Exhibit 4.3
INDENTURE
between
BAY VIEW _____ OWNER TRUST
as Issuer
and
--------------------
as Indenture Trustee
Dated as of __________
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE........................................................ 2
SECTION 1.01 Definitions....................................................................... 2
SECTION 1.02 Incorporation by Reference of Trust Indenture Act................................. 13
SECTION 1.03 Rules of Construction............................................................. 13
SECTION 1.04 Directions........................................................................ 14
ARTICLE II THE NOTES........................................................................................ 14
SECTION 2.01 Form.............................................................................. 14
SECTION 2.02 Execution, Authentication and Delivery............................................ 14
SECTION 2.03 Temporary Notes................................................................... 15
SECTION 2.04 Registration; Registration of Transfer and Exchange............................... 15
SECTION 2.05 Mutilated, Destroyed, Lost or Stolen Notes........................................ 16
SECTION 2.06 Payment of Principal and Interest; Defaulted Interest............................. 17
SECTION 2.07 Cancellation...................................................................... 19
SECTION 2.08 Book-Entry Notes.................................................................. 19
SECTION 2.09 Notices to Clearing Agency........................................................ 20
SECTION 2.10 Definitive Notes.................................................................. 20
SECTION 2.11 Release of Pledged Assets......................................................... 20
SECTION 2.12 Tax Treatment..................................................................... 20
SECTION 2.13 ERISA............................................................................. 21
SECTION 2.14 CUSIP NUMBERS..................................................................... 21
ARTICLE III COVENANTS....................................................................................... 21
SECTION 3.01 Payment of Principal and Interest................................................. 21
SECTION 3.02 Maintenance of Office or Agency................................................... 21
SECTION 3.03 Money for Payments to be Held in Trust............................................ 22
SECTION 3.04 Existence......................................................................... 23
SECTION 3.05 Protection of Trust Estate........................................................ 23
SECTION 3.06 Opinions as to Pledged Assets..................................................... 24
SECTION 3.07 Performance of Obligations; Servicing of Receivables.............................. 25
SECTION 3.08 Negative Covenants................................................................ 26
SECTION 3.09 Annual Statement as to Compliance................................................. 27
SECTION 3.10 Issuer May Consolidate, etc. Only on Certain Conditions........................... 27
SECTION 3.11 Successor Transferee.............................................................. 29
SECTION 3.12 No Other Business................................................................. 29
SECTION 3.13 No Borrowing...................................................................... 29
SECTION 3.14 Servicer's Obligations............................................................ 30
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities................................. 30
SECTION 3.16 Capital Expenditures.............................................................. 30
SECTION 3.17 Restricted Payments............................................................... 30
SECTION 3.18 Notice of Events of Default....................................................... 30
SECTION 3.19 Further Instruments and Acts...................................................... 30
SECTION 3.20 Compliance with Laws.............................................................. 30
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SECTION 3.21 Amendments of Trust Agreement..................................................... 31
ARTICLE IV SATISFACTION AND DISCHARGE....................................................................... 31
SECTION 4.01 Satisfaction and Discharge of Indenture........................................... 31
SECTION 4.02 Application of Trust Money........................................................ 32
SECTION 4.03 Repayment of Monies Held by Paying Agent.......................................... 32
ARTICLE V EVENTS OF DEFAULT; REMEDIES....................................................................... 33
SECTION 5.01 Events of Default................................................................. 33
SECTION 5.02 Rights Upon Event of Default...................................................... 34
SECTION 5.03 Collection of Indebtedness and Suits for Enforcement by Indenture Trustee......... 35
SECTION 5.04 Remedies.......................................................................... 37
SECTION 5.05 Optional Preservation of the Receivables.......................................... 38
SECTION 5.06 Priorities........................................................................ 38
SECTION 5.07 Limitation of Suits............................................................... 39
SECTION 5.08 Unconditional Rights of Noteholders to Receive Principal and Interest............. 39
SECTION 5.09 Restoration of Rights and Remedies................................................ 40
SECTION 5.10 Rights and Remedies Cumulative.................................................... 40
SECTION 5.11 Delay or Omission Not a Waiver.................................................... 40
SECTION 5.12 Control by Controlling Party...................................................... 40
SECTION 5.13 Waiver of Past Defaults........................................................... 41
SECTION 5.14 Undertaking for Costs............................................................. 41
SECTION 5.15 Waiver of Stay or Extension Laws.................................................. 41
SECTION 5.16 Action on Notes................................................................... 41
SECTION 5.17 Performance and Enforcement of Certain Obligations................................ 42
ARTICLE VI THE INDENTURE TRUSTEE............................................................................ 42
SECTION 6.01 Duties of Indenture Trustee....................................................... 42
SECTION 6.02 Rights of Indenture Trustee....................................................... 44
SECTION 6.03 Individual Rights of Indenture Trustee............................................ 46
SECTION 6.04 Indenture Trustee's Disclaimer.................................................... 46
SECTION 6.05 Notice of Defaults................................................................ 46
SECTION 6.06 Reports by Indenture Trustee to Holders........................................... 46
SECTION 6.07 Compensation and Indemnity........................................................ 46
SECTION 6.08 Replacement of Indenture Trustee.................................................. 47
SECTION 6.09 Successor Indenture Trustee by Merger............................................. 48
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture Trustee................. 49
SECTION 6.11 Eligibility....................................................................... 50
SECTION 6.12 Preferential Collection of Claims Against Issuer.................................. 50
SECTION 6.13 Representations and Warranties of Indenture Trustee............................... 50
SECTION 6.14 Disqualification of the Indenture Trustee......................................... 51
SECTION 6.15 Control by the Controlling Party.................................................. 51
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ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.................................................................. 51
SECTION 7.01 Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders............ 51
SECTION 7.02 Preservation of Information; Communications to Noteholders........................ 51
SECTION 7.03 Reports by Issuer................................................................. 52
SECTION 7.04 Reports by Indenture Trustee...................................................... 52
ARTICLE VIII DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS................................................... 52
SECTION 8.01 Collection Account................................................................ 52
SECTION 8.02 Collections....................................................................... 53
SECTION 8.03 Purchase Amounts.................................................................. 53
SECTION 8.04 Distributions to Parties.......................................................... 53
SECTION 8.05 Servicer Advances................................................................. 57
SECTION 8.06 Net Deposits...................................................................... 57
SECTION 8.07 Payahead Account.................................................................. 57
SECTION 8.08 Release of Pledged Assets......................................................... 57
SECTION 8.09 Opinion of Counsel................................................................ 58
ARTICLE IX CREDIT ENHANCEMENT............................................................................... 58
SECTION 9.01 Subordination..................................................................... 58
SECTION 9.02 Spread Account.................................................................... 58
SECTION 9.03 Policy............................................................................ 59
SECTION 9.04 Surrender of the Policy........................................................... 61
ARTICLE X SUPPLEMENTAL INDENTURES........................................................................... 62
SECTION 10.01 Supplemental Indentures Without Consent of Noteholders............................ 62
SECTION 10.02 Supplemental Indentures With Consent of Noteholders............................... 63
SECTION 10.03 Execution of Supplemental Indentures.............................................. 64
SECTION 10.04 Effect of Supplemental Indenture.................................................. 64
SECTION 10.05 Conformity with Trust Indenture Act............................................... 64
SECTION 10.06 Reference in Notes to Supplemental Indentures..................................... 65
ARTICLE XI REDEMPTION OF NOTES.............................................................................. 65
SECTION 11.01 Redemption........................................................................ 65
SECTION 11.02 Form of Redemption Notice......................................................... 65
SECTION 11.03 Notes Payable on Redemption Date.................................................. 66
ARTICLE XII MISCELLANEOUS................................................................................... 66
SECTION 12.01 Compliance Certificates and Opinions, etc......................................... 66
SECTION 12.02 Form of Documents Delivered to Indenture Trustee.................................. 67
SECTION 12.03 Acts of Noteholders............................................................... 68
SECTION 12.04 Notices, etc., to Indenture Trustee, Issuer, Insurer and Rating Agencies.......... 69
SECTION 12.05 Notices to Noteholders; Waiver.................................................... 69
SECTION 12.06 Alternate Payment and Notice Provisions........................................... 70
SECTION 12.07 Conflict With Trust Indenture Act................................................. 70
SECTION 12.08 Effect of Headings and Table of Contents.......................................... 70
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SECTION 12.09 Successors and Assigns............................................................ 70
SECTION 12.10 Separability...................................................................... 71
SECTION 12.11 Benefits of Indenture............................................................. 71
SECTION 12.12 Legal Holidays.................................................................... 71
SECTION 12.13 Governing Law..................................................................... 71
SECTION 12.14 Counterparts...................................................................... 71
SECTION 12.15 Recording of Indenture............................................................ 71
SECTION 12.16 Trust Obligation.................................................................. 71
SECTION 12.17 No Petition....................................................................... 72
SECTION 12.18 Inspection........................................................................ 72
SECTION 12.19 Limitation of Liability of Owner Trustee.......................................... 72
SECTION 12.20 Certain Matters Regarding the Insurer............................................. 72
SECTION 12.21 No Legal Title in Holders......................................................... 73
SECTION 12.22 Xxxxxxxx-Xxxxx Certifications..................................................... 73
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 B Form of Class B Note
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
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Trust Indenture Indenture
Act Section Section
--------------- ---------
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 __________, is entered into between BAY VIEW _____
OWNER TRUST, a Delaware business trust, as issuer (the "Issuer"), and
__________, a __________ 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 Liquidation Proceeds, (iv) 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, (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) funds deposited in the
Spread Account (and any Eligible Investments purchased therewith) and the
Collection Account, (vii) the interest of the Issuer in any proceeds from
recourse to Dealers relating to the Receivables, (viii) all documents contained
in the Receivable Files relating to the Receivables, (ix) all monies paid and
all monies due, including Accrued Interest, as of and after the Cutoff Date (but
excluding Accrued Interest paid on or prior to the Closing Date), (x) the rights
of the Transferor pursuant to the Purchase Agreement and the rights of the
Issuer pursuant to the Trust Agreement including without limitation, the right
to require BVAC to repurchase any such Receivables as to which there has been a
breach of the representations and warranties contained therein, (xi) the
benefits of the Policy, and (xii) 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 so transferred) of any of the
foregoing. Such property described in the preceding sentence, together with (a)
any and all other right, title and interest, including any beneficial interest
the Issuer may have in the Collection Account, the Spread Account and the
Payahead Account, (b) the funds deposited in and financial assets credited to
and from time to time on deposit in such accounts, 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 Issuer does
not convey to the Indenture Trustee, and the Pledged Assets do not include, any
interest in any contracts with Dealers related to any "dealer reserve" or any
rights to the recapture of any dealer reserve with respect to such Receivables.
