Exhibit 4.1
================================================================================
FIRST SECURITY AUTO OWNER TRUST 20__-__
Class A-1 ____% Asset Backed Notes
Class A-2 _____% Asset Backed Notes
Class A-3 ____% Asset Backed Notes
Class A-4 ____% Asset Backed Notes
Class B ____% Asset Backed Notes
___________________________________________
INDENTURE
Dated as of __________, 20__
___________________________________________
_______________________________________
as Indenture Trustee
================================================================================
CROSS-REFERENCE TABLE
================================================================================
TIA Indenture
Section Section
------- -------
--------------------------------------------------------------------------------
310(a)(1) ....................................... 6.11
(a)(2) ....................................... 6.11
(a)(3) ....................................... 6.10
(a)(4) ....................................... 6.14
(b) ....................................... 6.11
(c) ....................................... N.A.
311(a) ....................................... 6.12
(b) ....................................... 6.12
(c) ....................................... N.A.
312(a) ....................................... 7.1, 7.2
(b) ....................................... 7.2
(c) ....................................... 7.2
313(a) ....................................... 7.4(a), 7.4(b)
(b)(1) ....................................... 7.4(a)
(b)(2) ....................................... 7.4(a)
(c) ....................................... 7.4(a)
(d) ....................................... 7.4(a)
314(a) ....................................... 7.3(a), 3.9
(b) ....................................... 3.6
(c)(1) ....................................... 2.2, 2.9, 4.1, 11.1(a)
(c)(2) ....................................... 11.1(a)
(c)(3) ....................................... 11.1(a)
(d) ....................................... 2.9, 11.1(b)
(e) ....................................... 11.1(a)
(f) ....................................... 11.1(a)
315(a) ....................................... 6.1(b)
(b) ....................................... 6.5
(c) ....................................... 6.1(a)
(d) ....................................... 6.2, 6.1(c)
(e) ....................................... 5.13
316(a)last
sentence ....................................... 1.1
(a)(1)(A) ....................................... 5.11
(a)(1)(B) ....................................... 5.12
(a)(2) ....................................... Omitted
316(b), (c) ....................................... 5.7
317(a)(1) ....................................... 5.3(b)
(a)(2) ....................................... 5.3(d)
(b) ....................................... 3.3
318(a) ....................................... 11.7
N.A. means Not Applicable.
================================================================================
Note: This cross reference table shall not, for any purpose, be deemed to be
part of this Indenture.
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE........................................... 2
SECTION 1.1 Definitions............................................................ 2
SECTION 1.2 Incorporation by Reference of Trust Indenture Act...................... 2
ARTICLE II
THE NOTES............................................................................ 3
SECTION 2.1 Form................................................................... 3
SECTION 2.2 Execution, Authentication and Delivery................................. 3
SECTION 2.3 Temporary Notes........................................................ 4
SECTION 2.4 Registration; Registration of Transfer and Exchange of Notes........... 4
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes............................. 6
SECTION 2.6 Persons Deemed Noteholders............................................. 6
SECTION 2.7 Payment of Principal and Interest...................................... 7
SECTION 2.8 Cancellation of Notes.................................................. 8
SECTION 2.9 Release of Collateral.................................................. 8
SECTION 2.10 Book-Entry Notes..................................................... 9
SECTION 2.11 Notices to Clearing Agency........................................... 9
SECTION 2.12 Definitive Notes..................................................... 10
SECTION 2.13 Seller as Noteholder................................................. 10
SECTION 2.14 Tax Treatment........................................................ 10
SECTION 2.15 Special Terms Applicable to Subsequent Transfers of
Certain Notes........................................................ 10
ARTICLE III
COVENANTS............................................................................ 11
SECTION 3.1 Payment of Principal and Interest...................................... 11
SECTION 3.2 Maintenance of Agency Office11
SECTION 3.3 Money for Payments To Be Held in Trust................................. 12
SECTION 3.4 Existence.............................................................. 13
SECTION 3.5 Protection of Trust Estate; Acknowledgment of Pledge................... 13
SECTION 3.6 Opinions as to Trust Estate............................................ 14
SECTION 3.7 Performance of Obligations; Servicing of Receivables................... 15
SECTION 3.8 Negative Covenants..................................................... 16
SECTION 3.9 Annual Statement as to Compliance...................................... 16
SECTION 3.10 Consolidation, Merger, etc., of Issuer; Disposition of
Trust Assets......................................................... 17
ii
SECTION 3.11 Successor or Transferee............................................... 19
SECTION 3.12 No Other Business..................................................... 19
SECTION 3.13 No Borrowing.......................................................... 19
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities..................... 19
SECTION 3.15 Servicer's Obligations................................................ 20
SECTION 3.16 Capital Expenditures.................................................. 20
SECTION 3.17 Restricted Payments................................................... 20
SECTION 3.18 Notice of Events of Default........................................... 20
SECTION 3.19 Further Instruments and Acts.......................................... 20
SECTION 3.20 Indenture Trustee's Assignment of Purchased Receivables............... 20
SECTION 3.21 Representations and Warranties by the Issuer to the
Indenture Trustee..................................................... 21
ARTICLE IV
SATISFACTION AND DISCHARGE.......................................................... 21
SECTION 4.1 Satisfaction and Discharge of Indenture............................... 21
SECTION 4.2 Application of Trust Money............................................ 22
SECTION 4.3 Repayment of Monies Held by Paying Agent.............................. 23
ARTICLE V
DEFAULT AND REMEDIES................................................................ 23
SECTION 5.1 Events of Default..................................................... 23
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.................... 24
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee............................................................... 25
SECTION 5.4 Remedies; Priorities.................................................. 27
SECTION 5.5 Optional Preservation of the Trust Estate............................. 28
SECTION 5.6 Limitation of Suits................................................... 28
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal
and Interest.......................................................... 29
SECTION 5.8 Restoration of Rights and Remedies.................................... 29
SECTION 5.9 Rights and Remedies Cumulative........................................ 29
SECTION 5.10 Delay or Omission Not a Waiver...................................... 29
SECTION 5.11 Control by Noteholders.............................................. 30
SECTION 5.12 Waiver of Past Defaults............................................. 30
SECTION 5.13 Undertaking for Costs............................................... 31
SECTION 5.14 Waiver of Stay or Extension Laws.................................... 31
SECTION 5.15 Action on Notes..................................................... 31
SECTION 5.16 Performance and Enforcement of Certain Obligations.................. 32
ARTICLE VI
THE INDENTURE TRUSTEE............................................................... 32
iii
SECTION 6.1 Duties of Indenture Trustee.......................................... 32
SECTION 6.2 Rights of Indenture Trustee.......................................... 34
SECTION 6.3 Indenture Trustee May Own Notes...................................... 35
SECTION 6.4 Indenture Trustee's Disclaimer....................................... 35
SECTION 6.5 Notice of Defaults................................................... 36
SECTION 6.6 Reports by Indenture Trustee to Holders.............................. 36
SECTION 6.7 Compensation; Indemnity.............................................. 36
SECTION 6.8 Replacement of Indenture Trustee..................................... 36
SECTION 6.9 Merger or Consolidation of Indenture Trustee......................... 37
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.................................................. 38
SECTION 6.11 Eligibility; Disqualification...................................... 39
SECTION 6.12 Preferential Collection of Claims Against Issuer................... 40
SECTION 6.13 Representations and Warranties of Indenture Trustee................ 40
SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession
of Notes........................................................... 41
SECTION 6.15 Suit for Enforcement............................................... 41
SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee.................. 41
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS..................................................... 42
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders....................................................... 42
SECTION 7.2 Preservation of Information, Communications to Noteholders........... 42
SECTION 7.3 Reports by Issuer.................................................... 42
SECTION 7.4 Reports by Indenture Trustee......................................... 43
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES............................................... 43
SECTION 8.1 Collection of Money.................................................. 43
SECTION 8.2 Accounts; Payments................................................... 44
SECTION 8.3 General Provisions Regarding Accounts................................ 45
SECTION 8.4 Release of Trust Estate.............................................. 46
SECTION 8.5 Opinion of Counsel................................................... 46
ARTICLE IX
SUPPLEMENTAL INDENTURES............................................................ 47
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders............... 47
SECTION 9.2 Supplemental Indentures With Consent of Noteholders.................. 48
SECTION 9.3 Execution of Supplemental Indentures................................. 49
SECTION 9.4 Effect of Supplemental Indenture..................................... 49
iv
SECTION 9.5 Conformity with Trust Indenture Act................................... 50
SECTION 9.6 Reference in Notes to Supplemental Indentures......................... 50
ARTICLE X
REDEMPTION OF NOTES................................................................. 50
SECTION 10.1 Redemption............................................................ 50
SECTION 10.2 Form of Redemption Notice............................................. 51
SECTION 10.3 Notes Payable on Redemption Date...................................... 51
ARTICLE XI
MISCELLANEOUS....................................................................... 51
SECTION 11.1 Compliance Certificates and Opinions, etc............................. 51
SECTION 11.2 Form of Documents Delivered to Indenture Trustee...................... 53
SECTION 11.3 Acts of Noteholders................................................... 54
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating Agencies....... 54
SECTION 11.5 Notices to Noteholders; Waiver........................................ 55
SECTION 11.6 Alternate Payment and Notice Provisions............................... 55
SECTION 11.7 Conflict with Trust Indenture Act..................................... 55
SECTION 11.8 Effect of Headings and Table of Contents.............................. 56
SECTION 11.9 Successors and Assigns................................................ 56
SECTION 11.10 Separability.......................................................... 56
SECTION 11.11 Benefits of Indenture................................................. 56
SECTION 11.12 Legal Holidays........................................................ 56
SECTION 11.13 Governing Law......................................................... 56
SECTION 11.14 Counterparts.......................................................... 56
SECTION 11.15 Recording of Indenture................................................ 56
SECTION 11.16 No Recourse........................................................... 57
SECTION 11.17 No Petition........................................................... 57
SECTION 11.18 Inspection............................................................ 57
SECTION 11.19 Voting Rights......................................................... 58
Exhibit A - Locations of Schedule of Receivables
Exhibit B - Form of Class A Asset Backed Note
Exhibit C - Form of Class B Asset Backed Note
Exhibit D - Form of Note Depository Agreement
Exhibit E - Officer's Issuance Certificate
v
INDENTURE, dated as of __________, 20__ between FIRST SECURITY AUTO
OWNER TRUST 20__-__, a Delaware business trust (the "Issuer"), and
____________________, a ____________________, as trustee and not in its
individual capacity (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Notes and (only to the
extent expressly provided herein) the Certificateholders:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Noteholders and (only to the extent expressly
provided herein) the Certificate holders, all of the Issuer's right, title and
interest in, to and under (a) the Receivables listed on the Schedule of
-----------
Receivables which is on file at the locations listed on Exhibit A hereto and all
----------- ---------
monies due or received under the Receivables after the close of business of the
Servicer on the Cutoff Date; (b) the Accounts and such amounts as from time to
time may be held therein (including the Account Property related thereto); (c)
the security interests in the Financed Vehicles; (d) the Seller's rights (if
any) to receive proceeds from claims on Insurance Policies covering the Financed
Vehicles or the Obligors; (e) the Seller's rights relating to the Receivables
under the Dealer Agreements and Dealer Assignments; (f) the Seller's rights to
all documents and information contained in the Receivable Files; (g) the rights
of the Trust under this Agreement (including the right to receive payments
under the circumstances specified herein from the Reserve Account); and (h) all
proceeds (within the meaning of the Relevant UCC) of the foregoing
(collectively, the "Collateral").
The foregoing Grant is made in trust to secure (a) first, the payment
of principal of and interest on, and any other amounts owing in respect of, the
Class A Notes, equally and ratably without prejudice, priority or distinction,
and (b) second, the payment of principal of and interest on, and any other
amounts owing in respect of, the Class B Notes, equally and ratably without
prejudice, priority or distinction, and to secure compliance with the provisions
of this Indenture, all as provided in this Indenture. This Indenture
constitutes a security agreement under the UCC.
The foregoing Grant includes all rights, powers and options (but none
of the Obligations, if any) of the Issuer under any agreement or instrument
included in the Collateral, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of the Receivables included in the Collateral and all other monies
payable under the Collateral, 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 under or with respect to the Collateral.
The Indenture Trustee, as trustee on behalf of the Noteholders (only
to the extent expressly provided herein), acknowledges such Grant and accepts
the trusts under this Indenture in accordance with the provisions of this
Indenture.
1
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions. Certain capitalized terms used in this
-----------
Indenture shall have the respective meanings assigned them in Section 1.1 of the
Sale and Servicing Agreement of even date herewith among the Issuer and Seller
(as it may be amended, supplemented or modified from time to time, the "Sale and
Servicing Agreement"). All references herein to "the Indenture" or "this
Indenture" are to this Indenture as it may be amended, supplemented or modified
from time to time, the exhibits hereto and the capitalized terms used herein
which are defined in such Section 1.1 of the Sale and Servicing Agreement. All
references herein to Articles, Sections, subsections and exhibits are to
Articles, Sections, subsections and exhibits contained in or attached to this
Indenture unless otherwise specified. All terms defined in this Indenture shall
have the defined meanings when used in any certificate, notice, Note or other
document made or delivered pursuant hereto unless otherwise defined therein.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" means the Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by a Commission rule
have the respective meanings assigned to them by such definitions.
2
ARTICLE II
THE NOTES
SECTION 2.1 Form.
----
(a) Each of the Class A Notes and Class B Notes, with the Indenture
Trustee's certificate of authentication, shall be substantially in the form set
forth in Exhibit B and Exhibit C, respectively, with such appropriate
--------- ---------
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and each such class may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may, consistently herewith, be determined by the officers executing such
Notes, as evidenced by their execution of the Notes. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
(b) The Definitive Notes shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such Notes,
as evidenced by their execution of such Notes.
(c) Each Note shall be dated the date of its authentication. The
terms of each class of Notes as provided for on the face of each Note in Exhibit
-------
B and Exhibit C hereto are part of the terms of this Indenture.
- ---------
SECTION 2.2 Execution, Authentication and Delivery.
--------------------------------------
(a) Each Note shall be dated the date of its authentication, and shall
be issuable as a registered Note in the minimum denomination of $1,000 (other
than the Class B Notes) and in integral multiples thereof.
