding in the aggregate more than 50% of the outstanding Class A Note Balance,
may waive any past Default or Event of Default and/or its consequences except a
Default (a) in the payment of principal of or interest on any of the Notes or
(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. In the
case of any such waiver, the Issuer, the Indenture Trustee, the Insurer and the
Noteholders 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.
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(b) 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 Xxxxxx's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including attorneys' fees and expenses,
against any party litigant in such suit, in the manner and to the extent
provided by the Trust Indenture Act, 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 Note Balances 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).
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 Pledged Assets 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 or, so long
as it is the Controlling Party, the Insurer, to do so and at the Administrator's
expense, the Issuer shall take all such lawful action as the Indenture Trustee
or the Insurer may request to compel or secure the performance and observance by
the Transferor and the Servicer as applicable, of each of their obligations to
the Issuer under or in connection with the Trust 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
Trust Agreement to the extent and in the manner directed by the Indenture
Trustee, or, the Insurer, so long as it is the Controlling Party, including the
transmission of notices of default on the part of the Transferor, the Servicer,
the Back-up Servicer or the Standby Servicer thereunder and the institution of
legal or administrative actions or Proceedings to compel or secure performance
by the Transferor, the Servicer, the Back-up Servicer or the Standby Servicer of
each of their obligations under the Trust Agreement.
(b) If the Indenture Trustee is the Controlling Party and if an Event of
Default shall have occurred and be continuing, the Indenture Trustee may, and at
the direction (which direction shall be given in writing and may include a
facsimile) of the Majority Noteholders shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Transferor or the
Servicer under or in connection with the Trust Agreement, including the right or
power to take any action to compel or secure performance or observance by the
Transferor, the Servicer, the Back-up Servicer or the Standby Servicer of each
of their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Trust Agreement, and
any right of the Issuer to take such action shall be suspended.
SECTION 5.18. INTENTIONALLY LEFT BLANK.
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SECTION 5.19. OPTIONAL DEPOSITS BY THE INSURER. The Insurer shall at any
time, and from time to time, with respect to a Payment Date, have the option to
deliver amounts (any such amount, an "Insurer Optional Deposit") to the
Indenture Trustee for deposit into the Collection Account for any of the
following purposes: (i) to provide funds in respect of the payment of fees or
expenses of any provider of services to the Trust with respect to such Payment
Date, (ii) to pay Class A Monthly Principal or (iii) to include such amount as
part of the Monthly Interest for such Payment Date to the extent that without
such amount a draw would be required to be made on the Policy.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. DUTIES OF INDENTURE TRUSTEE.
(a) If an Event of Default shall have occurred and be continuing, and of
which 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 its 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 on their face 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.
(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 Trust Agreement.
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(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 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 Trust Agreement and this Indenture.
(j) INTENTIONALLY LEFT BLANK.
(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 the Majority
Noteholders, 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, Insurer Default, Servicer
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, Insurer Default, Servicer Default or Event of Default.
(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 Indenture 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 Pledged Assets, 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 Indenture 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.
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(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.
(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) Subject to Section 6.01(a), 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, or
Controlling Party, as the case may be, pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Indenture Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities which may be incurred therein or thereby.
(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 or the Insurer; provided, however, that if the payment within a
reasonable time to the Indenture Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require 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.
(i) The rights and privileges pertaining to the Indenture Trustee set
forth in Section 6.01 and 6.02 hereof shall apply to the Indenture Trustee in
all of the Basic Documents.
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 Pledged Assets 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.
SECTION 6.05. NOTICE OF DEFAULTS. If a Default shall have occurred and
be continuing and a Responsible Officer of the Indenture Trustee shall have
actual knowledge or shall have received written notice thereof, the Indenture
Trustee shall mail to each Noteholder, the Insurer and the Rating Agency notice
of the Default within 5 days after such knowledge or notice occurs.
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.
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SECTION 6.07. COMPENSATION AND INDEMNITY. Pursuant to Section 9.05(a)
hereof, the Indenture Trustee shall receive compensation on each Payment Date
for its services, in its capacities as Indenture Trustee, Collateral Agent and
Back-up Servicer under the Basic Documents. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. Pursuant to Section 9.05(a) hereof, the Indenture Trustee shall also be
entitled to receive reimbursement for all reasonable out-of-pocket expenses
incurred or made by it in its capacities as Indenture Trustee, Collateral Agent
and Back-up Servicer, 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, the
Administrator and the Insurer promptly of any claim for which it may seek
indemnity but failure to do so shall not constitute a waiver of any rights
hereunder. 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,
Collateral Agent and Back-up Servicer and the discharge of this Indenture. When
the Indenture Trustee incurs expenses after the occurrence of an Event of
Default specified in Section 5.01(a)(v) or (vi) with respect to the Issuer, the
expenses are intended to constitute expenses of administration under Title 11 of
the United States Code or any other applicable federal or state bankruptcy,
insolvency or similar law. The Indenture Trustee shall have a lien prior to the
Noteholders on the Pledged Assets for amounts due to it under this Section 6.07;
provided, however, the Indenture Trustee agrees that no amounts owed or paid
under the Policy shall be paid to the Indenture Trustee.
SECTION 6.08. REPLACEMENT OF INDENTURE TRUSTEE.
(a) 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, unless an Insurer Default shall have occurred and be continuing,
at the request of the Insurer shall, remove the Indenture Trustee, if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(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.
(b) The Insurer, so long as it is the Controlling Party, may remove the
Indenture Trustee for any reason upon 30 days written notice.
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(c) 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, so long as it is the Controlling Party.
(d) A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee, the Insurer and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture. The
Issuer or the successor Indenture Trustee shall mail a notice of its succession
to Noteholders, the Insurer and the Rating Agencies. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
(e) 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 Majority Noteholders may petition any court
of competent jurisdiction for the appointment of a successor Indenture Trustee
that is acceptable to the Insurer so long as it is the Controlling Party.
(f) 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.
(g) 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 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.
(h) Any resignation or removal of the Indenture Trustee hereunder shall
also result in the resignation or removal of such Person as Back-up Servicer and
Collateral Agent in accordance with the same terms and conditions unless
otherwise directed by the Controlling Party.
SECTION 6.09. SUCCESSOR INDENTURE TRUSTEE BY MERGER.
