EXHIBIT 4(f)(51)
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CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2003-1
$100,000,000 Class A Asset Backed Notes
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INDENTURE
Dated as of June 27, 2003
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JPMORGAN CHASE BANK
as the Trust Collateral Agent/Indenture Trustee
CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2003-1
as the Issuer
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TABLE OF CONTENTS
Page
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ARTICLE I Definitions and Incorporation by Reference................................................. 2
SECTION 1.1. Definitions........................................................................... 2
SECTION 1.2. Rules of Construction................................................................. 9
ARTICLE II The Notes.................................................................................. 10
SECTION 2.1. Form.................................................................................. 10
SECTION 2.2. Execution, Authentication and Delivery................................................ 10
SECTION 2.3. Registration of Transfer and Exchange of Class A Notes................................ 11
SECTION 2.4. Mutilated, Destroyed, Lost, or Stolen Notes........................................... 14
SECTION 2.5. Persons Deemed Owners................................................................. 15
SECTION 2.6. Access to List of Noteholders' Names and Addresses.................................... 15
SECTION 2.7. Maintenance of Office or Agency....................................................... 15
SECTION 2.8. Payment of Principal and Interest; Defaulted Interest................................. 15
SECTION 2.9. Release of Collateral................................................................. 16
ARTICLE III Covenants, Representations and Warranties.................................................. 16
SECTION 3.1. Payment of Principal and Interest..................................................... 16
SECTION 3.2. Maintenance of Office or Agency....................................................... 17
SECTION 3.3. Money for Payments to be Held in Trust................................................ 17
SECTION 3.4. Existence............................................................................. 18
SECTION 3.5. Protection of Trust Property.......................................................... 19
SECTION 3.6. Opinions as to Trust Property......................................................... 19
SECTION 3.7. Performance of Obligations; Servicing of Contracts.................................... 20
SECTION 3.8. Negative Covenants.................................................................... 21
SECTION 3.9. Annual Statement as to Compliance..................................................... 21
SECTION 3.10. Issuer May Consolidate, Etc........................................................... 22
SECTION 3.11. Successor or Transferee............................................................... 23
SECTION 3.12. No Other Business..................................................................... 24
SECTION 3.13. No Borrowing.......................................................................... 24
SECTION 3.14. Guarantees, Loans, Advances and Other Liabilities..................................... 24
SECTION 3.15. Capital Expenditures.................................................................. 24
SECTION 3.16. Compliance with Laws.................................................................. 24
SECTION 3.17. Restricted Payments................................................................... 24
SECTION 3.18. Notice of Indenture Events of Default................................................. 25
SECTION 3.19. Further Instruments and Acts.......................................................... 25
SECTION 3.20. Amendments of Sale and Servicing Agreement and
Trust Agreement....................................................................... 25
SECTION 3.21. Income Tax Characterization........................................................... 25
SECTION 3.22. Perfection Representations, Warranties and Covenants.................................. 25
ARTICLE IV Satisfaction and Discharge................................................................. 26
SECTION 4.1. Satisfaction and Discharge of Indenture............................................... 26
SECTION 4.2. Application of Trust Money............................................................ 27
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SECTION 4.3. Repayment of Moneys Held by Paying Agent.............................................. 27
ARTICLE V Remedies................................................................................... 27
SECTION 5.1. Indenture Events of Default........................................................... 27
SECTION 5.2. Rights Upon Indenture Event of Default................................................ 29
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee..................................................................... 30
SECTION 5.4. Remedies.............................................................................. 33
SECTION 5.5. Optional Preservation of the Trust Property........................................... 34
SECTION 5.6. Reserved.............................................................................. 34
SECTION 5.7. Limitation of Suits................................................................... 34
SECTION 5.8. Unconditional Rights of Noteholders To Receive
Principal and Interest................................................................ 35
SECTION 5.9. Restoration of Rights and Remedies.................................................... 35
SECTION 5.10. Rights and Remedies Cumulative........................................................ 36
SECTION 5.11. Delay or Omission Not a Waiver........................................................ 36
SECTION 5.12. Control by Class A Insurer............................................................ 36
SECTION 5.13. Undertaking for Costs................................................................. 36
SECTION 5.14. Waiver of Stay or Extension Laws...................................................... 37
SECTION 5.15. Action on Class A Notes............................................................... 37
SECTION 5.16. Performance and Enforcement of Certain Obligations.................................... 37
SECTION 5.17. Subrogation........................................................................... 37
SECTION 5.18. Preference Claims..................................................................... 38
ARTICLE VI The Indenture Trustee...................................................................... 39
SECTION 6.1. Duties of Indenture Trustee........................................................... 39
SECTION 6.2. Rights of Indenture Trustee........................................................... 41
SECTION 6.3. Individual Rights of Indenture Trustee................................................ 42
SECTION 6.4. Indenture Trustee's Disclaimer........................................................ 43
SECTION 6.5. Notice of Indenture Events of Default................................................. 43
SECTION 6.6. Reports by Indenture Trustee to Holders............................................... 43
SECTION 6.7. Compensation.......................................................................... 43
SECTION 6.8. Replacement of Indenture Trustee...................................................... 44
SECTION 6.9. Successor Indenture Trustee by Merger................................................. 45
SECTION 6.10. [Reserved]............................................................................ 46
SECTION 6.11. Appointment of Co-Indenture Trustee or Separate Indenture Trustee..................... 46
SECTION 6.12. Eligibility........................................................................... 47
SECTION 6.13. Trust Collateral Agent to Follow Indenture Trustee's Directions....................... 48
SECTION 6.14. Representations and Warranties of the Indenture Trustee............................... 48
SECTION 6.15. Waiver of Setoffs..................................................................... 48
SECTION 6.16. Control by the Class A Insurer........................................................ 49
SECTION 6.17. Disqualification of the Indenture Trustee............................................. 49
SECTION 6.18. Authorization and Direction........................................................... 49
SECTION 6.19. Action under the Intercreditor Agreement.............................................. 49
ARTICLE VII Noteholders' Lists and Reports............................................................. 49
SECTION 7.1. Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders............. 49
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SECTION 7.2. Preservation of Information; Communications to Noteholders............................ 50
ARTICLE VIII Accounts, Disbursements and Releases....................................................... 50
SECTION 8.1. Collection of Money................................................................... 50
SECTION 8.2. Release of Trust Property............................................................. 50
SECTION 8.3. Opinion of Counsel.................................................................... 50
ARTICLE IX Supplemental Indentures.................................................................... 51
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders................................ 51
SECTION 9.2. Supplemental Indentures with Consent of Noteholders................................... 52
SECTION 9.3. Execution of Supplemental Indentures.................................................. 53
SECTION 9.4. Effect of Supplemental Indenture...................................................... 54
SECTION 9.5. Reference in Class A Notes to Supplemental Indentures................................. 54
ARTICLE X Redemption of Notes........................................................................ 54
SECTION 10.1. Redemption............................................................................ 54
SECTION 10.2. Form of Redemption Notice............................................................. 55
SECTION 10.3. Class A Notes Payable on Redemption Date.............................................. 55
ARTICLE XI Miscellaneous.............................................................................. 56
SECTION 11.1. Compliance Certificates and Opinions, etc............................................. 56
SECTION 11.2. Form of Documents Delivered to Indenture Trustee...................................... 57
SECTION 11.3. Acts of Noteholders................................................................... 58
SECTION 11.4. Notices, etc.......................................................................... 58
SECTION 11.5. Notices to Noteholders; Waiver........................................................ 59
SECTION 11.6. Alternate Payment and Notice Provisions............................................... 60
SECTION 11.7. Effect of Headings and Table of Contents.............................................. 60
SECTION 11.8. Successors and Assigns................................................................ 60
SECTION 11.9. Separability.......................................................................... 60
SECTION 11.10. Benefits of Indenture................................................................. 60
SECTION 11.11. Legal Holidays........................................................................ 61
SECTION 11.12. GOVERNING LAW......................................................................... 61
SECTION 11.13. Counterparts.......................................................................... 61
SECTION 11.14. Recording of Indenture................................................................ 61
SECTION 11.15. Trust Obligation...................................................................... 61
SECTION 11.16. No Petition........................................................................... 62
SECTION 11.17. Inspection............................................................................ 62
SECTION 11.18. Maximum Interest Payable.............................................................. 62
SECTION 11.19. No Legal Title in Holders............................................................. 63
SECTION 11.20. Third Party Beneficiary............................................................... 63
SECTION 11.21. Class A Insurer Control Rights........................................................ 63
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EXHIBIT
Exhibit A Form of Class A Note
SCHEDULE
Schedule A Perfection Representations, Warranties and Covenants
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INDENTURE dated as of June 27, 2003, between CREDIT ACCEPTANCE
AUTO DEALER LOAN TRUST 2003-1, a Delaware statutory trust (the "Issuer"), and
JPMORGAN CHASE BANK, a New York banking corporation, as trust collateral agent
(the "Trust Collateral Agent") and as indenture trustee (the "Indenture
Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's
$100,000,000 Class A 2.77% Asset Backed Notes (the "Class A Notes"), and the
Class A Insurer:
GRANTING CLAUSE
The Issuer hereby grants to the Indenture Trustee for the
benefit of itself and the Class A Insurer and the Class A Noteholders, as their
respective interests may appear, a first-priority perfected security interest in
all property of the Issuer, including all of the Issuer's right, title and
interest in and to the following collateral (the "Collateral") now owned or
hereafter acquired, which Collateral shall be held by the Trust Collateral Agent
on behalf of the Indenture Trustee, subject to the lien of this Indenture:
(i) all right, title, and interest of the Issuer in and
to the Dealer Loans listed on Schedule A to the Sale and Servicing Agreement,
and listed on any addendum to Schedule A delivered by the Seller during the
Revolving Period; and proceeds thereof;
(ii) certain rights under the Dealer Agreements listed on
Schedule A to the Sale and Servicing Agreement, and listed on any addendum to
Schedule A delivered by the Seller during the Revolving Period, including Credit
Acceptance's right to service the Dealer Loans and Contracts and receive the
related collection fee and receive reimbursement of certain recovery and
repossession expenses, in accordance with the terms of the Dealer Agreements
(other than the Excluded Dealer Agreement Rights);
(iii) Collections (other than Dealer Collections) after the
applicable Cut-off Date;
(iv) a security interest in each Contract listed on
Schedule A to the Sale and Servicing Agreement, and listed on any addendum to
Schedule A delivered by the Seller during the Revolving Period;
(v) all records and documents relating to the Dealer
Loans and the Contracts;
(vi) all security interests purporting to secure payment
of the Dealer Loans;
(vii) all security interests purporting to secure payment
of the Contracts (including a security interest in each Financed Vehicle);
(viii) all guarantees, insurance (including insurance
insuring the priority or perfection of any Contract) or other agreements or
arrangements securing the Contracts;
(ix) all rights under the Contribution Agreement;
(x) the Collection Account, the Reserve Account, the
Principal Collection Account and the Note Distribution Account, amounts on
deposit in those accounts and Eligible Investments of amounts in deposit in
those accounts;
(xi) the Issuer's rights under the Sale and Servicing
Agreement; and
(xii) all proceeds of the foregoing.
Such grant shall include all rights, powers and options (but
none of the obligations) of the Issuer, including the immediate and continuing
right to claim for, collect, receive and give receipt for principal and interest
payments in respect of the Collateral and all other moneys payable thereunder,
to give and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring proceedings in the name
of the Issuer or otherwise and generally to do and receive anything that the
Issuer is or may be entitled to do or receive thereunder or with respect
thereto.
The Indenture Trustee hereby acknowledges such grant, accepts
the trusts under this Indenture in accordance with the provisions of this
Indenture and agrees to perform its duties required in this Indenture to the
best of its ability to the end that the interests of the parties and the Holders
of the Notes and the Class A Insurer, recognizing the priorities of their
respective interests, may be adequately and effectively protected.
The Indenture Trustee, solely in its capacity as the named
secured party or assignee of secured party on financing statements naming the
Credit Acceptance, the Seller or the Issuer as debtor or seller, acknowledges
that in that capacity it is acting as a representative, within the meaning of
Section 9-502(a)(2) of the UCC, for itself, the Trust Collateral Agent, the
Class A Noteholders, Class A Insurer, Issuer and the Seller, to the extent and
as their interests as secured parties with security interests in the collateral
indicated on such financing statements may be.
It is the intention of the Issuer and the Indenture Trustee
that this grant constitutes a grant or assignment of a valid, first priority
security interest in the Issuer's rights in the Collateral, free and clear of
all Liens (other than the security interest granted herein) to the Indenture
Trustee. This Agreement shall be deemed to create a security interest and deemed
to be a security agreement with respect to the Collateral within the meaning of
Article 1, Article 8 and Article 9 of the Uniform Commercial Code as in effect
in the States of New York and Michigan and under the law of all jurisdictions
governing the creation and perfection of security interests in the Collateral.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1 Definitions.
(a) Except as otherwise specified herein, the following
terms have the respective meanings set forth below for all purposes of this
Indenture.
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(b) Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to them in the Sale and
Servicing Agreement or the Trust Agreement.
"Act" has the meaning specified in Section 11.3(a).
"Affiliate" means, with respect to any specified Person, any
other Person controlling or controlled by or under common control with such
specified Person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing. A Person shall not be
deemed to be an Affiliate of any person solely because such other Person has the
contractual right or obligation to manage such Person unless such other Person
controls such Person through equity ownership or otherwise.
"Authorized Officer" means, with respect to the Issuer, any
officer or agent acting pursuant to a power of attorney of the Owner Trustee or,
with respect to the Servicer, any officer or agent of the Servicer, and who is
identified on the list of Authorized Officers delivered by each of the Owner
Trustee and the Servicer to the Indenture Trustee, the Backup Servicer and the
Class A Insurer on the Closing Date (as such list may be modified or
supplemented from time to time thereafter).
"Backup Servicer" means Systems and Services Technologies,
Inc. (the "Backup Servicer" or "SST").
"Backup Servicing Agreement" means the Backup Servicing
Agreement, dated as of June 27, 2003, among the Backup Servicer, the Servicer,
the Class A Insurer, the Trust, the Seller and the Trust Collateral Agent, as
amended, modified or supplemented from time to time, in accordance with its
terms.
"Basic Documents" has the meaning set forth in the Sale and
Servicing Agreement.
"Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions or trust companies located in Detroit,
Michigan or New York, New York are authorized or obligated by law, executive
order, or governmental decree to be closed.
"Certificate of Trust" means the certificate of trust of the
Issuer substantially in the form of Exhibit B to the Trust Agreement.
"Class A Insurer" means Radian Asset Assurance Inc., or its
successor in interest.
"Class A Note Insurance Policy" means the note guaranty
insurance policy issued by the Class A Insurer to the Indenture Trustee for the
benefit of the Class A Noteholders with respect to the Class A Notes, including
any endorsements thereto.
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"Class A Termination Date" means the date on which all amounts
owing to the Class A Noteholders and, as certified in writing by the Class A
Insurer to the Owner Trustee, all amounts owing to the Class A Insurer under the
Basic Documents are paid in full.
"Class A Notes" means the 2.77% Class A Asset Backed Notes of
the Issuer, substantially in the form of Exhibit A hereto.
"Class A Note Rate" means 2.77% per annum (computed on the
basis of a 360-day year of twelve 30-day months and assuming the Distribution
Date is on the 15th of each month).
"Clearing Agency" means the Depository Trust Company or its
successor, which shall be an organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended.
"Clearing Agency Participant" means the Depository Trust
Company, and its successors, each of which shall be a broker, dealer, bank or
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" means June 27, 2003.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and treasury regulations promulgated thereunder.
"Collateral" has the meaning set forth in Granting Clause.
"Control Party" means: (i) prior to the Class A Termination
Date, so long as no Class A Insurer Default has occurred and is continuing, the
Class A Insurer; and (ii) otherwise, the Majority Noteholders.
"Corporate Trust Office" means the principal corporate trust
office of the Indenture Trustee, which at time of execution of this Indenture is
located at 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, Attention:
Institutional Trust Services/Structured Finance or at such other address as the
Indenture Trustee may designate from time to time by notice to the Class A
Noteholders, the Servicer, the Class A Insurer and the Issuer, or the principal
corporate trust office of any successor Indenture Trustee (the address of which
the successor Indenture Trustee will notify the Class A Noteholders, the Class A
Insurer and the Issuer).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Dealer Agreement Rights" means, with respect to any
Dealer Agreement listed on Schedule A to the Sale and Servicing Agreement, or
listed on any addendum thereto, the rights of Credit Acceptance thereunder
related to loans made to the related Dealer which are not Dealer Loans owned by
the Issuer, including rights of set-off and rights of indemnification, related
to such loans.
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"Executive Officer" means, with respect to any corporation,
the Chairman of the Board, the Vice Chairman, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary,
Assistant Secretary, the Treasurer, Assistant Treasurer, or Controller of such
corporation; and with respect to any partnership, any general partner thereof.
"Indebtedness" means, with respect to any Person at any time,
(a) indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; provided that the amount of such
indebtedness if not so assumed shall in no event be deemed to be greater than
the fair market value from time to time (as reasonably determined in good faith
by the Issuer) of the property subject to such lien; or (h) obligations of such
Person under any interest rate or currency exchange agreement.
"Indenture" means this Indenture as amended and supplemented
from time to time.
"Indenture Default" means any occurrence that is, or with
notice or the lapse of time or both would become, an Indenture Event of Default.
"Indenture Event of Default" has the meaning given such term
in Section 5.1 herein.
"Indenture Trustee" means JPMorgan Chase Bank, a New York
banking corporation, not in its individual capacity but as trustee under this
Indenture, or any successor trustee under this Indenture.
