EXHIBIT 4(f)57
EXECUTION COPY
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CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2004-1
$100,000,000 Class A Asset Backed Notes
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INDENTURE
Dated as of August 25, 2004
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JPMORGAN CHASE BANK
as the Trust Collateral Agent/Indenture Trustee
CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2004-1
as the Issuer
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TABLE OF CONTENTS
PAGE
ARTICLE I Definitions and Incorporation by Reference................................................ 2
SECTION 1.1. Definitions............................................................... 2
SECTION 1.2. Rules of Construction..................................................... 8
ARTICLE II The Notes................................................................................ 9
SECTION 2.1. Form...................................................................... 9
SECTION 2.2. Execution, Authentication and Delivery.................................... 9
SECTION 2.3. Registration of Transfer and Exchange of Class A Notes.................... 10
SECTION 2.4. Mutilated, Destroyed, Lost, or Stolen Notes............................... 13
SECTION 2.5. Persons Deemed Owners..................................................... 14
SECTION 2.6. Access to List of Noteholders' Names and Addresses........................ 14
SECTION 2.7. Maintenance of Office or Agency........................................... 14
SECTION 2.8. Payment of Principal and Interest; Defaulted Interest..................... 15
SECTION 2.9. Release of Collateral..................................................... 15
ARTICLE III Covenants, Representations and Warranties............................................... 15
SECTION 3.1. Payment of Principal and Interest......................................... 15
SECTION 3.2. Maintenance of Office or Agency........................................... 16
SECTION 3.3. Money for Payments to be Held in Trust.................................... 16
SECTION 3.4. Existence................................................................. 17
SECTION 3.5. Protection of Trust Property.............................................. 18
SECTION 3.6. Opinions as to Trust Property............................................. 18
SECTION 3.7. Performance of Obligations; Servicing of Contracts........................ 19
SECTION 3.8. Negative Covenants........................................................ 20
SECTION 3.9. Annual Statement as to Compliance......................................... 20
SECTION 3.10. Issuer May Consolidate, Etc. Only on Certain Terms........................ 21
SECTION 3.11. Successor or Transferee................................................... 23
SECTION 3.12. No Other Business......................................................... 23
SECTION 3.13. No Borrowing.............................................................. 23
SECTION 3.14. Guarantees, Loans, Advances and Other Liabilities......................... 23
SECTION 3.15. Capital Expenditures...................................................... 23
SECTION 3.16. Compliance with Laws...................................................... 24
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 3.17. Restricted Payments....................................................... 24
SECTION 3.18. Notice of Indenture Events of Default..................................... 24
SECTION 3.19. Further Instruments and Acts.............................................. 24
SECTION 3.20. Amendments of Sale and Servicing Agreement and Trust Agreement............ 24
SECTION 3.21. Income Tax Characterization............................................... 24
SECTION 3.22. Perfection Representations, Warranties and Covenants...................... 25
ARTICLE IV Satisfaction and Discharge............................................................... 25
SECTION 4.1. Satisfaction and Discharge of Indenture................................... 25
SECTION 4.2. Application of Trust Money................................................ 26
SECTION 4.3. Repayment of Moneys Held by Paying Agent.................................. 26
ARTICLE V Remedies.................................................................................. 27
SECTION 5.1. Indenture Events of Default............................................... 27
SECTION 5.2. Rights Upon Indenture Event of Default.................................... 28
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee................................................................... 30
SECTION 5.4. Remedies.................................................................. 32
SECTION 5.5. Optional Preservation of the Trust Property............................... 34
SECTION 5.6. [Reserved]................................................................ 34
SECTION 5.7. Limitation of Suits....................................................... 34
SECTION 5.8. Unconditional Rights of Noteholders To Receive Principal and Interest..... 35
SECTION 5.9. Restoration of Rights and Remedies........................................ 35
SECTION 5.10. Rights and Remedies Cumulative............................................ 35
SECTION 5.11. Delay or Omission Not a Waiver............................................ 35
SECTION 5.12. Control by the Controlling Party.......................................... 36
SECTION 5.13. Undertaking for Costs..................................................... 36
SECTION 5.14. Waiver of Stay or Extension Laws.......................................... 36
SECTION 5.15. Action on Class A Notes................................................... 36
SECTION 5.16. Performance and Enforcement of Certain Obligations........................ 37
SECTION 5.17. Subrogation............................................................... 37
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TABLE OF CONTENTS
(continued)
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ARTICLE VI The Indenture Trustee.................................................................... 38
SECTION 6.1. Duties of Indenture Trustee............................................... 38
SECTION 6.2. Rights of Indenture Trustee............................................... 40
SECTION 6.3. Individual Rights of Indenture Trustee.................................... 41
SECTION 6.4. Indenture Trustee's Disclaimer............................................ 41
SECTION 6.5. Notice of Indenture Events of Default..................................... 42
SECTION 6.6. Reports by Indenture Trustee to Holders................................... 42
SECTION 6.7. Compensation.............................................................. 42
SECTION 6.8. Replacement of Indenture Trustee.......................................... 43
SECTION 6.9. Successor Indenture Trustee by Merger..................................... 44
SECTION 6.10. Appointment of Trust Collateral Agent..................................... 45
The Issuer and the Indenture Trustee do hereby appoint JPMorgan Chase Bank to act as the
initial trust collateral agent on behalf of the Indenture Trustee and
JPMorgan Chase Bank hereby accepts such appointment....................... 45
SECTION 6.11. Appointment of Co-Indenture Trustee or Separate Indenture Trustee......... 45
SECTION 6.12. Eligibility............................................................... 46
SECTION 6.13. Trust Collateral Agent to Follow Indenture Trustee's Directions........... 47
SECTION 6.14. Representations and Warranties of the Indenture Trustee................... 47
SECTION 6.15. Waiver of Setoffs......................................................... 47
SECTION 6.16. Controlling Party......................................................... 48
SECTION 6.17. Disqualification of the Indenture Trustee................................. 48
SECTION 6.18. Authorization and Direction............................................... 48
SECTION 6.19. Action under the Intercreditor Agreement.................................. 48
ARTICLE VII Noteholders' Lists and Reports.......................................................... 48
SECTION 7.1. Issuer To Furnish To Indenture Trustee Names and Addresses of
Noteholders............................................................... 48
SECTION 7.2. Preservation of Information; Communications to Noteholders................ 49
ARTICLE VIII Accounts, Disbursements and Releases................................................... 49
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 8.1. Collection of Money....................................................... 49
SECTION 8.2. Release of Trust Property................................................. 49
SECTION 8.3. Opinion of Counsel........................................................ 49
ARTICLE IX Supplemental Indentures.................................................................. 50
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.................... 50
SECTION 9.2. Supplemental Indentures with Consent of Noteholders....................... 51
SECTION 9.3. Execution of Supplemental Indentures...................................... 53
SECTION 9.4. Effect of Supplemental Indenture.......................................... 53
SECTION 9.5. Reference in Class A Notes to Supplemental Indentures..................... 53
ARTICLE X Redemption of Notes....................................................................... 53
SECTION 10.1. Redemption................................................................ 53
SECTION 10.2. Form of Redemption Notice................................................. 54
SECTION 10.3. Class A Notes Payable on Redemption Date.................................. 55
ARTICLE XI Miscellaneous............................................................................ 55
SECTION 11.1. Compliance Certificates and Opinions, etc................................. 55
SECTION 11.2. Form of Documents Delivered to Indenture Trustee.......................... 56
SECTION 11.3. Acts of Noteholders....................................................... 57
SECTION 11.4. Notices, etc. to Indenture Trustee, Class A Insurer, Backup Insurer,
Issuer and Rating Agencies................................................ 58
SECTION 11.5. Notices to Noteholders; Waiver............................................ 59
SECTION 11.6. Alternate Payment and Notice Provisions................................... 59
SECTION 11.7. Effect of Headings and Table of Contents.................................. 59
SECTION 11.8. Successors and Assigns.................................................... 59
SECTION 11.9. Separability.............................................................. 60
SECTION 11.10. Benefits of Indenture..................................................... 60
SECTION 11.11. Legal Holidays............................................................ 60
SECTION 11.12. GOVERNING LAW............................................................. 60
SECTION 11.13. Counterparts.............................................................. 60
SECTION 11.14. Recording of Indenture.................................................... 60
SECTION 11.15. Trust Obligation.......................................................... 61
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TABLE OF CONTENTS
(continued)
PAGE
SECTION 11.16. No Petition............................................................... 61
SECTION 11.17. Inspection................................................................ 61
SECTION 11.18. Maximum Interest Payable.................................................. 61
SECTION 11.19. No Legal Title in Holders................................................. 62
SECTION 11.20. Third Party Beneficiary................................................... 62
SECTION 11.21. Control Rights............................................................ 63
EXHIBIT
Exhibit A Form of Class A Note
SCHEDULE
Schedule A Perfection Representations, Warranties and Covenants
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INDENTURE dated as of August 25, 2004, between CREDIT ACCEPTANCE AUTO
DEALER LOAN TRUST 2004-1, a Delaware statutory trust (the "Issuer"), and
JPMORGAN CHASE BANK, a New York banking corporation, as trust collateral agent
(the "Trust Collateral Agent") and as indenture trustee (the "Indenture
Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Issuer's $100,000,000 Class
A 2.53% Asset Backed Notes (the "Class A Notes"), the Class A Insurer and the
Backup Insurer:
GRANTING CLAUSE
The Issuer hereby grants to the Indenture Trustee for the benefit of
itself, the Class A Insurer, the Backup Insurer and the Class A Noteholders, as
their respective interests may appear, a first-priority perfected security
interest in all property of the Issuer, including all of the Issuer's right,
title and interest in and to the following collateral (the "Collateral") now
owned or hereafter acquired, which Collateral shall be held by the Trust
Collateral Agent on behalf of the Indenture Trustee, subject to the lien of this
Indenture:
(i) all right, title, and interest of the Issuer in and to the Dealer
Loans listed on Schedule A to the Sale and Servicing Agreement, and listed on
any addendum to Schedule A delivered by the Seller during the Revolving Period;
and proceeds thereof;
(ii) certain rights under the Dealer Agreements listed on Schedule A to
the Sale and Servicing Agreement, and listed on any addendum to Schedule A
delivered by the Seller during the Revolving Period, including Credit
Acceptance's right to service the Dealer Loans and Contracts and receive the
related servicing fee and receive reimbursement of certain recovery and
repossession expenses, in accordance with the terms of the Dealer Agreements
(other than the Excluded Dealer Agreement Rights);
(iii) Collections (other than Dealer Collections) after the applicable
Cut-off Date;
(iv) a security interest in each Contract listed on Schedule A to the Sale
and Servicing Agreement, and listed on any addendum to Schedule A delivered by
the Seller during the Revolving Period;
(v) all records and documents relating to the Dealer Loans and the
Contracts;
(vi) all security interests purporting to secure payment of the Dealer
Loans;
(vii) all security interests purporting to secure payment of the Contracts
(including a security interest in each Financed Vehicle);
(viii) all guarantees, insurance (including insurance insuring the
priority or perfection of any Contract) or other agreements or arrangements
securing the Contracts;
(ix) all rights under the Contribution Agreement;
(x) the Collection Account, the Reserve Account, the Principal Collection
Account and the Note Distribution Account, amounts on deposit in those accounts
and Eligible Investments of amounts in deposit in those accounts;
(xi) the Issuer's rights under the Sale and Servicing Agreement; and
(xii) all proceeds of the foregoing.
Such grant shall include all rights, powers and options (but none of the
obligations) of the Issuer, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of the Collateral and all other moneys payable thereunder, to give
and receive notices and other communications, to make waivers or other
agreements, to exercise all rights and options, to bring proceedings in the name
of the Issuer or otherwise and generally to do and receive anything that the
Issuer is or may be entitled to do or receive thereunder or with respect
thereto.
The Indenture Trustee hereby acknowledges such grant, accepts the trusts
under this Indenture in accordance with the provisions of this Indenture and
agrees to perform its duties required in this Indenture to the best of its
ability to the end that the interests of the parties and the Class A
Noteholders, the Class A Insurer and the Backup Insurer, recognizing the
priorities of their respective interests, may be adequately and effectively
protected.
The Indenture Trustee, solely in its capacity as the named secured party
or assignee of secured party on financing statements naming Credit Acceptance,
the Seller or the Issuer as debtor or seller, acknowledges that in that capacity
it is acting as a representative, within the meaning of Section 9-502(a)(2) of
the UCC, for itself, the Trust Collateral Agent, the Class A Noteholders, the
Class A Insurer, the Backup Insurer, the Issuer and the Seller, to the extent
and as their interests as secured parties with security interests in the
collateral indicated on such financing statements may be.
It is the intention of the Issuer and the Indenture Trustee that this
grant constitutes a grant or assignment of a valid, first priority security
interest in the Issuer's rights in the Collateral, free and clear of all Liens
(other than the security interest granted herein) to the Indenture Trustee. This
Agreement shall be deemed to create a security interest and deemed to be a
security agreement with respect to the Collateral within the meaning of Article
1, Article 8 and Article 9 of the Uniform Commercial Code as in effect in the
States of New York and Michigan and under the law of all jurisdictions governing
the creation and perfection of security interests in the Collateral.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1 Definitions.
(a)Except as otherwise specified herein, the following terms have the
respective meanings set forth below for all purposes of this Indenture.
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(b) Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Sale and Servicing Agreement or the
Trust Agreement.
"Act" has the meaning specified in Section 11.3(a).
"Authorized Officer" means, with respect to the Issuer, any officer or
agent acting pursuant to a power of attorney of the Owner Trustee or, with
respect to the Servicer, any officer or agent of the Servicer, and who is
identified on the list of Authorized Officers delivered by each of the Owner
Trustee and the Servicer to the Indenture Trustee, the Backup Servicer, the
Class A Insurer and the Backup Insurer on the Closing Date (as such list may be
modified or supplemented from time to time thereafter).
"Class A Termination Date" means the date on which: (i) all amounts owing
to the Class A Noteholders and, as certified in writing by the relevant party to
the Owner Trustee, the Class A Insurer, the Indenture Trustee, the Trust
Collateral Agent, the Owner Trustee, the Backup Servicer and the Backup Insurer
under the Basic Documents are paid in full; and (ii) the Class A Note Insurance
Policy and the Backup Insurance Policy have expired in accordance with their
respective terms and have been returned to the Class A Insurer and the Backup
Insurer, as applicable, for cancellation.
"Class A Notes" means the 2.53% Class A Asset Backed Notes of the Issuer,
substantially in the form of Exhibit A hereto.
"Class A Note Rate" means 2.53% per annum (computed on the basis of a
360-day year of twelve 30-day months and assuming the Distribution Date is on
the 15th of each month).
"Clearing Agency" means the Depository Trust Company or its successor,
which shall be an organization registered as a "clearing agency" pursuant to
Section 17A of the Securities Exchange Act of 1934, as amended.
"Clearing Agency Participant" means the Depository Trust Company, and its
successors, each of which shall be a broker, dealer, bank or other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and treasury regulations promulgated thereunder.
"Collateral" has the meaning set forth in Granting Clause.
"Controlling Party" means, prior to the Class A Termination Date: (i) so
long as no Class A Insurer Default has occurred and is continuing, the Class A
Insurer; and (ii) after the occurrence and during the continuance of a Class A
Insurer Default, so long as no Backup Insurer Default has occurred and is
continuing, the Backup Insurer.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Excluded Dealer Agreement Rights" means, with respect to any Dealer
Agreement listed on Schedule A to the Sale and Servicing Agreement, or listed on
any addendum thereto, the rights of Credit Acceptance thereunder related to
loans made to the related Dealer which are not Dealer Loans owned by the Issuer,
including rights of set-off and rights of indemnification, related to such
loans.
"Executive Officer" means, with respect to any corporation, the Chairman
of the Board, the Vice Chairman, Chief Executive Officer, Chief Financial
Officer, President, Executive Vice President, any Vice President, the Secretary,
Assistant Secretary, the Treasurer, Assistant Treasurer, or Controller of such
corporation; and with respect to any partnership, any general partner thereof.
"Indebtedness" means, with respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of unfunded
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; provided that the amount of such
indebtedness if not so assumed shall in no event be deemed to be greater than
the fair market value from time to time (as reasonably determined in good faith
by the Issuer) of the property subject to such lien; or (h) obligations of such
Person under any interest rate or currency exchange agreement.
"Indenture" means this Indenture as amended and supplemented from time to
time.
"Indenture Default" means any occurrence that is, or with notice or the
lapse of time or both would become, an Indenture Event of Default.
"Indenture Event of Default" has the meaning given such term in Section
5.1 herein.
"Indenture Trustee" means JPMorgan Chase Bank, a New York banking
corporation, not in its individual capacity but as trustee under this Indenture,
or any successor trustee under this Indenture.
"Independent" means, when used with respect to any specified Person, that
the Person (a) is in fact independent of the Issuer, the Originator, any other
obligor upon the Class A Notes, the Seller and any Affiliate of any of the
foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, the Originator, any such
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other obligor, the Seller or any Affiliate of any of the foregoing Persons and
(c) is not connected with the Issuer, the Originator, any such other obligor,
the Seller or any Affiliate of any of the foregoing Persons as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions.
"Independent Certificate" means a certificate or opinion to be delivered
to the Indenture Trustee, the Class A Insurer and the Backup Insurer under the
circumstances described in, and otherwise complying with, the applicable
requirements of Section 11.1, prepared by an Independent appraiser or other
expert appointed by an Issuer Order and approved by the Indenture Trustee, and
prior to the Class A Termination Date, the Controlling Party, in the exercise of
reasonable care, which opinion or certificate shall state that the signer has
read the definition of "Independent" in this Indenture and that the signer is
Independent within the meaning thereof.
"Issuer" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein, each other obligor on the Class A Notes.
"Issuer Order" and "Issuer Request" means a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee a copy of which shall be delivered to the
Class A Insurer and the Backup Insurer.
"Issuer Secured Obligations" means all amounts and obligations which the
Issuer may at any time owe to or on behalf of the Class A Insurer, the Backup
Insurer and the Indenture Trustee for the benefit of the Indenture Trustee and
the Class A Noteholders under this Indenture, the Class A Notes or the other
Basic Documents.
