EXHIBIT 4.2
INDENTURE
between
UNITED FIDELITY AUTO TRUST 2001-A,
as Issuer
and
-------------------------------,
as Indenture Trustee
Dated as of __________, 2001
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE ..............................................................2
SECTION 1.01. Definitions...............................................................................2
SECTION 1.02. Incorporation by Reference of Trust Indenture Act........................................16
SECTION 1.03. Rules of Construction....................................................................16
ARTICLE II
THE NOTES...............................................................................................17
SECTION 2.01. Form.....................................................................................17
SECTION 2.02. Execution, Authentication and Delivery...................................................17
SECTION 2.03. Temporary Notes..........................................................................18
SECTION 2.04. Registration; Registration of Transfer and Exchange......................................18
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes...............................................19
SECTION 2.06. Payment of Principal and Interest; Defaulted Interest....................................21
SECTION 2.07. Cancellation.............................................................................22
SECTION 2.08. Book-Entry Notes.........................................................................22
SECTION 2.09. Notices to Clearing Agency...............................................................23
SECTION 2.10. Definitive Notes.........................................................................23
SECTION 2.11. Release of Pledged Assets................................................................24
SECTION 2.12. Tax Treatment............................................................................24
SECTION 2.13. ERISA....................................................................................24
SECTION 2.14. CUSIP Numbers............................................................................24
ARTICLE III
COVENANTS...............................................................................................25
SECTION 3.01. Payment of Principal and Interest........................................................25
SECTION 3.02. Maintenance of Office or Agency..........................................................25
SECTION 3.03. Money for Payments to be Held in Trust...................................................25
SECTION 3.04. Existence................................................................................27
SECTION 3.05. Protection of Trust Estate...............................................................27
SECTION 3.06. Opinions as to Pledged Assets............................................................28
SECTION 3.07. Performance of Obligations; Successor Servicer...........................................28
SECTION 3.08. Negative Covenants.......................................................................29
SECTION 3.09. Annual Statement as to Compliance........................................................30
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Conditions..................................30
SECTION 3.11. Successor Transferee.....................................................................33
SECTION 3.12. No Other Business........................................................................33
SECTION 3.13. Servicer's Obligations...................................................................33
SECTION 3.14. Restricted Payments......................................................................33
i
SECTION 3.15. Notice of Events of Default..............................................................34
SECTION 3.16. Further Instruments and Acts.............................................................34
SECTION 3.17. Compliance with Laws.....................................................................34
SECTION 3.18. Amendments of Trust Agreement............................................................34
ARTICLE IV
SATISFACTION AND DISCHARGE..............................................................................34
SECTION 4.01. Satisfaction and Discharge of Indenture..................................................34
SECTION 4.02. Application of Trust Money...............................................................35
SECTION 4.03. Repayment of Monies Held by Paying Agent.................................................35
ARTICLE V
EVENTS OF DEFAULT; REMEDIES.............................................................................36
SECTION 5.01. Events of Default........................................................................36
SECTION 5.02. Rights Upon Event of Default.............................................................37
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture
Trustee..................................................................................38
SECTION 5.04. Remedies.................................................................................40
SECTION 5.05. Optional Preservation of the Receivables.................................................41
SECTION 5.06. Priorities...............................................................................41
SECTION 5.07. Limitation of Suits......................................................................42
SECTION 5.08. Unconditional Rights of Noteholders to Receive Principal and
Interest.................................................................................43
SECTION 5.09. Restoration of Rights and Remedies.......................................................43
SECTION 5.10. Rights and Remedies Cumulative...........................................................43
SECTION 5.11. Delay or Omission Not a Waiver...........................................................44
SECTION 5.12. Control by Noteholders...................................................................44
SECTION 5.13. Waiver of Past Defaults..................................................................44
SECTION 5.14. Undertaking for Costs....................................................................45
SECTION 5.15. Waiver of Stay or Extension Laws.........................................................45
SECTION 5.16. Action on Notes..........................................................................45
SECTION 5.17. Performance and Enforcement of Certain Obligations.......................................46
ARTICLE VI
THE INDENTURE TRUSTEE...................................................................................46
SECTION 6.01. Duties of Indenture Trustee..............................................................46
SECTION 6.02. Rights of Indenture Trustee..............................................................49
SECTION 6.03. Individual Rights of Indenture Trustee...................................................50
SECTION 6.04. Indenture Trustee's Disclaimer...........................................................50
SECTION 6.05. Notice of Defaults.......................................................................50
SECTION 6.06. Reports by Indenture Trustee to Holders..................................................50
SECTION 6.07. Compensation and Indemnity...............................................................50
SECTION 6.08. Replacement of Indenture Trustee.........................................................51
ii
SECTION 6.09. Successor Indenture Trustee by Merger....................................................53
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee........................53
SECTION 6.11. Eligibility..............................................................................54
SECTION 6.12. Preferential Collection of Claims Against Issuer.........................................55
SECTION 6.13. Representations and Warranties of Indenture Trustee......................................55