(a) If the Indenture Trustee consolidates with, merges or converts into,
or transfers all or substantially all of its corporate trust business or assets
to, another corporation or banking association, the resulting, surviving or
transferee corporation without any further act shall be the successor Indenture
Trustee; provided, that such corporation or banking association shall be
otherwise qualified and eligible under Section 6.11. The Indenture Trustee shall
provide the Insurer and each Rating Agency prompt notice of any such
transaction.
(b) 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 Pledged Assets may at the time be located, the Indenture
Trustee, with the consent of the Insurer so long as it is the Controlling Party,
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 and to the extent expressly set forth herein
38
or the other Basic Documents, and the Insurer, such title to the Pledged Assets,
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 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. The Indenture Trustee shall at all times
satisfy the requirements of TIA Section 310(a). The Indenture Trustee hereunder
shall at all times be a financial institution, acceptable to the Insurer (so
long as it is the Controlling Party) organized and doing business under the laws
of the United States of America or any state, authorized under such laws to
exercise corporate trust powers, whose long term unsecured debt is rated at
least A2 by Xxxxx'x and A by Standard & Poor's and shall have a combined capital
and surplus of at least $50,000,000 or shall be a member of a bank holding
system to the aggregate combined capital and surplus of which is $50,000,000 and
subject to supervision or examination by federal or state authority, provided
that the Indenture Trustee's separate capital and surplus shall at all times be
at least the amount required by Section 310(a)(2) of the TIA. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of a supervising or examining authority, then for the purposes of
this Section 6.11, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Indenture Trustee
shall cease to be eligible in accordance with the provisions of this Section
6.11, the Indenture Trustee shall resign immediately in the manner and with the
effect specified in Section 6.08. 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 Sections 310(b)(1) are met.
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SECTION 6.12. COLLATERAL AGENT TO FOLLOW INDENTURE TRUSTEE'S DIRECTIONS.
The Indenture Trustee hereby authorizes the Collateral Agent to take such action
on its behalf, and to exercise such rights, remedies, powers and privileges
hereunder, as the Indenture Trustee may direct and as are specifically
authorized to be exercised by the Collateral Agent by the terms hereof, together
with such actions, rights, remedies, powers and privileges as are reasonably
incidental thereto.
SECTION 6.13. INTENTIONALLY BLANK.
SECTION 6.14. 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 6.15. 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;
(b) the Indenture Trustee has full power, authority and legal right to
execute, deliver, and perform this Indenture and has taken all necessary action
to authorize the execution, delivery and performance by it of this Indenture;
(c) this Indenture shall have been duly executed and delivered by the
Indenture Trustee; and
(d) this Indenture is a legal, valid and binding obligation of the
Indenture Trustee enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and to general
principles of equity.
SECTION 6.16. DISQUALIFICATION OF THE INDENTURE TRUSTEE. If the
Indenture Trustee has or shall acquire a conflicting interest within the meaning
of the TIA, as amended, the Indenture Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by and subject to,
the provisions of this Indenture.
SECTION 6.17. WAIVER OF SETOFFS. The Indenture Trustee hereby expressly
waives any and all rights of setoff that the Indenture Trustee may otherwise at
any time have under applicable law with respect to any of the Collection
Account, Payahead Account, Lock-Box Account or Reserve Account and agrees that
amounts in the Collection Account, Payahead Account and Lock-Box Account shall
at all times be held and applied solely in accordance with the provisions hereof
and the Trust Agreement.
SECTION 6.18. CONTROL BY THE CONTROLLING PARTY. The Indenture Trustee
shall comply with notices and instructions given by the Issuer only if
accompanied by the written consent of the Controlling Party, except that if any
Event of Default shall have occurred and be continuing, the Indenture Trustee
shall act upon and comply with notices and instructions given by the Controlling
Party alone in the place and stead of the Issuer.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. 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
Noteholders as of such Record Date and (ii) at such other times as the Indenture
Trustee may request in writing, within 15 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.
40
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 Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.01 and the names and addresses of Noteholders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
SECTION 7.03. REPORTS BY ISSUER.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) which the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) as may be required by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
SECTION 7.04. REPORTS BY INDENTURE TRUSTEE. 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
INTENTIONALLY BLANK
ARTICLE IX
DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS
SECTION 9.01. LOCK-BOX ACCOUNT. The Issuer shall cause the Servicer to
establish the Lock-Box Account as an Eligible Account with the Lock-Box Bank,
all in accordance with Section 9.01 of the Trust Agreement.
SECTION 9.02. COLLECTION ACCOUNT. The Issuer shall cause BVAC, as
initial Servicer, to establish the Collection Account with the Indenture Trustee
or another Eligible Bank as a segregated non-interest bearing trust
41
account in the name of the Indenture Trustee for the benefit of the Secured
Parties. The amounts in the Collection Account shall be invested upon receipt of
written direction from the Servicer (provided that, if the Standby Servicer is
then acting as Servicer, such direction shall be made by the Transferor) in
Eligible Investments that mature not later than the Business Day prior to the
next succeeding Payment Date and such Eligible Investments shall be held to
maturity. The Indenture Trustee (or its custodian) shall (i) maintain possession
of any negotiable instruments or securities evidencing Eligible Investments
until the time of sale or maturity and each certificated security or negotiable
instrument evidencing an Eligible Investment shall be endorsed in blank or to
the Indenture Trustee or registered in the name of the Indenture Trustee and
(ii) cause any Eligible Investment represented by an uncertificated security to
be registered in the name of the Indenture Trustee.
SECTION 9.03. COLLECTIONS.
(a) The Indenture Trustee shall review the Servicer's Certificate
prepared by the Servicer immediately upon receipt thereof pursuant to Section
8.12 of the Trust Agreement for purposes of making the distributions under
Section 9.05.
(b) For any Payment Date on which there will not be sufficient Available
Funds to make the distributions required pursuant to Sections 9.05(a)(i) through
(vi), then the Indenture Trustee shall deliver to the Collateral Agent, the
Insurer, the Fiscal Agent (as such term is defined in the Insurance Agreement)
and the Servicer, by hand delivery or facsimile transmission, a written notice
(a "Deficiency Notice") specifying the Deficiency Claim Amount for such
Distribution Date. Any Deficiency Notice shall be delivered by 10:00 a.m.,
Eastern time, on the Determination Date and in an event no later than the fourth
Business Day preceding such Payment Date. Such Deficiency Notice shall direct
the Collateral Agent to remit such Deficiency Claim Amount (to the extent of the
funds available to be distributed pursuant to the Spread Account Agreement) to
the Indenture Trustee for deposit of such amount in the Collection Account. If
such deficiency exceeds the Available Spread Amount, the Indenture Trustee shall
submit a claim under the Policy to the Insurer pursuant to Section 10.03.