"Majority Noteholders" means the Holders of a majority by principal amount
of the outstanding Class A Notes.
"Note" means a Class A Note.
"Note Owner" means, with respect to any Note registered in the name of the
Clearing Agency or its nominee, the Person who is the beneficial owner of such
Class A Note, as reflected on the books of the Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Note Register" and "Note Registrar" mean the register maintained and the
registrar appointed pursuant to Section 2.3 hereof.
"Noteholder", "Holder" or "Class A Noteholder" means the Person in whose
name a Class A Note shall be registered in the Note Register, except that,
solely for the purposes of giving any consent, waiver, request, or demand
pursuant to the Basic Documents, the interest evidenced by any Class A Note
registered in the name of the Seller, the Servicer, or any person controlling,
controlled by, or under common control with the Seller or the Servicer, shall
not be taken into account in determining whether the requisite percentage
necessary to effect any such consent, waiver, request, or demand shall have been
obtained.
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"Officer's Certificate" means a certificate signed by any Authorized
Officer of the Owner Trustee, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 hereof.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, or as otherwise
required by the Indenture Trustee or the Controlling Party, be employees of or
counsel to the Issuer and who shall be reasonably satisfactory to the Indenture
Trustee and the Controlling Party, and which shall comply with any applicable
requirements of Section 11.1 hereof, and shall be in form and substance
reasonably satisfactory to the Indenture Trustee and the Controlling Party.
"Outstanding" means, as of the date of determination, all Class A Notes
theretofore authenticated and delivered under this Indenture except:
(i) Class A Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Class A Notes or portions thereof the payment for which money
in the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent in trust for the Holders of such Notes
(provided, however, that if such Class A Notes are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture); and
(iii) Class A Notes in exchange for or in lieu of other Class A
Notes which have been authenticated and delivered pursuant to this
Indenture unless proof satisfactory to the Indenture Trustee is presented
that any such Class A Notes are held by a bona fide purchaser;
provided, however, that (x) in determining whether the Holders of the requisite
Outstanding Amount of the Class A Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or under any Basic
Document, Class A Notes owned by the Issuer, the Servicer, any other obligor
upon the Class A Notes, the Seller or any Affiliate of any of the foregoing
Persons shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be fully protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Class A Notes that a Responsible Officer of the Indenture Trustee
either actually knows to be so owned or has received written notice thereof
shall be so disregarded; provided, further, however, that Class A Notes which
have been paid with proceeds of the Class A Note Insurance Policy or the Backup
Insurance Policy shall continue to remain outstanding until the Class A Insurer
or the Backup Insurer, as applicable, has been paid as subrogee hereunder or
reimbursed pursuant to the Insurance Agreement, and the Class A Insurer or the
Backup Insurer, as applicable, shall be deemed to be the Holder thereof to the
extent of any payments thereon made by the Class A Insurer or the Backup
Insurer, as applicable. Class A Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgees right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the
Class A Notes, the Seller or any Affiliate of any of the foregoing Persons and
(y) to the extent that the Indenture Trustee is a Class A Noteholder, Class
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A Notes owned by the Indenture Trustee shall be disregarded for purposes of
Section 6.8(b) hereof.
"Outstanding Amount" means the aggregate principal amount of all Class A
Notes Outstanding at the date of determination.
"Paying Agent" means the Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.12
and is authorized by the Issuer to make the payments to and distributions from
the Collection Account, the Note Distribution Account, the Reserve Account, the
Principal Distribution Account and the Certificate Distribution Account
including payment of principal of or interest on the Class A Notes on behalf of
the Issuer.
"Predecessor Note" means, with respect to any particular Class A Note,
every previous Class A Note evidencing all or a portion of the same debt as that
evidenced by such particular Class A Note; and, for the purpose of this
definition, any Class A Note authenticated and delivered under Section 2.4 in
lieu of a mutilated, lost, destroyed or stolen Class A Note shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Class A Note.
"Proceeding" means any suit in equity, action at law or other judicial or
administrative proceeding.
"Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given 10 days (or such shorter period as shall be
acceptable to such Rating Agency) prior notice thereof and that such Rating
Agency shall have notified the Seller, the Servicer, the Indenture Trustee, the
Owner Trustee, the Class A Insurer, the Backup Insurer and the Issuer that such
action will not result in a reduction or withdrawal of its then current rating
of the Class A Notes, without regard to the Class A Note Insurance Policy or the
Backup Insurance Policy.
"Record Date" means, with respect to a Distribution Date, (i) if the Class
A Notes are held in book-entry form, the day immediately preceding such
Distribution Date; or (ii) if the Class A Notes are held in definitive form, the
last day of the calendar month preceding such Distribution Date; provided that
the Record Date with respect to the First Distribution Date shall be the Closing
Date.
"Redemption Date" means, in the case of a redemption of the Class A Notes
pursuant to Section 10.1(a) hereof, the Distribution Date specified by the
Servicer or the Issuer pursuant to Section 10.1(a) hereof.
"Redemption Price" means in the case of a redemption of the Class A Notes
pursuant to Section 10.1(a) hereof an amount equal to the unpaid principal
amount of the outstanding Class A Notes being redeemed plus accrued and unpaid
interest thereon to but excluding the Redemption Date plus all amounts due to
the Class A Insurer, the Backup Insurer, the Indenture Trustee, the Backup
Servicer and the Owner Trustee under the Basic Documents.
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"Related Security" means the property described in clauses (ii) through
(xii) of the Granting Clause.
"Required Long-Term Debt Rating" shall be a rating on long-term unsecured
debt obligations of "Aa3" by Xxxxx'x and "AA-" by S&P (or other equivalent
rating by a nationally recognized rating agency), and any requirement that
long-term unsecured debt obligations have the "Required Long-Term Debt Rating"
shall mean that such long-term unsecured debt obligations have the foregoing
required rating.
"Responsible Officer" means, with respect to the Indenture Trustee, the
Trust Collateral Agent, the Paying Agent or the Owner Trustee, any officer
within the Corporate Trust Office of the Indenture Trustee, the Trust Collateral
Agent, the Paying Agent, or the Owner Trustee, as the case may be, including any
Vice President, Assistant Vice President, Assistant Treasurer, Assistant
Secretary, Associate, Corporate Trust Officer or any other officer of the
Indenture Trustee, the Trust Collateral Agent, the Paying Agent, or the Owner
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Rule 144A" means Rule 144A of the Securities Act.
"Sale and Servicing Agreement" means the Sale and Servicing Agreement
dated as of August 25, 2004, among the Issuer, the Seller, Credit Acceptance
Corporation, in its individual capacity and as the Servicer, the Trust
Collateral Agent/Indenture Trustee and the Backup Servicer, as the same may be
amended or supplemented from time to time in accordance with its terms.
"Subsidiary" means, with respect to any Person, any corporation or other
Person (a) of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such Person or (b) that is directly or indirectly controlled by such Person
within the meaning of control under Section 15 of the Securities Act.
"Trust Collateral Agent" means, initially, JPMorgan Chase Bank, in its
capacity as collateral agent on behalf of the Indenture Trustee for the benefit
of the Class A Noteholders, the Class A Insurer and the Backup Insurer,
including its successors-in-interest, until and unless a successor Person shall
have become the Trust Collateral Agent pursuant to the Sale and Servicing
Agreement, and thereafter "Trust Collateral Agent" shall mean such successor
Person.
"Trust Property" has the meaning set forth in the Trust Agreement.
SECTION 1.2 Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
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(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words in the plural
include the singular.
ARTICLE II
The Notes
SECTION 2.1 Form.
The Class A Notes together with the Indenture Trustee's certificate of
authentication, shall be in definitive registered form in substantially the form
set forth in Exhibit A hereto, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Class A Notes, as evidenced by
their execution of the Class A Notes. Any portion of the text of any Class A
Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Class A Note.
The Class A Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Class A
Notes, as evidenced by their execution of such Class A Notes.
Each Class A Note shall be dated the date of its authentication. The
terms of the Class A Notes set forth in Exhibit A hereto are part of the terms
of this Indenture.
SECTION 2.2 Execution, Authentication and Delivery.
The Class A Notes shall be executed on behalf of the Issuer by any of the
Authorized Officers of the Owner Trustee. The signature of any such Authorized
Officer on the Class A Notes may be manual or facsimile.
Class A Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Class A Notes or did
not hold such offices at the date of such Class A Notes.
The Indenture Trustee shall upon receipt of the Issuer Order
authenticate and deliver the Class A Notes for original issue in an aggregate
principal amount of $100,000,000.
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The aggregate outstanding principal balance of the Class A Notes at any time may
not exceed such amount.
Each Class A Note shall be dated the date of its authentication. The Class
A Notes shall be issuable as registered Class A Notes in the minimum
denomination of $100,000 and integral multiples of $1,000 thereafter.
It is intended that the Class A Notes be registered so as to participate
in a book-entry system with the Clearing Agency as set forth herein. The Class A
Notes shall be initially issued in the form of a single fully-registered note
with a denomination equal to the original principal balance of the Class A
Notes. Upon initial issuance, the ownership of such Notes shall be registered in
the Note Register in the name of Cede & Co., or any successor thereto, as
nominee for the Clearing Agency.
No Class A Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Class A
Note a certificate of authentication substantially in the form provided for
herein executed by the Indenture Trustee by the manual signature of one of its
Responsible Officers, and such certificate upon any Class A Note shall be
conclusive evidence, and the only evidence, that such Class A Note has been duly
authenticated and delivered hereunder.
SECTION 2.3 Registration of Transfer and Exchange of Class A Notes.
(a) The Note Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 2.7, a Note Register in which, subject to
such reasonable regulations as it may prescribe, the Indenture Trustee shall
provide for the registration of Notes and of transfers and exchanges of Class A
Notes as herein provided. The Indenture Trustee shall be the initial Note
Registrar. In the event that, subsequent to the Closing Date, the Indenture
Trustee notifies the Seller, the Class A Insurer and the Backup Insurer that it
is unable to act as Note Registrar, the Seller shall appoint another bank or
trust company, having an office or agency located in the Borough of Manhattan,
The City of New York, agreeing to act in accordance with the provisions of this
Indenture applicable to it, and otherwise acceptable to the Indenture Trustee
and, prior to the Class A Termination Date, the Controlling Party, to act as
successor Note Registrar under this Indenture. If at any time the Indenture
Trustee is not the Note Registrar, the Note Registrar shall make available to
the Indenture Trustee ten (10) days prior to each Distribution Date and at such
other times as the Indenture Trustee may reasonably request the names and
addresses of the Holders as they appear in the Note Register.
No sale, pledge or other transfer of a Class A Note shall be made unless
such sale, pledge or other transfer is (A) pursuant to an effective registration
statement under the Securities Act, (B) for so long as the Class A Notes are
eligible for resale pursuant to Rule 144A to a Person the transferor reasonably
believes after due inquiry is a "qualified institutional buyer" as defined in
Rule 144A that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the transfer is being made in
reliance on Rule 144A, or (C) pursuant to another available exemption from the
registration requirements of the Securities Act, the Investment Company Act of
1940, as amended and any applicable state securities and blue sky laws or is
made in accordance with said Act and state laws. The Indenture
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Trustee may require an opinion of counsel to be delivered to it in connection
with any transfer of the Class A Notes pursuant to clauses (A) or (C) above.
Under no circumstances may an institutional "accredited investor" within
Regulation D of the Securities Act take delivery in the form of a beneficial
interest in a book-entry Class A Note if such purchaser is not a "qualified
institutional buyer" as defined under Rule 144A under the Securities Act.
If definitive Class A Notes are issued, the Class A Notes may not be
transferred, directly or indirectly, to any Person unless (A) the transferee of
the Class A Note certifies in a certificate to the Issuer and the Indenture
Trustee that such Person is a "qualified institutional buyer" as defined in Rule
144A or (B) the transferee of the Class A Note delivers to the Indenture Trustee
and the Issuer an opinion of counsel that such transfer is permitted pursuant to
clause (A) or (C) above.
All opinions of counsel required in connection with any transfer shall be
by counsel reasonably acceptable to the Indenture Trustee.
The transferee of each Class A Note shall be deemed to represent and
warrant that, with respect to the source of funds to be used by such transferee
to acquire this Class A Note (the "Source") either (a) such Source is not an
"employee benefit plan" (within the meaning of Section 3(3) of ERISA), a "plan"
(within the meaning of Section 4975(e)(1) of the Code) or a plan that is subject
to any substantively similar provision of any federal, state or local law, or a
person using assets of any such plan, or (b) the acquisition and holding of the
Class A Notes by such Source will not constitute or result in a nonexempt
prohibited transaction under Section 406 of ERISA, Section 4975 of the Code or
any substantively similar provision of any federal, state or local law.
Neither the Issuer nor the Indenture Trustee is obligated to register the
Class A Notes under the Securities Act or any other securities law. Any transfer
in violation of the provisions of this Section 2.3 shall be void ab initio.
(b) If an election is made to hold Class A Notes in book-entry form, the
Class A Notes shall be registered in the name of a nominee designated by the
Clearing Agency (and may be aggregated as to denominations with other Class A
Notes held by the Clearing Agency). With respect to Class A Notes held in
book-entry form:
(i) the Note Registrar, the Class A Insurer, the Backup Insurer, the
Trust Collateral Agent and the Indenture Trustee will be entitled to deal with
the Clearing Agency for all purposes of this Indenture (including the payment
of principal of and interest on the Class A Notes and the giving of
instructions or directions hereunder) as the sole holder of the Class A Notes,
and shall have no obligation to the Note Owners;
(ii) the rights of Note Owners will be exercised only through the
Clearing Agency and will be limited to those established by law and agreements
between such Note Owners and the Clearing Agency and/or the Clearing Agency
Participants pursuant to the Depository Agreement;
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(iii) whenever this Indenture or any of the Basic Documents requires
or permits actions to be taken based upon instructions or directions of
Holders of Class A Notes evidencing a specified percentage of the Class A Note
Balance, the Clearing Agency will be deemed to represent such percentage only
to the extent that it has received instructions to such effect from Note
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in the Class
A Notes and has delivered such instructions to the Indenture Trustee; and
(iv) without the consent of the Seller and the Indenture Trustee, no
such Class A Note may be transferred by the Clearing Agency except to a
successor Clearing Agency that agrees to hold such Note for the account of the
Note Owners or except upon the election of the Note Owner thereof or a
subsequent transferee to hold such Class A Note in physical form.
None of the Indenture Trustee, the Note Registrar, the Class A Insurer or
the Backup Insurer shall have any responsibility to monitor or restrict the
transfer of beneficial ownership in any Note an interest in which is
transferable through the facilities of the Clearing Agency.
If (i)(A) the Issuer advises the Indenture Trustee in writing that the
Clearing Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Class A Notes as described in the
Depository Agreement and (B) the Issuer is unable to locate a qualified
successor, (ii) the Issuer at its option advises the Indenture Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency, or (iii) Note Owners representing beneficial interests in Class A Notes
aggregating not less than a majority of the Class A Note Balance advise the
Indenture Trustee and the Clearing Agency through the Clearing Agency
Participants in writing that the continuation of a book-entry system through the
Clearing Agency with respect to such class is no longer in the best interests of
the related Note Owners, then the Indenture Trustee shall notify all such Note
Owners, through the Clearing Agency, and the Class A Insurer and the Backup
Insurer of the occurrence of any such event and of the availability of
definitive Class A Notes to such Note Owners requesting the same. Upon surrender
to the Indenture Trustee of the related Class A Notes by the Clearing Agency
accompanied by registration instructions from the Clearing Agency, the Indenture
Trustee shall issue definitive Class A Notes and deliver such definitive Notes
in accordance with the instructions of the Clearing Agency. None of the Issuer,
the Note Registrar, the Class A Insurer, the Backup Insurer nor the Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of definitive Class A Notes, the Indenture Trustee shall
recognize the Holders of the definitive Class A Notes as Noteholders hereunder.
The Indenture Trustee shall not be liable if the Seller is unable to locate a
qualified successor Clearing Agency.
(c)In order to preserve the exemption for resales and transfers provided
by Rule 144A, the Issuer shall provide to any Holder of a Class A Note and any
prospective purchaser designated by such Holder, upon request of such Holder or
such prospective purchaser, such information required by Rule 144A as will
enable the resale of such Class A Note to be made pursuant to Rule 144A. The
Servicer and the Indenture Trustee shall cooperate
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with the Issuer in providing the Issuer such information regarding the Class A
Notes, the Collateral and other matters regarding the Trust as the Issuer shall
reasonably request to meet its obligations under the preceding sentence.
(d) Upon surrender for registration of transfer of any Class A Note at the
Corporate Trust Office, the Indenture Trustee shall, subject to Section 2.3(a),
authenticate, and deliver, in the name of the designated transferee or
transferees, one or more new Class A Notes in authorized denominations of a like
aggregate amount dated the date of authentication by the Indenture Trustee. At
the option of a Holder, Class A Notes may be exchanged for other Class A Notes
of authorized denominations of a like aggregate amount upon surrender of the
Class A Notes to be exchanged at the Corporate Trust Office.
(e) Every Class A Note presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Indenture Trustee and the Note Registrar duly executed
by the Holder or his attorney duly authorized in writing. Each Class A Note
surrendered for registration of transfer or exchange shall be cancelled and
subsequently disposed of by the Indenture Trustee in accordance with its
customary practice.
(f)No service charge shall be made for any registration of transfer or
exchange of Class A Notes, but the Indenture Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Class A Notes.
(g)Subject to Article IX hereof, the Class A Notes and this Indenture may
be amended or supplemented from time to time, prior to the Class A Termination
Date, with the consent of the Controlling Party, and in certain circumstances
the Backup Insurer, but without the consent of any of the Class A Noteholders,
to modify restrictions on and procedures for resale and other transfers of the
Class A Notes to reflect any change in applicable law or regulations (or the
interpretation thereof) or practices relating to the resale or transfer of
restricted securities generally.
SECTION 2.4 Mutilated, Destroyed, Lost, or Stolen Notes.