(b) The Notes shall be executed on behalf of the Issuer by any of its
Authorized Officers. The signature of any such Authorized Officer on the Notes
may be manual or facsimile.
(c) 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
office prior to the authentication and delivery of such Notes or did not hold
such office at the date of such Notes.
(d) The Indenture Trustee shall upon Issuer Order authenticate and
deliver to or upon the order of the Issuer, the Notes for original issue in
aggregate principal amount of $_______________, comprised of (i) Class A-1 Notes
in the aggregate principal amount of $_______________, (ii) Class A-2 Notes in
the aggregate principal amount of $_______________, (iii) Class A-3 Notes in the
aggregate principal amount of $_______________, (iv) Class A-4 Notes in the
aggregate principal amount of $_______________ and (v) Class B Notes in the
aggregate
3
principal amount of $_______________. The aggregate principal amount of all
Notes outstanding at any time may not exceed $______________ except as provided
in Section 2.5.
(e) No Notes shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form set forth, in the case
of the Class A Notes, in Exhibit B, and in the case of the Class B Notes, in
---------
Exhibit C, executed by the Indenture Trustee by the manual signature of one of
---------
its authorized signatories, and such certificate upon any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.3 Temporary Notes.
---------------
(a) Pending the preparation of Definitive Notes, if any, the Issuer
may execute, and upon receipt of an Issuer Order the Indenture Trustee shall
authenticate and deliver, such Temporary Notes which are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations as are
consistent with the terms of this Indenture as the officers executing such Notes
may determine, as evidenced by their execution of such Notes.
(b) If Temporary Notes are issued, the Issuer shall cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the Temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the Temporary Notes at the Agency Office of the Issuer to be
maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more Temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so delivered in exchange, the Temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Notes.
SECTION 2.4 Registration; Registration of Transfer and Exchange of
------------------------------------------------------
Notes.
-----
(a) The Issuer shall cause to be kept the Note Register, comprising
separate registers for each class of Notes, in which, subject to such reasonable
regulations as the Issuer may prescribe, the Issuer shall provide for the
registration of the Notes and the registration of transfers and exchanges of the
Notes. The Indenture Trustee shall initially be the Note Registrar for the
purpose of registering the Notes and transfers of the Notes as herein provided.
Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor Note Registrar or, if it elects not to make such an appointment,
assume the duties of the Note Registrar.
(b) If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register. The Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof. The Indenture Trustee shall have the right to
conclusively rely upon a
4
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Noteholders and the principal
amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note at the
Corporate Trust Office of the Indenture Trustee or the Agency Office of the
Issuer (and following the delivery, in the former case, of such Notes to the
Issuer by the Indenture Trustee), the Issuer shall execute, the Indenture
Trustee shall authenticate and the Noteholder shall obtain from the Indenture
Trustee, in the name of the designated transferee or transferees, one or more
new Notes in any authorized denominations, of a like aggregate principal amount.
(d) At the option of the Noteholder, Notes may be exchanged for other
Notes of the same class in any authorized denominations, of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at the Corporate
Trust Office of the Indenture Trustee or the Agency Office of the Issuer (and
following the delivery, in the former case, of such Notes to the Issuer by the
Indenture Trustee), the Issuer shall execute, and the Indenture Trustee shall
authenticate and the Noteholder shall obtain from the Indenture Trustee, the
Notes which the Noteholder making the exchange is entitled to receive.
(e) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of transfer
or exchange shall be duly endorsed by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee and the Note
Registrar, duly executed by the Holder thereof or such Holder's attorney duly
authorized in writing, with such signature guaranteed by a commercial bank or
trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office of the Indenture Trustee is
located, or by a member firm of a national securities exchange, and such other
documents as the Indenture Trustee may require.
(g) No service charge shall be made to a Holder for any registration
of transfer or exchange of Notes, but the Issuer or Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Sections 2.3 or 9.6 not
involving any transfer.
(h) The preceding provisions of this Section 2.4 notwithstanding, the
Issuer shall not be required to transfer or make exchanges, and the Note
Registrar need not register transfers or exchanges, of Notes that: (i) have
been selected for redemption pursuant to Article X, if applicable; or (ii) are
due for repayment in full within 15 days of submission to the Corporate Trust
Office of the Indenture Trustee or the Agency Office.
5
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes.
------------------------------------------
(a) If (i) any mutilated Note is surrendered to the Indenture Trustee,
or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Indenture Trustee such security or indemnity as may be required by it to hold
the Issuer and the Indenture Trustee harmless, then, in the absence of notice to
the Issuer, the Note Registrar or the Indenture Trustee that such Note has been
acquired by a bona fide purchaser, the Issuer shall execute and upon the
Issuer's written request the Indenture Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note of a like class and aggregate principal amount;
provided, however, that if any such destroyed, lost or stolen Note, but not a
-------- -------
mutilated Note, shall have become or within seven days shall be due and payable
in full, or shall have been called for redemption, instead of issuing a
replacement Note, the Issuer may make payment to the Holder of such destroyed,
lost or stolen Note when so due or payable or upon the Redemption Date, if
applicable, without surrender thereof.
(b) If, after the delivery of a replacement Note or payment in respect
of a destroyed, lost or stolen Note pursuant to subsection (a), any bona fide
purchaser of the original Note in lieu of which such replacement Note was issued
presents for payment such original Note, the Issuer and the Indenture Trustee
shall be entitled to recover such replacement Note (or such payment) from (i)
any Person to whom it was delivered, (ii) the Person taking such replacement
Note from the Person to whom such replacement Note was delivered or (iii) any
assignee of such Person, except any bona fide purchaser, and the Issuer and the
Indenture Trustee shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
(c) In connection with the issuance of any replacement Note under this
Section 2.5, the Issuer may require the payment by the Holder of such Note of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other reasonable expenses (including all fees and
expenses of the Indenture Trustee) connected therewith.
(d) Any duplicate Note issued pursuant to this Section 2.5 in
replacement for any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be found at any time or be
enforced by any Person, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.
(e) The provisions of this Section 2.5 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Noteholders. Prior to due presentment
--------------------------
for registration of transfer of any Note, the Issuer, the Indenture Trustee and
any agent of the Issuer or the Indenture Trustee may treat the Person in whose
name any Note is registered (as of the day of determination) as the Noteholder
for the purpose of receiving payments of principal of and interest
6
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and neither the Issuer, the Indenture Trustee nor any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest.
---------------------------------
(a) Interest on the Class A-1 Notes will be computed on the actual
number of days elapsed from the most recent Distribution Date (or the Closing
Date, in the case of the initial Distribution Date) to but excluding the then
current Distribution Date divided by 360 at the Interest Rate for the Class A-1
Notes, and such interest shall be payable on each Distribution Date, in
accordance with the priorities set forth in Section 8.2(c). Interest on the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class B Notes
will be computed on the basis of a 360-day year of twelve 30-day months (or, in
the case of the initial Distribution Date, 13/30ths of a month) at the
applicable Interest Rate for such class, and such interest shall be payable on
each Distribution Date, in accordance with the priorities set forth in Section
8.2(c). Any installment of interest payable on any Note shall be punctually
paid or duly provided for by a deposit by or at the written direction of the
Issuer or the Servicer into the Note Distribution Account before each
Distribution Date for payment to Noteholders on the related Distribution Date
and shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the applicable Record Date, by check mailed
first-class, postage prepaid to such Person's address as it appears on the Note
Register on such Record Date; provided, however, that, unless and until
-------- -------
Definitive Notes have been issued pursuant to Section 2.12, with respect to
Notes registered on the applicable Record Date in the name of the Note
Depository (initially, Cede & Co.), payment shall be made by wire transfer in
immediately available funds to the account designated by the Note Depository;
and provided further that, so long as any Class B Notes are held by the Seller
or any of its Affiliates, payment on such Class B Notes shall be made by wire
transfer in immediately available funds to the account designated by the Seller.
(b) Until the earlier of (i) the occurrence of an Event of Default and
a declaration in accordance with Section 5.2(a) that the Notes have become
immediately due and payable and (ii) any Notes remaining unpaid on or after the
applicable Final Scheduled Distribution Date, the principal of each class of
Notes shall be payable in full on the Final Scheduled Distribution Date for such
class and, to the extent of funds available therefor, in installments on the
Distribution Dates (if any) preceding the Final Scheduled Distribution Date for
such class, in the amounts and in accordance with the priorities set forth in
Section 8.2(c)(ii) or (iii), as applicable. All principal payments on each
class of Notes shall be made pro rata to the Noteholders of such class entitled
thereto. Any installment of principal payable on any Note shall be punctually
paid or duly provided for by a deposit by or at the written direction of the
Issuer into the Note Distribution Account prior to the applicable Distribution
Date and shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the applicable Record Date, by check mailed
first-class, postage prepaid to such Person's address as it appears on the Note
Register on such Record Date; provided, however, that, unless and until
-------- -------
Definitive Notes have been issued pursuant to Section 2.12, with respect to
Notes registered on the Record Date in the name of the Note Depository, payment
shall be made by wire transfer in immediately available funds to the account
designated by the Note
7
Depository and provided further that, so long as any of the Class B Notes are
held by the Seller or any of its Affiliates, payment on such Class B Notes shall
be made by wire transfer in immediately available funds to the account
designated by the Seller, except, in each case, for: (i) the final installment
of principal on any Note; and (ii) the Redemption Price for the Notes redeemed
pursuant to Section 10.1, which, in each case, shall be payable as provided
herein. The funds represented by any such checks in respect of interest or
principal returned undelivered shall be held in accordance with Section 3.3.
(c) [Reserved.]
(d) From and after the occurrence of an Event of Default and a
declaration in accordance with Section 5.2(a) that the Notes have become
immediately due and payable, principal on the Notes shall be payable as provided
in Section 8.2(c)(iv).
(e) With respect to any Distribution Date on which the final
installment of principal and interest on a class of Notes is to be paid, the
Servicer shall notify the Indenture Trustee of such payment on the related
Determination Date. The Indenture Trustee shall notify each Noteholder of such
class of record as of the Record Date for such Distribution Date of the fact
that the final installment of principal of and interest on such Note is to be
paid on such Distribution Date. Such notice shall be sent (i) on such Record
Date by facsimile, if Book-Entry Notes are outstanding; or (ii) not later than
five Business Days after such Record Date in accordance with Section 11.5(a) if
Definitive Notes are outstanding, and shall specify that such final installment
shall be payable only upon presentation and surrender of such Note and shall
specify the place where such Note may be presented and surrendered for payment
of such installment and the manner in which such payment shall be made. Notices
in connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.2.
SECTION 2.8 Cancellation of Notes. All Notes surrendered for
---------------------
payment, redemption, exchange or registration of transfer shall, if surrendered
to any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly canceled by the Indenture Trustee. The Issuer may
at any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of
or in exchange for any Notes canceled as provided in this Section 2.8, except as
expressly permitted by this Indenture. All canceled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be returned to it; provided, however, that such Issuer
-------- -------
Order is timely and the Notes have not been previously disposed of by the
Indenture Trustee. The Indenture Trustee shall certify to the Issuer, upon
written request, that surrendered Notes have been duly canceled and retained or
destroyed, as the case may be.
SECTION 2.9 Release of Collateral. The Indenture Trustee shall
---------------------
release property from the lien of this Indenture, other than as permitted by
Sections 3.20, 8.2, 8.4 and 11.1, only upon receipt of an Issuer Request
accompanied by an Officers' Certificate, an Opinion of Counsel (to the
8
extent required by the TIA) and Independent Certificates in accordance with TIA
(S)(S)314(c) and 314(d)(1).
SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance,
----------------
shall be issued in the form of a typewritten Note or Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust Company, the initial
Clearing Agency by or on behalf of the Issuer. Such Note or Notes shall be
registered on the Note Register in the name of the Note Depository (initially,
Cede & Co.), and no Note Owner shall receive a Definitive Note representing such
Note Owner's interest in such Note, except as provided in Section 2.12. Unless
and until Definitive Notes have been issued to the Note Owners pursuant to
Section 2.12:
(a) the provisions of this Section 2.10 shall be in full force
and effect;
(b) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole holder
of the Notes and shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this Section 2.10
conflict with any other provisions of this Indenture, the provisions of
this Section 2.10 shall control;
(d) the rights of the Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants and unless and until Definitive Notes are
issued pursuant to Section 2.12, the initial Clearing Agency shall make
book-entry transfers between the Clearing Agency Participants and receive
and transmit payments of principal of and interest on the Notes to such
Clearing Agency Participants, pursuant to the Note Depository Agreement;
and
(e) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes evidencing
a specified percentage of in principal amount of such Notes then
Outstanding, the Clearing Agency shall be deemed to represent such
percentage only to the extent that it has (i) received written instructions
to such effect from Note Owners and/or Clearing Agency Participants owning
or representing, respectively, such required percentage of the beneficial
interest in the Notes and (ii) has delivered such instructions to the
Indenture Trustee.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
--------------------------
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders to the Clearing Agency and shall
have no other obligation to the Note Owners.
9
SECTION 2.12 Definitive Notes. If (i) the Administrator advises the
----------------
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Notes and
the Administrator is unable to locate a qualified successor; (ii) the
Administrator, at its option, advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency; or (iii)
after the occurrence of an Event of Default or an Event of Servicing
Termination, with respect to such Securities, the holders representing at least
a majority of the Outstanding Principal Amount of the related Notes advise the
Indenture Trustee and Clearing Agency in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of the Note Owners, then the Clearing Agency shall notify all Note Owners and
the Indenture Trustee of the occurrence of any such event and of the
availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Note or Notes representing
the Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be fully protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the Holders of the Definitive Notes as Noteholders.
SECTION 2.13 Seller as Noteholder. The Seller in its individual or
--------------------
any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Issuer or its affiliates with the same rights it would have if it
were not the Seller.
SECTION 2.14 Tax Treatment. The Issuer in entering into this
-------------
Indenture, and the Noteholders and the Note Owners, by acquiring any Note or
interest therein, (i) express their intention that the Notes qualify under
applicable tax law as indebtedness secured by the Collateral, and (ii) unless
otherwise required by appropriate taxing authorities, agree to treat the Notes
as indebtedness secured by the Collateral for the purpose of federal income
taxes, state and local income and franchise taxes, and any other taxes imposed
upon, measured by or based upon gross or net income.