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 (except as
provided herein with respect to the subordination of the Class B Notes), and to
secure compliance with the provisions of this Indenture and the Insurance
Agreement, all as provided in this Indenture and the Insurance Agreement.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders and the Insurer, acknowledges such Grant, accepts the trusts under
this Indenture in accordance with the provisions of this Indenture and agrees to
perform its duties required in this Indenture to the best
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of its ability to the end that the interests of the Noteholders 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 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.
"Accelerated Principal Amount" means, for any Payment Date after giving
effect to all payments of interest and principal (other than any Accelerated
Principal Amount) to the Noteholders, an amount equal to the lesser of (1) the
Available Excess Funds or (2) the amount necessary to reduce the then aggregate
Note Balances below the Pool Balance as of the end of the related Collection
period until the aggregate Pool Balance exceeds the aggregate Note Balances by
_____% of the initial Note Balances or $__________.
"Act" shall have the meaning specified in Section 12.03(a).
"Authorized Officer" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee or 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).
"Available Excess Funds" for any Payment Date means the amount of
Available Funds remaining from such Payment Date after paying the Servicer, the
Noteholders and the Insurer the amounts they are entitled to receive, without
considering the amount of the Monthly Principal payment in respect of the
Accelerated Principal Amount.
"Available Funds" has the meaning provided in the Trust Agreement.
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
the Administration Agreement, the Depository Agreement, the Insurance Agreement,
the Policy and this Indenture.
"BVAC" means Bay View Acceptance Corporation, a Nevada corporation, and
its successors.
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"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 2.08.
"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 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-l Interest Rate" means _____% per annum.
"Class A-l Monthly Interest" means, (i) for the first Payment Date, the
product of one-three hundred sixtieth (1/360th) of the Class A-l Interest Rate,
the actual number of days from the Closing Date through the day before the first
Payment Date and the Class A-l Note Balance at the Closing Date and (ii) for any
subsequent Payment Date, the product of one-three hundred sixtieth (1/360th) of
the Class A-l Interest Rate, the actual number of days from the previous Payment
Date through the day before the related Payment Date and the Class A-l Note
Balance as of the immediately preceding Payment Date (after giving effect to any
distribution 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 8.04.
"Class A-l 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-l.
"Class A-l Note Balance" means, at any time, the Initial Class A-l Note
Balance minus all payments of Monthly Principal actually distributed to Class
A-l 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, 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 _____% per annum.
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"Class A-2 Monthly Interest" means, (i) for the first Payment Date, the
product of (x) one twelfth of the Class A-2 Interest Rate, (y) the number of
days from the Closing Date through the day before the first Payment Date divided
by 30 (assuming the month of the Closing Date has 30 days) and (z) the Class A-2
Note Balance at the Closing Date and (ii) for any subsequent Payment Date, the
product of (x) one-twelfth of the Class A-2 Interest Rate and (y) the Class A-2
Note Balance as of the immediately preceding Payment Date (after giving effect
to any distribution 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 8.04.
"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, at any time, 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 _____% per annum.
"Class A-3 Monthly Interest" means, (i) for the first Payment Date, the
product of (x) one twelfth of the Class A-3 Interest Rate, (y) the number of
days from the Closing Date through the day before the first Payment Date divided
by 30 (assuming the month of the Closing Date has 30 days) and (z) the Class A-3
Note Balance at the Closing Date and (ii) for any subsequent Payment Date, the
product of (x) one-twelfth of the Class A-3 Interest Rate and (y) the Class A-3
Note Balance as of the immediately preceding Payment Date (after giving effect
to any distribution 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 8.04.
"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, at any time, 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
4
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 _____% per annum.
"Class A-4 Monthly Interest" means, (i) for the first Payment Date, the
product of (x) one twelfth of the Class A-4 Interest Rate, (y) the number of
days from the Closing Date through the day before the first Payment Date divided
by 30 (assuming the month of the Closing Date has 30 days) and (z) the Class A-4
Note Balance at the Closing Date and (ii) for any subsequent Payment Date, the
product of (x) one-twelfth of the Class A-4 Interest Rate and (y) the Class A-4
Note Balance as of the immediately preceding Payment Date (after giving effect
to any distribution of Monthly Principal made on such immediately preceding
Payment Date).
"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 8.04.
"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, at any time, 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 B Interest Rate" means _____% per annum.
"Class B Monthly Interest" means, (i) for the first Payment Date, the
product of (x) one twelfth of the Class B Interest Rate, (y) the number of days
from the Closing Date through the day before the first Payment Date divided by
30 (assuming the month of the Closing Date has 30 days) and (z) the Class B Note
Balance at the Closing Date and (ii) for any subsequent Payment Date, the
product of (x) one-twelfth of the Class B Interest Rate and (y) the Class B Note
Balance as of the immediately preceding Payment Date (after giving effect to any
distribution of Monthly Principal made on such immediately preceding Payment
Date).
"Class B Monthly Principal" means that portion of Monthly Principal to
be paid to Class B Noteholders on each Payment Date in accordance with Section
8.04.
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"Class B 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 B.
"Class B Note Balance" means, at any time, the Initial Class B Note
Balance minus all payments of Monthly Principal actually distributed to Class B
Noteholders as of such date of determination.
"Class B Noteholder" means the Person in whose name the respective
Class B 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 B 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.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participation" 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.
"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.
"Code" means the Internal Revenue Code of 1986, as amended.
"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 2.08.
"Depository Agreement" means the agreement dated __________, among the
Issuer, the Indenture Trustee and DTC, as the initial Clearing Agency, relating
to the Notes, substantially in the form attached hereto as Schedule A.
"Dissolution Payment Date" means the Payment Date following the
liquidation of the trust corpus pursuant to Section 16.2 of the Trust Agreement.
"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.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
6
"Executive Officer" means, with respect to any corporation or bank, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation or bank; and with respect to any partnership, any
general partner thereof.
"Final Maturity Date" means _____ with respect to the Class A-l Notes,
_____ with respect to the Class A-2 Notes, _____ with respect to the Class A-3
Notes, _____ with respect to the Class A-4 Notes and _____ with respect to the
Class B 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 granting party or otherwise and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Holder" means the Person in whose name a Note is registered on the
Note Register on the applicable Record Date.
"Indebtedness" means, with respect to any Person at any time, (i)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (ii)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (iii) current liabilities of such Person in respect of
unfunded vested benefits under plans covered by Title IV of ERISA; (iv)
obligations issued for or liabilities incurred on the account of such Person;
(v) obligations or liabilities of such Person arising under acceptance
facilities; (vi) obligations of such Person under any guaranties, endorsements
(other than for collection or deposit in the ordinary course of business) and
other contingent obligations to purchase, to provide funds for payment, to
supply funds to invest in any Person or otherwise to assure a creditor against
loss; (vii) obligations of such Person secured by any lien on property or assets
of such Person, whether or not the obligations have been assumed by such Person;
or (viii) obligations of such Person under any interest rate or currency
exchange agreement.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indenture Trustee" means ____________________ a __________ 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
such a 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
7
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 12.01, 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 $__________.
"Initial Class A-2 Note Balance" means $__________.
"Initial Class A-3 Note Balance" means $__________.
"Initial Class A-4 Note Balance" means $__________.
"Initial Class B Note Balance" means $__________.
"Initial Note Balances" means $__________.
"Insurance Premium" means for any Payment Date, an amount equal to the
product of (x) _____% per annum calculated for the actual number of days elapsed
during the Collection Period on the basis of a 360-day year and (y) the Note
Balances as of the Payment Date to which such Payment Date relates, payable
monthly in arrears.
"Insurer Default" means the Insurer is in default under the Policy or
the Insurance Agreement after the expiration of any applicable cure period.
"Issuer" means Bay View _____ Owner Trust as the issuer of the Notes
under this Indenture and its permitted successors and assigns.
"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.
"Majority Noteholders" means, as of any date of determination, the
Holders holding in the aggregate 66 2/3% or more of the outstanding Note Balance
as of such date.
"Monthly Interest" means the sum of Class A Monthly Interest and Class
B Monthly Interest.
"Monthly Principal" means for any Payment Date, the sum of the
following:
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(i) the amount by which the Pool Balance declined during
the related Collection Period;
(ii) the amount, if any, which is necessary to reduce the
Note Balance of a Class of Notes to zero on its Final Maturity Date;
and
(iii) the Accelerated Principal Amount.
For the purpose of determining Monthly Principal, the unpaid principal balance
of a Defaulted Receivable or a Purchased Receivable is deemed to be zero on and
after the last day of the Collection Period in which such Receivable became a
Defaulted Receivable or a Purchased Receivable.
