Exhibit 10.103(a)
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Execution Copy
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FIRST INVESTORS AUTO OWNER TRUST 2002-A
As Issuer,
FIRST INVESTORS FINANCIAL SERVICES, INC.,
As Seller, and
XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION
As Indenture Trustee
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INDENTURE
Dated as of January 1, 2002
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$159,036,000 3.46% Class A Asset-Backed Notes
$4,819,000 Class B Asset-Backed Notes
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TABLE OF CONTENTS
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Article I Definitions..........................................................................................2
SECTION 1.1 DEFINITIONS.................................................................................2
SECTION 1.2 RULES OF CONSTRUCTION......................................................................11
Article II the Notes..........................................................................................12
SECTION 2.1 FORM.......................................................................................12
SECTION 2.2 EXECUTION, AUTHENTICATION AND DELIVERY.....................................................12
SECTION 2.3 TEMPORARY CLASS A NOTES....................................................................13
SECTION 2.4 TAX TREATMENT..............................................................................13
SECTION 2.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE........................................13
SECTION 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.................................................14
SECTION 2.7 PERSONS DEEMED OWNERS......................................................................15
SECTION 2.8 PAYMENTS...................................................................................16
SECTION 2.9 CANCELLATION...............................................................................19
SECTION 2.10 RELEASE OF COLLATERAL......................................................................19
SECTION 2.11 BOOK-ENTRY.................................................................................19
SECTION 2.12 NOTICES TO CLEARING AGENCY.................................................................20
SECTION 2.13 DEFINITIVE NOTES...........................................................................21
SECTION 2.14 AUTHENTICATING AGENTS......................................................................21
SECTION 2.15 RESTRICTIONS ON TRANSFERS OF CLASS A NOTES.................................................22
SECTION 2.16 RESTRICTIONS ON TRANSFERS OF CLASS B NOTES.................................................23
Article III Covenants.........................................................................................25
SECTION 3.1 PAYMENT COVENANT...........................................................................25
SECTION 3.2 MAINTENANCE OF OFFICE OR AGENCY............................................................25
SECTION 3.3 MONEY FOR PAYMENTS TO BE HELD IN TRUST.....................................................25
SECTION 3.4 EXISTENCE..................................................................................27
SECTION 3.5 PROTECTION OF TRUST ESTATE.................................................................27
SECTION 3.6 OPINIONS AS TO TRUST ESTATE................................................................27
SECTION 3.7 PERFORMANCE OF OBLIGATIONS.................................................................28
SECTION 3.8 NEGATIVE COVENANTS.........................................................................30
SECTION 3.9 ANNUAL STATEMENT AS TO COMPLIANCE..........................................................31
SECTION 3.10 ISSUER MAY NOT MERGE.......................................................................31
SECTION 3.11 NO OTHER BUSINESS..........................................................................31
SECTION 3.12 [RESERVED].................................................................................31
SECTION 3.13 SERVICER'S OBLIGATION......................................................................31
SECTION 3.14 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES..........................................31
SECTION 3.15 CAPITAL EXPENDITURES.......................................................................32
SECTION 3.16 RESTRICTED PAYMENTS........................................................................32
SECTION 3.17 NOTICE OF EVENTS OF DEFAULT................................................................32
SECTION 3.18 REMOVAL OF ADMINISTRATOR...................................................................32
SECTION 3.19 FURTHER INSTRUMENTS AND ACTS...............................................................32
SECTION 3.20 RULE 144A INFORMATION......................................................................32
SECTION 3.21 RE-XXXXXXX TRIGGER.........................................................................33
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Article IV Satisfaction and Discharge.........................................................................33
SECTION 4.1 SATISFACTION AND DISCHARGE OF
INDENTURE....................................................33
SECTION 4.2 SATISFACTION, DISCHARGE AND DEFEASANCE OF THE NOTES........................................34
SECTION 4.3 APPLICATION OF TRUST MONEY.................................................................35
SECTION 4.4 REPAYMENT OF MONIES HELD BY PAYING AGENT...................................................35
SECTION 4.5 CONTINUING OBLIGATIONS OF
INDENTURE TRUSTEE................................................36
Article V Remedies............................................................................................36
SECTION 5.1 EVENTS OF DEFAULT..........................................................................36
SECTION 5.2 ACCELERATION OF MATURITY; RECISSION AND ANNULMENT..........................................39
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE..................40
SECTION 5.4 REMEDIES...................................................................................42
SECTION 5.5 OPTIONAL PRESERVATION OF THE CONTRACTS.....................................................43
SECTION 5.6 LIMITATION OF SUITS........................................................................44
SECTION 5.7 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST......................45
SECTION 5.8 RESTORATION OF RIGHTS AND REMEDIES.........................................................45
SECTION 5.9 RIGHTS AND REMEDIES CUMULATIVE RIGHTS......................................................45
SECTION 5.10 DELAY OR OMISSION NOT A WAIVER.............................................................45
SECTION 5.11 CONTROL BY NOTEHOLDER......................................................................45
SECTION 5.12 WAIVER OF PAST DEFAULTS....................................................................46
SECTION 5.13 UNDERTAKING FOR COSTS......................................................................46
SECTION 5.14 WAIVER OF STAY OR EXTENSION LAWS...........................................................47
SECTION 5.15 ACTION ON NOTES............................................................................47
SECTION 5.16 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.........................................47
Article VI The
Indenture Trustee..............................................................................48
SECTION 6.1 DUTIES OF
INDENTURE TRUSTEE................................................................48
SECTION 6.2 RIGHTS OF
INDENTURE TRUSTEE................................................................49
SECTION 6.3 INDIVIDUAL RIGHTS OF
INDENTURE TRUSTEE.....................................................50
SECTION 6.4
INDENTURE TRUSTEE'S DISCLAIMER.............................................................50
SECTION 6.5 NOTICE OF DEFAULT..........................................................................50
SECTION 6.6 REPORTS BY INDENTURE TRUSTEE TO HOLDERS....................................................51
SECTION 6.7 COMPENSATION AND INDEMNITY.................................................................51
SECTION 6.8 REPLACEMENT OF INDENTURE TRUSTEE...........................................................52
SECTION 6.9 APPOINTMENT OF CO-INDENTURE TRUSTEE........................................................53
SECTION 6.10 ELIGIBILITY; DISQUALIFICATION..............................................................54
SECTION 6.11 ELIGIBILITY; DISQUALIFICATION..............................................................55
Article VI-A..................................................................................................55
SECTION 6A.1 POSSESSION OF CONTRACT FILES BY THE CUSTODIAN............................................55
SECTION 6A.2 RELEASE OF CONTRACT FILES BY THE CUSTODIAN...............................................56
SECTION 6A.3 REGARDING THE CUSTODIAN..................................................................57
Article VII Noteholders' Lists and Reports................................................................... 60
SECTION 7.1 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF NOTEHOLDERS.....................60
SECTION 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.................................60
SECTION 7.3 REPORTS BY ISSUER..........................................................................60
Article VIII Accounts, Disbursements and Releases.............................................................61
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SECTION 8.1 COLLECTION OF MONEY COLLECTION.............................................................61
SECTION 8.2 TRUST ACCOUNTS.............................................................................61
SECTION 8.3 GENERAL PROVISIONS REGARDING ACCOUNTS......................................................62
SECTION 8.4 RELEASE OF TRUST ESTATE....................................................................63
SECTION 8.5 OPINION OF COUNSEL.........................................................................63
Article IX Supplemental Indentures............................................................................63
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDER......................................63
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS........................................64
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.......................................................66
SECTION 9.4 EFFECT OF SUPPLEMENT INDENTURE.............................................................66
SECTION 9.5 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES..............................................67
Article X Redemption of Notes.................................................................................67
SECTION 10.1 REDEMPTION.................................................................................67
SECTION 10.2 FORM OF REDEMPTION NOTICE..................................................................68
SECTION 10.3 NOTES PAYABLE ON REDEMPTION DATE...........................................................68
Article XI Miscellaneous......................................................................................68
SECTION 11.1 COMPLIANCE CERTIFICATES AND OPINIONS, ETC..................................................68
SECTION 11.2 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE...........................................70
SECTION 11.3 ACTS OF NOTEHOLDERS........................................................................71
SECTION 11.4 NOTICES, ETC, TO INDENTURE TRUSTEE.........................................................71
SECTION 11.5 NOTICES TO NOTEHOLDERS; WAIVER NOTICES TO NOTEHOLDERS......................................72
SECTION 11.6 ALTERNATE PAYMENT AND NOTICE PROVISIONS....................................................72
SECTION 11.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS...................................................73
SECTION 11.8 SUCCESSORS AND ASSIGNS.....................................................................73
SECTION 11.9 SEVERABILITY...............................................................................73
SECTION 11.10 BENEFITS OF INDENTURE....................................................................73
SECTION 11.11 LEGAL HOLIDAY............................................................................73
SECTION 11.12 GOVERNING LAW............................................................................73
SECTION 11.13 COUNTERPARTS.............................................................................73
SECTION 11.14 RECORDING OF INDENTURE...................................................................73
SECTION 11.15 TRUST OBLIGATION.........................................................................74
SECTION 11.16 NO PETITION..............................................................................74
SECTION 11.17 INSPECTION...............................................................................74
SECTION 11.18 CERTAIN MATTERS REGARDING THE INSURER....................................................75
SECTION 11.19 ACKNOWLEDGMENT OF MULTIPLE ROLES.........................................................75
SECTION 11.20 SELLERS' OBLIGATIONS.....................................................................75
EXHIBITS
Exhibit A-1 Form of Class A Notes
Exhibit A-2 Form of Class B Notes
Exhibit B Form of Issuer Opinion
Exhibit C Request for Release of Contract
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INDENTURE, dated as of January 1, 2002 (as amended, supplemented or
otherwise modified and in effect from time to time, this "INDENTURE"), between
FIRST INVESTORS AUTO OWNER TRUST 2002-A, a Delaware business trust (the
"ISSUER"), FIRST INVESTORS FINANCIAL SERVICES, INC., a Texas corporation, as
seller (the "SELLER"), and XXXXX FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association, not in its individual capacity but solely as
indenture trustee (in such capacity, the "INDENTURE TRUSTEE").
Each party agrees as follows for the benefit of the other party and for the
benefit of the Noteholders:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee on the Closing Date, for
the benefit of the Noteholders and the Insurer, all of the Issuer's right, title
and interest in, to and under, whether now owned or existing or hereafter
acquired or arising (i) the Contracts listed in the Contract Schedule as of the
Closing Date (the "INITIAL CONTRACTS") and the Additional Contracts; (ii) all
amounts received on or in respect of the Contracts after the applicable Cutoff
Dates (except interest received which accrued before such Cutoff Dates); (iii)
the security interests in the Financed Vehicles granted by the Obligors pursuant
to the Contracts; (iv) all proceeds from claims on or refunds of premiums with
respect to any physical damage, credit life or credit disability insurance
policies covering the Financed Vehicles or the Obligors; (v) any Liquidation
Proceeds; (vi) all of the Issuer's rights to the Contract Files; (vii) the
Collection Account, the Reserve Account, the Prefunding Account, the Class A
Note Payment Account and the Class B Note Payment Account and all amounts,
securities, financial assets, investments and other property deposited in or
credited to any of the foregoing and all proceeds thereof; (viii) all of the
Issuer's rights under the Policy and under the Sale and Allocation Agreement and
the Servicing Agreement, including the right of the Issuer to cause the Seller
or the Servicer, as applicable, to repurchase Contracts from the Issuer and the
right of the Issuer to cause the Servicer to purchase Contracts from the Issuer;
and (ix) all present and future claims, demands, causes of action and choses in
action in respect of any or all of the foregoing and all payments on or under
and all proceeds of every kind and nature whatsoever in respect of any or all of
the foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "COLLATERAL").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes, equally
and ratably without prejudice, priority or distinction, and to secure compliance
with the provisions of this Indenture, all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Noteholders,
acknowledges such Grant, accepts the trusts under this Indenture in accordance
with the provisions of this Indenture and agrees to perform its duties required
in this Indenture to the best of its ability to the
end that the interests of the Noteholders and the Insurer may be adequately and
effectively protected.
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS.
(a) Except as otherwise specified herein or as the context may otherwise
require, the following terms shall have the respective meanings set forth below
for all purposes of this Indenture.
ACT: As defined in SECTION 11.3(a).
ADDITIONAL CONTRACT: As defined in the Sale and Allocation Agreement.
ADDITIONAL CONTRACT PURCHASE DATE: As defined in the Sale and Allocation
Agreement.
ADMINISTRATION AGREEMENT: The Administration Agreement, dated as of January 1,
2002, by and among the Administrator, the Issuer and the Indenture Trustee, as
the same may from time to time be amended, supplemented or otherwise modified
and in effect.
ADMINISTRATOR: First Investors or any successor Administrator under the
Administration Agreement.
AFFILIATE: As defined in the Sale and Allocation Agreement.
AUTHENTICATING AGENT: As defined in SECTION 2.14.
AUTHORIZED OFFICER: With respect to the Issuer, any officer of the Owner Trustee
who is authorized to act for or on behalf of the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as
such list may be modified or supplemented from time to time thereafter) and, for
so long as the Administration Agreement is in full force and effect, any officer
of the Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to the
Administration Agreement.
AVAILABLE FUNDS: As defined in the Sale and Allocation Agreement.
BACK-UP SERVICER: As defined in the Sale and Allocation Agreement.
BOOK-ENTRY NOTES: A beneficial interest in the Class A Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in SECTION 2.11.
BUSINESS DAY: Any day other than a Saturday, a Sunday or a day on which banking
institutions or trust companies in
New York,
New York; Wilmington, Delaware;
Houston, Texas;
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Minneapolis, Minnesota or Atlanta, Georgia are authorized or obligated by law,
executive order or governmental decree to remain closed.
CERTIFICATE OF TRUST: As defined in the Trust Agreement.
CERTIFICATE REGISTRAR: As defined in the Trust Agreement.
CLASS A HOLDER or CLASS A NOTEHOLDER: The Person in whose name a Class A Note is
registered in the Note Register.
CLASS A MONTHLY NOTE PRINCIPAL: As defined in the Sale and Allocation Agreement.
CLASS A NOTES: The Class A Asset-Backed Notes issued by the Issuer pursuant to
this Indenture in the initial aggregate principal amount of $159,036,000.
CLASS A NOTE BALANCE: (a) Initially, the original principal amount of the Class
A Notes issued by the Issuer on the Closing Date and (b) on any date of
determination thereafter, the aggregate outstanding principal balance of the
Class A Notes after giving effect to any distribution in respect of principal on
the Class A Notes on or prior to such date.
CLASS A NOTE PAYMENT ACCOUNT: As defined in the Sale and Allocation Agreement.
CLASS B HOLDER or CLASS B NOTEHOLDER: The Person in whose name a Class B Note is
registered in the Note Register.
CLASS B MONTHLY NOTE PRINCIPAL: As defined in the Sale and Allocation Agreement.
CLASS B NOTE: The Class B Asset-Backed Notes issued by the Issuer pursuant to
this Indenture in the initial aggregate principal amount of $4,819,000.
CLASS B NOTE BALANCE: (a) Initially, the original principal amount of the Class
B Notes issued by the Issuer on the Closing Date and (b) on any date of
determination thereafter, the aggregate outstanding principal balance of the
Class B Notes after giving effect to any distribution in respect of principal on
the Class B Notes on or prior to such date.
CLASS B NOTE PAYMENT ACCOUNT: As defined in the Sale and Allocation Agreement.
CLEARING AGENCY: An organization registered as a "clearing agency" pursuant to
Section 17A of the Exchange Act.
CLEARING AGENCY PARTICIPANT: A broker, dealer, bank, other financial institution
or other Person for whom from time to time a Clearing Agency effects book-entry
transfers and pledges of securities deposited with the Clearing Agency.
CLOSING DATE: January 29, 2002.
CODE: The Internal Revenue Code of 1986, as amended from time to time, and the
Treasury Regulations promulgated thereunder.
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COLLATERAL: As defined in the GRANTING CLAUSE of this Indenture.
COLLECTION ACCOUNT: As defined in the Sale and Allocation Agreement.
COMMISSION: The Securities and Exchange Commission.
CORPORATE TRUST OFFICE: The principal office of the Indenture Trustee at which
at any particular time its corporate trust business shall be administered, which
office at date of execution of this Indenture is located at Sixth Street and
Marquette Avenue MAC N9311-161, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention:
Corporate Trust Services - Asset-Backed Administration, or at such other address
as the Indenture Trustee may designate from time to time by notice to the
Noteholders and the Issuer, or the principal corporate trust office of any
successor Indenture Trustee at the address designated by such successor
Indenture Trustee by notice to the Noteholders and the Issuer.
CUSTODIAN: Xxxxx Fargo Bank Minnesota, National Association, not in its
individual capacity but solely as custodian, as specified herein.
CUT-OFF DATE: (a) With respect to the Initial Contracts, December 31, 2001 and
(b) with respect to any Additional Contract, two (2) Business Days prior to the
Additional Contract Purchase Date for such Contract.
DEFAULT: Any event that, with notice or the lapse of time or both, would become
an Event of Default.
DEFINITIVE NOTES: As defined in SECTION 2.11.
DELINQUENCY RATIO: As defined in the Sale and Allocation Agreement.
DEPOSITOR: As defined in the Trust Agreement.
DEPOSITOR ACCOUNT: As defined in the Trust Agreement.
EVENT OF DEFAULT: As defined in SECTION 5.1.
EXCESS PREFUNDING AMOUNT: The funds, if any, remaining in the Prefunding Account
on the Prefunding Account Ending Date.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.
EXECUTIVE OFFICER: With respect to any corporation, the Chief Executive Officer,
the Chief Operating Officer, the Chief Financial Officer, the President, any
Executive Vice President, any Senior Vice President, any Vice President, the
Secretary or the Treasurer of such corporation and with respect to any
partnership, any general partner of such partnership.
FILE NUMBERS: As defined SECTION 6A.1(f).
FILE NUMBER LIST: As defined in SECTION 6A.1(f).
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FINAL NOTE PAYMENT DATE: December 15, 2008.
FINANCED VEHICLE: As defined in the Sale and Allocation Agreement.
FIRST INVESTORS: First Investors Financial Services, Inc.
FISC: First Investors Servicing Corporation, together with its successors and
assigns.
FISCAL YEAR: The period commencing on May 1 and ending on April 30 of the
following year.
GRANT: To mortgage, pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, and to xxxxx x xxxx upon and a security
interest in and right of set-off against, and to deposit, set over and confirm
pursuant to this Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other monies payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the granting party or otherwise, and generally to do
and receive anything that the granting party is or may be entitled to do or
receive thereunder or with respect thereto.
GUARANTY: The guaranty entered into as of January 1, 2002 by the Seller, the
Depositor, the Issuer, FISC, the Back-Up Servicer and the Indenture Trustee.
HOLDER or NOTEHOLDER: A Class A Holder or Class B Holder or a Class A Noteholder
or Class B Noteholder, respectively.
INDEMNIFICATION AGREEMENT: The Indemnification Agreement dated as of January 17,
2002 among the Insurer, the Seller, and Wachovia Securities.
INDENTURE TRUSTEE: Xxxxx Fargo Bank Minnesota, National Association, a national
banking association, not in its individual capacity but solely as Indenture
Trustee under this Indenture, and any successor indenture trustee under this
Indenture.
INDEPENDENT: When used with respect to any specified Person, that such Person
(i) is in fact independent of the Trust, any other obligor on the Notes, the
Seller, the Servicer and any Affiliate of any of the foregoing Persons, (ii)
does not have any direct financial interest or any material indirect financial
interest in the Trust, any such other obligor, the Seller, the Servicer or any
Affiliate (other than a special purpose securitization vehicle whose rating is
based in part on its being bankruptcy-remote) of any of the foregoing Persons
and (iii) is not connected with the Trust, any such other obligor, the Seller,
the Servicer or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
INDEMNITEES: As defined in SECTION 6A.3(d).
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INDEPENDENT CERTIFICATE: A certificate or opinion to be delivered to the
Indenture Trustee under the circumstances described in, and otherwise complying
with, the applicable requirements of SECTION 11.1, made by an Independent
appraiser or other expert appointed by an Issuer Order and approved by the
Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.
INITIAL CONTRACTS: As defined in the Granting Clause.
INITIAL CUTOFF DATE: December 31, 2001.