SECTION 2.15 Special Terms Applicable to Subsequent Transfers of
---------------------------------------------------
Certain Notes.
-------------
(a) At the time of issuance, a Class B Note shall be issued to and
retained by the Seller in the aggregate principal amount of $______ and shall
not be registered under the Securities Act, or the securities laws of any other
jurisdiction. Consequently, such Class B Note (the "Unregistered Note") shall
not be transferable other than pursuant to (i) an exemption from the
registration requirements of the Securities Act and satisfaction of certain
other provisions specified herein or (ii) registration under the Securities Act.
Unless registered under the Securities Act, no sale, pledge or other transfer of
the Unregistered Note (or interest therein) may be made by any Person unless
either (i) such sale, pledge or other transfer is made to a "qualified
institutional buyer" (as defined under Rule 144A under the Securities Act) or to
an institutional investor that is an "accredited investor" (as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and,
10
if so requested by the Seller or the Indenture Trustee, such proposed transferee
executes and delivers a certificate, substantially in the form attached hereto
as Exhibit E or otherwise in form and substance satisfactory to the Indenture
---------
Trustee and the Seller, or (ii) such sale, pledge or other transfer is otherwise
made in a transaction exempt from the registration requirements of the
Securities Act, in which case, unless the Seller otherwise directs, (A) the
Indenture Trustee shall require that both the prospective transferor and the
prospective transferee certify to the Indenture Trustee and the Seller in
writing the facts surrounding such transfer, which certification shall be in
form and substance satisfactory to the Indenture Trustee and the Seller, and (B)
the Indenture Trustee shall require a written Opinion of Counsel (which shall
not be at the expense of the Seller, the Servicer or the Indenture Trustee)
satisfactory to the Seller and the Indenture Trustee to the effect that such
transfer will not violate the Securities Act. Neither the Seller nor the
Indenture Trustee shall be obligated hereunder to register the Unregistered Note
under the Securities Act, qualify the Unregistered Note under the securities
laws of any state or provide registration rights to any purchaser or holder
thereof.
(b) The Unregistered Note shall be issued in the form of a Definitive
Note and Sections 2.10, 2.11 and 2.12 of this Indenture shall not apply thereto.
(c) The Unregistered Note shall bear legends to the effect set forth
in subsection (a).
ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer shall
---------------------------------
duly and punctually pay the principal of and interest on the Notes in accordance
with the terms of the Notes and this Indenture. On each Distribution Date and
on the Redemption Date (if applicable), the Indenture Trustee shall distribute
amounts on deposit in the Note Distribution Account to the Noteholders in
accordance with Sections 2.7 and 8.2, less amounts properly withheld under the
Code by any Person from a payment to any Noteholder of interest and/or
principal. Any amounts so withheld shall be considered as having been paid by
the Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.2 Maintenance of Agency Office. As long as any of the
----------------------------
Notes remains outstanding, the Issuer shall maintain in the Borough of
Manhattan, the City of New York, an office (the "Agency Office"), being an
office or agency where Notes may be surrendered to the Issuer for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer shall give prompt written notice to the Indenture Trustee
of the location, and of any change in the location, of the Agency Office. If at
any time the Issuer shall fail to maintain any such office or agency or shall
fail to furnish the Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Indenture Trustee, and the Issuer hereby appoints the Indenture Trustee as its
agent to receive all such surrenders, notices and demands; provided that,
-------- ----
11
notwithstanding the forgoing, the Agency Office shall not be the location for
the service of process to the Issuer.
SECTION 3.3 Money for Payments To Be Held in Trust.
--------------------------------------
(a) As provided in Section 8.2, all payments of amounts due and
payable with respect to any Notes that are to be made from amounts withdrawn
from the Note Distribution Account pursuant to Section 8.2(c) shall be made on
behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no
amounts so withdrawn from the Note Distribution Account for payments of Notes
shall be paid over to the Issuer except as provided in this Section 3.3.
(b) Before each Distribution Date or the Redemption Date (if
applicable), the Indenture Trustee at the written direction of the Servicer
shall deposit in the Note Distribution Account an aggregate sum sufficient to
pay the amounts then becoming due with respect to the Notes, such sum to be held
in trust for the benefit of the Persons entitled thereto.
(c) The Issuer shall cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee 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 3.3, that such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay
such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has
actual knowledge in the making of any payment required to be
made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, forthwith pay
to the Indenture Trustee all sums so held in trust by such
Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the
payment of Notes if at any time it ceases to meet the
standards required to be met by a Paying Agent in effect at
the time of determination of the Issuer; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with
respect to any applicable reporting requirements in
connection therewith.
12
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
(e) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid by the Indenture Trustee to the Issuer on Issuer Request; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts so
paid to the Issuer), and all liability of the Indenture Trustee or such Paying
Agent with respect to such trust money shall thereupon cease; provided, however,
-------- -------
that the Indenture Trustee or such Paying Agent, before being required to make
any such payment, may at the expense and written direction of the Issuer cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining shall be
paid to the Issuer. The Indenture Trustee may also adopt and employ, at the
expense and written direction of the Issuer, any other reasonable means of
notification of such payment (including, but not limited to, mailing notice of
such payment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
SECTION 3.4 Existence. The Issuer shall keep in full effect its
---------
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer shall keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and shall obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5 Protection of Trust Estate; Acknowledgment of Pledge.
----------------------------------------------------
The Issuer shall from time to time execute and deliver all such supplements and
amendments hereto and all such financing statements, amendments thereto,
continuation statements, assignments, certificates, instruments of further
assurance and other instruments, and shall take such other action as may be
determined to be necessary or advisable in an Opinion of Counsel to the Owner
Trustee delivered to the Indenture Trustee to:
13
(i) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the purposes
hereof including by making the necessary filings of financing statements or
amendments thereto within sixty days after the occurrence of any of the
following: (A) any change in the Issuer's name, (B) any change in the location
of the Issuer's principal place of business and (C) any merger or consolidation
or other change in the Issuer's identity or organizational structure and by
promptly notifying the Indenture Trustee of any such filings;
(ii) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(iii) enforce the rights of the Indenture Trustee and the Noteholders
in any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the rights of
the Indenture Trustee and the Noteholders in such Trust Estate against the
claims of all Persons and parties, and the Issuer hereby designates the
Indenture Trustee its agent and attorney-in-fact to execute at the expense and
written direction of the Issuer any financing statement, continuation statement
or other instrument required by the Indenture Trustee pursuant to this Section
3.5.
SECTION 3.6 Opinions as to Trust Estate.
---------------------------
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee an Opinion of Counsel either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording and filing of
this Indenture, any indentures supplemental hereto and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements as are necessary to perfect and make
effective the lien and security interest of 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) On or before March 15 in each calendar year, beginning March 15,
20__, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as is 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 the lien and security interest created by this Indenture. 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 March 15 in
the following calendar year.
14
SECTION 3.7 Performance of Obligations; Servicing of Receivables.
----------------------------------------------------
(a) The Issuer shall not take any action and shall use its reasonable
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 Estate 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
otherwise expressly provided in this Indenture, the Sale and Servicing
Agreement, the Administration Agreement or any other Basic Documents.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in the Basic Documents or an
Officers' Certificate of the Issuer shall be deemed to be action taken by the
Issuer. Initially, the Issuer has contracted with the Servicer and the
Administrator to assist the Issuer in performing its duties under this
Indenture.
(c) The Issuer shall 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 Estate, including but
not limited to filing or causing to be filed all UCC financing statements and
continuation statements required to be filed under 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) If the Issuer shall have knowledge of the occurrence of an Event
of Servicing Termination under the Sale and Servicing Agreement, the Issuer
shall promptly notify in writing the Indenture Trustee and the Rating Agencies
thereof, and shall specify in such notice the response or action, if any, the
Issuer has taken or is taking with respect of such default. If an Event of
Servicing Termination 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 Receivables, the Issuer and the Indenture Trustee shall take all
reasonable steps available to them pursuant to the Sale and Servicing Agreement
to remedy such failure.
(e) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees that it shall not, without the
prior written consent of the Indenture Trustee or the Holders of at least a
majority in principal amount of such then outstanding Notes, as applicable in
accordance with the terms thereof, amend, modify, waive, supplement, terminate
or surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of any Collateral or any of the Basic
Documents, or waive timely performance or observance by the Servicer or the
Seller under the Sale and Servicing Agreement, the Administrator under the
Administration Agreement; provided, however, that, notwithstanding the
-------- -------
foregoing, no action specified in the proviso to Section 9.2 shall be taken
-------
except in compliance with Section 9.2. If any such amendment, modification,
supplement or waiver shall be so consented to by the Indenture Trustee or such
Holders, as applicable, the Issuer agrees, promptly following a request by the
15
Indenture Trustee to do so, to execute and deliver, in its own name and at its
own expense, such agreements, instruments, consents and other documents as the
Indenture Trustee may deem necessary or appropriate in the circumstances.
SECTION 3.8 Negative Covenants. So long as any Notes are
------------------
Outstanding, the Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, except the Issuer may (i) collect,
liquidate, sell or otherwise dispose of Receivables (including Purchased
Receivables and Liquidating Receivables), (ii) make cash payments out of
the Accounts and (iii) take other actions, in each case as contemplated by
the Basic Documents;
(b) claim any credit on, or make any deduction from the principal or
interest payable in respect of the Notes (other than amounts properly
withheld from such payments under the Code or applicable state law) or
assert any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust Estate;
(c) voluntarily commence any insolvency, readjustment of debt,
marshaling of assets and liabilities or other proceeding, or apply for an
order by a court or agency or supervisory authority for the winding-up or
liquidation of its affairs or any other event specified in Section 5.1(f);
or
(d) either (i) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person
to be released from any covenants or obligations with respect to the Notes
under this Indenture except as may be expressly permitted hereby, (ii)
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 Estate 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), or (iii) permit the lien of this
Indenture not to constitute a valid first priority security interest in the
Trust Estate (other than with respect to any such tax, mechanics' or other
lien).
SECTION 3.9 Annual Statement as to Compliance. The Issuer shall
---------------------------------
deliver to the Indenture Trustee, with a copy to each of the Rating Agencies, on
or before March 15 of each year, beginning March 15, 20__, an Officer's
Certificate signed by an Authorized Officer, dated as of the immediately
preceding March 15, stating that:
16
(a) a review of the activities of the Issuer during such fiscal year
and of performance under this Indenture has been made under such Authorized
Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based on such
review, the Issuer has fulfilled in all material respects all of its
obligations under this Indenture throughout such year, or, if there has
been a default in the fulfillment of any such obligation, specifying each
such default known to such Authorized Officer and the nature and status
thereof. A copy of such certificate may be obtained by any Noteholder by a
request in writing to the Issuer addressed to the Corporate Trust Office of
the Indenture Trustee.
SECTION 3.1 Consolidation, Merger, etc., of Issuer; Disposition of
------------------------------------------------------
Trust Assets.
------------
(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, any State or the
District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in
form satisfactory to the Indenture Trustee, the due and timely 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 merger or
consolidation, no Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction and such Person for each then outstanding class
of Notes;
(iv) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been completed; and
(v) the Issuer shall have delivered to the Indenture Trustee an
Officers' Certificate and an Opinion of Counsel addressed to the Indenture
Trustee, each stating:
(A) that such consolidation or merger and such supplemental
indenture comply with this Section 3.10;
(B) that such consolidation or merger and such supplemental
indenture shall have no material adverse tax consequence to the Issuer
or any Securityholder; and
17
(C) that all conditions precedent herein provided for in
this Section 3.10 have been complied with, which shall include any
filing required by the Exchange Act.
(b) Except as otherwise expressly permitted by this Indenture or the
other Basic Documents, the Issuer shall not sell, convey, exchange, transfer or
otherwise dispose of any of its properties or assets, including those included
in the Trust Estate, to any Person, unless:
(i) the Person that acquires such properties or assets of
the Issuer (A) shall be a United States citizen or a Person organized and
existing under the laws of the United States of America or any State and
(B) by an indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee:
(1) expressly assumes 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;
(2) expressly agrees that all right, title and
interest so sold, conveyed, exchanged, transferred or otherwise disposed of
shall be subject and subordinate to the rights of Noteholders;
(3) unless otherwise provided in such supplemental
indenture, expressly agrees to indemnify, defend and hold harmless the
Issuer against and from any loss, liability or expense arising under or
related to this Indenture and the Notes; and
(4) expressly agrees that such Person (or if a group
of Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange Act
in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default shall
have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with respect to
such transaction and such Person for each then outstanding class of Notes;
(iv) any action as is necessary to maintain the lien and security interest
created by this Indenture shall have been taken; and
(v) the Issuer shall have delivered to the Indenture Trustee an Officers'
Certificate and an Opinion of Counsel addressed to the Indenture Trustee, each
stating that:
18
(A) such sale, conveyance, exchange, transfer or
disposition and such supplemental indenture comply with this Section
3.10;
(B) such sale, conveyance, exchange, transfer or
disposition and such supplemental indenture have no material adverse
tax consequence to the Issuer or to any Noteholders or
Certificateholders; and
(C) that all conditions precedent herein provided for in
this Section 3.10 have been complied with, which shall include any
filing required by the Exchange Act.
SECTION 3.11 Successor or Transferee.
-----------------------
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.10(b), the Issuer shall 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 Securityholders immediately upon the delivery
of written notice to the Indenture Trustee from the Person acquiring such assets
and properties stating that the Issuer is to be so released.
SECTION 3.12 No Other Business. The Issuer shall not engage in any
-----------------
business or activity other than acquiring, holding and managing the Collateral
and the proceeds therefrom in the manner contemplated by the Basic Documents,
issuing the Securities, making payments on the Securities and such other
activities that are necessary, suitable, desirable or convenient to accomplish
the foregoing or are incidental thereto, as set forth in Section 2.3 of the
Trust Agreement.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur,
------------
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness for money borrowed other than indebtedness for money borrowed in
respect of the Notes or in accordance with the Basic Documents.
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities.