"Net Principal Policy Amount" means the Initial Note Balances as of the
first Payment Date minus all amounts previously drawn on the Policy or from the
Spread Account with respect to Monthly Principal.
"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 B Note.
"Note Balance" means the Class A-1 Note Balance, the Class A-2 Note
Balance, the Class A-3 Note Balance, the Class A-4 Note Balance or the Class B
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 Notes then Outstanding
such that the Noteholders will vote as a single class.
"Noteholder" means any Holder of a Note.
"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.
"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 12.01, 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 or the Issuer and who shall be satisfactory to the
Indenture Trustee and, if addressed to the Insurer, satisfactory to the Insurer,
and which shall comply with any applicable requirements of Section 12.01, and
shall be in form and substance satisfactory to the Indenture Trustee, and if
addressed to the Insurer, satisfactory to the Insurer.
9
"Original Pool Balance" means $__________.
"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 has
been made, satisfactory to the Indenture Trustee, has been
made); and
(iii) Notes in exchange for or in lieu of other Notes which have
been authenticated and delivered pursuant to this Indenture
unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a bona fide
purchaser; provided, however, that in determining whether the
Holders of the requisite Outstanding Note Balances have given
any request, demand, authorization, direction, notice, consent
or waiver hereunder or under any other Basic Document, Notes
owned by the Issuer, the Transferor, BVAC, any other obligor
upon the Notes, or any of their respective Affiliates shall be
disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected
in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes that the
Indenture Trustee knows to be so owned shall be so
disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Notes and that
the pledgee is not the Issuer, the Transferor, BVAC, any other
obligor upon the Notes, or any of their respective Affiliates.
"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.
"Pledged Assets" has the meaning provided in the Granting Clause of
this Indenture.
"Policy" means the irrevocable financial guaranty insurance policy
dated as of __________, issued by the Insurer to the Indenture Trustee for the
benefit of the Noteholders and having a maximum amount available to be drawn in
respect of Monthly Interest and Monthly Principal equal to the Policy Amount.
"Policy Amount" means with respect to any Payment Date:
(x) the sum of (A) the lesser of (i) the Note Balances
(after giving effect to any distribution of Available Funds and any funds
withdrawn from the Spread Account to pay
10
Monthly Principal on such Payment Date) and (ii) the Net Principal Policy
Amount, plus (B) Monthly Interest, plus (C) the Monthly Servicing Fee; less
(y) all amounts on deposit in the Spread Account on such
Payment Date (after giving effect to any amounts withdrawn from the Spread
Account to pay Monthly Principal on such Payment Date).
"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.
"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;
(4) to the Class A-4 Noteholders until the Class A-4 Note Balance
has been reduced to zero; and
(5) to the Class B Noteholders until the Class B Note Balance has
been reduced to zero.
However, if the amount of Available Funds (together with
amounts withdrawn from the Spread Account and/or the Policy) are not
sufficient to pay the required payment of Class A Monthly Principal to
Class A Noteholders in full on any Payment Date, 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)
_______________ shall have been given ten Business Days (or such shorter period
as is acceptable to _______________) prior notice thereof and that
_______________ shall have 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)
_______________ shall have been given ten Business Days (or such shorter period
as is acceptable to _______________) prior notice thereof and copies of all
documentation relating to
11
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.
"Redemption Date" means the Payment Date specified by the Servicer or
the Issuer pursuant to Section 11.01.
"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 Notes redeemed plus (ii) accrued and unpaid interest on the 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, any Successor Servicer, the Indenture Trustee and
the Owner Trustee.
"Required Spread Amount" means on each Payment Date, the lesser of (x)
_____% of the Initial Note Balances and (y) the Note Balances as of the previous
Payment Date (after giving effect to any payment of Monthly Principal on such
Payment Date); provided, that, upon and during the continuance of an Indenture
Default or a Trigger Event, the Required Spread Amount shall be equal to the
Policy Amount as of such Payment Date, without giving effect to amounts on
deposit in the related Spread Account, after giving effect to any draws on the
Policy, draws on the related Spread Account and other distributions pursuant to
Section 8.04 on such Payment Date. Once such Indenture Default or Trigger Event
has been cured or discontinued, the Required Spread Amount shall be determined
as set forth above.
"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.
"Servicer Default" means an Event of Servicer Default under the Trust
Agreement.
"Successor Servicer" shall have the meaning specified in Section
3.07(e).
"Trust Agreement" means the Trust and Servicing Agreement, dated as of
the date hereof, between the Transferor, the 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.
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"Xxxxxx Xxxxxx" xxxxx xxx Xxxxxx Xxxxxx 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
13
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 the Insurer is no
longer the Controlling Party, in which case the Majority Noteholders shall be
entitled to give such direction.
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 B Notes, in each case together with the Indenture Trustee's
certificate of authentication, shall be in substantially the forms set forth as
Exhibits X-0, X-0, X-0, X-0 and B to this Indenture with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
(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, the Initial Class A-4 Note Balance and the Initial Class B
Note Balance. The aggregate principal amount of the Notes outstanding at any
time may not exceed such respective amounts, except as otherwise provided in
Section 2.05. Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples of $1,000 in excess thereof, except that one Note of each
Class may be issued in a different denomination.
14
(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 anyone or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like tenor and principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.04 Registration; Registration of Transfer and Exchange.
(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 prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the 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
15
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 Holder's attorney duly authorized in writing, with such
signature guaranteed by a commercial bank or trust company located, or having a
correspondent located, in the city of New York or the city in which the
Corporate Trust Office is located, or by a member firm of a national securities
exchange, and such other documents as the Indenture Trustee may require.
(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 10.06 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.
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
16
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 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 additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes. 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.
SECTION 2.06 Payment of Principal and Interest; Defaulted
Interest.
(a) Each Class of Notes shall accrue interest as provided in the
Indenture at the related interest rate for such Class, and such interest shall
be payable on each Payment Date as specified therein, 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 2.10, 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
17
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 11.01), which shall be payable as provided below.
The funds represented by any such checks returned undelivered shall be held in
accordance with Section 3.03.
(b) The principal of each Note shall be payable on each Payment Date to
the extent provided in the form of the related Note set forth as an Exhibit
hereto. Notwithstanding the foregoing, the entire unpaid principal amount of the
Notes of a Class of Notes shall be due and payable, if not previously paid, on
the earlier of:
(i) the 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 Noteholders representing not less than
66 2/3% of the Note Balances have declared the Notes to be immediately
due and payable in the manner provided in Section 5.02.
All principal payments on each Class of Notes shall be made
pro rata to the Noteholders of such Class entitled thereto. The
Indenture Trustee shall notify the Person in whose name a Note is
registered at the close of business on the Record Date preceding the
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 11.02. In addition, the Administrator shall notify the Insurer
and the Rating Agencies upon the final payment of interest and
principal of each Class of Notes, and upon the termination of the
Trust, in each case pursuant to the Administration Agreement.
(c) 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
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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 2.07 Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time unless the Issuer shall direct by an Issuer Order that
they be destroyed or returned to it; provided that such Issuer Order is timely
and the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.08 Book-Entry Notes. The Notes, upon original issuance,
will be issued in the form of a typewritten Note or Notes representing the
Book-Entry Notes, to be delivered to DTC, the initial Depository, by, or on
behalf of, the Issuer (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 2.10. Unless and until definitive,
fully registered Notes (the "Definitive Notes") have been issued to Note Owners
pursuant to Section 2.10:
(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 2.10, 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
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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 2.09 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 2.10, 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 2.10 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, 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, of the availability of Definitive Notes to Note Owners requesting the
same. Upon surrender to the Indenture Trustee of the Note or Notes evidencing
the Book Entry Notes by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes and deliver such
Definitive Notes in accordance with the instructions of the Clearing Agency.
None of the Issuer, the Note Registrar or the Indenture Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Notes of a Class, the Indenture Trustee shall recognize the Holders
of the Definitive Notes as Noteholders hereunder.
(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 2.11 Release of Pledged Assets. Subject to Section 12.01
and the terms of the Basic Documents, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with Sections 314(c) and 314(d) (1) 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 2.12 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, by entering into this Indenture, and each Noteholder, by its
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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 2.13 ERISA. Each purchaser or transferee of a Note that is
a Benefit and shall be deemed to have represented that the relevant conditions
for exemptive relief under Prohibited Transaction Class Exemption ("PTCE")
00-00, XXXX 00-0, XXXX 91-38, PTCE 95-60 or PTCE 96-23 or other applicable
exemption providing substantially similar relief have been satisfied.
SECTION 2.14 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 and Monthly Principal on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, subject to Section 8.04(a), the Issuer will cause to be distributed
the amount of Available Funds on a 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. Amounts
properly withheld under the Code by any Person from a payment to any Noteholder
of interest and/or principal shall be considered as having been paid by the
Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02 Maintenance of Office or Agency. The Issuer will
maintain or will cause the Administrator or the Indenture Trustee to maintain in
The City of New York, an office or agency where Notes may be surrendered for
registration of transfer or exchange, and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Indenture Trustee to serve as its agent for the
foregoing purposes. The Issuer will give prompt written notice to the Indenture
Trustee of the location, and of any change in the location, of any such office
or agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
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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, the Spread 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, the Spread 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 and
the Policy as provided in this Indenture and the Issuer shall not otherwise be
liable for payments on the Notes. No Person shall be personally liable for any
amounts payable under the Notes. If any other provision of this Indenture
conflicts or is deemed to conflict with the provisions of this paragraph, the
provisions of this paragraph shall control.
(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 or
otherwise disposed of as herein provided and pay such sums to such
Persons 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
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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 (so long as the Insurer is the Controlling
Party), 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, 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;
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(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 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.