"Independent" means, when used with respect to any specified
Person, that the Person (a) is in fact independent of the Issuer, the
Originator, any other obligor upon the Class A Notes, the Seller and any
Affiliate of any of the foregoing Persons, (b) does not have any direct
financial interest or any material indirect financial interest in the Issuer,
the Originator, any such other obligor, the Seller or any Affiliate of any of
the foregoing Persons and (c) is not connected with the Issuer, the Originator,
any such other obligor, the Seller or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or Person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee and the Class A Insurer under the
circumstances described in, and otherwise
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complying with, the applicable requirements of Section 11.1, prepared by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee, and prior to the Class A Termination Date, the Class A
Insurer, in the exercise of reasonable care, which opinion or certificate shall
state that the signer has read the definition of "Independent" in this Indenture
and that the signer is Independent within the meaning thereof.
"Issuer" means the party named as such in this Indenture until
a successor replaces it and, thereafter, means the successor and, for purposes
of any provision contained herein, each other obligor on the Class A Notes.
"Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee a copy of which shall be delivered to the
Class A Insurer.
"Issuer Secured Obligations" means all amounts and obligations
which the Issuer may at any time owe to or on behalf of the Class A Insurer and
the Indenture Trustee for the benefit of the Indenture Trustee and the Class A
Noteholders under this Indenture, the Class A Notes or the other Basic
Documents.
"Majority Noteholders" means the Holders of a majority by
principal amount of the outstanding Class A Notes.
"Moody's" means Xxxxx'x Investors Service, Inc. and its
successors and assigns.
"Note" means a Class A Note.
"Note Owner" means, with respect to any Note registered in the
name of the Clearing Agency or its nominee, the Person who is the beneficial
owner of such Class A Note, as reflected on the books of the Clearing Agency
(directly as a Clearing Agency Participant or as an indirect participant, in
each case in accordance with the rules of such Clearing Agency).
"Note Register" and "Note Registrar" mean the register
maintained and the registrar appointed pursuant to Section 2.3 hereof.
"Noteholder", "Holder" or "Class A Noteholder" means the
Person in whose name a Class A Note shall be registered in the Note Register,
except that, solely for the purposes of giving any consent, waiver, request, or
demand pursuant to the Basic Documents, the interest evidenced by any Class A
Note registered in the name of the Seller, the Servicer, or any person
controlling, controlled by, or under common control with the Seller 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.
"Officer's Certificate" means a certificate signed by any
Authorized Officer of the Owner Trustee, under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1
hereof.
"Opinion of Counsel" means one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture, or as
otherwise required by the
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Indenture Trustee or the Class A Insurer, be employees of or counsel to the
Issuer and who shall be reasonably satisfactory to the Indenture Trustee and the
Class A Insurer, and which shall comply with any applicable requirements of
Section 11.1 hereof, and shall be in form and substance reasonably satisfactory
to the Indenture Trustee and the Class A Insurer.
"Outstanding" means, as of the date of determination, all
Class A Notes theretofore authenticated and delivered under this Indenture
except:
(i) Class A Notes theretofore canceled by the
Note Registrar or delivered to the Note Registrar for cancellation;
(ii) Class A 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 Class A
Notes are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture); and
(iii) Class A Notes in exchange for or in lieu of
other Class A Notes which have been authenticated and delivered
pursuant to this Indenture unless proof satisfactory to the Indenture
Trustee is presented that any such Class A Notes are held by a bona
fide purchaser;
provided, however, that (x) in determining whether the Holders of the requisite
Outstanding Amount of the Class A Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any Basic
Document, Class A Notes owned by the Issuer, the Servicer, any other obligor
upon the Class A Notes, the Seller or any Affiliate of any of the foregoing
Persons shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be fully protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Class A Notes that a Responsible Officer of the Indenture Trustee
either actually knows to be so owned or has received written notice thereof
shall be so disregarded; provided, further, however, that Class A Notes which
have been paid with proceeds of the Class A Note Insurance Policy shall continue
to remain outstanding until the Class A Insurer has been paid as subrogee
hereunder or reimbursed pursuant to the Insurance Agreement delivered to the
Indenture Trustee, and the Class A Insurer shall be deemed to be the Holder
thereof to the extent of any payments thereon made by the Class A Insurer. Class
A 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 pledgees right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Class A Notes, the Seller
or any Affiliate of any of the foregoing Persons and (y) to the extent that the
Indenture Trustee is a Class A Noteholder, Class A Notes owned by the Indenture
Trustee shall be disregarded for purposes of Section 6.8(b) hereof.
"Outstanding Amount" means the aggregate principal amount of
all Class A Notes Outstanding at the date of determination.
"Paying Agent" means the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.12 and is authorized by the
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Issuer to make the payments to and distributions from the Collection Account,
the Note Distribution Account, the Reserve Account, the Principal Distribution
Account and the Certificate Distribution Account including payment of principal
of or interest on the Class A Notes on behalf of the Issuer.
"Predecessor Note" means, with respect to any particular Class
A Note, every previous Class A Note evidencing all or a portion of the same debt
as that evidenced by such particular Class A Note; and, for the purpose of this
definition, any Class A Note authenticated and delivered under Section 2.4 in
lieu of a mutilated, lost, destroyed or stolen Class A Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Class A Note.
"Private Placement Memorandum" means the confidential private
placement memorandum, relating to the Class A Notes, dated June 17, 2003.
"Proceeding" means any suit in equity, action at law or other
judicial or administrative proceeding.
"Rating Agency" means S&P or any other nationally recognized
statistical rating agency requested by the Seller or an Affiliate thereof, and
acceptable to the Class A Insurer, to rate the Class A Notes.
"Rating Agency Condition" means, with respect to any action,
that the Rating Agency shall have been given 10 days (or such shorter period as
shall be acceptable to the Rating Agency) prior notice thereof and that such
Rating Agency shall have notified the Seller, the Servicer, the Indenture
Trustee, the Owner Trustee, the Class A Insurer and the Issuer that such action
will not result in a reduction or withdrawal of the then current rating of the
Class A Notes, without regard to the Class A Note Insurance Policy.
"Record Date" means, with respect to a Distribution Date, (i)
if the Class A Notes are held in book-entry form, the day immediately preceding
such Distribution Date; or (ii) if the Class A Notes are held in definitive
form, the last day of the calendar month preceding such Distribution Date.
"Redemption Date" means, in the case of a redemption of the
Class A Notes pursuant to Section 10.1(a) hereof, the Distribution Date
specified by the Servicer or the Issuer pursuant to Section 10.1(a) hereof.
"Redemption Price" means in the case of a redemption of the
Class A Notes pursuant to Section 10.1(a) hereof an amount equal to the unpaid
principal amount of the outstanding Class A Notes being redeemed plus accrued
and unpaid interest thereon to but excluding the Redemption Date plus all
amounts due to the Class A Insurer, the Indenture Trustee, the Backup Servicer
and the Owner Trustee under the Basic Documents.
"Related Security" means the property described in clauses
(ii) through (xii) of the Granting Clause.
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"Required Long-Term Debt Rating" shall be a rating on
long-term unsecured debt obligations of "Aa3" by Moody's and "AA-" by S&P (or
other equivalent rating by a nationally recognized rating agency), and any
requirement that long-term unsecured debt obligations have the "Required
Long-Term Debt Rating" shall mean that such long-term unsecured debt obligations
have the foregoing required rating.
"Responsible Officer" means, with respect to the Indenture
Trustee, the Trust Collateral Agent, the Paying Agent or the Owner Trustee, any
officer within the Corporate Trust Office of the Indenture Trustee, the Trust
Collateral Agent, the Paying Agent, or the Owner Trustee, as the case may be,
including any Vice President, Assistant Vice President, Assistant Treasurer,
Assistant Secretary, Associate, Corporate Trust Officer or any other officer of
the Indenture Trustee, the Trust Collateral Agent, the Paying Agent, or the
Owner Trustee customarily performing functions similar to those performed by any
of the above designated officers and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Rule 144A" means Rule 144A of the Securities Act.
"S&P" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc.
"Sale and Servicing Agreement" means the Sale and Servicing
Agreement dated as of June 27, 2003, among the Issuer, the Seller, the Servicer,
the Trust Collateral Agent/Indenture Trustee and the Backup Servicer, as the
same may be amended or supplemented from time to time in accordance with its
terms.
"Securities Act" means the Securities Act of 1933, as amended.
"Servicer Default" has the meaning given such term in Section
8.01 of the Sale and Servicing Agreement.
"State" means any state or commonwealth of the United States
of America or the District of Columbia.
"Subsidiary" means, with respect to any Person, any
corporation or other Person (a) of which securities or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other Persons performing similar functions are at the time directly or
indirectly owned by such Person or (b) that is directly or indirectly controlled
by such Person within the meaning of control under Section 15 of the Securities
Act.
"Termination Date" means the later of: (i) the expiration of
the Class A Note Policy in accordance with its terms and the return thereof to
the Class A Insurer for cancellation and (ii) the date on which the Indenture
Trustee and the Class A Insurer shall have received payment and performance of
all Issuer Secured Obligations.
"Trust Collateral Agent" means, initially, JPMorgan Chase
Bank, in its capacity as collateral agent on behalf of the Indenture Trustee for
the benefit of the Class A Noteholders and the Class A Insurer, including its
successors-in-interest, until and unless a successor Person
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shall have become the Trust Collateral Agent pursuant to the Sale and Servicing
Agreement, and thereafter "Trust Collateral Agent" shall mean such successor
Person.
"Trust Property" has the meaning set forth in the Trust
Agreement.
"UCC" means, unless the context otherwise requires, the
Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended
from time to time.
SECTION 1.2. Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has
the meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without
limitation; and
(v) words in the singular include the plural and
words in the plural include the singular.
ARTICLE II
The Notes
SECTION 2.1. Form.
The Class A Notes together with the Indenture Trustee's certificate of
authentication, shall be in definitive registered form in substantially the form
set forth in Exhibit A hereto, 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 Class A Notes, as evidenced by
their execution of the Class A Notes. Any portion of the text of any Class A
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Class A Note.
The Class A 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 Class
A Notes, as evidenced by their execution of such Class A Notes.
Each Class A Note shall be dated the date of its
authentication. The terms of the Class A Notes set forth in Exhibit A hereto are
part of the terms of this Indenture.
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SECTION 2.2. Execution, Authentication and Delivery.
The Class A Notes shall be executed on behalf of the Issuer by any of the
Authorized Officers of the Owner Trustee. The signature of any such Authorized
Officer on the Class A Notes may be manual or facsimile.
Class A 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 Class A Notes
or did not hold such offices at the date of such Class A Notes.
The Indenture Trustee shall upon receipt of the Issuer Order
authenticate and deliver the Class A Notes for original issue in an aggregate
principal amount of $100,000,000. The aggregate outstanding principal balance of
the Class A Notes at any time may not exceed such amount.
Each Class A Note shall be dated the date of its
authentication. The Class A Notes shall be issuable as registered Class A Notes
in the minimum denomination of $100,000 and integral multiples of $1,000
thereafter.
It is intended that the Class A Notes be registered so as to
participate in a book-entry system with the Clearing Agency as set forth herein.
The Class A Notes shall be initially issued in the form of a single
fully-registered note with a denomination equal to the original principal
balance of the Class A Notes. Upon initial issuance, the ownership of such Notes
shall be registered in the Note Register in the name of Cede & Co., or any
successor thereto, as nominee for the Clearing Agency.
No Class A Note shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose, unless there appears on
such Class A Note a certificate of authentication substantially in the form
provided for herein executed by the Indenture Trustee by the manual signature of
one of its Responsible Officers, and such certificate upon any Class A Note
shall be conclusive evidence, and the only evidence, that such Class A Note has
been duly authenticated and delivered hereunder.
SECTION 2.3. Registration of Transfer and Exchange of Class A
Notes.
(a) The Note Registrar shall keep or cause to be kept, at
the office or agency maintained pursuant to Section 2.7, a Note Register in
which, subject to such reasonable regulations as it may prescribe, the Indenture
Trustee shall provide for the registration of Notes and of transfers and
exchanges of Class A Notes as herein provided. The Indenture Trustee shall be
the initial Note Registrar. In the event that, subsequent to the Closing Date,
the Indenture Trustee notifies the Seller and the Class A Insurer that it is
unable to act as Note Registrar, the Seller shall appoint another bank or trust
company, having an office or agency located in the Borough of Manhattan, The
City of New York, agreeing to act in accordance with the provisions of this
Indenture applicable to it, and otherwise acceptable to the Indenture Trustee,
and, prior to the Class A Termination Date, the Class A Insurer, to act as
successor Note Registrar under this Indenture. If at any time the Indenture
Trustee is not the Note Registrar, the Note Registrar shall make available to
the Indenture Trustee ten (10) days prior to each Distribution Date and at such
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other times as the Indenture Trustee may reasonably request the names and
addresses of the Holders as they appear in the Note Register.
No sale, pledge or other transfer of a Class A Note shall be
made unless such sale, pledge or other transfer is (A) pursuant to an effective
registration statement under the Securities Act, (B) for so long as the Class A
Notes are eligible for resale pursuant to Rule 144A to a Person the transferor
reasonably believes after due inquiry is a "qualified institutional buyer" as
defined in Rule 144A that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the transfer is being
made in reliance on Rule 144A, or (C) pursuant to another available exemption
from the registration requirements of the Securities Act, the Investment Company
Act of 1940, as amended and any applicable state securities and blue sky laws or
is made in accordance with said Act and state laws. The Indenture Trustee may
require an opinion of counsel to be delivered to it in connection with any
transfer of the Class A Notes pursuant to clauses (A) or (C) above.
Under no circumstances may an institutional "accredited
investor" within Regulation D of the Securities Act take delivery in the form of
a beneficial interest in a book-entry Class A Note if such purchaser is not a
"qualified institutional buyer" as defined under Rule 144A under the Securities
Act.
If definitive Class A Notes are issued, the Class A Notes may
not be transferred, directly or indirectly, to any Person unless (A) the
transferee of the Class A Note certifies in a certificate to the Issuer and the
Indenture Trustee that such Person is a "qualified institutional buyer" as
defined in Rule 144A or (B) the transferee of the Class A Note delivers to the
Indenture Trustee and the Issuer an opinion of counsel that such transfer is
permitted pursuant to clause (A) or (C) above.
All opinions of counsel required in connection with any
transfer shall be by counsel reasonably acceptable to the Indenture Trustee.
The transferee of each Class A Note shall be deemed to
represent and warrant that, with respect to the source of funds to be used by
such transferee to acquire this Class A Note (the "Source") either (a) such
Source is not an "employee benefit plan" (within the meaning of Section 3(3) of
ERISA), a "plan" (within the meaning of Section 4975(e)(1) of the Code) or a
plan that is subject to any substantially similar provision of any federal,
state or local law, or a person using assets of any such plan, or (b) the
acquisition and holding of the Class A Notes by such Source will not constitute
or result in a nonexempt prohibited transaction under Section 406 of ERISA,
Section 4975 of the Code or any substantially similar provision of any federal,
state or local law.
Neither the Issuer nor the Indenture Trustee is obligated to
register the Class A Notes under the Securities Act or any other securities law.
Any transfer in violation of the provisions of this Section 2.3 shall be void ab
initio.
(b) If an election is made to hold Class A Notes in
book-entry form, the Class A Notes shall be registered in the name of a nominee
designated by the Clearing Agency (and
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may be aggregated as to denominations with other Class A Notes held by the
Clearing Agency). With respect to Class A Notes held in book-entry form:
(i) the Note Registrar, the Class A Insurer, the Trust
Collateral Agent and the Indenture Trustee will be entitled to deal
with the Clearing Agency for all purposes of this Indenture (including
the payment of principal of and interest on the Class A Notes and the
giving of instructions or directions hereunder) as the sole holder of
the Class A Notes, and shall have no obligation to the Note Owners;
(ii) the rights of Note Owners will be exercised only
through the Clearing Agency and will be limited to those established by
law and agreements between such Note Owners and the Clearing Agency
and/or the Clearing Agency Participants pursuant to the Depository
Agreement;
(iii) whenever this Indenture or any of the Basic Documents
requires or permits actions to be taken based upon instructions or
directions of Holders of Class A Notes evidencing a specified
percentage of the Class A Note Balance, the Clearing Agency will be
deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or Clearing
Agency Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Class A Notes and has
delivered such instructions to the Indenture Trustee; and
(iv) without the consent of the Seller and the Indenture
Trustee, no such Class A Note may be transferred by the Clearing Agency
except to a successor Clearing Agency that agrees to hold such Note for
the account of the Note Owners or except upon the election of the Note
Owner thereof or a subsequent transferee to hold such Class A Note in
physical form.
None of the Indenture Trustee, the Note Registrar or the Class A
Insurer shall have any responsibility to monitor or restrict the transfer of
beneficial ownership in any Note an interest in which is transferable through
the facilities of the Clearing Agency.
If (i)(A) the Issuer advises the Indenture Trustee in writing
that the Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Class A Notes as described in the
Depository Agreement and (B) the Issuer is unable to locate a qualified
successor, (ii) the Issuer at its option advises the Indenture Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency, or (iii) Note Owners representing beneficial interests in Class A Notes
aggregating not less than a majority of the Class A Note Balance advise the
Indenture Trustee and the Clearing Agency through the Clearing Agency
Participants in writing that the continuation of a book-entry system through the
Clearing Agency with respect to such class is no longer in the best interests of
the related Note Owners, then the Indenture Trustee shall notify all such Note
Owners, through the Clearing Agency, and the Class A Insurer of the occurrence
of any such event and of the availability of definitive Class A Notes to such
Note Owners requesting the same. Upon surrender to the Indenture Trustee of the
related Class A Notes by the Clearing Agency accompanied by registration
instructions from the Clearing Agency, the Indenture Trustee shall issue
definitive
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Class A Notes and deliver such definitive Notes in accordance with the
'instructions of the Clearing Agency. None of the Issuer, the Note Registrar,
the Class A Insurer, or the Indenture Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of definitive
Class A Notes, the Indenture Trustee shall recognize the Holders of the
definitive Class A Notes as Noteholders hereunder. The Indenture Trustee shall
not be liable if the Seller is unable to locate a qualified successor Clearing
Agency.