INSOLVENCY EVENT: (i) the entry against the Insurer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the premises for
the appointment of a trustee, conservator, receiver or liquidator in any
insolvency, conservatorship, receivership, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of the Insurer's affairs, and the continuance of any such decree or
under unstayed and in effect or (ii) the consent by the Insurer to the
appointment of a trustee, conservator, receiver or liquidator in any insolvency,
conservatorship, receivership, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to such Insurer as of or
relating to substantially all of its property, or such Insurer shall admit in
writing its liability to pay its debts generally as they become due, file a
petition (or have one filed against such Insurer) to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or suspend (voluntarily or involuntarily) payment of
its obligations.
INSURANCE AGREEMENT: The Insurance Agreement, dated as of January 1, 2002, by
and among the Seller, the Administrator, the Servicer, the Back-Up Servicer, the
Issuer, the Depositor, the Owner Trustee, the Indenture Trustee and the Insurer,
as the same may be amended, supplemented or otherwise modified and in effect
from time to time.
INSURANCE PREMIUM: As defined in the Insurance Agreement.
INSURER: MBIA Insurance Corporation, a corporation domiciled in
New York, and
its successors.
INSURER DEFAULT: A default by the Insurer under the Policy, including an
Insolvency Event (after giving effect to any applicable cure period).
ISSUER: First Investors Auto Owner Trust 2002-A or any successor to First
Investors Auto Owner Trust 2002-A and, for purposes of any provision contained
herein each other obligor on the Notes.
ISSUER ORDER: A written order signed in the name of the Issuer by an Authorized
Officer of the Issuer and delivered to the Indenture Trustee.
ISSUER REQUEST: A written request signed in the name of the Issuer by an
Authorized Officer of the Issuer and delivered to the Indenture Trustee.
LIQUIDATION PROCEEDS: All amounts received by the Servicer with respect to any
Defaulted Contract, net of the sum of (i) any reasonable expenses incurred by
the Servicer in connection
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with collection of such contract and the disposition of the related Financed
Vehicle (to the extent determinable by the Servicer and not previously
reimbursed) PLUS (ii) any amounts required by law to be remitted to the related
Obligor.
LOSSES: As defined in SECTIONS 6.7(a) and 6A.3(d).
MOODY'S: Xxxxx'x Investors Service, Inc., and its successors.
MONTHLY NOTE PRINCIPAL: The Class A Monthly Note Principal and/or the Class B
Monthly Note Principal, as the context may require.
NOTE BALANCE: At any time, the sum of the Class A Note Balance and the Class B
Note Balance.
NOTE DEPOSITORY AGREEMENT: The agreement dated as of January 29, 2002, among the
Issuer, the Indenture Trustee and The Depository Trust Company, as the initial
Clearing Agency, relating to the Notes.
NOTE PAYMENT ACCOUNT: The Class A Note Payment Account or the Class B Note
Payment Account, as the case may be.
NOTE OWNER: With respect to any Class A Noteholder of a Book-Entry Note, the
Person who is the beneficial owner of such Book-Entry Note as reflected on the
books of the Clearing Agency or on the books of a Person maintaining an account
with such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
NOTE RATE: 3.46% per annum.
NOTE REGISTER: As defined in SECTION 2.5.
NOTE REGISTRAR: As defined in SECTION 2.5.
NOTEHOLDERS: Collectively, the Class A Noteholders and the Class B Noteholders,
it being understood that with regards to voting prior to the payment in full of
the Class A Notes and the payment in full of all amounts owed to the Insurer, a
majority of Class A Noteholders will not include Class B Noteholders.
NOTES: Collectively, the Class A Notes and the Class B Notes, it being
understood that with regards to voting prior to the payment in full of the Class
A Notes and the payment in full of all amounts owed to the Insurer, a majority
of Class A Notes will not include Class B Notes.
OFFICER'S CERTIFICATE: A certificate signed by an Authorized Officer of the
Issuer and delivered to the Indenture Trustee, which certificate shall comply
with the applicable requirements of SECTION 11.1.
OPINION OF COUNSEL: One or more written opinions of counsel who may, except as
otherwise expressly provided in this Indenture, be outside counsel to, the
Issuer, the Seller or the Servicer and who shall be acceptable to the Indenture
Trustee and the Insurer (provided that no Insurer
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Default shall have occurred and is continuing), which opinion or opinions shall
be addressed to and delivered to the Indenture Trustee as Indenture Trustee and
the Insurer (provided that no Insurer Default shall have occurred and is
continuing), shall comply with any applicable requirements of SECTION 11.1 and
shall be in form and substance satisfactory to the Indenture Trustee.
OUTSTANDING: As of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i) Notes theretofore canceled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes; PROVIDED,
HOWEVER, that if such Notes are to be redeemed, notice of such redemption
must have been duly given pursuant to this Indenture or provision for such
notice must have been made in a manner satisfactory to the Indenture
Trustee; and
(iii) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a protected purchaser;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite Note
Balance have given any request, demand, authorization, direction, notice,
consent or waiver hereunder or under any Transaction Document, Notes owned by
the Issuer, any other obligor upon the Notes, the Seller, the Servicer or any
Affiliate of any of the foregoing Persons shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Indenture Trustee shall
be protected in relying on any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that a Responsible Officer knows to be so
owned shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes, the Seller, the Servicer or any Affiliate of any of the foregoing
Persons.
OWNER TRUSTEE: Bankers Trust (Delaware), a Delaware banking corporation, not in
its individual capacity but solely as Owner Trustee under the Trust Agreement,
and any successor owner trustee under the Trust Agreement.
PAYING AGENT: The Indenture Trustee or any other Person that meets the
eligibility standards for the Indenture Trustee specified in SECTION 6.11 and is
authorized by the Issuer to make payments to and distributions from the
Collection Account, the Prefunding Account and each Note Payment Account,
including payment of principal of or interest on the Notes, on behalf of the
Issuer.
PAYMENT DATE: The 15th day of each month, or if such 15th day is not a Business
Day, the following Business Day, commencing on March 15, 2002.
8
POLICY: The irrevocable financial guaranty insurance policy dated January 29,
2002, issued by the Insurer to the Indenture Trustee for the benefit of the
Class A Noteholders.
POLICY CLAIM AMOUNT: As defined in the Sale and Allocation Agreement.
POOL BALANCE: As defined in the Sale and Allocation Agreement.
PREDECESSOR NOTE: With respect to any particular Note, every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note. Any Note authenticated and delivered under SECTION 2.6 in lieu
of a mutilated, lost, destroyed or stolen Note shall be deemed, for purposes of
this definition, to evidence the same debt as the mutilated, lost, destroyed or
stolen Note.
PREFUNDING ACCOUNT: As defined in the Sale and Allocation Agreement.
PREFUNDING ACCOUNT ENDING DATE: May 31, 2002.
PREFUNDING ACCOUNT PAYOUT DATE: The Payment Date in June, 2002.
PREMIUM SIDE LETTER AGREEMENT: As defined in the Insurance Agreement.
PROCEEDING: Any suit in equity, action at law or other judicial or
administrative proceeding.
PURCHASE AGREEMENT: That Purchase Agreement, dated as of January 17, 2002,
between the Issuer, the Seller and Wachovia Securities.
RATING AGENCY: S&P and Moody's or, if S&P and Moody's cease to exist, any
nationally recognized statistical rating organization or other comparable Person
designated by the Issuer and acceptable to the Insurer (provided that no Insurer
Default shall have occurred and be continuing), notice of which designation
shall have been given to the Indenture Trustee, the Owner Trustee and the
Servicer.
RATING AGENCY CONDITION: With respect to any action, that each Rating Agency
shall have notified the Seller, the Servicer, the Insurer, the Indenture Trustee
and the Owner Trustee that such action shall not result in a reduction or
withdrawal of the then current rating assigned to the Notes without regard to
the Policy.
RE-XXXXXXX TRIGGER: The occurrence of any Event of Default.
RECORD DATE: With respect to any Payment Date or Redemption Date, the close of
business on the Business Day preceding such Payment Date or Redemption Date;
PROVIDED, HOWEVER, that if Definitive Notes have been issued pursuant to SECTION
2.13, Record Date shall mean, with respect to any Payment Date or Redemption
Date, the last day of the preceding Collection Period.
REDEMPTION DATE: The Payment Date specified by the Servicer pursuant to SECTION
10.1 on which date the Indenture Trustee shall withdraw any amount remaining in
the Reserve Account and deposit the portion of such amount payable to the
Noteholders in the Note Payment Account.
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REDEMPTION PRICE: In the case of a redemption of Notes pursuant to SECTION 10.1,
an amount equal to the unpaid principal amount of the Notes redeemed plus
accrued and unpaid interest thereon.
RESERVE ACCOUNT: As defined in the Sale and Allocation Agreement.
RESPONSIBLE OFFICER: Any officer within the Corporate Trust Department of the
Indenture Trustee with direct responsibility for the administration of this
Indenture and also, with respect to a particular matter, any other officer of
the Indenture Trustee to whom such matter is referred because of such officer's
knowledge of and familiarity with such matter or other similar matters.
RULE 144A: Rule 144A under the Securities Act of 1933, as amended.
RULE 144A INFORMATION: Such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto).
SALE AND ALLOCATION AGREEMENT: The Sale and Allocation Agreement, dated as of
January 1, 2002, by and among the Issuer, the Seller, the Servicer, the
Indenture Trustee and the Depositor as the same may be amended, supplemented or
otherwise modified and in effect from time to time.
SELLER: First Investors Financial Services, Inc. a Texas corporation, in its
capacity as seller under the Sale and Allocation Agreement, and its successors
in such capacity.
SERVICER: FISC, in its capacity as servicer under the Servicing Agreement, and
any Successor Servicer.
SERVICING AGREEMENT: That certain Servicing Agreement, dated as of January 1,
2002, between FISC, the Depositor, the Back-Up Servicer, the Indenture Trustee
and the Trust.
SERVICING FEE: As defined in the Sale and Allocation Agreement.
SERVICING RATE: As defined in the Sale and Allocation Agreement.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., and its
successors.
STATE: Any of the fifty states of the United States of America or the District
of Columbia.
SUCCESSOR SERVICER: As defined in SECTION 3.7(e).
TOTAL AVAILABLE FUNDS: As defined in the Sale and Allocation Agreement.
TOTAL NOTE INTEREST: As defined in the Sale and Allocation Agreement.
TOTAL SERVICING FEE: As defined in the Sale and Allocation Agreement.
TRANSACTION DOCUMENTS: The Servicing Agreement, the Sale and Allocation
Agreement, the Premium Side Letter Agreement, the Trust Agreement, the
Indemnification Agreement, the Certificate of Trust, this Indenture, the
Administration Agreement, the Purchase Agreement, the
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Note Depository Agreement, the Insurance Agreement, the Policy, the Guaranty and
the other documents and certificates delivered in connection therewith, in each
case as the same may from time to time be amended, supplemented or otherwise
modified and in effect.
TRUST ACCOUNTS: The Collection Account, the Class A Note Payment Account, the
Class B Note Payment Account, the Prefunding Account, the Depositor Account and
the Reserve Account.
TRUST ESTATE: All money, instruments, rights and other property that are subject
or intended to be subject to the lien and security interest of this Indenture
for the benefit of the Noteholders and the Insurer (including, but not limited
to, all property and interests Granted to the Indenture Trustee), including all
proceeds thereof.
WACHOVIA SECURITIES: First Union Securities Inc., operating under the trade name
Wachovia Securities.
(b) Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein have the
respective meanings set forth in, or incorporated by reference into, the Sale
and Allocation Agreement for all purposes of this Indenture.
SECTION 1.2 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned to it
in accordance with generally accepted accounting principles as in effect from
time to time;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular and the masculine as well as the feminine and neuter
genders of such terms;
(f) any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; and
(g) references to a Person are also to its permitted successors and
assigns.
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ARTICLE II
THE NOTES
SECTION 2.1 FORM.
(a) The Class A Notes and the Class B Notes, together with the Indenture
Trustee's certificates of authentication, shall be substantially in the form set
forth in EXHIBIT A-1 and EXHIBIT A-2, respectively, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution thereof. 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
the Class A Notes and the Class B Notes set forth in EXHIBIT A-1 and EXHIBIT
A-2, respectively, hereto are part of the terms of this Indenture and are
incorporated herein by reference.
SECTION 2.2 EXECUTION, AUTHENTICATION AND DELIVERY.
(a) The Notes shall be executed on behalf of the Issuer by any of its
Authorized Officers. The signatures of any such Authorized Officer on the Notes
may be manual or facsimile.
(b) Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices on the date of such Notes.
(c) The Indenture Trustee shall, upon Issuer Order, authenticate and
deliver the Class A Notes and the Class B Notes for original issue in an
aggregate principal amount of $159,036,000 and $4,819,000, respectively. The
Class A Note Balance and the Class B Note Balance at any time may not exceed
such respective amounts except as provided in this Indenture.
(d) Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in minimum denominations of $250,000 and
integral multiples of $1,000 in excess thereof.
(e) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be
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conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder.
SECTION 2.3 TEMPORARY CLASS A NOTES.
(a) Pending the preparation of Definitive Notes, the Issuer may execute,
and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and
deliver, temporary Notes that are printed, lithographed, typewritten,
mimeographed or otherwise produced of the tenor of the Definitive Notes in lieu
of which they are issued and with such variations not inconsistent with the
terms of this Indenture as the officers executing such Notes may determine, as
evidenced by their execution of such Notes.
(b) If temporary Class A Notes are issued, the Issuer shall cause
Definitive Notes to be prepared without unreasonable delay. After the
preparation of Definitive Notes, the temporary Class A Notes shall be
exchangeable for Definitive Notes upon surrender of the temporary Class A Notes
at the office or agency of the Issuer to be maintained as provided in SECTION
3.2, without charge to the Class A Holder. Upon surrender for cancellation of
any one or more temporary Class A 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
exchanged, the temporary Class A Notes shall in all respects be entitled to the
same benefits under this Indenture as Definitive Notes.
SECTION 2.4 TAX TREATMENT.
The Issuer has entered into this Indenture, and the Class A Notes shall be
issued, with the intention that, for federal, state and local income and
franchise tax purposes, the Class A Notes shall qualify as indebtedness of the
Issuer secured by the Trust Estate. The Issuer, by entering into this Indenture,
and each Class A Noteholder, by its acceptance of a Class A Note (and each Note
Owner of a Class A Note by its acceptance of an interest in the applicable
Book-Entry Note), agree to treat the Class A Notes as indebtedness of the Issuer
for federal, state and local income and franchise tax purposes.
SECTION 2.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept a register (the "NOTE REGISTER") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee initially shall be the registrar (the "NOTE
REGISTRAR") for the purpose of registering Notes and transfers of Notes as
herein provided. Upon any resignation of any Note Registrar, the Issuer shall
promptly appoint a successor or, if it elects not to make such an appointment,
assume the duties of Note Registrar. In addition, the Indenture Trustee hereby
accepts its appointment as Certificate Registrar, as defined in and pursuant to
Section 3.4 of the Trust Agreement.
(b) If a Person other than the Indenture Trustee is appointed by the Issuer
as Note Registrar, (i) the Issuer shall give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location, or
any change in the location, of the Note Register, (ii) the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof and (iii) the Indenture Trustee shall have the right to
rely upon a
13
certificate executed on behalf of the Note Registrar by an Executive Officer
thereof as to the names and addresses of the Noteholders and the principal
amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in SECTION 3.2, if the
requirements of Section 8-401 of the Relevant UCC are met, the Issuer shall
execute, and the Indenture Trustee shall authenticate and deliver to the
Noteholder making such surrender, in the name of the designated transferee or
transferees, one or more new Notes in any authorized denomination, of a like
aggregate principal amount. The Indenture Trustee may rely upon the
Administrator with respect to the determination of whether the requirements of
Section 8-401 of the Relevant UCC are met.
(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 such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401 the Relevant UCC are met, the Issuer shall execute, and the
Indenture Trustee shall authenticate and deliver to the Noteholder making such
exchange, the Notes which such Noteholder is entitled to receive. The Indenture
Trustee may rely upon the Administrator with respect to the determination of
whether the requirements of Section 8-401 of the Relevant UCC are met.
(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) All Notes presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in the form of the Assignment attached to EXHIBIT A-1 or EXHIBIT A-2,
as the case may be, satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar.
(g) No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment by such Holder
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of Notes,
other than exchanges pursuant to SECTION 2.3 or 9.5 not involving any transfer.
(h) The Issuer shall not be required to make, and the Note Registrar need
not register, transfers or exchanges of Notes selected for redemption or Notes
with respect to which the due date for any payment will occur within 15 days.
SECTION 2.6 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
protected
14
purchaser, and provided that the requirements of Section 8-405 of the Relevant
UCC are met, the Issuer shall execute and the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note ; PROVIDED, HOWEVER, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven (7) days of the Indenture Trustee's receipt of evidence
to its satisfaction of such destruction, loss or theft shall be due and payable,
or shall have been called for redemption in whole pursuant to SECTION 10.1,
instead of issuing a replacement Note, the Issuer may pay such destroyed, lost
or stolen Note when so due or payable or upon the Redemption Date without
surrender thereof. The Indenture Trustee may rely upon the Administrator with
respect to the determination of whether the requirements of Section 8-405 of the
Relevant UCC are met. If, after the delivery of such replacement Note or payment
of a destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a protected purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom such replacement Note was delivered or any
Person taking such replacement Note from such Person to whom such replacement
Note was delivered or any assignee of such Person, except a protected purchaser,
and shall be entitled to recover upon the 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.
(b) Upon the issuance of any replacement Note under this SECTION 2.6, 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 connection
with such issuance and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) related thereto.
(c) Every replacement Note issued pursuant to this SECTION 2.6 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this SECTION 2.6 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 2.7 PERSONS DEEMED OWNERS.
Prior to due presentation of a Note for registration of transfer, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name such Note is registered in the Note
Register (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest on such Note and for
all other purposes whatsoever, whether or not such Note shall be overdue, and
none of the Issuer, the Indenture Trustee or any agent of the Issuer or the
Indenture Trustee shall be affected by any notice to the contrary.
15
SECTION 2.8 PAYMENTS.
(a) On each Payment Date, upon receipt of instructions from the Servicer
pursuant to Section 3.5(d) of the Sale and Allocation Agreement, the Indenture
Trustee shall apply or cause to be applied the amount on deposit in the
Collection Account (including amounts deposited therein from all interest
earnings on the Collection Account) (but with respect to Reserve Account Draw
Amounts, only to clauses (ii) through (vi) below) on such Payment Date to make
the following payments in the following order of priority:
(i) to the Back-Up Servicer, Indenture Trustee, Custodian and Owner
Trustee, in its individual capacity, respectively, any unpaid or
unreimbursed fees and expenses (including, but not limited to, attorneys'
fees and transition expenses); PROVIDED that such expenses shall not exceed
$50,000 in the aggregate per year and (A) prior to an Event of Servicing
Termination, $100,000 in the total aggregate or (B) after an Event of
Servicing Termination, $200,000 in the total aggregate, during such time as
the Notes shall remain outstanding and the Policy has not been cancelled;
(ii) to the Servicer, the Total Servicing Fee for the preceding
Collection Period;
(iii) to the Class A Note Payment Account for distribution to the Class
A Noteholders, the Total Note Interest for such Payment Date;
(iv) unless an Insurer Default has occurred and is continuing, to the
Insurer, the Insurance Premium for such Payment Date plus any overdue
Insurance Premiums for previous Payment Dates;
(v) to the Class A Note Payment Account for distribution to the Class
A Noteholders, the Class A Monthly Note Principal for such Payment Date,
(vi) to the Insurer, the aggregate amount of any unreimbursed payments
under the Policy to the extent payable to the Insurer under the Insurance
Agreement PLUS accrued interest on any unreimbursed payments under the
Policy at the rate provided in the Insurance Agreement PLUS any other
amounts due the Insurer under the Insurance Agreement and the Policy;
(vii) if the Notes have been declared immediately due and payable
following the occurrence of an Event of Default, to the Class A Note
Payment Account, the lesser of (A) the amount of Available Funds available
to be applied on such Payment Date to pay the Class A Note Balance and (B)
the Class A Note Balance;
(viii) to the Reserve Account, the Reserve Account Deficiency, if any,
for such Payment Date;
(ix) after the occurrence of a Re-Xxxxxxx Trigger, to the Servicer (if
not First Investors Servicing Corporation) any and all expenses incurred in
connection with re-titling the Financed Vehicles, to the extent not
previously paid;
16
(x) to the Class B Note Payment Account for distribution to the Class
B Noteholders, the Class B Monthly Note Principal for such Payment Date;
(xi) to the Owner Trustee, in its individual capacity, Indenture
Trustee, Custodian, Back-Up Servicer, Servicer, and Insurer, respectively,
any other amounts, if any, due under the Transaction Documents; and
(xii) to the Depositor Account, any remaining amount of Available
Funds.