(a) Promptly after the execution and delivery of this Indenture, the
Issuer shall furnish to the Indenture Trustee and the Insurer an Opinion of
Counsel to the effect that, in the opinion of such counsel, either (i) all
financing statements and continuation statements have been executed and filed
that are necessary to create and continue the Indenture Trustee's first priority
perfected security interest in the Pledged Assets (subject to the rights of the
Insurer under the Insurance Agreement) for the benefit of the Noteholders, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (ii) no such action shall be necessary to
perfect such security interest.
(b) Within 90 days after the beginning of each calendar year beginning
with the first calendar year beginning more than three months after the 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 financing statements and
continuation statements have been executed and filed that are necessary to
create and continue the Indenture Trustee's first priority perfected security
interest in the Pledged Assets (subject to the rights of the Insurer under the
Insurance Agreement) for the benefit of the Noteholders, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (ii) no such action shall be necessary to perfect such
security interest.
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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 the
Servicer 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,
the Insurer (so long as the Insurer is the Controlling Party) and the Holders of
at least a majority of the Note Balances of the Notes.
(d) If the Issuer shall have actual knowledge of the occurrence of a
Servicer Default, the Issuer shall promptly notify the Indenture Trustee, the
Insurer and each Rating Agency thereof, and shall specify in such notice the
action, if any, the Issuer is taking with respect of such default. If a Servicer
Default shall arise from the failure of the Servicer to perform any of its
duties or obligations under the 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
Sections 12.05 or 13.01 of the Trust Agreement, the Indenture Trustee shall
appoint a successor servicer ("Successor Servicer") acceptable to the Insurer
pursuant to the Trust Agreement. If the Indenture Trustee shall succeed to the
Servicer's duties as servicer of the Receivables as provided in 13.02 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 VI
shall be inapplicable to the Indenture Trustee in its duties as the successor to
the Servicer and the servicing of the Receivables. In case the Indenture Trustee
shall become successor to the Servicer under the Trust Agreement, the Indenture
Trustee shall be entitled to appoint as Servicer one of its Affiliates, provided
that it shall not be liable for the actions and omissions of any such Affiliate
in such capacity as successor Servicer appointed with due care.
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(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 Servicer 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 Seller of their respective duties under the
Basic Documents: (i) without the prior consent of the Insurer (unless an Insurer
Default shall have occurred and be continuing) or (ii) if the effect thereof
would adversely affect the 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 the Insurer 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 (other than with respect to any such
tax, mechanics' or other lien) security interest 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
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(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 __________ of each year, beginning on the first __________ 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 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.
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 Indenture
Trustee and the Insurer (so long as the Insurer is the Controlling
Party) 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;
27
(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 Insurer is the Controlling
Party) 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 the Insurer is the Controlling Party, 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 conveyance or transfer.
(b) The Issuer shall not conveyor 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 the Insurer 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, (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 expense
arising under or related to this Indenture and the Notes and (E)
expressly agree by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall make
all filings with the Commission (and any other appropriate Person)
required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such conveyance or
transference, no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such conveyance or transference;
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(iv) the Issuer shall have received an Opinion of Counsel
which shall be delivered to and shall be satisfactory to the Indenture
Trustee and the Insurer (so long as the Insurer is the Controlling
Party) to the effect that such conveyance or transference 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 Insurer is the Controlling
Party) 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
transference 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 the Insurer is the Controlling Party, the
Issuer shall have given the Insurer written notice of such conveyance
or transfer of properties or assets at least 20 Business Days prior to
the consummation of such action and shall have received the prior
written approval of the Insurer of such conveyance or transfer and the
Person acquiring by conveyance or transference the properties or assets
of the Issuer has a net worth, immediately after such conveyance or
transfer, that is (A) greater than zero and (B) not less than the net
worth of the Issuer immediately prior to giving effect to such
conveyance or transfer.
SECTION 3.11 Successor Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all or substantially all the
assets or properties of the Issuer pursuant to Section 3.10(b), the Issuer will
be released from every covenant and agreement of this Indenture to be observed
or performed on the part of the Issuer with respect to the Notes immediately
upon the delivery of written notice to the Indenture Trustee and the Insurer
stating that the Issuer is to be so released.
SECTION 3.12 No Other Business. The Issuer shall not engage in (i)
any business other than financing, purchasing, owning, selling and managing the
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
29
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.
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, (A) distributions to the Servicer, the
Indenture Trustee, the Owner Trustee, the Insurer, the Noteholders and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under, the Trust Agreement and (B) payments to the Indenture
Trustee and the Owner Trustee pursuant to the Administration Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture and the 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 and each default on the part of the
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 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
30
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 16.01 of the Trust Agreement to eliminate the
requirements thereunder that the Insurer (so long as it is the Controlling
Party) and/or the Noteholders consent to amendments thereto as 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, 3.20 and 3.21, (v) the rights,
obligations and immunities of the Indenture Trustee hereunder (including the
rights of the Indenture Trustee under Section 6.07 and the obligations of the
Indenture Trustee under Section 4.02), (vi) the rights of Noteholders as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee payable to all or any of them and (vii) the obligation of the
Indenture Trustee to make claims under the Policy, which shall survive the Final
Maturity Date of the 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,
(ii) will become due and payable at the
respective Final Maturity Date of the 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
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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
and the Class B Notes or Redemption Date (if Notes shall have been
called for redemption pursuant to Section 11.01), 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 and the Basic
Documents;
(C) the Issuer has delivered to the Indenture Trustee and
the Insurer an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA, the Indenture Trustee) an Independent Certificate
from a firm of certified public accountants, each meeting the
applicable requirements of Section 12.01(a) and, subject to Section
12.02, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been
complied with and the Rating Agency Condition has been satisfied; 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 Insurer is the
Controlling Party) 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.
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 and 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
32
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 anyone of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) default in the payment of any interest on any Note
when the same becomes due and payable and such default shall continue
for a period of five days after notice thereof is given to the Issuer,
the Insurer and the Servicer (solely for purposes of this clause, a
payment on the Notes funded by the Insurer or 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 a Class of Notes on the Final Maturity
Date for such Class of Notes and such default shall continue for a
period of five days after notice thereof is given to the Issuer, the
Insurer and the Servicer (solely for purposes of this clause, a payment
on the Notes funded by the Insurer from the Spread Account shall be
deemed to be a payment made by the Issuer);
(iii) (A) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other than
a covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), and such
default shall continue or not be cured for a period of 90 days after
notice thereof shall have been given, by registered or certified mail,
to the Issuer by the Indenture Trustee or the Insurer or to the Issuer
and the Indenture Trustee by the Holders of at least 25% of the Note
Balances, acting together as a single class or (B) any representation
or warranty made by the Issuer in this Indenture or in any certificate
delivered pursuant hereto or in connection herewith having been
incorrect in a material respect as of the time made, and such breach
not having been cured within 30 days after notice thereof is given to
the Issuer by the Indenture Trustee or the Insurer, or to the Issuer
and the Indenture Trustee by the holders of at least 25% of the Note
Balances of the Notes acting together as a single class;
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the 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,
33
and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer to
the entry of an order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the 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.
(vi) the Issuer becoming taxable as an association (or
publicly traded partnership) taxable as a corporation for federal or
state income tax purposes; or
(vii) the Issuer or the Transferor 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 Insurer is the Controlling Party),
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 (and only 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 Notes become immediately due and payable, and
upon any such declaration the unpaid principal amount of the Notes, together
with accrued and unpaid interest thereon, shall become immediately due and
payable. The Indenture Trustee will have no discretion with respect to the
acceleration of the Notes under the foregoing circumstances. In the event of any
such acceleration of the Notes, the Indenture Trustee shall continue to make
claims under the Policy with respect to the Notes.
(b) If 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 Notes become immediately due and
payable, and upon any such declaration the unpaid principal amount of the Notes,
together with accrued and unpaid interest thereon, shall become immediately due
and payable.
(c) 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
34
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.
(d) At any time after declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article V provided, the
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 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 5.13.
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 Indenture Trustee and its agents and counsel.
(b) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall (i) if 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
35
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
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, 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.
36
(d) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the 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 5.2, 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 5.2, the Indenture Trustee shall
(subject to Section 5.04(b) below and Section 5.05), if an Insurer Default shall
have occurred and be continuing, at 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 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 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
37
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),
(iii), (vi) or (vii) 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 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)(iv) or (v) shall have occurred and be continuing.
(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 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.
(i) If the Notes have been declared to be due and payable
under Section 5.02 following an Indenture Event of Default and such
declaration and its consequences have not been rescinded and annulled,
any money collected by the Indenture Trustee with respect to the
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 8.04(g).
(ii) 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
38
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 has previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Note Balances
of the Notes have made written request to the Indenture Trustee to
institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt
of such notice, request and offer of indemnity has failed to institute
such Proceedings;
(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 of the Notes,
voting together as a single class; and
(vi) an Insurer Default shall have occurred and be
continuing or the Insurance Agreement has been 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.
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 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
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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 has instituted any Proceeding to enforce
any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason or has been determined adversely to the
Indenture Trustee, the Insurer or to such Noteholder, then and in every such
case the Issuer, the Indenture Trustee, the Insurer and the Noteholders shall,
subject to any determination in such Proceeding, be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Indenture Trustee and the Noteholders shall continue as though
no such Proceeding had been instituted.
SECTION 5.10 Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee, the Insurer or to
the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11 Delay or Omission Not a Waiver. No delay or omission
of the Indenture Trustee, the Insurer or any Holder of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
Five or by law to the Indenture Trustee, the Insurer or to the Noteholders may
be exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee, the Insurer or by the Noteholders, as the case may be.