(c) In order to preserve the exemption for resales and
transfers provided by Rule 144A, the Issuer shall provide to any Holder of a
Class A Note and any prospective purchaser designated by such Holder, upon
request of such Holder or such prospective purchaser, such information required
by Rule 144A as will enable the resale of such Class A Note to be made pursuant
to Rule 144A. The Servicer and the Indenture Trustee shall cooperate with the
Issuer in providing the Issuer such information regarding the Class A Notes, the
Collateral and other matters regarding the Trust as the Issuer shall reasonably
request to meet its obligations under the preceding sentence.
(d) Upon surrender for registration of transfer of any
Class A Note at the Corporate Trust Office, the Indenture Trustee shall, subject
to Section 2.3(a), authenticate, and deliver, in the name of the designated
transferee or transferees, one or more new Class A Notes in authorized
denominations of a like aggregate amount dated the date of authentication by the
Indenture Trustee. At the option of a Holder, Class A Notes may be exchanged for
other Class A Notes of authorized denominations of a like aggregate amount upon
surrender of the Class A Notes to be exchanged at the Corporate Trust Office.
(e) Every Class A Note presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee and the
Note Registrar duly executed by the Holder or his attorney duly authorized in
writing. Each Class A Note surrendered for registration of transfer or exchange
shall be cancelled and subsequently disposed of by the Indenture Trustee in
accordance with its customary practice.
(f) No service charge shall be made for any registration
of transfer or exchange of Class A Notes, but the Indenture Trustee may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Class A Notes.
(g) Subject to Article IX hereof, the Class A Notes and
this Indenture may be amended or supplemented from time to time, prior to the
Class A Termination Date, with the consent of the Class A Insurer, but without
the consent of any of the Class A Noteholders, to modify restrictions on and
procedures for resale and other transfers of the Class A Notes to reflect any
change in applicable law or regulations (or the interpretation thereof) or
practices relating to the resale or transfer of restricted securities generally.
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SECTION 2.4. Mutilated, Destroyed, Lost, or Stolen Notes.
If (a) any mutilated Class A Note shall be surrendered to the Note Registrar, or
if the Note Registrar shall receive evidence to its satisfaction of the
destruction, loss, or theft of any Class A Note and (b) there shall be delivered
to the Note Registrar, the Class A Insurer, the Issuer and the Indenture Trustee
such security or indemnity (an unsecured indemnity agreement of a Class A
Noteholder with a net worth at least equal to $200,000,000 containing terms
reasonably satisfactory to the Indenture Trustee and the Class A Insurer being
sufficient for such security or indemnity requirement), as may be required by
them to save each of them and the Issuer harmless, then in the absence of notice
that such Note shall have been acquired by a bona fide purchaser, the Owner
Trustee on behalf of the Issuer shall execute and the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost, or stolen Class A Note, a new Class A Note of like tenor and
denomination. In connection with the issuance of any new Class A Note under this
Section, the Indenture Trustee and the Note Registrar may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. The Indenture Trustee may charge such Holder
for its expenses (including without limitation the fees and expenses of its
counsel) in replacing a Class A Note. Any duplicate Class A Note issued pursuant
to this Section shall constitute conclusive evidence of ownership of such Class
A Note, as if originally issued, whether or not the lost, stolen, or destroyed
Class A Note shall be found at any time.
SECTION 2.5. Persons Deemed Owners.
The Issuer, the Indenture Trustee, the Trust Collateral Agent, the Note
Registrar and any agent of the Issuer, the Indenture Trustee or the Note
Registrar may treat the Person in whose name any Class A Note shall be
registered as the owner of such Class A Note for the purpose of receiving
distributions pursuant to Section 5.08 of the Sale and Servicing Agreement and
Section 5.2 hereof and for all other purposes whatsoever, and neither the
Issuer, the Indenture Trustee, the Trust Collateral Agent, the Class A Insurer
nor the Note Registrar nor any such agent shall be bound by any notice to the
contrary.
SECTION 2.6. Access to List of Noteholders' Names and
Addresses.
The Indenture Trustee shall furnish or cause to be furnished to the Servicer or
the Class A Insurer, within 15 days after receipt by the Indenture Trustee of a
request therefor from the Servicer or the Class A Insurer in writing, a list, in
such form as the Servicer or the Class A Insurer may reasonably require, of the
names and addresses of the Class A Noteholders as of the most recent Record
Date. If three or more Class A Noteholders, or one or more Holders of Notes
aggregating not less than 10% of the Class A Note Balance, apply in writing to
the Indenture Trustee, and such application states that the applicants desire to
communicate with other Noteholders with respect to their rights under this
Indenture or under the Class A Notes and such application shall be accompanied
by a copy of the communication that such applicants propose to transmit, then
the Indenture Trustee shall, within five Business Days after the receipt of such
application, make available to such Class A Noteholders access during normal
business hours to the current list of Class A Noteholders. Each Holder, by
receiving and holding a Class A Note, shall be deemed to have agreed to hold
neither the Servicer, the Class A Insurer nor the Indenture
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Trustee accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 2.7. Maintenance of Office or Agency.
The Indenture Trustee shall maintain in New York, New York, an office or offices
or agency or agencies where Class A Notes may be surrendered for registration of
transfer or exchange and an office in New York, New York, where notices and
demands to or upon the Indenture Trustee in respect of the Class A Notes and
this Indenture may be served. The Indenture Trustee initially designates the
Corporate Trust Office as specified in this Indenture as its office for such
purposes. The Indenture Trustee shall give prompt written notice to the
Servicer, the Class A Insurer and to Class A Noteholders of any change in the
location of the Note Register or any such office or agency.
SECTION 2.8. Payment of Principal and Interest; Defaulted
Interest.
(a) The Class A Notes shall accrue interest as provided
in the form of the Class A Note set forth in Exhibit A hereto and such interest
shall be due and payable on each Distribution Date as specified therein. Any
installment of interest or principal, if any, payable on any Class A Note which
is punctually paid or duly provided for by the Issuer on the applicable
Distribution Date or on the Stated Final Maturity shall be paid as set forth in
Section 5.09(a) of the Sale and Servicing Agreement.
(b) The principal of each Class A Note shall be payable
in installments on each Distribution Date as provided in the form of the Class A
Note set forth in Exhibit A hereto. Notwithstanding the foregoing, the entire
unpaid principal amount of the Class A Notes, and all accrued interest thereon,
shall become due and payable, if not previously paid, upon the acceleration
thereof after the occurrence of an Indenture Event of Default in the manner
provided in Section 5.2. All principal payments on the Class A Notes shall be
made as provided in Section 5.2 and in Section 5.09(a) of the Sale and Servicing
Agreement, as applicable. Upon written notice from the Issuer, the Indenture
Trustee shall notify the Person in whose name a Class A Note is registered at
the close of business on the Record Date preceding the Distribution Date on
which the Issuer expects that the final installment of principal of and interest
on such Class A Note will be paid. Such notice shall be mailed or transmitted by
facsimile prior to such final Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Class A Note and shall specify the place where such Class A Note may be
presented and surrendered for payment of such installment. Notices in connection
with redemptions of Class A Notes shall be mailed to Noteholders as provided in
Section 10.2.
(c) If the Issuer defaults in a payment of interest on
the Class A Notes, such defaulted interest shall itself bear interest (to the
extent lawful) at the Class A Note Rate. Such defaulted interest (and such
interest thereon) shall be paid on subsequent Distribution Dates pursuant to
Section 5.09 of the Sale and Servicing Agreement, or as otherwise set forth
below.
SECTION 2.9. Release of Collateral.
The Indenture Trustee shall, on or after the Termination Date, release and shall
cause the Trust Collateral Agent to release any remaining portion of the Trust
Property from the lien created by
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this Indenture and shall cause the Trust Collateral Agent to deposit in the
Collection Account any funds then on deposit in any other Trust Account. The
Indenture Trustee shall release property from the lien created by this Indenture
pursuant to this Section only upon receipt by the Indenture Trustee and the
Class A Insurer of an Issuer Request accompanied by an Officer's Certificate and
an Opinion of Counsel meeting the applicable requirements of Section 11.1.
ARTICLE III
Covenants, Representations and Warranties
SECTION 3.1. Payment of Principal and Interest.
The Issuer will duly and punctually pay the principal of and interest on the
Class A Notes in accordance with the terms of the Class A Notes and this
Indenture. Without limiting the foregoing and in accordance with the terms set
forth in Section 5.09(a) of the Sale and Servicing Agreement, the Issuer will
cause to be distributed to the Class A Noteholders all amounts on deposit in the
Note Distribution Account on each Distribution Date deposited therein pursuant
to the Sale and Servicing Agreement for the benefit of the Class A Notes, to the
Class A Noteholders. Amounts properly withheld under the Code by any Person from
a payment to any Class A Noteholder of interest and/or principal shall be
considered as having been paid by the Issuer to such Class A Noteholder for all
purposes of this Indenture.
SECTION 3.2. Maintenance of Office or Agency.
For so long as the Indenture Trustee is the transfer agent, the Issuer will
maintain in New York, New York, an office or agency where Class A Notes may be
surrendered for registration of transfer or exchange, and an office in New York,
New York where notices and demands to or upon the Issuer in respect of the Class
A Notes and this Indenture may be served. The Issuer hereby initially appoints
the Indenture Trustee to serve as its agent for the foregoing purposes. The
Issuer will give prompt written notice to the Indenture Trustee and the Class A
Insurer of the location, and of any change in the location, of any such office
or agency. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee or the Class A Insurer
with the address thereof, such surrenders, notices and demands may be made or
served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and
demands.
SECTION 3.3. Money for Payments to be Held in Trust.
On or before each Distribution Date and Redemption Date, the Issuer shall
deposit or cause to be deposited in the Note Distribution Account from the
Collection Account, a sum sufficient to pay the amounts then becoming due under
the Class A Notes, such sum to be held in trust for the benefit of the Persons
entitled thereto and (unless the Paying Agent is the Indenture Trustee) shall
promptly notify the Indenture Trustee of its action or failure so to act.
The Issuer will cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee and the Class
A 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:
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(i) hold all sums held by it for the payment of amounts
due with respect to the Class A 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 Class A Insurer
written notice of any default by the Issuer of which a Responsible
Officer has actual knowledge (or any other obligor upon the Class A
Notes) in the making of any payment required to be made with respect to
the Class A Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, or, prior
to the Class A Termination Date, the Class A Insurer, forthwith pay to
the Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith
pay to the Indenture Trustee all sums held by it in trust for the
payment of Class A 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 Class A Notes of
any applicable withholding taxes imposed thereon and with respect to
any applicable reporting requirements in connection therewith in each
case, as instructed by the Issuer.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such a payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to the escheat of funds,
any money held by the Indenture Trustee or any Paying Agent in trust for the
payment of any amount due with respect to any Class A Note and remaining
unclaimed for two years after such amount has become due and payable shall be
discharged from such trust and be paid to the Issuer on Issuer Request, with the
written consent of the Class A Insurer if the Class A Termination Date has not
occurred; and the Holder of such Class A Note shall thereafter, as an unsecured
general creditor, look only to the Issuer for payment thereof (but only to the
extent of the amounts so paid to the Issuer), and all liability of the Indenture
Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that the Indenture Trustee or such Paying Agent,
before being required to make any such repayment, shall at the expense of the
Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in The City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee shall also adopt and employ,
at the
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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 Class A Notes have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Indenture Trustee or of any
Paying Agent, at the last address of record for each such Holder).
SECTION 3.4. Existence.
Except as otherwise permitted by the provisions of Section 3.10, the Issuer will
keep in full effect its existence, rights and franchises as a statutory trust
under the laws of the State of Delaware and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Indenture, the Class A Notes, the Collateral and each other instrument or
agreement included in the Trust Property.
SECTION 3.5. Protection of Trust Property.
The Issuer intends the security interest granted pursuant to this Indenture in
favor of the Indenture Trustee, the Class A Noteholders and the Class A Insurer
to be prior to all other liens in respect of the Trust Property, and the Issuer
shall take all actions necessary to obtain and maintain, in favor of the
Indenture Trustee, for the benefit of the Class A Noteholders and the Class A
Insurer, a first lien on and a first priority, perfected security interest in
the Trust Property. The Issuer will from time to time prepare (or shall cause to
be prepared), execute, file and deliver all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) grant more effectively all or any portion of the
Trust Property;
(ii) maintain or preserve the lien and security interest
(and the priority thereof) in favor of the Indenture Trustee for the
benefit of the Class A Noteholders and the Class A Insurer created by
this Indenture or carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any grant made or to be made by this Indenture;
(iv) enforce any of the Trust Property;
(v) preserve and defend title to the Trust Property and
the rights of the Indenture Trustee in such Trust Property against the
claims of all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon
the Trust Property when due.
The Issuer hereby designates and authorizes the Indenture Trustee
its agent and attorney-in-fact to execute, upon Issuer request, any financing
statement, continuation statement or other instrument required to be executed by
the Issuer pursuant to this Section.
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SECTION 3.6. Opinions as to Trust Property.
(a) On the Closing Date, the Issuer shall furnish to the
Indenture Trustee and the Class A Insurer an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect to
this Indenture and other requisite documents and with respect to the execution
and filing of any financing statements and continuation statements, as are
necessary to perfect and make effective the first priority lien and security
interest in favor of the Indenture Trustee, created by this Indenture and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and security interest
effective.
(b) Within 90 days after the beginning of each calendar
year, beginning with the first calendar year beginning more than three months
after the Closing Date, the Issuer shall furnish to the Indenture Trustee and
the Class A Insurer an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and with respect to the filing of any
financing statements and continuation statements as are necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture until the 90th day
to occur in the following calendar year.
SECTION 3.7. Performance of Obligations; Servicing of
Contracts.
(a) The Issuer will not take any action and will use its
best efforts not to permit any action to be taken by others that would release
any Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Property or that would result in
the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement,
except as ordered by any bankruptcy or other court or as expressly provided in
this Indenture, the Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable
to the Class A Insurer to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Indenture Trustee and the Class A Insurer in an Officer's Certificate of the
Issuer shall be deemed to be action taken by the Issuer. Initially, the Servicer
has agreed to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of
its obligations and agreements contained in this Indenture, the Basic Documents
and in the instruments and agreements included in the Trust Property, including,
but not limited to, preparing (or causing to be prepared) and filing (or causing
to be filed) all UCC financing statements and continuation
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statements required to be filed by the terms of this Indenture and the Sale and
Servicing Agreement in accordance with and within the time periods provided for
herein and therein.
(d) The Issuer shall promptly notify the Indenture
Trustee, the Class A Insurer and the Rating Agency of the occurrence of a
Servicer Default in accordance with Section 11.4 hereof, and shall specify in
such notice the action, if any, the Issuer is taking in respect of such default.
If a Servicer Default shall arise from the failure of the Servicer to perform
any of its duties or obligations under the Sale and Servicing Agreement with
respect to the Dealer Loans or Contracts, the Issuer shall take all reasonable
steps available to it to remedy such failure.
(e) The Issuer agrees that it will not waive timely
performance or observance by the Servicer or the Seller of their respective
duties under the Basic Documents, (x) prior to the Class A Termination Date
without the prior written consent of the Class A Insurer, or (y) if the effect
thereof would adversely affect the Holders of the Class A Notes.
SECTION 3.8. Negative Covenants.
So long as any Class A Notes are Outstanding, the Issuer shall not:
(i) except as expressly permitted by this
Indenture or the Basic Documents, sell, transfer, exchange or otherwise
dispose of any of the properties or assets of the Issuer, including
those included in the Trust Property, unless directed to do so by the
Class A Insurer;
(ii) claim any credit on, or make any deduction
from the principal or interest payable in respect of, the Class A Notes
(other than amounts properly withheld from such payments under the
Code) or assert any claim against any present or former Noteholder by
reason of the payment of the taxes levied or assessed upon any part of
the Trust Property; or
(iii) (A) permit the validity or effectiveness of
this Indenture to be impaired, or permit the lien in favor of the
Indenture Trustee created by this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to
the Class A Notes under this Indenture except as may be expressly
permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Property or any part thereof or any interest therein
or the proceeds thereof (other than tax liens, mechanics' liens and
other liens that arise by operation of law, in each case on a Financed
Vehicle and arising solely as a result of an action or omission of the
related Obligor), (C) permit the lien of this Indenture not to
constitute a valid perfected first priority security interest in the
Trust Property, (D) change its name, identity, state of organization or
structure as a statutory trust in any manner that would, could or might
make any financing statement or continuation statement filed with
respect to it seriously misleading within the meaning of Section 9-507
of the UCC or (E) waive, amend, modify, supplement or terminate any
Basic Document or any provision thereof, or fail to
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comply with the provisions of the Basic Documents, in each case, prior
to the Class A Termination Date, without the prior written consent of
the Class A Insurer.
SECTION 3.9. Annual Statement as to Compliance.
The Issuer will deliver to the Indenture Trustee, the Rating Agency, the Class A
Insurer and the Noteholders on or before March 31st of each year beginning in
the year 2004, an Officer's Certificate dated as of the previous December 31st
stating, as to the Authorized Officer signing such Officer's Certificate, that
(i) a review of the activities of the Issuer
during the preceding 12-month period (or, for the initial certificate,
for such shorter period as may have elapsed from the initial issuance
of the Class A Notes to such December 31st) and of performance under
this Indenture has been made under such Authorized Officer's
supervision; and
(ii) to the best of such Authorized Officer's
knowledge, based on such review, the Issuer has complied with all
conditions and covenants under this Indenture throughout such year, or,
if there has been a default in the compliance of any such condition or
covenant, specifying each such default known to such Authorized Officer
and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, Etc. Only on Certain
Terms.