-------------------------------------------------
Except as contemplated by this Indenture or the other Basic Documents, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
19
SECTION 3.15 Servicer's Obligations. The Issuer shall use its best
----------------------
efforts to cause the Servicer to comply with its obligations under Sections 3.9,
3.10 and 3.11 of the Sale and Servicing Agreement.
SECTION 3.16 Capital Expenditures. The Issuer shall not make any
--------------------
expenditure (whether by long-term or operating lease or otherwise) for capital
assets (either real, personal or intangible property) other than the purchase of
the Receivables and other property and rights from the Seller pursuant to the
Sale and Servicing Agreement.
SECTION 3.17 Restricted Payments. Except for payments of principal
-------------------
or interest on or redemption of the Notes, so long as any Notes are Outstanding,
the Issuer shall not, directly or indirectly:
(a) 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, in each case with respect to any
ownership or equity interest or similar security in or of the Issuer or to
the Servicer;
(b) redeem, purchase, retire or otherwise acquire for value any such
ownership or equity interest or similar security; or
(c) 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 Seller, the Indenture Trustee, the Owner Trustee and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement, the Trust Agreement or the
other Basic Documents. The Issuer shall not, directly or indirectly, make
payments to or distributions from the Collection Account except in accordance
with the Basic Documents.
SECTION 3.18 Notice of Events of Default. The Issuer agrees to give
---------------------------
the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder, each Event of Servicing Termination, and each
default on the part of the Seller of its obligations under the Sale and
Servicing Agreement.
SECTION 3.19 Further Instruments and Acts. Upon request of the
----------------------------
Indenture Trustee, the Issuer shall 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 Indenture Trustee's Assignment of Purchased
-------------------------------------------
Receivables. Upon receipt of the Repurchase Amount with respect to a Purchased
-----------
Receivable, the Indenture Trustee shall assign, without recourse, representation
or warranty to the Servicer or the Seller, as applicable, all of the Indenture
Trustee's right, title and interest in and to such Purchased Receivable, all
monies due thereon, the security interest in the related Financed Vehicle or
Financed Vehicle, proceeds arising thereafter from any Insurance Policies with
respect to such Receivable, rights
20
relating to the Receivables under the Dealer Agreements and Dealer Assignments,
such assignment being an assignment outright and not for security; and the
Servicer or the Seller, as applicable, shall thereupon own such Receivable, and
all such security and documents, free of any further obligation to the Indenture
Trustee or the Securityholders with respect thereto. If in any enforcement suit
or legal proceeding it is held that the Servicer may not enforce a Receivable on
the ground that it is not a real party in interest or a holder entitled to
enforce such Receivable, the Indenture Trustee shall, at the Servicer's expense,
take such steps as the Servicer deems necessary to enforce the Receivable,
including bringing suit in the Indenture Trustee's name or the names of the
Securityholders.
SECTION 3.21 Representations and Warranties by the Issuer to the
---------------------------------------------------
Indenture Trustee. The Issuer hereby represents and warrants to the Indenture
-----------------
Trustee as follows:
(a) Good Title. No Receivable has been sold, transferred, assigned
----------
or pledged by the Issuer to any Person other than the Indenture Trustee;
immediately prior to the conveyance of the Receivables pursuant to this
Indenture, the Issuer had good and marketable title thereto, free of any Lien;
and, upon execution and delivery of this Indenture by the Issuer, the Indenture
Trustee shall have all of the right, title and interest of the Issuer in, to and
under the Collateral, free of any Lien; and
(b) All Filings Made. All filings necessary under the UCC in any
----------------
jurisdiction to give the Indenture Trustee a first priority perfected security
interest in the Receivables and, to the extent constituting Code Collateral, the
other Collateral shall have been made. The Receivables constitute Code
Collateral.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. This
---------------------------------------
Indenture shall cease to be of further effect with respect to the Notes except
as to: (i) rights of registration of transfer and exchange; (ii) substitution
of mutilated, destroyed, lost or stolen Notes; (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon; (iv) Sections 3.2,
3.3, 3.4, 3.5, 3.8, 3.10, 3.11, 3.12, 3.13, 3.14, 3.16, 3.18 and 3.20; (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 Sections 4.2 and 4.4); and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them, and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, if:
21
(a) either:
(1) all Notes theretofore authenticated and delivered
(other than (A) Notes that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 2.5 and (B)
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 Notes not theretofore delivered to the
Indenture Trustee for cancellation:
(A) have become due and payable,
(B) will be due and payable on their respective Final
Scheduled Distribution Dates within one year, or
(C) 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 (A), (B) or (C) of subsection 4.1(a)(2)
above, has irrevocably deposited or caused to be irrevocably deposited
with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States 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
unpaid principal and accrued interest on such Notes not theretofore
delivered to the Indenture Trustee for cancellation when due on the
Final Scheduled Distribution Dates for such Notes or the Redemption
Date for such Notes (if such Notes are to be 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 other sums
payable hereunder by the Issuer; and
(c) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate of the Issuer, an Opinion of Counsel and (if
required by the TIA or the Indenture Trustee) 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.
SECTION 4.2 Application of Trust Money. All monies deposited with
--------------------------
the Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied
by it in accordance with the
22
provisions of the Notes and this Indenture to the payment, either directly or
through any Paying Agent, as the Indenture Trustee may determine, to the Holders
of the particular Notes for the payment or redemption of which such monies have
been deposited with the Indenture Trustee, of all sums due and to become due
thereon for principal and interest; but such monies need not be segregated from
other funds except to the extent required herein or in the Sale and Servicing
Agreement or by applicable law.
SECTION 4.3 Repayment of Monies Held by Paying Agent. In
----------------------------------------
connection with the satisfaction and discharge of this Indenture with respect to
each class of Notes, all monies then held by any Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to each
such class of Notes shall, upon demand of the Issuer, be paid to the Indenture
Trustee to be held and applied according to Section 3.3 and thereupon such
Paying Agent shall be released from all further liability with respect to such
monies.
ARTICLE V
DEFAULT AND REMEDIES
SECTION 5.1 Events of Default. For the purposes of this Indenture,
-----------------
"Event of Default" wherever used herein, means any one of the following events:
(a) failure to pay the Class A Noteholders' Interest Distributable
Amount or the Class B Noteholders' Interest Distributable Amount, as
applicable, to the Noteholders on the related Distribution Date, and such
default shall continue unremedied for a period of five (5) days; or
(b) except as set forth in Section 5.1(c), failure to pay any
installment of the principal of any Note as and when the same becomes due
and payable; or
(c) failure to pay in full the outstanding principal balance of any
class of Notes by the Final Scheduled Distribution Date for such class; or
(d) default in the observance or performance in any material respect
of any covenant or agreement of the Issuer made in this Indenture (other
than a covenant or agreement, a default in the observance or performance of
which is specifically dealt with elsewhere in this Section 5.1) which
failure materially and adversely affects the rights of the Noteholders, and
such default shall continue or not be cured for a period of thirty (30)
days after there shall have been given, by registered or certified mail, to
the Issuer and the Seller (or the Servicer, as applicable) by the Indenture
Trustee or to the Issuer and the Seller (or the Servicer, as applicable)
and the Indenture Trustee by the Holders of at least a majority in
Principal Amount of such Notes then outstanding, a written notice
specifying such default, demanding that it be remedied and stating that
such notice is a "Notice of Default" hereunder; or
23
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable
federal or state bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the Issuer or for
any substantial part of the Trust Estate, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of sixty (60) consecutive days; or
(f) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for any substantial part of the Trust Estate, or the
making by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its debts as such
debts become due, or the taking of action by the Issuer in furtherance of
any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five (5) Business Days
after learning of the occurrence thereof, written notice in the form of an
Officer's Certificate of any Default under Section 5.1(d), its status and what
action the Issuer is taking or proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
(a) If an Event of Default should occur and be continuing, then and in
every such case, unless the principal amount of the Notes shall have already
become due and payable, either the Indenture Trustee or the Holders of Notes
representing not less than a majority in Principal Amount of such Notes then
outstanding may declare the principal of such Notes to be immediately due and
payable, by a notice in writing to the Issuer (and to the Indenture Trustee if
given by the Note holders) setting forth the Event or Events of Default, and
upon any such declaration the unpaid principal amount of the Notes, together
with accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
(b) At any time after such declaration of acceleration of maturity of
the Notes has been made and before a judgment or decree for payment of the money
due thereunder has been obtained by the Indenture Trustee as hereinafter
provided in this Article V, the Holders of Notes representing not less than a
majority in Principal Amount of such Notes then outstanding, by written notice
to the Issuer and the Indenture Trustee, may rescind and annul such declaration
and its consequences with respect to the Notes; provided, that no such
--------
rescission and annulment shall extend to or affect any subsequent or other
Default or impair any right consequent thereto; and provided further, that if
----------------
the Indenture Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission and annulment or for any other reason, or such proceedings
shall have been determined adversely to the Indenture Trustee, then and in every
such case, the Indenture Trustee, the Issuer and the Noteholders, as the case
may be, shall be restored to their respective former positions and rights
hereunder, and
24
all rights, remedies and powers of the Indenture Trustee, the Issuer and the
Noteholders, as the case may be, shall continue as though no such proceedings
had been commenced.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Indenture Trustee.
-----------------
(a) The Issuer covenants that if there shall occur an Event of
Default under Sections 5.1(a), (b) or (c) which has not been waived pursuant to
Section 5.12, the Issuer shall, upon demand of the Indenture Trustee, pay to the
Indenture Trustee, for the benefit of the Noteholders in accordance with their
respective outstanding principal amounts, the entire amount then due and payable
on the Notes for principal and interest, with interest through the date of such
payment on the overdue principal amount of each class of Notes, at the rate
applicable to such class of Notes, and in addition thereto such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel.
(b) If the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the monies adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by
applicable law.
(d) If there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or if a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section 5.3, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
25
(i) to file and prove a claim or claims for the entire amount
of the unpaid principal and interest owing in respect of the Notes and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
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 trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in such
Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the Indenture Trustee
on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee, and, if the Indenture Trustee shall consent
to the making of payments directly to such Noteholders, to pay to the Indenture
Trustee such amounts as shall be sufficient to cover reasonable compensation to
the Indenture Trustee, each predecessor 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 trustee, except as
a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such Proceedings instituted by the
Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
trustee and their respective agents and attorneys, shall be first for the
ratable benefit of the Class A Noteholders until the Class A Notes have been
paid full and then for the benefit of the Class B Noteholders.
26
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4 Remedies; Priorities.
--------------------
(a) If an Event of Default shall have occurred and be continuing and
the Notes have been accelerated under Section 5.2(a), the Indenture Trustee may
do one or more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then due and payable on the
Notes or under this Indenture with respect thereto, whether by declaration
of acceleration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and
take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee and such Noteholders; and
(iv) sell the Trust Estate 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 or elect to have the Issuer
maintain possession of the Receivables and continue to apply collections on
such Receivables as if there had been no declaration of acceleration;
provided, however, that the Indenture Trustee may not sell or otherwise
-------- -------
liquidate the Trust Estate following an Event of Default and acceleration
of the Notes, unless (A) the Holders of all such Outstanding Notes consent
to such sale, (B) the proceeds of such sale or liquidation distributable to
the Noteholders are sufficient to discharge in full the principal of and
the accrued interest on such Outstanding Notes at the date of such sale or
liquidation or (C) (i) there has been an Event of Default under Section
5.1(a), (b) or (c) or otherwise arising from a failure to make a required
payment of principal on any Notes, (ii) the Indenture Trustee determines
that the proceeds of Receivables will not continue to provide sufficient
funds for the payment of principal of and interest on the Notes as and when
they would have become due if the Notes had not been declared due and
payable and (iii) the Indenture Trustee obtains the consent of Holders of
sixty-six and two-thirds percent of the aggregate outstanding principal
amount of such Notes. In determining such sufficiency or insufficiency
with respect to clauses (B) and (C), the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking
or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such
purpose.
27
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out or deposit such money or property in the
following order:
FIRST: to the Indenture Trustee for amounts due under Section
6.7; and
SECOND: to the Collection Account, for distribution.
SECTION 5.5 Optional Preservation of the Trust Estate. If the
-----------------------------------------
Notes have been declared to be due and payable under Section 5.2(a) following an
Event of Default and such declaration and its consequences have not been
rescinded and annulled in accordance with Section 5.2(b), the Indenture Trustee
may, but need not, elect to take and maintain possession of the Trust Estate.
In determining whether to take and maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
SECTION 5.6 Limitation of Suits. No Holder of any Note shall have
-------------------
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than a majority in principal amount
of the Outstanding Notes have made written request to the Indenture Trustee
to institute such Proceeding in respect of such Event of Default in its own
name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of a majority in principal amount of such Outstanding Notes;
it being understood and intended that no Holder or Holders of Notes shall have
any right in any manner whatsoever 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 of Notes or to enforce any right under this Indenture,
except in the manner herein provided and for the equal, ratable (on the basis of
the respective aggregate
28
amount of principal and interest, respectively, due and unpaid on the Notes held
by each Noteholder) and common benefit of all Noteholders. For the protection
and enforcement of the provisions of this Section 5.6, each and every Noteholder
shall be entitled to such relief as can be given either at law or in equity.
If the Indenture Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a majority in principal amount of such Outstanding Notes,
the Indenture Trustee shall act at the direction of the group with the greater
principal amount of Outstanding Notes, provided however, should the Indenture
Trustee receive conflicting requests and indemnity from two or more groups with
the same principal amount of Outstanding Notes, the Indenture Trustee in its
sole discretion may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture and the Indenture Trustee
shall not be liable for any action taken pursuant to this Section 5.