SECTION 5.12 Control by 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 may take any other action
deemed proper by the Indenture Trustee that is not inconsistent with
such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines,
in its sole discretion, might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
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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 Holders holding
in the aggregate more than 50% of the outstanding Note Balance, may waive any
past Default or Event of Default and 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.
(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 Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (i) any suit instituted by the
Indenture Trustee, (ii) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the 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 and 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
41
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
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, so long as it is
the Controlling Party, the Insurer, including the transmission of notices of
default on the part of the Transferor or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Transferor or the Servicer of each of their
obligations under the Trust Agreement.
(b) If the Indenture Trustee is the Controlling Party and if an Event
of Default has occurred and is continuing, the Indenture Trustee may, and at the
direction (which direction shall be given in writing and may include a
facsimile) of the 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 or the Servicer of each of their obligations to the Issuer thereunder
and to give any consent, request, notice, direction, approval, extension or
waiver under the Trust Agreement, and any right of the Issuer to take such
action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01 Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, 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 their exercise as a prudent person would exercise or
use under the circumstances in the conduct of such person's own affairs;
provided, however, that if the Indenture Trustee shall assume the duties of the
Servicer pursuant to Section 3.07(e), the Indenture Trustee in performing such
duties shall use the degree of care and skill customarily exercised by a prudent
institutional servicer with respect to automobile retail installment sales
contracts that it services for itself or others.
(b) Except during the continuance of an Event of Default of which a
Responsible Officer of the Indenture Trustee shall have actual knowledge or
written notice:
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(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into
this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; however, the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture and the other Basic Documents to which the Indenture Trustee
is a party; provided, however, that the Indenture Trustee shall not be
responsible for the accuracy or content of any of the aforementioned
documents and the Indenture Trustee shall have no obligation to verify,
re-compute or recalculate any numerical information provided to it
pursuant to the Basic Documents.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct except that:
(i) This paragraph does not limit the effect of Section
6.01(b);
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer unless it
is proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 5.12.
(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.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
(i) The Indenture Trustee shall, and hereby agrees that it will (i)
perform all of the obligations and duties required of it under the Trust
Agreement and (ii) hold the Policy in trust,
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and will hold any proceeds of any claim on the Policy in trust solely for
application as provided in the Trust Agreement.
(j) Except as otherwise required or permitted by the TIA, nothing
contained herein shall be deemed to authorize the Indenture Trustee to engage in
any business operations or any activities other than those set forth in this
Indenture. Specifically, the Indenture Trustee shall have no authority to engage
in any business operations, acquire any assets other than those specifically
included in the Pledged Assets under this Indenture or otherwise vary the assets
held by the Trust. Similarly, the Indenture Trustee shall have no discretionary
duties other than performing those ministerial acts set forth above necessary to
accomplish the purpose of this Trust as set forth in this Indenture.
(k) The Indenture Trustee shall not be liable in its individual
capacity with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with this Indenture or at the direction of 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 or Event of Default unless a
Responsible Officer of the Indenture Trustee shall have received written notice
thereof. In the absence of receipt of such notice, the Indenture Trustee may
conclusively assume that there is no Default or Event of Default.
(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
44
investigate any fact or matter stated in the document. Notwithstanding the
foregoing, the Indenture Trustee, subject to Section 6.01(b) (ii) upon receipt
of all resolutions, certificates, statements, opinions, reports, documents,
orders or other instruments furnished to the Indenture Trustee that shall be
specifically required to be furnished pursuant to any provision of this
Indenture, shall examine them to determine whether they comply as to form to the
requirements of this Indenture.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate (with respect to factual matters) or an Opinion
of Counsel, as applicable. The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on the Officer's
Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of any such
agent, attorney, custodian or nominee appointed by the Indenture Trustee with
due care.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(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,
pursuant to the provisions of this Indenture, unless such Noteholders shall have
offered to the Indenture Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Indenture Trustee of the
obligation, during the continuance of an Event of Default of which a Responsible
Officer of the Indenture Trustee shall have actual knowledge, to exercise such
of the rights and powers vested in it by this Indenture, and to use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of such person's own affairs.
(g) The Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Majority
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
45
Agreement, the Indenture Trustee may require reasonable indemnity against such
cost, expense or liability as a condition to taking any such action.
(h) The right of the Indenture Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the Indenture
Trustee shall not be answerable for other than its willful misconduct,
negligence or bad faith in the performance of such act.
SECTION 6.03 Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee is required to comply with Sections 6.11 and
6.12.
SECTION 6.04 Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the 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 occurs and is
continuing and a Responsible Officer of the Indenture Trustee has actual
knowledge or has received written notice thereof, the Indenture Trustee shall
mail to each Noteholder and the Insurer notice of the Default within 5 days
after it 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.
SECTION 6.07 Compensation and Indemnity. The Issuer shall cause
the Servicer to pay to the Indenture Trustee from time to time reasonable
compensation for its services. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall cause the Servicer to reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses and disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer shall,
or shall cause the Administrator to, indemnify the Indenture Trustee against any
and all loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder. The Indenture Trustee shall notify the Issuer and the
Administrator promptly of any claim for which it may seek indemnity. Failure by
the Indenture Trustee to so notify the Issuer and the Administrator shall not
relieve the Issuer or the Administrator of its obligations hereunder. The Issuer
shall, or shall cause the Administrator to, defend any such claim, and the
Indenture Trustee may have separate counsel and the Issuer shall, or shall cause
the Administrator to, pay the fees and expenses of such counsel. Neither the
Issuer nor the Administrator need reimburse any expense or indemnify against any
loss, liability or
46
expense incurred by the Indenture Trustee through the Indenture Trustee's own
willful misconduct, negligence or bad faith.
The Issuer's obligations to the Indenture Trustee pursuant to this
Section shall survive the resignation or removal of the Indenture Trustee and
the discharge of this Indenture. When the Indenture Trustee incurs expenses
after the occurrence of a Default specified in Section 5.01(a)(iv) or (v) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
SECTION 6.08 Replacement of Indenture Trustee.
(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 (unless an Insurer Default shall have occurred and be continuing), and,
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.
(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 the Insurer is the Controlling Party).
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(d) A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights, powers
and duties of the Indenture Trustee under this Indenture. The Issuer or the
successor Indenture Trustee shall mail a notice of its succession to
Noteholders, the 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.
(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.
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 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.
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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
shall have the power and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co-trustees, jointly with the
Indenture Trustee, or separate trustee or separate trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, such title to the 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.
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(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 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 _____ by __________ and _____ by __________ 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 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.
SECTION 6.12 Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to Section 311(a) to the extent indicated.
SECTION 6.13 Representations and Warranties of Indenture Trustee.
The Indenture Trustee hereby makes the following representations and warranties
on which the Issuer and Noteholders shall rely:
(a) the Indenture Trustee is a corporation duly organized, validly
existing and in good standing under the laws of its place of incorporation;
(b) the Indenture Trustee has full power, authority and legal right to
execute, deliver, and perform this Indenture and shall have taken all necessary
action to authorize the execution, delivery and performance by it of this
Indenture;
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(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 6.14 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 6.15 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.
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.
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(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 _______ beginning with _______, _____,
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
DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS
SECTION 8.01 Collection Account. The Issuer shall cause the
Servicer to establish the Collection Account with the Indenture Trustee or
another Eligible Bank as a segregated trust account in the name of the Indenture
Trustee for the benefit of the Secured Parties. The amounts in the Collection
Account shall be invested 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
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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 8.02 Collections.
(a) The Indenture Trustee shall review the Servicer's Certificate
prepared by the Servicer immediately upon receipt thereof pursuant to Section
8.02 of the Trust Agreement.
(b) For any Payment Date on which there will not be sufficient
Available Funds to make the distributions required pursuant to Sections 8.04(a)
(i) through (viii), the Indenture Trustee shall withdraw or direct the Servicer
to withdraw from the Spread Account, to the extent of the Available Spread
Amount, an amount equal to such deficiency and promptly deposit such amount in
the Collection Account. If such deficiency exceeds the Available Spread Amount,
the Indenture Trustee shall notify the Insurer of the amount of such excess
deficiency. The Indenture Trustee shall promptly (and in any event not later
than 1:00 p.m., New York City time, on the Business Day preceding the Payment
Date) deliver a notice for payment to the Insurer with respect to the Policy (a
"Notice of Claim"). The Insurer is required pursuant to Section 9.03 and the
terms of the Policy to pay the amount of such excess deficiency of Monthly
Interest and Monthly Principal, up to the Policy Amount.
(c) The Indenture Trustee shall, immediately upon receipt, deposit
in the Collection Account any funds received by the Indenture Trustee in respect
of funds drawn under the Policy from the Insurer.
(d) If the Available Funds for a Payment Date are insufficient to
pay current and past due Insurance Premiums on the Policy, or any amounts owing
to the Insurer pursuant to the Insurance Agreement including, without
limitation, reimbursements, indemnities, fees and expenses, plus accrued
interest thereon, to the Insurer, the Servicer shall notify the Indenture
Trustee of such deficiency, and the applicable Available Spread Amount, if any,
then on deposit in the Spread Account (after giving effect to any withdrawal to
satisfy a deficiency in Monthly Interest or Monthly Principal) shall be
available to cover such deficiency.
SECTION 8.03 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 and 8.10 of the Trust Agreement.
SECTION 8.04 Distributions to Parties.