(c) The Indenture Trustee shall, immediately upon receipt, deposit in
the Collection Account for application in accordance with the Policy any funds
received by the Indenture Trustee in respect of funds drawn under the Policy
from the Insurer.
SECTION 9.04. PURCHASE AMOUNTS. Pursuant to the Trust Agreement, the
Servicer and the Transferor have agreed to remit to the Collection Account not
later than the Determination Date, the aggregate Purchase Amount for such
Collection Period pursuant to Sections 7.02, 8.08 and 8.10, respectively, of the
Trust Agreement.
SECTION 9.05. DISTRIBUTIONS TO PARTIES.
(a) On each Payment Date (unless the Notes shall have been declared to
be due and payable under Section 5.02 following an Event of Default), the
Indenture Trustee, solely in reliance on the Servicer's Certificate, shall apply
or cause to be applied the Available Funds in the Collection Account for the
prior Collection Period, (plus any amounts withdrawn from the Spread Account or
drawn on the Policy pursuant to Section 9.03 and Section 10.03 for application
in accordance with the terms hereof and the Policy), to make the following
payments in the listed order of priority:
(i) the monthly Indenture Trustee Fee (which Indenture Trustee
Fee shall not exceed $50,000 in the aggregate) including any overdue
monthly Indenture Trustee Fee, to the Indenture Trustee, as well as
expense reimbursements and indemnities owed to the Indenture Trustee
(subject to the foregoing limitation);
(ii) without duplication, an amount equal to the sum of (y)
Outstanding Advances on all Receivables that became Charged-off
Receivables during the prior Collection Period, plus (z) Outstanding
Advances which the Servicer determines to be unrecoverable pursuant to
Section 9.07 of the Trust Agreement, to the Servicer;
(iii) the monthly Servicing Fee, including any overdue monthly
Servicing Fee, to the Servicer, to the extent not previously distributed
to the Servicer, the monthly Standby Servicing Fee, (which Standby
Servicing Fee shall not exceed $50,000) including any overdue monthly
Standby Servicing Fee to the Standby Servicer to the extent not
previously distributed to the Standby Servicer, the monthly Owner
42
Trustee Fee (which Owner Trustee Fee shall not exceed $25,000 in the
aggregate), including any overdue monthly Owner Trustee Fee, to the
Owner Trustee, as well as expense reimbursements and indemnities owed to
the Servicer, Standby Servicer and Owner Trustee (subject to the
foregoing limitations), and, to any Successor Servicer, Transition Costs
(which Transition Costs shall not exceed $100,000 without the prior
written consent of the Insurer and the satisfaction of the Rating Agency
Condition), and, to the extent Available Funds are insufficient on any
Payment Date to make all such payments, such Available Funds shall be
distributed pro rata with respect to the foregoing payments;
(iv) Class A Monthly Interest (including any overdue amounts) to
the Class A Noteholders and Class I Monthly Interest (including any
overdue amounts) to the Class I Noteholders;
(v) Monthly Principal (including any overdue amounts) to the
Class A Noteholders, in accordance with the Principal Payment Sequence;
(vi) the Premium, including any overdue Premium, the aggregate
amount of all unreimbursed draws made on the Policy and any other
amounts payable to the Insurer under the Insurance Agreement, plus
accrued interest on all such amounts at the rate provided in the
Insurance Agreement, to the Insurer;
(vii) the Spread Account, up to the Requisite Amount;
(viii) the Servicing Fee, Standby Servicer Fee, Indenture
Trustee Fee, and Owner Trustee Fee, as well as expense reimbursements
and indemnities owed to the Servicer, Standby Servicer, Indenture
Trustee and Owner Trustee and Transition Costs incurred by any Successor
Servicer (to the extent not paid pursuant to (i) or (iii) above), to the
Servicer, Standby Servicer, Indenture Trustee, Owner Trustee and any
Successor Servicer, respectively;
(ix) the amount of Recoveries of Advances, to the Servicer (to
the extent not applied pursuant to (ii) above on or prior to such
Payment Date); and
(x) the balance for deposit in the Spread Account for
application in accordance with the Spread Account Agreement.
provided, however, that in no event shall any amounts received pursuant to the
Policy be paid to any party other than pursuant to clauses (iv) and (v) above.
(b)(i) If on any Payment Date there are not sufficient Available Funds
(together with amounts withdrawn from the applicable Spread Account and/or the
Policy) to pay the distributions required by Section 9.05(a)(iv) and (v), the
Available Funds payable under Section 9.05(a)(iv) and (v) shall be allocated
first to Class A and Class I Noteholders pari passu for the payment of Class A
and Class I Monthly Interest, and second for Class A Monthly Principal in
accordance with the proviso to the definition of Principal Payment Sequence. The
amount of Monthly Interest allocated to Class A and Class I Noteholders shall be
based upon the amount of interest due each class of Class A Noteholders and the
Class I Noteholders and the amount of Monthly Principal allocated to Class A
Noteholders shall be based upon the relative outstanding Note Balance of each
class of Class A Notes then Outstanding.
(ii) Notwithstanding the foregoing, if on any Payment Date, the
Servicer exercises its option to cause a disposition of the remaining
corpus of the Trust pursuant to Section 16.02 of the Trust Agreement:
(a) the Available Funds and amounts withdrawn from the Spread Account or
drawn on the Policy in respect only of Monthly Interest and principal
payable on any Class of the Class A Notes equal to the Outstanding Note
Balance on the Final Maturity Date of such Class of Class A Notes with
respect to the immediately preceding Payment Date as determined in
accordance with Sections 9.03 and 9.05 shall be distributed to the
Noteholders on such Payment Date; and (b) any remaining Pledged Assets
(including all remaining Available Spread Amounts) shall be paid first
to the Noteholders and then the Insurer on such Payment Date until the
Note Balances shall have been reduced to zero and all amounts due and
owing to the Insurer under the Insurance Agreement have been paid in
full. Any amounts in excess thereof shall be remitted to the Spread
Account for application in accordance with the terms thereof.