(b) The principal of each Note shall be due and payable in installments on
each Payment Date in an aggregate amount (unless the Notes have been declared
immediately due and payable in accordance with SECTION 5.2 following the
occurrence of an Event of Default) equal to the applicable Monthly Note
Principal for such Payment Date. On each Payment Date (unless the Notes have
been declared immediately due and payable in accordance with SECTION 5.2
following the occurrence of an Event of Default), upon receipt of instructions
from the Servicer pursuant to Section 3.5(d), (e) and (f) of the Sale and
Allocation Agreement, the Indenture Trustee shall:
(i) apply or cause to be applied the amount on deposit in the Class A
Note Payment Account on such Payment Date to make the following payments in
the following order of priority:
(A) to the Class A Noteholders, the Total Note Interest payable for
such Payment Date; and
(B) to the Class A Noteholders, the Class A Monthly Note Principal
for that Payment Date until the principal amount of the Class A Notes
has been paid in full.
(ii) apply or cause to be applied the amount on deposit in the Class B
Note Payment Account on such Payment Date to the Class B Noteholders, for
the payment of the Class B Monthly Note Principal for that Payment Date
until the principal amount of the Class B Notes has been paid in full.
(c) The principal amount of the Notes, to the extent not previously paid,
shall be due on the Final Note Payment Date.
(d) The Class A Notes shall accrue interest at 3.46% and such interest
shall be due and payable on each Payment Date. The Class B Notes shall not
accrue interest. Interest on the Class A Notes shall be calculated on the basis
a 360-day year consisting of twelve 30-day months. Subject to SECTION 3.1, any
installment of interest or principal, if any, payable on any Class A Note that
is punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the related 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 Definitive Notes
have been issued pursuant to SECTION 2.13, with respect to Class A Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payment shall be made by wire
transfer in
17
immediately available funds to the account designated by such nominee, and
except for the final installment of principal payable with respect to such Class
A Note on a Payment Date or on the related Final Note Payment Date (and except
for the Redemption Price for any Note called for redemption in whole pursuant to
SECTION 10.1(a) or (b)), which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in accordance
with SECTION 3.3. The Indenture Trustee shall pay all Total Note Interest for
any Payment Date to the Noteholders on the related Record Date even if a portion
of such Total Note Interest relates to an earlier Payment Date.
(e) All principal and, as to the Class A Notes, interest payments on the
Notes shall be made PRO RATA to the Noteholders in the related class. The
Indenture Trustee shall, before the Payment Date on which the Issuer expects to
pay the final installment of principal of and, as to the Class A Notes, interest
on any Note, notify the Holder of such Note as of the related Record Date of
such final installment. Such notice shall be mailed or transmitted by facsimile
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. Notices
in connection with redemption of Notes shall be mailed to Noteholders as
provided in SECTION 10.2.
(f) Notwithstanding the foregoing, the entire unpaid principal amount of
the Notes shall be due and payable, if not previously paid, on the date on which
the Notes have been declared or have automatically become immediately due and
payable in accordance with SECTION 5.2 following the occurrence of an Event of
Default. On each Payment Date following acceleration of the Notes, upon receipt
of instructions from the Servicer pursuant to Section 3.5(d) of the Sale and
Allocation Agreement, the Indenture Trustee shall:
(i) apply or cause to be applied the amount on deposit in the Class A
Note Payment Account on such Payment Date to make the following payments in
the following order of priority:
(A) to the Class A Noteholders, the Total Note Interest payable for
such Payment Date; and
(B) to the Class A Noteholders, the amount remaining on deposit in
the Class A Note Payment Account on such Payment Date up to the Class A
Note Balance.
(ii) following the payment in full of the entire Class A Note Balance
and all amounts due the Insurer, to pay or cause to be paid the amount on
deposit in the Class B Note Payment Account on such Payment Date to the
Class B Noteholders, the amount remaining on deposit in the Class B Note
Payment Account on such Payment Date up to the Class B Note Balance.
(g) the Indenture Trustee, upon receipt of instructions from the Servicer,
pursuant to Section 3.5(c) of the Sale and Allocation Agreement, shall deposit
the proceeds of any drawing under the Policy in respect of the Policy Claim
Amount in the Class A Note Payment Account.
18
(h) the Indenture Trustee, upon receipt of instructions from the Servicer
pursuant to Section 3.5(e) or (f) of the Sale and Allocation Agreement, shall
apply the proceeds of any drawing from the Reserve Account as follows: (i)
amounts drawn in respect of the Total Servicing Fee shall be deposited to an
account designated by the Servicer; (ii) amounts drawn in respect of Total Note
Interest, Class A Monthly Note Principal or the Class A Note Balance shall be
deposited into the Class A Note Payment Account; and (iii) amounts drawn in
respect of the Insurance Premium or unreimbursed payments under the Policy shall
be deposited to an account designated by the Insurer.
SECTION 2.9 CANCELLATION.
All Notes surrendered for payment, registration of transfer, exchange or
redemption in whole pursuant to SECTION 10.1(a) or (b) 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 2.9, except as
expressly permitted by this Indenture. All canceled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by an
Issuer Order that they be destroyed or returned to it, provided that such Issuer
Order is timely and the Notes have not been previously disposed of by the
Indenture Trustee.
SECTION 2.10 RELEASE OF COLLATERAL.
Subject to SECTION 11.1 and the terms of the Transaction Documents, the
Indenture Trustee shall release property from the lien of this Indenture at any
time before the Notes have been paid in full only upon receipt of an Issuer
Request accompanied by an Officer's Certificate and an Opinion of Counsel.
SECTION 2.11 BOOK-ENTRY.
The Class A Notes, upon original issuance, shall be issued in the form of
typewritten 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. The Class A Notes representing the Book-Entry Notes shall be registered
initially on the Note Register in the name of Cede & Co., the nominee of the
initial Clearing Agency, and no Note Owner thereof shall receive a Definitive
Note representing such Note Owner's interest in such Note, except as provided in
SECTION 2.13. Unless and until definitive, fully registered Class A Notes (the
"DEFINITIVE NOTES") have been issued to such Note Owners pursuant to SECTION
2.13:
(a) the provisions of this SECTION 2.11 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 Class A Notes and the giving of
instructions or directions hereunder) as the sole Holder of the Class A Notes,
and shall have no obligation to the Note Owners;
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(c) to the extent that the provisions of this SECTION 2.11 conflict with
any other provisions of this Indenture, the provisions of this Section shall
control;
(d) the rights of Note Owners shall be exercised only through the Clearing
Agency and shall be limited to those established by law and agreements between
such Note Owners and the Clearing Agency and/or the Clearing Agency Participants
pursuant to the Note Depository Agreement; unless and until Definitive Notes are
issued pursuant to SECTION 2.13, the initial Clearing Agency shall make
book-entry transfers among the Clearing Agency Participants and receive and
transmit payments of principal of and interest on the Notes to such Clearing
Agency Participants; and
(e) whenever this Indenture requires or permits actions to be taken based
upon instructions or directions of Noteholders evidencing a specified percentage
of the Class A Note Balance, the Clearing Agency shall be deemed to represent
such percentage only to the extent that it has received instructions to such
effect from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial interest
in the Class A Notes and has delivered such instructions to the Indenture
Trustee.
SECTION 2.12 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Class A Noteholders is
required under this Indenture, unless and until Definitive Notes shall have been
issued to such Note Owners pursuant to SECTION 2.13, the Indenture Trustee shall
give all such notices and communications specified herein to be given to Class A
Noteholders to the Clearing Agency, and shall have no obligation to such Note
Owners.
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SECTION 2.13 DEFINITIVE NOTES.
If (a) the Issuer, the Administrator or the Servicer 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 Book-Entry Notes and
the Indenture Trustee or the Administrator is unable to locate a qualified
successor, (b) 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 (c) after the occurrence of an Event of Default or an Event
of Servicing Termination, Note Owners of the Book-Entry Notes representing
beneficial interests aggregating not less than 51% of the principal amount of
such Notes advise the Indenture Trustee and the Clearing Agency in writing that
the continuation of a book-entry system through the Clearing Agency is no longer
in the best interests of such Note Owners, then the Clearing Agency shall notify
all Note Owners and the Indenture Trustee of the occurrence of 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 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 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 2.14 AUTHENTICATING AGENTS.
The Indenture Trustee may appoint one or more Persons (each, an
"AUTHENTICATING AGENT") with power to act on its behalf and subject to its
direction in the authentication of Notes in connection with issuance, transfers
and exchanges under SECTIONS 2.2, 2.3, 2.5 and 2.6, as fully to all intents and
purposes as though each such Authenticating Agent had been expressly authorized
by those Sections to authenticate such Notes. For all purposes of this
Indenture, the authentication of Notes by an Authenticating Agent pursuant to
this SECTION 2.14 shall be deemed to be the authentication of Notes "by the
Indenture Trustee."
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, without the execution or filing of any
further act on the part of the parties hereto or such Authenticating Agent or
such successor corporation.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Indenture Trustee and the Owner Trustee. The Indenture
Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the Owner
Trustee. Upon receiving such notice of resignation or upon such a termination,
the Indenture Trustee may appoint a successor Authenticating Agent and shall
give written notice of any such appointment to the Owner Trustee.
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The Administrator agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services. The provisions of SECTIONS 2.9
and 6.4 shall be applicable to any Authenticating Agent.
SECTION 2.15 RESTRICTIONS ON TRANSFERS OF CLASS A NOTES.
(a) The Class A Notes have not been and will not be registered under the
Securities Act and no Class A Note or any interest therein may be reoffered,
resold, pledged or otherwise transferred except as contemplated by the legend
set forth in PARAGRAPH (d) below. Any resale or other transfer, or attempted
resale or other transfer which is not made in compliance with the restrictions
set forth in such legend shall not be recognized by the Issuer. Authorization of
the Issuer of a purchase, resale or transfer of a Class A Note will be granted
only if made to a qualified institutional buyer and, in each case, in accordance
with the other requirements applicable to a sale of Class A Notes. Each
purchaser acknowledges and is deemed to acknowledge that no representation is
made by the Issuer as to the availability of any exemption under the Securities
Act or any state securities laws for resale of the Class A Notes and that such
purchaser may be required to bear the financial risks of this investment for an
indefinite period of time.
(b) Each purchaser and any account for which such purchaser is acquiring
the Class A Notes are "Qualified Institutional Buyers" (as defined in Rule 144A
under the Securities Act). Each purchaser 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 Class A Notes, and each purchaser and any account
for which such purchaser is acting are each able to bear the economic risk of
such investment.
(c) Each purchaser understands that the Class A Notes, herein, are being
sold to it pursuant to an exemption from the registration requirements of the
Securities Act. Each purchaser is not purchasing the Class A Notes with a view
to resale, distribute or dispose of in any other manner thereof in violation of
the Securities Act. Each purchaser has had access to such financial and other
information concerning the Issuer and the Class A Notes as it deemed necessary
or appropriate in order to make an informed investment decision with respect to
such purchase of the Class A Notes, including an opportunity to ask questions of
and request information from the Issuer.
(d) Each Class A Note evidencing Book-Entry Notes and Definitive Notes (and
all Class A Notes issued in exchange therefor or substitution thereof) shall
bear a legend in substantially the following form:
"THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER APPLICABLE LAWS.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
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NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF
THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN (THE "HOLDER") BY ITS
ACCEPTANCE HEREOF OR OF SUCH INTEREST OR PARTICIPATION HEREIN AGREES AND IS
DEEMED TO AGREE TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN ONLY (A) TO THE ISSUER, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND OTHERWISE IN COMPLIANCE WITH OTHER APPLICABLE LAWS, AND
IN ACCORDANCE WITH THE TERMS OF THE INDENTURE AND SUBJECT TO THE ISSUER'S AND
THE INDENTURE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM, AND SUCH PERSON FURTHER COVENANTS AND
AGREES THAT IT WILL, PRIOR TO ANY OFFER, SALE, PLEDGE OR OTHER TRANSFER OF THIS
SECURITY, NOTIFY THE PERSON TO WHOM SUCH RESALE, PLEDGE OR OTHER TRANSFER IS TO
BE MADE OF THE RESALE RESTRICTIONS SET FORTH ABOVE AND THE REPRESENTATIONS SUCH
PERSON SHALL BE DEEMED TO HAVE MADE UPON ITS ACQUISITION HEREOF IN COMPLIANCE
WITH THE SECURITIES ACT."
(e) The purchaser of a Class A Note or any interest therein understands and
agrees and is deemed to understand and agree by its acceptance of such purchase
that the Class A Notes and related documentation may be amended or supplemented
from time to time to modify the restrictions on and procedures for resales and
other transfers of the Class A Notes to reflect any change in applicable law or
regulation (or interpretation thereof) or in practice relating to the resale or
transfer of restricted securities generally.
(f) The Holders of the Class A Notes and all Note Owners of Class A Notes
are bound by, and are deemed to have notice of, all provisions contained in the
Indenture.
(g) The purchaser of a Class A Note or any interest therein acknowledges
and is deemed to acknowledge by its acceptance of such purchase that the Issuer
and others will rely upon the truth and accuracy of the foregoing
acknowledgments, representations and agreements. If the purchaser is acquiring
any Class A Notes as a fiduciary or agent for one or more investor accounts, it
represents that it has sole investment discretion with respect to each such
account and that it has full power to make the foregoing acknowledgments,
representations and agreements on behalf of each such account.
SECTION 2.16 RESTRICTIONS ON TRANSFERS OF CLASS B NOTES.
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(a) Every Class B Note presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee, duly
executed by such Class B Noteholder or its attorney duly authorized in writing.
(b) Each Class B Note shall bear a legend substantially to the following
effect:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS.
THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO AN AFFILIATE OF THE
DEPOSITOR, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (3) IN RELIANCE ON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUBJECT TO THE ISSUER'S AND THE
INDENTURE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. ANY NOTEHOLDER WILL, AND EACH
SUBSEQUENT NOTEHOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. THE ISSUER IS NOT
OBLIGATED TO REGISTER THIS NOTE UNDER THE 1933 ACT OR ANY STATE SECURITIES
OR BLUE SKY LAWS. TRANSFER OF THIS NOTE IS SUBJECT TO ADDITIONAL TRANSFER
RESTRICTIONS CONTAINED IN SECTION 2.16 OF THE INDENTURE. EACH HOLDER OF
THIS NOTE AGREES THAT THIS NOTE IS SUBJECT TO THE PROVISIONS OF ARTICLE 8
OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ALL APPLICABLE
JURISDICTIONS.
(c) No Class B Note (or any interest therein) may be transferred
(including, without limitation, by pledge or hypothecation) unless such
transferee executes and delivers to the Issuer, the Insurer and the Indenture
Trustee a transfer certificate certifying as to the items set forth in this
SECTION 2.16; PROVIDED, HOWEVER, that no such transferee may be an employee
benefit plan, trust, annuity or account subject to ERISA or a plan described in
Section 4975(E)(1) of the Code, an indenture trustee of any of the foregoing, or
an entity, account or other pooled investment fund the underlying assets of
which include or are deemed to include assets of any of the foregoing.
Upon the transfer of any such Class B Note and if the requirements of
Section 8-401(a) of the UCC are met, the Issuer shall issue and the Indenture
Trustee shall authenticate in the name of the transferee a new Class B Note of
the same aggregate principal amount as the surrendered Class B Note.
(d) No transfer of a Class B Note shall be permitted to the extent that
such transfer would result in more than 80 Holders of Class B Notes and
beneficial interests in the Issuer in the aggregate. No transfer of a Class B
Note may be made to any Person (a "PASS-THROUGH ENTITY") that is a partnership
(including any other entity treated as a partnership for income tax
24
purposes), S corporation or grantor trust unless such pass-through entity is
able to represent that the Class B Note represents less than 50% of the fair
market value of all assets of such entity. Notwithstanding the foregoing, no
transfer of a Class B Note shall made except in accordance with the restrictions
in Section 2.10 of the Trust Agreement.
ARTICLE III
COVENANTS
SECTION 3.1 PAYMENT COVENANT.
The Issuer shall duly and punctually pay the principal of and interest, if
any, on the Notes in accordance with the terms of the Notes and this Indenture.
Amounts properly withheld under the Code by any Person from a payment to any
Noteholder of interest (with respect to the Class A Notes) and/or principal
shall be considered as having been paid by the Issuer to such Noteholder for all
purposes of this Indenture.
SECTION 3.2 MAINTENANCE OF OFFICE OR AGENCY.
The Issuer shall maintain in Minneapolis, Minnesota, an office or agency
where Notes may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer shall give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If, at any time, the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 3.3 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 the Notes that are to be made from amounts withdrawn from the
Trust Accounts shall be made on behalf of the Issuer by the Indenture Trustee or
by another Paying Agent, and no amounts so withdrawn from the Trust Accounts
shall be paid over to the Issuer, except as provided in this SECTION 3.3.
(b) On or before each Payment Date and Redemption Date, the Issuer shall
deposit or cause to be deposited in the applicable Note Payment Account an
aggregate sum sufficient to pay the amounts then becoming due under the Notes,
such sum to be held in trust for the benefit of the Persons entitled thereto,
and (unless the Paying Agent is the Indenture Trustee) shall promptly notify the
Indenture Trustee of its action or failure so to act.
(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:
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(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 payment of the Notes if
at any time it ceases to meet the standards required to be met by a Paying
Agent at the time of its appointment; and
(v) comply with all requirements of the Code and any state or local
tax law with respect to the withholding from any payments made by it on the
Notes of any applicable withholding taxes imposed thereon and with respect
to any applicable reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which such sums were held by such Paying Agent,
and upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
(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 (2)
years after such amount has become due and payable shall be discharged from such
trust and be paid 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 repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of
New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than thirty (30) days from the date of such publication, any
unclaimed balance of such money then remaining shall be repaid to the Issuer.
The Indenture Trustee shall also adopt and employ, at the expense and direction
of the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption in
whole pursuant to SECTION 10.1 or
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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.
The Issuer shall from time to time execute and deliver all such supplements
and amendments hereto and all such financing statements, continuation
statements, instruments of further assurance and other instruments, and shall
take such other action necessary or advisable to:
(a) maintain or preserve the lien and security interest (and the priority
thereof) of this Indenture or carry out more effectively the purposes hereof;
(b) perfect, publish notice of or protect the validity of any Grant made or
to be made by this Indenture;
(c) enforce any of the Collateral; or
(d) preserve and defend title to the Trust Estate and the rights of the
Indenture Trustee, the Insurer and the Noteholders in the Trust Estate against
the claims of all Persons.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute upon a written instruction from the Issuer, the
Insurer or Servicer any financing statement, continuation statement or other
instrument required to be executed pursuant to this SECTION 3.5.
SECTION 3.6 OPINIONS AS TO TRUST ESTATE.
(a) On the Closing Date, the Issuer shall deliver to the Indenture Trustee
and the Insurer an Opinion of Counsel substantially in the form attached hereto
as EXHIBIT B.
(b) On or before March 31 of each year (commencing with the year 2003), the
Issuer shall deliver to the Indenture Trustee and the Insurer an Opinion of
Counsel acceptable to such parties 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
27
interest created by this Indenture and reciting the details of such action or
stating that, in the opinion of such counsel, no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that shall, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until March 31 in the following year.
SECTION 3.7 PERFORMANCE OF OBLIGATIONS.
(a) The Issuer shall not take any action and shall use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Trust 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
expressly provided in this Indenture and the other Transaction 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 an Officer's Certificate 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 other Transaction Documents and
the instruments and agreements included in the Trust Estate, including, but not
limited to, filing or causing to be filed all financing statements and
continuation statements required to be filed under the Relevant UCC by the terms
of this Indenture and the Servicing Agreement in accordance with and within the
time periods provided for herein and therein. Except as otherwise expressly
provided therein, the Issuer shall not waive, amend, modify, supplement or
terminate any Transaction Document or any provision thereof without the consent
of the Indenture Trustee, the Insurer or the Noteholders evidencing not less
than 51% of the Note Balance.