If (a) any mutilated Class A Note shall be surrendered to the Note Registrar, or
if the Note Registrar shall receive evidence to its satisfaction of the
destruction, loss, or theft of any Class A Note and (b) there shall be delivered
to the Note Registrar, the Class A Insurer, the Backup Insurer, the Issuer and
the Indenture Trustee such security or indemnity (an unsecured indemnity
agreement of a Class A Noteholder with a net worth at least equal to
$200,000,000 containing terms reasonably satisfactory to the Indenture Trustee
and the Controlling Party being sufficient for such security or indemnity
requirement), as may be required by them to save each of them and the Issuer
harmless, then in the absence of notice that such Note shall have been acquired
by a bona fide purchaser, the Owner Trustee on behalf of the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost, or stolen Class A Note, a
new Class A Note of like tenor and denomination. In connection with the issuance
of any new Class A Note under this Section, the Indenture Trustee and the Note
Registrar may require the payment of a sum sufficient to cover any tax or other
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governmental charge that may be imposed in connection therewith. The Indenture
Trustee may charge such Holder for its expenses (including without limitation
the fees and expenses of its counsel) in replacing a Class A Note. Any duplicate
Class A Note issued pursuant to this Section shall constitute conclusive
evidence of ownership of such Class A Note, as if originally issued, whether or
not the lost, stolen, or destroyed Class A Note shall be found at any time.
SECTION 2.5 Persons Deemed Owners.
The Issuer, the Indenture Trustee, the Trust Collateral Agent, the Note
Registrar and any agent of the Issuer, the Indenture Trustee or the Note
Registrar may treat the Person in whose name any Class A Note shall be
registered as the owner of such Class A Note for the purpose of receiving
distributions pursuant to Section 5.08 of the Sale and Servicing Agreement and
Section 5.2 hereof and for all other purposes whatsoever, and neither the
Issuer, the Indenture Trustee, the Trust Collateral Agent, the Class A Insurer,
the Backup Insurer nor the Note Registrar nor any such agent shall be bound by
any notice to the contrary.
SECTION 2.6 Access to List of Noteholders' Names and Addresses.
The Indenture Trustee shall furnish or cause to be furnished to the Servicer,
the Class A Insurer or the Backup Insurer, within 15 days after receipt by the
Indenture Trustee of a request therefor from the Servicer, the Class A Insurer
or the Backup Insurer in writing, a list, in such form as the Servicer, Class A
Insurer or the Backup Insurer may reasonably require, of the names and addresses
of the Class A Noteholders as of the most recent Record Date. If three or more
Class A Noteholders, or one or more Holders of Notes aggregating not less than
10% of the Class A Note Balance, apply in writing to the Indenture Trustee, and
such application states that the applicants desire to communicate with other
Noteholders with respect to their rights under this Indenture or under the Class
A Notes and such application shall be accompanied by a copy of the communication
that such applicants propose to transmit, then the Indenture Trustee shall,
within five Business Days after the receipt of such application, make available
to such Class A Noteholders access during normal business hours to the current
list of Class A Noteholders. Each Holder, by receiving and holding a Class A
Note, shall be deemed to have agreed to hold none of the Servicer, the Class A
Insurer, the Backup Insurer nor the Indenture Trustee accountable by reason of
the disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 2.7 Maintenance of Office or Agency.
The Indenture Trustee shall maintain in New York, New York, an office or offices
or agency or agencies where Class A Notes may be surrendered for registration of
transfer or exchange and an office in New York, New York, where notices and
demands to or upon the Indenture Trustee in respect of the Class A Notes and
this Indenture may be served. The Indenture Trustee initially designates the
Corporate Trust Office as specified in this Indenture as its office for such
purposes. The Indenture Trustee shall give prompt written notice to the
Servicer, the Class A Insurer, the Backup Insurer and to Class A Noteholders of
any change in the location of the Note Register or any such office or agency.
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SECTION 2.8 Payment of Principal and Interest; Defaulted Interest.
(a) The Class A Notes shall accrue interest as provided in the form of the
Class A Note set forth in Exhibit A hereto and such interest shall be due and
payable on each Distribution Date as specified therein. Any installment of
interest or principal, if any, payable on any Class A Note which is punctually
paid or duly provided for by the Issuer on the applicable Distribution Date or
on the Stated Final Maturity shall be paid as set forth in Section 5.09(a) of
the Sale and Servicing Agreement.
(b) The principal of each Class A Note shall be payable in installments on
each Distribution Date as provided in the form of the Class A Note set forth in
Exhibit A hereto. Notwithstanding the foregoing, the entire unpaid principal
amount of the Class A Notes, and all accrued interest thereon, shall become due
and payable, if not previously paid, upon the acceleration thereof after the
occurrence of an Indenture Event of Default in the manner provided in Section
5.2. All principal payments on the Class A Notes shall be made as provided in
Section 5.2 and in Section 5.09(a) of the Sale and Servicing Agreement, as
applicable. Upon written notice from the Issuer, the Indenture Trustee shall
notify the Person in whose name a Class A Note is registered at the close of
business on the Record Date preceding the Distribution Date on which the Issuer
expects that the final installment of principal of and interest on such Class A
Note will be paid. Such notice shall be mailed or transmitted by facsimile prior
to such final Distribution Date and shall specify that such final installment
will be payable only upon presentation and surrender of such Class A Note and
shall specify the place where such Class A Note may be presented and surrendered
for payment of such installment. Notices in connection with redemptions of Class
A Notes shall be mailed to Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Class A Notes,
such defaulted interest shall itself bear interest (to the extent lawful) at the
Class A Note Rate. Such defaulted interest (and such interest thereon) shall be
paid on subsequent Distribution Dates pursuant to Section 5.09 of the Sale and
Servicing Agreement, or as otherwise set forth below.
SECTION 2.9 Release of Collateral.
The Indenture Trustee shall, on or after the Class A Termination Date, release
and shall cause the Trust Collateral Agent to release any remaining portion of
the Trust Property from the lien created by this Indenture and shall cause the
Trust Collateral Agent to deposit in the Collection Account any funds then on
deposit in any other Trust Account. The Indenture Trustee shall release property
from the lien created by this Indenture pursuant to this Section only upon
receipt by the Indenture Trustee, the Class A Insurer and the Backup Insurer of
an Issuer Request accompanied by an Officer's Certificate and an Opinion of
Counsel meeting the applicable requirements of Section 11.1.
ARTICLE III
Covenants, Representations and Warranties
SECTION 3.1 Payment of Principal and Interest.
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The Issuer will duly and punctually pay the principal of and interest on the
Class A Notes in accordance with the terms of the Class A Notes and this
Indenture. Without limiting the foregoing and in accordance with the terms set
forth in Section 5.09(a) of the Sale and Servicing Agreement, the Issuer will
cause to be distributed to the Class A Noteholders all amounts on deposit in the
Note Distribution Account on each Distribution Date deposited therein pursuant
to the Sale and Servicing Agreement for the benefit of the Class A Notes, to the
Class A Noteholders. Amounts properly withheld under the Code by any Person from
a payment to any Class A Noteholder of interest and/or principal shall be
considered as having been paid by the Issuer to such Class A Noteholder for all
purposes of this Indenture.
SECTION 3.2 Maintenance of Office or Agency.
For so long as the Indenture Trustee is the transfer agent, the Issuer will
maintain in New York, New York, an office or agency where Class A Notes may be
surrendered for registration of transfer or exchange, and an office in New York,
New York where notices and demands to or upon the Issuer in respect of the Class
A Notes and this Indenture may be served. The Issuer hereby initially appoints
the Indenture Trustee to serve as its agent for the foregoing purposes. The
Issuer will give prompt written notice to the Indenture Trustee, the Class A
Insurer and the Backup Insurer of the location, and of any change in the
location, of any such office or agency. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Indenture
Trustee or the Class A Insurer and the Backup Insurer with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
SECTION 3.3 Money for Payments to be Held in Trust.
On or before each Distribution Date and Redemption Date, the Issuer shall
deposit or cause to be deposited in the Note Distribution Account from the
Collection Account, a sum sufficient to pay the amounts then becoming due under
the Class A Notes, such sum to be held in trust for the benefit of the Persons
entitled thereto and (unless the Paying Agent is the Indenture Trustee) shall
promptly notify the Indenture Trustee of its action or failure so to act.
The Issuer will cause each Paying Agent other than the Indenture Trustee
to execute and deliver to the Indenture Trustee, the Class A Insurer and the
Backup Insurer an instrument in which such Paying Agent shall agree with the
Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section, that such Paying Agent
will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Class A Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of
as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee, the Class A Insurer and the Backup
Insurer written notice of any default by the Issuer of which a Responsible
Officer has
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actual knowledge (or any other obligor upon the Class A Notes) in the
making of any payment required to be made with respect to the Class A
Notes;
(iii) at any time during the continuance of any such default, upon
the written request of the Indenture Trustee, or, prior to the Class A
Termination Date, the Controlling Party, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Class A
Notes if at any time it ceases to meet the standards required to be met by
a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Class A Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith in each case, as
instructed by the Issuer.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such a payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to the escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Class A Note and remaining unclaimed for
two years after such amount has become due and payable shall be discharged from
such trust and be paid to the Issuer on Issuer Request, with the written consent
of the Controlling Party if the Class A Termination Date has not occurred; and
the Holder of such Class A Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent of
the amounts so paid to the Issuer), and all liability of the Indenture Trustee
or such Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Indenture Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of the Issuer cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to the Issuer.
The Indenture Trustee shall also adopt and employ, at the expense of the Issuer,
any other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Holders whose Class A Notes have
been called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).
SECTION 3.4 Existence.
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Except as otherwise permitted by the provisions of Section 3.10, the Issuer will
keep in full effect its existence, rights and franchises as a statutory trust
under the laws of the State of Delaware and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Indenture, the Class A Notes, the Collateral and each other instrument or
agreement included in the Trust Property.
SECTION 3.5 Protection of Trust Property.
The Issuer intends the security interest granted pursuant to this Indenture in
favor of the Indenture Trustee, the Class A Noteholders, the Class A Insurer and
the Backup Insurer to be prior to all other liens in respect of the Trust
Property, and the Issuer shall take all actions necessary to obtain and
maintain, in favor of the Indenture Trustee, for the benefit of the Class A
Noteholders, the Class A Insurer and the Backup Insurer, a first lien on and a
first priority, perfected security interest in the Trust Property. The Issuer
will from time to time prepare (or shall cause to be prepared), execute, file
and deliver all such supplements and amendments hereto and all such financing
statements, continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(i) grant more effectively all or any portion of the Trust Property;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) in favor of the Indenture Trustee for the benefit of the
Class A Noteholders, the Class A Insurer and the Backup Insurer created by
this Indenture or carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
grant made or to be made by this Indenture;
(iv) enforce any of the Trust Property;
(v) preserve and defend title to the Trust Property and the rights
of the Indenture Trustee in such Trust Property against the claims of all
persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the Trust
Property when due.
The Issuer hereby designates and authorizes the Indenture Trustee its
agent and attorney-in-fact to execute, upon Issuer request, any financing
statement, continuation statement or other instrument required to be executed by
the Issuer pursuant to this Section.
SECTION 3.6 Opinions as to Trust Property.
(a)On the Closing Date, the Issuer shall furnish to the Indenture
Trustee, the Class A Insurer and the Backup Insurer an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to this Indenture with respect to the filing of any financing statements
and continuation statements, as are necessary to perfect and
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make effective the first priority lien and security interest in favor of the
Indenture Trustee, created by this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.
(b)Within 90 days after the beginning of each calendar year, beginning
with the first calendar year beginning more than three months after the Closing
Date, the Issuer shall furnish to the Indenture Trustee, the Class A Insurer and
the Backup Insurer an Opinion of Counsel either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and with respect to the filing of any financing statements and continuation
statements as are necessary to maintain the lien and security interest created
by this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security interest. Such Opinion of Counsel shall also describe the recording,
filing, re-recording and refiling of this Indenture, any indentures supplemental
hereto and the filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until the 90th day to occur in the following
calendar year.
SECTION 3.7 Performance of Obligations; Servicing of Contracts.
(a)The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Trust Property or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
ordered by any bankruptcy or other court or as expressly provided in this
Indenture, the Basic Documents or such other instrument or agreement.
(b)The Issuer may contract with other Persons acceptable to the
Controlling Party or, if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, the Indenture Trustee, to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee and the Controlling Party in an
Officer's Certificate of the Issuer shall be deemed to be action taken by the
Issuer. Initially, the Servicer has agreed to assist the Issuer in performing
its duties under this Indenture.
(c)The Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Trust Property, including, but not
limited to, preparing (or causing to be prepared) and filing (or causing to be
filed) all UCC financing statements and continuation statements required to be
filed by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
(d)Upon a Responsible Officer of the Owner Trustee having actual knowledge
or written notice thereof, the Issuer shall promptly notify the Indenture
Trustee, the Class A Insurer, the Backup Insurer and the Rating Agencies of the
occurrence of a Servicer Default in accordance with Section 11.4 hereof, and
shall specify in such notice the action, if
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any, the Issuer is taking in respect of such default. If a Servicer Default
shall arise from the failure of the Servicer to perform any of its duties or
obligations under the Sale and Servicing Agreement with respect to the Dealer
Loans or Contracts, the Issuer shall take all reasonable steps available to it
to remedy such failure.
(e)The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under the
Basic Documents, (x) prior to the Class A Termination Date without the prior
written consent of the Controlling Party, or (y) if the effect thereof would
adversely affect the Holders of the Class A Notes.
SECTION 3.8 Negative Covenants.
So long as any Class A Notes are Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or the Basic
Documents, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the Trust
Property, unless directed to do so by the Controlling Party;
(ii) claim any credit on, or make any deduction from the principal
or interest payable in respect of, the Class A Notes (other than amounts
properly withheld from such payments under the Code) or assert any claim
against any present or former Noteholder by reason of the payment of the
taxes levied or assessed upon any part of the Trust Property; or
(iii) (A) permit the validity or effectiveness of this Indenture to
be impaired, or permit the lien in favor of the Indenture Trustee created
by this Indenture to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations with respect to the Class A Notes under this Indenture except
as may be expressly permitted hereby, (B) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than the
lien of this Indenture) to be created on or extend to or otherwise arise
upon or burden the Trust Property or any part thereof or any interest
therein or the proceeds thereof (other than tax liens, mechanics' liens
and other liens that arise by operation of law, in each case on a Financed
Vehicle and arising solely as a result of an action or omission of the
related Obligor), (C) permit the lien of this Indenture not to constitute
a valid perfected first priority security interest in the Trust Property,
(D) change its name, identity, state of organization or structure as a
statutory trust in any manner that would, could or might make any
financing statement or continuation statement filed with respect to it
seriously misleading within the meaning of Section 9-507 of the UCC or (E)
waive, amend, modify, supplement or terminate any Basic Document or any
provision thereof, or fail to comply with the provisions of the Basic
Documents, in each case, prior to the Class A Termination Date, without
the prior written consent of the Controlling Party.
SECTION 3.9 Annual Statement as to Compliance.
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The Issuer will deliver to the Indenture Trustee, the Rating Agencies, the Class
A Insurer, the Backup Insurer and the Noteholders on or before April 30th of
each year beginning in the year 2005, an Officer's Certificate dated as of the
previous December 31st stating, as to the Authorized Officer signing such
Officer's Certificate, that
(i) a review of the activities of the Issuer during the preceding
12-month period (or, for the initial certificate, for such shorter period
as may have elapsed from the initial issuance of the Class A Notes to such
December 31st) and of performance under this Indenture has been made under
such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a default
in the compliance of any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status
thereof.
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms.
(a)The Issuer shall not consolidate or merge with or into any other
Person, unless
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form satisfactory to the Indenture
Trustee, and prior to the Class A Termination Date, the Controlling Party,
the due and punctual payment of the principal of and interest on all Notes
and the performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction, no Early
Amortization Event, Indenture Default or Indenture Event of Default shall
have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee, the Class A
Insurer and the Backup Insurer) to the effect that such transaction will
not have any material adverse tax consequence to the Trust, any Class A
Noteholder, the Class A Insurer, the Backup Insurer or any
Certificateholder;
(v) any action as is necessary to maintain the Lien and security
interest created by this Indenture shall have been taken;
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(vi) prior to the Class A Termination Date, the Issuer shall have
given the Class A Insurer and the Backup Insurer written notice of such
proposed consolidation or merger at least 30 Business Days prior to its
proposed consummation, and the Controlling Party has given its prior
written consent of such consolidation or merger; and
(vii) the Issuer shall have delivered to the Indenture Trustee, the
Class A Insurer and the Backup Insurer an Officer's Certificate and an
Opinion of Counsel each stating that such consolidation or merger and such
supplemental indenture comply with this Section 3.10(a) and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
(b) The Issuer shall not convey or transfer all or substantially all of
its properties or assets, including those included in the Trust Property, to any
Person, unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any State, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, and prior to the Class A Termination Date the
Controlling Party, the due and punctual payment of the principal of and
interest on all Class A Notes and the performance or observance of every
agreement and covenant of this Indenture and each of the Basic Documents
on the part of the Issuer to be performed or observed, all as provided
herein, (C) expressly agree by means of such supplemental indenture that
all right, title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Holders of the securities and (D) unless
otherwise provided in such supplemental indenture, expressly agree to
indemnify, defend and hold harmless the Issuer against and from any loss,
liability or expense arising under or related to this Indenture and the
Class A Notes;
(ii) immediately after giving effect to such transaction, no Early
Amortization Event, Indenture Default or Indenture Event of Default shall
have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee, the Class A
Insurer and the Backup Insurer) to the effect that such transaction will
not have any material adverse tax consequence to the Trust, any Class A
Noteholder, the Class A Insurer, the Backup Insurer or any Certificate
holder;
(v) any action as is necessary to maintain the Lien and security
interest created by this Indenture shall have been taken;
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(vi) prior to the Class A Termination Date, the Issuer shall have
given the Class A Insurer and the Backup Insurer written notice of such
proposed action at least 30 Business Days prior to its proposed consummation,
and the Controlling Party shall have given its prior written consent to such
action; and
(vii) the Issuer shall have delivered to the Indenture Trustee, the
Class A Insurer and the Backup Insurer an Officer's Certificate and an Opinion
of Counsel each stating that such conveyance or transfer and such supplemental
indenture comply with this Section 3.10(b) and that all conditions precedent
herein provided for relating to such transaction have been complied with.