SECTION 5.7 Unconditional Rights of Noteholders To Receive
----------------------------------------------
Principal and Interest. Notwithstanding any other provisions in this Indenture,
----------------------
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such Note
on or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, if applicable, on or after the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
SECTION 5.8 Restoration of Rights and Remedies. If the Indenture
----------------------------------
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally to their respective former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee and
the Noteholders shall continue as though no such Proceeding had been instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right or remedy
------------------------------
herein conferred upon or reserved to the Indenture Trustee or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10 Delay or Omission Not a Waiver. No delay or omission
------------------------------
of the Indenture Trustee or any Holder of any Note to exercise any right or
remedy accruing upon any Default shall impair any such right or remedy or
constitute a waiver of any such Default or an acquiescence therein. Every right
and remedy given by this Article V or by law to the Indenture
29
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
SECTION 5.11 Control by Noteholders. The Holders of a majority in
----------------------
principal amount of such Outstanding Notes shall, subject to provision being
made for indemnification against costs, expenses and liabilities in a form
satisfactory to the Indenture Trustee, have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided, however, that:
-------- -------
(i) such written direction shall not be in conflict with any
rule of law or with this Indenture;
(ii) subject to the express terms of Section 5.4, any written
direction to the Indenture Trustee to sell or liquidate the Trust Estate
shall be by the Holders of Notes representing 100% of the Outstanding
Amount of the Class A Notes (or, if the Class A Notes have been paid in
full, 100% of the Outstanding Amount of the Class B Notes);
(iii) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Trust Estate
pursuant to Section 5.5, then any written direction to the Indenture
Trustee by Holders of Notes representing less than 100% of the Outstanding
Amount of the Class A Notes (or, if the Class A Notes have been paid in
full, 100% of the Outstanding Amount of the Class B Notes) to sell or
liquidate the Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such written
direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need not
-------- -------
take any action that it determines might cause it to incur any liability (a)
with respect to which the Indenture Trustee shall have reasonable grounds to
believe that indemnity satisfactory to it against such liability is not assured
to it and (b) which might materially adversely affect the rights of any
Noteholders not consenting to such action.
SECTION 5.12 Waiver of Past Defaults.
-----------------------
(a) Prior to the declaration of the acceleration of the maturity of
the Notes as provided in Section 5.2(a), the Holders of not less than a majority
in principal amount of such Outstanding Notes may waive any past Default and its
consequences except a Default (i) in the payment of principal of or interest on
any of the Notes or (ii) in respect of a covenant or provision hereof which
cannot be modified or amended without the waiver or consent of the Holder of
such Outstanding Notes. In the case of any such waiver, the Issuer, the
Indenture Trustee and the Noteholders shall be restored to their respective
former positions and rights hereunder; but no such
30
waiver shall extend to or affect any subsequent or other Default or impair any
right consequent thereto.
(b) Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
for every purpose of this Indenture and for purposes of Section 8.1(a)(ii) of
the Sale and Servicing Agreement; but no such waiver shall extend to or affect
any subsequent or other Default or impair any right consequent thereto.
SECTION 5.13 Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
Proceeding for the enforcement of any right or remedy under this Indenture, or
in any Proceeding against the Indenture Trustee for any action taken, suffered
or omitted by it as Trustee, the filing by any party litigant in such Proceeding
of an undertaking to pay the costs of such Proceeding, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys' fees
and expenses, against any party litigant in such Proceeding, having due regard
to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section 5.13 shall not apply to:
(a) any Proceeding instituted by the Indenture Trustee;
(b) any Proceeding instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% in principal
amount of such Outstanding Notes; or
(c) any Proceeding instituted by any Noteholder for the enforcement of
the payment of principal of or interest on any Note on or after the respective
due dates expressed in such Note and in this Indenture (or, in the case of
redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer covenants
--------------------------------
(to the extent that it may lawfully do so) that it shall 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 adversely affect the covenants or the performance
of this Indenture. 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
shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15 Action on Notes. The Indenture Trustee's right to seek
---------------
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or upon any of the assets of the
31
Issuer. Any money or property collected by the Indenture Trustee shall be
applied in accordance with Section 5.4(b).
SECTION 5.16 Performance and Enforcement of Certain Obligations. If
--------------------------------------------------
an Event of Default has occurred and is continuing, the Indenture Trustee may,
and, at the direction (which direction shall be in writing or by telephone
(confirmed in writing promptly thereafter)) of the Holders of at least a
majority in principal amount of such Notes then Outstanding shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or 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 each of the Seller or Servicer of its 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.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee.
---------------------------
(a) If an Event of Default has occurred and is continuing of which an
Authorized Officer of the Indenture Trustee shall have been given written notice
of or have actual knowledge of, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and the
Sale and Servicing Agreement and no implied covenants or obligations shall
be read into this Indenture, the Sale and Servicing Agreement or any other
Basic Document against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions ex pressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the Indenture
-------- -------
Trustee shall examine the certificates and opinions to determine whether or
not they conform to any applicable requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this Section 6.1(c) does not limit the effect of Section
6.1(b);
32
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with this
Agreement or a direction received by it pursuant to Section 5.11.
(d) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.
(f) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayments of such funds or indemnity reasonably satisfactory to the Indenture
Trustee against such risk or liability is not reasonably assured to it.
(g) Every provision of this Indenture relating to the Indenture
Trustee shall be subject to the provisions of this Section 6.1 and to the
provisions of the TIA.
(h) No provision of this Indenture shall in any event require the
Indenture Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Servicer, under the Sale and Servicing
Agreement or this Indenture except during such time, if any, as the Indenture
Trustee shall be the successor to, and be vested with the rights, duties, powers
and privileges of, the Servicer in accordance with the terms of the Sale and
Servicing Agreement and this Indenture.
(i) Subject to the other provisions of this Indenture and without
limiting the generality of this Section 6.1, 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, 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, (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 Estate other than from funds available in the
Note Distribution Account, to the extent permitted by the Basic Documents, (D)
to confirm or verify the contents of any reports or certificates of the Servicer
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.
33
SECTION 6.2 Rights of Indenture Trustee.
---------------------------
(a) The Indenture Trustee may conclusively rely and shall be fully
protected in relying on any resolution, officer's certificate, statement,
report, notice, consent, order, appraisal, bond or other paper document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Indenture Trustee need not calculate or verify any information set forth in
the Servicer's Certificate. The Indenture Trustee need not investigate any fact
or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require and shall be entitled to receive an Officer's Certificate from the
Issuer or an Opinion of Counsel that such action or omission is required or
permissible hereunder. The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such Officer's
Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
-------- -------
not constitute wilful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall not be charged with knowledge of an
Event of Default unless an Authorized Officer obtains actual knowledge of such
an event or the Indenture Trustee receives written notice of such Event of
Default.
(g) The Indenture Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
of direction of any of the Noteholders, unless such Noteholders shall have
offered to the Indenture Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Indenture Trustee of the
obligation, upon the occurrence of a Event of Default of which a Responsible
Officer of the Indenture Trustee shall have actual knowledge (which has not been
cured), to exercise such of the rights and powers vested in it by this
Indenture, and to use the
34
same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(h) 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 holders of
a majority in principal amount of the Outstanding Notes, provided, however, that
if the payment within a reasonable time to the Indenture Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Indenture Trustee, not reasonably
assured to the Indenture Trustee by the security afforded to it by the terms of
this Indenture, the Indenture Trustee may require reasonable indemnity against
such cost, expense or liability as a condition to taking any such action.
(i) The right of the Indenture Trustee to perform any discretionary
act enumerated in this Indenture shall not be construed as a duty, and the
Indenture Trustee shall not be answerable for other than its negligence or
willful misconduct in the performance of any such act.
(j) The Indenture Trustee shall not be required to give any bond or
surety in respect of the Trust Estate or the powers granted hereunder.
SECTION 6.3 Indenture Trustee May Own Notes. The Indenture Trustee
-------------------------------
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer, the Servicer or any of their respective
Affiliates with the same rights it would have if it were not Indenture Trustee;
provided, however, that the Indenture Trustee shall comply with Sections 6.10
-------- -------
and 6.11. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may
do the same with like rights.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture Trustee
------------------------------
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the
Issuer's use of the proceeds from the Notes, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication. Except as expressly set forth in the
Sale and Servicing Agreement and the Indenture, the Indenture Trustee shall have
no obligation to administer, service or collect the Receivables or to maintain
or otherwise supervise the administration, servicing or collection of the
Receivables. The Indenture Trustee shall have no duty to monitor the
performance of the Servicer nor shall it have any liability in connection with
the malfeasance or nonfeasance by the Servicer. The Indenture Trustee shall have
no liability in connection with compliance by the Servicer with statutory or
regulatory requirements related to the Receivables or any provision of this
Indenture, the Sale and Servicing Agreement or any related instrument or
agreement. The Indenture Trustee shall not make or be deemed to have made any
representations or warranties with respect to the applicable Basic Documents or
the validity or sufficiency of any assignment of the Receivables to the
Indenture Trustee.
35
SECTION 6.5 Notice of Defaults. If a Default occurs and is
------------------
continuing and only if it is actually known to an Authorized Officer of the
Indenture Trustee, the Indenture Trustee shall mail to each Noteholder notice of
the Default within 60 days after it occurs. Except in the case of a Default in
payment of principal of or interest on any Note, the Indenture Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders. The Indenture
---------------------------------------
Trustee shall deliver to each Noteholder the information and documents set forth
in Section 7.4, and, in addition, all such information with respect to the Notes
as may be required, as specified by the Servicer, to enable such Holder to
prepare its federal and state income tax returns.
SECTION 6.7 Compensation; Indemnity.
-----------------------
(a) The Issuer shall cause the Servicer to pay to the Indenture
Trustee from time to time such compensation for its services as shall be agreed
upon in writing. The Indenture Trustee's compensation shall not be limited by
any law on compensation of a trustee of an express trust. The Issuer shall
cause the Servicer to reimburse the Indenture Trustee for all reasonable out-of-
pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer shall
cause the Servicer pursuant to the Sale and Servicing Agreement to indemnify the
Indenture Trustee in accordance with Section 6.2 of the Sale and Servicing
Agreement.
(b) The Issuer's obligations to the Indenture Trustee pursuant to this
Section 6.7 shall survive the discharge of this Indenture and the resignation
and removal of the Indenture Trustee. When the Indenture Trustee incurs
expenses after the occurrence of a Default specified in Section 5.1(e) or (f)
with respect to the Issuer or an Event of Servicing Termination specified in
Section 7.1 of the Sale and Servicing Agreement with respect to the Servicer,
the expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.
SECTION 6.8 Replacement of Indenture Trustee.
--------------------------------
(a) The Indenture Trustee may at any time give notice of its intent to
resign by so notifying the Issuer; provided, however, that no such resignation
-------- -------
shall become effective and the Indenture Trustee shall not resign prior to the
time set forth in Section 6.8(c). The Holders of a majority in principal amount
of such Outstanding Notes may remove the Indenture Trustee by so notifying the
Indenture Trustee and may appoint a successor Indenture Trustee. Such
resignation or removal shall become effective in accordance with Section 6.8(c).
The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
36
(ii) the Indenture Trustee is adjudged a bankrupt or insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
(b) If the Indenture Trustee gives notice of its intent to resign or
is removed or if a vacancy exists in the office of the Indenture Trustee for any
reason (the Indenture Trustee in such event being referred to herein as the
retiring Indenture Trustee), the Issuer shall promptly appoint and designate an
Eligible Institution as the successor Indenture Trustee.
(c) A successor Indenture Trustee shall deliver a written acceptance
of its appointment and designation to the retiring Indenture Trustee and to the
Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee
shall become effective, and the successor Indenture Trustee shall have all the
rights, powers and duties of the Indenture Trustee under this Indenture;
provided, however, that all amounts due and owing the retiring Indenture Trustee
have been paid. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders and to each of the Rating Agencies. The retiring
Indenture Trustee shall promptly transfer all property held by it as Indenture
Trustee to the successor Indenture Trustee.
(d) If a successor Indenture Trustee does not take office within 60
days after the retiring Indenture Trustee gives notice of its intent to resign
or is removed, the retiring Trustee, the Issuer or the Holders of a majority in
principal amount of such Outstanding Notes may petition any court of competent
jurisdiction for the appointment and designation of a successor Indenture
Trustee.
(e) If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
(f) Notwithstanding the replacement of the Indenture Trustee pursuant
to this Section 6.8, the Issuer's obligations under Section 6.7 and the
Servicer's corresponding obligations under the Sale and Servicing Agreement
shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 Merger or Consolidation of Indenture Trustee.
--------------------------------------------
(a) Any corporation into which the Indenture Trustee may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Indenture Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the Indenture Trustee,
shall be the successor of the Indenture Trustee under this Indenture; provided,
--------
however, that such corporation shall be eligible under the provisions of Section
-------
6.11, without the execution or filing of any instrument or any further act on
the part of any of the parties to this Indenture, anything in this Indenture to
the contrary notwithstanding. Following such
37
merger or consolidation, the successor Indenture Trustee shall mail a notice of
such merger or consolidation to each of the Rating Agencies.
(b) If at the time such successor or successors by merger 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. In all such cases such certificate of
authentication shall have the same full force as is provided anywhere in the
Notes or herein with respect to the certificate of authentication of the
Indenture Trustee.
SECTION 6.10 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 Estate or any Financed Vehicle may at the time be
located, the Indenture Trustee shall have the power and may execute and deliver
all instruments to appoint one or more Persons to act as a co-trustee or co-
trustees, or separate trustee or separate trustees, of all or any part of the
Trust Estate, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders and (only to the extent expressly provided
herein) the Certificateholders, such title to the Trust Estate, or any part
hereof, and, subject to the other provisions of this Section 6.10, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.11 and no notice to Noteholders of the appointment of any co-trustee or
separate trustee shall be required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Indenture
Trustee joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be performed
the Indenture Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Estate 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;
38
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article 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 Indenture on its behalf and in its name. If any separate trustee or co-
trustee shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised
by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11 Eligibility; Disqualification.
-----------------------------
(a) The Indenture Trustee shall at all times satisfy the requirements
of TIA (S) 310(a) and Section 26(a)(1) of the Investment Company Act. The
Indenture Trustee shall have a combined capital and surplus of at least
$100,000,000 as set forth in its most recent published annual report of
condition and (i) a rating of at least P-1 from Moody's and A-l+ from S&P with
respect to short-term deposit obligations, and (ii) if such institution has
issued long-term unsecured debt obligations, a rating of A2 or higher from
Moody's and AA- or higher from S&P with respect to long-term unsecured debt
obligations. The Indenture Trustee shall comply with TIA (S) 310(b); provided,
--------
however, that there shall be excluded from the operation of TIA (S) 310(b)(1)
-------
any indenture or indentures under which other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA (S)
310(b)(1) are met.