(a) The Issuer shall not consolidate or merge with or
into any other Person, unless
(i) the Person (if other than the Issuer) formed
by or surviving such consolidation or merger shall be a Person
organized and existing under the laws of the United States of America
or any State and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, and prior to the Class A
Termination Date, the Class A Insurer, the due and punctual payment of
the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such
transaction, no Early Amortization Event, Indenture Default or
Indenture Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the Indenture
Trustee and the Class A Insurer) to the effect that such transaction
will not have any material adverse tax consequence to the Trust, any
Class A Noteholder, the Class A Insurer or any Certificateholder;
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(v) any action as is necessary to maintain the
Lien and security interest created by this Indenture shall have been
taken;
(vi) prior to the Class A Termination Date, the
Issuer shall have given the Class A Insurer written notice of such
proposed consolidation or merger at least 30 Business Days prior to its
proposed consummation, and the Class A Insurer has given its prior
written consent of such consolidation or merger; and
(vii) the Issuer shall have delivered to the
Indenture Trustee and the Class A Insurer an Officer's Certificate and
an Opinion of Counsel each stating that such consolidation or merger
and such supplemental indenture comply with this Section 3.10(a) and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
(b) The Issuer shall not convey or transfer all or
substantially all of its properties or assets, including those included in the
Trust Property, to any Person, unless
(i) the Person that acquires by conveyance or
transfer the properties and assets of the Issuer the conveyance or
transfer of which is hereby restricted shall (A) be a United States
citizen or a Person organized and existing under the laws of the United
States of America or any State, (B) expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee,
in form satisfactory to the Indenture Trustee, and prior to the Class A
Termination Date the Class A Insurer, the due and punctual payment of
the principal of and interest on all Class A Notes and the performance
or observance of every agreement and covenant of this Indenture and
each of the Basic Documents on the part of the Issuer to be performed
or observed, all as provided herein, (C) expressly agree by means of
such supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the rights
of Holders of the securities and (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 Class A Notes;
(ii) immediately after giving effect to such
transaction, no Early Amortization Event, Indenture Default or
Indenture Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the Indenture
Trustee and the Class A Insurer) to the effect that such transaction
will not have any material adverse tax consequence to the Trust, any
Class A Noteholder, the Class A Insurer or any Certificate holder;
(v) any action as is necessary to maintain the
Lien and security interest created by this Indenture shall have been
taken;
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(vi) prior to the Class A Termination Date, the
Issuer shall have given the Class A Insurer written notice of such
proposed action at least 30 Business Days prior to its proposed
consummation, and the Class A Insurer shall have given its prior
written consent to such action; and
(vii) the Issuer shall have delivered to the
Indenture Trustee and the Class A Insurer an Officer's Certificate and
an Opinion of Counsel each stating that such conveyance or transfer and
such supplemental indenture comply with this Section 3.10(b) and that
all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 3.11. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in
accordance with Section 3.10(a), the Person formed by or surviving such
consolidation or merger (if other than the Issuer) shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein.
(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.10 (b), Credit Acceptance Auto
Dealer Loan Trust 2003-1 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 Class A Notes immediately upon the delivery of written notice
from the Issuer to the Indenture Trustee and the Class A Insurer stating that
Credit Acceptance Auto Dealer Loan Trust 2003-1 is to be so released.
SECTION 3.12. No Other Business.
The Issuer shall not engage in any business other than financing, purchasing,
owning, selling and managing the Contracts in the manner contemplated by this
Indenture and the Basic Documents and activities incidental thereto and any
other activities permitted under 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 Class A Notes;
(ii) obligations owing from time to time to the Class A Insurer; and (iii) any
other Indebtedness permitted by or arising under the Basic Documents. The
proceeds of the Class A Notes shall be used exclusively to fund the Issuer's
purchase of the Dealer Loans and the other assets specified in the Sale and
Servicing Agreement, to fund the Reserve Account and to pay the Issuer's
organizational, transactional and start-up expenses.
SECTION 3.14. Guarantees, Loans, Advances and Other
Liabilities.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or
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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 3.15. Capital Expenditures.
The Issuer shall not make any expenditure (by long-term or operating lease or
otherwise) for capital assets (either realty or personalty) except as
contemplated by the Basic Documents.
SECTION 3.16. Compliance with Laws.
The Issuer shall comply with the requirements of all applicable laws, the
non-compliance with which would, individually or in the aggregate, materially
and adversely affect the ability of the Issuer to perform its obligations under
the Class A Notes, this Indenture or any Basic Document.
SECTION 3.17. Restricted Payments.
The Issuer shall not, directly or indirectly, (i) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to the Owner Trustee or any owner of a
beneficial interest in the Issuer or otherwise with respect to any ownership or
equity interest or security in or of the Issuer or to the Servicer, (ii) redeem,
purchase, retire or otherwise acquire for value any such ownership or equity
interest or security or (iii) set aside or otherwise segregate any amounts for
any such purpose; provided, however, that the Issuer may make, or cause to be
made, distributions to the Servicer, the Owner Trustee, the Indenture Trustee,
the Trust Collateral Agent, the Class A Insurer and the Certificateholders as
permitted by, and to the extent funds are available for such purpose under, the
Sale and Servicing Agreement and the Trust 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 Basic Documents.
SECTION 3.18. Notice of Indenture Events of Default.
Upon a Responsible Officer of the Owner Trustee having actual knowledge or
receipt of written notice thereof, the Issuer agrees to give the Indenture
Trustee, the Trust Collateral Agent, the Class A Insurer and the Rating Agency
prompt written notice of each Indenture Event of Default hereunder and each
default on the part of the Servicer or the Seller of its obligations under the
Sale and Servicing Agreement.
SECTION 3.19. Further Instruments and Acts.
Upon request of the Indenture Trustee or the Class A 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. Amendments of Sale and Servicing Agreement and
Trust Agreement.
The Issuer shall not agree to any amendment to Section 11.01 of the Sale and
Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate the
requirements thereunder that
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the Indenture Trustee or the Holders of the Class A Notes consent to amendments
thereto as provided therein.
SECTION 3.21. Income Tax Characterization.
For purposes of federal income, state and local income and franchise and any
other income taxes, the Issuer will, and each Class A Noteholder by such Class A
Noteholder's acceptance thereof agrees to, treat the Class A Notes as
indebtedness and hereby instructs the Issuer to treat the Class A Notes as
indebtedness for federal, state and other tax reporting purposes.
SECTION 3.22. Perfection Representations, Warranties and
Covenants.
The perfection representations, warranties and covenants made by the Issuer and
set forth on Schedule A hereto shall be a part of this Indenture for all
purposes.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect with respect to the Class A
Notes except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Class A Notes, (iii) rights
of Class A Noteholders to receive payments of principal thereof and interest
thereon, (iv) Sections 3.3, 3.4, 3.5, 3.7, 3.8, 3.10, 3.12, 3.13, 3.14, 3.15,
3.16, 3.17, 3.19, 3.20 and 3.21, (v) the rights, obligations and immunities of
the Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.7 and the obligations of the Indenture Trustee under Section
4.2) and (vi) the rights of Class A Noteholders and the Class A Insurer as
beneficiaries hereof with respect to the property so deposited with the
Indenture Trustee, or the Trust Collateral Agent, payable to all or any of them,
and the Indenture Trustee, on written demand of and at the expense of the
Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Class A Notes, when
(A) either
(1) all Class A Notes theretofore
authenticated and delivered (other than (i) Class A
Notes that have been destroyed, lost or stolen and
that have been replaced or paid as provided in
Section 2.4 and (ii) Class A Notes for whose payment
money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.3) have been
delivered to the Indenture Trustee for cancellation;
or
(2) all Class A Notes not theretofore
delivered to the Indenture Trustee for cancellation
(i) have become due and
payable,
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(ii) will become due and payable
at the Stated Final Maturity within one
year, or
(iii) are to be called for
redemption within one year under
arrangements satisfactory to the Indenture
Trustee for the giving of notice of
redemption by the Indenture Trustee in the
name, and at the expense, of the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) of this clause (2), has
irrevocably deposited or caused to be irrevocably deposited with the Trust
Collateral Agent cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Class A Notes not theretofore
delivered to the Indenture Trustee for cancellation when due to the Stated Final
Maturity or Redemption Date (if Class A Notes shall have been called for
redemption pursuant to Section 10.1(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all
Issuer Secured Obligations;
(C) the Issuer has delivered to the Indenture
Trustee and the Class A Insurer an Officer's Certificate, an
Opinion of Counsel and if required by the Indenture Trustee or
the Class A Insurer an Independent Certificate from a firm of
certified public accountants, each meeting the applicable
requirements of Section 11.1(a) and each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been
complied with; and
(D) upon the satisfaction and discharge of the
Indenture pursuant to this Section 4.1, the Indenture Trustee
shall deliver to the Owner Trustee and the Class A Insurer a
certificate of a Responsible Officer stating that the Class A
Noteholders and the Indenture Trustee have been paid all
amounts owed to them.
SECTION 4.2. Application of Trust Money.
All moneys deposited with the Indenture Trustee pursuant to Section 4.1 hereof
shall be held in trust and applied by it, in accordance with the provisions of
the Class A 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 Class A Notes for the payment or redemption of which such moneys have
been deposited with the Indenture Trustee, of all sums due and to become due
thereon for principal and interest; but such moneys need not be segregated from
other funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.
SECTION 4.3. Repayment of Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture with respect
to the Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Class A
Notes shall, upon demand of the Issuer, be paid to the
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Indenture Trustee to be held and applied according to Section 3.3 and thereupon
such Paying Agent shall be released from all further liability with respect to
such moneys.
ARTICLE V
Remedies
SECTION 5.1. Indenture Events of Default.
"Indenture Event of Default", wherever used herein or in the other Basic
Documents, means any one of the following events (whatever the reason for such
Indenture 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 by the Issuer in the payment of any
interest on the Class A Notes when the same becomes due and payable,
and such default shall continue for a period of five (5) days (it being
understood that any payment by the Class A Insurer under the Class A
Note Insurance Policy shall not constitute payment by the Issuer); or
(ii) default by the Issuer in the payment of the
principal of or any installment of the principal of the Class A Notes
when the same becomes due and payable (it being understood that any
payment by the Class A Insurer under the Class A Note Insurance Policy
shall not constitute payment by the Issuer); or
(iii) default in the observance or performance of
any covenant or agreement of the Issuer made under this Indenture
(other than a covenant or agreement, a default in the observance or
performance of which is specifically dealt with elsewhere in this
Section 5.1), or any representation or warranty of the Issuer made in
this Indenture or in any certificate or other writing delivered
pursuant to this Indenture or in connection with this Indenture proving
to have been incorrect in any material respect as of the time when the
same shall have been made, and such default shall continue or not be
cured, or the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of 30 days (or a longer
period, not in excess of 60 days as may be reasonably necessary to
remedy such default, if the default is capable of remedy within 60 days
or less, and the Servicer, on behalf of the Issuer, delivers an
officer's certificate to the Indenture Trustee to the effect that the
Issuer has commenced, or will promptly commence and diligently pursue,
all reasonable efforts to remedy the default) after there shall have
been given to the Issuer by the Class A Insurer, or if a Class A
Insurer Default has occurred and is continuing, the Indenture Trustee
at the direction of Class A Noteholders representing at least 25% of
the outstanding Class A Note Balance, a written notice specifying such
default or incorrect representation or warranty and requiring it to be
remedied and stating that such notice is a "Notice of Default" pursuant
to this Indenture; or
(iv) the filing of a decree or order for relief
by a court having jurisdiction in the premises in respect of the
Seller, the Issuer or any substantial part of
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the Trust Property in an involuntary case under any applicable Federal
or state bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Seller or the Issuer,
as applicable, or for any substantial part of the Trust Property, or
ordering the winding-up or liquidation of the Seller's affairs or the
Issuer's affairs, as applicable, and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Seller or 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
Seller or Issuer, as applicable, or for any substantial part of the
Trust Property, or the making by the Seller or Issuer, as applicable,
of any general assignment for the benefit of creditors, or the failure
by the Seller or Issuer, as applicable, 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; or
(vi) a draw is made on the Class A Note Insurance
Policy; or
(vii) Collections for any three (3) consecutive
Collection Periods are less than 65.0% of Forecasted Collections for
such Collection Periods; or
(viii) the Seller sells or otherwise transfers
ownership of the Certificate except as permitted by the Basic
Documents; or
(ix) the Seller, fails to observe or perform in
any material respect any of its separateness or limited purpose
covenants in the Basic Documents to which it is a party (after notice
and after giving effect to any applicable grace periods set forth
therein) or its organizational documents.
SECTION 5.2. Rights Upon Indenture Event of Default.
(a) If an Indenture Event of Default described in clause
(iv) or (v) of Section 5.1 shall have occurred, the entire unpaid principal
balance of the Class A Notes, all interest accrued and unpaid thereon and all
other amounts payable under this Indenture and the Basic Documents shall
automatically become immediately due and payable. If any other Indenture Event
of Default shall have occurred, the Indenture Trustee, if so requested in
writing by: (x) the Class A Insurer, or (y) if a Class A Insurer Default has
occurred and is continuing the Majority Noteholders, shall declare the entire
principal balance of the Class A Notes, all interest accrued and unpaid thereon
and all other amounts payable under this Indenture and the other Basic Documents
to be immediately due and payable.
(b) If an Indenture Event of Default occurs and the Class
A Notes have been accelerated, the Indenture Trustee may exercise any of the
remedies specified in Section 5.4(a). Payments in accordance with Section 5.2(a)
hereof following acceleration of the Class A Notes shall be applied by the
Indenture Trustee:
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FIRST: (x) pro rata, to the Servicer or the Backup Servicer,
the Servicing Fee and any indemnification amounts owed to the Backup
Servicer, and to the Trust Collateral Agent, the Indenture Trustee and
the Owner Trustee, their related accrued and unpaid fees,
indemnification amounts and expenses and (y) to any successor Servicer,
any unpaid Transition Expenses which may be due to it pursuant to the
terms of the Sale and Servicing Agreement;
SECOND: to the Class A Insurer, the Premium due pursuant to
the Insurance Agreement;
THIRD: to Class A Noteholders for amounts due and unpaid on
the Class A Notes for interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Class A
Notes for interest;
FOURTH: to Class A Noteholders for amounts due and unpaid on
the Class A Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Class A Notes for principal until the Class A Note Balance has been
reduced to zero; and
FIFTH: to the Class A Insurer, the Class A Insurer
Reimbursement Obligations.
(c) At any time after declaration of acceleration of
maturity has been made in accordance with Section 5.2(a) hereof 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 Control Party
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 of and interest on
all Class A Notes and all other amounts that would then be due
hereunder or upon such Class A Notes if the Indenture Event of
Default giving rise to such acceleration had not occurred,
which funds shall be deposited into the Note Distribution
Account;
(B) all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel, which funds shall be deposited into the
Collection Account; and
(C) all sums paid or advanced by or due to the
Class A Insurer and its Premium, which funds shall be paid to
the Class A Insurer; and
(ii) all Indenture Events of Default, other than
the nonpayment of the interest on or the principal of the Class A Notes
that has become due solely by such acceleration, have been cured or
waived as provided in Section 5.12.
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No such rescission shall affect any subsequent default or
impair any right consequent thereto.
(d) In the event the Class A Notes have been accelerated
in accordance with Section 5.2(a) hereof, the Class A Insurer shall have the
right, but not the obligation, to make payments under the Class A Note Policy,
or otherwise, of principal and interest due on the Class A Notes, in whole or in
part, on any date or dates following such acceleration, as the Class A Insurer,
in its sole discretion, may elect.
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee.
(a) The Issuer hereby irrevocably and unconditionally
appoints the Indenture Trustee as the true and lawful attorney-in-fact of the
Issuer, with full power of substitution, to execute, acknowledge and deliver any
notice, document, certificate, paper, pleading or instrument and to do in the
name of the Indenture Trustee as well as in the name, place and stead of the
Issuer such acts, things and deeds for or on behalf of and in the name of the
Issuer under this Indenture (including specifically under Section 5.4) and under
the Basic Documents which the Issuer could or might do or which may be
necessary, desirable or convenient in the Indenture Trustee's sole discretion to
effect the purposes contemplated hereunder and under the Basic Documents and,
without limitation, following the occurrence of an Indenture Event of Default,
acting at the instruction or with the consent of the Control Party, in
accordance with the terms of Article V hereof, exercise full right, power and
authority to take, or defer from taking, any and all acts with respect to the
administration, maintenance or disposition of the Trust Property.
(b) Notwithstanding anything to the contrary contained in
this Indenture (including, without limitation, Sections 5.4(a), 5.12, 5.13 and
5.16), the Indenture Trustee, prior to the Class A Termination Date, may with
the prior written consent of the Class A Insurer or shall, at the direction of
the Class A Insurer, and thereafter may at its discretion, proceed to protect
and enforce its rights and the rights of the Class A Noteholders and the Class A
Insurer by such appropriate proceedings as the Indenture Trustee or the Class A
Insurer shall deem most effective to protect and enforce any such rights,
whether for specific performance of any covenant or agreement in this Indenture
or in aid of the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Indenture Trustee by
this Indenture or by law.
(c) In case there shall be pending, relative to the
Issuer or any other obligor upon the Class A Notes or any Person having or
claiming an ownership interest in the Trust Property, proceedings under Title 11
of the United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Issuer or its property or
such other obligor or Person, or in case of any other comparable judicial
proceedings relative to the Issuer or other obligor upon the Class A Notes, or
to the creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Class A 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
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be entitled and empowered, at the expense of the Seller 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 Class A Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all
expenses and liabilities incurred, and all advances made, by the
Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence, bad faith or willful misconduct), the Class A
Insurer and of the Class A Noteholders allowed in such proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Holders of Class A Notes in any
election of a trustee, a standby trustee or person performing similar
functions in any such proceedings;
(iii) to collect and receive any moneys or other
property payable or deliverable on any such claims and to distribute
all amounts received with respect to the claims of the Class A
Noteholders, the Class A Insurer and 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, the Class A Insurer or the Holders
of Class A Notes allowed in any judicial proceedings relative to the
Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Class A 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 Class A
Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence,
bad faith or willful misconduct.