SECTION 3.11 Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.10 (b), Credit Acceptance Auto Dealer Loan Trust
2004-1 will be released from every covenant and agreement of this Indenture to
be observed or performed on the part of the Issuer with respect to the Class A
Notes immediately upon the delivery of written notice from the Issuer to the
Indenture Trustee, the Class A Insurer and the Backup Insurer stating that
Credit Acceptance Auto Dealer Loan Trust 2004-1 is to be so released.
SECTION 3.12 No Other Business.
The Issuer shall not engage in any business other than financing, purchasing,
owning, selling and managing the Contracts in the manner contemplated by this
Indenture and the Basic Documents and activities incidental thereto and any
other activities permitted under the Trust Agreement.
SECTION 3.13 No Borrowing.
The Issuer shall not issue, incur, assume, guarantee or otherwise become liable,
directly or indirectly, for any Indebtedness except for: (i) the Class A Notes;
(ii) obligations owing from time to time to the Class A Insurer and the Backup
Insurer; and (iii) any other Indebtedness permitted by or arising under the
Basic Documents. The proceeds of the Class A Notes shall be used exclusively to
fund the Issuer's purchase of the Dealer Loans and the other assets specified in
the Sale and Servicing Agreement, to fund the Reserve Account and to pay the
Issuer's organizational, transactional and start-up expenses.
SECTION 3.14 Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by the Sale and Servicing Agreement or this Indenture,
the Issuer shall not make any loan or advance or credit to, or guarantee
(directly or indirectly or by an instrument having the effect of assuring
another's payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or
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acquire (or agree contingently to do so) any stock, obligations, assets or
securities of, or any other interest in, or make any capital contribution to,
any other Person.
SECTION 3.15 Capital Expenditures.
The Issuer shall not make any expenditure (by long-term or operating lease or
otherwise) for capital assets (either realty or personalty) except as
contemplated by the Basic Documents.
SECTION 3.16 Compliance with Laws.
The Issuer shall comply with the requirements of all applicable laws, the
non-compliance with which would, individually or in the aggregate, materially
and adversely affect the ability of the Issuer to perform its obligations under
the Class A Notes, this Indenture or any Basic Document.
SECTION 3.17 Restricted Payments.
The Issuer shall not, directly or indirectly, (i) pay any dividend or make any
distribution (by reduction of capital or otherwise), whether in cash, property,
securities or a combination thereof, to the Owner Trustee or any owner of a
beneficial interest in the Issuer or otherwise with respect to any ownership or
equity interest or security in or of the Issuer or to the Servicer, (ii) redeem,
purchase, retire or otherwise acquire for value any such ownership or equity
interest or security or (iii) set aside or otherwise segregate any amounts for
any such purpose; provided, however, that the Issuer may make, or cause to be
made, distributions to the Servicer, the Owner Trustee, the Indenture Trustee,
the Trust Collateral Agent, the Class A Insurer, the Backup Insurer and the
Certificateholders as permitted by, and to the extent funds are available for
such purpose under, the Sale and Servicing Agreement and the Trust Agreement.
The Issuer will not, directly or indirectly, make payments to or distributions
from the Collection Account except in accordance with this Indenture and the
Basic Documents.
SECTION 3.18 Notice of Indenture Events of Default.
Upon a Responsible Officer of the Owner Trustee having actual knowledge or
receipt of written notice thereof, the Issuer agrees to give the Indenture
Trustee, the Trust Collateral Agent, the Class A Insurer, the Backup Insurer and
the Rating Agency prompt written notice of each Indenture Event of Default
hereunder and each default on the part of the Servicer or the Seller of its
obligations under the Sale and Servicing Agreement.
SECTION 3.19 Further Instruments and Acts.
Upon request of the Indenture Trustee or the Controlling Party, the Issuer will
execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of this
Indenture.
SECTION 3.20 Amendments of Sale and Servicing Agreement and Trust
Agreement.
The Issuer shall not agree to any amendment to Section 11.01 of the Sale and
Servicing Agreement or Section 11.1 of the Trust Agreement to eliminate the
requirements thereunder that
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the Indenture Trustee or the Holders of the Class A Notes consent to amendments
thereto as provided therein.
SECTION 3.21 Income Tax Characterization.
For purposes of federal income, state and local income and franchise and any
other income taxes, the Issuer will, and each Class A Noteholder by such Class A
Noteholder's acceptance thereof agrees to, treat the Class A Notes as
indebtedness and hereby instructs the Issuer to treat the Class A Notes as
indebtedness for federal, state and other tax reporting purposes.
SECTION 3.22 Perfection Representations, Warranties and Covenants.
The perfection representations, warranties and covenants made by the Issuer and
set forth on Schedule A hereto shall be a part of this Indenture for all
purposes.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1 Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect with respect to the Class A
Notes except as to: (i) rights of registration of transfer and exchange; (ii)
substitution of mutilated, destroyed, lost or stolen Class A Notes; (iii) rights
of Class A Noteholders to receive payments of principal thereof and interest
thereon; (iv) Sections 3.3, 3.4, 3.5, 3.7, 3.8, 3.10, 3.12, 3.13, 3.14, 3.15,
3.16, 3.17, 3.19, 3.20 and 3.21; (v) the rights, obligations and immunities of
the Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.7 and the obligations of the Indenture Trustee under Section
4.2); and (vi) the rights of Class A Noteholders, the Class A Insurer and the
Backup Insurer as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee, or the Trust Collateral Agent, payable to all or any
of them, and the Indenture Trustee, on written demand of and at the expense of
the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Class A Notes, when
(A) either
(1) all Class A Notes theretofore authenticated and delivered
(other than (i) Class A Notes that have been destroyed, lost or
stolen and that have been replaced or paid as provided in Section
2.4 and (ii) Class A Notes for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.3) have been delivered to the
Indenture Trustee for cancellation; or
(2) all Class A Notes not theretofore delivered to the
Indenture Trustee for cancellation
(i) have become due and payable,
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(ii) will become due and payable at the Stated
Final Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Indenture
Trustee for the giving of notice of redemption by the
Indenture Trustee in the name, and at the expense, of
the Issuer,
and the Issuer, in the case of (i), (ii) or (iii) of this clause (2), has
irrevocably deposited or caused to be irrevocably deposited with the Trust
Collateral Agent cash or direct obligations of or obligations guaranteed by the
United States of America (which will mature prior to the date such amounts are
payable), in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Class A Notes not theretofore
delivered to the Indenture Trustee for cancellation when due to the Stated Final
Maturity or Redemption Date (if Class A Notes shall have been called for
redemption pursuant to Section 10.1(a)), as the case may be;
(B) the Issuer has paid or caused to be paid all Issuer
Secured Obligations;
(C) the Issuer has delivered to the Indenture Trustee, the
Class A Insurer and the Backup Insurer an Officer's Certificate, an
Opinion of Counsel and if required by the Indenture Trustee or the
Controlling Party an Independent Certificate from a firm of
certified public accountants, each meeting the applicable
requirements of Section 11.1(a) and each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with; and
(D) upon the satisfaction and discharge of the Indenture
pursuant to this Section 4.1, the Indenture Trustee shall deliver to
the Owner Trustee, the Class A Insurer and the Backup Insurer a
certificate of a Responsible Officer stating that the Class A
Noteholders, the Class A Insurer, the Backup Insurer and the
Indenture Trustee have been paid all amounts owed to them.
SECTION 4.2. Application of Trust Money.
All moneys deposited with the Indenture Trustee pursuant to Section 4.1 hereof
shall be held in trust and applied by it, in accordance with the provisions of
the Class A Notes and this Indenture, to the payment, either directly or through
any Paying Agent, as the Indenture Trustee may determine, to the Holders of the
particular Class A Notes for the payment or redemption of which such moneys have
been deposited with the Indenture Trustee, of all sums due and to become due
thereon for principal and interest; but such moneys need not be segregated from
other funds except to the extent required herein or in the Sale and Servicing
Agreement or required by law.
SECTION 4.3. Repayment of Moneys Held by Paying Agent.
In connection with the satisfaction and discharge of this Indenture with respect
to the Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of
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this Indenture with respect to such Class A 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 moneys.
ARTICLE V
Remedies
SECTION 5.1. Indenture Events of Default.
"Indenture Event of Default", wherever used herein or in the other Basic
Documents, means any one of the following events (whatever the reason for such
Indenture Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or governmental
body):
(i) default by the Issuer in the payment of any interest on
the Class A Notes when the same becomes due and payable, and such default
shall continue for a period of five (5) days or more (it being understood
that any payment by the Class A Insurer under the Class A Note Insurance
Policy or by the Backup Insurer under the Backup Insurance Policy shall
not constitute payment by the Issuer); or
(ii) default by the Issuer in the payment of the principal of
or any installment of the principal of the Class A Notes when the same
becomes due and payable on the Stated Final Maturity (it being understood
that any payment by the Class A Insurer under the Class A Note Insurance
Policy or by the Backup Insurer under the Backup Insurance Policy shall
not constitute payment by the Issuer); or
(iii) default in the observance or performance of any covenant
or agreement of the Issuer made under this Indenture (other than a
covenant or agreement, a default in the observance or performance of which
is specifically dealt with elsewhere in this Section 5.1), or any
representation or warranty of the Issuer made in this Indenture or in any
certificate or other writing delivered pursuant to this Indenture or in
connection with this Indenture proving to have been incorrect in any
material respect as of the time when the same shall have been made, and
such default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a period
of 30 days (or a longer period, not in excess of 60 days as may be
reasonably necessary to remedy such default, if the default is capable of
remedy within 60 days or less, and the Servicer, on behalf of the Issuer,
delivers an officer's certificate to the Indenture Trustee to the effect
that the Issuer has commenced, or will promptly commence and diligently
pursue, all reasonable efforts to remedy the default) after there shall
have been given to the Issuer by either Insurer, or if both a Class A
Insurer Default and a Backup Insurer Default have occurred and are
continuing, the Indenture Trustee at the direction of Class A Noteholders
representing at least 25% of the outstanding Class A Note Balance, a
written notice specifying such default or incorrect representation or
warranty
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and requiring it to be remedied and stating that such notice is a "Notice
of Default" pursuant to this Indenture; or
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Seller, the Issuer
or any substantial part of the Trust Property in an involuntary case under
any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the
Seller or the Issuer, as applicable, or for any substantial part of the
Trust Property, or ordering the winding-up or liquidation of the Seller's
affairs or the Issuer's affairs, as applicable, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days;
or
(v) the commencement by the Seller or the Issuer of a
voluntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or the consent
by the Issuer to the entry of an order for relief in an involuntary case
under any such law, or the consent by the Issuer to the appointment or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Seller or Issuer, as applicable,
or for any substantial part of the Trust Property, or the making by the
Seller or Issuer, as applicable, of any general assignment for the benefit
of creditors, or the failure by the Seller or Issuer, as applicable,
generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing; or
(vi) a draw is made on either the Class A Note Insurance
Policy or the Backup Insurance Policy; or
(vii) cumulative Collections through the end of the related
Collection Period, expressed as a percentage of the cumulative Forecasted
Collections through the end of the related Collection Period, is less than
65.0% for any three (3) consecutive Collection Periods; or
(viii) the Seller sells or otherwise transfers ownership of
the Certificate except as permitted by the Basic Documents; or
(ix) the Seller, fails to observe or perform in any material
respect any of its separateness or limited purpose covenants in the Basic
Documents to which it is a party (after notice and after giving effect to
any applicable grace periods set forth therein) or its organizational
documents; or
(x) the Indenture Trustee ceases to have a valid and perfected
first priority security interest in the Trust Property and such failure
has not been remedied within ten (10) Business Days; or
(xi) any Transaction Document (in its entirety) ceases to be
in full force and effect.
SECTION 5.2. Rights Upon Indenture Event of Default.
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(a) If an Indenture Event of Default described in clause (iv) or (v)
of Section 5.1 shall have occurred, the entire unpaid principal balance of the
Class A Notes, all interest accrued and unpaid thereon and all other amounts
payable under this Indenture and the Basic Documents shall automatically become
immediately due and payable. If any other Indenture Event of Default shall have
occurred, the Indenture Trustee, if so requested in writing by: (x) the
Controlling Party, or (y) if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, the Majority Noteholders, shall
declare by written notice to the Issuer that the entire principal balance of the
Class A Notes, all interest accrued and unpaid thereon and all other amounts
payable under this Indenture and the other Basic Documents to be immediately due
and payable.
(b) If an Indenture Event of Default occurs and the Class A Notes
have been accelerated, the Indenture Trustee may exercise any of the remedies
specified in Section 5.4(a). Payments in accordance with Section 5.2(a) hereof
following acceleration of the Class A Notes shall be applied by the Indenture
Trustee:
FIRST: (x) pro rata, to the Servicer or the Backup Servicer, the
Servicing Fee and any indemnification amounts owed to the Backup Servicer,
and to the Trust Collateral Agent, the Indenture Trustee and the Owner
Trustee, their related accrued and unpaid fees, indemnification amounts
and expenses and (y) to any successor servicer, any unpaid Transition
Expenses which may be due to it pursuant to the terms of the Sale and
Servicing Agreement;
SECOND: to Class A Noteholders for amounts due and unpaid on the
Class A Notes for interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class A Notes for
interest;
THIRD: to each Insurer, in accordance with the terms of the
Insurance Agreement, its respective Premium due pursuant to the Insurance
Agreement;
FOURTH: to Class A Noteholders for amounts due and unpaid on the
Class A Notes for principal, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Class A Notes
for principal until the Class A Note Balance has been reduced to zero; and
FIFTH: to each Insurer, in accordance with the terms of the
Insurance Agreement, its respective Reimbursement Obligations.
(c) At any time after declaration of acceleration of maturity has
been made in accordance with Section 5.2(a) hereof and before a judgment or
decree for payment of the money due has been obtained by the Indenture Trustee
as hereinafter in this Article V provided, the Controlling Party, or the
Majority Noteholders, as the case may be, by written notice to the Issuer and
the Indenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
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(A) all payments of principal of and interest on all Class A
Notes and all other amounts that would then be due hereunder or upon
such Class A Notes if the Indenture Event of Default giving rise to
such acceleration had not occurred, which funds shall be deposited
into the Note Distribution Account;
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel,
which funds shall be deposited into the Collection Account; and
(C) all sums (including any Premium) paid or advanced by or
due to the Class A Insurer and the Backup Insurer, which funds shall
be paid to the Class A Insurer or the Backup Insurer in accordance
with the terms of the Insurance Agreement; and
(ii) all Indenture Events of Default, other than the
nonpayment of the interest on or the principal of the Class A Notes that
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
(d) In the event the Class A Notes have been accelerated in
accordance with Section 5.2(a) hereof, each Insurer shall have the right, but
not the obligation, to make payments under the Class A Note Insurance Policy or
Backup Insurance Policy, as applicable, or otherwise, of principal and interest
due on the Class A Notes, in whole or in part, on any date or dates following
such acceleration, as such Insurer, in its sole discretion, may elect.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer hereby irrevocably and unconditionally appoints the
Indenture Trustee as the true and lawful attorney-in-fact of the Issuer, with
full power of substitution, to execute, acknowledge and deliver any notice,
document, certificate, paper, pleading or instrument and to do in the name of
the Indenture Trustee as well as in the name, place and stead of the Issuer such
acts, things and deeds for or on behalf of and in the name of the Issuer under
this Indenture (including specifically under Section 5.4) and under the Basic
Documents which the Issuer could or might do or which may be necessary,
desirable or convenient in the Indenture Trustee's sole discretion to effect the
purposes contemplated hereunder and under the Basic Documents and, without
limitation, following the occurrence of an Indenture Event of Default, acting at
the instruction or with the consent of the Controlling Party or, if both a Class
A Insurer Default and a Backup Insurer Default have occurred and are continuing,
the Majority Noteholders, in accordance with the terms of Article V hereof,
exercise full right, power and authority to take, or defer from taking, any and
all acts with respect to the administration, maintenance or disposition of the
Trust Property.
(b) Notwithstanding anything to the contrary contained in this
Indenture (including, without limitation, Sections 5.4(a), 5.12, 5.13 and 5.16),
the Indenture Trustee, prior
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to the Class A Termination Date, may with the prior written consent of the
Controlling Party or, if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, the Majority Noteholders, or shall, at
the direction of the Controlling Party or, if both a Class A Insurer Default and
a Backup Insurer Default have occurred and are continuing, the Majority
Noteholders, and thereafter may at its discretion, proceed to protect and
enforce its rights and the rights of the Class A Noteholders, the Class A
Insurer and the Backup Insurer by such appropriate proceedings as the Indenture
Trustee or the Controlling Party (or the Majority Noteholders, if applicable)
shall deem most effective to protect and enforce any such rights, whether for
specific performance of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy
or legal or equitable right vested in the Indenture Trustee by this Indenture or
by law.
(c) In case there shall be pending, relative to the Issuer or any
other obligor upon the Class A Notes or any Person having or claiming an
ownership interest in the Trust Property, proceedings under Title 11 of the
United States Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or in case a receiver, assignee or trustee in
bankruptcy or reorganization, liquidator, sequestrator or similar official shall
have been appointed for or taken possession of the Issuer or its property or
such other obligor or Person, or in case of any other comparable judicial
proceedings relative to the Issuer or other obligor upon the Class A Notes, or
to the creditors or property of the Issuer or such other obligor, the Indenture
Trustee, irrespective of whether the principal of any Class A Notes shall then
be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, at
the expense of the Seller by intervention in such proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Class A Notes
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee (including
any claim for reasonable compensation to the Indenture Trustee and each
predecessor Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence, bad faith or willful
misconduct), the Class A Insurer, the Backup Insurer and of the Class A
Noteholders allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Class A Notes in any election of a
trustee, a standby trustee or person performing similar functions in any
such proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Class A Noteholders, the Class
A Insurer, the Backup Insurer and the Indenture Trustee on their behalf;
and
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(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of
the Indenture Trustee, the Class A Insurer, the Backup Insurer or the
Holders of Class A Notes allowed in any judicial proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Class A Noteholders to
make payments to the Indenture Trustee, and, in the event that the Indenture
Trustee shall consent to the making of payments directly to such Class A
Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient
to cover reasonable compensation to the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Indenture
Trustee and each predecessor Indenture Trustee except as a result of negligence,
bad faith or willful misconduct.