(b) If a Default occurs and is continuing, and the Indenture Trustee
is deemed to have a conflicting interest as a result of acting as trustee for
both the Class A Notes and the Class B Notes, the Issuer shall appoint, at the
Issuer's expense, a successor Indenture Trustee for the Class B Notes, so that
there will be separate Indenture Trustees for the Class A Notes and the Class B
Notes. No such event shall alter the voting rights of the Class A Noteholders or
Class B Noteholders under this Indenture or any other Basic Document. However,
so long as any amounts remain unpaid with respect to the Class A Notes, only the
Indenture Trustee for the Class A Noteholders will have the right to exercise
remedies under this Indenture (but subject to the express provisions of Section
5.4
39
and to the right of the Class B Noteholders to receive their share of any
proceeds of enforcement, subject to the subordination of the Class B Notes to
the Class A Notes as described herein) to make deposits to and withdrawals from
the Accounts, hold Account Property and to make distributions to Noteholders
from the Note Distribution Account. Upon repayment of the Class A Notes in full,
all rights to exercise remedies under the Indenture will transfer to the
Indenture Trustee for the Class B Notes.
(c) In the case of the appointment hereunder of a successor Indenture
Trustee with respect to any class of Notes, the Issuer, the retiring Indenture
Trustee and the successor Indenture Trustee with respect to such class of Notes
shall execute and deliver an indenture supplemental hereto wherein the successor
Indenture Trustee shall accept such appointment and which (i) shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, the successor Indenture Trustee all the rights, powers, trusts and
duties of the retiring Indenture Trustee with respect to the Notes of the class
to which the appointment of such successor Indenture Trustee relates, (ii) if
the retiring Indenture Trustee is not retiring with respect to all classes of
Notes, shall contain such provisions as shall be deemed necessary or desirable
to confirm that all the rights, powers, trusts and duties of the retiring
Indenture Trustee with respect to the Notes of each class as to which the
retiring Indenture Trustee is not retiring shall continue to be vested in the
retiring Indenture Trustee, and (iii) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Indenture Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Indenture Trustees co-trustees of the same trust and that each
such Indenture Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Indenture Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Indenture Trustee shall
become effective to the extent provided therein.
SECTION 6.12 Preferential Collection of Claims Against Issuer. The
------------------------------------------------
Indenture Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
SECTION 6.13 Representations and Warranties of Indenture Trustee.
---------------------------------------------------
The Indenture Trustee represents and warrants as of the Closing Date that:
(a) the Indenture Trustee is a New York banking corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and the eligibility requirements set forth in Section 6.11 are
satisfied with respect to the Indenture Trustee;
(b) the Indenture Trustee has full power, authority and legal right to
execute, deliver and perform this Indenture, and has taken all necessary action
to authorize the execution, delivery and performance by it of this Indenture;
and
40
(c) this Indenture has been duly executed and delivered by the
Indenture Trustee and constitutes the legal, valid and binding agreement of the
Indenture Trustee, enforceable in accordance with its terms, subject as to
enforceability, to applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect affecting the enforcement of
creditors' rights in general and except as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or in equity).
SECTION 6.14 Indenture Trustee May Enforce Claims Without Possession
-------------------------------------------------------
of Notes. All rights of action and claims under this Indenture or the Notes may
--------
be prosecuted and enforced by the Indenture Trustee without the possession of
any of the Notes or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Indenture Trustee shall be brought in
its own name as Indenture Trustee. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel, be
for the ratable benefit of the Noteholders and (only to the extent expressly
provided herein) the Certificateholders in respect of which such judgment has
been obtained.
SECTION 6.15 Suit for Enforcement. If an Event of Default shall
--------------------
occur and be continuing, the Indenture Trustee in its discretion may, subject to
the provisions of Section 6.1, proceed to protect and enforce its rights and the
rights of the Noteholders under this Indenture by a Proceeding whether for the
specific performance of any covenant or agreement contained in this Indenture or
in aid of the execution of any power granted in this Indenture or for the
enforcement of any other legal, equitable or other remedy as the Indenture
Trustee, being advised by counsel, shall deem most effectual to protect and
enforce any of the rights of the Indenture Trustee or the Noteholders.
SECTION 6.16 Rights of Noteholders to Direct Indenture Trustee.
-------------------------------------------------
Holders of Notes evidencing not less than a majority in principal of the
Outstanding Notes shall have the right to direct in writing the time, method and
place of conducting any Proceeding for any remedy available to the Indenture
Trustee or exercising any trust or power conferred on the Indenture Trustee;
provided however, that reasonable indemnity is provided to the Indenture Trustee
-------- -------
by the holders of the Outstanding Notes directing such action and provided,
--------
further, that subject to Section 6.1, the Indenture Trustee shall have the right
-------
to decline to follow any such direction if the Indenture Trustee being advised
by counsel determines that the action so directed may not lawfully be taken, or
if the Indenture Trustee in good faith shall, by a Responsible Officer,
determine that the proceedings so directed would be illegal or subject it to
personal liability or be unduly prejudicial to the rights of Noteholders not
parties to such direction; and provided, further, that nothing in this Indenture
-------- -------
shall impair the right of the Indenture Trustee to take any action deemed proper
by the Indenture Trustee and which is not inconsistent with such direction by
the Noteholders.
41
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and Addresses
-------------------------------------------------------
of Noteholders. The Issuer shall furnish or cause to be furnished by the
--------------
Servicer to the Indenture Trustee (a) not more than five days before each
Distribution Date, a list, in such form as the Indenture Trustee may reasonably
require, of the names and addresses of the Holders of Notes as of the close of
business on the Record Date, and (b) at such other times as the Indenture
Trustee may request in writing, within 14 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
10 days prior to the time such list is furnished; provided, however, that so
-------- -------
long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be furnished.
SECTION 7.2 Preservation of Information, Communications to
----------------------------------------------
Noteholders.
-----------
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.1 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.1 upon receipt of
a new list so furnished.
(b) Noteholders may communicate pursuant to TIA (S) 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA (S) 312(c).
SECTION 7.3 Reports by Issuer.
-----------------
(a) If required, the Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
42
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall, upon written request, transmit by mail to all Noteholders described
in TIA (S) 313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of this
Section 7.3(a) as may be required by rules and regulations prescribed from
time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of such year.
SECTION 7.4 Reports by Indenture Trustee.
----------------------------
(a) If required by TIA (S) 313(a), within 60 days after each February
1, beginning with February 1, 20__, the Indenture Trustee shall mail to each
Noteholder as required by TIA (S) 313(c) a brief report dated as of such date
that complies with TIA (S) 313(a). The Indenture Trustee also shall comply with
TIA (S) 313(b). A copy of any report delivered pursuant to this Section 7.4(a)
shall, at the time of its mailing to Noteholders, be filed by the Indenture
Trustee with the Commission and each stock exchange, if any, on which the Notes
are listed. The Issuer shall notify the Indenture Trustee in writing if and
when the Notes are listed on any stock exchange.
(b) On each Distribution Date, the Indenture Trustee shall forward to
each Noteholder a copy of the statement for the related Monthly Period as
required pursuant to Section 4.7 of the Sale and Servicing Agreement.
ARTICLE VII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly
-------------------
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The
Indenture Trustee shall apply all such 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 Article III of 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 Estate, the
Indenture Trustee may take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim
an Event of Default under this Indenture and any right to proceed thereafter as
provided in Article V.
43
SECTION 8.2 Accounts; Payments.
------------------
(a) On or prior to the Closing Date, the Indenture Trustee shall
establish and maintain for the benefit of the Securityholders, the Accounts as
provided in Article IV of the Sale and Servicing Agreement.
(b) On each Deposit Date, the Indenture Trustee shall cause all
withdrawals, deposits, transfers and distributions provided for in Section
4.5(b) of the Sale and Servicing Agreement to be made based solely on the
information contained in the related Servicer's Certificate. On each Deposit
Date, at the direction of the Servicer, the Indenture Trustee shall make the
distributions from the Collection Account provided for in Section 4.5(c) of the
Sale and Servicing Agreement.
(c) On each Distribution Date, the Indenture Trustee shall distribute
all amounts on deposit in the Note Distribution Account based solely on the
information contained in the related Servicer's Certificate, to the Noteholders
to the extent of amounts due and unpaid on the Notes for principal and interest,
in the following amounts, and in the following order of priority:
(i) (A) first, to accrued and unpaid interest on the Class A
Notes; provided, however, that if there are not sufficient funds in the
-------- -------
Note Distribution Account to pay the entire amount of accrued and unpaid
interest then due on the Class A Notes, the amount in the Note Distribution
Account shall be applied to the payment of such interest on each Note of
each class of the Class A Notes pro rata on the basis of the respective
aggregate amount of interest due on each such class of Class A Notes; and
(B) second, unless otherwise provided in clause (iv) below, to accrued and
unpaid interest on the Class B Notes; provided, however, that if there are
-------- -------
not sufficient funds in the Note Distribution Account (after the payment of
all accrued and unpaid interest on the Class A Notes) to pay the entire
amount of accrued and unpaid interest then due on the Class B Notes, the
amount in the Note Distribution Account shall be applied to the payment of
such interest on each of the Class B Notes pro rata on the basis of the
aggregate amount of interest due on each such Class B Note;
(ii) unless otherwise provided in clause (iii) or (iv) below, the
Principal Payment Amount shall be applied on each Distribution Date, as
follows:
(A) first, 100% of the Principal Payment Amount to
principal of the Class A-1 Notes, until paid in full, and
(B) second, (1) the Class A Principal Percentage of the
Principal Payment Amount to the Class A Notes until paid in full
(all of which shall be paid to the Class A-2 Notes until paid in
full, then to the Class A-3 Notes until paid in full and then to
the Class A-4 Notes until paid in full) and (2) the Class B
Principal Percentage of the Principal Payment Amount to the Class
B Notes until paid in full; provided, however, that
-------- -------
44
principal on the Class B Notes will not be paid on any
Distribution Date until the Class A Noteholders' Principal
Distributable Amount for such Distribution Date has been paid in
full; provided further, that so long as any Class A Notes are
----------------
outstanding, if the amount on deposit in the Reserve Account
(after giving effect to all deposits or withdrawals therefrom on
the related Deposit Date) is less than the Specified Reserve
Account Balance for such Distribution Date, all amounts otherwise
payable as principal on the Class B Notes will be paid as
principal on the Class A Notes;
(iii) unless otherwise provided in clause (iv) below, from and after
the occurrence of a Gross Loss Trigger Event, the Principal Payment Amount
shall be applied on each Distribution Date, as follows:
(A) first, 100% of the Principal Payment Amount to
principal of the Class A Notes, all of which shall be paid to
principal of the Class A-1 Notes until paid in full, then to
principal of the Class A-2 Notes until paid in full, then to
principal of the Class A-3 Notes until paid in full and then to
the Class A-4 Notes until paid in full, and
(B) thereafter, 100% of the Principal Payment Amount to
principal of the Class B Notes.
(iv) if the Notes have been declared immediately due and payable as
provided in Section 5.2(a) following the occurrence of an Event of Default
or if any Notes remain unpaid on and after the applicable Final Scheduled
Payment Date, until such time as the Class A Notes have been paid in full
and this Indenture has been discharged with respect to the Class A Notes,
any amounts remaining in the Note Distribution Account on any Distribution
Date after the application described in Section 8.2(c)(i) (A) shall be
applied in the following priority: (1) to the repayment of principal on
each of the Class A Notes pro rata on the basis of the respective unpaid
principal amount of each such Class A Note; (2) to the repayment of
interest on each of the Class B Notes pro rata on the basis of the amount
of interest due and unpaid on each such Class B Note; and (3) to the
repayment of principal on each of the Class B Notes pro rata on the basis
of the unpaid principal amount of each such Class B Note.
SECTION 8.3 General Provisions Regarding Accounts.
-------------------------------------
(a) Subject to Section 6.1(c), the Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any of the Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to the Indenture Trustee's failure to make payments on such
Eligible Investments issued by the Indenture Trustee, in its commercial capacity
as principal obligor and not as trustee, in accordance with their terms. The
Indenture Trustee shall
45
have no obligation to invest or reinvest any amounts held in any of the Accounts
in the absence of written investment direction.
(b) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Accounts to the Indenture Trustee by
11:00 a.m., New York City time (or such other time as may be agreed by the
Servicer and the Indenture Trustee) on any Business Day; or (ii) a Default shall
have occurred and be continuing with respect to the Notes but the Notes shall
not have been declared due and payable pursuant to Section 5.2(a), or, if such
Notes shall have been declared due and payable following an Event of Default,
but amounts collected or receivable from the Trust Estate are being applied in
accordance with Section 5.5 as if there had not been such a declaration, then
the Indenture Trustee shall, to the fullest extent practicable, invest and
reinvest funds in the Accounts in the Chase money market fund; provided such
fund is an Eligible Investment or in one or more other Eligible Investments
until such time as the Indenture Trustee shall receive written direction
otherwise.
SECTION 8.4 Release of Trust Estate.
-----------------------
(a) Subject to the payment of its fees and expenses pursuant to
Section 6.7, the Indenture Trustee may, and when required by the provisions of
this Indenture shall, execute instruments to release property in the Trust
Estate from the lien of this Indenture, or convey the Indenture Trustee's
interest in the same, in a manner and under circumstances that are consistent
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
monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due to the Indenture Trustee pursuant to Section 6.7
have been paid, notify the Issuer thereof in writing and upon receipt of an
Issuer Request, release any remaining portion of the Trust Estate that secured
the Notes from the lien of this Indenture and release to the Issuer or any other
Person entitled thereto any funds then on deposit in the Note Distribution
Account. The Indenture Trustee shall (i) release any remaining portion of the
Trust Estate that secured the Certificates from the lien of this Indenture and
(ii) remit in the Certificate Distribution Account or pay as otherwise required
by the Trust Agreement any funds then on deposit in the Reserve Account or the
Collection Account only at such time as (y) there are no Notes Outstanding and
(z) all sums due to the Indenture Trustee pursuant to Section 6.7 have been
paid.