(d) Nothing herein contained shall be deemed to authorize
the Indenture Trustee to authorize or consent to or vote for or accept or adopt
on behalf of any Class A Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Class A Notes or the rights of any
Holder thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any Class A 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 Class A Notes, may be enforced by the
Indenture Trustee without the possession of any of the Class A 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
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in its own name as trustee of an express trust, and any recovery of judgment,
subject to the payment of the expenses, disbursements and compensation of the
Indenture Trustee, each predecessor Indenture Trustee and their respective
agents and attorneys, shall be for the ratable benefit of the Holders of the
Class A Notes and the Class A Insurer.
(f) In any proceedings brought by the Indenture Trustee
(and also any proceedings involving the interpretation of any provision of this
Indenture), the Indenture Trustee shall be held to represent all the Holders of
the Class A Notes, and it shall not be necessary to make any Class A Noteholder
a party to any such proceedings.
SECTION 5.4. Remedies.
(a) If an Indenture Event of Default shall have occurred
and be continuing, the Control Party, or the Indenture Trustee at the written
direction of the Control Party, may do any one or more of the following:
(i) institute Proceedings in its own name and as
trustee of an express trust for the collection of all amounts then
payable to the Class A Insurer or on the Class A Notes or under this
Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and any
other obligor upon such Class A Notes moneys adjudged due;
(ii) institute Proceedings from time to time for
the complete or partial foreclosure of this Indenture with respect to
the Trust Property;
(iii) exercise any remedies of a secured party
under the UCC and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee, the Holders
of the Class A Notes and the Class A Insurer; and
(iv) direct the Indenture Trustee to sell the
Trust Property or any portion thereof or rights or interest therein, at
one or more public or private sales called and conducted in any manner
permitted by law; provided, however, that the Control Party may not
direct the Indenture Trustee to sell or otherwise liquidate the Trust
Property following an Indenture Event of Default unless:
(A) if the Class A Insurer is the Control Party,
the Class A Insurer may not direct the Indenture Trustee to
sell or otherwise liquidate the Trust Property following an
Indenture Event of Default unless the proceeds of such sale or
liquidation distributable to the Class A Noteholders are
sufficient to discharge in full all amounts then due and
unpaid upon the Class A Notes for principal and interest due
thereon;
(B) if the Majority Holders are the Control
Party, the Indenture Trustee, if so directed by the Majority
Holders, may not sell or otherwise liquidate the Trust
Property following an Indenture Event of Default unless:
(I) such Indenture Event of Default is
of the type described in Section 5.1(iv) or (v),
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(II) such Indenture Event of Default is
of the type described in any other clause of Section
5.1 and the Class A Noteholders consent thereto in
writing, or
(III) either (i) the proceeds of such
sale or liquidation would be in an amount sufficient
to discharge in full all amounts then due and unpaid
upon such Class A Notes for principal and interest or
(ii) the Indenture Trustee determines that the Trust
Property will not continue to provide sufficient
funds for the payment of principal of and interest on
the Class A Notes as they would have become due if
they had not been declared due and payable (it being
understood that for purposes of making such a
determination, the Indenture Trustee may conclusively
rely on an independent auditor);
provided, however, that, subject to Section 6.1, the Indenture Trustee shall
have the right to decline to follow any such direction if it, being advised by
counsel, determines that the action so directed may not lawfully be taken, or if
it, in good faith shall, by a Responsible Officer, determine that the
proceedings so directed would be illegal or subject it to personal liability.
(b) If the Indenture Trustee sells all or a portion of
the Trust Property, following an Indenture Event of Default, the Trust
Collateral Agent shall give Credit Acceptance at least ten (10) days' prior
notice of such sale, and Credit Acceptance may, but is not required to, make a
bid for the portion, or all, of the Trust Property being sold by the Indenture
Trustee.
SECTION 5.5. Optional Preservation of the Trust Property.
If the Class A Notes have been declared to be due and payable under Section 5.2
following an Indenture Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee may,
with the prior written consent of the Control Party, but need not unless
directed in writing by the Control Party, maintain possession of the Trust
Property which is in its possession and elect to direct the Trust Collateral
Agent to maintain possession of the Trust Property which is in the possession of
the Trust Collateral Agent. It is the desire of the parties hereto and the Class
A Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Class A Notes, and the Control Party shall take
such desire into account when determining whether or not to direct the Indenture
Trustee or the Trust Collateral Agent, as applicable, to maintain possession of
the Trust Property. In determining whether to direct the Indenture Trustee or
the Trust Collateral Agent, as applicable, to obtain possession of the Trust
Property, the Control Party may, but need not maintain and conclusively rely
upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Property for such purpose.
SECTION 5.6. [Reserved].
SECTION 5.7. Limitation of Suits.
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Subject to Section 5.8 and Section 6.8, no Holder of any Class A 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 Indenture Event of
Default;
(ii) (A) the Indenture Event of Default arises
from the Seller's or the Servicer's failure to remit payments under the
Sale and Servicing Agreement when due or (B) the Majority Noteholders
shall have made written request to the Indenture Trustee to institute
such proceeding in respect of such Indenture Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the
Indenture Trustee indemnity reasonably satisfactory to it against the
costs, expenses and liabilities to be incurred in complying with such
request;
(iv) the Indenture Trustee for 30 days after its
receipt of such notice, request and offer of indemnity has failed to
institute such proceedings;
(v) no direction inconsistent with such written
request has been given to the Indenture Trustee during such 30-day
period; and
(vi) the Class A Insurer has given its prior
written consent.
it being understood and intended that no one or more Holders of Class A Notes
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of all
Class A Noteholders.
In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Holders of
Class A Notes, each representing less than a majority of the Outstanding Amount
of the Class A Notes, the Indenture Trustee in its sole discretion may determine
what action, if any, shall be taken, notwithstanding any other provisions of
this Indenture.
SECTION 5.8. Unconditional Rights of Noteholders To Receive
Principal and Interest.
Notwithstanding any other provisions in this Indenture, the Holder of any Class
A Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Class A Note on or
after the respective due dates thereof expressed in such Class A Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
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SECTION 5.9. Restoration of Rights and Remedies.
If the Indenture Trustee, the Class A Insurer or any Class A 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 Class A Insurer or such
Class A Noteholder, then and in every such case the Issuer, the Indenture
Trustee, the Class A Insurer and the Class A Noteholders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee, the Class A Insurer and the Class A Noteholders shall
continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as provided in Section 5.7, no right or remedy herein conferred upon or
reserved to the Indenture Trustee, the Class A Insurer or the Class A
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 Class A Insurer or any Holder
of any Class A Note to exercise any right or remedy accruing upon any Indenture
Default or Indenture Event of Default shall impair any such right or remedy or
constitute a waiver of any such Indenture Default or Indenture Event of Default
or an acquiescence therein. Every right and remedy given by this Article V or by
law to the Indenture Trustee, the Class A Insurer or to the Class A Noteholders
may be exercised from time to time, and as often as may be deemed expedient, by
the Indenture Trustee, the Class A Insurer or by the Class A Noteholders, as the
case may be.
SECTION 5.12. Control by Class A Insurer.
Prior to the Termination Date, and so long as no Class A Insurer Default has
occurred and is continuing, the Class A Insurer 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 Class A Notes or exercising any
trust or power conferred on the Indenture Trustee;
provided, however, that, the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such direction;
and subject to Section 6.1, the Indenture Trustee shall have the right to
decline to follow any direction of the Class A Insurer if the Indenture Trustee
being advised by counsel determines that the action so directed may not lawfully
be taken, or if the Indenture Trustee in good faith shall, by a Responsible
Officer, determine that the proceedings so directed would be illegal or subject
it to personal liability or be unduly prejudicial to the rights of Class A
Noteholders not parties to such direction.
SECTION 5.13. Undertaking for Costs.
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All parties to this Indenture agree, and each Holder of any Class A 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.
SECTION 5.14. Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15. Action on Class A 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 Class
A Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee against the Issuer or by the levy of any execution under such judgment
upon any portion of the Trust Property or upon any of the assets of the Issuer.
SECTION 5.16. Performance and Enforcement of Certain
Obligations.
(a) Promptly following a request from the Indenture
Trustee or, prior to the Class A Termination Date, the Class A Insurer, to do so
and at the Issuer's expense, the Issuer agrees to take all such lawful action as
the Indenture Trustee or the Class A Insurer, as the case may be, may request to
compel or secure the performance and observance by the Seller and the Servicer,
as applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement in accordance with the terms thereof, and
to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee, or
prior to the Class A Termination Date, the Class A Insurer, including the
transmission of notices of default on the part of the Seller or the Servicer
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure performance by the Seller or the Servicer of each of their
obligations under the Sale and Servicing Agreement.
(b) If an Indenture Event of Default has occurred, the
Indenture Trustee may, with the prior written consent of the Class A Insurer or
at the written direction of the Class A Insurer, shall, exercise all rights,
remedies, powers, privileges and claims of the Issuer against
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the Seller or the Servicer under or in connection with the Sale and Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller or the Servicer of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension or waiver under the Sale and Servicing Agreement,
and any right of the Issuer to take such action shall be suspended.
SECTION 5.17. Subrogation. Any and all proceeds of claims paid
by the Class A Insurer under the Class A Note Policy and disbursed by the
Indenture Trustee or the Trust Collateral Agent shall not be considered payment
by the Issuer with respect to the Class A Notes, and shall not discharge the
obligations of the Issuer with respect thereto. The Class A Insurer shall, to
the extent it makes any payment with respect to the Class A Notes, become
subrogated to the rights of the recipients of such payments to the extent of
such payments. Subject to and conditioned upon any payment with respect to the
Class A Notes by or on behalf of the Class A Insurer, each Class A Noteholder
shall be deemed, without further action, to have directed the Indenture Trustee
or the Trust Collateral Agent to assign to the Class A Insurer all rights to the
payment of interest or principal with respect to the Class A Notes which are
then due for payment to the extent of all payments made by the Class A Insurer
and the Class A Insurer may exercise any option, vote, right, power or the like
with respect to the Class A Notes to the extent that it has made payment
pursuant to the Class A Note Policy. To evidence such subrogation, the Note
Registrar shall note the Class A Insurer's rights as subrogee upon the Class A
Note Register upon receipt from the Class A Insurer of proof of payment by the
Class A Insurer of any Class A Interest Distributable Amount or Class A
Principal Distributable Amount.
SECTION 5.18. Preference Claims. (a) In the event that the
Indenture Trustee has received a certified copy of a final, non-appealable order
of the appropriate court that any Insured Payment paid on a Class A Note has
been avoided in whole or in part as a preference payment under applicable
bankruptcy law, the Indenture Trustee shall so notify the Class A Insurer, shall
comply with the provisions of the Class A Note Policy to obtain payment by the
Class A Insurer of such avoided payment, and shall, at the time it provides
notice to the Class A Insurer, comply with the provisions of the Class A Note
Policy to obtain payment by the Class A Insurer, notify Holders of the Class A
Notes by mail that, in the event that any Class A Noteholder's payment is so
recoverable, such Class A Noteholder will be entitled to payment pursuant to the
terms of the Class A Note Policy. The Indenture Trustee shall furnish to the
Class A Insurer at its written request, the requested records it holds in its
possession evidencing the payments of principal of and interest on the Class A
Notes, if any, which have been made by the Indenture Trustee and subsequently
recovered from any Class A Noteholders, and the dates on which such payments
were made. Pursuant to the terms of the Class A Note Policy, the Class A Insurer
will make such payment on behalf of the Class A Noteholder to the receiver,
conservator, debtor-in-possession or trustee in bankruptcy named in the Order
(as defined in the Class A Note Policy) and not to the Indenture Trustee or any
Class A Noteholder directly (unless a Class A Noteholder has previously paid
such payment to the receiver, conservator, debtor-in-possession or trustee in
bankruptcy, in which case the Class A Insurer will make such payment to the
Indenture Trustee for payment, in accordance with the instructions to be
provided by the Class A Insurer, to such Class A Noteholder upon proof of such
payment reasonably satisfactory to the Class A Insurer).
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(b) Each Notice for Payment (as defined in the Class A
Note Policy) shall provide that the Indenture Trustee, on its behalf and on
behalf of the Class A Noteholders, thereby appoints the Class A Insurer as agent
and attorney-in-fact for the Indenture Trustee and each Class A Noteholder in
any legal proceeding with respect to the Class A Notes. The Indenture Trustee
shall promptly notify the Class A Insurer of any proceeding or the institution
of any action (of which a Responsible Officer of the Indenture Trustee has
actual knowledge) seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership, rehabilitation or similar law
(a "Preference Claim") of any payment made with respect to the Class A Notes.
Each Class A Noteholder, by its purchase of a Class A Note, and the Indenture
Trustee hereby agree that so long as a Class A Insurer Default shall not have
occurred and be continuing, the Class A 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 Class A Insurer, but subject to reimbursement as
provided in the Insurance Agreement. In addition, and without limitation of the
foregoing, as set forth in Section 5.17, the Class A Insurer shall be subrogated
to, and each Class A Noteholder and the Indenture Trustee hereby delegate and
assign, to the fullest extent permitted by law, the rights of the Indenture
Trustee and each Class A Noteholder in the conduct of any proceeding with
respect to a Preference Claim, including, without limitation, all rights of any
party to an adversary Proceeding action with respect to any court order issued
in connection with any such Preference Claim.
ARTICLE VI
The Indenture Trustee
SECTION 6.1. Duties of Indenture Trustee.
(a) If an Indenture Event of Default has occurred and is
continuing, the Indenture Trustee shall follow such instructions and directions
as it may receive pursuant to Section 5.2 hereof and use the same degree of care
and skill in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Indenture Event
of Default:
(i) the Indenture Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture and the Basic Documents and no implied covenants or
obligations shall be read into this Indenture or the Basic Documents
against the Indenture Trustee; and
(ii) in the absence of bad faith, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture and the Basic Documents; however, the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform on their face to the requirements
of this Indenture and the Basic Documents.
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(c) The Indenture Trustee may not be relieved from
liability for its own negligent action, its own negligent failure to act or its
own bad faith or willful misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Indenture Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer
of the Indenture Trustee unless it is proved that the Indenture Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable
with respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 5.12.
(d) Money held in trust by the Indenture Trustee need not
be segregated from other funds except to the extent required by law or the terms
of this Indenture.
(e) No provision of this Indenture shall require the
Indenture Trustee to expend or risk its own funds or otherwise incur liability
(financial or otherwise) in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers, if it shall have reasonable grounds
to believe that repayment of such funds or indemnity satisfactory to it against
such risk or liability is not reasonably assured to it.
(f) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Indenture
Trustee shall be subject to the provisions of this Section.
(g) Without limiting the generality of this Section, the
Indenture Trustee shall have no duty (A) to see to any recording, filing or
depositing of this Indenture or any agreement referred to herein or any
financing statement or continuation statement evidencing a security interest in
the Financed Vehicles, or to see to the maintenance of any such recording or
filing or depositing or to any rerecording, refiling or redepositing of any
thereof, (B) to see to any insurance on the Financed Vehicles or Obligors or to
effect or maintain any such insurance, (C) to see to the payment or discharge of
any tax, assessment or other governmental charge or any Lien or encumbrance of
any kind owing with respect to, assessed or levied against any part of the
Trust, (D) to confirm or verify the contents of any reports or certificates
delivered to the Indenture Trustee pursuant to this Indenture or the Sale and
Servicing Agreement believed by the Indenture Trustee to be genuine and to have
been signed or presented by the proper party or parties, or (E) to inspect the
Financed Vehicles at any time or ascertain or inquire as to the performance or
observance of any of the Issuer's, the Seller's or the Servicer's
representations, warranties or covenants or the Servicer's duties and
obligations as Servicer and as custodian of the original Certificates of Title
of the Financed Vehicles under the Sale and Servicing Agreement.
(h) In no event shall JPMorgan Chase Bank, in any of its
capacities hereunder, be deemed to have assumed any duties of the Owner Trustee
under the Delaware Statutory Trust Act, common law, or the Trust Agreement.
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(i) The Indenture Trustee shall, upon reasonable prior
written notice to the Indenture Trustee by the Class A Insurer, permit any
representative of the Class A Insurer, during the Indenture Trustee's normal
business hours, at its offices, to examine all books of account, records,
reports and other papers of the Indenture Trustee relating to the Class A Notes
or the Collateral, to make copies and extracts therefrom and to discuss the
Indenture Trustee's affairs and actions, as such affairs and actions relate to
the Indenture Trustee's duties with respect to the Class A Notes or the
Collateral, with the Indenture Trustee's officers and employees responsible for
carrying out the Indenture Trustee's duties with respect to the Collateral or
the Class A Notes. Any expenses incurred in connection with such examination
shall be payable by the Issuer to the Class A Insurer or the Indenture Trustee,
as applicable, in accordance with Section 5.08(a) of the Sale and Servicing
Agreement.
(j) The Indenture Trustee shall, and agrees that it will
hold any proceeds of any claim under the Class A Note Policy in trust, solely
for the use and benefit of the Class A Noteholders.
SECTION 6.2. Rights of Indenture Trustee.
Except as otherwise provided in Section 6.1:
(a) Before the Indenture Trustee acts or refrains from
acting, it may require an Officer's Certificate and/or an Opinion of Counsel.
The Indenture Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on an Officer's Certificate or Opinion of
Counsel.
(b) The Indenture Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee and shall not be
responsible for the misconduct or negligence of any agent, attorney, custodian
or nominee appointed with due care.
(c) The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers; provided, however, that the Indenture
Trustee's conduct does not constitute willful misconduct, negligence or bad
faith.
(d) The Indenture Trustee shall not be deemed to have
knowledge of an Indenture Event of Default unless a Responsible Officer of the
Indenture Trustee has actual knowledge or has received written notice of such
Indenture Event of Default.