(a) On each Payment Date, the Indenture Trustee 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 8.02 and Section 9.03), to make the following
payments in the listed order of priority:
(i) the monthly Indenture Trustee Fee (which Indenture
Trustee Fee shall not exceed _________ 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);
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(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 9.05 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 _______) including any overdue
monthly Standby Servicing Fee to the Standby Servicer to the extent not
previously distributed to the Standby Servicer, the monthly Owner
Trustee Fee (which Owner Trustee Fee shall not exceed ______________ 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 ___________ 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 to the Class A Noteholders;
(v) Monthly Principal to the Class A Noteholders, in
accordance with the Principal Payment Sequence;
(vi) Class B Monthly Interest to the Class B Noteholders;
(vii) Monthly Principal to the Class B Noteholders in
accordance with the Principal Payment Sequence (only after the
principal balances of the Class A Notes have been repaid in full);
(viii) The Insurance Premium, including any overdue
Insurance Premium, plus accrued interest thereon at the rate provided
in the Insurance Agreement, the aggregate amount of all unreimbursed
draws made on the Policy in respect of Monthly Interest and Monthly
Principal and any other amounts payable to the Insurer under the
Insurance Agreement, plus accrued interest thereon at the rate provided
in the Insurance Agreement, to the Insurer;
(ix) 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;
(x) 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);
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(xi) The balance for deposit in the Spread Account. The
rights of the Certificateholders to receive distributions from the
Spread Account are described in Sections 9.02(e) and (f).
(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 8.04(a)(iv) through
(vii), the Available Funds payable under Section 8.04(a)(iv) through (vii) shall
be allocated first to Class A Noteholders pari passu for the payment of Class A
Monthly Interest, and second for Class A Monthly Principal. The amount of
Monthly Interest allocated to Class A Noteholders shall be based upon the amount
of interest due each class of Class A 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 Monthly Principal with respect to the immediately
preceding Payment Date as determined in accordance with Sections 8.02
and 8.04 shall be distributed to the Noteholders on such Payment Date
(B) the Policy will not be available to pay any shortfall of Monthly
Interest or Monthly Principal after a prepayment of the Note Balances
pursuant to this Section 8.04(b) (ii); and (C) any remaining Pledged
Assets (including all remaining Available Spread Amounts) shall be paid
to the Noteholders on such Payment Date until the Note Balances shall
have been reduced to zero. Any amounts in excess thereof shall be
remitted to the Certificateholder pursuant to the Trust Agreement.
(iii) In making such payments the Indenture Trustee shall
be entitled to 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.
(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 8.02, 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
8.04.
(d) If the Servicer has failed to provide the Indenture Trustee
with Servicer's Certificate required pursuant to Section 8.02, the Indenture
Trustee may calculate Monthly Interest and Monthly Principal and apply funds, if
any, in the Collection Account as of the last
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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 8.04 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.
(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.
(g) 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;
(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;
(iii) third, to pay accrued interest on each class of Class
A 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;
(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
Note Balance of each Class of Class A Notes is reduced to zero;
(v) fifth, to pay accrued interest on the Class B Notes
(including interest accrued on past due interest);
(vi) sixth, to pay principal on the Class B Notes until
the Note Balance on the Class B Notes is reduced to zero;
(vii) seventh, to pay the Insurance Premium and all other
amounts owing the Insurer under the Insurance Agreement; and
(viii) eighth, to the Spread Account, to be applied in
accordance with the Insurance 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)
through (vi) above.
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SECTION 8.05 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
8.04(a) (ii), and Outstanding Advances with respect to such Receivable shall be
reduced accordingly.
SECTION 8.06 Net Deposits. For so long as BVAC is the Servicer,
BVAC (in whatever capacity) may make the remittances with respect to any Payment
Date pursuant to Section 8.02 above, net of amounts to be distributed to itself
or its delegee under Section 12.06 (also in whatever capacity) pursuant to
Section 8.04, if it determines pursuant to Section 8.02 that there is no
deficiency in Available Funds for such Payment Date. Nonetheless, the Servicer
shall account for all of the above described amounts as if such amounts were
deposited and distributed.
SECTION 8.07 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 9.09 of the Trust Agreement. Investment
income or interest earned on the Payahead Account 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
9.02 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 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 shall not constitute Available Funds under Section 8.02. Any amount
deposited to the Collection Account from a Payahead Account pursuant to this
Section 8.07(b) shall be included in Available Funds under Section 8.02.
SECTION 8.08 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 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
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secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.08(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 12.01.
SECTION 8.09 Opinion of Counsel. The Indenture Trustee shall
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.08(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.
ARTICLE IX
CREDIT ENHANCEMENT
SECTION 9.01 Subordination. The payment of Monthly Interest and
Monthly Principal to Class B Noteholders shall be subordinated to the payment of
Class A Monthly Interest and Class A Monthly Principal on any Payment Date.
SECTION 9.02 Spread Account.
(a) On or prior to the Closing Date, the Indenture Trustee shall
establish and maintain a segregated trust account with the Indenture Trustee or
in the corporate trust department of another Eligible Bank referred to herein as
the "Spread Account." The Spread Account shall be maintained in the name of the
Indenture Trustee. The Spread Account and any amounts on deposit therein shall
be part of the Pledged Assets and shall be for the benefit of Secured Parties,
as their respective interests may appear herein; provided, however, that the
interest of the Insurer therein shall be subordinated to the interests of the
Noteholders as provided herein.
(b) Funds on deposit in the Spread Account shall be invested in
Eligible Investments in the same manner and subject to the same requirements and
limitations as the investment of funds in the Collection Account pursuant to
Section 8.01, including the limitation that Eligible Investments mature not
later than the Business Day prior to the next succeeding Payment Date; provided,
however, that no such limitation on the maturity of Eligible Investments shall
apply if the Indenture Trustee obtains the benefit of a liquidity facility or
similar arrangement from a commercial bank with an Approved Rating or other
provider approved in advance in writing by the Insurer and the Administrative
Agent, with respect to funds in the Spread Account (a "Spread
58
Account Facility") and confirm in writing that the rating of the Notes will not
be lowered or withdrawn as a result of eliminating or modifying the limitation
on the maturity of Eligible Investments in respect of the Spread Account. For
purposes of determining the availability of funds or the balance in the Spread
Account for any reason under this Indenture, investment earnings on such funds
shall be deemed to be available or on deposit only to the extent that the
aggregate of such amounts, plus the funds on deposit in such Spread Account, do
not exceed the Required Spread Amount.
(c) If on any Payment Date the amount of Available Funds is
insufficient to make the distributions required by Sections 8.04(a)(i) through
(viii), the Indenture Trustee shall withdraw or cause to be withdrawn from the
Spread Account and deposited in the Collection Account the lesser of (i) the
entire Available Spread Amount and (ii) the amount necessary to make up such
deficiency to pay any deficiency in permitted reimbursements of Outstanding
Advances pursuant to Section 8.04(a) (ii), the Monthly Servicing Fee, Monthly
Interest, Monthly principal (prior to making any draw on the Policy) and the
Insurance Premium, all as provided in Sections 8.02 and 8.04 and the Policy.
(d) On each Payment Date, all distributions made pursuant to
Section 8.04(a)(xi) shall be deposited into the Spread Account; provided,
however, that the Accelerated Principal Amount has been paid in full to the
Noteholders.
(e) If the amount on deposit in the Spread Account, after giving
effect to the distributions set forth in Section 8.04 (including, without
limitation, payment of amounts due and owing to the Insurer) is greater than the
Required Spread Amount on such Payment Date (after giving effect to the payment
of the Accelerated Principal Amount in Monthly Principal), the amount of such
excess shall be distributed by the Indenture Trustee to the Owner Trustee, or as
the Owner Trustee shall direct in accordance with the Trust Agreement to the
Certificateholders. Amounts properly distributed to the Owner Trustee or
Certificateholders pursuant to this Section either directly without deposit in
the Spread Account or from excess amounts in the Spread Account shall be deemed
released from the security interest of the Indenture Trustee on behalf of the
Secured Parties.
(f) Upon discharge and satisfaction of this Indenture pursuant to
Section 4.01, amounts remaining in the Spread Account, after payment of any
amounts due and owing to the Noteholders and to the Insurer, shall be
distributed by the Indenture Trustee to the Owner Trustee, or as the Owner
Trustee shall direct in accordance with the Trust Agreement to the
Certificateholders and such amounts shall not be subject to any claims or rights
of any Noteholder.
SECTION 9.03 Policy.
(a) The Insurer is required under the terms of the Policy to pay
Monthly Interest and Monthly Principal on any Payment Date up to the Policy
Amount in the event of any deficiency of Available Funds to pay such amounts
(after permitted reimbursements of related Outstanding Advances and payment of
the related Monthly Servicing Fee) not covered by amounts withdrawn from the
Spread Account, as determined pursuant to Section 8.02 (the amount of such
shortfall being hereinafter referred to as the "Policy Claim Amount") to the
Indenture
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Trustee for credit to the Collection Account on the later of (a) 12:00 noon, New
York City time, on the applicable Payment Date and (b) 12:00 noon, New York City
time, on the Business Day immediately succeeding presentation to the Insurer of
the Indenture Trustee's demand therefor. Any demand for payment pursuant to
Section 8.02 to the Insurer received by the Insurer on a Business Day after 1:00
p.m., New York City time, or on any day that is not a Business Day, will be
deemed to be received by the Indenture Trustee at 9:00 a.m., New York City time,
on the next Business Day. Notwithstanding the foregoing, on a Dissolution
Payment Date, the obligations of the Insurer under the Policy shall be limited
in accordance with Section 8.04(b) (ii). The Indenture Trustee hereby agrees on
behalf of the Noteholders (and each Noteholder, by its acceptance of its Notes,
hereby agrees) for the benefit of the Insurer that the Indenture Trustee shall
recognize that to the extent the Insurer makes a payment under the Policy,
either directly or indirectly (as by paying through the Indenture Trustee), to
the Noteholders, the Insurer will be entitled to be subrogated to the rights of
the Noteholders to the extent of such payments under the Policy. Any rights of
subrogation acquired by the Insurer as a result of any payment made under the
Policy shall, in all respects, be subordinate and junior in right of payment to
the prior indefeasible payment in full of all amounts due the Indenture Trustee
on account of payments due under the Notes pursuant to Section 8.04 hereof.