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(c) On each Payment Date, if the Servicer has reported to the Indenture
Trustee in the Servicer's Certificate for any Collection Period that an Obligor
or an Obligor's representative or successor successfully shall have asserted a
claim or defense under bankruptcy law or similar laws for the protection of
creditors generally (including the avoidance of a preferential transfer under
bankruptcy law) that results in a liability to such Obligor for monies
previously collected and remitted to the Indenture Trustee and not otherwise
netted against collections pursuant to Section 9.05, the Indenture Trustee shall
make all payments in respect of such claims or defenses out of the amounts on
deposit in the Collection Account with respect to such Collection Period before
making the distributions required by paragraph (a) of this Section 9.05.
(d) If the Servicer has failed to provide the Indenture Trustee with the
notice required pursuant to Section 9.03, the Indenture Trustee may calculate
Monthly Interest and Monthly Principal and apply funds, if any, in the
Collection Account as of the last day of the Collection Period, to make a
distribution of Monthly Interest and Monthly Principal to the Noteholders.
(e) In making such payments under this Section 9.05 the Indenture
Trustee shall be entitled to solely rely (without investigation, confirmation or
recalculation) upon all information and calculations contained in the Servicer's
Certificate delivered to the Indenture Trustee pursuant to Section 8.12 of the
Trust Agreement.
(f) All monthly payments shall be made by wire transfer of immediately
available funds to the Noteholder of record on the preceding Record Date.
Notwithstanding the foregoing, the final payment on the Notes shall be made only
against presentation and surrender of the Notes at the office or agency then
maintained by the Indenture Trustee in accordance with Section 3.02 of this
Indenture.
SECTION 9.06. SERVICER ADVANCES. The Servicer is required to make
certain Advances pursuant to Section 9.05 of the Trust Agreement. If the
Servicer shall determine that an Outstanding Advance with respect to any
Receivable shall not be recoverable, the Servicer shall be entitled to
reimbursement from any collections made on other Receivables pursuant to Section
9.05(a)(ii), after the Notes have been paid in full, and Outstanding Advances
with respect to such Receivable shall be reduced accordingly.
SECTION 9.07. INTENTIONALLY BLANK.
SECTION 9.08. INTENTIONALLY BLANK.
SECTION 9.09. INTENTIONALLY BLANK.
SECTION 9.10. PAYAHEAD ACCOUNT. The Servicer shall establish the
Payahead Account with the Indenture Trustee or another Eligible Bank in the name
of the Indenture Trustee on behalf of the Obligors and the Noteholders as their
interests may appear pursuant to Section 9.11 of the Trust Agreement. Investment
income or interest earned on the Payahead Account during each Collection Period
shall be included as Available Funds. On or prior to each Payment Date, the
Servicer shall transfer or the Indenture Trustee (as instructed in the
Servicer's Certificate) shall transfer (a) from the Collection Account to the
Payahead Account, in immediately available funds, all Payaheads received by the
Servicer and previously deposited to the Collection Account during the
Collection Period as described in Section 8.05(b) of the Trust Agreement; and
(b) from the Payahead Account to the Collection Account, in immediately
available funds, the aggregate amount of previously deposited Payaheads to be
applied to the related Scheduled Receivable Payments on Precomputed Receivables
for the related Collection Period or prepayments for the related Collection
Period, pursuant to Section 8.05(b) of the Trust Agreement, each in the amounts
set forth in the Servicer's Certificate delivered on the related Determination
Date. A single, net transfer between the Payahead Account and the Collection
Account may be made. Any amount deposited in any Payahead Account (other than
interest income) shall not constitute Available Funds under Section 9.03. Any
amount deposited to the Collection Account from a Payahead Account pursuant to
this Section 9.10 shall be included in Available Funds under Section 9.05.
SECTION 9.11. RELEASE OF PLEDGED ASSETS.
(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
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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 and
to the Insurer pursuant to the Insurance Agreement have been paid, release any
remaining portion of the Pledged Assets 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
9.11(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 13.01.
SECTION 9.12. 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 9.11(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 Counsel
shall not be required to express an opinion as to the fair value of the Pledged
Assets. 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.
SECTION 9.13. CALCULATION OF NOTIONAL PRINCIPAL AMOUNT.
(a) Solely for the purpose of calculating the Class I Monthly Interest,
the aggregate Class A Note Balance will be divided into, and equal the sum of,
two principal components: (i) the "PAC Component" and (ii) the "Companion
Component." The PAC Component shall initially equal the Original Notional
Principal Amount.
(b) On each Payment Date, solely for the purposes of calculating the
Notional Principal Amount, the Monthly Principal will be allocated (i) first, to
the PAC Component up to the amount necessary to reduce the PAC Component to its
Planned Notional Principal Amount for such Payment Date, as specified on the
Planned Notional Principal Amount Schedule attached as Schedule B, (ii) second,
to the Companion Component until the balance thereof is reduced to zero, and
(iii) third, to the PAC Component without regard to the Planned Notional
Principal Amount for such Payment Date, until reduced to zero. If the amount of
Available Funds (together with amounts withdrawn from the Spread Account) are
not sufficient on any Payment Date to pay the required payment of Class A
Monthly Principal to the Class A Noteholders in full on any Payment Date at any
time after the occurrence and during the continuance of an Insurer Default, any
shortfall in the principal payments on the Class A Notes will be allocated to
reduce the PAC Component and the Companion Component on a pro rata basis. To the
extent there are any recoveries on the Receivables creating such shortfall, such
recoveries, to the extent of any portion thereof allocable to Class I Monthly
Interest, shall be allocated to pay Class I Monthly Interest.
ARTICLE X
CREDIT ENHANCEMENT
SECTION 10.01. SUBORDINATION. The rights of the Certificateholder shall
be subordinated to the rights of Class A and Class I Noteholders.
SECTION 10.02. SPREAD ACCOUNT.
(a) The Transferor, simultaneously with the execution and delivery of
this Indenture and pursuant to Section 9.06 of the Trust Agreement, caused the
Spread Account Depositor to execute and deliver the Spread Account Agreement
and, pursuant to the terms thereof, to deposit the Spread Account Initial
Deposit in the Spread Account on the Closing Date. Although the Spread Account
Depositor, as Certificateholder, has pledged the Spread Account to the
Collateral Agent and the Insurer pursuant to the Spread Account Agreement, the
Spread Account
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shall not under any circumstances be deemed to be a part of or otherwise
includible in the Issuer or the Pledged Assets.