(e) The Indenture Trustee may consult with counsel, and
the written advice or opinion of counsel with respect to legal matters relating
to this Indenture and the Class A Notes shall be full and complete authorization
and protection from liability in respect to any action taken, omitted or
suffered by it hereunder in good faith and in accordance with the written advice
or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to
exercise any of the rights and powers vested in it by this Indenture or the
other Basic Documents, or to institute, conduct or defend any litigation under
this Indenture or in relation to this Indenture, at the
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request, order or direction of any of the Holders of Class A Notes, pursuant to
the provisions of this Indenture, unless it shall have been offered security or
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities that may be incurred therein or thereby; provided, however, that the
Indenture Trustee shall, upon the occurrence of an Indenture Event of Default
(that has not been cured), exercise the rights and powers vested in it by this
Indenture with the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of such
person's own affairs.
(g) Except during the continuance of an Indenture Event
of Default, 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 Class A Insurer; provided, however, that if the payment
within a reasonable time to the Indenture Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require indemnity reasonably satisfactory to the Indenture
Trustee against such cost, expense or liability as a condition to so proceeding;
the reasonable expense of every such examination shall be paid by the requesting
Holders or the instructing party, as the case may be, or, if paid by the
Indenture Trustee, shall be reimbursed by the requesting Holders or the
instructing party, as the case may be, upon demand.
(h) In no event shall the Indenture Trustee be liable for
any indirect, consequential, punitive or special damages, regardless of the form
of action and whether or not any such damages were foreseeable or contemplated.
(i) Delivery of any reports, information and documents to
the Indenture Trustee provided for herein is for informational purposes only
(unless otherwise expressly stated herein) and the Indenture Trustee's receipt
of such shall not constitute constructive knowledge of any information contained
therein or determinable from information contained therein, including the
Issuer's compliance with any of its representations, warranties or covenants
hereunder (as to which the Indenture Trustee is entitled to rely exclusively on
Officers' Certificates).
(j) The Indenture Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties.
(k) In the event the Indenture Trustee is also acting in
the capacity of Paying Agent, transfer agent or Note Registrar, it shall be
afforded all of the rights, protections, immunities and indemnities afforded to
the Indenture Trustee hereunder in each of its capacities hereunder.
(l) In no event shall the Indenture Trustee be liable for
any act or omission on the part of the Issuer, the Seller or the Servicer or any
other Person. The Indenture Trustee shall not be responsible for monitoring or
supervising the Issuer, the Seller or the Servicer.
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SECTION 6.3. Individual Rights of Indenture Trustee.
The Indenture Trustee in its individual or any other capacity may become the
owner or pledgee of Class A Notes and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not Indenture Trustee.
Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the
same with like rights. However, the Indenture Trustee must comply with Section
6.15.
SECTION 6.4. Indenture Trustee's Disclaimer.
The Indenture Trustee shall not be responsible for and makes no representation
as to the validity, sufficiency or adequacy of this Indenture, the Trust
Property or the Class A Notes, shall not be accountable for the Issuer's use of
the proceeds from the Class A Notes, and shall not be responsible for any
statement of the Issuer in the Indenture or in any document issued in connection
with the sale of the Class A Notes or in the Class A Notes other than, the
Indenture Trustee's certificate of authentication.
SECTION 6.5. Notice of Indenture Events of Default.
If an Indenture Event of Default occurs and is continuing and if written notice
of the existence thereof has been delivered to a Responsible Officer of the
Indenture Trustee or a Responsible Officer of the Indenture Trustee has actual
knowledge thereof, the Indenture Trustee shall mail to the Class A Insurer, the
Rating Agency and each Class A Noteholder notice of the Indenture Event of
Default within five (5) Business Days after such knowledge or notice occurs.
SECTION 6.6. Reports by Indenture Trustee to Holders.
The Indenture Trustee shall on behalf of the Issuer deliver to each Class A
Noteholder such information as may be reasonably required to enable such Holder
to prepare its federal and state income tax returns. Such obligation shall be
satisfied if the Indenture Trustee provides such Class A Noteholder a form 1099.
SECTION 6.7. Compensation.
(a) The Issuer shall pay to the Indenture Trustee from
time to time compensation for its services as agreed in writing and in
accordance with Section 5.08(a) of the Sale and Servicing Agreement. The
Indenture Trustee's compensation shall not be limited by any law on compensation
of a trustee of an express trust. The Issuer shall reimburse the Indenture
Trustee for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services,
except any such expense as may be attributable to its willful misconduct,
negligence or bad faith. Such expenses shall include securities transaction
charges relating to the investment of funds (net of investment earnings) on
behalf of the Indenture Trustee or the Trust Collateral Agent on deposit in the
Trust Accounts (except for the Certificate Distribution Account) and the
reasonable compensation and reasonable expenses, disbursements and advances of
the Indenture Trustee's counsel and of all persons not regularly in its employ;
provided, however, that the securities transaction charges referred to above
shall, in the case of certain Eligible Investments selected by the Servicer, be
waived for a particular investment in the event that any amounts are received by
the Trust
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Collateral Agent from a financial institution in connection with the purchase of
such Eligible Investments. The Issuer agrees to indemnify the Indenture Trustee
and Trust Collateral Agent as set forth in Section 6.05 of the Sale and
Servicing Agreement. The Indenture Trustee agrees that its recourse to the
Issuer, the Seller and the Trust Property shall be limited to the right to
receive distributions in accordance with Section 5.08(a) of the Sale and
Servicing Agreement and Article V hereof and shall not be recourse to the assets
of any Class A Noteholder.
(b) The Issuer's payment obligations to the Indenture
Trustee pursuant to this Section shall survive the discharge of this Indenture
and the earlier resignation or removal of the Indenture Trustee. When the
Indenture Trustee incurs expenses after the occurrence of an Indenture Event of
Default specified in Section 5.1(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. Notwithstanding anything else set forth in this
Indenture or the Basic Documents, the Indenture Trustee agrees that the
obligations of the Issuer to the Indenture Trustee hereunder and under the Basic
Documents shall not be recourse to the assets of any Class A Noteholder.
SECTION 6.8. Replacement of Indenture Trustee.
(a) The Indenture Trustee may resign at any time by so
notifying the Issuer and the Class A Insurer in writing at least sixty days
prior and upon the appointment and assumption of its obligations by a successor
Indenture Trustee which shall be acceptable to the Class A Insurer if such
succession occurs prior to the Class A Termination Date.
(b) The Issuer, prior to the Class A Termination Date
with the prior written consent of the Class A Insurer, may remove the Indenture
Trustee by written notice if:
(i) the Indenture Trustee fails to comply with
Section 6.17 hereof;
(ii) a court having jurisdiction in the premises
in respect of the Indenture Trustee in an involuntary case or
proceeding under federal or state banking or bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, shall have entered a
decree or order granting relief or appointing a receiver, liquidator,
assignee, custodian, trustee, conservator, sequestrator (or similar
official) for the Indenture Trustee or for any substantial part of the
Indenture Trustee's property, or ordering the winding-up or liquidation
of the Indenture Trustee's affairs;
(iii) an involuntary case under the federal
bankruptcy laws, as now or hereafter in effect, or another present or
future federal or state bankruptcy, insolvency or similar law is
commenced with respect to the Indenture Trustee and such case is not
dismissed within 60 days;
(iv) the Indenture Trustee commences a voluntary
case under any federal or state banking or bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or consents to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, conservator, sequestrator (or other
similar official) for the Indenture Trustee or for any
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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;
(v) failure to comply with any material covenant
hereunder; or
(vi) the Indenture Trustee otherwise becomes
legally incapable of acting.
(c) The Class A Insurer may remove the Indenture Trustee
for any reason by 30 days' prior written notice.
(d) If the Indenture Trustee resigns or is removed or if
a vacancy exists in the office of Indenture Trustee for any reason (the
Indenture Trustee in such event being referred to herein as the retiring
Indenture Trustee), prior to the Class A Termination Date the Class A Insurer
may appoint a successor Indenture Trustee and if it fails to, the Issuer shall
promptly appoint a successor Indenture Trustee acceptable to the Class A
Insurer. After the Class A Termination Date, the Issuer may appoint a successor
Indenture Trustee without the consent of the Class A Insurer.
A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the retiring Indenture Trustee under this Indenture
subject to satisfaction of the Rating Agency Condition. The successor Indenture
Trustee shall mail a notice of its succession to Class A Noteholders, the Class
A Insurer and the Rating Agency. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor Indenture
Trustee.
If a successor Indenture Trustee that is, prior to the Class A
Termination Date, acceptable to the Class A Insurer does not take office within
60 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee or the Control Party may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee that meets the
eligibility requirements set forth in Section 6.12 hereof.
If the Indenture Trustee fails to comply with Section 6.15,
any Noteholder, prior to the Class A Termination Date with the prior written
consent of the Class A Insurer, may petition any court of competent jurisdiction
for the removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee acceptable to the Class A Insurer.
Any resignation or removal of the Indenture Trustee and
appointment of a successor Indenture Trustee pursuant to any of the provisions
of this Section shall not become effective until acceptance of appointment by
the successor Indenture Trustee acceptable to the Class A Insurer pursuant to
this Section 6.8 and payment of all fees and expenses owed to the outgoing
Indenture Trustee by the Servicer and the Issuer.
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Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Servicer's obligations under Section 6.7 shall
continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9. Successor Indenture Trustee by Merger.
If the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation, provided it meets the eligibility requirements of
Section 6.12, without any further act shall be the successor Indenture Trustee.
The Indenture Trustee shall provide the Rating Agency and the Class A Insurer
written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. The Issuer and the Indenture Trustee do hereby
appoint JPMorgan Chase Bank to act as the initial collateral agent on behalf of
the Indenture Trustee and JPMorgan Chase Bank hereby accepts such appointment.
SECTION 6.11. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.
(a) Notwithstanding any other provisions of this
Indenture, at any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Trust may at the time be located, the
Issuer and the Indenture Trustee acting jointly and at the expense of the
Issuer, prior to the Class A Termination Date with the consent of the Class A
Insurer, shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Class A
Noteholders and the Class A Insurer, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Issuer and the Indenture Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 6.12 and no notice to Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:
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(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,
including acts or omissions of predecessor or successor trustees; and
(iii) the Indenture Trustee may at any time accept
the resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, dissolve, become insolvent, become incapable of
acting, resign or be removed, all of its estates, properties, rights, remedies
and trusts shall vest in and be exercised by the Indenture Trustee, to the
extent permitted by law, without the appointment of a new or successor trustee.
SECTION 6.12. Eligibility.
The Indenture Trustee under this Indenture shall at all times be a corporation
or banking association acceptable to the Class A Insurer having an office in the
same state as the location of the Corporate Trust Office as specified in this
Indenture; organized and doing business under the laws of such state or the
United States of America; authorized under such laws to exercise corporate trust
powers; having a combined capital and surplus of at least $100,000,000; having
long-term unsecured debt obligations which have at least the Required Long-Term
Debt Rating and subject to supervision or examination by federal or state
authorities. If such corporation
- 47 -
shall publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Indenture
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Indenture Trustee shall resign immediately.
SECTION 6.13. Trust Collateral Agent to Follow Indenture
Trustee's Directions.
The Indenture Trustee hereby authorizes the Trust Collateral Agent to take such
action on its behalf, and to exercise such rights, remedies, powers and
privileges hereunder, as the Indenture Trustee may direct and as are
specifically authorized to be exercised by the Trust Collateral Agent by the
terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto.
SECTION 6.14. Representations and Warranties of the Indenture
Trustee.
The Indenture Trustee represents and warrants to the Issuer as follows:
(i) The Indenture Trustee is a banking
corporation, duly organized and validly existing under the laws of New
York and is authorized and licensed to conduct and engage in a banking
and trust business under such laws.
(ii) The Indenture Trustee has full corporate
power, authority, and legal right to execute, deliver, and perform this
Indenture, and has taken all necessary action to authorize the
execution, delivery, and performance by it of this Indenture and the
other Basic Documents to which it is a party.
(iii) Each of this Indenture, and the other Basic
Documents to which it is a party, has been duly executed and delivered
by the Indenture Trustee.
(iv) Each of this Indenture, and the other Basic
Documents to which it is a party, 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.
(v) The execution, delivery and performance of
this Indenture, and each other Basic Document to which it is a party,
by the Indenture Trustee will not constitute a violation, to the best
of the Indenture Trustee's knowledge, with respect to any order or
decree of any court or any order, regulation or demand of any federal,
State, municipal or governmental agency binding on the Indenture
Trustee, which violation might have consequences that would materially
and adversely affect the performance of its duties under this
Indenture.
(vi) The execution, delivery and performance of
this Indenture, and each other Basic Document to which it is a party,
by the Indenture Trustee do not require
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any approval or consent of any Person, do not conflict with the
articles of incorporation or bylaws of the Indenture Trustee.
SECTION 6.15. Waiver of Setoffs. Each of the Indenture Trustee
and the Trust Collateral Agent hereby expressly waives any and all rights of
setoff that the Indenture Trustee or the Trust Collateral Agent may otherwise at
any time have under applicable law with respect to any Trust Account and agrees
that amounts in the Trust Accounts shall at all times be held and applied solely
in accordance with the provisions hereof and the Sale and Servicing Agreement or
under Article V hereunder.
SECTION 6.16. Control by the Class A Insurer. Subject to the
terms of Section 11.21 hereof and the definition of "Control Party," and unless
otherwise specifically set forth herein, the Indenture Trustee and the Trust
Collateral Agent shall comply with notices and instructions given by the Issuer
prior to the Class A Termination Date only if accompanied by the prior written
consent of the Class A Insurer, except that if any Indenture Event of Default
shall have occurred and be continuing, the Indenture Trustee and the Trust
Collateral Agent shall act upon and comply with notices and instructions given
by the Class A Insurer alone in the place and stead of the Issuer.
SECTION 6.17. Disqualification of the Indenture Trustee.
If the Indenture Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act of 1939, as amended, the Indenture Trustee
shall either eliminate such interest or resign to the extent in the manner
provided by and subject to the provisions of this Indenture.
SECTION 6.18. Authorization and Direction.
The Issuer hereby authorizes and directs the Indenture Trustee to execute the
Basic Documents to which it is a party.
SECTION 6.19. Action under the Intercreditor Agreement.
Before taking or omitting to take any action under the Intercreditor Agreement,
the Indenture Trustee may request and shall be entitled to receive direction
from the Control Party with respect to any action required to be taken by it
thereunder. The Indenture Trustee shall not be required to take any action or
omit to take any action in the absence of such consent.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish To Indenture Trustee Names and
Addresses of Noteholders.
The Issuer will furnish or cause to be furnished to the Indenture Trustee (a)
not more than five days after each Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Holders as of such Record Date, (b) at such other times as the Indenture Trustee
may request in writing, within 30 days after receipt by the Issuer
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of any such request, a list of similar form and content as of a date not more
than 10 days prior to the time such list is furnished; provided, however, that
so long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished.
SECTION 7.2. Preservation of Information; Communications to
Noteholders.
The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Indenture Trustee as provided in Section 7.1 and the names
and addresses of Holders received by the Indenture Trustee in its capacity as
Note Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in such Section 7.1 upon receipt of a new list so furnished.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money.
Except as otherwise expressly provided herein, the Indenture Trustee may demand
payment or delivery of, and shall receive and collect, directly and without
intervention or assistance of any fiscal agent or other intermediary, all money
and other property payable to or receivable by the Trust Collateral Agent
pursuant to the Sale and Servicing Agreement. The Indenture Trustee shall apply
all such money received by it, or cause the Trust Collateral Agent to apply all
money received by it as provided in this Indenture and the Sale and Servicing
Agreement. Except as otherwise expressly provided in this Indenture or in the
Sale and Servicing Agreement, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part of the Trust
Property, the Indenture Trustee may at the expense of the Issuer take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings. Any such action
shall be without prejudice to any right to claim an Indenture Default or
Indenture Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
SECTION 8.2. Release of Trust Property.
Subject to the payment of its fees and expenses pursuant to Section 6.7, the
Indenture Trustee may after the Termination Date, and when required by the
provisions of this Indenture shall, and shall cause the Trust Collateral Agent
to execute instruments to release property from the lien of this Indenture, in a
manner and under circumstances that are not inconsistent with the provisions of
this Indenture. No party relying upon an instrument executed by the Indenture
Trustee as provided in this Article VIII shall be bound to ascertain the
Indenture Trustee's authority, inquire into the satisfaction of any conditions
precedent or see to the application of any moneys.
SECTION 8.3. Opinion of Counsel.
The Indenture Trustee and the Class A Insurer shall receive at least seven days'
written notice when requested by the Issuer to take any action pursuant to
Section 8.2, accompanied by copies of any instruments involved, and the
Indenture Trustee and the Class A Insurer shall also require
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as a condition to such action, an Opinion of Counsel in form and substance
satisfactory to the Indenture Trustee, and prior to the Class A Termination
Date, to the Class A Insurer, stating the legal effect of any such action,
outlining the steps required to complete the same, and concluding that all
conditions precedent to the taking of such action have been complied with and
such action will not materially and adversely impair the security for the Class
A Notes or the rights of the Class A Noteholders or the Class A Insurer in
contravention of the provisions of this Indenture; provided, however, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Trust Property. Counsel rendering any such opinion may rely,
without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Class A
Notes but, prior to the Class A Termination Date, with the prior written consent
of the Class A Insurer, and with prior notice to the Rating Agency by the
Issuer, as evidenced to the Indenture Trustee, the Issuer and the Indenture
Trustee, when authorized by an Issuer Order, at any time and from time to time,
may enter into one or more indentures supplemental hereto, in form satisfactory
to the Indenture Trustee, and prior to the Class A Termination Date, the Class A
Insurer, for any of the following purposes; provided, however, if any party to
this Indenture is unable to sign any amendment due to its dissolution, winding
up or comparable circumstances, then the consent of the Noteholders and
Certificate holders representing at least 51% of the total current outstanding
Class A Note Balance and at least 51% of the current total Certificate Interest,
respectively and the consent of the Class A Insurer shall be sufficient to amend
this Agreement without such party's signature:
(i) to correct or amplify the description of any
property at any time subject to the lien of this Indenture, or better
to assure, convey and confirm unto the Indenture Trustee any property
subject or required to be subjected to the lien of this Indenture, or
to subject to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance
with the applicable provisions hereof, of another person to the Issuer,
and the assumption by any such successor of the covenants of the Issuer
herein and in the Class A Notes contained;
(iii) to add to the covenants of the Issuer, for
the benefit of the Holders of the Class A Notes and the Class A
Insurer, 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 Trust Collateral Agent;
(v) to cure any ambiguity, to correct or
supplement any provision herein or in any supplemental indenture which
may be inconsistent with any other provision herein or in any
supplemental indenture or to add any other provisions with
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respect to matters or questions arising under this Indenture or in any
supplemental indenture; provided that such action shall not adversely
affect the interests of the Holders of the Class A Notes; or
(vi) to evidence and provide for the acceptance
of the appointment hereunder by a successor Indenture Trustee with
respect to the Notes and to add to or change any of the provisions of
this Indenture as shall be necessary to facilitate the administration
of the trusts hereunder by more than one Indenture Trustee, pursuant to
the requirements of Article VI.