(d) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Class A Noteholder any plan of reorganization, arrangement,
adjustment or composition affecting the Class A Notes or the rights of any
Holder thereof or to authorize the Indenture Trustee to vote in respect of the
claim of any Class A Noteholder in any such proceeding except, as aforesaid, to
vote for the election of a trustee in bankruptcy or similar person.
(e) All rights of action and of asserting claims under this
Indenture or under any of the Class A Notes, may be enforced by the Indenture
Trustee without the possession of any of the Class A Notes or the production
thereof in any trial or other proceedings relative thereto, and any such action
or proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Class A Notes,
the Class A Insurer and the Backup Insurer.
(f) In any proceedings brought by the Indenture Trustee (and also
any proceedings involving the interpretation of any provision of this
Indenture), the Indenture Trustee shall be held to represent all the Holders of
the Class A Notes, and it shall not be necessary to make any Class A Noteholder
a party to any such proceedings.
SECTION 5.4. Remedies.
(a) If an Indenture Event of Default shall have occurred and be
continuing, the Controlling Party or the Indenture Trustee at the written
direction of the Controlling Party or, if both a Class A Insurer Default and
Backup Insurer Default have occurred and are continuing, the Majority
Noteholders may do any one or more of the following:
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable to the Class
A Insurer and the Backup Insurer or on the Class A Notes or under this
Indenture with respect thereto, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer and any other
obligor upon such Class A Notes moneys adjudged due;
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(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Property;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee, the Holders of the Class A Notes,
the Class A Insurer and the Backup Insurer; and
(iv) direct the Indenture Trustee to sell the Trust Property
or any portion thereof or rights or interest therein, at one or more
public or private sales called and conducted in any manner permitted by
law; provided, however, that the Indenture Trustee shall not, and shall
not be directed by the Controlling Party or the Majority Noteholders, as
the case may be, to, sell or otherwise liquidate the Trust Property
following an Indenture Event of Default unless:
(A) the proceeds of such sale or liquidation distributable to
the Class A Noteholders, together with amounts to be paid to the
Insurers concurrently therewith, are anticipated to be sufficient to
discharge in full all amounts then due and unpaid upon the Class A
Notes for principal and interest due thereon, in the event such
direction is from the Controlling Party; or
(B) in the event that both a Class A Insurer Default and a
Backup Insurer Default have occurred and are continuing, the
Indenture Trustee, if so directed by the Majority Holders in
accordance with the terms of this Indenture, may not sell or
otherwise liquidate the Trust Property following an Indenture Event
of Default unless:
(I) such Indenture Event of Default is of the type
described in Section 5.1(iv) or (v),
(II) such Indenture Event of Default is of the type
described in any other clause of Section 5.1 and the Class A
Noteholders consent thereto in writing, or
(III) either (i) the proceeds of such sale or
liquidation would be in an amount sufficient to discharge in
full all amounts then due and unpaid upon such Class A Notes
for principal and interest or (ii) the Indenture Trustee
determines that the Trust Property will not continue to
provide sufficient funds for the payment of principal of and
interest on the Class A Notes as they would have become due if
they had not been declared due and payable (it being
understood that for purposes of making such a determination,
the Indenture Trustee may conclusively rely on an independent
auditor);
provided, however, that, subject to Section 6.1, the Indenture Trustee shall
have the right to decline to follow any such direction if it, being advised by
counsel, determines that the action so directed may not lawfully be taken, or if
it, in good faith shall, by a Responsible Officer, determine that the
proceedings so directed would be illegal or subject it to personal liability.
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(b) If the Indenture Trustee sells all or a portion of the Trust
Property, following an Indenture Event of Default, the Trust Collateral Agent
shall give Credit Acceptance at least ten (10) days' prior notice of such sale,
and Credit Acceptance may, but is not required to, make a bid for the portion,
or all, of the Trust Property being sold by the Indenture Trustee.
SECTION 5.5. Optional Preservation of the Trust Property.
If the Class A Notes have been declared to be due and payable under Section 5.2
following an Indenture Event of Default and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee may,
with the prior written consent of the Controlling Party or, if both a Class A
Insurer Default and a Backup Insurer Default have occurred and are continuing,
the Majority Noteholders, but need not unless directed in writing by the
Controlling Party or, if both a Class A Insurer Default and Backup Insurer
Default have occurred and are continuing, the Majority Noteholders, maintain
possession of the Trust Property which is in its possession and elect to direct
the Trust Collateral Agent to maintain possession of the Trust Property which is
in the possession of the Trust Collateral Agent. It is the desire of the parties
hereto and the Class A Noteholders that there be at all times sufficient funds
for the payment of principal of and interest on the Class A Notes, and the
Controlling Party, or the Majority Noteholders, as the case may be, shall take
such desire into account when determining whether or not to direct the Indenture
Trustee or the Trust Collateral Agent, as applicable, to maintain possession of
the Trust Property. In determining whether to direct the Indenture Trustee or
the Trust Collateral Agent, as applicable, to obtain possession of the Trust
Property, the Controlling Party, or the Majority Noteholders, as the case may
be, may, but need not maintain and conclusively rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as to
the feasibility of such proposed action and as to the sufficiency of the Trust
Property for such purpose.
SECTION 5.6. [Reserved].
SECTION 5.7. Limitation of Suits.
Subject to Section 5.8 and Section 6.8, no Holder of any Class A Note shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Indenture Event of Default;
(ii) (A) the Indenture Event of Default arises from the
Seller's or the Servicer's failure to remit payments under the Sale and
Servicing Agreement when due or (B) the Majority Noteholders shall have
made written request to the Indenture Trustee to institute such proceeding
in respect of such Indenture Event of Default in its own name as Indenture
Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee indemnity reasonably satisfactory to it against the costs,
expenses and liabilities to be incurred in complying with such request;
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(iv) the Indenture Trustee for 30 days after its receipt of
such notice, request and offer of indemnity has failed to institute such
proceedings;
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 30-day period; and
(vi) the Controlling Party has given its prior written
consent.
it being understood and intended that no one or more Holders of Class A Notes
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal, ratable and common benefit of all
Class A Noteholders.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Class
A Notes, each representing less than a majority of the Outstanding Amount of the
Class A Notes, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture.
SECTION 5.8. Unconditional Rights of Noteholders To Receive
Principal and Interest.
Notwithstanding any other provisions in this Indenture, the Holder of any Class
A Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Class A Note on or
after the respective due dates thereof expressed in such Class A Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Indenture Trustee, the Class A Insurer, the Backup Insurer or any Class A
Noteholder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason or has been determined adversely to the Indenture Trustee, the Class A
Insurer, the Backup Insurer or such Class A Noteholder, then and in every such
case the Issuer, the Indenture Trustee, the Class A Insurer, the Backup Insurer
and the Class A Noteholders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee, the
Class A Insurer, the Backup Insurer and the Class A Noteholders shall continue
as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as provided in Section 5.7, no right or remedy herein conferred upon or
reserved to the Indenture Trustee, the Class A Insurer, the Backup Insurer or
the Class A Noteholders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the
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extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.11. Delay or Omission Not a Waiver.
No delay or omission of the Indenture Trustee, the Class A Insurer, the Backup
Insurer or any Holder of any Class A Note to exercise any right or remedy
accruing upon any Indenture Default or Indenture Event of Default shall impair
any such right or remedy or constitute a waiver of any such Indenture Default or
Indenture Event of Default or an acquiescence therein. Every right and remedy
given by this Article V or by law to the Indenture Trustee, the Class A Insurer,
the Backup Insurer or to the Class A Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee, the
Class A Insurer, the Backup Insurer or by the Class A Noteholders, as the case
may be.
SECTION 5.12. Control by the Controlling Party.
Prior to the Class A Termination Date, the Controlling Party, so long as both a
Class A Insurer Default and a Backup Insurer Default have not occurred and are
not continuing, shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Indenture Trustee with
respect to the Class A Notes or exercising any trust or power conferred on the
Indenture Trustee;
provided, however, that, the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such direction;
and subject to Section 6.1, the Indenture Trustee shall have the right to
decline to follow any direction of the Controlling Party if the Indenture
Trustee being advised by counsel determines that the action so directed may not
lawfully be taken, or if the Indenture Trustee in good faith shall, by a
Responsible Officer, determine that the proceedings so directed would be illegal
or subject it to personal liability or be unduly prejudicial to the rights of
Class A Noteholders not parties to such direction.
SECTION 5.13. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Class A Note by such
Holder's acceptance thereof shall be deemed to have agreed, that any court may
in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Indenture Trustee for
any action taken, suffered or omitted by it as Indenture Trustee, the filing by
any party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant.
SECTION 5.14. Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do so) that it will not
at any time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the
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covenants or the performance of this Indenture; and the Issuer (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 5.15. Action on Class A Notes.
The Indenture Trustee's right to seek and recover judgment on the Notes or under
this Indenture shall not be affected by the seeking, obtaining or application of
any other relief under or with respect to this Indenture. Neither the lien of
this Indenture nor any rights or remedies of the Indenture Trustee or the Class
A Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee against the Issuer or by the levy of any execution under such judgment
upon any portion of the Trust Property or upon any of the assets of the Issuer.
SECTION 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee or the
Controlling Party or, if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, the Majority Noteholders, to do so and
at the Issuer's expense, the Issuer agrees to take all such lawful action as the
Indenture Trustee or the Controlling Party, as the case may be, may request to
compel or secure the performance and observance by the Seller and the Servicer,
as applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement in accordance with the terms thereof, and
to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee, or
prior to the Class A Termination Date, the Controlling Party, including the
transmission of notices of default on the part of the Seller or the Servicer
thereunder and the institution of legal or administrative actions or proceedings
to compel or secure performance by the Seller or the Servicer of each of their
obligations under the Sale and Servicing Agreement.
(b) If an Indenture Event of Default has occurred, the Indenture
Trustee may, with the prior written consent of the Controlling Party or, if both
a Class A Insurer Default and a Backup Insurer Default have occurred and are
continuing, the Majority Noteholders, but need not unless directed in writing by
the Controlling Party or, if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, the Majority Noteholders, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Sale and Servicing Agreement,
including the right or power to take any action to compel or secure performance
or observance by the Seller or the Servicer of each of their obligations to the
Issuer thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement, and any right of the
Issuer to take such action shall be suspended.
SECTION 5.17. Subrogation. Any and all proceeds of claims paid by
the Class A Insurer or the Backup Insurer under the Class A Note Insurance
Policy or the Backup Insurance Policy, as the case may be, and disbursed by the
Indenture Trustee or the Trust Collateral Agent shall not be considered payment
by the Issuer with respect to the Class A Notes,
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and shall not discharge the obligations of the Issuer with respect thereto. The
Class A Insurer or the Backup Insurer, as the case may be, shall, to the extent
it makes any payment with respect to the Class A Notes, become subrogated to the
rights of the recipients of such payments to the extent of such payments.
Subject to and conditioned upon any payment with respect to the Class A Notes by
or on behalf of either the Class A Insurer or the Backup Insurer, each Class A
Noteholder shall be deemed, without further action, to have directed the
Indenture Trustee or the Trust Collateral Agent to assign to the Insurer which
made such payment all rights to the payment of interest or principal with
respect to the Class A Notes which are then due for payment to the extent of all
payments made by such Insurer and such Insurer may exercise any option, vote,
right, power or the like with respect to the Class A Notes to the extent that it
has made payment pursuant to the Class A Note Insurance Policy or the Backup
Insurance Policy, as the case may be. To evidence such subrogation, the Note
Registrar shall note such Insurer's rights as subrogee upon the Class A Note
Register upon receipt from such Insurer of proof of payment by the Insurer of
any Class A Interest Distributable Amount or Class A Principal Distributable
Amount.
ARTICLE VI
The Indenture Trustee
SECTION 6.1. Duties of Indenture Trustee.
(a) If an Indenture Event of Default has occurred and is continuing,
the Indenture Trustee shall follow such instructions and directions as it may
receive pursuant to Section 5.2 hereof and use the same degree of care and skill
in its exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Indenture Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and
the Basic Documents and no implied covenants or obligations shall be read
into this Indenture or the Basic Documents against the Indenture Trustee;
and
(ii) in the absence of bad faith, the Indenture Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Indenture Trustee and conforming to the requirements of this
Indenture and the Basic Documents; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform on their face to the requirements of this Indenture and the Basic
Documents.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own bad faith or
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
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(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Indenture
Trustee unless it is proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.12.
(d) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture.
(e) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur liability (financial
or otherwise) in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to
believe that repayment of such funds or indemnity satisfactory to it against
such risk or liability is not reasonably assured to it.
(f) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section.
(g) Without limiting the generality of this Section, the Indenture
Trustee shall have no duty (A) to see to any recording, filing or depositing of
this Indenture or any agreement referred to herein or any financing statement or
continuation statement evidencing a security interest in the Financed Vehicles,
or to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof, (B) to see to any
insurance on the Financed Vehicles or Obligors or to effect or maintain any such
insurance, (C) to see to the payment or discharge of any tax, assessment or
other governmental charge or any Lien or encumbrance of any kind owing with
respect to, assessed or levied against any part of the Trust, (D) to confirm or
verify the contents of any reports or certificates delivered to the Indenture
Trustee pursuant to this Indenture or the Sale and Servicing Agreement believed
by the Indenture Trustee to be genuine and to have been signed or presented by
the proper party or parties, or (E) to inspect the Financed Vehicles at any time
or ascertain or inquire as to the performance or observance of any of the
Issuer's, the Seller's or the Servicer's representations, warranties or
covenants or the Servicer's duties and obligations as Servicer and as custodian
of the original Certificates of Title of the Financed Vehicles under the Sale
and Servicing Agreement.
(h) In no event shall JPMorgan Chase Bank, in any of its capacities
hereunder, be deemed to have assumed any duties of the Owner Trustee under the
Delaware Statutory Trust Act, common law, or the Trust Agreement.
(i) The Indenture Trustee shall, upon reasonable prior written
notice to the Indenture Trustee by the Class A Insurer or the Backup Insurer,
permit any representative of the Class A Insurer or the Backup Insurer, during
the Indenture Trustee's normal business hours, at its offices, to examine all
books of account, records, reports and other papers of the Indenture Trustee
relating to the Class A Notes or the Collateral, to make copies and extracts
therefrom and
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to discuss the Indenture Trustee's affairs and actions, as such affairs and
actions relate to the Indenture Trustee's duties with respect to the Class A
Notes or the Collateral, with the Indenture Trustee's officers and employees
responsible for carrying out the Indenture Trustee's duties with respect to the
Collateral or the Class A Notes. Any expenses incurred in connection with such
examination shall be payable by the Issuer to the Class A Insurer, the Backup
Insurer or the Indenture Trustee, as applicable, in accordance with Section
5.08(a) of the Sale and Servicing Agreement.
(j) The Indenture Trustee shall, and agrees that it will hold any
proceeds of any claim under the Class A Note Insurance Policy or Backup
Insurance Policy in trust, solely for the use and benefit of the Class A
Noteholders.
SECTION 6.2. Rights of Indenture Trustee.
Except as otherwise provided in Section 6.1:
(a) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate and/or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(b) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and shall not be responsible for
the misconduct or negligence of any agent, attorney, custodian or nominee
appointed with due care.
(c) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Indenture Trustee's
conduct does not constitute willful misconduct, negligence or bad faith.
(d) The Indenture Trustee shall not be deemed to have knowledge of
an Indenture Event of Default unless a Responsible Officer of the Indenture
Trustee has actual knowledge or has received written notice of such Indenture
Event of Default.
(e) The Indenture Trustee may consult with counsel, and the written
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Class A Notes shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the written advice or opinion
of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise
any of the rights and powers vested in it by this Indenture or the other Basic
Documents, or to institute, conduct or defend any litigation under this
Indenture or in relation to this Indenture, at the request, order or direction
of any of the Holders of Class A Notes, pursuant to the provisions of this
Indenture, unless it shall have been offered security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities that may be
incurred therein or thereby; provided, however, that the Indenture Trustee
shall, upon the occurrence of an Indenture Event of Default
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(that has not been cured), exercise the rights and powers vested in it by this
Indenture with the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of such
person's own affairs.
(g) Except during the continuance of an Indenture Event of Default,
the Indenture Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing to do so by the Majority Noteholders or
the Controlling Party; provided, however, that if the payment within a
reasonable time to the Indenture Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Indenture Trustee, not reasonably assured to the Indenture
Trustee by the security afforded to it by the terms of this Indenture, the
Indenture Trustee may require indemnity reasonably satisfactory to the Indenture
Trustee against such cost, expense or liability as a condition to so proceeding;
the reasonable expense of every such examination shall be paid by the requesting
Holders or the instructing party, as the case may be, or, if paid by the
Indenture Trustee, shall be reimbursed by the requesting Holders or the
instructing party, as the case may be, upon demand.
(h) In no event shall the Indenture Trustee be liable for any
indirect, consequential, punitive or special damages, regardless of the form of
action and whether or not any such damages were foreseeable or contemplated.
(i) Delivery of any reports, information and documents to the
Indenture Trustee provided for herein is for informational purposes only (unless
otherwise expressly stated herein) and the Indenture Trustee's receipt of such
shall not constitute constructive knowledge of any information contained therein
or determinable from information contained therein, including the Issuer's
compliance with any of its representations, warranties or covenants hereunder
(as to which the Indenture Trustee is entitled to rely exclusively on Officers'
Certificates).
(j) The Indenture Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.
(k) In the event the Indenture Trustee is also acting in the
capacity of Paying Agent, transfer agent or Note Registrar, it shall be afforded
all of the rights, protections, immunities and indemnities afforded to the
Indenture Trustee hereunder in each of its capacities hereunder.
(l) In no event shall the Indenture Trustee be liable for any act or
omission on the part of the Issuer, the Seller or the Servicer or any other
Person. The Indenture Trustee shall not be responsible for monitoring or
supervising the Issuer, the Seller or the Servicer.