(b) If on any Payment Date, as set forth in the Servicer's Certificate.
the amount of Available Funds is insufficient to make the distributions required
by Sections 9.05(a)(i) through (vi), the Indenture Trustee shall notify the
Collateral Agent, in accordance with Section 9.05(b) of the Trust Agreement to
withdraw from the Spread Account, for deposit in the Collection Account, the
lesser of (i) the entire Available Spread Amount and (ii) the Deficiency Claim
Amount.
(c) On each Payment Date, all distributions made pursuant to Section
9.05(a)(vii) and (x) shall be deposited into the Spread Account.
SECTION 10.03. CLAIMS UNDER THE POLICY.
(a) In the event that the Indenture Trustee has delivered a Deficiency
Notice with respect to any Determination Date, the Indenture Trustee shall
determine on the Determination Date for the related Draw Date whether the sum of
(i) the Available Funds with respect to such Determination Date (as stated in
the Servicer's Certificate with respect to such Determination Date) plus (ii)
the amount of the Deficiency Claim Amount, if any, available to be distributed
pursuant to the Spread Account Agreement by the Collateral Agent to the
Indenture Trustee pursuant to a Deficiency Notice delivered with respect to such
Payment Date (as stated in the certificate delivered on the immediately
preceding Deficiency Claim Date by the Collateral Agent pursuant to Section
3.03(a) of the Spread Account Agreement) plus (iii) the Insurer Optional
Deposit, if any, with respect to such Determination Date, would be insufficient,
after giving effect to the payments required by Section 9.05(a)(i), (ii) and
(iii) to pay the Scheduled Payments (as defined in the Policy) for the related
Payment Date, then in such event the Indenture Trustee shall furnish to the
Insurer no later than 12:00 noon New York City time on the Determination Date
and in no even later than the Draw Date a completed Notice of Claim in the
amount of the shortfall in amounts so available to pay the Scheduled Payments
with respect to such Payment Date (the amount of such shortfall being
hereinafter referred to as the "Policy Claim Amount"). Amounts paid by the
Insurer under the Policy shall be deposited by the Indenture Trustee into the
Collection Account for payment to Noteholders on the related Payment Date (or
promptly following payment by the Insurer on a later date as set forth in the
Policy) solely in accordance with the terms of the Policy.
(b) Any notice delivered by the Indenture Trustee to the Insurer
pursuant to Section 9.03(b) shall specify the Policy Claim Amount claimed under
the Policy and shall constitute a "Notice of Claim" under the Policy. In
accordance with the provisions of the Policy, the Insurer is required to pay to
the Indenture Trustee the Policy Claim Amount properly claimed thereunder by
12:00 noon, New York City time, on the later of (i) the third Business Day (as
defined in the Policy) following receipt on a Business Day (as defined in the
Policy) of the Notice of Claim, and (ii) the applicable Payment Date. Any
payment made by the Insurer under the Policy shall be applied solely to the
payment of Scheduled Payments on the Notes, and for no other purpose.
(c) The Indenture Trustee shall (i) receive as attorney-in-fact of each
Noteholder any Policy Claim Amount from the Insurer and (ii) deposit the same in
the Collection Account for distribution to the Noteholders solely in accordance
with the terms of the Policy. Any and all Policy Claim Amounts disbursed by the
Indenture Trustee from claims made under the Policy shall not be considered
payment by the Trust or from the Spread Account with respect to such Notes, and
shall not discharge the obligations of the Trust with respect thereto. The
Insurer shall, to the extent it makes any payment with respect to the Notes,
become subrogated to the rights of the recipients of such payments to the extent
of such payments. Subject to and conditioned upon any payment with respect to
the Notes by or on behalf of the Insurer, each Noteholder shall be deemed
without further action, to have directed the Indenture Trustee to assign to the
Insurer all rights to the payment of interest or principal with respect to the
Notes which are then due for payment to the extent of all payments made by the
Insurer, and the Insurer may exercise any option, vote, right, power or the like
with respect to the Notes to the extent that it has made payment pursuant to the
Policy. Notwithstanding the foregoing, the order of priority of payments to be
made pursuant to Section 9.05(a) shall not be modified by this Section 10.03. To
evidence such subrogation, the Note Registrar shall note the Insurer's rights as
subrogee upon the register of Noteholders upon receipt from the Insurer of proof
of payment by the Insurer of any Scheduled Payments (as defined in the Policy).
The foregoing subrogation shall in all cases be subject to the rights of the
Noteholders to receive all Scheduled Payments (as defined in the Policy) in
respect of the Notes.
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(d) The Indenture Trustee shall keep a complete and accurate record of
all funds received by it from the Insurer, amounts deposited by the Indenture
Trustee into the Collection Account and the allocation of such funds to payment
of interest on and principal paid in respect of any Note. The Insurer shall have
the right to inspect such records at reasonable times upon one Business Day's
prior notice to the Indenture Trustee.
(e) The Indenture Trustee shall be entitled, but not obligated, to
enforce on behalf of the Noteholders the obligations of the Insurer under the
Policy. Notwithstanding any other provision of this Agreement or any Basic
Document, the Noteholders are not entitled to institute proceedings directly
against the Insurer.
SECTION 10.04. PREFERENCE CLAIMS; DIRECTION OF PROCEEDINGS.
(a) In the event that the Indenture Trustee has received a certified
copy of an order of the appropriate court that any Scheduled Payment (as defined
in the Policy) paid on a Note has been avoided in whole or in part as a
preference payment under applicable bankruptcy law, the Indenture Trustee shall
so notify the Insurer, shall comply with the provisions of the Policy to obtain
payment by the Insurer of such avoided payment, and shall, at the time it
provides notice to the Insurer, notify Holders of the Notes by mail that, in the
event that any Noteholder's payment is so recoverable, such Noteholder will be
entitled to payment pursuant to the terms of the Policy. The Indenture Trustee
shall furnish to the Insurer its records evidencing the payments of principal
and interest on Notes, if any, which have been made by the Indenture Trustee and
subsequently recovered from Noteholders, and the dates on which such payments
were made. Pursuant to the terms of the Policy, the Insurer will make such
payment on behalf of the Noteholder to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order (as defined in
the Policy) and not to the Indenture Trustee or any Noteholder directly (unless
a Noteholder has previously paid such payment to the receiver, conservator,
debtor-in-possession or trustee in bankruptcy, in which case the Insurer will
make such payment to the Indenture Trustee for distribution in accordance with
the instructions to be provided by the Insurer, to such Noteholder upon proof of
such payment reasonably satisfactory to the Insurer).