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 provided that such
action shall not adversely affect the interests of the Holders of the Notes.
(b) The Issuer and the Indenture Trustee, when authorized
by an Issuer Order, may, also without the consent of any of the Holders of the
Class A Notes but, prior to the Class A Termination Date with the prior written
consent of the Class A Insurer, and with prior notice to the Rating Agency by
the Issuer, as evidenced to the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Class A Notes
under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Noteholder.
SECTION 9.2. Supplemental Indentures with Consent of
Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agency and with the consent of the Class A
Insurer, or if a Class A Insurer Default has occurred and is continuing, with
the consent of the Majority Noteholders, enter into an indenture or indentures
supplemental hereto for the purpose of modifying in any manner the rights of the
Holders of the Class A Notes under this Indenture; provided, however, if any
party to this Indenture is unable to sign any amendment due to its dissolution,
winding up or comparable circumstances, then the consent of the Class A
Noteholders and representing at least 51% of the total current outstanding Class
A Note Balance or the consent of the Class A Insurer shall be sufficient to
amend this Agreement without such party's signature; provided further, however,
that, no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Note affected thereby:
(i) change the time of payment of any
installment of principal of or interest on any Class A Note, or reduce
the principal amount thereof, the interest rate thereon or the
Redemption Price with respect thereto, change the provision of this
Indenture relating to the application of collections on, or the
proceeds of the sale of, the Trust Property to payment of principal of
or interest on the Class A Notes;
(ii) impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as
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provided in Article V, to the payment of any such amount due on the
Class A Notes on or after the respective due dates thereof (or, in the
case of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding
Amount of the Class A Notes, the consent of the Holders of which is
required for any such supplemental indenture, or the consent of the
Holders of which is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iv) modify or alter the provisions of the
proviso to the definition of the term "Outstanding Amount";
(v) reduce the percentage of the Outstanding
Amount of the Class A Notes required to direct the Indenture Trustee to
direct the Issuer to sell or liquidate the Trust Property pursuant to
Section 5.4;
(vi) modify any provision of this Section except
to increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the Basic Documents cannot
be modified or waived without the consent of the Holder of each
Outstanding Note affected thereby;
(vii) modify any of the provisions of this
Indenture in such manner as to affect the calculation of the amount of
any payment of interest or principal due on any Note on any
Distribution Date (including the calculation of any of the individual
components of such calculation) or to affect the rights of the Holders
of Class A Notes to the benefit of any provisions for the mandatory
redemption of the Class A Notes contained herein; or
(viii) permit the creation of any Lien ranking
prior to or on a parity with the Lien of this Indenture with respect to
any part of the Trust Property or, except as otherwise permitted or
contemplated herein or in any of the Basic Documents, terminate the
Lien of this Indenture on any property at any time subject hereto or
deprive the Holder of any Note of the security provided by the Lien of
this Indenture.
The Issuer may determine whether or not any Class A Notes
would be affected by any supplemental indenture and any such determination shall
be conclusive upon the Holders of all Class A Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section, the Indenture
Trustee shall mail to the Class A Insurer and the Holders of the Class A Notes
to which such amendment or supplemental indenture relates a notice setting forth
in general terms the substance of such supplemental indenture. Any failure of
the Indenture Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
SECTION 9.3. Execution of Supplemental Indentures.
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In executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Class A Insurer and the Indenture Trustee
shall be entitled to receive, and subject to Sections 6.1 and 6.2, shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and be deemed to be modified and amended in
accordance therewith with respect to the Class A Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Class A Notes shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 9.5. Reference in Class A Notes to Supplemental
Indentures.
Class A Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer or the Indenture Trustee shall so determine, new Class A Notes so
modified as to conform, in the opinion of the Indenture Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
ARTICLE X
Redemption of Notes
SECTION 10.1. Redemption.
(a) The Class A Notes are subject to redemption in whole,
but not in part, at the direction of the Seller or the Servicer pursuant to
Section 10.01(a) of the Sale and Servicing Agreement, on any Distribution Date
on which the Servicer or the Seller exercises its option to redeem the Trust
Property pursuant to Section 10.01(a) of the Sale and Servicing Agreement for a
redemption price equal to the Redemption Price; provided, however, that the
Indenture Trustee on behalf of the Issuer has received funds sufficient to pay
the Redemption Price. The Issuer shall furnish the Class A Insurer and the
Rating Agency notice of such redemption. If the Class A Notes are to be redeemed
pursuant to this Section, the Issuer shall furnish notice of such election to
the Class A Insurer, the Trust Collateral Agent and the Indenture Trustee not
later than 45 days prior to the Redemption Date and promptly upon giving such
notice, the Issuer shall deposit or cause to be deposited with the Indenture
Trustee in the Note Distribution Account the
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Redemption Price of the Class A Notes to be redeemed whereupon all such Class A
Notes shall be due and payable on the Redemption Date, together with other
amounts due and owing at such time under the Basic Documents, upon the
furnishing of a notice complying with Section 10.2 to each Holder of Notes and
the Class A Insurer.
(b) [Reserved]
(c) If amounts are to be paid to Class A Noteholders
pursuant to Section 10.01(a), the Issuer shall, to the extent practicable,
furnish notice of such event to the Indenture Trustee and the Class A Insurer
not later than 45 days prior to the Redemption Date whereupon all such amounts
shall be payable on the Redemption Date.
SECTION 10.2. Form of Redemption Notice.
Notice of redemption under Section 10.1(a) shall be given by the Indenture
Trustee by facsimile or by first-class mail, postage prepaid, transmitted or
mailed prior to the applicable Redemption Date to each Holder of the Class A
Notes, as of the close of business on the Record Date preceding the applicable
Redemption Date, at such Holder's address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to
such Redemption Date is not applicable and that payments shall be made
only upon presentation and surrender of such Class A Notes and the
place where such Class A 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 2.7); and
(iv) that interest on the Class A Notes shall
cease to accrue on the Redemption Date.
Notice of redemption of the Class A 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 Class A
Note shall not impair or affect the validity of the redemption of any other
Note.
SECTION 10.3. Class A Notes Payable on Redemption Date.
The Class A Notes to be redeemed shall, following notice of redemption as
required by Section 10.2 (in the case of redemption pursuant to Section
10.1(a)), 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.
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ARTICLE XI
Miscellaneous
SECTION 11.1. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer or the
Class A Insurer to the Indenture Trustee or the Trust Collateral Agent to take
any action under any provision of this Indenture, the Issuer shall furnish to
the Indenture Trustee, or the Trust Collateral Agent, as the case may be, and to
the Class A Insurer, if such request is made by the Issuer, 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.
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 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
(iii) a statement as to whether, in the opinion of
each such signatory, such condition or covenant has been complied with.
(b) Prior to the deposit of any Collateral or other
property or securities with the Trust Collateral Agent that is to be made the
basis for the release of any property or securities subject to the lien of this
Indenture, the Issuer shall, in addition to any obligation imposed in Section
11.1(a) or elsewhere in this Indenture, furnish to the Indenture Trustee, the
Class A Insurer and the Trust Collateral Agent an Officer's Certificate
certifying or stating the opinion of each person signing such certificate (which
may be based upon a certification of the Seller or the Servicer) as to the fair
value (within 90 days of such deposit) to the Issuer of the Collateral or other
property or securities to be so deposited.
(c) Whenever the Issuer is required to furnish to the
Indenture Trustee, the Class A Insurer and the Trust Collateral Agent an
Officer's Certificate certifying or stating the opinion of any signer thereof as
to the matters described in clause (b) above, the Issuer shall also deliver to
the Indenture Trustee, the Class A Insurer and the Trust Collateral Agent an
Independent Certificate as to the same matters, if the fair value to the Issuer
of the securities to be so deposited and of all other such securities made the
basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (b) above and this clause (c), is 10% or more of
the Outstanding Amount of the Class A Notes, but such a certificate need not be
furnished with respect to any securities so deposited, if the fair value thereof
to the Issuer as set forth in the related Officer's Certificate is less than
$25,000.
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(d) Other than with respect to the release of any
Purchased Loans, whenever any property or securities are to be released from the
Lien of this Indenture, the Issuer shall also furnish to the Trust Collateral
Agent and the Class A Insurer an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value (within 90
days of such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not impair
the security under this Indenture in contravention of the provisions hereof.
(e) Whenever the Issuer is required to furnish to the
Indenture Trustee and the Class A Insurer an Officer's Certificate certifying or
stating the opinion of any signer thereof as to the matters described in clause
(d) above, the Issuer shall also furnish to the Trust Collateral Agent and the
Class A Insurer an Independent Certificate as to the same matters if the fair
value of the property or securities and of all other property other than
Purchased Loans, or securities released from the Lien of this Indenture since
the commencement of the then current calendar year, as set forth in the
certificates required by clause (d) above and this clause (e), equals 10% or
more of the Outstanding Amount of the Notes, but such certificate need not be
furnished in the case of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is less than $25,000.
(f) Notwithstanding Section 2.9 or any other provision of
this Section, the Issuer may, without delivering any Officer's Certificates or
Independent Certificates (A) collect, liquidate, sell or otherwise dispose of
Contracts as and to the extent required by the Basic Documents and (B) instruct
the Trust Collateral Agent to make cash payments out of the Trust Accounts as
and to the extent permitted or required by the Basic Documents.
SECTION 11.2. Form of Documents Delivered to Indenture
Trustee.
In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
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Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever in this Indenture, in connection with any application
or certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to conclusively
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
SECTION 11.3. Acts of Noteholders.
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided by this Indenture to be given
or taken by Class A Noteholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Class A 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 Class A Noteholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 6.1) conclusive in favor of the Indenture Trustee and the Issuer, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any person of
any such instrument or writing may be proved in any customary manner of the
Indenture Trustee.
(c) The ownership of Class A Notes shall be proved by the
Note Register.
(d) Any request, demand, authorization, direction,
notice, consent, waiver or other action by the Holder of any Class A Notes shall
bind the Holder of every Class A 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 Class A Note.
SECTION 11.4. Notices, etc. to Indenture Trustee, Class A
Insurer, Issuer and Rating Agency.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Class A Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:
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(a) The Indenture Trustee by any Class A Noteholder, the
Class A Insurer or by the Issuer shall be sufficient for every purpose hereunder
if personally delivered, delivered by overnight courier, mailed certified mail,
return receipt requested or by telecopy to: JPMorgan Chase Bank, 0 Xxx Xxxx
Xxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, Attention: Institutional Trust
Services/Structured Finance, Telephone: (000) 000-0000, Telecopy: (000) 000-0000
and shall be deemed to have been duly given upon receipt to the Indenture
Trustee at its principal Corporate Trust Office, or
(b) The Issuer by the Indenture Trustee, the Class A
Insurer or by any Class A Noteholder shall be sufficient for every purpose
hereunder if personally delivered, delivered by overnight courier, mailed
certified mail, return receipt requested or by telecopy to: Credit Acceptance
Corporation, Silver Triangle Building, 00000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 0000,
Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxx X. Xxxxxx, Xx., Telephone:
(000) 000-0000 (ext. 884), Telecopy: (000) 000-0000. The Issuer shall promptly
transmit any notice received by it from the Class A Noteholders to the Indenture
Trustee and the Class A Insurer.
(c) Notices required to be given to the Class A Insurer
by the Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, delivered by overnight courier, mailed certified mail,
return receipt requested to the following address: Radian Asset Assurance Inc.,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Risk Officer and
Chief Legal Officer; "Urgent Material Enclosed".
(d) Notices required to be given to the Rating Agency by
the Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, delivered by overnight courier, or mailed certified mail,
return receipt requested to the following address: to Standard & Poor's Rating
Services, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000;
or, in each case, to such other address as shall be designated by written notice
from the applicable notice party to the other parties.
SECTION 11.5. Notices to Noteholders; Waiver.
Where this Indenture provides for notice to Class A 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 Class A
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
Class A Noteholders is given by mail, neither the failure to mail such notice
nor any defect in any notice so mailed to any particular Class A Noteholder
shall affect the sufficiency of such notice with respect to other Noteholders,
and any notice that is mailed in the manner herein provided shall conclusively
be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
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In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agency,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Indenture
Default or Indenture Event of Default.
SECTION 11.6. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Class A Notes to
the contrary, the Issuer may enter into any agreement with any Holder of a Class
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, provided that such methods are
reasonable and consented to by the Indenture Trustee (which consent shall not be
unreasonably withheld). The Issuer will furnish to the Indenture Trustee and the
Class A Insurer a copy of each such agreement and the Indenture Trustee will
cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.8. Successors and Assigns.
All covenants and agreements in this Indenture and the Class A 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.
SECTION 11.9. Separability.
In case any provision in this Indenture or in the Class A Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.10. Benefits of Indenture.
Nothing in this Indenture or in the Class A Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the Class A Noteholders, and any other party secured hereunder,
and any other person with an Ownership interest in any part of the Trust
Property, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
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SECTION 11.11. Legal Holidays.
In any case where the date on which any payment is due shall not be a Business
Day, then (notwithstanding any other provision of the Class A 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 an
which nominally due, and no interest shall accrue for the period from and after
any such nominal date.
SECTION 11.12. GOVERNING LAW.
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
SECTION 11.13. Counterparts.
This Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.14. Recording of Indenture.
If this Indenture is subject to recording in any appropriate public recording
offices, such recording is to be effected by the Issuer and at its expense
accompanied by an Opinion of Counsel (which may be counsel to the Indenture
Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to
the effect that such recording is necessary either for the protection of the
Class A Noteholders or any other person secured hereunder or for the enforcement
of any right or remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.15. Trust Obligation.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Seller, the Owner Trustee, the Trust Collateral
Agent or the Indenture Trustee on the Class A Notes or under this Indenture or
any certificate or other writing delivered in connection herewith or therewith,
against: (i) the Seller, the Indenture Trustee or the Trust Collateral Agent or
the Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Issuer, the Seller, the Servicer, the
Indenture Trustee or the Trust Collateral Agent or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer or of any
successor or assign of the Seller, the Servicer, the Indenture Trustee or the
Trust Collateral Agent or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee or the Trust Collateral Agent and the Owner Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or
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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 Article VI, VII and VIII of the Trust Agreement.
SECTION 11.16. No Petition.
The Indenture Trustee, by entering into this Indenture, and each Class A
Noteholder, by accepting a Class A Note, hereby covenant and agree that they
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law.
SECTION 11.17. Inspection.
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee or the Class A Insurer, during the
Issuer's normal business hours, to examine all the books of account, records,
reports, and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law or in
connection with litigation, and except to the extent that the Indenture Trustee
may reasonably determine that such disclosure is consistent with its obligations
hereunder and under the Basic Documents.
SECTION 11.18. Maximum Interest Payable.
The Issuer, the Indenture Trustee and the Holders of the Class A Notes
specifically intend and agree to limit contractually the amount of interest
payable under this Indenture, the Class A Notes and all other instruments and
agreements related hereto and thereto to the maximum amount of interest lawfully
permitted to be charged under applicable law. Therefore, none of the terms of
this Indenture, the Class A Notes or any instrument pertaining to or relating to
or executed in connection with this Indenture or the Class A Notes shall ever be
construed to create a contract to pay interest (or amounts deemed to be interest
under applicable law) at a rate in excess of the maximum rate permitted to be
charged under applicable law, and neither the Issuer nor any other party liable
or to become liable hereunder, under the Class A Notes or under any other
instruments and agreements related hereto and thereto shall ever be liable for
interest in excess of the amount determined at such maximum rate, and the
provisions of this Section shall control over all other provisions of this
Indenture, the Class A Notes or any other instrument pertaining to or relating
to the transactions herein or therein contemplated. If any amount of interest
taken or received by the Indenture Trustee or any Holder of a Class A Note shall
be in excess of said maximum amount of interest which, under applicable law,
could lawfully have been collected by the Indenture Trustee or such Holder
incident to such transactions, then such excess shall be deemed to have been the
result of a mathematical error by all parties hereto and shall be automatically
applied to the reduction of the principal amount owing under the Class A Notes
or if such excessive interest exceeds the unpaid principal balance of the Class
A Notes,
- 62 -
such excess shall be refunded promptly by the Person receiving such amount to
the party paying such amount. All amounts paid or agreed to be paid in
connection with such transactions which would under applicable law be deemed
"interest" shall, to the extent permitted by such applicable law, be amortized,
prorated, allocated and spread throughout the stated term of the Indenture.
"Applicable law" as used in this paragraph means that law in effect from time to
time which permits the charging and collection of the highest permissible
lawful, nonusurious rate of interest on the transactions herein contemplated
including laws of each State which may be held to be applicable and of the
United States of America, and "maximum rate" as used in this paragraph means,
with respect to each of the Class A Notes, the maximum lawful, nonusurious rates
of interest (if any) which under applicable law may be charged to the Issuer
from time to time with respect to such Class A Notes.
SECTION 11.19. No Legal Title in Holders.
No Holder of a Class 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 Class A Note in and to the Trust
Property or hereunder shall operate to terminate this Indenture or the trusts
hereunder or entitle any successor or transferee of such Holder to an accounting
or to the transfer to it of legal title to any part of the Trust Property.