(d) If the Issuer shall have knowledge of the occurrence of an Event of
Servicing Termination under the Servicing Agreement, the Issuer shall promptly
notify the Indenture Trustee, the Insurer and the Rating Agencies thereof and
shall specify in such notice the action, if any, the Issuer is taking in 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
Servicing Agreement with respect to the Contracts, the Issuer shall take all
reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination to
the Servicer and Back-Up Servicer of the Servicer's rights and powers pursuant
to Section 5.2 of the Servicing Agreement, the Issuer shall (subject to the
rights of the Indenture Trustee to direct such appointment pursuant to Section
5.2 of the Servicing Agreement) appoint a successor servicer acceptable to the
Insurer (the "SUCCESSOR SERVICER"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee and the
28
Insurer (provided that no Insurer Default shall have occurred and be
continuing). In the event that a Successor Servicer has not been appointed and
has not accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee, without further action, shall automatically be
appointed the Successor Servicer. In its role as Successor Servicer, Xxxxx Fargo
Bank Minnesota, National Association its successors or assigns, shall have (i)
no liability with respect to any obligation which was required to be performed
by the terminated Servicer prior to the date that the Successor Servicer becomes
the Servicer or any claim of a third party based on any alleged action or
inaction of the terminated Servicer, (ii) no obligation to perform any
repurchase or advancing obligations, if any, of the Servicer, (iii) no
obligation to pay any taxes required to be paid by the Servicer, (iv) no
obligation to pay any of the fees and expenses of any other party involved in
this transaction and (v) no liability or obligation with respect to any Servicer
indemnification obligations of any prior Servicer including the original
Servicer. Notwithstanding any other provision in the Transaction Documents to
the contrary, should the Back-Up Servicer by any means become Successor
Servicer, the Back-Up Servicer shall not inherit any of the indemnification
obligations of any prior servicer including the original Servicer. The
indemnification obligations of the Back-Up Servicer, upon becoming Successor
Servicer are expressly limited to those instances of gross negligence or willful
misconduct on behalf of the Back-Up Servicer in its role as Successor Servicer.
The Indenture Trustee may resign as the Servicer by giving written notice of
such resignation to the Issuer and the Insurer (provided that no Insurer Default
shall have occurred and be continuing) and in such event shall be released from
such duties and obligations, such release not to be effective until the date a
new servicer acceptable to the Insurer enters into a Servicing Agreement with
the Issuer as provided below. Upon delivery of any such notice to the Issuer,
the Issuer shall obtain a new servicer as the Successor Servicer under the
Servicing Agreement. Any Successor Servicer (other than the Indenture Trustee)
shall (A) be an established financial institution having a net worth of not less
than $50,000,000 and whose regular business includes the servicing of
installment sale contracts and (B) enter into a Servicing Agreement with the
Issuer having substantially the same provisions as the provisions of the
Servicing Agreement applicable to the Servicer and (C) shall otherwise be an
Eligible Servicer. If, within thirty (30) days after the delivery of the notice
referred to above, the Issuer shall not have obtained such a new servicer, the
Indenture Trustee may appoint, or may petition a court of competent jurisdiction
to appoint, a Successor Servicer. In connection with any such appointment, the
Indenture Trustee may make such arrangements for the compensation of such
successor as it and such successor shall agree, subject to the limitations set
forth below and in the Servicing Agreement, and, in accordance with Section 2.1
of the Servicing Agreement, the Issuer shall enter into an agreement with such
successor for the servicing of the Contracts (such agreement to be in form and
substance satisfactory to the Indenture Trustee and the Insurer (provided that
no Insurer Default shall have occurred and be continuing) or if an Insurer
Default has occurred and is continuing, such agreement has been consented to by
the Noteholders evidencing not less than 51% of the Class A Note Balance). If
the Indenture Trustee shall succeed to the Servicer's duties as servicer of the
Contracts as provided herein, it shall do so in its individual capacity and not
in its capacity as Indenture Trustee and, accordingly, the provisions of ARTICLE
VI shall be inapplicable to the Indenture Trustee in its duties as the successor
to the Servicer and the servicing of the Contracts. In case the Indenture
Trustee shall become successor to the Servicer under the Servicing Agreement,
the Indenture Trustee shall be entitled to subservice any and all of its duties
and responsibilities hereunder; PROVIDED, HOWEVER, that the Indenture Trustee,
in its capacity as the Servicer, shall be
29
fully liable for the actions and omissions of such subservicer in such capacity
as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant to
Section 5.2 of the Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee and the Insurer of such termination. Upon any appointment of a
Successor Servicer by the Issuer, the Issuer shall promptly notify the Indenture
Trustee and the Insurer of such appointment, specifying in such notice the name
and address of such Successor Servicer.
(g) 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 shall not, without the prior written consent of
the Insurer (if no Insurer Default shall have occurred an be continuing), the
Indenture Trustee and the Holders of not less than 51% of the Class A Note
Balance, amend, modify, waive, supplement, terminate or surrender, or agree to
any amendment, modification, waiver, supplement, termination or surrender of,
the terms of any Collateral (except to the extent otherwise provided in the
Servicing Agreement or the other Transaction Documents).
SECTION 3.8 NEGATIVE COVENANTS.
If any Notes are Outstanding or the Insurer has not been paid all amounts
owed to it, the Issuer shall not:
(a) except as expressly permitted by this Indenture, the Trust Agreement,
the Servicing Agreement or the Sale and Allocation Agreement, sell, transfer,
exchange or otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Trust Estate, unless directed to do so by the
Indenture Trustee with the prior written consent of the Insurer;
(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 taxes
levied or assessed upon the Issuer;
(c) dissolve or liquidate in whole or in part;
(d) (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 any of the Financed Vehicles 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
(other than with respect to any such tax, mechanics' or other lien) security
interest in the Trust Estate;
30
(e) engage in any activities other than financing, acquiring, owning,
pledging and managing the Contracts as contemplated by the Servicing Agreement,
the Trust Agreement, the Sale and Allocation Agreement, the Insurance Agreement
and this Indenture and activities incidental to such activities; or
(f) incur, assume or guarantee any indebtedness other than the indebtedness
evidenced by the Notes or indebtedness otherwise permitted by the Servicing
Agreement, the Trust Agreement, the Sale and Allocation Agreement or this
Indenture.
SECTION 3.9 ANNUAL STATEMENT AS TO COMPLIANCE.
On or before July 31 of each year (commencing with the year 2002), the
Issuer shall deliver to the Indenture Trustee and the Insurer an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:
(a) a review of the activities of the Issuer during the preceding Fiscal
Year (or, in the case of the Officer's Certificate to be delivered in the year
2002, during the period beginning on the Closing Date and ending on April 30,
2002) and of its 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 complied with all conditions and covenants under this
Indenture throughout such preceding Fiscal Year (or, in the case of the
Officer's Certificate to be delivered in the year 2002, during the period
beginning on the Closing Date and ending on April 30, 2002) or, if there has
been a default in its compliance with any such condition or covenant, specifying
each such default known to such Authorized Officer and the nature and status
thereof.
SECTION 3.10 ISSUER MAY NOT MERGE.
The Issuer shall not enter into any merger, consolidation or conveyance
transaction regardless of the surviving entity.
SECTION 3.11 NO OTHER BUSINESS.
The Issuer shall not engage in any business other than financing,
acquiring, owning and pledging the Contracts in the manner contemplated by this
Indenture and the other Transaction Documents and activities incidental thereto.
SECTION 3.12 [RESERVED].
SECTION 3.13 SERVICER'S OBLIGATION.
The Issuer shall cause the Servicer to comply with the Sale and Allocation
Agreement and the Servicing Agreement.
SECTION 3.14 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES.
31
Except as contemplated by this Indenture and the other Transaction
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.
SECTION 3.15 CAPITAL EXPENDITURES.
The Issuer shall not make any expenditure (by long-term or operating lease
or otherwise) for capital assets (either realty or personalty).
SECTION 3.16 RESTRICTED PAYMENTS.
The Issuer shall not, directly or indirectly, (a) make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Owner Trustee or any owner of a beneficial interest
in the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (b) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or 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, (i) payments to the
Servicer and the Owner Trustee as contemplated by, and to the extent funds are
available for such purpose under, the Sale and Allocation Agreement or the Trust
Agreement and (ii) payments to the Indenture Trustee pursuant to Section
2(a)(ii) of the Administration Agreement. The Issuer shall not, directly or
indirectly, make payments to or distributions from the Collection Account except
in accordance with this Indenture and the other Transaction Documents.
SECTION 3.17 NOTICE OF EVENTS OF DEFAULT.
The Issuer shall give the Indenture Trustee, the Insurer and the Rating
Agencies prompt written notice of each Event of Default hereunder, each default
on the part of the Seller or the Servicer of its obligations under the Sale and
Allocation Agreement.
SECTION 3.18 REMOVAL OF ADMINISTRATOR.
For so long as any Notes are Outstanding, the Issuer shall not remove the
Administrator without cause unless the Rating Agency Condition shall have been
satisfied in connection therewith and the Insurer has previously consented in
writing.
SECTION 3.19 FURTHER INSTRUMENTS AND ACTS.
Upon request of the Indenture Trustee or the Insurer, 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 RULE 144A INFORMATION.
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At any time when the Issuer is not subject to Section 13 or 15(d) of the
Exchange Act and is not exempt from reporting pursuant to Rule 12g3-2(b) under
the Exchange Act, upon the request of any Class A Noteholder or Note Owner of a
Class A Note, the Issuer shall promptly furnish or cause to be furnished Rule
144A Information to such Noteholder or Note Owner or to a prospective purchaser
of a Class A Note designated by such Class A Noteholder or Note Owner, in order
to permit compliance by such Noteholder or Note Owner with Rule 144A in
connection with the resale of such Class A Note.
SECTION 3.21 RE-XXXXXXX TRIGGER.
Upon the occurrence of a Re-Xxxxxxx Trigger, the Insurer may instruct the
Servicer to and, upon the receipt of such request, the Servicer shall, take or
cause to be taken all steps as may, in the judgment of the Insurer or its
counsel, be necessary to cause the certificate of title or other evidence of
ownership of the related Financed Vehicle to be revised to name the Indenture
Trustee as lien holder on behalf of the Noteholders and the Insurer. Any costs
associated with such revision of the certificate of title shall be paid by the
Seller, and to the extent not paid by the Seller, by the Servicer. Any and all
expenses incurred in connection with re-titling the Financed Vehicles, to the
extent not previously paid, shall be paid pursuant to Section 3.5(d) of the Sale
and Allocation Agreement.
It is understood that the Servicer shall remain obligated to perform its
duties pursuant to this SECTION 3.21, notwithstanding anything to the contrary
in this Indenture, until such time as all outstanding amounts under the
Transaction Documents have been paid to the Class A Noteholders and the Insurer.
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 (a) rights of registration of transfer and exchange, (b)
substitution of mutilated, destroyed, lost or stolen Notes, (c) rights of
Noteholders to receive payments of principal thereof and interest thereon, (d)
SECTIONS 3.3, 3.4, 3.5, 3.8, 3.10, 3.11, 3.12, 3.13, 3.15 and 3.16 and, (e) the
rights, obligations and immunities of the Indenture Trustee hereunder (including
the rights of the Indenture Trustee under SECTION 6.7 and the obligations of the
Indenture Trustee under SECTION 4.3), and (f) 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
Collateral securing the Notes and the Notes, when:
(i) either
(A) all Notes theretofore authenticated and delivered (other than
(1) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in SECTION 2.6 and (2) Notes for whose
payment money has
33
theretofore been irrevocably 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 and the Policy has
expired and has been returned to the Insurer for cancellation; or
(B) all Notes not theretofore delivered to the Indenture Trustee
for cancellation have become due and payable and the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee, in trust, cash or direct obligations of or
obligations guaranteed by the United States of America (which will
mature prior to the date needed), in an amount sufficient to pay and
discharge the entire indebtedness on such Notes when due on the Final
Note Payment Date or Redemption Date (if Notes shall have been called
for redemption pursuant to SECTION 10.1(A)), as the case may be;
(ii) the Issuer has paid or caused to be paid all other sums payable
by the Issuer hereunder and under the other Transaction Documents;
(iii) the Issuer has delivered to the Indenture Trustee and the Insurer
an Officer's Certificate, an Opinion of Counsel and (if required by the
Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of SECTION
11.1(A) and, subject to SECTION 11.2, each stating that all conditions
precedent provided for in this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with; and
(iv) the Issuer has delivered to the Indenture Trustee an Opinion of
Counsel to the effect that the satisfaction and discharge of this Indenture
pursuant to this SECTION 4.1 will not cause any Noteholder to be treated as
having sold or exchanged any of its Notes for purposes of Section 1001 of
the Code.
SECTION 4.2 SATISFACTION, DISCHARGE AND DEFEASANCE OF THE NOTES.
(a) Upon satisfaction of the conditions set forth in SUBSECTION (B) below,
the Issuer shall be deemed to have paid and discharged the entire indebtedness
on all the Notes Outstanding, and the provisions of this Indenture, as it
relates to such Notes, shall no longer be in effect (and the Indenture Trustee,
at the expense of the Issuer, shall execute proper instruments acknowledging the
same), except as to:
(i) the rights of the Noteholders to receive, from the trust funds
described in SUBSECTION (b)(i) hereof, payment of the principal of and
interest on the Notes Outstanding at maturity of such principal or
interest;
(ii) the obligations of the Issuer with respect to the Notes under
SECTIONS 2.5, 2.6, 3.2 and 3.3;
(iii) the obligations of the Issuer to the Indenture Trustee under
SECTION 6.7; and
34
(iv) the rights, powers, trusts and immunities of the Indenture Trustee
hereunder and the duties of the Indenture Trustee hereunder.
(b) The satisfaction, discharge and defeasance of the Notes pursuant to
SUBSECTION (a) of this SECTION 4.2 is subject to the satisfaction of all of the
following conditions:
(i) the Issuer has deposited or caused to be deposited irrevocably
(except as provided in SECTION 4.4) with the Indenture Trustee as trust
funds in trust, specifically pledged as security for, and dedicated solely
to, the benefit of the Noteholders, which, through the payment of interest
and principal in respect thereof in accordance with their terms will
provide, not later than one day prior to the due date of any payment
referred to below, money in an amount sufficient, in the opinion of a
nationally recognized firm of independent certified public accountants
expressed in a written certification thereof delivered to the Indenture
Trustee, to pay and discharge the entire indebtedness on the Notes
Outstanding, for principal thereof and interest thereon to the date of such
deposit (in the case of Notes that have become due and payable) or to the
maturity of such principal and interest, as the case may be;
(ii) such deposit will not result in a breach or violation of, or
constitute an event of default under, any Transaction Document or other
agreement or instrument to which the Issuer is bound;
(iii) no Event of Default has occurred and is continuing on the date of
such deposit or on the ninety-first (91st) day after such date;
(iv) the Issuer has delivered to the Indenture Trustee and the Insurer
an Opinion of Counsel to the effect that the satisfaction, discharge and
defeasance of the Notes pursuant to this SECTION 4.2 will not cause any
Noteholder to be treated as having sold or exchanged any of its Notes for
purposes of Section 1001 of the Code; and
(v) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for in this Indenture relating to the defeasance
contemplated by this SECTION 4.2 have been complied with; and
(vi) all amounts then owing to the Insurer have been paid.
SECTION 4.3 APPLICATION OF TRUST MONEY.
All monies deposited with the Indenture Trustee pursuant to SECTION 4.1
shall be held in trust and applied by the Indenture Trustee, in accordance with
the provisions of the Notes and this Indenture, to the payment, either directly
or through any Paying Agent, as the Indenture Trustee may determine, to the
Noteholders 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 Allocation
Agreement or required by law.
SECTION 4.4 REPAYMENT OF MONIES HELD BY PAYING AGENT.
35
In connection with the satisfaction and discharge of this Indenture with
respect to the Notes, all monies then held by any Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to such
Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to SECTION 3.3, and thereupon such Paying Agent shall
be released from all further liability with respect to such monies.
SECTION 4.5 CONTINUING OBLIGATIONS OF INDENTURE TRUSTEE.
It is understood that the Indenture Trustee shall remain obligated to
perform its duties pursuant to SECTIONS 2.8 (a)(i), (ii), (v), (vi), (vii),
(viii), (ix) and (x) and SECTION 5.4(b)(i),(ii), (v) and (vi), notwithstanding
anything to the contrary in this ARTICLE IV or elsewhere in this Indenture,
until such time as all outstanding amounts have been paid pursuant to such
sections.
ARTICLE V
REMEDIES
SECTION 5.1 EVENTS OF DEFAULT.
"EVENT OF DEFAULT" means the occurrence of any one of the following events
(whatever the reason for such event and whether such event shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of any interest on any Class A Note when the
same becomes due and payable;
(b) default in the payment of any principal due and payable on the Class A
Notes on the date payable, including, the Final Note Payment Date;
(c) default in the observance or performance of any material covenant or
agreement of the Issuer, the Seller or the Servicer made in the Transaction
Documents (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),
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 by the Indenture Trustee or to the Issuer and the Indenture Trustee by
the Noteholders evidencing not less than 25% of the Class A Note Balance or the
Insurer (provided that no Insurer Default shall have occurred and be
continuing), a written notice specifying such default and requiring it to be
remedied and stating that such notice is a notice of Default hereunder;
(d) any representation or warranty of the Issuer, the Seller or the
Servicer made in the Transaction Documents or in any certificate delivered
pursuant hereto or in connection herewith proving to have been incorrect in any
material respect as of the time when the same shall have been made, and the
circumstance or condition in respect of which such representation or warranty
was incorrect shall not have been eliminated or otherwise cured for a period of
thirty (30) days after there shall have been given, by registered or certified
mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture
Trustee by the Noteholders evidencing not less than 25% of the Class A Note
Balance or the Insurer (provided that no Insurer Default shall
36
have occurred and be continuing), a written notice specifying such incorrect
representation or warranty and requiring it to be remedied and stating that such
notice is a notice of Default hereunder;
(e) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Seller, the Servicer, 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;
(f) the cessation of a valid perfected first priority security interest in
the Contracts in favor of the Indenture Trustee which is not cured within the
applicable cure period;
(g) the merger or consolidation (including any conveyance transaction) of
the Issuer with or into any Person regardless of the surviving entity;
(h) the merger or consolidation (including a conveyance transaction) of the
Servicer with or into any person whereby the Servicer is not the surviving
entity;
(i) the commencement by the Seller, the Servicer or the Issuer of a
voluntary case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by the Seller, the
Servicer or the Issuer to the entry of an order for relief in an involuntary
case under any such law, or the consent by the Seller, the Servicer or the
Issuer to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Seller,
the Servicer or the Issuer or for any substantial part of the Trust Estate, or
the making by the Seller, the Servicer or the Issuer of any general assignment
for the benefit of creditors, or the failure by the Seller, the Servicer or the
Issuer generally to pay its debts as such debts become due, or the taking of any
action by the Seller, the Servicer or the Issuer in furtherance of any of the
foregoing;
(j) an Event of Servicing Termination shall have occurred under the
Servicing Agreement;
(k) the Seller or the Servicer shall have defaulted on any payment required
to be made by it under any material credit agreement or other loan agreement
pursuant to which it has borrowed money;
(l) a draw shall be made under the Policy;
(m) the Insurer shall have given notice that an Event of Default (as
defined in the Insurance Agreement) has occurred and is continuing under the
Insurance Agreement;
(n) a material breach by the Seller of its obligations under the Sale and
Allocation Agreement;
37
(o) failure of the Servicer to make any required deposit or payment when
due under the Transaction Documents;
(p) an event of default under any Transaction Document which is not cured
within the applicable cure period set forth under the related Transaction
Document;
(q) the average Delinquency Ratio for any three Collection Periods exceeds
7.0% during months one through twelve after closing and the Delinquency Ratio
exceeds 8.5% thereafter;
(r) the Cumulative Net Loss Rate at any month indicated in the following
table (measured from the Closing Date) shall exceed the percentage corresponding
thereto:
Month
0-3 0.25%
4-6 1.80%
7-9 3.00%
10-12 4.30%
13-15 5.60%
16-18 6.60%
19-21 7.40%
22-24 8.20%
25-27 8.80%
28-30 9.50%
31-33 10.00%
34-36 10.40%
37-39 10.70%
40-42 11.00%
43 and 11.10%
there-
after
(s) the Servicer shall violate the servicing standards in the Servicing
Agreements; and
(t) the Servicer or a wholly-owned subsidiary of the Seller fails to
maintain a warehouse facility of at least $150,000,000.