(b) Each Notice of Claim shall provide that the Indenture Trustee, on
its behalf and on behalf of the Noteholders, thereby appoints the Insurer as
agent and attorney-in-fact for the Indenture Trustee and each Noteholder in any
legal proceeding with respect to the Notes. The Indenture Trustee shall promptly
notify the Insurer of any proceeding or the institution of any action (of which
a Responsible Officer of the Indenture Trustee has actual knowledge) seeking the
avoidance as a preferential transfer under applicable bankruptcy, insolvency,
receivership, rehabilitation or similar law (a "Preference Claim") of any
distribution made with respect to the Notes. Each Holder, by its purchase of
Notes, and the Indenture Trustee hereby agree that so long as the Insurer is the
Controlling Party the Insurer may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such
Preference Claim, including, without limitation, (i) the direction of any appeal
of any order relating to any Preference Claim and (ii) the posting of any
surety, supersedeas or performance bond pending any such appeal at the expense
of the Insurer, but subject to reimbursement as provided in the Insurance
Agreement. In addition, and without limitation of the foregoing, as set forth in
Section 10.03(c), the Insurer shall be subrogated to, and each Noteholder and
the Indenture Trustee hereby delegate and assign, to the fullest extent
permitted by law, the rights of the Indenture Trustee and each Noteholder in the
conduct of any proceeding with respect to a Preference Claim, including, without
limitation, all rights of any party to an adversary proceeding action with
respect to any court order issued in connection with any such Preference Claim.
Any right of the Insurer to receive payments in respect of the subrogation
resulting from payments made pursuant to the Policy shall be subject in every
case to (i) the priority of payment set forth in the Indenture and (ii) the
prior payment in full to Noteholders of all payments covered by the Policy that
are then due.
SECTION 10.05. INTENTIONALLY LEFT BLANK.
SECTION 10.06. SURRENDER OF THE POLICY.
The Indenture Trustee shall surrender the Policy to the Insurer for
cancellation upon its expiration in accordance with the terms thereof and
payment of all amounts due thereunder.
ARTICLE XI
SUPPLEMENTAL INDENTURES
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SECTION 11.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with the consent
of the Insurer so long as it is the Controlling Party, 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 Noteholders, 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 Noteholders;
(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
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee shall 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 Noteholders but with the
consent of the Insurer so long as it is the Controlling Party 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 Noteholders 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 11.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
(a) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, (i) with prior notice to each Rating Agency, (ii) with the
consent of the Insurer so long as it is the Controlling Party, and (iii) with
the consent of the Holders of not less than a majority of the Note Balances 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 Noteholders under this Indenture; provided, however, that,
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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:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto, or
change any place of payment where, or the coin or currency in which, any
Note or the interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any such
amount due on the Notes on or after the respective due dates thereof
(or, in the case of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Note Balances of the Notes,
the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iv) modify or alter the provisions of the second proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Note Balances of the Notes, the
consent of the Holders of which is required to direct the Indenture
Trustee to sell or liquidate the Pledged Assets pursuant to Section
5.04;
(vi) decrease the percentage of the Note Balances of the Notes
required to amend this Indenture or the other Basic Documents;
(vii) 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 Pledged Assets 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.
(b) 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.
(c) It shall not be necessary for any act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such act shall approve the substance thereof.
(d) Promptly after the execution by the parties hereto of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Noteholders 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 11.03. 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 Insurer and 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 and an Officers' Certificate 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 11.04. 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
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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 Noteholders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 11.05. 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 TIA as then in effect so long
as this Indenture shall then be qualified under the TIA.
SECTION 11.06. 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 XII
REDEMPTION OF NOTES
SECTION 12.01. REDEMPTION. In the event that the Servicer exercises its
right to require disposition of the corpus of the Trust pursuant to Section
16.02 of the Trust Agreement, the Notes are subject to redemption in whole, but
not in part, on the Payment 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 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 12.01, the
Servicer or the Issuer shall furnish notice of such election to the Insurer and
Indenture Trustee not later than ten (10) days prior to the Redemption Date and
the Issuer shall deposit with the Indenture Trustee in the Collection Account
the Redemption Price of the Notes to be redeemed whereupon all such Notes shall
be due and payable on the Redemption Date upon the furnishing of a notice
complying with Section 12.02 to each Holder of the Notes.
SECTION 12.02. FORM OF REDEMPTION NOTICE. Notice of redemption under
Section 12.01 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 2.07(b) of this Indenture.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) CUSIP numbers; and
(iv) 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 12.03. NOTES PAYABLE ON REDEMPTION DATE. The Notes or portions
thereof to be redeemed shall, following notice of redemption (if any) as
required by Section 12.02, 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
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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 XIII
MISCELLANEOUS
SECTION 13.01. COMPLIANCE CERTIFICATES AND OPINIONS, ETC.
(a) Upon any application or request by the Issuer or the Insurer (so
long as it is the Controlling Party) to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer or the Insurer, as applicable,
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 and TIA Sections 314(c) and 314(d)(1). 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 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 Pledged Assets or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property subject to the lien created by this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 13.01(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 Pledged
Assets or other 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 Note Balances, 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 Note Balances.
(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.
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(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 Note Balances 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 Note Balances of the Notes.
SECTION 13.02. FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE.
(a) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his 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 Transferor or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Transferor 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.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the 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 Six.
SECTION 13.03. ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
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(c) The ownership of Notes shall be proved by the Note Register and the
record date applicable to any solicitation for an Act of the Noteholders shall
comply with Section 316(c) of the TIA.
(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 13.04. 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, the Insurer 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, the Insurer 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:
Bay View 2002-LJ-1 Owner Trust, in care of Wilmington Trust Company
(Delaware), as Owner Trustee, 0000 X. Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000-0000, Attention: Corporate Trust Administration, 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:
Financial Security Assurance Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Transaction Oversight
Re: Auto Receivables Trust 2002-LJ-1
Telex No: (000) 000-0000
Confirmation: (000) 000-0000
Telecopy Nos.: (000) 000-0000 or
(000) 000-0000
(In each case in which notice or other communication to the Insurer refers to an
Event of Default, a claim on the Policy or with respect to which failure on the
part of the Insurer to respond shall be deemed to constitute consent or
acceptance, then a copy of such notice or other communication should also be
sent to the attention of the General Counsel and the Head--Financial Guaranty
Group marked "URGENT MATERIAL ENCLOSED.")