(b) 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 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 8.04 (a) shall not be modified by this Section 9.03.
(c) 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.
(d) 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.
(e) 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
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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).
(f) 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 9.03(a) and (b), 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 by the Policy that are then
due.
SECTION 9.04 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.
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ARTICLE X
SUPPLEMENTAL INDENTURES
SECTION 10.01 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 successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
The Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
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(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 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 10.02 Supplemental Indentures With Consent of Noteholders.
(a) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, also may, with prior notice to each Rating Agency, with the
consent of the Insurer (so long as it is the Controlling Party) and 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, 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;
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(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 10.03 Execution of Supplemental Indentures. In executing,
or permitting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Indenture Trustee shall be entitled to receive, and subject
to Sections 6.01 and 6.02 shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 10.04 Effect of Supplemental Indenture. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the parties hereto and the 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 10.05 Conformity with Trust Indenture Act. Every amendment
of this Indenture and every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act as then in
effect so long as this Indenture shall then be qualified under the Trust
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SECTION 10.06 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 XI
REDEMPTION OF NOTES
SECTION 11.01 Redemption. In the event that the Servicer pursuant
to Section 16.02 of the Trust Agreement purchases the corpus of the Trust, 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 11.01, the Servicer or the Issuer shall furnish notice
of such election to the Indenture Trustee not later than 20 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 11.02 to each Holder of the Notes.
SECTION 11.02 Form of Redemption Notice. Notice of redemption under
Section 11.01 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 2.06(b) of this Indenture.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where such Notes are to be surrendered for
payment of the Redemption Price (which shall be the office or agency of
the Issuer to be maintained as provided in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
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SECTION 11.03 Notes Payable on Redemption Date. The Notes or
portions thereof to be redeemed shall, following notice of redemption (if any)
as required by Section 11.02, on the Redemption Date become due and payable at
the Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section 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 12.01(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
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(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 of the Notes, but such Officer's Certificate
need not be furnished with respect to any property so deposited, if the
fair value thereof to the Issuer as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of the Note
Balances of the Notes.
(iii) Whenever any property or securities are to be
released from the lien created by this Indenture, the Issuer shall also
furnish to the Indenture Trustee and the Insurer an Officer's
Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such release)
of the property or securities proposed to be released and stating that
in the opinion of such person the proposed release will not impair the
security created by this Indenture in contravention of the provisions
hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee and the Insurer an Officer's Certificate certifying
or stating the opinion of any signer thereof as to the matters
described in clause (iii) above, the Issuer shall also furnish to the
Indenture Trustee and the Insurer an Independent Certificate as to the
same matters if the fair value of the property or securities and of all
other property or securities released from the lien created by this
Indenture since the commencement of the then current fiscal year, as
set forth in the Officer's Certificate required by clause (iii) above
and this clause (iv), equals 10% or more of the 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 12.02 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,
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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 12.03 Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register
and the record date applicable to any solicitation for an Act of the Noteholders
shall comply with Section 316(c) of the TIA.
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(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 12.04 Notices, etc., to Indenture Trustee, Issuer, Insurer
and Rating Agencies.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or Act of Noteholders or other documents provided or permitted
by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or Act of Noteholders is to be
made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the
Issuer shall be sufficient for every purpose hereunder if in writing,
personally delivered, sent by facsimile transmission and confirmed or
mailed by overnight service, to or with the Indenture Trustee at its
Corporate Trust Office;
(ii) the Issuer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in
writing, personally delivered, sent by facsimile transmission and
confirmed or mailed by overnight service, to the Issuer addressed to:
Bay View _____ Owner Trust in care of __________, as Owner Trustee,
__________ Attention: __________ 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:__________________.
(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 ____________________, at the following
address: ____________________; in the case of ____________________, Attention:
____________________; or as to each of the foregoing, at such other address as
shall be designated by written notice to the other parties.
SECTION 12.05 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
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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.
(d) Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute a
Default or Event of Default.
SECTION 12.06 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 12.07 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 Trust Indenture Act, 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 12.08 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 12.09 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.
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SECTION 12.10 Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 12.11 Benefits of Indenture. The Insurer and its successors
and assigns shall be a third-party beneficiary to the provisions of this
Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture so long as no Insurer Default shall have occurred
and be continuing. Nothing in this Indenture or in the Notes, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Noteholders, and any other party secured
hereunder, and any other Person with an ownership interest in any part of the
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 12.12 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 12.13 Governing Law. This Indenture shall be construed in
accordance with the laws of the state of New York and the obligations, rights,
and remedies of the parties under this Indenture shall be determined in
accordance with such laws.
SECTION 12.14 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 12.15 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 12.16 Trust Obligation. No recourse may be taken, directly
or indirectly, with respect to the obligations of the Issuer, the Owner Trustee
or the Indenture Trustee on the Notes or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their
71
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles Six, Seven and Eight of the Trust Agreement.
SECTION 12.17 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 Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the other Basic
Documents.
SECTION 12.18 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 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 12.19 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 VIII, IX, XII and XIV of the Trust Agreement.
SECTION 12.20 Certain Matters Regarding the Insurer.
(a) So long as an Insurer Default shall not have occurred and be
continuing, 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
72
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 Instruments, or (iii) alter the rights of any such Holder to
consent to such amendment.
(b) Notwithstanding any provision in this Indenture to the
contrary, in the event an Insurer Default shall have occurred and be continuing,
the Insurer shall not have the right to take any action under this Agreement or
to control or direct the actions of the Trust, the Seller, the Indenture Trustee
or the Owner Trustee pursuant to the terms of this Indenture, nor shall the
consent of the Insurer be required with respect to any action (or waiver of a
right to take action) to be taken by the Trust, the Seller, the Indenture
Trustee, the Owner
SECTION 12.21 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 12.22 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.
73
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 _____ OWNER TRUST
By: [Owner Trust]
not in its individual capacity but solely
on behalf of the Issuer as Owner Trustee
under the Trust Agreement
By:_____________________________________
Name:___________________________________
Title:__________________________________
[INDENTURE TRUSTEE]
not in its individual capacity but solely as
Indenture Trustee
By:_____________________________________
Name:___________________________________
Title:__________________________________
74
SCHEDULE A
FORM OF DEPOSITORY AGREEMENT
EXHIBIT A-1
[FORM OF CLASS A-l NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-l 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 _____ OWNER TRUST
% CLASS A-l AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View _____ Owner Trust, a
Delaware Business 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 trucks and vans.
(This Note does not represent an interest in Bay View Transaction
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 $__________
CUSIP __________
Bay View _____ Owner Trust, a Delaware Business Trust, for value
received, hereby promises to pay to the order of [__________] ("the Noteholder")
or its registered assigns, the principal sum of ____________________ dollars
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of __________, (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
1
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 a pool of simple and precomputed interest loan and security agreements and
installment sales contracts for new and used automobiles, light-duty trucks,
motorcycles, recreational vehicles and vans (the "Receivables"), all monies paid
thereon, and all monies due thereon, including Accrued Interest (but excluding
Accrued Interest paid on or prior to the Closing Date with respect to such
Receivables), security interests in the vehicles financed thereby, certain bank
accounts and the proceeds thereof, all documents contained in the Receivable
Files, any property that shall have secured a Receivable and that shall have
been acquired by the Indenture Trustee on behalf of the Noteholder, any
Liquidation Proceeds, any rights of the Issuer in proceeds from claims or
refunds of premiums on physical damage, lender's single interest, credit life,
disability and hospitalization insurance policies, if any, covering vehicles
financed thereby and the obligors thereunder, the interest of the Issuer in
recourse to dealers relating to certain of the Receivables, the proceeds of all
of the foregoing and amounts on deposit from time to time in the Spread Account
for the benefit of the Noteholder, and the Policy for the benefit of the
Noteholder.
Under the Indenture, the Issuer will pay, on the _____ calendar day of
each month, or if such day is not a Business Day, on the first Business Day
thereafter (the" Payment Date"), commencing __________, 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 Transaction
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 B Notes. The Class B Notes are subordinated to the Class A Notes
as provided in the Indenture. 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 up to the Policy Amount to pay such deficiency.
2
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 Noteholder. Any such
consent by the holder of this Note shall be conclusive and binding on the
Noteholder.
This Note is transferable 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 Trust Agreement, 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.
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.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated:_______________
BAY VIEW _____ OWNER TRUST
By __________, as Indenture Trustee
By:_____________________________________
Name:___________________________________
Title:__________________________________
3
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
____________________, solely in its capacity as Indenture Trustee,
By:_____________________________________
Name:___________________________________
Title:__________________________________
Dated: ____________________
4
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed:________________________
*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
5
EXHIBIT A-2
[FORM OF CLASS A-2 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-2 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 _____ OWNER TRUST
% CLASS A-2 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View _____ Owner Trust, a
Delaware Business 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 trucks and vans.