SECTION 6.3. Individual Rights of Indenture Trustee.
The Indenture Trustee in its individual or any other capacity may become the
owner or pledgee of Class A Notes and may otherwise deal with the Issuer or its
Affiliates with the same rights it would have if it were not Indenture Trustee.
Any Paying Agent, Note Registrar, co-registrar or
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co-paying agent may do the same with like rights. However, the Indenture Trustee
must comply with Section 6.15.
SECTION 6.4. Indenture Trustee's Disclaimer.
The Indenture Trustee shall not be responsible for and makes no representation
as to the validity, sufficiency or adequacy of this Indenture, the Trust
Property or the Class A Notes, shall not be accountable for the Issuer's use of
the proceeds from the Class A Notes, and shall not be responsible for any
statement of the Issuer in the Indenture or in any document issued in connection
with the sale of the Class A Notes or in the Class A Notes other than, the
Indenture Trustee's certificate of authentication.
SECTION 6.5. Notice of Indenture Events of Default.
If an Indenture Event of Default occurs and is continuing and if written notice
of the existence thereof has been delivered to a Responsible Officer of the
Indenture Trustee or a Responsible Officer of the Indenture Trustee has actual
knowledge thereof, the Indenture Trustee shall mail to the Class A Insurer, the
Backup Insurer, the Rating Agencies and each Class A Noteholder notice of the
Indenture Event of Default within five (5) Business Days after such knowledge or
notice occurs.
SECTION 6.6. Reports by Indenture Trustee to Holders.
The Indenture Trustee shall on behalf of the Issuer deliver to each Class A
Noteholder such information as may be reasonably required to enable such Holder
to prepare its federal and state income tax returns. Such obligation shall be
satisfied if the Indenture Trustee provides such Class A Noteholder a form 1099.
SECTION 6.7. Compensation.
(a) The Issuer shall pay to the Indenture Trustee from time to time
compensation for its services as agreed in writing and in accordance with
Section 5.08(a) of the Sale and Servicing Agreement. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services, except any such
expense as may be attributable to its willful misconduct, negligence or bad
faith. Such expenses shall include securities transaction charges relating to
the investment of funds (net of investment earnings) on behalf of the Indenture
Trustee or the Trust Collateral Agent on deposit in the Trust Accounts (except
for the Certificate Distribution Account) and the reasonable compensation and
reasonable expenses, disbursements and advances of the Indenture Trustee's
counsel and of all persons not regularly in its employ; provided, however, that
the securities transaction charges referred to above shall, in the case of
certain Eligible Investments selected by the Servicer, be waived for a
particular investment in the event that any amounts are received by the Trust
Collateral Agent from a financial institution in connection with the purchase of
such Eligible Investments. The Issuer agrees to indemnify the Indenture Trustee
and Trust Collateral Agent as set forth in Section 6.05 of the Sale and
Servicing Agreement. The Indenture Trustee agrees that its recourse to the
Issuer, the Seller and the Trust Property shall be limited to the right to
receive
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distributions in accordance with Section 5.08(a) of the Sale and Servicing
Agreement and Article V hereof and shall not be recourse to the assets of any
Class A Noteholder.
(b) The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this Indenture and the
earlier resignation or removal of the Indenture Trustee. When the Indenture
Trustee incurs expenses after the occurrence of an Indenture Event of Default
specified in Section 5.1(iv) or (v) with respect to the Issuer, the expenses are
intended to constitute expenses of administration under Title 11 of the United
States Code or any other applicable federal or state bankruptcy, insolvency or
similar law. Notwithstanding anything else set forth in this Indenture or the
Basic Documents, the Indenture Trustee agrees that the obligations of the Issuer
to the Indenture Trustee hereunder and under the Basic Documents shall not be
recourse to the assets of any Class A Noteholder.
SECTION 6.8. Replacement of Indenture Trustee.
(a) The Indenture Trustee may resign at any time by so notifying the
Issuer, the Class A Insurer and the Backup Insurer in writing at least sixty
days prior and upon the appointment and assumption of its obligations by a
successor Indenture Trustee which shall be acceptable to the Controlling Party
if such succession occurs prior to the Class A Termination Date.
(b) The Issuer, prior to the Class A Termination Date with the prior
written consent of the Controlling Party, may remove the Indenture Trustee by
written notice if:
(i) the Indenture Trustee fails to comply with Section 6.17
hereof;
(ii) a court having jurisdiction in the premises in respect of
the Indenture Trustee in an involuntary case or proceeding under federal
or state banking or bankruptcy laws, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or other
similar law, shall have entered a decree or order granting relief or
appointing a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or similar official) for the Indenture Trustee
or for any substantial part of the Indenture Trustee's property, or
ordering the winding-up or liquidation of the Indenture Trustee's affairs;
(iii) an involuntary case under the federal bankruptcy laws,
as now or hereafter in effect, or another present or future federal or
state bankruptcy, insolvency or similar law is commenced with respect to
the Indenture Trustee and such case is not dismissed within 60 days;
(iv) the Indenture Trustee commences a voluntary case under
any federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or other similar official) for the Indenture
Trustee or for any substantial part of the Indenture Trustee's property,
or makes any assignment for the benefit of creditors or fails generally to
pay its debts as such debts become due or takes any corporate action in
furtherance of any of the foregoing;
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(v) failure to comply with any material covenant hereunder; or
(vi) the Indenture Trustee otherwise becomes legally incapable
of acting.
(c) The Controlling Party may remove the Indenture Trustee for any
reason by 30 days' prior written notice.
(d) If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), prior
to the Class A Termination Date the Controlling Party may appoint a successor
Indenture Trustee and if it fails to, the Issuer shall promptly appoint a
successor Indenture Trustee acceptable to the Controlling Party. After the Class
A Termination Date, the Issuer may appoint a successor Indenture Trustee without
the consent of the Controlling Party.
A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights, powers
and duties of the retiring Indenture Trustee under this Indenture subject to
satisfaction of the Rating Agency Condition. The successor Indenture Trustee
shall mail a notice of its succession to Class A Noteholders, the Class A
Insurer, the Backup Insurer and the Rating Agencies. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
If a successor Indenture Trustee that is, prior to the Class A
Termination Date, acceptable to the Controlling Party does not take office
within 60 days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee or the Controlling Party may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee that
meets the eligibility requirements set forth in Section 6.12 hereof.
If the Indenture Trustee fails to comply with Section 6.15, any
Noteholder, prior to the Class A Termination Date with the prior written consent
of the Controlling Party, may petition any court of competent jurisdiction for
the removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee acceptable to the Controlling Party.
Any resignation or removal of the Indenture Trustee and appointment
of a successor Indenture Trustee pursuant to any of the provisions of this
Section shall not become effective until acceptance of appointment by the
successor Indenture Trustee acceptable to the Controlling Party pursuant to this
Section 6.8 and payment of all fees and expenses owed to the outgoing Indenture
Trustee by the Servicer and the Issuer.
Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's and the Servicer's obligations under Section 6.7 shall
continue for the benefit of the retiring Indenture Trustee.
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SECTION 6.9. Successor Indenture Trustee by Merger.
If the Indenture Trustee consolidates with, merges or converts into, or
transfers all or substantially all its corporate trust business or assets to,
another corporation or banking association, the resulting, surviving or
transferee corporation, provided it meets the eligibility requirements of
Section 6.12, without any further act shall be the successor Indenture Trustee.
The Indenture Trustee shall provide the Rating Agencies, the Class A Insurer and
the Backup Insurer written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. Appointment of Trust Collateral Agent.
The Issuer and the Indenture Trustee do hereby appoint JPMorgan Chase Bank to
act as the initial trust collateral agent on behalf of the Indenture Trustee and
JPMorgan Chase Bank hereby accepts such appointment.
SECTION 6.11. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust may at the time be located, the Issuer and the
Indenture Trustee acting jointly and at the expense of the Issuer, prior to the
Class A Termination Date with the consent of the Controlling Party, shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person or
Persons, in such capacity and for the benefit of the Class A Noteholders, the
Class A Insurer and the Backup Insurer, such title to the Trust, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Issuer and the Indenture Trustee
may consider necessary or desirable. No co-trustee or separate trustee hereunder
shall be required to meet the terms of eligibility as a successor trustee under
Section 6.12 and no notice to Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon and
exercised or
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performed by the Indenture Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Indenture Trustee joining in
such act), except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed the Indenture Trustee
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding
of title to the Trust or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder, including acts or
omissions of predecessor or successor trustees; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, dissolve, become insolvent, become incapable of acting,
resign or be removed, all of its estates, properties, rights, remedies and
trusts shall vest in and be exercised by the Indenture Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
SECTION 6.12. Eligibility.
The Indenture Trustee under this Indenture shall at all times be a corporation
or banking association acceptable to the Controlling Party having an office in
the same state as the location of the Corporate Trust Office as specified in
this Indenture; organized and doing business under the laws of such state or the
United States of America; authorized under such laws to exercise corporate trust
powers; having a combined capital and surplus of at least $100,000,000; having
long-term unsecured debt obligations which have at least the Required Long-Term
Debt Rating and subject to supervision or examination by federal or state
authorities. If such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined
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capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Indenture Trustee shall cease to be eligible
in accordance with the provisions of this Section, the Indenture Trustee shall
resign immediately.
SECTION 6.13. Trust Collateral Agent to Follow Indenture Trustee's
Directions.
The Indenture Trustee hereby authorizes the Trust Collateral Agent to take such
action on its behalf, and to exercise such rights, remedies, powers and
privileges hereunder, as the Indenture Trustee may direct and as are
specifically authorized to be exercised by the Trust Collateral Agent by the
terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto.
SECTION 6.14. Representations and Warranties of the Indenture
Trustee.
The Indenture Trustee represents and warrants to the Issuer as follows:
(i) The Indenture Trustee is a banking corporation, duly
organized and validly existing under the laws of New York and is
authorized and licensed to conduct and engage in a banking and trust
business under such laws.
(ii) The Indenture Trustee has full corporate power,
authority, and legal right to execute, deliver, and perform this
Indenture, and has taken all necessary action to authorize the execution,
delivery, and performance by it of this Indenture and the other Basic
Documents to which it is a party.
(iii) Each of this Indenture, and the other Basic Documents to
which it is a party, has been duly executed and delivered by the Indenture
Trustee.
(iv) Each of this Indenture, and the other Basic Documents to
which it is a party, is a legal, valid and binding obligation of the
Indenture Trustee enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally and to general
principles of equity.
(v) The execution, delivery and performance of this Indenture,
and each other Basic Document to which it is a party, by the Indenture
Trustee will not constitute a violation, to the best of the Indenture
Trustee's knowledge, with respect to any order or decree of any court or
any order, regulation or demand of any federal, State, municipal or
governmental agency binding on the Indenture Trustee, which violation
might have consequences that would materially and adversely affect the
performance of its duties under this Indenture.
(vi) The execution, delivery and performance of this
Indenture, and each other Basic Document to which it is a party, by the
Indenture Trustee do not require any approval or consent of any Person, do
not conflict with the articles of incorporation or bylaws of the Indenture
Trustee.
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SECTION 6.15. Waiver of Setoffs. Each of the Indenture Trustee and
the Trust Collateral Agent hereby expressly waives any and all rights of setoff
that the Indenture Trustee or the Trust Collateral Agent may otherwise at any
time have under applicable law with respect to any Trust Account and agrees that
amounts in the Trust Accounts shall at all times be held and applied solely in
accordance with the provisions hereof and the Sale and Servicing Agreement or
under Article V hereunder.
SECTION 6.16. Controlling Party. Subject to the terms of Section
11.21 hereof and the definition of "Controlling Party," and unless otherwise
specifically set forth herein, the Indenture Trustee and the Trust Collateral
Agent shall comply with notices and instructions given by the Issuer prior to
the Class A Termination Date only if accompanied by the prior written consent of
the Controlling Party, except that if any Indenture Event of Default shall have
occurred and be continuing, the Indenture Trustee and the Trust Collateral Agent
shall act upon and comply with notices and instructions given by the Controlling
Party alone in the place and stead of the Issuer. On or after the Class A
Termination Date, any consent, control and voting rights of the Controlling
Party hereunder shall terminate.
SECTION 6.17. Disqualification of the Indenture Trustee.
If the Indenture Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act of 1939, as amended, the Indenture Trustee
shall either eliminate such interest or resign to the extent in the manner
provided by and subject to the provisions of this Indenture.
SECTION 6.18. Authorization and Direction.
The Issuer hereby authorizes and directs the Indenture Trustee to execute the
Basic Documents to which it is a party.
SECTION 6.19. Action under the Intercreditor Agreement.
Before taking or omitting to take any action under the Intercreditor Agreement,
the Indenture Trustee may request and shall be entitled to receive direction
from the Controlling Party with respect to any action required to be taken by it
thereunder. The Indenture Trustee shall not be required to take any action or
omit to take any action in the absence of such consent.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish To Indenture Trustee Names and
Addresses of Noteholders.
The Issuer will furnish or cause to be furnished to the Indenture Trustee (a)
not more than five days after each Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Holders as of such Record Date, (b) at such other times as the Indenture Trustee
may request in writing, within 30 days after receipt by the Issuer of any such
request, a list of similar form and content as of a date not more than 10 days
prior to
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the time such list is furnished; provided, however, that so long as the
Indenture Trustee is the Note Registrar, no such list shall be required to be
furnished.
SECTION 7.2. Preservation of Information; Communications to
Noteholders.
The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to the Indenture Trustee as provided in Section 7.1 and the names
and addresses of Holders received by the Indenture Trustee in its capacity as
Note Registrar. The Indenture Trustee may destroy any list furnished to it as
provided in such Section 7.1 upon receipt of a new list so furnished.
ARTICLE VIII
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money.
Except as otherwise expressly provided herein, the Indenture Trustee may demand
payment or delivery of, and shall receive and collect, directly and without
intervention or assistance of any fiscal agent or other intermediary, all money
and other property payable to or receivable by the Trust Collateral Agent
pursuant to the Sale and Servicing Agreement. The Indenture Trustee shall apply
all such money received by it, or cause the Trust Collateral Agent to apply all
money received by it as provided in this Indenture and the Sale and Servicing
Agreement. Except as otherwise expressly provided in this Indenture or in the
Sale and Servicing Agreement, if any default occurs in the making of any payment
or performance under any agreement or instrument that is part of the Trust
Property, the Indenture Trustee may at the expense of the Issuer take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate proceedings. Any such action
shall be without prejudice to any right to claim an Indenture Default or
Indenture Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
SECTION 8.2. Release of Trust Property.
Subject to the payment of its fees and expenses pursuant to Section 6.7, the
Indenture Trustee may after the Class A Termination Date, and when required by
the provisions of this Indenture shall, and shall cause the Trust Collateral
Agent to execute instruments to release property from the lien of this
Indenture, in a manner and under circumstances that are not inconsistent with
the provisions of this Indenture. No party relying upon an instrument executed
by the Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.
SECTION 8.3. Opinion of Counsel.
The Indenture Trustee, the Class A Insurer and the Backup Insurer shall receive
at least seven days' written notice when requested by the Issuer to take any
action pursuant to Section 8.2, accompanied by copies of any instruments
involved, and the Indenture Trustee and the
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Controlling Party shall also require as a condition to such action, an Opinion
of Counsel in form and substance satisfactory to the Indenture Trustee, and
prior to the Class A Termination Date, to the Controlling Party, stating the
legal effect of any such action, outlining the steps required to complete the
same, and concluding that all conditions precedent to the taking of such action
have been complied with and such action will not materially and adversely impair
the security for the Class A Notes or the rights of each of the Class A
Noteholders, the Class A Insurer and the Backup Insurer in contravention of the
provisions of this Indenture; provided, however, that such Opinion of Counsel
shall not be required to express an opinion as to the fair value of the Trust
Property. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Class A Notes but,
prior to the Class A Termination Date, with the prior written consent of the
Controlling Party, and with prior notice to the Rating Agencies by the Issuer,
as evidenced to the Indenture Trustee, the Issuer and the Indenture Trustee,
when authorized by an Issuer Order, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Indenture Trustee, and prior to the Class A Termination Date, the Controlling
Party, for any of the purposes set forth in clauses (i)-(vi) below; provided,
however, if any party to this Indenture is unable to sign any amendment due to
its dissolution, winding up or comparable circumstances, then the consent of the
Noteholders and Certificate holders representing at least 51% of the total
current outstanding Class A Note Balance and at least 51% of the current total
Certificate Interest, respectively and the consent of the Controlling Party
shall be sufficient to amend this Agreement without such party's signature:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject to
the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein and
in the Class A Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Holders of the Class A Notes, the Class A Insurer and the Backup
Insurer, or to surrender any right or power herein conferred upon the
Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Trust Collateral Agent;
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(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to add any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental indenture;
provided that such action shall not adversely affect the interests of the
Holders of the Class A Notes; or
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor Indenture Trustee with respect to the
Notes and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one Indenture Trustee, pursuant to the requirements
of Article VI.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained provided that such
action shall not adversely affect the interests of the Holders of the Notes.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Holders of the Class A
Notes but, prior to the Class A Termination Date with the prior written consent
of the Controlling Party, and with prior notice to the Rating Agency by the
Issuer, as evidenced to the Indenture Trustee, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Class A Notes
under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Noteholder.
(c) Notwithstanding anything in this Indenture to the contrary, the
Backup Insurer must consent to all amendments to this Indenture which have an
adverse effect on the Backup Insurer.