(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,
a division of the XxXxxx-Xxxx Companies, Inc.
53
00 Xxxxx Xxxxxx (00xx Xxxxx)
Xxx Xxxx, Xxx Xxxx 00000-0003
Attention: Structured Finance/Asset Backed
Surveillance Department
or as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
SECTION 13.05. NOTICES TO NOTEHOLDERS; WAIVER.
(a) 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.
(b) Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the 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 13.06. 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 13.07. CONFLICT WITH TRUST INDENTURE ACT.
(a) 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 TIA, such required provision shall control.
(b) 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 13.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 13.09. 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 13.10. SEPARABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
54
SECTION 13.11. 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 and the Insurance Agreement has not terminated. 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 Pledged Assets, 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 13.12. 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 13.13. GOVERNING LAW. This Indenture shall be construed in
accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof, (except with regard to the UCC) and the
obligations, rights, and remedies of the parties under this Indenture shall be
determined in accordance with such laws.
SECTION 13.14. 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 13.15. 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 13.16. TRUST OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, or of any holder of a
beneficial interest in the Issuer, or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacities) 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 Six, Seven and Eight of the Trust Agreement.
SECTION 13.17. 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 Transferor or the Issuer, or join in any institution against the
Transferor or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, this Indenture or any of the other Basic
Documents.
SECTION 13.18. INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or of the
Insurer, so long as it is the Controlling Party, 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
55
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 13.19. LIMITATION OF LIABILITY OF OWNER TRUSTEE.
Notwithstanding anything contained herein to the contrary, this instrument has
been countersigned by the Owner Trustee not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer and in no event shall the
Owner Trustee 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 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 Eight, Thirteen and Fifteen of the Trust Agreement.
SECTION 13.20. CERTAIN MATTERS REGARDING THE INSURER. So long as an
Insurer Default shall not have occurred and be continuing and the Insurance
Agreement has not terminated, the Insurer shall have the right to exercise all
rights (other than to receive payments), including voting rights, which the
Noteholders or Certificateholders are entitled to exercise pursuant to this
Indenture, without any consent of such Noteholders or Certificateholders;
provided, however, that without the consent of each Noteholder and
Certificateholder 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 Receivables or distributions
which are required to be made on any Note or Certificate, (ii) adversely affect
in any material respect the interests of the Holders of any Notes or
Certificates, or (iii) alter the rights of any such Holder to consent to such
amendment.
SECTION 13.21. NO LEGAL TITLE IN HOLDERS. No Holder of a Note shall
have legal title to any part of the Trust Property. No transfer, by operation of
law or otherwise, of any Note or other right, title and interest of any Holder
of a Note in and to the Trust Property or hereunder shall operate to terminate
this Indenture or the trusts hereunder or entitle any successor or transferee of
such Holder to an accounting or to the transfer to it of legal title to any part
of the Trust Property.
SECTION 13.22. EFFECT OF TERMINATION DATE. Notwithstanding anything to
the contrary set forth herein, all references to any right of the Insurer to
direct, appoint, consent to, accept, approve of, take or omit to take any action
under this Indenture or any other Basic Document shall be inapplicable at all
times after the Termination Date or Insurer Default, and (i) if such reference
provides for another party or parties to take or omit to take such action
following an Insurer Default, such party or parties shall also be entitled to
take or omit to take such action following the Termination Date or Insurer
Default and (ii) if such reference does not provide for another party or parties
to take or omit to take such action following an Insurer Default, then the
Indenture Trustee acting at the direction of the Majority Noteholders shall have
the right to take or omit to take any such action following the Termination Date
or Insurer Default. In addition, any other provision of this Indenture or any
other Basic Document which is operative based in whole or in part on whether an
Insurer Default has or has not occurred shall, at all times on or after the
Termination Date or Insurer Default, be deemed to refer to whether or not the
Termination Date has occurred.
SECTION 13.23. XXXXXXXX-XXXXX CERTIFICATIONS. The certifications
required by the Xxxxxxxx-Xxxxx Act of 2002 and the rules of the Securities and
Exchange Commission promulgated thereunder to be included in filings with
respect to the Issuer pursuant to the Securities Exchange Act of 1934, as
amended, shall be made by BVAC, so long as BVAC is the Servicer; if BVAC is no
longer the Servicer, such certifications shall be made by the Transferor. If
BVAC is no longer the Servicer, the successor Servicer shall provide to the
Transferor all information as the Transferor may reasonably request in order to
fulfill its obligations to make such certifications. In addition, the Indenture
Trustee shall provide to BVAC or the Transferor (whichever of the two is then
required to make such certifications) with a certification signed by a
Responsible Officer stating that such Responsible Officer is not actually aware
(without any independent duty of inquiry or investigation) of any matters which
would cause the certification to be made by BVAC or the Transferor, as the case
may be, to be incorrect.
56
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.
BAY VIEW 2002-LJ-1 OWNER TRUST
By: Wilmington Trust Company,
not in its individual capacity but solely on behalf of the Issuer as Owner
Trustee under the Trust Agreement
By:
Name:
Title:
DEUTSCHE BANK TRUST COMPANY AMERICAS,
not in its individual capacity but solely as Indenture Trustee
By:
Name:
Title:
57
EXHIBIT A-1
[FORM OF CLASS A-1 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-1 NOTE IS DISTRIBUTABLE AS SET FORTH
HEREIN. ACCORDINGLY, THE UNPAID PRINCIPAL AMOUNT OF THE FRACTIONAL INTEREST
EVIDENCED HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL PRINCIPAL AMOUNT SET
FORTH HEREIN.
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Certificate issued is
registered in the name of Cede & Co. or in such other name as requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an
interest herein.
PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
BAY VIEW 2002-LJ-1 OWNER TRUST
_____% CLASS A-1 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View 2002-LJ-1 Owner Trust, a
Delaware statutory trust, secured by the Pledged Assets, as defined
below, including a pool of simple and precomputed interest installment
loan and security agreements and installment sales contracts secured by
new and used automobiles, light-duty trucks, sport utility vehicles and
vans.
(This Note does not represent an interest in Bay View Securitization
Corporation nor an interest in or obligation of any of its affiliates.
Neither this Note nor the underlying Receivables, as defined below, are
insured or guaranteed by any government agency).