PROVIDED, HOWEVER, that if no Insurer Default shall have occurred and be
continuing, neither the Indenture Trustee nor the Noteholders may declare an
Event of Default under the Indenture. If no Insurer Default shall have occurred
and be continuing, an Event of Default shall occur only
38
upon delivery by the Insurer to the Indenture Trustee of notice of the
occurrence of such Event of Default.
The Issuer shall deliver to the Indenture Trustee, within five (5) days after
the occurrence of any event that, with notice or the lapse of time or both,
would become an Event of Default under CLAUSE (c) or (d), written notice of such
Default in the form of an Officer's Certificate, the status of such Default and
what action the Issuer is taking or proposes to take with respect to such
Default.
SECTION 5.2 ACCELERATION OF MATURITY; RECISSION AND ANNULMENT.
(a) If no Insurer Default shall have occurred and be continuing and if an
Event of Default shall have occurred and be continuing, then the Insurer shall
have the right, but not the obligation, upon prior written notice to each Rating
Agency, to declare the Notes to be immediately due and payable by written notice
to the Issuer, the Servicer and the Indenture Trustee, and upon any such
declaration the unpaid principal amount of the Notes, together with accrued and
unpaid interest on the Class A Notes through the date of acceleration, shall
become immediately due and payable. The Indenture Trustee shall have no
discretion with respect to the acceleration of the Notes under the foregoing
circumstances. In the event of any such acceleration of the Notes, the Indenture
Trustee shall continue to make claims under the Policy with respect to the Class
A Notes.
(b) If an Insurer Default has occurred and is continuing and an Event of
Default has occurred and is continuing, then and in every such case the
Indenture Trustee or the Noteholders evidencing not less than 66 2/3% of the
Class A Note Balance may, upon prior written notice to each Rating Agency,
declare the Class A Notes to be immediately due and payable by written notice to
the Issuer (and to the Indenture Trustee if given by Noteholders), and upon any
such declaration the unpaid principal amount of the Class A Notes, together with
accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
Notwithstanding the foregoing, upon the occurrence of an Event of Default
specified in SECTION 5.1(i) with respect to the Issuer, the Class A Notes shall
become immediately due and payable, without declaration, notice or demand by or
to any Person.
(c) At any time after a declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the amount due has been
obtained by the Indenture Trustee as hereinafter provided in this ARTICLE V,
either (i) if the Class A Noteholders accelerated, the Class A Noteholders
evidencing not less than 66 2/3% of the Class A Note Balance (with the prior
written consent of the Insurer if the Insurer Default referred to in clause (b)
above has been cured) or (ii) if the Insurer accelerated, the Insurer, by
written notice to the Issuer and the Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(A) the Issuer has paid or deposited with the Indenture Trustee a
sum sufficient to pay all principal of and interest on the Class A
Notes and all other amounts that would then be due hereunder or upon
the Class A Notes if the Event of Default giving rise to such
acceleration had not occurred; and
39
(B) all Events of Default, other than the nonpayment of the
principal of the Class A Notes that has become due solely by such
acceleration, have been cured or waived as provided in SECTION 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
(d) If an Event of Default has occurred and is continuing, the Insurer may
(i) if the Class A Notes have been accelerated in accordance with SECTION 5.2(a)
or 5.2(b) and not rescinded pursuant to SECTION 5.2(c), elect to prepay all or
any portion of the Class A Notes, plus accrued but unpaid interest thereon to
the date of payment and (ii) terminate FISC as the servicer under the Servicing
Agreement; PROVIDED, HOWEVER, that the Insurer shall fulfill its obligations
under the Policy.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
(a) If (i) default is made in the payment of any interest on any Class A
Note when the same becomes due and payable, and such default continues for a
period of five (5) Business Days, or (ii) default is made in the payment of the
principal of any Class A Note when the same becomes due and payable, the Issuer
shall pay to the Indenture Trustee, for the benefit of the applicable
Noteholders, the amount then due and payable on the Notes for principal and, if
applicable, interest, with interest upon the overdue principal at the Note Rate
and, to the extent payment at such rate of interest shall be legally
enforceable, upon overdue installments of interest at the Note Rate and in
addition thereto such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and counsel
and other amounts due and owing to the Indenture Trustee pursuant to SECTION
6.7.
(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 with the written consent of the Insurer (provided that no Insurer
Default shall be occurred and be continuing), and shall, at the direction of the
Insurer (provided that no Insurer Default shall have occurred and be
continuing), 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 any other obligor upon the Notes and
collect in the manner provided by law out of the property of the Issuer or such
other obligor, 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 and the Insurer
by such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
40
(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 if
there shall be pending any other comparable judicial Proceedings relative to the
Issuer or any 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:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the Indenture Trustee (including any claim for
reasonable compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel, and
all other amounts due and owing to the Indenture Trustee pursuant to
SECTION 6.7) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Noteholders in any election of a trustee, a standby trustee
or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable or
deliverable on any such claims and to pay all amounts received with respect
to the claims of the Noteholders and of the Indenture Trustee on their
behalf; and
(iv) to file such proofs of claim and other papers or documents as may
be necessary or advisable in order to have the claims of the Indenture
Trustee or the Noteholders allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of the Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to the Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee and each predecessor Indenture Trustee,
and their respective agents, attorneys and counsel, and all other amounts due
and owing to the Indenture Trustee pursuant to SECTION 6.7.
(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
41
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 action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Noteholders.
(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.
(a) If an Event of Default has occurred and is continuing, the Indenture
Trustee shall, at the direction of the Insurer (if no Insurer Default has
occurred and is continuing), or at the direction of the Class A Noteholders
evidencing not less than 66 2/3% of the Class A Note Balance (if an Insurer
Default has occurred and is continuing), take one or more of the following
actions as so directed (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 payable on the Class A
Notes or under this Indenture with respect thereto, whether by declaration
or otherwise, enforce any judgment obtained, and collect from the Issuer
and any other obligor upon the 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 Relevant UCC
and take any other appropriate action under applicable law to protect and
enforce the rights and remedies of the Indenture Trustee and the Class A
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;
PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default unless (A) if no
Insurer Default has occurred and is continuing, the Insurer consents thereto; or
if an Insurer Default has occurred, the Holders of 100% of the Class A Notes
consent thereto, (B) the proceeds of such sale or liquidation are sufficient to
pay in full the Class A Notes and all accrued but unpaid interest on the
outstanding Class A Notes and all amounts due to the Insurer under the Insurance
Agreement and the Policy and (C) if an Insurer Default has occurred and is
continuing, the Indenture Trustee determines that the Trust Estate will not
continue to provide sufficient funds for the payment of principal of and
interest on the Class A Notes as they would have become due if the Class A Notes
had not been declared
42
due and payable, and the Indenture Trustee obtains the consent of the Class A
Noteholders evidencing not less than 66 2/3% of the Class A Note Balance, or if
no Insurer Default has occurred or is continuing, the Insurer makes such
determination. In determining such sufficiency or insufficiency with respect to
CLAUSES (B) and (C) above, 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.
(b) If the Indenture Trustee collects any money or property pursuant to
this SECTION 5.4, it shall pay out such money or property in the following order
of priority:
(i) to the Back-Up Servicer, Indenture Trustee and Owner Trustee, in
its individual capacity, respectively, any unpaid or unreimbursed fees and
any out-of-pocket expenses (including, but not limited to, attorneys' fees
and transition expenses); PROVIDED that such expenses shall not exceed
$50,000 in the aggregate per year and $100,000 in the total aggregate;
(ii) to the Servicer, all amounts due to the Servicer as compensation
pursuant to Sections 2.8 and 2.11 of the Servicing Agreement;
(iii) to the Class A Noteholders, all accrued but unpaid interest on
the Class A Notes;
(iv) to the Class A Noteholders, the outstanding Class A Note Balance;
(v) to the Insurer, all amounts then owing to it;
(vi) to the Class B Noteholders, the principal balance of the Class B
Notes; and
(vii) to the Depositor Account any remaining amounts for distribution
in accordance with Section 5.2 of the Trust Agreement.
The Indenture Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this SECTION 5.4. At least fifteen (15) days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.
(c) When the Class A Notes have been paid in full, including all accrued
and unpaid interest owing thereon, all amounts owing the Insurer have been paid
in full and the Policy has been returned for cancellation, the rights of the
Class A Noteholders under this Indenture and any other Transaction Document,
including, without limitation, with rights with respect to the Trust Estate,
shall automatically vest in the Class B Noteholders.
SECTION 5.5 OPTIONAL PRESERVATION OF THE CONTRACTS.
If the Notes have been declared to be due and payable under SECTION 5.2
following an Event of Default, and such declaration and its consequences have
not been rescinded and annulled, the Indenture Trustee may, but need not, elect
to maintain possession of the Trust
43
Estate and apply proceeds as if there had been no declaration of acceleration;
PROVIDED, HOWEVER, that the Total Available Funds shall be applied in accordance
with such declaration of acceleration in the manner specified in Sections
3.5(d), (e) and (f) of the Sale and Allocation Agreement. It is the desire of
the parties hereto and the Noteholders that there be at all times sufficient
funds for the payment of principal of and, if applicable, interest on the Notes,
and the Indenture Trustee shall take such desire into account when determining
whether or not to maintain possession of the Trust Estate. In determining
whether to 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 with
respect to this Indenture or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) the Noteholders evidencing not less than 25% of the Class A Note
Balance 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;
(c) such Holder or Holders have offered to the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
complying with such request;
(d) the Indenture Trustee for sixty (60) days after its receipt of such
notice, request and offer of indemnity has failed to institute such Proceedings;
(e) no direction inconsistent with such written request has been given to
the Indenture Trustee during such 60-day period by the Noteholders evidencing
not less than 51% of the Class A Note Balance; and
(f) an Insurer Default has occurred and is continuing.
It is understood and intended that no one or more Noteholders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Noteholders or to obtain or to seek to obtain priority or preference over any
other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
evidencing less than 51% of the Class A Note Balance, the Indenture Trustee in
its sole discretion may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.
44
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, if applicable, interest, if any, on such Note
on or after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.8 RESTORATION OF RIGHTS AND REMEDIES.
If the Indenture Trustee, the Insurer or any Noteholder has instituted any
Proceeding to enforce any right or remedy under this Indenture and such
Proceeding has been discontinued or abandoned for any reason or has been
determined adversely to the Indenture Trustee, the Insurer or such Noteholder,
then and in every such case the Issuer, the Indenture Trustee, the Insurer and
the Noteholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.
SECTION 5.9 RIGHTS AND REMEDIES CUMULATIVE RIGHTS.
No right or remedy herein conferred upon or reserved to the Indenture
Trustee, the Insurer or 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, the Insurer or any Holder of
any Note to exercise any right or remedy accruing upon any Default or Event of
Default shall impair any such right or remedy or constitute a waiver of any such
Default or Event of Default or any acquiescence therein. Every right and remedy
given by this ARTICLE V or by law to the Indenture Trustee, the Insurer or the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, the Insurer or the Noteholders, as the case
may be.
SECTION 5.11 CONTROL BY NOTEHOLDERS.
The Noteholders evidencing not less than 51% of the Class A Note Balance
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to the
Notes or exercising any trust or power conferred on the Indenture Trustee;
PROVIDED, HOWEVER, that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture;
45
(b) subject to the express terms of SECTION 5.4, any direction to the
Indenture Trustee to sell or liquidate the Trust Estate shall be by the
Noteholders evidencing not less than 100% of the Class A Notes;
(c) if the conditions set forth in SECTION 5.5 have been satisfied and the
Indenture Trustee elects to retain the Trust Estate pursuant to such section,
then any direction to the Indenture Trustee by the Noteholders evidencing less
than 100% of the Class A Notes to sell or liquidate the Trust Estate shall be of
no force and effect;
(d) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction; and
(e) an Insurer Default shall have occurred and is continuing.
Notwithstanding the rights of Noteholders set forth in this SECTION 5.11,
subject to SECTION 6.1, the Indenture Trustee need not take any action that it
reasonably believes might involve it in costs, expenses and liabilities for
which it will not be adequately indemnified or might materially adversely affect
the rights of any Noteholders not consenting to such action.
SECTION 5.12 WAIVER OF PAST DEFAULTS.
Prior to the declaration of the acceleration of the maturity of the Notes
as provided in SECTION 5.2, the Insurer (if no Insurer Default shall have
occurred and be continuing) or the Noteholders evidencing not less than 51% of
the Class A Note Balance, with the consent of the Insurer (if no Insurer Default
shall have occurred and be continuing), may waive any past Default or Event of
Default and its consequences except a Default or Event of Default (a) in the
payment of principal of or interest on any of the Notes or (b) in respect of a
covenant or provision hereof that cannot be amended, supplemented or modified
without the consent of all the Holders. Upon any such waiver, the Issuer, the
Indenture Trustee, the Insurer and the Holders shall be restored to their former
positions and rights hereunder, respectively, but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereto. Upon any such waiver, such Default or Event of Default shall
cease to exist and be deemed to have been cured and not to have occurred, and
any Event of Default arising therefrom shall be deemed to have been cured and
not to have occurred, for every purpose of this Indenture, but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.
SECTION 5.13 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 suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Indenture Trustee for
any action taken, suffered or omitted by it as Indenture Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; PROVIDED, HOWEVER, that the provisions of this SECTION 5.13 shall not
apply to (a) any suit instituted by the Indenture Trustee, (b) any suit
46
instituted by any Noteholder or group of Noteholders, in each case holding Notes
evidencing in the aggregate more than 10% of the Class A Note Balance or (c) any
suit instituted by any Noteholder for the enforcement of the payment of
principal of or, if applicable, 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 affect the covenants or the
performance of this Indenture, and the Issuer (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not hinder, delay or impede the execution of
any power herein granted to the Indenture Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
SECTION 5.15 ACTION ON 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
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.
(a) Promptly following a request from the Indenture Trustee to do so, and
at the Administrator's expense, the Issuer shall take all such lawful action as
the Indenture Trustee may request to compel or secure the performance and
observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Allocation
Agreement or by the Seller of each of its obligations under or in connection
with the Servicing Agreement, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Sale and Allocation Agreement to the extent and in the manner directed
by the Indenture Trustee, including the transmission of notices of default on
the part of the Seller or the Servicer thereunder and the institution of legal
or administrative actions or proceedings to compel or secure performance by the
Seller or the Servicer of each of their obligations under the Sale and
Allocation Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may with prior written consent of the Insurer (provided that no Insurer
Default has occurred and is continuing), and at the direction (which direction
shall be in writing or by telephone (confirmed in writing promptly thereafter))
of the Noteholders evidencing not less than 66 2/3% of the Class A Note Balance
(with the prior written consent of the Insurer, or, at the direction of the
Insurer, in each case provided that no Insurer Default has occurred and is
continuing) shall, exercise all
47
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Sale and Allocation Agreement or
against the Servicer under or in connection with the Servicing Agreement,
including the right or power to take any action to compel or secure performance
or observance by the Seller or the Servicer, as the case may be, of each of
their obligations to the Issuer thereunder and to give any consent, request,
notice, direction, approval, extension or waiver under the Sale and Allocation
Agreement or the Servicing Agreement, as the case may be, 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, 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 upon the occurrence and during the continuation 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 no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Indenture Trustee and, if required by the terms of this Indenture,
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 the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own gross negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of PARAGRAPH (b) of this
SECTION 6.1;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is proved
that the Indenture Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to SECTION 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to PARAGRAPHS (a), (b), (c) and (g) of this SECTION
6.1.
48
(e) 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.
(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Allocation Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers hereunder if the Indenture Trustee shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this SECTION 6.1.
(i) The Indenture Trustee shall not be charged with knowledge of any
Event of Default unless either (i) a Responsible Officer shall have actual
knowledge of such Event of Default or (ii) written notice of such Event of
Default shall have been given to the Indenture Trustee in accordance with the
provisions of this Indenture.
SECTION 6.2 RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel unless it is proved
that the Indenture Trustee was negligent in such reliance.
(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 such action or omission by the
Indenture Trustee does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
49
(f) The Indenture Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Noteholders pursuant to this Indenture, unless such Noteholders
shall have offered to the Indenture Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction.
(g) The Indenture Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Indenture Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Indenture Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuer, personally or by agent or attorney.
(h) Except where the Transaction Documents specifically state otherwise,
the Indenture Trustee, provided it has sent out notices in accordance with the
applicable Transaction Document and is otherwise acting in accordance with the
Transaction Documents, may act as directed by the majority of the outstanding
Noteholders responding in writing to such request for amendment or written
direction; PROVIDED, HOWEVER, that the Noteholders representing at least 51% of
the Class A Note Balance as of the time such voting response is due back to the
Indenture Trustee must have responded in writing to the Indenture Trustee's
notice to amend or for written direction. In addition, the Indenture Trustee
shall not have any liability to any Noteholder or Note Owner with respect to any
action taken pursuant to such notice if the Noteholder or Note Owner does not
respond to such notice within the time period set forth in such notice. By
acceptance of a Note, each Noteholder and Note Owner is deemed to agree to the
foregoing provisions.
SECTION 6.3 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE.
The Indenture Trustee, in its individual or any other capacity, may become
the owner or pledgee of Notes and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not Indenture Trustee.
Any Paying Agent, Note Registrar, co-registrar or co-paying agent hereunder may
do the same with like rights.
SECTION 6.4 INDENTURE TRUSTEE'S DISCLAIMER.
The Indenture Trustee (a) shall not be responsible for, and makes no
representation as to, the validity or adequacy of this Indenture or the Notes
and (b) shall not be accountable for the Issuer's use of the proceeds from the
Notes or responsible for any statement of the Issuer in this Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee's certificate of authentication.
SECTION 6.5 NOTICE OF DEFAULT.
If a Default occurs and is continuing and if it is known to a Responsible
Officer of the Indenture Trustee, the Indenture Trustee shall mail to each
Noteholder notice of such Default within ninety (90) days after it occurs.
Except in the case of a Default in payment of principal of or interest, as
applicable, on any Note (including payments pursuant to the mandatory
50
redemption provisions of such 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.
(a) The Indenture Trustee shall deliver, within a reasonable period of time
after the end of each calendar year, to each Person who at any time during such
calendar year was a Noteholder, such information as may be required to enable
such Person to prepare its federal and state income tax returns.
(b) The Indenture Trustee shall deliver, within a reasonable period of time
after the end of each calendar year, to all Noteholders and the Insurer a brief
report relating to (i) its eligibility and qualification to continue as
Indenture Trustee pursuant to the terms of this Indenture, (ii) any amounts
advanced by it under this Indenture, (iii) the amount, interest rate and
maturity date of any material indebtedness owing by the Issuer to the Indenture
Trustee in its individual capacity, (iv) the property and funds physically held
by the Indenture Trustee and (v) any action taken by the Indenture Trustee that
materially affects the Notes which has not been previously reported.
SECTION 6.7 COMPENSATION AND INDEMNITY.
(a) The Issuer shall, or shall cause the Administrator to, pay to the
Indenture Trustee from time to time reasonable compensation for its services.
The Indenture Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Issuer shall, or shall cause
the Administrator to, reimburse the Indenture Trustee for all expenses
reasonably incurred or made by it, including costs of collection, in addition to
the compensation for its services; PROVIDED, HOWEVER, that neither the Issuer
nor the Administrator need reimburse the Indenture Trustee for any expense
incurred through the Indenture Trustee's willful misconduct, negligence, or bad
faith. 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, or shall cause the Administrator to,
indemnify the Indenture Trustee and the Custodian against any and all loss,
liability or expense (including attorneys' fees) (collectively, together with
the amounts specified as "Losses" in SECTION 6A.3(D), the "LOSSES") incurred by
it in connection with the administration of this trust and the performance of
its duties hereunder; PROVIDED, HOWEVER, that neither the Issuer nor the
Administrator need indemnify the Indenture Trustee or the Custodian for any such
loss, liability or expense incurred through the Indenture Trustee's or
Custodian's willful misconduct, negligence, or bad faith, as applicable. The
Indenture Trustee or Custodian shall notify the Issuer and the Administrator
promptly of any claim for which it may seek indemnity. Any failure by the
Indenture Trustee or the Custodian to so notify the Issuer and the Administrator
shall not, however, relieve the Issuer or the Administrator of its obligations
hereunder. The Issuer shall, or shall cause the Servicer to, defend any such
claim, and the Indenture Trustee or the Custodian, as applicable, may have
separate counsel and the Issuer shall, or shall cause the Servicer to, pay the
fees and expenses of such counsel. Notwithstanding the foregoing, Losses shall
be paid pursuant to this SECTION 6.7 solely from amounts in excess of funds
necessary to pay all outstanding interest and principal due to the Noteholders
in accordance with the priorities set
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forth in Section 3.5(d) of the Sale and Allocation Agreement and shall in any
case be nonrecourse as to the Issuer and, to the extent funds are not so
available to pay any Losses when due and owing, the claims relating thereto
shall not constitute a claim (as defined in Section 101 of Title 11 of the
United States Bankruptcy Code) against the Issuer but shall continue to accrue.