SECTION 9.2. Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agencies and with the consent of the
Controlling Party, or if both a Class A Insurer Default and a Backup Insurer
Default have occurred and are continuing, with the consent of the Majority
Noteholders, enter into an indenture or indentures supplemental hereto for the
purpose of modifying in any manner the rights of the Holders of the Class A
Notes under this Indenture; provided, however, if any party to this Indenture is
unable to sign any amendment due to its dissolution, winding up or comparable
circumstances, then the consent of the Class A Noteholders representing at least
51% of the total current outstanding Class A Note Balance or the consent of the
Controlling Party shall be sufficient to amend this Agreement without such
party's signature; provided further, however, that, no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby:
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(i) change the time of payment of any installment of principal
of or interest on any Class A Note, or reduce the principal amount
thereof, the interest rate thereon or the Redemption Price with respect
thereto, change the provision of this Indenture relating to the
application of collections on, or the proceeds of the sale of, the Trust
Property to payment of principal of or interest on the Class A Notes;
(ii) impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any such
amount due on the Class A Notes on or after the respective due dates
thereof (or, in the case of redemption, on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Amount of the
Class A Notes, the consent of the Holders of which is required for any
such supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding Amount";
(v) reduce the percentage of the Outstanding Amount of the
Class A Notes required to direct the Indenture Trustee to direct the
Issuer to sell or liquidate the Trust Property pursuant to Section 5.4;
(vi) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified or
waived without the consent of the Holder of each Outstanding Note affected
thereby;
(vii) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Distribution Date (including
the calculation of any of the individual components of such calculation)
or to affect the rights of the Holders of Class A Notes to the benefit of
any provisions for the mandatory redemption of the Class A Notes contained
herein; or
(viii) permit the creation of any Lien ranking prior to or on
a parity with the Lien of this Indenture with respect to any part of the
Trust Property or, except as otherwise permitted or contemplated herein or
in any of the Basic Documents, terminate the Lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Note of
the security provided by the Lien of this Indenture.
The Issuer may determine whether or not any Class A Notes would be
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of all Class A Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
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Notwithstanding anything in this Indenture to the contrary, the
Backup Insurer must consent to all amendments to this Indenture which have an
adverse effect on the Backup Insurer.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Class A Insurer, the Backup Insurer and the Holders of the
Class A Notes to which such amendment or supplemental indenture relates a notice
setting forth in general terms the substance of such supplemental indenture. Any
failure of the Indenture Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures.
In executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Class A Insurer, the Backup Insurer and
the Indenture Trustee shall be entitled to receive, and subject to Sections 6.1
and 6.2, shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Indenture Trustee may, but shall not be obligated to, enter
into any such supplemental indenture that affects the Indenture Trustee's own
rights, duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture.
Upon the execution of any supplemental indenture pursuant to the provisions
hereof, this Indenture shall be and be deemed to be modified and amended in
accordance therewith with respect to the Class A Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Class A Notes shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 9.5. Reference in Class A Notes to Supplemental Indentures.
Class A Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer or the Indenture Trustee shall so determine, new Class A Notes so
modified as to conform, in the opinion of the Indenture Trustee and the Issuer,
to any such supplemental indenture may be prepared and executed by the Issuer
and authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
ARTICLE X
Redemption of Notes
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SECTION 10.1. Redemption.
(a) The Class A Notes are subject to redemption in whole, but not in
part, at the direction of the Seller or the Servicer pursuant to Section
10.01(a) of the Sale and Servicing Agreement, on any Distribution Date on which
the Servicer or the Seller exercises its option to redeem the Trust Property
pursuant to Section 10.01(a) of the Sale and Servicing Agreement for a
redemption price equal to the Redemption Price; provided, however, that the
Indenture Trustee on behalf of the Issuer has received funds sufficient to pay
the Redemption Price. The Issuer shall furnish the Class A Insurer, the Backup
Insurer and the Rating Agencies notice of such redemption. If the Class A Notes
are to be redeemed pursuant to this Section, the Issuer shall furnish notice of
such election to the Class A Insurer, the Backup Insurer, the Trust Collateral
Agent and the Indenture Trustee not later than 45 days prior to the Redemption
Date and promptly upon giving such notice, the Issuer shall deposit or cause to
be deposited with the Indenture Trustee in the Note Distribution Account the
Redemption Price of the Class A Notes to be redeemed whereupon all such Class A
Notes shall be due and payable on the Redemption Date, together with other
amounts due and owing at such time under the Basic Documents, upon the
furnishing of a notice complying with Section 10.2 to each Holder of Notes, the
Class A Insurer and the Backup Insurer.
(b) [Reserved]
(c) If amounts are to be paid to Class A Noteholders pursuant to
Section 10.01(a), the Issuer shall, to the extent practicable, furnish notice of
such event to the Indenture Trustee, the Class A Insurer and the Backup Insurer
not later than 45 days prior to the Redemption Date whereupon all such amounts
shall be payable on the Redemption Date.
SECTION 10.2. Form of Redemption Notice.
Notice of redemption under Section 10.1(a) shall be given by the Indenture
Trustee by facsimile or by first-class mail, postage prepaid, transmitted or
mailed prior to the applicable Redemption Date to each Holder of the Class A
Notes, as of the close of business on the Record Date preceding the applicable
Redemption Date, at such Holder's address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such
Redemption Date is not applicable and that payments shall be made only
upon presentation and surrender of such Class A Notes and the place where
such Class A Notes are to be surrendered for payment of the Redemption
Price (which shall be the office or agency of the Issuer to be maintained
as provided in Section 2.7); and
(iv) that interest on the Class A Notes shall cease to accrue
on the Redemption Date.
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Notice of redemption of the Class A Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Class A Note
shall not impair or affect the validity of the redemption of any other Note.
SECTION 10.3. Class A Notes Payable on Redemption Date.
The Class A Notes to be redeemed shall, following notice of redemption as
required by Section 10.2 (in the case of redemption pursuant to Section
10.1(a)), on the Redemption Date become due and payable at the Redemption Price
and (unless the Issuer shall default in the payment of the Redemption Price) no
interest shall accrue on the Redemption Price for any period after the date to
which accrued interest is calculated for purposes of calculating the Redemption
Price.
ARTICLE XI
Miscellaneous
SECTION 11.1. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer or the Controlling
Party to the Indenture Trustee or the Trust Collateral Agent to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee, or the Trust Collateral Agent, as the case may be, and to the Class A
Insurer and the Backup Insurer, if such request is made by the Issuer, and if
such request is made by the Controlling Party, to the Insurer not then acting as
Controlling Party, an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(ii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is necessary
to enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(iii) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) Prior to the deposit of any Collateral or other property or
securities with the Trust Collateral Agent that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee, the Class A
Insurer, the Backup Insurer and the Trust Collateral Agent an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate (which may be based upon a
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certification of the Seller or the Servicer) as to the fair value (within 90
days of such deposit) to the Issuer of the Collateral or other property or
securities to be so deposited.
(c) Whenever the Issuer is required to furnish to the Indenture
Trustee, the Class A Insurer, the Backup Insurer and the Trust Collateral Agent
an Officer's Certificate certifying or stating the opinion of any signer thereof
as to the matters described in clause (b) above, the Issuer shall also deliver
to the Indenture Trustee, the Class A Insurer, the Backup Insurer and the Trust
Collateral Agent an Independent Certificate as to the same matters, if the fair
value to the Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in the
certificates delivered pursuant to clause (b) above and this clause (c), is 10%
or more of the Outstanding Amount of the Class A Notes, but such a certificate
need not be furnished with respect to any securities so deposited, if the fair
value thereof to the Issuer as set forth in the related Officer's Certificate is
less than $25,000.
(d) Other than with respect to the release of any Purchased Loans,
whenever any property or securities are to be released from the Lien of this
Indenture, the Issuer shall also furnish to the Trust Collateral Agent, the
Class A Insurer and the Backup Insurer an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed to be
released and stating that in the opinion of such person the proposed release
will not impair the security under this Indenture in contravention of the
provisions hereof.
(e) Whenever the Issuer is required to furnish to the Indenture
Trustee, the Class A Insurer and the Backup Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to the matters
described in clause (d) above, the Issuer shall also furnish to the Trust
Collateral Agent, the Class A Insurer and the Backup Insurer an Independent
Certificate as to the same matters if the fair value of the property or
securities and of all other property other than Purchased Loans, or securities
released from the Lien of this Indenture since the commencement of the then
current calendar year, as set forth in the certificates required by clause (d)
above and this clause (e), equals 10% or more of the Outstanding Amount of the
Notes, but such certificate need not be furnished in the case of any release of
property or securities if the fair value thereof as set forth in the related
Officer's Certificate is less than $25,000.
(f) Notwithstanding Section 2.9 or any other provision of this
Section, the Issuer may, without delivering any Officer's Certificates or
Independent Certificates (A) collect, liquidate, sell or otherwise dispose of
Contracts as and to the extent required by the Basic Documents and (B) instruct
the Trust Collateral Agent to make cash payments out of the Trust Accounts as
and to the extent permitted or required by the Basic Documents.
SECTION 11.2. Form of Documents Delivered to Indenture Trustee.
In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more
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other such Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the Seller
or the Issuer, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to conclusively rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Article VI.
SECTION 11.3. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by Class
A Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Class A Noteholders in person or by
agents duly appointed in writing; and except as herein otherwise expressly
provided such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Class A Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any customary manner of the Indenture
Trustee.
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(c) The ownership of Class A Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Class A Notes shall bind the Holder
of every Class A Note issued upon the registration thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to
be done by the Indenture Trustee or the Issuer in reliance thereon, whether or
not notation of such action is made upon such Class A Note.
SECTION 11.4. Notices, etc. to Indenture Trustee, Class A Insurer,
Backup Insurer, Issuer and Rating Agencies.
Any request, demand, authorization, direction, notice, consent, waiver or Act of
Class A Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:
(a) The Indenture Trustee by any Class A Noteholder, the Class A
Insurer, the Backup Insurer or by the Issuer shall be sufficient for every
purpose hereunder if personally delivered, delivered by overnight courier,
mailed certified mail, return receipt requested or by telecopy to: JPMorgan
Chase Bank, 0 Xxx Xxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000, Attention:
Institutional Trust Services/Structured Finance, Telephone: (000) 000-0000,
Telecopy: (000) 000-0000 and shall be deemed to have been duly given upon
receipt to the Indenture Trustee at its principal Corporate Trust Office, or
(b) The Issuer by the Indenture Trustee, the Class A Insurer, the
Backup Insurer or by any Class A Noteholder shall be sufficient for every
purpose hereunder if personally delivered, delivered by overnight courier,
mailed certified mail, return receipt requested or by telecopy to: Credit
Acceptance Corporation, Silver Triangle Building, 00000 Xxxx Xxxxxx Xxxx Xxxx,
Xxxxx 0000, Xxxxxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxx Xxxxxxx,
Telephone: (000) 000-0000 (ext. 217), Telecopy: (000) 000-0000. The Issuer shall
promptly transmit any notice received by it from the Class A Noteholders to the
Indenture Trustee, the Class A Insurer and the Backup Insurer.
(c) Notices required to be given to the Class A Insurer by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, delivered by overnight courier, mailed certified mail,
return receipt requested to the following address: Radian Asset Assurance Inc.,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Chief Risk Officer and
Chief Legal Officer; "Urgent Material Enclosed", and all reporting information
required to be provided to the Class A Insurer shall also be sent by electronic
mail to XXXXX@xxxxxx.xxx.
(d) Notices required to be given to the Backup Insurer by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, delivered by overnight courier, mailed certified mail,
return receipt requested to the following address: XL Capital Assurance Inc.,
Surveillance, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(e) 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, delivered by
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overnight courier, or mailed certified mail, return receipt requested to the
following addresses: Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx
Xxxx, XX 00000; Standard & Poor's Rating Services, 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
or, in each case, to such other address as shall be designated by written notice
from the applicable notice party to the other parties.
SECTION 11.5. Notices to Noteholders; Waiver.
Where this Indenture provides for notice to Class A Noteholders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class, postage prepaid to each Class A
Noteholder affected by such event, at his address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Class A Noteholders is given by mail, neither the failure to mail such notice
nor any defect in any notice so mailed to any particular Class A Noteholder
shall affect the sufficiency of such notice with respect to other Noteholders,
and any notice that is mailed in the manner herein provided shall conclusively
be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agency,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Indenture
Default or Indenture Event of Default.
SECTION 11.6. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Class A Notes to
the contrary, the Issuer may enter into any agreement with any Holder of a Class
A Note providing for a method of payment, or notice by the Indenture Trustee or
any Paying Agent to such Holder, that is different from the methods provided for
in this Indenture for such payments or notices, provided that such methods are
reasonable and consented to by the Indenture Trustee (which consent shall not be
unreasonably withheld). The Issuer will furnish to the Indenture Trustee, the
Class A Insurer and the Backup Insurer a copy of each such agreement and the
Indenture Trustee will cause payments to be made and notices to be given in
accordance with such agreements.
SECTION 11.7. Effect of Headings and Table of Contents.
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The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.8. Successors and Assigns.
All covenants and agreements in this Indenture and the Class A Notes by the
Issuer shall bind its successors and assigns, whether so expressed or not. All
agreements of the Indenture Trustee in this Indenture shall bind its successors.
SECTION 11.9. Separability.
In case any provision in this Indenture or in the Class A Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.10. Benefits of Indenture.
Nothing in this Indenture or in the Class A Notes, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, and the Class A Noteholders, and any other party secured hereunder,
and any other person with an Ownership interest in any part of the Trust
Property, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 11.11. Legal Holidays.
In any case where the date on which any payment is due shall not be a Business
Day, then (notwithstanding any other provision of the Class A Notes or this
Indenture) payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date an
which nominally due, and no interest shall accrue for the period from and after
any such nominal date.
SECTION 11.12. GOVERNING LAW.
THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS
AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH
SUCH LAWS.
SECTION 11.13. Counterparts.
This Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.14. Recording of Indenture.
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If this Indenture is subject to recording in any appropriate public recording
offices, such recording is to be effected by the Issuer and at its expense
accompanied by an Opinion of Counsel (which may be counsel to the Indenture
Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to
the effect that such recording is necessary either for the protection of the
Class A Noteholders or any other person secured hereunder or for the enforcement
of any right or remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.15. Trust Obligation.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Seller, the Owner Trustee, the Trust Collateral
Agent or the Indenture Trustee on the Class A Notes or under this Indenture or
any certificate or other writing delivered in connection herewith or therewith,
against: (i) the Seller, the Indenture Trustee or the Trust Collateral Agent or
the Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Issuer, the Seller, the Servicer, the
Indenture Trustee or the Trust Collateral Agent or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer or of any
successor or assign of the Seller, the Servicer, the Indenture Trustee or the
Trust Collateral Agent or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee or the Trust Collateral Agent and the Owner Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.16. No Petition.
The Indenture Trustee, by entering into this Indenture, and each Class A
Noteholder, by accepting a Class A Note, hereby covenant and agree that they
will not at any time institute against the Seller or the Issuer, or join in any
institution against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or state bankruptcy or similar law.
SECTION 11.17. Inspection.
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee, the Class A Insurer or the Backup
Insurer, during the Issuer's normal business hours, to examine all the books of
account, records, reports, and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall and shall cause its representatives to
hold in confidence all such information except to the extent disclosure may be
required by law or in connection with litigation, and except to the extent that
the Indenture
- 61 -
Trustee may reasonably determine that such disclosure is consistent with its
obligations hereunder and under the Basic Documents.
SECTION 11.18. Maximum Interest Payable.
The Issuer, the Indenture Trustee and the Holders of the Class A Notes
specifically intend and agree to limit contractually the amount of interest
payable under this Indenture, the Class A Notes and all other instruments and
agreements related hereto and thereto to the maximum amount of interest lawfully
permitted to be charged under applicable law. Therefore, none of the terms of
this Indenture, the Class A Notes or any instrument pertaining to or relating to
or executed in connection with this Indenture or the Class A Notes shall ever be
construed to create a contract to pay interest (or amounts deemed to be interest
under applicable law) at a rate in excess of the maximum rate permitted to be
charged under applicable law, and neither the Issuer nor any other party liable
or to become liable hereunder, under the Class A Notes or under any other
instruments and agreements related hereto and thereto shall ever be liable for
interest in excess of the amount determined at such maximum rate, and the
provisions of this Section shall control over all other provisions of this
Indenture, the Class A Notes or any other instrument pertaining to or relating
to the transactions herein or therein contemplated. If any amount of interest
taken or received by the Indenture Trustee or any Holder of a Class A Note shall
be in excess of said maximum amount of interest which, under applicable law,
could lawfully have been collected by the Indenture Trustee or such Holder
incident to such transactions, then such excess shall be deemed to have been the
result of a mathematical error by all parties hereto and shall be automatically
applied to the reduction of the principal amount owing under the Class A Notes
or if such excessive interest exceeds the unpaid principal balance of the Class
A Notes, such excess shall be refunded promptly by the Person receiving such
amount to the party paying such amount. All amounts paid or agreed to be paid in
connection with such transactions which would under applicable law be deemed
"interest" shall, to the extent permitted by such applicable law, be amortized,
prorated, allocated and spread throughout the stated term of the Indenture.
"Applicable law" as used in this paragraph means that law in effect from time to
time which permits the charging and collection of the highest permissible
lawful, nonusurious rate of interest on the transactions herein contemplated
including laws of each State which may be held to be applicable and of the
United States of America, and "maximum rate" as used in this paragraph means,
with respect to each of the Class A Notes, the maximum lawful, nonusurious rates
of interest (if any) which under applicable law may be charged to the Issuer
from time to time with respect to such Class A Notes.
SECTION 11.19. No Legal Title in Holders.
No Holder of a Class A Note shall have legal title to any part of the Trust
Property. No transfer, by operation of law or otherwise, of any Note or other
right, title and interest of any Holder of a Class A Note in and to the Trust
Property or hereunder shall operate to terminate this Indenture or the trusts
hereunder or entitle any successor or transferee of such Holder to an accounting
or to the transfer to it of legal title to any part of the Trust Property.
SECTION 11.20. Third Party Beneficiary.
- 62 -
The parties hereto acknowledge and agree that the Class A Insurer, the Backup
Insurer and the Class A Noteholders are each an express third party beneficiary
of this Indenture.
SECTION 11.21. Control Rights.
So long as any Class A Note is outstanding, the Controlling Party shall have the
power to exercise the voting, consent and control rights granted to the Class A
Noteholders, except as set forth in Sections 9.1 and 9.2 hereof; provided,
however, that after the occurrence and during the continuance of a Class A
Insurer Default, all voting, consent or control rights of the Class A Insurer
shall be suspended and the Backup Insurer shall be the Controlling Party. Upon
the cure of a Class A Insurer Default, such voting, consent and control rights
shall be reinstated and the Backup Insurer shall no longer be the Controlling
Party. If the Backup Insurer is the Controlling Party, after the occurrence and
during the continuance of a Backup Insurer Default, any voting, consent or
control rights granted to the Backup Insurer shall be suspended. Upon the cure
of any such Backup Insurer Default, the Backup Insurer's voting, consent and
control rights shall be reinstated.