NUMBER ____ $_____________
CUSIP ________________
Bay View 2002-LJ-1 Owner Trust , a Delaware statutory trust, for value
received, hereby promises to pay to the order of [____________] ("the
Noteholder") or its registered assigns, the principal sum of
____________________ dollars ($___________), which amount shall be payable in
the amounts and at the times set forth in the Indenture dated as of September 1,
2002 (the "Indenture"; such term to include any amendment, restatement,
supplement or other modification thereof or thereto) provided, however, that the
entire unpaid amount of this Note shall be due and payable on or
before__________, ____. However, principal with respect to the Notes may be paid
earlier or later under certain limited circumstances under the Indenture. The
Issuer will pay interest on this Note at the Class A-1 Interest Rate. Such
interest shall be payable in the manner and at the times set forth in the
Indenture. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Indenture. This Note is
issued under and is subject to the terms, provisions, and conditions of the
Indenture, to which the holder of this Note by virtue of the acceptance hereof
assents and by which such holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of (i) the Receivables listed on Schedule A to the Trust Agreement, (ii) the
security interests in the Financed Vehicles or in any other property granted by
Obligors pursuant to the Receivables, (iii) any proceeds from claims and other
amounts relating to Insurance Policies and other items financed under the
Receivables or otherwise covering an Obligor or a Financed Vehicle, (iv) any
Liquidation Proceeds, (v) all property (including the right to receive future
Liquidation Proceeds) that secures a Receivable and that has been or may be
acquired pursuant to the liquidation of the Receivable, (vi) the interest of the
Issuer in any proceeds from recourse to Dealers relating to the Receivables,
(vii) all documents contained in the Receivable Files relating to the
Receivables, (viii) all monies paid on the Receivables, and all monies due
thereon after the Cut-off Date, (ix) the rights of the Transferor pursuant to
the Purchase Agreement, the
1
Trust Agreement and the Transfer and Contribution Agreement and the rights of
the Issuer pursuant to the Trust Agreement, including, without limitation, a
direct right to cause BVAC to purchase Receivables from the Transferor upon the
occurrence of a breach of any of the representations and warranties contained in
Section 3.02(b) of the Purchase Agreement or the failure of BVAC to timely
comply with its obligations pursuant to Section 5.05 of the Purchase Agreement
and (x) all proceeds (including, without limitation, "proceeds" as defined in
the UCC of the jurisdiction the law of which governs the perfection of the
interest in such Receivables and such other property so transferred) of any of
the foregoing. Pledged Assets shall also include (a) any and all other right,
title and interest, including any beneficial interest the Issuer may have in the
Collection Account, the Payahead Account, the Reserve Account and the Lock-Box
Account (to the extent such amounts and property in the Lock-Box Account relate
to the Receivables), (b) the funds deposited in and financial assets credited to
and from time to time on deposit in such accounts (to the extent such amounts
and property in the Lock-Box account relate to the Receivables), and all
Eligible Investments and other securities, instruments and other investments
purchased from such funds.
Under the Indenture, the Issuer will pay, on the twenty-fifth calendar
day of each month, or if such day is not a Business Day, on the first Business
Day thereafter (the " Payment Date"), commencing October 25, 2002, to the person
in whose name this Note is registered on the Record Date, the portion of Monthly
Interest and Monthly Principal to which the Noteholder is entitled pursuant to
the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
Unless the certificate of authentication hereon shall have been executed
by a Responsible Officer of the Indenture Trustee, by manual or facsimile
signature, this Note shall not entitle the holder hereof to any benefit under
the Indenture or be valid for any purpose.
The Note does not represent an interest in the Issuer nor an interest in
or obligation of any affiliate of the Issuer, including Bay View Securitization
Corporation or Bay View Acceptance Corporation. The Note is limited in right of
payment to certain collections and recoveries respecting the Receivables, all as
more specifically set forth in the Indenture. In addition to the Class A-1
Notes, the Issuer has also issued Class A-2 Notes, Class A-3 Notes, Class A-4
Notes and Class I Notes. The Indenture provides for certain amounts to be
deposited into the Spread Account. In the event amounts available for withdrawal
from the Spread Account are insufficient to make payments relating to this Note
and the other notes issued by the Issuer, the Indenture Trustee will draw on the
Policy to pay such deficiency to the extent provided therein. In furtherance of
an in limitation of the foregoing, the Noteholder, by its acceptance of this
Note, specifically acknowledges that it has no right to or interest in any
monies at any time held pursuant to the Spread Account Agreement prior to the
release of such monies pursuant to the Spread Account Agreement, such monies
being held in trust for the benefit of the Secured Parties (as defined therein).
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Insurer and the
Noteholder. Any such consent by the holder of this Note shall be conclusive and
binding on the Noteholder.
This Note is transferrable solely in accordance with Section 2.04 of the
Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to Noteholder of all amounts required
to be paid to it pursuant to the Indenture. The Servicer may at its option cause
the Indenture Trustee to sell the Pledged Assets at a price not to be less than
the price specified in the Indenture, and such sale of the Receivables and other
property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
2
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
3
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed.
Dated:
---------------------
BAY VIEW 2002-LJ-1 OWNER TRUST
By: Wilmington Trust Company
solely as Owner Trustee
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
Deutsche Bank Trust Company Americas, solely in its capacity as Indenture
Trustee
Dated:
---------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
4
Social Security or taxpayer I.D. or other identifying number of assignee:_______
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, __________________________ attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated:_________________
Signature Guaranteed:
*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
5
SCHEDULE B
PLANNED NOTIONAL PRINCIPAL AMOUNT SCHEDULE
PLANNED NOTIONAL
MONTH PRINCIPAL AMOUNT
0 $339,622,444
1 $325,538,375
2 $311,621,653
3 $297,874,717
4 $284,300,038
5 $270,900,116
6 $257,677,485
7 $244,634,708
8 $231,774,381
9 $219,099,133
10 $206,611,625
11 $194,314,552
12 $182,210,642
13 $170,302,658
14 $158,593,395
15 $147,085,686
16 $135,782,395
17 $124,686,427
18 $113,800,717
19 $103,128,242
20 $92,672,012
21 $84,226,292
22 $76,126,761
23 $68,340,865
24 $60,875,896
25 $53,702,143
6
26 $46,809,081
27 $40,186,179
28 $33,822,891
29 $27,697,588
30 $22,213,925
31 $16,969,448
32 $14,017,376
33 $11,191,567
34 $8,483,822
35 $5,892,642
36 $3,410,780
37 $1,668,954
38 and thereafter $0
7