Each party hereto agrees that the payment of any claim of any such party in
respect of Losses shall be subordinated to the payment in full of all
outstanding interest and principal due to the Noteholders.
(b) Notwithstanding the foregoing, the Indenture Trustee and the Custodian
will not be liable:
(i) for any error of judgment made by it in good faith unless it is
proved that the Indenture Trustee or the Custodian, as applicable, was
negligent in ascertaining the pertinent facts;
(ii) for any action it takes or omits to take in good faith in
accordance with directions received by it from the requisite percentage of
Noteholders in accordance with the terms herein or in the other applicable
Transaction Documents; or
(iii) for interest on any money received by the Indenture Trustee
except as the Indenture Trustee and the Issuer may agree in writing.
(c) The Issuer's payment obligations to the Indenture Trustee pursuant to
this SECTION 6.7 shall survive the resignation or removal of the Indenture
Trustee and the discharge of this Indenture. When the Indenture Trustee incurs
expenses after the occurrence of a Default specified in SECTION 5.1(E) or (I)
with respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
SECTION 6.8 REPLACEMENT OF INDENTURE TRUSTEE.
(a) No resignation or removal of the Indenture Trustee, and no appointment
of a successor Indenture Trustee, shall become effective until either (i) the
acceptance of appointment by the successor Indenture Trustee acceptable to the
Insurer and payment of fees and expenses owed to the outgoing Indenture Trustee
pursuant to this SECTION 6.8 and SECTION 6.7 or (ii) the Notes have been paid
and discharged in full in accordance with SECTION 4.2 of the this Indenture and
all amounts received, if any, in connection with the payment and discharge of
the Notes have been distributed to the Noteholders. The Indenture Trustee may
resign at any time by so notifying the Issuer and the Insurer. The Insurer,
provided an Insurer Default shall not have occurred and be continuing, or the
Noteholders evidencing not less than 51% of the Class A Note Balance (with the
prior written consent of the Insurer (provided that no Insurer Default has
occurred and is continuing)) may remove the Indenture Trustee without cause by
so notifying the Indenture Trustee and the Issuer and shall appoint a successor
Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(A) the Indenture Trustee fails to comply with SECTION 6.11;
(B) an Insolvency Event occurs with respect to the Indenture
Trustee;
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(C) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(D) the Indenture Trustee otherwise becomes incapable of acting.
If (a) the Indenture Trustee resigns or is removed, (b) the Class A
Noteholders fail to appoint a successor Indenture Trustee acceptable to the
Insurer (provided that no Insurer Default has occurred and is continuing)
following the removal of the Indenture Trustee without cause or (c) if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee acceptable to the
Insurer (provided that no Insurer Default has occurred and is continuing).
(b) Any successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee, the Insurer and the Issuer.
Upon delivery of such written acceptance, the resignation or removal of the
retiring Indenture Trustee shall become effective and the successor Indenture
Trustee shall have all the rights, powers and duties of the Indenture Trustee
under this Indenture. The successor Indenture Trustee shall mail a notice of its
succession to the Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor Indenture
Trustee.
(c) If a successor Indenture Trustee does not take office within sixty (60)
days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Noteholders evidencing not less than 51% of
the Class A Note Balance may petition any court of competent jurisdiction for
the appointment of a successor Indenture Trustee. If the Indenture Trustee fails
to comply with SECTION 6.11, any Noteholder may petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of a
successor Indenture Trustee.
(d) Notwithstanding the replacement of the Indenture Trustee pursuant to
this SECTION 6.8, the Issuer's and the Administrator's obligations under SECTION
6.7 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9 APPOINTMENT OF CO-INDENTURE TRUSTEE.
(a) If the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation or banking association without any further act shall be
the successor Indenture Trustee; PROVIDED, HOWEVER, that such corporation or
banking association must be otherwise qualified and eligible under SECTION 6.11.
The Indenture Trustee shall provide the Rating Agencies and the Insurer with
prior written notice of any such transaction.
(b) If at the time such successor or successors by consolidation, merger or
conversion 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
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such successor to the Indenture Trustee may authenticate such Notes either in
the name of any predecessor trustee or in the name of the successor to the
Indenture Trustee. In all such cases such certificates shall have the full force
which the Notes or this Indenture provide that the certificate of the Indenture
Trustee shall have.
SECTION 6.10 ELIGIBILITY; DISQUALIFICATION.
(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 may at the time be located, the Indenture Trustee
shall have the power and may execute and deliver an instrument to appoint one or
more Persons to act as a co-trustee or co-trustees, jointly with the Indenture
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Estate, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, 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 under this Indenture
shall be required to meet the terms of eligibility as a successor trustee under
SECTION 6.11 and no notice of the appointment of any co-trustee or separate
trustee shall be required under SECTION 6.8.
(b) Each 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 shall not be 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;
(ii) no trustee under this Indenture shall be personally liable by
reason of any act or omission of any other trustee under this Indenture;
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
54
provision of this Indenture relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Each 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 permitted 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.
The Indenture Trustee or its parent shall have a combined capital, surplus
and undivided profits of at least $50,000,000 as set forth in its most recent
published annual report of condition and shall have a long-term debt rating of
investment grade by each of the Rating Agencies or shall otherwise be acceptable
to each of the Rating Agencies and the Insurer (provided that no Insurer Default
has occurred and is continuing).
ARTICLE VI-A
SECTION 6A.1 POSSESSION OF CONTRACT FILES BY THE CUSTODIAN.
(a) GRANT OF SECURITY INTEREST. The Seller hereby covenants and agrees with
the Indenture Trustee to deliver or cause to be delivered to the Custodian all
Contract Files no later than the Closing Date. The Custodian shall hold the
Contract Files (i) in trust for, and as bailee of, the Indenture Trustee and as
bailee for the Issuer for purposes of establishing the Issuer's ownership
thereof, (ii) for purposes of perfecting the Indenture Trustee's security
interest therein, to the extent available under applicable law, for the benefit
of the Noteholders and the Insurer, and establishing the Issuer's ownership
thereof subject to such security interest, (iii) to restrict the possession
thereof by any other person except as permitted in accordance with the terms of
this Article, and (iv) subject to and in accordance with the terms and
provisions of this Article.
(b) Subject to the terms and conditions hereof, the Indenture Trustee
hereby appoints the Custodian, and the Custodian hereby accepts such
appointment, to act as custodian and bailee of the Indenture Trustee, for the
benefit of the Noteholders and the Insurer, for purposes of Article 9 of the
Relevant UCC, to maintain custody of the Contract Files until the Servicer shall
have delivered a release with respect to any such Contract Files pursuant to
SECTION 6A.2 hereof.
(c) The Custodian will promptly report to the Indenture Trustee and the
Insurer any failure on its part to hold the Contract Files as herein provided
and promptly take appropriate action to remedy any such failure.
(d) The Custodian shall (i) maintain in effect a fidelity bond and errors
and omissions insurance, affording coverage to such employees, directors,
officers and other Persons acting on the Custodian's behalf and in an amount
customary for custodians of automobile loans similar to the Contracts or (ii)
self-insure at levels and in a manner acceptable to the Insurer.
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(e) CUSTODY. All Contract Files held by the Custodian under this Indenture
shall be placed by the Issuer in a separate file for each Contract File,
properly fastened or secured.
(f) INVENTORY OF CONTRACT FILES. At the time of delivery by or on behalf of
the Issuer to the Custodian of any Contract File or other documents related to a
Contract, the Issuer shall also deliver a list in an electronic format
acceptable to the Custodian (the "FILE NUMBER LIST") of Contract File numbers
(the "FILE NUMBERS"). The Custodian shall check the File Numbers of the Contract
Files delivered pursuant to this Indenture and certify to the Seller, the
Insurer, the Issuer and the Indenture Trustee in writing within 48 hours after
delivery of the File Number List, that it has received all the Contract Files
corresponding to the File Number List. If upon examination of the Contract
Files, the Custodian determines that it does not have all the Contract Files on
the File Number List, the Custodian shall promptly give written notice of the
same to the Indenture Trustee, the Insurer, the Issuer and the Seller.
(g) POSSESSION OF CONTRACT FILES. Without any limitation of SECTION 6A.1(a)
or (b) hereof, following the Custodian's receipt of each Contract File, the
Custodian shall retain possession and custody thereof, subject to the terms of
this Indenture, for the exclusive benefit of, in trust for, and as bailee of,
the Indenture Trustee and for purposes (i) of perfecting the Indenture Trustee's
security interest therein, to the extent available under applicable law, for the
benefit of the Noteholders and the Insurer and as bailee of the Issuer for
purposes of establishing the Issuer's ownership thereof and (ii) of restricting
the possession thereof by any person except as permitted in accordance with the
terms of this Article, until and unless such security interest in any Contract
File is released pursuant to the terms of SECTION 6A.2 hereof. Upon such receipt
the Custodian shall also make appropriate notations in the Custodian's books and
records reflecting that the Contract File has been pledged to the Indenture
Trustee for the benefit of the Noteholders and the Insurer and that the
Indenture Trustee has acquired and holds a security interest therein.
Notwithstanding any other provisions of this Indenture, the Custodian shall not
at any time exercise or seek to enforce any claim, right or remedy, including
any statutory or common law rights of set-off, that it might otherwise have
against all or any of the Contract Files or related documents or the proceeds
thereof.
SECTION 6A.2 RELEASE OF CONTRACT FILES BY THE CUSTODIAN.
(a) The Custodian shall promptly release any Contract File then held by it
to the Servicer upon receipt of (i) a written request for release of such
Contract File signed by an Authorized Officer of the Servicer in the form
attached hereto as EXHIBIT C or (ii) an email request by an Authorized Officer
of the Servicer containing the information described in EXHIBIT C, followed by a
signed copy of such EXHIBIT C; PROVIDED, HOWEVER, that the Custodian shall be
deemed to have received proper instructions with respect to the Contract Files
upon its receipt of such a written or emailed request from an Authorized Officer
of the Servicer. "Authorized Officer of the Servicer" shall mean an officer
certified by the Secretary of the Servicer as an officer who is authorized to
give instructions to the Custodian as set forth on a certificate delivered to
the Custodian, the Issuer, the Insurer and the Indenture Trustee on the Closing
Date or on any such subsequent certificate delivered to the Custodian, the
Issuer, the Insurer and the Indenture Trustee.
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(b) The Custodian shall promptly deliver to the Indenture Trustee or its
designee any or all Contract Files in the Custodian's custody upon the written
request of an Authorized Officer of the Indenture Trustee. The Indenture Trustee
shall provide the Issuer, the Insurer and the Servicer with a copy of any such
request delivered to the Custodian. Written instructions as to the method of
shipment and shipper(s) the Custodian is directed to utilize in connection with
the delivery of Contract Files in the performance of the Custodian's duties
hereunder shall be delivered by the Indenture Trustee to the Custodian prior to
any shipment of Contract Files pursuant to the request of Indenture Trustee
hereunder. The Indenture Trustee will arrange for the provision of such services
at the cost and expense of the Issuer (or, at the Custodian's option, the
Custodian shall be reimbursed by the Issuer for all costs and expenses incurred
by the Custodian consistent with such instructions (it being understood that any
such reimbursement shall be paid in accordance with the priorities set forth in
SECTION 2.8 hereof)) and will maintain such insurance against loss or damage to
the Contract Files as the Indenture Trustee and the Servicer reasonably deem
appropriate. "Authorized Officer of the Indenture Trustee" shall mean an officer
certified by the Secretary of the Indenture Trustee as an officer who is
authorized to give instructions to the Custodian as set forth on a certificate
delivered to the Custodian, the Issuer and the Insurer on the Closing Date or on
any such subsequent certificate delivered to the Custodian, the Issuer and the
Insurer.
SECTION 6A.3 REGARDING THE CUSTODIAN.
(a) The Custodian undertakes to perform only such duties as are expressly
set forth herein.
(b) The Custodian may rely and shall be protected in acting or refraining
from acting upon any written notice, instruction or request furnished to it
hereunder and believed by it to be genuine and to have been signed or presented
by the proper party or parties. The Custodian shall be under no duty to inquire
into or investigate the validity, accuracy or content of any such document. The
Custodian shall have no duty to verify the authenticity, genuineness or
conformity to the requirements of this Indenture of any Contract Files or
related documents delivered to it hereunder, or to determine whether the
materials included in any Contract File conform to the requirements hereof.
(c) The Custodian shall not be liable for any action taken or omitted by it
in good faith unless a court of competent jurisdiction determines that the
Custodian's willful misconduct, gross negligence or bad faith was the primary
cause of any loss to the Issuer, the Insurer or the Indenture Trustee. In the
administration of the custodial account hereunder, the Custodian may execute any
of its powers and perform its duties hereunder directly or through agents or
attorneys and may consult with counsel, accountants and other skilled persons to
be selected and retained by it. The Custodian shall not be liable for anything
done, suffered or omitted in good faith by it in accordance with the advice of
counsel.
(d) The Issuer agrees to indemnify and hold the Custodian and its
directors, officers, agents and employees (collectively the "INDEMNITEES")
harmless from and against any and all claims, liabilities, losses, damages,
fines, penalties, and expenses, including out-of-pocket and incidental expenses
and legal fees and expenses (collectively, together with the amounts specified
as "Losses" pursuant to SECTION 6.7(a), the "LOSSES") that may be imposed on,
incurred
57
by, or asserted against, the Indemnitees or any of them for following any
instructions or other directions upon which the Custodian is authorized to rely
pursuant to the terms of this Indenture (it being understood that such Losses
shall be paid pursuant to SECTION 2.8(xi) hereof).
(e) In addition to and not in limitation of PARAGRAPH (d) immediately
above, the Issuer also agrees to indemnify and hold the Indemnitees and each of
them harmless from and against any and all Losses that may be imposed on,
incurred by, or asserted against, the Indemnitees or any of them in connection
with or arising out of the Custodian's performance under this Indenture,
provided the Indemnitees have not acted with gross negligence or bad faith or
engaged in willful misconduct or breach of contract (it being understood that
such Losses shall be paid pursuant to SECTION 2.8(xi) hereof).
(f) The duties and responsibilities of the Custodian hereunder shall be
determined solely by the express provisions of this Indenture, and no other or
further duties or responsibilities shall be implied. The Custodian shall not
have any liability under, nor duty to inquire into the terms and provisions of,
any agreement or instructions, other than as specifically required by this
Indenture.
(g) The Custodian shall not incur any liability for following the
instructions herein contained or expressly provided for, or written instructions
given by the parties hereto in accordance with the express provisions hereof.
(h) In the event that the Custodian shall be uncertain as to its duties or
rights hereunder or shall receive instructions, claims or demands from any party
hereto which, in its opinion, conflict with any of the provisions of this
Indenture, it shall be entitled to refrain from taking any action and its sole
obligation shall be to request definitive instructions from the other parties
hereto and to keep safely all property held in custody until it shall be
directed otherwise in writing by all of the other parties hereto or by a final
order or judgment of a court of competent jurisdiction.
(i) Any corporation or association into which the Custodian in its
individual capacity may be merged or converted or with which it may be
consolidated, or any corporation or association resulting from any merger,
conversion or consolidation to which the Custodian in its individual capacity
shall be a party, or any corporation or association to which all or
substantially all of the corporate trust business of the Custodian in its
individual capacity may be sold or otherwise transferred, shall be the Custodian
under this Indenture without further act.
(j) Anything in this Agreement to the contrary notwithstanding, in no event
shall the Custodian be liable for special, indirect or consequential loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Custodian has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(k) The Custodian agrees to maintain the Contract Files which are delivered
to it at the offices of the Custodian located at MAC N9328-011, Suite ABS, 000
Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attn: Corporate Trust Services -
Asset Backed Securities Vault, and the Custodian shall notify the Indenture
Trustee, the Issuer and the Insurer by written notice of any change in the
location of the Contract Files. Subject to the foregoing, the Custodian may
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temporarily move individual Contract Files or any portion thereof without notice
as necessary to allow the Servicer to conduct collection and other servicing
activities in accordance with its customary practices and procedures.
(l) The Custodian shall hold the Contract Files in its fire-resistant
storage vault under its exclusive custody and control in accordance with
customary standards for such custody and shall maintain a fidelity bond plus
document hazard insurance in such amounts and against such risks as customarily
are maintained by custodians acting in a similar capacity to the Custodian
hereunder with respect to receivables similar to the Contracts. If the Indenture
Trustee or the Issuer suffers losses or damages as a result of the destruction
or loss of any of the Contract Files or any item therein, the Custodian shall,
(i) at the request of the Indenture Trustee or the Issuer, make any appropriate
claim under such bond or insurance, and (ii) to the extent of the Indenture
Trustee's or the Issuer's losses or damages, pay the proceeds thereof to the
Indenture Trustee, or if all of the Issuer's obligations under this Indenture
and the Notes and the Insurance Agreement have been paid in full, to the Issuer,
unless the Custodian has replaced the lost or destroyed items or has otherwise
reimbursed the Indenture Trustee or the Issuer, as applicable, for such losses
or damages. The Custodian shall maintain the Contract Files segregated from and
not commingled with any other files of the Custodian.
(m) The Custodian shall not deliver physical possession of, or otherwise
transfer, assign, pledge, mortgage, convey or dispose of any Contract Files in
its possession to any Person except (i) as provided in this Article, and (ii)
upon termination of this Indenture.
(n) The Custodian hereby waives any and all rights of offset with respect
to any and all Contract Files in the Custodian's possession, whether such right
of offset arises by contract, operation of law or otherwise.
(o) The Custodian specifically acknowledges and agrees that so long as
Xxxxx Fargo Bank Minnesota, National Association, is acting as Custodian under
this Indenture in the event that Xxxxx Fargo Bank Minnesota, National
Association shall either be terminated or resign as Indenture Trustee pursuant
to this Indenture, then the Custodian shall similarly either be terminated or
resign and the Custodian shall deliver the Contract Files to the successor
Indenture Trustee, acting as successor Custodian, appointed pursuant to the
terms of this Indenture at such place as the successor Custodian may reasonably
designate. Any entity acting as Custodian hereunder may not resign as such
unless such entity also resigns its capacity as Indenture Trustee.
(p) Except for actions expressly authorized by this Article, the Custodian
shall take no action which would or would be likely to impair the security
interests created or existing under any Contract or Financed Vehicle or to
impair the value of any Contract or Financed Vehicle.
(q) The Custodian hereby agrees not to assert (in its individual capacity
or otherwise) any liens of any kind with respect to the Contract Files held by
it or the related Contracts and hereby releases and waives any such liens.
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(r) The Custodian shall permit inspection at all reasonable times upon at
least two Business Days prior notice during regular business hours by the
Issuer, the Indenture Trustee or the Insurer (or by its auditors when requested
by the Insurer or the Indenture Trustee, as applicable) of the Contract Files
and the records of the Custodian relating to this Article (or its auditors when
requested by the Insurer or the Indenture Trustee, as applicable) to make copies
of the Contract Files and the records of the Custodian relating to this
Indenture.
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 to the Indenture Trustee
(i) within five (5) days after each Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Class A Noteholders as of such Record Date and (ii) at such other times as the
Indenture Trustee may request in writing, within thirty (30) days after receipt
by the Issuer of any such request, a list of similar form and content as of a
date not more than ten (10) days prior to the time such list is furnished;
PROVIDED, HOWEVER, that so long as the Indenture Trustee is the Note Registrar
or the Class A Notes are issued as Book-Entry Notes, 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 Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in SECTION
7.1 and the names and addresses of the Noteholders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in SECTION 7.1 upon receipt of a new list so
furnished.