SECTION 8.5 Opinion of Counsel. The Indenture Trustee shall
------------------
receive at least seven days' written notice when requested by the Issuer to take
any action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require as a condition to such
action, an Opinion of Counsel, in form and substance satisfactory to the
Indenture Trustee, 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
shall not materially and adversely impair the security
46
for the Notes or the rights of the Noteholders in contravention of the
provisions of this Indenture; provided, however, that such Opinion of
-------- -------
Counsel shall not be required to express an opinion as to the fair
value of the Trust Estate. 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 Notes but with prior
notice to the Rating Agencies, 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 (which shall conform to the
provisions of the TIA as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Indenture Trustee any property subject or required to
be subjected to the lien of this Indenture, or to subject additional
property to the lien of this Indenture;
(ii) to evidence the succession, in compliance with Section 3.10
and the applicable provisions hereof, of another Person to the Issuer, and
the assumption by any such successor of the covenants of the Issuer
contained herein and in the Notes;
(iii) to add to the covenants of the Issuer for the benefit of
the Securityholders, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity or to correct or supplement any
provision herein or in any supplemental indenture which may be inconsistent
with any other provision herein, in any supplemental indenture or in any
other Basic Document;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor or additional Indenture Trustee with
respect to the Notes or any class thereof and to add to or change any of
the provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant
to the requirements of Article VI; or
47
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as may
be expressly required by the TIA, and the Indenture Trustee is hereby
authorized to join in the execution of any such supplemental indenture and
to make any further appropriate agreements and stipulations that may be
therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Noteholders but with
prior notice to the Rating Agencies, at any time and from time to time enter
into one or more indentures supplemental hereto for the purpose of adding any
provisions to, changing in any manner, or eliminating any of the provisions of,
this Indenture or modifying in any manner the rights of the Noteholders under
this Indenture; provided, however, that such action shall not, as evidenced by
-------- -------
an Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.
SECTION 9.2 Supplemental Indentures With Consent of Noteholders.
---------------------------------------------------
(a) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, also may, with prior notice to the Rating Agencies by the Issuer
and with the consent of the Holders of not less than a majority of the
Outstanding Notes of the related Series, by Act of such Holders delivered to the
Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, changing in any
manner, or eliminating any of the provisions of, this Indenture or modifying in
any manner the rights of the Noteholders under this Indenture; provided,
--------
however, that no such supplemental indenture shall, without the consent of the
-------
Holder of each Outstanding Note affected thereby:
(i) change the due date of any installment of principal of or
interest on any Note, or reduce the principal amount thereof, the interest
rate applicable thereto, or the Redemption Price with respect thereto,
change any place of payment where, or the coin or currency in which, any
Note or any interest thereon is payable, or impair the right to institute
suit for the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to the
payment of any such amount due on the Notes on or after the respective due
dates thereof (or, in the case of redemption, on or after the Redemption
Date);
(ii) reduce the percentage of the aggregate amount of the
Outstanding Notes of such Series, the consent of the Holders of which is
required for (a) any such supplemental indenture, (b) any waiver of
compliance with certain provisions of this Indenture, certain defaults
hereunder and their consequences as provided for in this Indenture or (c)
any action described in Sections 2.12, 3.7(e), 5.2, 5.6, 5.11, 5.12(a),
6.8, or 6.16;
(iii) modify or alter the provisions of this Indenture regarding
the voting of Notes held by the related Trust, any other obligor on such
Notes, the Seller or an affiliate of any of them;
48
(iv) reduce the percentage of the aggregate Outstanding Amount
of such Notes required to direct the Indenture Trustee to sell or liquidate
the Trust Estate pursuant to Section 5.4 if the proceeds of such sale would
be insufficient to pay the principal amount of and accrued but unpaid
interest on the Outstanding Notes;
(v) modify any provision of this Section 9.2 to decrease the
required minimum percentage necessary to approve any amendments to any
provisions of this Indenture or any of the Basic Documents;
(vi) 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 modify or alter the provisions of the Indenture regarding the voting of
Notes held by the Issuer, the Seller or any Affiliate of either of them; or
(vii) 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 Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time subject to
the lien of this Indenture or deprive the Holder of any Note of the
security afforded by the lien of this Indenture.
(b) It shall be sufficient if an Act of Noteholders approves the
substance, but not the form, of any proposed supplemental indenture.
(c) Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section 9.2, the Issuer
shall mail to the Noteholders to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing, or
------------------------------------
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in conclusively
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture and that all
conditions precedent to such execution have been satisfied. 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,
indemnities or immunities under this Indenture or otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution
--------------------------------
of any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and
49
the respective rights, limitations of rights, obligations, duties, liabilities
and immunities under this Indenture of the Indenture Trustee, the Issuer and the
Noteholders shall thereafter be determined, exercised and enforced hereunder
subject in all respects to such modifications and amendments, and all the terms
and conditions of any such supplemental indenture shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes.
SECTION 9.5 Conformity with Trust Indenture Act. Every amendment
-----------------------------------
of this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the TIA as then in effect so
long as this Indenture shall then be qualified under the TIA.
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
---------------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes of the same class.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption.
----------
(a) The Class A-4 Notes and Class B Notes are subject to redemption
in whole, but not in part, upon the exercise by the Servicer of its option to
purchase the Receivables pursuant to Section 9.2 of the Sale and Servicing
Agreement. Such redemption shall occur on any Distribution Date after all Class
A-1 Notes, the Class A-2 Notes and the Class A-3 Notes have been paid in full.
The purchase price for the Class A-4 Notes and Class B Notes to be redeemed
shall be equal to the applicable Redemption Price, provided the Issuer has
available funds sufficient to pay such amount. The Issuer shall furnish the
Rating Agencies notice of such redemption. If the Class A-4 Notes and Class B
Notes are to be redeemed pursuant to this Section 10.1(a), the Issuer shall
furnish notice thereof to the Indenture Trustee not later than 10 days prior to
the Redemption Date and the Issuer shall deposit into the Note Distribution
Account, before the Redemption Date, the aggregate Redemption Price of the Class
A-4 Notes and Class B Notes to be redeemed, whereupon all such Notes shall be
due and payable on the Redemption Date.
(b) [Reserved.]
(c) Within sixty days after the redemption in full pursuant to this
Section 10.1 of any class of Notes, the Issuer shall provide each of the Rating
Agencies with written notice stating that all of such Notes have been redeemed.
50
SECTION 10.2 Form of Redemption Notice.
-------------------------
(a) Notice of redemption of the Class A-4 Notes and Class B Notes
under Section 10.1(a) shall be given by the Indenture Trustee by first-class
mail, postage prepaid, mailed not less than five days prior to the applicable
Redemption Date to each Holder of the Class A-4 Notes and Class B Notes of
record, respectively, at such Noteholder's address appearing in the Note
Register.
(b) All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) the place where Class A-4 Notes and Class B Notes are to be
surrendered for payment of the Redemption Price (which shall be the Agency
Office of the Indenture Trustee to be maintained as provided in Section
3.2); and
(c) Notice of redemption of the Class A-4 Notes and Class B 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-4 Note and Class B Note to be redeemed shall not impair or
affect the validity of the redemption of any other Class A-4 Note or Class B
Note to be redeemed.
SECTION 10.3 Notes Payable on Redemption Date. The Class A-4 Notes
--------------------------------
or Class B Notes to be redeemed shall, following notice of redemption as
required by Section 10.2, on the Redemption Date cease to be Outstanding for
purposes of this Indenture and shall thereafter represent only the right to
receive the applicable Redemption Price and (unless the Issuer shall default in
the payment of such Redemption Price) no interest shall accrue on such
Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating such Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc.
------------------------------------------
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee: (i) an Officer's Certificate stating
that all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with, (ii) an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with and (iii) (if required by the TIA) an Independent
Certificate from a firm of certified public accountants meeting the applicable
requirements of this Section 11.1, except that, in the case of any such
51
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished. Every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the judgment of each such signatory,
such signatory has made such examination or investigation as is necessary
to enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit with the Indenture Trustee of any
Collateral or other property or securities 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 an Officer's
Certificate certifying or stating the opinion of each Person signing such
certificate as to the fair value (within 60 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (b)(i) above, the
Issuer shall also deliver to the Indenture Trustee 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 on 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 (i) above and this clause (b)(ii), is 10% or
more of the Outstanding Amount of the 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 or less than one percent of the
Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any Purchased
Receivables or Liquidating Receivables, whenever any property or securities
are to be released from the lien of this Indenture, the Issuer shall also
furnish to the Indenture Trustee an Officer's Certificate
52
certifying or stating the opinion of each Person signing such certificate
as to the fair value (within 60 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.
(iv) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signatory thereof as to the matters described in clause (b)(iii) above, the
Issuer shall also furnish to the Indenture Trustee 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 Receivables and
Liquidating Receivables, or securities released from the lien of this
Indenture since the commencement of the then current calendar year, as set
forth in the certificates required by clause (b)(iii) above and this clause
(b)(iv), 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 or less than one percent
of the then Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other provision of this
Section 11.1, the Issuer may (A) collect, liquidate, sell or otherwise
dispose of Receivables as and to the extent permitted or required by the
Basic Documents, (B) make cash payments out of the Accounts as and to the
extent permitted or required by the Basic Documents and (C) take any other
action not inconsistent with the TIA.
SECTION 11.2 Form of Documents Delivered to Indenture Trustee.
------------------------------------------------
(a) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his 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, the Issuer or the Administrator, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller, the Issuer or the Administrator, 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.
53
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to 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
Noteholders or a class of Noteholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Noteholders in
person or by agents duly appointed in writing; and except as herein otherwise
expressly provided such action shall become effective when such instrument or
instruments are delivered to the Indenture Trustee, and, where it is hereby
expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 11.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes (or any one or more
predecessor Notes) shall bind the Holder of every Note issued upon the
registration thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Indenture Trustee or the
Issuer in reliance thereon, whether or not notation of such action is made upon
such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating
------------------------------------------------------
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
--------
or Act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with the Indenture Trustee, the
Issuer or the Rating Agencies under this Indenture shall be made
54
upon, given or furnished to or filed with such party as specified in Section 9.5
to the Sale and Servicing Agreement.
SECTION 11.5 Notices to Noteholders; Waiver.
------------------------------
(a) Where this Indenture provides for notice to Noteholders of any
condition or event, such notice shall be given as specified in Section 9.5 of
the Sale and Servicing Agreement.
(b) Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event of Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
SECTION 11.6 Alternate Payment and Notice Provisions.
---------------------------------------
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for in
this Indenture for such payments or notices. The Issuer shall furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee shall
cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.7 Conflict with Trust Indenture Act.
---------------------------------
(a) If any provision hereof limits, qualifies or conflicts with
another provision hereof that is required to be included in this Indenture by
any of the provisions of the TIA, such required provision shall control.
(b) The provisions of TIA (S)(S) 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
55
SECTION 11.8 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 11.9 Successors and Assigns.
----------------------
(a) All covenants and agreements in this Indenture and the Notes by
the Issuer shall bind its successors and assigns, whether so expressed or not.
(b) All covenants and agreements of the Indenture Trustee in this
Indenture shall bind its successors and assigns, whether so expressed or not.
SECTION 11.10 Separability. In case any provision in this Indenture
------------
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this Indenture or in
---------------------
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the Noteholders and the Note Owners and
(only to the extent expressly provided herein) the Certificateholders, any other
party secured hereunder and any other Person with an ownership interest in any
part of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 11.12 Legal Holidays. If the date on which any payment is
--------------
due shall not be a Business Day, then (notwithstanding any other provision of
the Notes or this Indenture) payment need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the date on which nominally due, and no interest shall accrue for the
period from and after any such nominal date.
SECTION 11.13 Governing Law. This Indenture shall be governed by and
-------------
construed in accordance with the laws of the State of New York, without
reference to its conflict of law provisions.
SECTION 11.14 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 11.15 Recording of Indenture. If this Indenture is subject
----------------------
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
56
SECTION 11.16 No Recourse. No recourse may be taken, directly or
-----------
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against:
(i) the Indenture Trustee or the Owner Trustee in its individual
capacity;
(ii) any owner of a beneficial interest in the Issuer; or
(iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Indenture Trustee or the Owner Trustee in their
individual capacities, any holder of a beneficial interest in the Issuer,
the Owner Trustee or the Indenture Trustee or of any successor or assign of
the Indenture Trustee or the Owner Trustee in their individual capacities
(or any of their successors or assigns), except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the
Owner Trustee have no such obligations in their individual capacities) and
except that any such partner, owner or beneficiary shall be fully liable,
to the extent provided by applicable law, for any unpaid consideration for
stock, unpaid capital contribution or failure to pay any installment or
call owing to such entity. For all purposes of this Indenture, in the
performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
SECTION 11.17 No Petition. The Indenture Trustee, by entering into
-----------
this Indenture, and each Noteholder and Note Owner, by accepting a Note (or
interest therein) issued hereunder, hereby covenant and agree that they shall
not, prior to the date which is one year and one day after the termination of
this Indenture with respect to the Issuer pursuant to Section 4.1, acquiesce,
petition or otherwise invoke or cause the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a case
against the Issuer under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Issuer.
SECTION 11.18 Inspection. The Issuer agrees that, on reasonable
----------
prior notice, it shall permit any representative of the Indenture Trustee,
during the Issuer's normal business hours, to examine all the books of account,
records, reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees and Independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Indenture Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
57
SECTION 11.19 Voting Rights. Notwithstanding anything to the
-------------
contrary contained herein, if any of the Basic Documents discuss specific
certain circumstances under which a specified percentage of Outstanding Notes
must consent, approve, direct or request an action, such action shall be valid
only if the holders of such specified percentage of all outstanding Class A
Notes (or if no Class A Notes are outstanding, all outstanding Class B Notes)
voting together as a single class have voted to give such consent, approval,
direction, request or notice or take such action.
58
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
FIRST SECURITY AUTO OWNER TRUST 20__-__
By: Wilmington Trust Company,
not in its individual capacity but solely as
Owner Trustee
By: ______________________________________
Name:
Title:
_________________________________,
as Indenture Trustee
By: ____________________________
Name:
Title:
STATE OF )
) ss.:
COUNTY OF )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared _____________, known to me to
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said First Security Auto
Owner Trust 20__-__, a Delaware business trust, and that he executed the same as
the act of said business trust for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of
___________, 20__.
________________________________________________
Notary Public in and for the State of New York.