[THIS SPACE LEFT INTENTIONALLY BLANK]
-63-
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, hereunto duly
authorized, all as of the day and year first above written.
CREDIT ACCEPTANCE AUTO DEALER LOAN
TRUST 2004-1
By: Wachovia Bank of Delaware,
National Association, not in its
individual capacity but solely as
Owner Trustee,
By: _______________________________
Name:
Title:
JPMORGAN CHASE BANK, not in its
individual capacity but solely
as Indenture Trustee,
By: _______________________________
Name:
Title:
[Indenture Signature Page]
EXHIBIT A
FORM OF CLASS A NOTE
SEE ATTACHED PAGES FOR CERTAIN DEFINITIONS
UNLESS THIS CLASS A NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CLASS A NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CLASS A NOTE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE APPLICABLE
SECURITIES LAWS OF ANY STATE. ACCORDINGLY, TRANSFER OF THIS CLASS A NOTE IS
SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE INDENTURE. BY ITS ACCEPTANCE OF
THIS CLASS A NOTE THE HOLDER OF THIS CLASS A NOTE IS DEEMED TO REPRESENT TO THE
SELLER AND THE INDENTURE TRUSTEE THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT AND IS ACQUIRING THIS NOTE FOR ITS
OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR
OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS).
NO SALE, PLEDGE OR OTHER TRANSFER OF A CLASS A NOTE SHALL BE MADE
UNLESS SUCH SALE, PLEDGE OR OTHER TRANSFER IS (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (B) FOR SO LONG AS THE CLASS A
NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT TO
A PERSON THE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (C) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AND IN EACH OF THE
FOREGOING CASES, IS MADE IN ACCORDANCE WITH SAID ACT AND THE APPLICABLE STATE
SECURITIES AND BLUE SKY LAWS. THE INDENTURE TRUSTEE MAY REQUIRE AN OPINION OF
COUNSEL TO BE DELIVERED TO IT IN CONNECTION WITH ANY TRANSFER OF THE NOTES
PURSUANT TO CLAUSES (A) OR (C) ABOVE. ALL OPINIONS OF COUNSEL
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REQUIRED IN CONNECTION WITH ANY TRANSFER SHALL BE BY COUNSEL REASONABLY
ACCEPTABLE TO THE INDENTURE TRUSTEE.
EACH TRANSFEREE OF THIS CLASS A NOTE IS DEEMED TO REPRESENT AND
WARRANT THAT, WITH RESPECT TO THE SOURCE OF FUNDS TO BE USED BY SUCH TRANSFEREE
TO ACQUIRE THIS CLASS A NOTE (THE "SOURCE") EITHER (A) SUCH SOURCE IS NOT AN
"EMPLOYEE BENEFIT PLAN" (WITHIN THE MEANING OF SECTION 3(3) OF ERISA), A "PLAN"
(WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE CODE) OR A PLAN THAT IS SUBJECT
TO ANY SUBSTANTIALLY SIMILAR PROVISION OF ANY FEDERAL, STATE OR LOCAL LAW, OR A
PERSON USING ASSETS OF ANY SUCH PLAN, OR (B) THE ACQUISITION AND HOLDING OF THIS
CLASS A NOTE BY SUCH SOURCE WILL NOT CONSTITUTE OR RESULT IN A NONEXEMPT
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA, SECTION 4975 OF THE CODE OR
ANY SUBSTANTIALLY SIMILAR PROVISION OF ANY FEDERAL, STATE OR LOCAL LAW.
A-2
REGISTERED
CUSIP 00000XXX0
No. A-1
THE PRINCIPAL OF THIS CLASS A NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS CLASS A NOTE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
CREDIT ACCEPTANCE AUTO DEALER LOAN TRUST 2004-1
2.53% CLASS A ASSET BACKED NOTES
Credit Acceptance Auto Dealer Loan Trust 2004-1, a statutory trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of ONE HUNDRED MILLION DOLLARS
($100,000,000) payable on each Distribution Date in an amount equal to the
aggregate amount, if any, payable from the Note Distribution Account in respect
of principal on the Class A Notes pursuant to Section 3.1 of the Indenture and
Section 5.09 of the Sale and Servicing Agreement until the Class A Note Balance
is reduced to zero; provided, however, that the entire unpaid principal amount
of this Class A Note shall be due and payable on August 17, 2009 (the "Stated
Final Maturity"). The Issuer will pay interest on this Class A Note at the rate
per annum shown above (the "Class A Note Rate"), which shall be due and payable
on each Distribution Date until the principal of this Class A Note is paid, on
the principal amount of this Class A Note outstanding on the last day of the
immediately preceding Collection Period. Interest on this Class A Note will
accrue for each Distribution Date from the preceding Distribution Date to (or,
in the case of the initial Distribution Date, from the Closing Date) but
excluding the current Distribution Date. Interest will be computed on the basis
of a 360-day year and twelve thirty day months.
This Class A Note is one of a duly authorized issue of notes of the
Issuer, designated as its 2.53% Class A Asset Backed Notes (the "Class A
Notes"), issued under an Indenture dated as of August 25, 2004 (such indenture,
as supplemented or amended, is herein called the "Indenture"), between the
Issuer and JPMorgan Chase Bank, as indenture trustee (the "Indenture Trustee",
which term includes any successor Indenture Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights and obligations thereunder of the
Issuer, the Indenture Trustee and the Holders of the Class A Notes. The Class A
Notes are subject to all terms of the Indenture and the Sale and Servicing
Agreement. All terms used in this Class A Note that are defined in the
Indenture, as supplemented or amended, shall have the meanings assigned to them
in or pursuant to the Indenture, as so supplemented or amended.
The Class A Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
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On each Distribution Date, Holders of the Class A Notes will be
entitled to the Class A Interest Distributable Amount and its Class A Principal
Distributable Amount in accordance with the terms of the Indenture.
"Distribution Date" means the fifteenth day of each month, or, if any such date
is not a Business Day, the next succeeding Business Day, commencing September
15, 2004.
The Class A Notes are entitled to the benefits of the Class A Note
Insurance Policy issued by Radian Asset Assurance Inc. (the "Class A Insurer")
and the Backup Insurance Policy issued by XL Capital Assurance Inc. (the "Backup
Insurer"). The Class A Insurer is obligated to pay in accordance with the terms
of the Class A Note Insurance Policy and the Backup Insurer is obligated to pay
in accordance with the terms of the Backup Insurance Policy as described in the
"Statements of Insurance" attached hereto.
As described above, the entire unpaid principal amount of this Class
A Note shall be due and payable on the earlier of the Stated Final Maturity and
the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Class A
Notes shall be due and payable if an Indenture Event of Default shall have
occurred and be continuing, and the Class A Notes have been accelerated subject
to the terms of the Indenture.
All principal payments on the Class A Notes shall be made pro rata
to the Class A Noteholders entitled thereto.
Upon written notice from the Issuer, the Indenture Trustee shall
notify the Person in whose name a Class A Note is registered at the close of
business on the Record Date preceding the Distribution Date on which the Issuer
expects that the final installment of principal of and interest on such Class A
Note will be paid. Such notice shall be mailed or transmitted by facsimile prior
to such final Distribution Date and shall specify that such final installment
will be payable only upon presentation and surrender of such Class A Note and
shall specify the place where such Class A Note may be presented and surrendered
for payment of such installment. Notices in connection with purchases of Class A
Notes shall be mailed to Class A Noteholders as provided in the Indenture.
Distributions required to be made to Class A Noteholders on any
Distribution Date shall be made to each Class A Noteholder of record on the
preceding Record Date either by wire transfer, in immediately available funds,
to the account of such Holder at a bank or other entity having appropriate
facilities therefor, if (i) such Class A Noteholder shall have provided to the
Note Registrar appropriate written instructions at least ten (10) Business Days
prior to such Distribution Date and such Holder's Notes in the aggregate
evidence a denomination of not less than $100,000 and integral multiples of
$1,000 or (ii) such Class A Noteholder is the Seller, or an Affiliate thereof,
or, if not, by check mailed to such Class A Noteholder at the address of such
holder appearing in the Note Register.
The Issuer shall pay interest on overdue installments of interest on
the Class A Notes at the Class A Note Rate to the extent lawful.
A-4
As provided in the Indenture, the Class A Notes may be redeemed
pursuant to Section 10.1(a) of the Indenture, in whole, but not in part, at the
option of the Servicer or the Seller, on any Distribution Date on or after the
date on which the Class A Note Balance is less than or equal to 15% of the
initial Class A Note Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Class A Note may be registered on the Note
Register upon surrender of this Class A Note for registration of transfer at the
office or agency designated by the Issuer pursuant to the Indenture, (i)
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee and the Note Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and (ii) accompanied by such other
documents as the Indenture Trustee may require, and thereupon one or more new
Class A Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Class A Note, but the Indenture Trustee may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any such transfer or exchange of the Class A Notes.
Each Noteholder, by acceptance of a Class A Note covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Seller, the Servicer, the Owner Trustee, the
Indenture Trustee or the Trust Collateral Agent under the Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) the Seller, the Servicer, the Indenture Trustee or the Trust
Collateral Agent or the Owner Trustee, (ii) any owner of a beneficial interest
in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director
or employee of the Issuer, the Seller, the Servicer, the Indenture Trustee or
the Trust Collateral Agent or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Seller, the Servicer, the
Owner Trustee or the Indenture Trustee or the Trust Collateral Agent or of any
successor or assign of the Seller, the Servicer, the Indenture Trustee, the
Owner Trustee in its individual capacity, or the Trust Collateral Agent except
as any such Person may have expressly agreed (it being understood that the
Indenture Trustee or the Trust Collateral Agent and the Owner Trustee have no
such obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each Class A Noteholder, by acceptance of a Class A Note, covenants
and agrees that by accepting the benefits of the Indenture that such Class A
Noteholder will not at any time institute against the Seller or the Issuer or
join in any institution against the Seller or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings, under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Class A Notes, the Indenture
or the Basic Documents. In addition, each Class A Noteholder, by acceptance of a
Class A Note, agrees to treat the Class A Notes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Class A Note, the Issuer, the Indenture Trustee, the Class A Insurer, the Backup
Insurer and the Note Registrar and any agent of the Issuer, the Indenture
Trustee, the Class A Insurer, the Backup Insurer and the
A-5
Note Registrar may treat the Person in whose name this Class A Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Class A Note be overdue, and neither the Issuer, the Indenture Trustee, the
Note Registrar, the Class A Insurer, the Backup Insurer nor any such agent shall
be bound by notice to the contrary.
The term "Issuer" as used in this Class A Note includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee, the Class A Insurer, the Backup Insurer and the Holders of Class A
Notes under the Indenture.
The Class A Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Class A Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Class
A Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Class A Note at the times, place, and rate, and in the coin or currency
herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Indenture or the Basic Documents, neither Wachovia Bank of
Delaware, National Association in its individual capacity, any owner of a
beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Class A Note or the Indenture, it being expressly understood that said
covenants, obligations and indemnifications have been made by the Owner Trustee
for the sole purposes of binding the interests of the Owner Trustee in the
assets of the Issuer. The Holder of this Class A Note by the acceptance hereof
agrees that except as expressly provided in the Indenture or the Basic
Documents, in the case of an Indenture Event of Default, the Holder shall have
no claim against any of the foregoing for any deficiency, loss or claim
therefrom; provided, however, that nothing contained herein shall be taken to
prevent recourse to, and enforcement against, the assets of the Issuer for any
and all liabilities, obligations and undertakings contained in the Indenture or
in this Class A Note.
The principal of and interest on this Class A Note are payable in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts. All payments made by
the Issuer with respect to this Class A Note shall be applied first to interest
due and payable on this Class A Note as provided above and then to the unpaid
principal of this Class A Note.
A-6
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Class A
Note shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
A-7
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer as of the date set
forth below.
CREDIT ACCEPTANCE AUTO DEALER LOAN
TRUST 2004-1
By: WACHOVIA BANK OF DELAWARE,
NATIONAL ASSOCIATION, not in
its individual capacity but
solely as Owner Trustee under
the Trust Agreement
By: __________________________
Name:
Title:
Dated: __________________________
A-8
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes designated above and referred to in
the within-mentioned Indenture.
Date: JPMORGAN CHASE BANK, not in its
individual capacity but solely as
Indenture Trustee,
by: _______________________________
Authorized Signatory
A-9
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
(name and address of assignee)
the within Class A Note and all rights thereunder, and hereby irrevocably
constitutes and appoints, attorney, to transfer said Class A Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: _________________________________ ________________________________(1)
------------------
(1) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Class A Note
in every particular, without alteration, enlargement or any change
whatsoever.
A-10
STATEMENT OF INSURANCE
[Class A Note Insurance Policy]
A-11
STATEMENT OF INSURANCE
[Backup Insurance Policy]
A-12
SCHEDULE A
to Indenture
PERFECTION REPRESENTATIONS, WARRANTIES AND COVENANTS
In addition to the representations, warranties and covenants contained in
the Indenture, the Issuer hereby represents, warrants, and covenants to the
Trust, the Trust Collateral Agent and the Indenture Trustee as follows on the
Closing Date and on each Distribution Date on which the Trust purchases Dealer
Loans, in each case only with respect to the Collateral pledged to the Indenture
Trustee on the Closing Date or the relevant Distribution Date:
GENERAL
1. The Indenture creates a valid and continuing security interest (as defined in
UCC Section 9-102) in the Collateral in favor of the Indenture Trustee, which
security interest is prior to all other Liens, and is enforceable as such as
against creditors of and purchasers from and assignees of the Trust.
2. Each Contract constitutes "tangible chattel paper" or a "payment intangible",
within the meaning of UCC Section 9-102. Each Dealer Loan constitutes a "payment
intangible" or a "general intangible" within the meaning of UCC Section 9-102.
3. Each Dealer Agreement constitutes either a "general intangible" or "tangible
chattel paper" within the meaning of UCC Section 9-102.
4. The Trust has taken or will take all steps necessary actions with respect to
the Dealer Loans to perfect its security interest in the Dealer Loans and in the
property securing the Dealer Loans.
CREATION
1. The Trust owns and has good and marketable title to the Collateral, free and
clear of any Lien, claim or encumbrance of any Person, excepting only liens for
taxes, assessments or similar governmental charges or levies incurred in the
ordinary course of business that are not yet due and payable or as to which any
applicable grace period shall not have expired, or that are being contested in
good faith by proper proceedings and for which adequate reserves have been
established, but only so long as foreclosure with respect to such a lien is not
imminent and the use and value of the property to which the Lien attaches is not
impaired during the pendency of such proceeding.
PERFECTION
1. The Trust has caused or will have caused, within ten days after the effective
date of the Indenture, the filing of all appropriate financing statements in the
proper filing office in the appropriate jurisdictions under applicable law in
order to perfect the security interest in the Collateral granted to the
Indenture Trustee under the Indenture.
A-1
2. With respect to Collateral that constitutes tangible chattel paper, such
tangible chattel paper is in the possession of the Servicer, in its capacity as
custodian for the Trust and the Trust Collateral Agent, and the Trust Collateral
Agent has received a written acknowledgment from the Servicer, in its capacity
as custodian, that it is holding such tangible chattel paper solely on its
behalf and for the benefit of the Trust Collateral Agent, the Seller, the Trust
and the relevant Dealer(s). All financing statements filed or to be filed
against the Trust in favor of the Indenture Trustee in connection with this
Indenture describing the Trust Property contain a statement to the following
effect: "A purchase of or security interest in any collateral described in this
financing statement will violate the rights of the Secured Party."
PRIORITY
1. Other than the security interest granted to the Indenture Trustee pursuant to
this Indenture, the Trust has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Trust Property. None of the
Originator, the Servicer nor the Seller has authorized the filing of, or is
aware of any financing statements against either the Seller, the Originator or
the Trust that includes a description of the Collateral and proceeds related
thereto other than any financing statement: (i) relating to the sale of the
Originator Property by the Originator to the Seller under the Contribution
Agreement; (ii) relating to the security interest granted to the Trust under the
Sale and Servicing Agreement; (iii) relating to the security interest granted to
the Indenture Trustee under the Indenture; or (iv) that has been terminated or
amended to reflect a release of the Collateral.
2. Neither the Seller, the Originator nor the Trust is aware of any judgment,
ERISA or tax lien filings against either the Seller, the Originator or the
Trust.
3. None of the tangible chattel paper that constitutes or evidences the
Contracts or the Dealer Agreements has any marks or notations indicating that it
has been pledged, assigned or otherwise conveyed to any Person other than the
Originator, the Servicer, the Seller, the Trust, a collection agent or the
Indenture Trustee.
SURVIVAL OF PERFECTION REPRESENTATIONS
1. Notwithstanding any other provision of the Agreement, the Contribution
Agreement, the Indenture or any other Basic Document, the Perfection
Representations, Warranties and Covenants contained in this Schedule shall be
continuing, and remain in full force and effect (notwithstanding any replacement
of the Servicer or termination of Servicer's rights to act as such) until such
time as all obligations under the Sale and Servicing Agreement, Contribution
Agreement and the Indenture have been finally and fully paid and performed.
NO WAIVER
1. The parties hereto: (i) shall not, without obtaining a confirmation of the
then-current ratings of the Class A Notes (without giving effect to the Class A
Note Insurance Policy or the Backup Insurance Policy), waive any of the
Perfection Representations, Warranties or Covenants; (ii) shall provide the
Rating Agencies with prompt written notice of any breach of the Perfection
Representations, Warranties or Covenants, and shall not, without obtaining a
confirmation of the then-current rating of the Class A Notes (without giving
effect to the Class A
A-2
Note Insurance Policy or the Backup Insurance Policy) as determined after any
adjustment or withdrawal of the ratings following notice of such breach, waive a
breach of any of the Perfection Representations, Warranties or Covenants.
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