SECTION 7.3 REPORTS BY ISSUER.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (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) that 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 the 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
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(iii) supply to the Indenture Trustee 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) and by the
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 April 30 of each year.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 COLLECTION OF MONEY COLLECTION.
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 and the Sale and Allocation Agreement. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture
and the Sale and Allocation Agreement. Except as otherwise expressly provided in
this Indenture, if any default occurs in the making of any payment or
performance under any agreement or instrument that is part of the 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 a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in ARTICLE V.
SECTION 8.2 TRUST ACCOUNTS.
(a) On or before the Closing Date, the Issuer shall cause the Servicer to
establish and maintain, in the name of the Indenture Trustee, for the benefit of
the Insurer and the Noteholders, the Collection Account as provided in Section
3.1 of the Sale and Allocation Agreement. The Servicer shall deposit in the
Collection Account all amounts required to be deposited therein with respect to
the preceding Collection Period as provided in Section 3.2 of the Sale and
Allocation Agreement.
(b) On or before the Closing Date, the Issuer shall cause the Servicer to
establish and maintain, in the name of the Indenture Trustee, for the benefit of
the Class A Noteholders and the Insurer, the Reserve Account as provided in
Section 3.6(a) of the Sale and Allocation Agreement. On each Payment Date, upon
receipt of instructions from the Servicer pursuant to Section 3.5(b) of the Sale
and Allocation Agreement, the Indenture Trustee shall withdraw from the Reserve
Account (up to the amount on deposit in the Reserve Account) and apply pursuant
to SECTION 3.5(e) thereof the amount, if any, by which the Required Payment
Amount for such Payment Date exceeds the Available Funds for such Payment Date.
(c) On each Payment Date, the Indenture Trustee shall apply or cause to be
applied the amount on deposit in the Collection Account on such Payment Date in
accordance with SECTION 2.8(a).
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(d) On or before the Closing Date, the Issuer shall cause the Servicer to
establish and maintain, in the name of the Indenture Trustee, for the exclusive
benefit of the Class A Noteholders, the Class A Note Payment Account as provided
in Section 3.1 of the Sale and Allocation Agreement. On each Payment Date, the
Indenture Trustee shall apply or cause to be applied the amount on deposit in
the Class A Note Payment Account on such Payment Date in accordance with SECTION
2.8(b) or (f), as applicable.
(e) On or before the Closing Date, the Issuer shall cause the Servicer to
establish and maintain, in the name of the Indenture Trustee, for the exclusive
benefit of the Class A Noteholders and the Class B Noteholders, the Prefunding
Account as provided in Section 3.7 of the Sale and Allocation Agreement. On each
Additional Contract Purchase Date, upon receipt of instructions from the
Servicer pursuant to Section 3.7(c) of the Sale and Allocation Agreement, the
Indenture Trustee shall transfer the purchase price for such Additional
Contracts from the Prefunding Account to such account as the Issuer through the
Servicer may specify. On the Prefunding Account Ending Date, the Indenture
Trustee at the direction of the Servicer shall transfer 99% of the Excess
Prefunding Amount to the Class A Note Payment Account and the remaining 1% of
the Excess Prefunding Amount to the Class B Note Payment Account.
SECTION 8.3 GENERAL PROVISIONS REGARDING ACCOUNTS.
(a) So long as no Default or Event of Default shall have occurred and be
continuing, all or a portion of the funds in the Trust Accounts shall be
invested by the Indenture Trustee at the direction of the Servicer in Eligible
Investments as provided in Sections 3.1 and 3.6(b) of the Sale and Allocation
Agreement. All income or other gain (net of losses and investment expenses) from
investments of monies deposited in the Trust Accounts shall be withdrawn by the
Indenture Trustee from such accounts and distributed (but only under the
circumstances set forth in the Sale and Allocation Agreement) as provided in
Sections 3.1 and 3.6(d) of the Sale and Allocation Agreement. The Servicer shall
not direct the Indenture Trustee to make any investment of any funds or to sell
any investment held in any of the Trust Accounts unless the security interest
Granted and perfected in such account will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction to the Indenture
Trustee to make any such investment or sale, if requested by the Indenture
Trustee, the Issuer shall deliver to the Indenture Trustee an Opinion of
Counsel, acceptable to the Indenture Trustee, to such effect.
(b) 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 Trust Accounts
resulting from any loss on any Permitted 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.
(c) If (i) the Servicer shall have failed to give investment directions for
any funds on deposit in the Trust Accounts to the Indenture Trustee by 11:00
A.M. (
New York City time) (or such other time as may be agreed upon by the
Issuer and Indenture Trustee), on the Business Day preceding each Payment Date,
(ii) a Default or Event of 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 or (iii) if the Notes shall have been declared due and
payable following
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an Event of Default, amounts collected or receivable from the Trust Estate are
being applied in accordance with SECTION 5.4 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 Trust Accounts in Eligible
Investments described in CLAUSE (vii) of the definition thereof.
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 from the lien of this
Indenture, or convey the Indenture Trustee's interest in the same, in a manner
and under circumstances that are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture Trustee
as provided in this ARTICLE 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, the Policy has been terminated in accordance with its terms and has
been returned to the Insurer for cancellation and all sums due the Indenture
Trustee and the Insurer pursuant to SECTION 6.7 have been paid in full, 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 Trust Accounts. The Indenture Trustee shall
release property from the lien of this Indenture pursuant to this SECTION 8.4(b)
only upon receipt of an Issuer Request accompanied by an Officer's Certificate
and an Opinion of Counsel.
SECTION 8.5 OPINION OF COUNSEL.
The Indenture Trustee shall receive at least seven (7) days 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, except in connection with any action contemplated by SECTION
8.4(b), 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 such action, and
concluding that all conditions precedent to the taking of such action have been
complied with and such action will not materially and adversely impair the
security for the Notes or the rights of the Noteholders or the Insurer in
contravention of the provisions of this Indenture; PROVIDED, HOWEVER, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Trust 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 NOTEHOLDER.
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The Issuer and the Indenture Trustee, when authorized by an Issuer Order,
may, without the consent of the Holders of any Notes but with prior notice to
the Rating Agencies and the Insurer and with the consent of the Insurer (if no
Insurer Default shall have occurred and be continuing), at any time and from
time to time, enter into one or more indentures supplemental hereto, in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(a) to correct or amplify the description of any property at any time
subject to the lien of this Indenture, or better to assure, convey and confirm
unto the Indenture Trustee any property subject or required to be subjected to
the lien of this Indenture, or to subject to the lien of this Indenture
additional property;
(b) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by any
such successor of the covenants of the Issuer herein and in the Notes contained;
(c) to add to the covenants of the Issuer, for the benefit of the
Noteholders and the Insurer, or to surrender any right or power herein conferred
upon the Issuer;
(d) to convey, transfer, assign, mortgage or pledge any property to or with
the Indenture Trustee;
(e) to cure any ambiguity, to correct or supplement any provision herein or
in any supplemental indenture that may be inconsistent with any other provision
herein or in any supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture which will not be
inconsistent with other provisions of this Indenture;
(f) to evidence and provide for the acceptance of the appointment hereunder
by a successor trustee with respect to the Notes and to add to or change any of
the provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to the
requirements of ARTICLE VI; or
(g) 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
any federal statute hereafter enacted.
PROVIDED, HOWEVER, that (i) such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder or the Insurer, (ii) the Rating Agency Condition shall have been
satisfied with respect to such action and (iii) such action shall not, as
evidenced by an Opinion of Counsel, cause the Issuer to be characterized for
federal income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the federal income taxation of any
Notes Outstanding or any Noteholder. 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.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS.
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The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, with the consent of the Insurer (if no Insurer Default shall have
occurred and be continuing) and the Noteholders evidencing not less than 51% of
the Class A Note Balance and with prior notice to the Rating Agencies and the
Insurer, by Act of such Holders delivered to the Issuer and the Indenture
Trustee, at any time and from time to time, enter into one or more indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or modifying
in any manner the rights of the Noteholders under this Indenture; PROVIDED,
HOWEVER, that (a) such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder or the
Insurer, (b) the Rating Agency Condition shall have been satisfied with respect
to such action and (c) such action shall not, as evidenced by an Opinion of
Counsel, cause the Issuer to be characterized for federal income tax purposes as
an association taxable as a corporation or otherwise have any material adverse
impact on the federal income taxation of any Notes Outstanding or any
Noteholder; and, provided FURTHER, that no such supplemental indenture shall,
without the consent of the Insurer and the Holder of each Outstanding Note
affected thereby:
(i) change any Final Note Payment Date or the date of payment of any
installment of principal of or interest on any Note, or reduce the
principal amount thereof, the interest rate thereon or the Redemption Price
with respect thereto, change the provisions of this Indenture relating to
the application of collections on, or the proceeds of the sale of, the
Trust Estate to payment of principal of or interest on the Notes, or change
any place of payment where, or the coin or currency in which, any Note or
the interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of available funds,
as provided in ARTICLE V, to the payment of any amount due on the Notes on
or after the respective due dates thereof (or, in the case of redemption,
on or after the Redemption Date);
(iii) reduce the percentage of the Notes the consent of the Holders of
which is required for any such supplemental indenture or for any waiver of
compliance with certain provisions of this Indenture or of certain defaults
hereunder and their consequences as provided in this Indenture;
(iv) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(v) reduce the percentage of the Notes the consent of the Holders of
which is 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 in full the principal amount of and accrued but unpaid
interest on the Notes;
(vi) modify any provision of this Indenture specifying a percentage of
the principal amount of the Notes necessary to amend this Indenture or the
other Transaction Documents except to increase any percentage specified
herein or to provide that certain additional provisions of this Indenture
or the other Transaction Documents cannot be
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modified or waived without the consent of the Holders of each Outstanding
Note affected thereby;
(vii) modify any of the provisions of this Indenture in such a manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date (including the calculation of
any of the individual components of such calculation) or to affect the
rights of the Noteholders to the benefit of any provisions for the
mandatory redemption of the Notes contained herein; or
(viii) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Trust
Estate or, except as otherwise permitted or contemplated herein, terminate
the lien of this Indenture on any such collateral at any time subject
hereto or deprive the Holder of any Note of the security provided by the
lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this SECTION 9.2
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof. Promptly
after the execution by the Issuer and the Indenture Trustee of any supplemental
indenture pursuant to this SECTION 9.2, the Indenture Trustee shall mail to the
Noteholders to which such amendment or supplemental indenture relates a notice
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Indenture Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 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 modification 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
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 in this Indenture to the execution and delivery of such
supplemental indenture 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 or immunities under this
Indenture or otherwise.
SECTION 9.4 EFFECT OF SUPPLEMENT INDENTURE.
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Upon the execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and shall be deemed to be modified and amended
in accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the 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 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Any 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.
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 REDEMPTION.
(a) The Notes are subject to redemption in whole, but not in part, at the
direction of the Issuer on any Payment Date on which the Depositor exercises its
option to purchase the assets of the Issuer pursuant to Section 9.3(a) of the
Trust Agreement, and the amount paid by the Depositor pursuant to such Section
9.3(a) shall be treated as collections in respect of the Contracts and applied
to pay the unpaid principal amount of the Notes plus all amounts owed to the
Insurer plus accrued and unpaid interest thereon. The Issuer shall furnish
notice of such redemption to the Insurer, the Rating Agencies and the
Noteholders. If the Notes are to be redeemed pursuant to this SECTION 10.1(a),
the Issuer shall furnish or cause the Depositor to furnish notice of such
election to the Indenture Trustee not later than fifteen (15) days prior to the
Redemption Date and the Issuer shall deposit the Redemption Price of the Notes
to be redeemed in the Class A Note Payment Account and the Class B Note Payment
Account, as applicable, by 10:00 A.M. (
New York City time) on the Business Day
prior to the Redemption Date, whereupon all such Notes shall be due and payable
on the Redemption Date.
(b) In the event that the assets of the Issuer are sold pursuant to Section
9.3 of the Trust Agreement, all amounts on deposit in the Note Payment Accounts
shall be paid first, to the Class A Noteholders until such amounts are reduced
to zero and all amount are paid in full to the Insurer and second, to the Class
B Noteholders, respectively, up to the unpaid principal amount of the Notes and
all accrued and unpaid interest thereon. If such amounts are to be paid to
Noteholders pursuant to this SECTION 10.1(b), the Issuer shall, to the extent
practicable, furnish or cause the Servicer to furnish notice of such event to
the Indenture Trustee not later than fifteen
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(15) days prior to the Redemption Date, whereupon all such amounts shall be
payable on the Redemption Date.
SECTION 10.2 FORM OF REDEMPTION NOTICE.
Notice of redemption of the Notes under SECTION 10.1(a) shall be given by
the Indenture Trustee by first-class mail, postage prepaid, or by facsimile
mailed or transmitted promptly following receipt of notice from the Issuer or
the Servicer pursuant to SECTION 10.1(a), but not later than ten (10) days prior
to the applicable Redemption Date, to each Holder of the Notes as of the close
of business on the Record Date preceding the applicable Redemption Date, at such
Holder's address or facsimile number appearing in the Note Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price; and
(c) the place where the Notes are to be surrendered for payment of the
Redemption Price (which shall be the office or agency of the Issuer to be
maintained as provided in SECTION 3.2).
Notice of redemption of the Notes shall be given by the Indenture Trustee
in the name and at the expense of the Issuer. Any failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not, however,
impair or affect the validity of the redemption of any other Note.
SECTION 10.3 NOTES PAYABLE ON REDEMPTION DATE.
The Notes to be redeemed shall, following notice of redemption as required
by SECTION 10.2 (in the case of redemption pursuant to SECTION 10.1(a)), become
due and payable on the Redemption Date at the Redemption Price and (unless the
Issuer shall default in the payment of the Redemption Price) no interest shall
accrue on the Redemption Price for any period after the date to which accrued
interest is calculated for purposes of calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 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.
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Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(A) 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;
(B) 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;
(C) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(D) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) Prior to the deposit of any Collateral or other property or securities
with the Indenture Trustee 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, deliver 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 ninety (90) days of such deposit) to the Issuer of the Collateral
or other property or securities to be so deposited.
(c) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof as
to the matters described in SECTION 11.1(b), the Issuer shall also furnish to
the Indenture Trustee an Independent Certificate as to the same matters if the
fair value to the Issuer of the property or securities to be so deposited and of
all other such property or securities made the basis of any such withdrawal or
release since the commencement of the then-current Fiscal Year of the Issuer, as
set forth in the certificates furnished pursuant to SECTION 11.1(b) and this
SECTION 11.1(c), is ten percent (10%) or more of the Class A Note Balance, but
such a certificate need not be furnished with respect to any property or
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
(1%) of the Class A Note Balance.
(d) 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 certifying or stating the opinion of each person signing
such certificate as to the fair value (within ninety (90) days of such release)
of the property or securities proposed to be released and stating that in the
opinion of such person the proposed release will not impair the security under
this Indenture in contravention of the provisions hereof.
(e) Whenever the Issuer is required to furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of any signer thereof as
to the matters described in
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SECTION 11.1(d), 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 property as contemplated by
SECTION 11.1(f) 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 SECTION 11.1(d) and this SECTION 11.1(e), is ten percent (10%) or
more of the Class A Note Balance, but such a 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 (1%) of the Class A Note Balance.
(f) Notwithstanding SECTION 2.10 or any other provisions of this SECTION
11.1, the Issuer may, without compliance with the requirements of the other
provisions of this SECTION 11.1, (i) collect, liquidate, sell or otherwise
dispose of Contracts and Financed Vehicles as and to the extent permitted or
required by the Transaction Documents and (ii) make cash payments out of the
Trust Accounts as and to the extent permitted or required by the Transaction
Documents.
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 such officer's
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, one or
more officers of the Servicer, the Seller, the Administrator or the Issuer,
stating that the information with respect to such factual matters is in the
possession of the Servicer, the Seller, the Administrator or the Issuer, unless
such Authorized Officer or counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The
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foregoing shall not, however, be construed to affect the Indenture Trustee's
right to rely upon the truth and accuracy of any statement or opinion contained
in any such document as provided in ARTICLE VI.
SECTION 11.3 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 the
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by the 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 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.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Noteholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver, Act of Noteholders is to be made upon, given or
furnished to or filed with:
(a) the Indenture Trustee by any Noteholder or by the Issuer, shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Indenture Trustee at its Corporate Trust Office;
(b) the Issuer by the Indenture Trustee or by any Noteholder, shall be
sufficient for every purpose hereunder if in writing and mailed first-class,
postage prepaid to the Issuer addressed to: First Investors Auto Owner Trust
2002-A, c/o Bankers Trust (Delaware), 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxx,
Xxxxxxxx 00000-0000, Attention: Corporate Trust, with a copy to Bankers Trust
Company, 0 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Structured Finance Group, or at any other address previously furnished in
writing to the Indenture Trustee by the Issuer or the Administrator. The Issuer
shall promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee; or
71
(c) the Insurer by the Indenture Trustee, the Servicer or any Noteholder,
shall be sufficient for every purpose hereunder if in writing and mailed
first-class, postage prepaid to the Insurer addressed to MBIA Insurance
Corporation, 000 Xxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: Insured
Portfolio Management, Structured Finance.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, telecopied or mailed by certified mail, return receipt requested, to
(i) in the case of Moody's, at the following address: Xxxxx'x Investors Service,
Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
(ii) in case of S&P, at the following address: Standard & Poor's, a division of
The XxXxxx-Xxxx Companies, 00 Xxxxx Xxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx
00000, Attention: Asset Backed Surveillance Department.
SECTION 11.5 NOTICES TO NOTEHOLDERS: WAIVER NOTICES TO NOTEHOLDERS.
(a) Where this Indenture provides for notice to Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class, postage prepaid to each
Noteholder affected by such event, at its address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given.
(b) Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) If, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
SECTION 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
72
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 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
SECTION 11.8 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture and the Notes by the Issuer
shall bind its successors and assigns, whether so expressed or not. All
agreements of the Indenture Trustee in this Indenture shall bind its successors,
co-trustees and agents.
SECTION 11.9 SEVERABILITY.
If any provision of this Indenture or the Notes shall be invalid, illegal
or unenforceable, the validity, legality, and enforceability of the remaining
provisions of this Indenture and the Notes shall not in any way be affected or
impaired thereby.
SECTION 11.10 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
Insurer, the Noteholders, 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 11.11 LEGAL HOLIDAY.
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 11.12 GOVERNING LAW.
This Indenture shall be construed in accordance with the laws of the State
of
New York and the obligations, rights and remedies of the parties under this
Indenture shall be determined in accordance with such laws.
SECTION 11.13 COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of which
counterparts when so executed shall be deemed to be an original, and all of
which counterparts shall together constitute but one and the same instrument.
SECTION 11.14 RECORDING OF INDENTURE.
73
If this Indenture is subject to recording in any appropriate public
recording office, such recording shall be effected by the Issuer at its expense
and shall be 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.
SECTION 11.15 TRUST OBLIGATION.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith against (a) the Indenture Trustee or the Owner
Trustee in its individual capacity, (b) any holder of a beneficial interest in
the Issuer or (c) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, of any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their 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 the
Owner Trustee (as such and in its individual capacity) shall be subject to, and
entitled to the benefits of, the terms and provisions of the Trust Agreement.
SECTION 11.16 NO PETITION.
The Indenture Trustee, by entering into this Indenture, and each Noteholder
or Note Owner, by accepting a Note or beneficial interest in a Note, as the case
may be, hereby covenant and agree that they will not at any time institute
against, join in any institution against, or knowingly or intentionally
cooperate or encourage any other Person in instituting against, the Depositor or
the Issuer, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other proceedings under any United States federal or
state bankruptcy or similar law in connection with any obligations relating to
the Notes, this Indenture or any of the other Transaction Documents.
SECTION 11.17 INSPECTION.
The Issuer shall, with reasonable prior notice, permit any representative
of the Indenture Trustee or the Insurer, during the Issuer's normal business
hours, to examine 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
74
Trustee may reasonably determine that such disclosure is consistent with its
obligations hereunder.
SECTION 11.18 CERTAIN MATTERS REGARDING THE INSURER.