SECTION 11.20. Third Party Beneficiary.
The parties hereto acknowledge and agree that the Class A Insurer and the Class
A Noteholders are express third party beneficiaries of this Indenture.
SECTION 11.21. Class A Insurer Control Rights. Notwithstanding
anything herein or in any other Basic Document to the contrary, during the
continuance of a Class A Insurer Default, any voting, consent or control rights
granted to the Class A Insurer hereunder or under any other Basic Document shall
be suspended and shall instead be made by the Majority Noteholders; provided,
however, that upon the cure of such Class A Insurer Default, such voting,
consent and control rights shall be reinstated.
[THIS SPACE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers, hereunto
duly authorized, all as of the day and year first above written.
CREDIT ACCEPTANCE AUTO DEALER LOAN
TRUST 2003-1
By: Wachovia Bank of Delaware, National Association,
not in its individual capacity but solely as
Owner Trustee,
By: /S/ Xxxxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
JPMORGAN CHASE BANK, not in its individual capacity
but solely as Indenture Trustee,
By: /S/ Xxxxxx X. Xxxxxxx
------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Trust Officer
[Indenture Signature Page]
- 64 -
EXHIBIT A
FORM OF CLASS A NOTE
SEE ATTACHED PAGES FOR CERTAIN DEFINITIONS
UNLESS THIS CLASS A 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 CLASS A NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CLASS A NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
APPLICABLE SECURITIES LAWS OF ANY STATE. ACCORDINGLY, TRANSFER OF THIS CLASS A
NOTE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE INDENTURE. BY ITS
ACCEPTANCE OF THIS CLASS A NOTE THE HOLDER OF THIS CLASS A NOTE IS DEEMED TO
REPRESENT TO THE SELLER AND THE INDENTURE TRUSTEE THAT IT IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS
ACQUIRING THIS NOTE FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR
AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED
INSTITUTIONAL BUYERS).
NO SALE, PLEDGE OR OTHER TRANSFER OF A CLASS A NOTE SHALL BE
MADE UNLESS SUCH SALE, PLEDGE OR OTHER TRANSFER IS (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE CLASS A
NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO
A PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (C) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AND IN EACH OF THE
FOREGOING CASES, IS MADE IN ACCORDANCE WITH SAID ACT AND THE APPLICABLE STATE
SECURITIES AND BLUE SKY LAWS. THE INDENTURE TRUSTEE MAY REQUIRE AN OPINION OF
COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY TRANSFER OF THE NOTES
PURSUANT TO CLAUSES (A) OR (C) ABOVE. ALL OPINIONS OF COUNSEL
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REQUIRED IN CONNECTION WITH ANY TRANSFER SHALL BE BY COUNSEL REASONABLY
ACCEPTABLE TO THE INDENTURE TRUSTEE.
EACH TRANSFEREE OF THIS CLASS A NOTE IS DEEMED TO REPRESENT
AND WARRANT THAT, WITH RESPECT TO THE SOURCE OF FUNDS TO BE USED BY SUCH
TRANSFEREE TO ACQUIRE THIS CLASS A NOTE (THE "SOURCE") EITHER (A) SUCH SOURCE IS
NOT AN "EMPLOYEE BENEFIT PLAN" (WITHIN THE MEANING OF SECTION 3(3) OF ERISA), A
"PLAN" (WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE CODE) OR A PLAN THAT IS
SUBJECT TO ANY SUBSTANTIALLY SIMILAR PROVISION OF ANY FEDERAL, STATE OR LOCAL
LAW, OR A PERSON USING ASSETS OF ANY SUCH PLAN, OR (B) THE ACQUISITION AND
HOLDING OF THIS CLASS A NOTE BY SUCH SOURCE WILL NOT CONSTITUTE OR RESULT IN A
NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA, SECTION 4975 OF THE
CODE OR ANY SUBSTANTIALLY SIMILAR PROVISION OF ANY FEDERAL, STATE OR LOCAL LAW.
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REGISTERED
CUSIP 00000XXX0
No. A-1
THE PRINCIPAL OF THIS CLASS A NOTE IS PAYABLE IN INSTALLMENTS
AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS
A NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2003-1
2.77% CLASS A ASSET BACKED NOTES
Credit Acceptance Auto Dealer Loan Trust 2003-1, a statutory
trust organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to CEDE
& CO., or registered assigns, the principal sum of ONE HUNDRED MILLION DOLLARS
($100,000,000) payable on each Distribution Date in an amount equal to the
aggregate amount, if any, payable from the Note Distribution Account in respect
of principal on the Class A Notes pursuant to Section 3.1 of the Indenture and
Section 5.09 of the Sale and Servicing Agreement until the Class A Note Balance
is reduced to zero; provided, however, that the entire unpaid principal amount
of this Class A Note shall be due and payable on June 16, 2008 (the "Stated
Final Maturity"). The Issuer will pay interest on this Class A Note at the rate
per annum shown above (the "Class A Note Rate"), which shall be due and payable
on each Distribution Date until the principal of this Class A Note is paid, on
the principal amount of this Class A Note outstanding on the last day of the
immediately preceding Collection Period. Interest on this Class A Note will
accrue for each Distribution Date from the preceding Distribution Date to (or,
in the case of the initial Distribution Date, from the Closing Date) but
excluding the current Distribution Date. Interest will be computed on the basis
of a 360-day year and twelve thirty day months.
This Class A Note is one of a duly authorized issue of notes
of the Issuer, designated as its 2.77% Class A Asset Backed Notes (the "Class A
Notes"), issued under an Indenture dated as of June 27, 2003 (such indenture, as
supplemented or amended, is herein called the "Indenture"), between the Issuer
and JPMorgan Chase Bank, as indenture trustee (the "Indenture Trustee", which
term includes any successor Indenture Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights and obligations thereunder of the Issuer, the
Indenture Trustee and the Holders of the Class A Notes. The Class A Notes are
subject to all terms of the Indenture and the Sale and Servicing Agreement. All
terms used in this Class A Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture, as so supplemented or amended.
The Class A Notes are and will be equally and ratably secured
by the collateral pledged as security therefor as provided in the Indenture.
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On each Distribution Date, Holders of the Class A Notes will
be entitled to the Class A Interest Distributable Amount and its Class A
Principal Distributable Amount in accordance with the terms of the Indenture.
"Distribution Date" means the fifteenth day of each month, or, if any such date
is not a Business Day, the next succeeding Business Day, commencing July 15,
2003.
The Class A Notes are entitled to the benefits of the Class A
Note Insurance Policy issued by Radian Asset Assurance Inc. (the "Class A
Insurer"). The Class A Insurer is obligated to pay in accordance with the terms
of the Class A Note Insurance Policy as described in the "Statement of
Insurance" attached hereto.
As described above, the entire unpaid principal amount of this
Class A Note shall be due and payable on the earlier of the Stated Final
Maturity and the Redemption Date, if any, pursuant to Section 10.1(a) of the
Indenture. Notwithstanding the foregoing, the entire unpaid principal amount of
the Class A Notes shall be due and payable if an Indenture Event of Default
shall have occurred and be continuing, and the Class A Notes have been
accelerated subject to the terms of the Indenture.
All principal payments on the Class A Notes shall be made pro
rata to the Class A Noteholders entitled thereto.
Upon written notice from the Issuer, the Indenture Trustee
shall notify the Person in whose name a Class A Note is registered at the close
of business on the Record Date preceding the Distribution Date on which the
Issuer expects that the final installment of principal of and interest on such
Class A Note will be paid. Such notice shall be mailed or transmitted by
facsimile prior to such final Distribution Date and shall specify that such
final installment will be payable only upon presentation and surrender of such
Class A Note and shall specify the place where such Class A Note may be
presented and surrendered for payment of such installment. Notices in connection
with purchases of Class A Notes shall be mailed to Class A Noteholders as
provided in the Indenture.
Distributions required to be made to Class A Noteholders on
any Distribution Date shall be made to each Class A Noteholder of record on the
preceding Record Date either by wire transfer, in immediately available funds,
to the account of such Holder at a bank or other entity having appropriate
facilities therefor, if (i) such Class A Noteholder shall have provided to the
Note Registrar appropriate written instructions at least ten (10) Business Days
prior to such Distribution Date and such Holder's Notes in the aggregate
evidence a denomination of not less than $100,000 and integral multiples of
$1,000 or (ii) such Class A Noteholder is the Seller, or an Affiliate thereof,
or, if not, by check mailed to such Class A Noteholder at the address of such
holder appearing in the Note Register.
The Issuer shall pay interest on overdue installments of
interest on the Class A Notes at the Class A Note Rate to the extent lawful.
As provided in the Indenture, the Class A Notes may be
redeemed pursuant to Section 10.1(a) of the Indenture, in whole, but not in
part, at the option of the Servicer or the
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Seller, on any Distribution Date on or after the date on which the Class A Note
Balance is less than or equal to 15% of the initial Class A Note Balance.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Class A Note may be
registered on the Note Register upon surrender of this Class A Note for
registration of transfer at the office or agency designated by the Issuer
pursuant to the Indenture, (i) accompanied by a written instrument of transfer
in form satisfactory to the Indenture Trustee and the Note Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
(ii) accompanied by such other documents as the Indenture Trustee may require,
and thereupon one or more new Class A Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Class A Note, but 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 such transfer or exchange of the Class A
Notes.
Each Noteholder, by acceptance of a Class A Note covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Trust Collateral Agent under the Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Seller, the Servicer, the Indenture Trustee or the Trust
Collateral Agent or the Owner Trustee, (ii) any owner of a beneficial interest
in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Issuer, the Seller, the Servicer, the Indenture Trustee or
the Trust Collateral Agent or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Seller, the Servicer, the
Owner Trustee or the Indenture Trustee or the Trust Collateral Agent or of any
successor or assign of the Seller, the Servicer, the Indenture Trustee, the
Owner Trustee in its individual capacity, or the Trust Collateral Agent except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee or the Trust Collateral Agent and the Owner Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Class A Noteholder, by acceptance of a Class A Note,
covenants and agrees that by accepting the benefits of the Indenture that such
Class A Noteholder will not at any time institute against the Seller or the
Issuer or join in any institution against the Seller or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings, under any United States federal or state bankruptcy or
similar law in connection with any obligations relating to the Class A Notes,
the Indenture or the Basic Documents. In addition, each Class A Noteholder, by
acceptance of a Class A Note, agrees to treat the Class A Notes as indebtedness
of the Issuer.
Prior to the due presentment for registration of transfer of
this Class A Note, the Issuer, the Indenture Trustee, the Class A Insurer and
the Note Registrar and any agent of the Issuer, the Indenture Trustee, the Class
A Insurer and the Note Registrar may treat the Person in whose name this Class A
Note (as of the day of determination or as of such other date as may be
specified in the Indenture) is registered as the owner hereof for all purposes,
whether or not this
A-5
Class A Note be overdue, and neither the Issuer, the Indenture Trustee, the Note
Registrar, the Class A Insurer nor any such agent shall be bound by notice to
the contrary.
The term "Issuer" as used in this Class A Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee, the Class A Insurer and the Holders of Class A Notes under the
Indenture.
The Class A Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Class A Note and the Indenture shall be construed in
accordance with the laws of the State of New York, without reference to its
conflict of law provisions, and the obligations, rights and remedies of the
parties hereunder and thereunder shall be determined in accordance with such
laws.
No reference herein to the Indenture and no provision of this
Class A Note or of the Indenture shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Class A Note at the times, place, and rate, and in the coin or
currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Wachovia
Bank of Delaware, National Association in its individual capacity, any owner of
a beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Class A Note or the Indenture, it being expressly understood that said
covenants, obligations and indemnifications have been made by the Owner Trustee
for the sole purposes of binding the interests of the Owner Trustee in the
assets of the Issuer. The Holder of this Class A Note by the acceptance hereof
agrees that except as expressly provided in the Indenture or the Basic
Documents, in the case of an Indenture Event of Default, the Holder shall have
no claim against any of the foregoing for any deficiency, loss or claim
therefrom; provided, however, that nothing contained herein shall be taken to
prevent recourse to, and enforcement against, the assets of the Issuer for any
and all liabilities, obligations and undertakings contained in the Indenture or
in this Class A Note.
The principal of and interest on this Class A Note are payable
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts. All payments
made by the Issuer with respect to this Class A Note shall be applied first to
interest due and payable on this Class A Note as provided above and then to the
unpaid principal of this Class A Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Class A Note shall not be entitled to any benefit under the Indenture
referred to on the reverse hereof, or be valid or obligatory for any purpose.
A-6
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer as of the date
set forth below.
CREDIT ACCEPTANCE AUTO DEALER LOAN
TRUST 2003-1
By: WACHOVIA BANK OF DELAWARE,
NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Owner Trustee under the Trust
Agreement
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
A-7
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes designated above and referred
to in the within-mentioned Indenture.
Date: JPMORGAN CHASE BANK, not in its individual
capacity but solely as Indenture Trustee,
by: ___________________________________
Authorized Signatory
A-8
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 Class A Note and all rights thereunder, and hereby irrevocably
constitutes and appoints, attorney, to transfer said Class A Note on the books
kept for registration thereof, with full power of substitution in the premises.
A-9
STATEMENT OF INSURANCE
A-10
SCHEDULE A
to Indenture
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained
in the Indenture, the Issuer hereby represents, warrants, and covenants to the
Trust, the Trust Collateral Agent and the Indenture Trustee as follows on the
Closing Date and on each Distribution Date on which the Trust purchases Dealer
Loans, in each case only with respect to the Collateral pledged to the Indenture
Trustee on the Closing Date or the relevant Distribution Date:
GENERAL
1. The Indenture creates a valid and continuing security interest (as
defined in UCC Section 9-102) in the Collateral in favor of the Indenture
Trustee, which security interest is prior to all other Liens, and is enforceable
as such as against creditors of and purchasers from and assignees of the Trust.
2. Each Contract constitutes "tangible chattel paper" or a "payment
intangible", within the meaning of UCC Section 9-102. Each Dealer Loan
constitutes a "payment intangible" or a "general intangible" within the meaning
of UCC Section 9-102.
3. Each Dealer Agreement constitutes either a "general intangible" or
"tangible chattel paper" within the meaning of UCC Section 9-102.
4. The Trust has taken or will take all steps necessary actions with
respect to the Dealer Loans to perfect its security interest in the Dealer Loans
and in the property securing the Dealer Loans.
CREATION
1. The Trust owns and has good and marketable title to the Collateral,
free and clear of any Lien, claim or encumbrance of any Person, excepting only
liens for taxes, assessments or similar governmental charges or levies incurred
in the ordinary course of business that are not yet due and payable or as to
which any applicable grace period shall not have expired, or that are being
contested in good faith by proper proceedings and for which adequate reserves
have been established, but only so long as foreclosure with respect to such a
lien is not imminent and the use and value of the property to which the Lien
attaches is not impaired during the pendency of such proceeding.
PERFECTION
1. The Trust has caused the filing of all appropriate financing statements
in the proper filing office in the appropriate jurisdictions under applicable
law in order to perfect the security interest in the Collateral granted to the
Indenture Trustee under the Indenture.
A-1
2. With respect to Collateral that constitutes tangible chattel paper,
such tangible chattel paper is in the possession of the Servicer, in its
capacity as custodian for the Trust and the Trust Collateral Agent, and the
Trust Collateral Agent has received a written acknowledgment from the Servicer,
in its capacity as custodian, that it is holding such tangible chattel paper
solely on its behalf and for the benefit of the Trust Collateral Agent, the
Seller, the Trust and the relevant Dealer(s). All financing statements filed or
to be filed against the Trust in favor of the Indenture Trustee in connection
with this Indenture describing the Trust Property contain a statement to the
following effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the Secured
Party."
PRIORITY
1. Other than the security interest granted to the Indenture Trustee
pursuant to this Indenture, the Trust has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Trust Property. None of
the Originator, the Servicer nor the Seller has authorized the filing of, or is
aware of any financing statements against either the Seller, the Originator or
the Trust that includes a description of the Collateral and proceeds related
thereto other than any financing statement: (i) relating to the sale of the
Originator Property by the Originator to the Seller under the Contribution
Agreement; (ii) relating to the security interest granted to the Trust under the
Sale and Servicing Agreement; (iii) relating to the security interest granted to
the Indenture Trustee under the Indenture; or (iv) that has been terminated or
amended to reflect a release of the Collateral.
2. Neither the Seller, the Originator nor the Trust is aware of any
judgment, ERISA or tax lien filings against either the Seller, the Originator or
the Trust.
3. None of the tangible chattel paper that constitutes or evidences the
Contracts or the Dealer Agreements has any marks or notations indicating that it
has been pledged, assigned or otherwise conveyed to any Person other than the
Originator, the Servicer, the Seller, the Trust, a collection agent or the
Indenture Trustee.
SURVIVAL OF PERFECTION REPRESENTATIONS
1. Notwithstanding any other provision of the Agreement, the Contribution
Agreement, the Indenture or any other Basic Document, the Perfection
Representations, Warranties and Covenants contained in this Schedule shall be
continuing, and remain in full force and effect (notwithstanding any replacement
of the Servicer or termination of Servicer's rights to act as such) until such
time as all obligations under the Sale and Servicing Agreement, Contribution
Agreement and the Indenture have been finally and fully paid and performed.
NO WAIVER
1. The parties hereto: (i) shall not, without obtaining a confirmation of
the then-current rating of the Class A Notes (without giving effect to the Class
A Note Insurance Policy), waive any of the Perfection Representations,
Warranties or Covenants; (ii) shall provide the Rating Agency with prompt
written notice of any breach of the Perfection Representations, Warranties or
Covenants, and shall not, without obtaining a confirmation of the then-current
rating of the Class A Notes (without giving effect to the Class A Note Insurance
Policy) as determined after any adjustment or withdrawal of the ratings
following notice of such breach) waive a breach of any of the Perfection
Representations, Warranties or Covenants.
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