My commission expires:
____________________________
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ______________, known to me to
be the person and officer whose name is subscribed to the foregoing instrument
and acknowledged to me that the same was the act of the said
____________________, a ____________________, and that she executed the same as
the act of said _____________________ for the purpose and consideration therein
stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the _____ day of
___________, 20__.
_________________________________________________
Notary Public in and for the State of New York.
My commission expires:
____________________________
EXHIBIT A
LOCATIONS OF
SCHEDULE OF RECEIVABLES
The Schedule of Receivables is on file at the offices of:
-----------------------
1. The Indenture Trustee
2. The Owner Trustee
3. First Security Bank, N.A.
EXHIBIT B
REGISTERED $____________/1/
No. R-__
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. __________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
FIRST SECURITY AUTO OWNER TRUST 20__-__
CLASS A-__ _____% ASSET BACKED NOTES
FIRST SECURITY AUTO OWNER TRUST 20__-__, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of _______________ DOLLARS ($_________)
payable in accordance with the Indenture, prior to the occurrence of an Event of
Default and a declaration that the Notes are due and payable, on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction, the numerator of which is the initial principal amount hereof and the
denominator of which is [aggregate principal amount for class] by (ii) the
aggregate amount, if any, payable from the Note Distribution Account in respect
of principal on such class of Notes pursuant to Sections 2.7, 3.1 and 8.2 of the
Indenture; provided, however, that the entire unpaid principal amount of this
-------- -------
Note shall be due and payable on ______________ (the "Final Scheduled
Distribution Date"). The Issuer shall pay interest on this Note at the rate per
annum shown above on each Distribution Date until the
____________________
/1/ Denominations of $1,000 and integral multiples thereof.
1
principal of this Note is paid or made available for payment, on the principal
amount of this Note outstanding on the preceding Distribution Date (after giving
effect to all payments of principal made on the preceding Distribution Date).
Interest on this Note will accrue for each Distribution Date from and including
the most recent Distribution Date on which interest has been paid to but
excluding the then current Distribution Date or, if no interest has yet been
paid, from __________, 20__. [Interest will be computed on the actual number of
days elapsed from the most recent Distribution Date (or the Closing Date, in the
case of the initial Distribution Date) to but excluding the then current
Distribution Date divided by 360.] [Interest will be computed on the basis of a
360-day year of twelve 30-day months (or, in the case of the initial
Distribution Date, 13/30ths of a month).] Such principal of and interest on this
Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, 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 Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: FIRST SECURITY AUTO OWNER
TRUST 20__-__,
By: _____________________,
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ______________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: ______________________, not in its
individual capacity but solely as
Indenture Trustee
By: _________________________
Name:
Title:
3
REVERSE OF NOTE
This Note, designated as a Class A-__ ____% Asset Backed Note, is one
of a duly authorized issue of Notes of the Issuer (herein called the "Notes"),
all issued under an Indenture, dated as of ___________, 20__ (such Indenture, as
supplemented or amended, is herein called the "Indenture"), between the Issuer
and _____________________, a _____________________, as trustee (the "Indenture
Trustee", which term includes any successor 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 Noteholders. The Notes are governed by
and subject to all terms of the Indenture (which terms are incorporated herein
and made a part hereof), to which Indenture the holder of this Note by virtue of
acceptance hereof assents and by which such holder is bound. All capitalized
terms used and not otherwise defined in this Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture.
The Indenture secures (a) first, the payment of principal of and
interest on, and any other amounts owing in respect of, the Class A Notes,
equally and ratably without prejudice, priority or distinction and (b) second,
the payment of principal and interest on, and any other amounts owing in respect
of, the Class B Notes, equally and ratably without prejudice, priority or
distinction, and to secure compliance with the provisions of the Indenture, all
as provided in the Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in their
individual capacities, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in their individual capacities, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in their individual capacities, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacities) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other
4
similar official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Receivables for the purpose of federal income taxes, state and local income and
franchise taxes, and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this 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 Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
Outstanding Notes of the related Series. The Indenture also contains provisions
permitting the Holders of Notes representing a majority of the Outstanding Notes
of the related Series, on behalf of the Holders of all the Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of the Noteholders.
The term "Issuer" as used in this 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 and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This 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.
5
No reference herein to the Indenture and no provision of this 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 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 Basic Documents, neither the Seller, the Servicer, the Indenture
Trustee nor the Owner Trustee in their respective individual capacities, 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 Note or the Indenture, it being expressly understood that said
covenants, obligations and indemnifications have been made by the Owner Trustee
solely as the Owner Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, 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 Note.
6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________________________________________
_________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________, as attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated:__________________ __________________________________/2/
Signature Guaranteed:
________________________ __________________________________
____________________
/2/ NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
7
EXHIBIT C
REGISTERED $____________
No. R-__
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP NO. ________
[Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any
Note issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.] [THE SECURITIES
REPRESENTED BY THIS NOTE WERE ORIGINALLY ISSUED ON ____________________,
20__, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM
REGISTRATION THEREUNDER.]
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY
BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
FIRST SECURITY AUTO OWNER TRUST 20__-__
CLASS B ____% ASSET BACKED NOTES
FIRST SECURITY AUTO OWNER TRUST 20__-__, a business trust organized
and existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of _______________ DOLLARS ($_________)
payable in accordance with the Indenture, prior to the occurrence of an Event of
Default and a declaration that the Notes are due and payable, on each
Distribution Date in an amount equal to the result obtained by multiplying (i) a
fraction, the numerator of which is the initial principal amount hereof and the
denominator of which is the [initial aggregate principal amount of Class B
Notes] by (ii) the aggregate amount, if any, payable from
1
the Note Distribution Account in respect of principal on such class of Notes
pursuant to Sections 2.7, 3.1 and 8.2 of the Indenture; provided, however, that
-------- -------
the entire unpaid principal amount of this Note shall be due and payable on the
earlier of _____________, 20,__,(the "Final Scheduled Distribution Date") and
the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture. The
Issuer shall pay interest on this Note at the rate per annum shown above on each
Distribution Date until the principal of this Note is paid or made available for
payment, on the principal amount of this Note outstanding on the preceding
Distribution Date (after giving effect to all payments of principal made on the
preceding Distribution Date). Interest on this Note will accrue for each
Distribution Date from and including the most recent Distribution Date on which
interest has been paid to but excluding the then current Distribution Date or,
if no interest has yet been paid, from and including _______________,20__.
Interest will be computed on the basis of a 360-day year of twelve 30-day months
(or, in the case of the initial Distribution Date, 13/30ths of a month). Such
principal of and interest on this Note shall be paid in the manner specified on
the reverse hereof.
The Holder of this Class B Note acknowledges and agrees that its
rights to receive payments in respect of this Class B Note are subordinated to
the rights of the Class A Noteholders as and to the extent described in the
Indenture.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America which, 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 Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof or be valid or obligatory for any purpose.
2
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Date: ________________, 20__ FIRST SECURITY AUTO OWNER
TRUST 20__-__,
By: ___________________________,
not in its individual capacity but
solely as Owner Trustee under the
Trust Agreement
By: ______________________
Name:
Title:
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date: ________________, 20__ ____________________________,
not in its individual capacity but
solely as Indenture Trustee
By: _________________________
Name:
Title:
3
REVERSE OF NOTE
This Note, designated as a Class B ___% Asset Backed Note, is one of a
duly authorized issue of Notes of the Issuer (herein called the "Notes"), all
issued under an Indenture, dated as of ________________, 20__ (such Indenture,
as supplemented or amended, is herein called the "Indenture"), between the
Issuer and ____________________, a ______________________, as trustee (the
"Indenture Trustee", which term includes any successor 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 Noteholders. The Notes
are governed by and subject to all terms of the Indenture (which terms are
incorporated herein and made a part hereof), to which Indenture the holder of
this Note by virtue of acceptance hereof assents and by which such holder is
bound. All capitalized terms used and not otherwise defined in this Note that
are defined in the Indenture, as supplemented or amended, shall have the
meanings assigned to them in or pursuant to the Indenture.
The Indenture secures (a) first, the payment of principal of and
interest on, and any other amounts owing in respect of, the Class A Notes,
equally and ratably without prejudice, priority or distinction and (b) second,
the payment of principal of interest on, and any other amounts owing in respect
of, the Class B Notes, equally and ratably without prejudice, priority or
distinction, and to secure compliance with the provisions of the Indenture, all
as provided in the Indenture.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in their
individual capacities, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in their individual capacities, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in their individual capacities, except as any such Person may have
expressly agreed (it being understood that the Indenture Trustee and the Owner
Trustee have no such obligations in their individual capacities) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that by
accepting the benefits of the Indenture such Noteholder will not, prior to the
date which is one year and one day after the termination of this Indenture with
respect to the Issuer, acquiesce, petition or otherwise invoke or cause the
Issuer to invoke the process of any court or government authority for the
purpose of commencing or sustaining a case against the Issuer under any federal
or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other
4
similar official of the Issuer or any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer.
Each Noteholder, by acceptance of a Note or, in the case of a Note
Owner, a beneficial interest in a Note, unless otherwise required by appropriate
taxing authorities, agrees to treat the Notes as indebtedness secured by the
Receivables for the purpose of federal income taxes, state and local income and
franchise taxes, and any other taxes imposed upon, measured by or based upon
gross or net income.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this 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 Note shall
be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Holders of Notes representing a majority of the
Outstanding Notes of the related Series. The Indenture also contains provisions
permitting the Holders of Notes representing a majority of the Outstanding Notes
of the related Series, on behalf of the Holders of all the Notes, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Indenture Trustee
to amend or waive certain terms and conditions set forth in the Indenture
without the consent of the Noteholders. The Indenture further provides that the
Holder of this Note shall not be entitled to vote until such time as all of the
Class A Notes have been paid in full.
The term "Issuer" as used in this 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 and the
Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
5
This 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 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 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 Basic Documents, neither the Seller, the Servicer, the Indenture
Trustee nor the Owner Trustee in their respective individual capacities, 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 Note or the Indenture, it being expressly understood that said
covenants, obligations and indemnifications have been made by the Owner Trustee
solely as the Owner Trustee in the assets of the Issuer. The Holder of this
Note by the acceptance hereof agrees that, except as expressly provided in the
Basic Documents, in the case of an Event of Default under the Indenture, 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 Note.
6
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
_________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _______________________________________________
_________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ____________________________________, as attorney, to transfer said
Note on the books kept for registration thereof, with full power of substitution
in the premises.
Dated:__________________ __________________________________/1/
Signature Guaranteed:
_________________________ __________________________________
_________________________
/1/NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
7
EXHIBIT D
FORM OF NOTE DEPOSITORY AGREEMENT
EXHIBIT E
TRANSFER CERTIFICATE
--------------------
First Security Bank, N.A.
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Executive Vice President and
General Counsel
[Name and Address of Indenture Trustee]
Ladies and Gentlemen:
In connection with the purchase of a Note subject to Section 2.15 of
the Indenture dated as of ________________, 20__ (the "Unregistered Note") of
First Security Auto Owner Trust 20__-__, the undersigned buyer ("Buyer") hereby
acknowledges, represents and agrees that:
(a)The Buyer has received the [describe offering document] relating to
the offering of the Unregistered Note (including exhibits thereto).
2. The Buyer understands that the Unregistered Note has not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and may not be sold except as permitted in the following sentence. The Buyer
agrees, on its own behalf and on behalf of any accounts for which it is acting
as hereinafter stated, that such Unregistered Note may be resold, pledged or
transferred only (i) to an institutional investor that is an "Accredited
Investor" as defined in Rule 501(a)(1),(2),(3) or (7) (an "Institutional
Accredited Investor") under the Securities Act acting for its own account (and
not for the account of others) or as a fiduciary or agent for others (which
others also are Institutional Accredited Investors unless the holder is a bank
acting in its fiduciary capacity) that, if so requested by the Seller or the
Indenture Trustee, executes a certificate in the form hereof, (ii) so long as
such Unregistered Note is eligible for resale pursuant to Rule 144A under the
Securities Act ("Rule 144A"), to a person whom the Buyer reasonably believes
after due inquiry to be a "qualified institutional buyer" (as defined in Rule
144A) acting 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") that, if so requested by the Seller or the Indenture Trustee, executes
a certificate in the form hereof or (iii) in a sale, pledge or other transfer
made in a transaction otherwise exempt from the registration requirements of the
Securities Act, in which case (A) the Indenture Trustee shall require that both
the prospective transferor and the prospective transferee certify to the
Indenture Trustee and the Seller in writing the facts surrounding such transfer,
which certification shall be in form and substance satisfactory to the Indenture
Trustee and the Seller, and (B) the Indenture Trustee shall require a written
opinion of counsel (which will not be at the expense
1
of the Seller, the Servicer or the Indenture Trustee) satisfactory to the Seller
and the Indenture Trustee to the effect that such transfer will not violate the
Securities Act, in each case in accordance with any applicable securities laws
of any state of the United States. The Buyer will notify any purchaser of the
Unregistered Note from it of the above resale restrictions, if then applicable.
The Buyer further understands that in connection with any transfer of the
Unregistered Note by it that the Seller and the Indenture Trustee may request,
and if so requested the Buyer will furnish, such certificates and other
information as they may reasonably require to confirm that any such transfer
complies with the foregoing restrictions.
3.
[CHECK ONE]
[ ] (1) The Buyer is an institutional investor and an "accredited
investor" (as defined in Rule 501(a)(1),(2),(3) or (7) of
Regulation D under the Securities Act) acting for its own
account (and not for the account of others) or as a fiduciary
or agent for others (which others also are Institutional
Accredited Investors unless the Buyer is bank acting in its
fiduciary capacity). The Buyer has such knowledge and
experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment in the
Unregistered Note, and the Buyer and any accounts for which it
is acting are able to bear the economic risk of investment in
the Unregistered Note for an indefinite period of time. The
Buyer is acquiring the Unregistered Note for investment and not
with a view to, or for offer and sale in connection with, a
public distribution.
[ ] (2) The Buyer is a "qualified institutional buyer" as defined
under Rule 144A under the Securities Act and is acquiring the
Unregistered 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"). The Buyer is are
familiar with Rule 144A under the Securities Act and is aware
that the seller of the Unregistered Note and other parties
intend to rely on the statements made herein and the exemption
from the registration requirements of the Securities Act
provided by Rule 144A.
2
4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Print Name of Buyer
By:
Name:
Title:
Date:
3