(This Note does not represent an interest in Bay View Transaction
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 $__________
CUSIP __________
Bay View _____ Owner Trust, a Delaware Business Trust, for value
received, hereby promises to pay to the order of [__________] ("the Noteholder")
or its registered assigns, the principal sum of ____________________ dollars
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of __________, (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-2 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
1
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 a pool of simple and precomputed interest loan and security agreements and
installment sales contracts for new and used automobiles, light-duty trucks,
motorcycles, recreational vehicles and vans (the "Receivables"), all monies paid
thereon, and all monies due thereon, including Accrued Interest (but excluding
Accrued Interest paid on or prior to the Closing Date with respect to such
Receivables), security interests in the vehicles financed thereby, certain bank
accounts and the proceeds thereof, all documents contained in the Receivable
Files, any property that shall have secured a Receivable and that shall have
been acquired by the Indenture Trustee on behalf of the Noteholder, any
Liquidation Proceeds, any rights of the Issuer in proceeds from claims or
refunds of premiums on physical damage, lender's single interest, credit life,
disability and hospitalization insurance policies, if any, covering vehicles
financed thereby and the obligors thereunder, the interest of the Issuer in
recourse to dealers relating to certain of the Receivables, the proceeds of all
of the foregoing and amounts on deposit from time to time in the Spread Account
for the benefit of the Noteholder, and the Policy for the benefit of the
Noteholder.
Under the Indenture, the Issuer will pay, on the _____ calendar day of
each month, or if such day is not a Business Day, on the first Business Day
thereafter (the" Payment Date"), commencing ____________________, 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 Transaction
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-2
Notes, the Issuer has also issued Class A-1 Notes, Class A-3 Notes, Class A-4
Notes and Class B Notes. The Class B Notes are subordinated to the Class A Notes
as provided in the Indenture. 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 up to the Policy Amount to pay such deficiency.
2
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 Noteholder. Any such
consent by the holder of this Note shall be conclusive and binding on the
Noteholder.
This Note is transferable 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 Trust Agreement, 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.
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.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated:_______________
BAY VIEW _____ OWNER TRUST
By __________, as Indenture Trustee
By:_____________________________________
Name:___________________________________
Title:__________________________________
3
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
____________________, solely in its capacity as Indenture Trustee,
By:_____________________________________
Name:___________________________________
Title:__________________________________
Dated: ____________________
4
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed:________________________
*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
5
EXHIBIT A-3
[FORM OF CLASS A-3 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-3 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 _____ OWNER TRUST
% CLASS A-3 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View _____ Owner Trust, a
Delaware Business 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 trucks and vans.
(This Note does not represent an interest in Bay View Transaction
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 $__________
CUSIP __________
Bay View _____ Owner Trust, a Delaware Business Trust, for value
received, hereby promises to pay to the order of [__________] ("the Noteholder")
or its registered assigns, the principal sum of ____________________ dollars
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of __________, (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-3 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
1
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 a pool of simple and precomputed interest loan and security agreements and
installment sales contracts for new and used automobiles, light-duty trucks,
motorcycles, recreational vehicles and vans (the "Receivables"), all monies paid
thereon, and all monies due thereon, including Accrued Interest (but excluding
Accrued Interest paid on or prior to the Closing Date with respect to such
Receivables), security interests in the vehicles financed thereby, certain bank
accounts and the proceeds thereof, all documents contained in the Receivable
Files, any property that shall have secured a Receivable and that shall have
been acquired by the Indenture Trustee on behalf of the Noteholder, any
Liquidation Proceeds, any rights of the Issuer in proceeds from claims or
refunds of premiums on physical damage, lender's single interest, credit life,
disability and hospitalization insurance policies, if any, covering vehicles
financed thereby and the obligors thereunder, the interest of the Issuer in
recourse to dealers relating to certain of the Receivables, the proceeds of all
of the foregoing and amounts on deposit from time to time in the Spread Account
for the benefit of the Noteholder, and the Policy for the benefit of the
Noteholder.
Under the Indenture, the Issuer will pay, on the _____ calendar day of
each month, or if such day is not a Business Day, on the first Business Day
thereafter (the" Payment Date"), commencing ____________________, 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 Transaction
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-3
Notes, the Issuer has also issued Class A-1 Notes, Class A-2 Notes, Class A-4
Notes and Class B Notes. The Class B Notes are subordinated to the Class A Notes
as provided in the Indenture. 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 up to the Policy Amount to pay such deficiency.
2
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 Noteholder. Any such
consent by the holder of this Note shall be conclusive and binding on the
Noteholder.
This Note is transferable 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 Trust Agreement, 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.
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.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated:_______________
BAY VIEW _____ OWNER TRUST
By __________, as Indenture Trustee
By:_____________________________________
Name:___________________________________
Title:__________________________________
3
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
____________________, solely in its capacity as Indenture Trustee,
By:_____________________________________
Name____________________________________
Title:__________________________________
Dated: ____________________
4
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed:________________________
*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
5
EXHIBIT A-4
[FORM OF CLASS A-4 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-4 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 _____ OWNER TRUST
% CLASS A-4 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View _____ Owner Trust, a
Delaware Business 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 trucks and vans.
(This Note does not represent an interest in Bay View Transaction
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 $__________
CUSIP __________
Bay View _____ Owner Trust, a Delaware Business Trust, for value
received, hereby promises to pay to the order of [__________] ("the Noteholder")
or its registered assigns, the principal sum of ____________________ dollars
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of __________, (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-4 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
1
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 a pool of simple and precomputed interest loan and security agreements and
installment sales contracts for new and used automobiles, light-duty trucks,
motorcycles, recreational vehicles and vans (the "Receivables"), all monies paid
thereon, and all monies due thereon, including Accrued Interest (but excluding
Accrued Interest paid on or prior to the Closing Date with respect to such
Receivables), security interests in the vehicles financed thereby, certain bank
accounts and the proceeds thereof, all documents contained in the Receivable
Files, any property that shall have secured a Receivable and that shall have
been acquired by the Indenture Trustee on behalf of the Noteholder, any
Liquidation Proceeds, any rights of the Issuer in proceeds from claims or
refunds of premiums on physical damage, lender's single interest, credit life,
disability and hospitalization insurance policies, if any, covering vehicles
financed thereby and the obligors thereunder, the interest of the Issuer in
recourse to dealers relating to certain of the Receivables, the proceeds of all
of the foregoing and amounts on deposit from time to time in the Spread Account
for the benefit of the Noteholder, and the Policy for the benefit of the
Noteholder.
Under the Indenture, the Issuer will pay, on the _____ calendar day of
each month, or if such day is not a Business Day, on the first Business Day
thereafter (the" Payment Date"), commencing ____________________, 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 Transaction
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-4
Notes, the Issuer has also issued Class A-1 Notes, Class A-2 Notes, Class A-3
Notes and Class B Notes. The Class B Notes are subordinated to the Class A Notes
as provided in the Indenture. 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 up to the Policy Amount to pay such deficiency.
2
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 Noteholder. Any such
consent by the holder of this Note shall be conclusive and binding on the
Noteholder.
This Note is transferable 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 Trust Agreement, 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.
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.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated:_______________
BAY VIEW _____ OWNER TRUST
By __________, as Indenture Trustee
By:_____________________________________
Name____________________________________
Title:__________________________________
3
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
____________________, solely in its capacity as Indenture Trustee,
By:_____________________________________
Name____________________________________
Title:__________________________________
Dated: ____________________
4
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed:________________________
*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
5
EXHIBIT B
[FORM OF CLASS B NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS B 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 _____ OWNER TRUST
% CLASS B AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the Bay View _____ Owner Trust, a
Delaware Business 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 trucks and vans.
(This Note does not represent an interest in Bay View Transaction
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 $__________
CUSIP __________
Bay View _____ Owner Trust, a Delaware Business Trust, for value
received, hereby promises to pay to the order of [__________] ("the Noteholder")
or its registered assigns, the principal sum of ____________________ dollars
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of __________, (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 B 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
1
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 a pool of simple and precomputed interest loan and security agreements and
installment sales contracts for new and used automobiles, light-duty trucks,
motorcycles, recreational vehicles and vans (the "Receivables"), all monies paid
thereon, and all monies due thereon, including Accrued Interest (but excluding
Accrued Interest paid on or prior to the Closing Date with respect to such
Receivables), security interests in the vehicles financed thereby, certain bank
accounts and the proceeds thereof, all documents contained in the Receivable
Files, any property that shall have secured a Receivable and that shall have
been acquired by the Indenture Trustee on behalf of the Noteholder, any
Liquidation Proceeds, any rights of the Issuer in proceeds from claims or
refunds of premiums on physical damage, lender's single interest, credit life,
disability and hospitalization insurance policies, if any, covering vehicles
financed thereby and the obligors thereunder, the interest of the Issuer in
recourse to dealers relating to certain of the Receivables, the proceeds of all
of the foregoing and amounts on deposit from time to time in the Spread Account
for the benefit of the Noteholder, and the Policy for the benefit of the
Noteholder.
Under the Indenture, the Issuer will pay, on the _____ calendar day of
each month, or if such day is not a Business Day, on the first Business Day
thereafter (the" Payment Date"), commencing ____________________, 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 Transaction
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 B Notes,
the Issuer has also issued Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and
Class A-4 Notes. The Class B Notes are subordinated to the Class A Notes as
provided in the Indenture. 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 up to the Policy Amount to pay such deficiency.
2
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 Noteholder. Any such
consent by the holder of this Note shall be conclusive and binding on the
Noteholder.
This Note is transferable 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 Trust Agreement, 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.
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.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated:_______________
BAY VIEW _____ OWNER TRUST
By __________, as Indenture Trustee
By:_____________________________________
Name____________________________________
Title:__________________________________
3
CERTIFICATE OF AUTHENTICATION
This is the Note referred to in the within-mentioned Indenture.
____________________, solely in its capacity as Indenture Trustee,
By:_____________________________________
Name____________________________________
Title:__________________________________
Dated: ____________________
4
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
_______________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, ____________________ attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ____________________
Signature Guaranteed:________________________
*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
5