If no Insurer Default shall have occurred and be continuing, the Insurer
shall have the right to exercise all rights, including voting rights, which the
Class A Noteholders are entitled to exercise pursuant to this Indenture, without
any consent of such Class A Noteholders; PROVIDED, HOWEVER, that, without the
consent of each Class A Noteholder affected thereby, the Insurer shall not
exercise such rights to amend this Indenture in any manner that would (a) reduce
the amount of, or delay the timing of, collections of payments on the Contracts
or distributions which are required to be made on any Class A Note, (b)
adversely affect in any material respect the interests of the Holders of any
Class A Notes or (c) alter the rights of any such Class A Holder to consent to
such amendment.
Notwithstanding any provision of this Indenture to the contrary, if an
Insurer Default has occurred and is continuing, the Insurer shall not have the
right to take any action under this Indenture or to control or direct the
actions of the Issuer, the Seller, the Indenture Trustee or the Owner Trustee
pursuant to the terms of this Indenture, nor shall the consent of the Insurer be
required with respect to any action (or waiver of a right to take action) to be
taken by the Issuer, the Seller, the Indenture Trustee, the Owner Trustee, the
Class A Noteholders; PROVIDED, HOWEVER, that (i) the consent of the Insurer
shall be required at all times with respect to any amendment of this Indenture
and (ii) the Insurer shall be entitled to receive notices hereunder at all times
whether or not an Insurer Default has occurred.
SECTION 11.19 ACKNOWLEDGMENT OF MULTIPLE ROLES.
The parties expressly acknowledge and consent to Xxxxx Fargo Bank
Minnesota, National Association ("XXXXX FARGO") acting in the possible dual
capacity of Back-Up Servicer or successor Servicer and in the capacity as
Indenture Trustee and Custodian. Xxxxx Fargo may, in such dual capacity,
discharge its separate functions fully, without hindrance or regard to conflict
of interest principles, duty of loyalty principles or other breach of fiduciary
duties to the extent that any such conflict or breach arises from the
performance by Xxxxx Fargo of express duties set forth in this Indenture in any
of such capacities, all of which defenses, claims or assertions are hereby
expressly waived by the other parties hereto except in the case of negligence
(other than errors in judgment) and willful misconduct by Xxxxx Fargo.
SECTION 11.20 SELLERS' OBLIGATIONS.
The Seller is a party to this Indenture solely for the purpose of
performing those duties which it is explicitly obligated to perform pursuant to
the terms hereof, including those duties listed in SECTIONS 3.21 and 6A.1
hereof.
75
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers, thereunto duly authorized and duly
attested, all as of the day and year first above written.
FIRST INVESTORS AUTO OWNER TRUST 2002-A
By: BANKERS TRUST (DELAWARE),
not in its individual capacity but
solely as Owner Trustee
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
not in its individual capacity but as
Indenture Trustee and Custodian
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
FIRST INVESTORS FINANCIAL SERVICES, INC.,
as Seller
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
STATE OF )
) ss. :
COUNTY OF )
The foregoing instrument was acknowledged before me this ____ day of
January, 2002, by ________________________, as ____________________ of BANKERS
TRUST (DELAWARE), Owner Trustee of FIRST INVESTORS AUTO OWNER TRUST 2002-A, a
Delaware business trust.
------------------------
Notary Public in and for
the State of____________
[SEAL]
My commission expires: _________________
STATE OF NORTH CAROLINA )
) ss. :
COUNTY OF UNION )
The foregoing instrument was acknowledged before me this 28th day of
January, 2002, by Xxx Xxxxxx, as Assistant Vice President of XXXXX FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION, Indenture Trustee of FIRST INVESTORS AUTO OWNER
TRUST 2002-A, a Delaware business trust.
----------------------------------------------------
Notary Public in and for the State of North Carolina
[SEAL]
My commission expires: August 29, 0000
XXXXX XX XXXXX XXXXXXXX )
) ss. :
COUNTY OF UNION )
The foregoing instrument was acknowledged before me this 28th day of
January, 2002, by Xxxxxx X. Duck, as Vice President - Treasurer of FIRST
INVESTORS FINANCIAL SERVICES, INC.
----------------------------------------------------
Notary Public in and for the State of North Carolina
[SEAL]
My commission expires: August 29, 2005
Exhibit A-1
$159,036,000
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION AND SUBJECT TO COMPLIANCE WITH OTHER APPLICABLE LAWS.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS NOTIFIED THAT THE SELLER MAY
BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY OR ANY
INTEREST OR PARTICIPATION HEREIN (THE "HOLDER") BY ITS ACCEPTANCE HEREOF OR OF
SUCH INTEREST OR PARTICIPATION HEREIN AGREES AND IS DEEMED TO AGREE TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY OR ANY INTEREST OR PARTICIPATION HEREIN
ONLY (A) TO THE ISSUER, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND OTHERWISE IN
COMPLIANCE WITH OTHER APPLICABLE LAWS, SUBJECT TO THE ISSUER'S AND THE INDENTURE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND SUCH PERSON FURTHER COVENANTS AND AGREES THAT
IT WILL, PRIOR TO ANY OFFER, SALE, PLEDGE OR OTHER TRANSFER OF THIS SECURITY,
NOTIFY THE PERSON TO WHOM SUCH RESALE, PLEDGE OR OTHER TRANSFER IS TO BE MADE OF
THE RESALE RESTRICTIONS SET FORTH ABOVE AND THE REPRESENTATIONS SUCH PERSON
SHALL BE DEEMED TO HAVE MADE UPON ITS ACQUISITION HEREOF IN COMPLIANCE WITH THE
SECURITIES ACT.
Unless this Class A Note is presented by an authorized representative of The
Depository Trust Company, a
New York corporation ("DTC"), to 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.
REGISTERED
No. R-1 CUSIP NO.00000XXX0
FIRST INVESTORS AUTO OWNER TRUST 2002-A
3.46% CLASS A ASSET-BACKED NOTES
First Investors Auto Owner Trust 2002-A, 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 its
registered assigns, the principal sum of $159,036,000 payable on each Payment
Date in the aggregate amount, if any, payable from the Class A Note Payment
Account in respect of principal on the Class A Notes pursuant to and in
accordance with SECTION 2.8 of the Indenture, dated as of January 1, 2002 (as
amended, supplemented or otherwise modified and in effect from time to time, the
"INDENTURE"), among the Issuer, First Investors Financial Services, Inc. and
Xxxxx Fargo Bank Minnesota, National Association, a national banking
association, as Indenture Trustee (in such capacity the "INDENTURE TRUSTEE");
PROVIDED, HOWEVER, that if not paid prior to such date, the entire unpaid
principal amount of this Note shall be due and payable on the earlier of
December 15, 2008 (the "FINAL NOTE PAYMENT DATE") and the Redemption Date, if
any, pursuant to SECTION 10.1(a) of the Indenture. Capitalized terms used but
not defined herein are defined in ARTICLE I of the Indenture, which also
contains rules as to construction that shall be applicable herein.
The Issuer shall pay interest on this Note at the rate per annum shown
above on each Payment 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 Payment Date (after giving effect to all payments of principal made on
the preceding Payment Date), subject to certain limitations contained in SECTION
3.1 of the Indenture. Interest on this Note will accrue for each Payment Date
from and including the previous Payment Date (or, in the case of the initial
Payment Date or if no interest has been paid, from the Closing Date) to but
excluding such Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months. 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 as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this 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.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, as of the date set forth below.
Date: January 29, 2002
FIRST INVESTORS AUTO OWNER TRUST 2002-A,
By: BANKERS TRUST (DELAWARE), not in its
individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
-------------------------------------
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By:
-------------------------------------
Authorized Signatory
This Note is one of a duly authorized issue of Class A Notes of the Issuer,
designated as its Class A Asset-Backed Notes, are issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Notes are
subject to all terms of the Indenture.
This Note is and will be secured by the Collateral pledged as security
therefor as provided in the Indenture.
Principal of this Note is due and payable on each Payment Date as described
on the face hereof. "PAYMENT DATE" means the fifteenth day of each month or, if
any such day is not a Business Day, the next succeeding Business Day, commencing
March 15, 2002.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Final Note Payment Date and the
Redemption Date, if any, pursuant to SECTION 10.1(a) of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of this Note
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing and, provided that no Insurer Default shall have
occurred and be continuing, the Insurer has, or, if an Insurer Default shall
have occurred and be continuing, the Noteholders evidencing not less that 66
2/3% of the Class A Note Balance have, declared the Notes to be immediately due
and payable in the manner provided in SECTION 5.2 of the Indenture (subject to
the right of the Insurer to make such declaration provided that no Insurer
Default shall have occurred and be continuing). Notwithstanding the foregoing
sentence, this Note shall become immediately due and payable without
declaration, notice or demand by or to any Person upon the occurrence of an
Event of Default specified in SECTION 5.1(i) of the Indenture with respect to
the Issuer. All principal payments on the Class A Notes shall be made PRO RATA
to the Class A Holders entitled thereto.
Payments of interest on this Note due and payable on each Payment Date,
together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by check mailed to the Person in whose name
this Note is registered appears as the Registered Holder of this Note (or one or
more Predecessor Notes) on the related 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 Definitive Notes have been
issued pursuant to SECTION 2.13 of the Indenture, if this Note is registered in
the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Any reduction in the principal
amount of this Note effected by any payments made on any Payment Date shall be
binding 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 noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Payment Date, then the Indenture Trustee, in the name of and on
behalf of the Issuer, will notify the Person who was the registered Holder
hereof as of the Record Date preceding such Payment Date by notice mailed or
transmitted by facsimile prior to such Payment Date, and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's Corporate Trust Office or at the office of the Indenture
Trustee's agent appointed for such purposes located at Sixth Street and
Marquette Avenue MAC
N9311-161, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust Services B
Asset-Backed Administration or such other address as the Indenture Trustee may
designate from time to time as its Corporate Trust Offices in accordance with
the Indenture.
The Issuer shall pay interest on overdue installments of interest at the
Note Rate to the extent permitted by law.
As provided in the Indenture, the Notes may be redeemed in the manner and
to the extent described in SECTION 10.1(a) of the Indenture.
As provided in the Indenture, and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder or Note Owner, by its acceptance of this Note or, in the
case of a Note Owner, a beneficial interest in this 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 this
Note or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (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, each in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, except as any such Person
may have expressly agreed (it being understood that the Indenture Trustee and
the Owner Trustee have no such obligations in their individual capacities) and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by accepting this Note or a beneficial
interest in this Note, as the case may be, hereby covenants and agrees that it
will not at any time institute against, join in any institution against, or
knowingly or intentionally cooperate or encourage any other Person in
instituting against, the Depositor or the Issuer, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or any
of the other Transaction Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, state and local income, and franchise tax purposes,
the Notes will qualify as indebtedness
of the Issuer secured by the Trust Estate. The Issuer, by entering into the
Indenture and this Note, and each Noteholder, by its acceptance of this Note
(and each Note Owner by its acceptance of a beneficial interest in this Note),
agree to treat this Note as indebtedness of the Issuer for federal, state and
local income and franchise tax purposes.
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 be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture allows, with certain exceptions as therein provided, the
Issuer and the Indenture Trustee to enter into one or more indentures that are
supplemental to the Indenture and which effect a modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Noteholders
evidencing not less than 51% of the Class A Note Balance (subject to the right
of the Insurer to exercise such consent provided that no Insurer Default shall
have occurred and be continuing). The Indenture also permits the Indenture
Trustee and the Issuer to enter into supplemental indentures with respect to
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer," as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is not permitted by the Indenture to enter into any merger,
consolidation or conveyance transaction regardless of the surviving entity.
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 governed by, and construed in
accordance with the laws of the State of
New York, 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 Transaction Documents, none of Xxxxx Fargo Bank Minnesota,
National Association, in its individual capacity, Bankers Trust (Delaware), in
its individual capacity, any owner of a beneficial interest in the Issuer, or
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 or of interest on
this Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Note, by its acceptance hereof (and each Note Owner, by its acceptance of a
beneficial interest herein), agrees that, except as expressly provided in the
Transaction 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.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
---------------------------------------------------------------------------
--------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:
*/
--------------------------------------------------------------------------------
Signature of Assignor
*/
--------------------------------------------------------------------------------
Signature Guaranteed
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar.
Exhibit A-2
$4,819,000
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES OR "BLUE SKY" LAWS.
THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT THIS NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO AN AFFILIATE OF THE
DEPOSITOR, (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (3) IN RELIANCE ON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUBJECT TO THE ISSUER'S AND THE
INDENTURE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM. ANY NOTEHOLDER WILL, AND EACH
SUBSEQUENT NOTEHOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE. THE ISSUER IS NOT
OBLIGATED TO REGISTER THIS NOTE UNDER THE 1933 ACT OR ANY STATE SECURITIES
OR BLUE SKY LAWS. TRANSFER OF THIS NOTE IS SUBJECT TO ADDITIONAL TRANSFER
RESTRICTIONS CONTAINED IN SECTION 2.16 OF THE INDENTURE. EACH HOLDER OF
THIS NOTE AGREES THAT THIS NOTE IS SUBJECT TO THE PROVISIONS OF ARTICLE 8
OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN ALL APPLICABLE
JURISDICTIONS.
REGISTERED
No. R-1
FIRST INVESTORS AUTO OWNER TRUST 2002-A
CLASS B ASSET-BACKED NOTES
First Investors Auto Owner Trust 2002-A, 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 [________], or its
registered assigns, the principal sum of $4,819,000 payable on each Payment Date
in the aggregate amount, if any, payable from the Class B Note Payment Account
in respect of principal on the Class B Notes pursuant to and in accordance with
SECTION 2.8 of the Indenture, dated as of January 1, 2002 (as amended,
supplemented or otherwise modified and in effect from time to time, the
"INDENTURE"), between the Issuer and Xxxxx Fargo Bank Minnesota, National
Association, a national banking association, as Indenture Trustee (in such
capacity the "INDENTURE TRUSTEE"); PROVIDED, HOWEVER, that if not paid prior to
such date, the entire unpaid principal amount of this Note shall be due and
payable on the earlier of December 15, 2008 (the "FINAL NOTE PAYMENT DATE") and
the Redemption Date, if any, pursuant to SECTION 10.1(a) of the Indenture.
Capitalized terms used but not defined herein are defined in ARTICLE I of the
Indenture, which also contains rules as to construction that shall be applicable
herein.
Principal of this Note shall be paid in the manner specified on the reverse
hereof.
The principal of this Note are payable in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts.
This Note shall not accrue interest.
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.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, as of the date set forth below.
Date: January 29, 2002
FIRST INVESTORS AUTO OWNER TRUST 2002-A,
By: BANKERS TRUST (DELAWARE), not in its
individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
-------------------------------------
Authorized Signatory
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Indenture Trustee
By:
-------------------------------------
Authorized Signatory
This Note is one of a duly authorized issue of Class B Notes of the Issuer,
designated as its Class B Asset-Backed Notes, are issued under the Indenture, to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Notes. The Notes are
subject to all terms of the Indenture.
This Note is and will be equally and ratably secured by the Collateral
pledged as security therefor as provided in the Indenture.
Principal of this Note is due and payable on each Payment Date as described
on the face hereof. "PAYMENT DATE" means the fifteenth day of each month or, if
any such day is not a Business Day, the next succeeding Business Day, commencing
March 15, 2002.
As described above, the entire unpaid principal amount of this Note shall
be due and payable on the earlier of the Final Note Payment Date and the
Redemption Date, if any, pursuant to SECTION 10.1(a) of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of this Note
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing and, provided that no Insurer Default shall have
occurred and be continuing, the Insurer has, or, if an Insurer Default shall
have occurred and be continuing, the Noteholders evidencing not less that 66
2/3% of the Class A Note Balance have, declared the Notes to be immediately due
and payable in the manner provided in SECTION 5.2 of the Indenture (subject to
the right of the Insurer to make such declaration provided that no Insurer
Default shall have occurred and be continuing). Notwithstanding the foregoing
sentence, this Note shall become immediately due and payable without
declaration, notice or demand by or to any Person upon the occurrence of an
Event of Default specified in SECTION 5.1(i) of the Indenture with respect to
the Issuer. All principal payments on the Class B Notes shall be made PRO RATA
to the Class B Holders entitled thereto.
Installment of principal, if any, to the extent not in full payment of this
Note, shall be made by check mailed to the Person in whose name this Note is
registered appears as the Registered Holder of this Note (or one or more
Predecessor Notes) on the related Record Date by wire transfer in immediately
available funds to the account designated by such Holder. Any reduction in the
principal amount of this Note effected by any payments made on any Payment Date
shall be binding 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 noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee's Corporate Trust Office or at
the office of the Indenture Trustee's agent appointed for such purposes located
at Sixth Street and Marquette Avenue MAC N9311-161, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: Corporate Trust Services B Asset-Backed Administration or such
other address as the Indenture Trustee may designate from time to time as its
Corporate Trust Offices in accordance with the Indenture.
As provided in the Indenture, the Notes may be redeemed in the manner and
to the extent described in SECTION 10.1(a) of the Indenture.
As provided in the Indenture, and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for any
registration of transfer or exchange of this Note, but the transferor may be
required to pay a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection with any such registration of transfer or
exchange.
Each Noteholder, by its acceptance of this 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 this
Note or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (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, each in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, except as any such Person
may have expressly agreed (it being understood that the Indenture Trustee and
the Owner Trustee have no such obligations in their individual capacities) and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder, by accepting this Note hereby covenants and agrees that it
will not at any time institute against, join in any institution against, or
knowingly or intentionally cooperate or encourage any other Person in
instituting against, the Depositor or the Issuer, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or any
of the other Transaction Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, state and local income, and franchise tax purposes,
the Notes will qualify as indebtedness of the Issuer secured by the Trust
Estate. The Issuer, by entering into the Indenture and this Note, and each
Noteholder, by its acceptance of this Note, agree to treat this Note as
indebtedness of the Issuer for federal, state and local income and franchise tax
purposes.
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 be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture allows, with certain exceptions as therein provided, the
Issuer and the Indenture Trustee to enter into one or more indentures that are
supplemental to the Indenture and which effect a modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Noteholders
evidencing not less than 51% of the Class A Note Balance (subject to the right
of the Insurer to exercise such consent provided that no Insurer Default shall
have occurred and be continuing). The Indenture also permits the Indenture
Trustee and the Issuer to enter into supplemental indentures with respect to
certain terms and conditions set forth in the Indenture without the consent of
Holders of the Notes issued thereunder.
The term "Issuer," as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is not permitted by the Indenture to enter into any merger,
consolidation or conveyance transaction regardless of the surviving entity.
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 governed by, and construed in
accordance with the laws of the State of
New York, 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 Transaction Documents, none of Xxxxx Fargo Bank Minnesota,
National Association, in its individual capacity, Bankers Trust (Delaware), in
its individual capacity, any owner of a beneficial interest in the Issuer, or
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 or of interest on
this Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Holder of this
Note, by its acceptance hereof, agrees that, except as expressly provided in the
Transaction 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.
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
---------------------------------------------------------------------------
--------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:
*/
--------------------------------------------------------------------------------
Signature of Assignor
*/
--------------------------------------------------------------------------------
Signature Guaranteed
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar.
Exhibit B
Form of Issuer Opinion
Exhibit C
REQUEST FOR RELEASE OF CONTRACT
TO: Xxxxx Fargo Bank Minnesota, National Association
as Custodian
MAC N9328-011
Suite ABS
000 Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Services --Asset-Backed Administration
In connection with the Contract Files which are owned by First Investors
Auto Owner Trust 2002-A (the "ISSUER") and are pledged by the Issuer to Xxxxx
Fargo Bank Minnesota, National Association, as Indenture Trustee (the "INDENTURE
TRUSTEE"), the undersigned, as [INDENTURE TRUSTEE][SERVICER], requests the
release of the Contract File related to the Contract identified below by its
number. The undersigned shall return the documents to you when the undersigned's
need therefor no longer exists, except where the Contract is paid in full or
otherwise disposed of. Capitalized terms used but not otherwise defined herein
shall have the respective meanings assigned to such terms in the Indenture,
dated as of January 1, 2002, between you, the Issuer and First Investors
Financial Services, Inc.
By
-------------------------------------
Name:
Title:
CONTRACT NUMBER
-------------------------
CUSTOMER
--------------------------------
TO CUSTODIAN: Please acknowledge below by your signature the execution of the
above request. You must retain this form for your file, and a copy of this form,
signed and dated by you, shall be returned to the Indenture Trustee and the
Issuer.
---------------------------------
Authorized Signature of Custodian
Release Date
RETURN OF RELEASED DOCUMENT(S) FILE
All documents identified above as previously released have been returned:
---------------------------------
Date of Return