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS..........................................................................55
SECTION 7.01. Issuer to Furnish Names and Addresses of Noteholders.....................................55
SECTION 7.02. Preservation of Information; Communications to Noteholders...............................56
SECTION 7.03. Reports by Issuer........................................................................56
SECTION 7.04. Reports by Indenture Trustee.............................................................57
ARTICLE VIII
DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS ...........................................................57
SECTION 8.01. Collection Account.......................................................................57
SECTION 8.02. Collections..............................................................................57
SECTION 8.03. Purchase Amounts.........................................................................58
SECTION 8.04. Distributions to Parties.................................................................58
SECTION 8.05. Servicer Advances........................................................................61
SECTION 8.06. Net Deposits.............................................................................61
SECTION 8.07. Release of Pledged Assets................................................................62
SECTION 8.08. Opinion of Counsel.......................................................................62
ARTICLE IX
CREDIT ENHANCEMENT......................................................................................62
SECTION 9.01. Subordination............................................................................62
SECTION 9.02. Spread Account...........................................................................63
SECTION 9.03. Policy...................................................................................64
ARTICLE X
SUPPLEMENTAL INDENTURES.................................................................................66
SECTION 10.01. Supplemental Indentures Without Consent of Noteholders..................................66
SECTION 10.02. Supplemental Indentures With Consent of Noteholders. ...................................67
SECTION 10.03. Execution of Supplemental Indentures....................................................68
SECTION 10.04. Effect of Supplemental Indenture........................................................69
SECTION 10.05. Conformity With Trust Indenture Act.....................................................69
SECTION 10.06. Reference in Notes to Supplemental Indentures...........................................69
ARTICLE XI
REDEMPTION OF NOTES.....................................................................................69
SECTION 11.01. Redemption..............................................................................69
SECTION 11.02. Form of Redemption Notice...............................................................69
iii
SECTION 11.03. Notes Payable on Redemption Date........................................................70
ARTICLE XII
MISCELLANEOUS...........................................................................................70
SECTION 12.01. Compliance Certificates and Opinions, etc...............................................70
SECTION 12.02. Form of Documents Delivered to Indenture Trustee........................................72
SECTION 12.03. Acts of Noteholders.....................................................................73
SECTION 12.04. Notices, etc., to Indenture Trustee, Issuer, Insurer and Rating
Agencies................................................................................73
SECTION 12.05. Notices to Noteholders; Waiver..........................................................74
SECTION 12.06. Alternate Payment and Notice Provisions.................................................75
SECTION 12.07. Conflict With Trust Indenture Act.......................................................75
SECTION 12.08. Effect of Headings and Table of Contents................................................75
SECTION 12.09. Successors and Assigns..................................................................75
SECTION 12.10. Separability............................................................................76
SECTION 12.11. Benefits of Indenture...................................................................76
SECTION 12.12. Legal Holidays..........................................................................76
SECTION 12.13. Governing Law...........................................................................76
SECTION 12.14. Counterparts............................................................................76
SECTION 12.15. Recording of Indenture..................................................................76
SECTION 12.16. Trust Obligation........................................................................76
SECTION 12.17. No Petition.............................................................................77
SECTION 12.18. Inspection..............................................................................77
SECTION 12.19. Limitation of Liability of Owner Trustee................................................77
SECTION 12.20. Certain Matters Regarding the Insurer...................................................77
EXHIBITS
Schedule A Form of Depository Agreement
Exhibit A-1 Form of Class A-1 Note
Exhibit A-2 Form of Class A-2 Note
Exhibit A-3 Form of Class A-3 Note
Exhibit A-4 Form of Class A-4 Note
Exhibit B Form of Class B Note
iv
TRUST INDENTURE ACT CROSS-REFERENCE TABLE
TIA SECTION OF
REQUIREMENT INDENTURE
----------- ----------
310(a)......................................................................6.11
310(b)......................................................................6.11
310(c).......................................................................N/A
311(a)......................................................................6.12
311(b)......................................................................6.12
311(c).......................................................................N/A
312(a)................................................................7.01, 7.02
312(b)......................................................................7.02
312(c)......................................................................7.02
313(a)......................................................................7.04
313(b)......................................................................7.04
313(c)......................................................................7.04
314(a)......................................................................7.03
314(b)......................................................................3.06
314(c)...............................................................4.01, 12.01
314(d).....................................................................12.01
314(e).....................................................................12.01
314(f).......................................................................N/A
315(a)......................................................................6.01
315(b)......................................................................6.05
315(c)......................................................................6.01
315(d)......................................................................6.01
315(e)......................................................................5.14
316(a)......................................................................5.04
316(b).....................................................................10.02
316(c).....................................................................12.03
317(a)......................................................................5.03
317(b)......................................................................3.03
318(c)......................................................................1.02
v
INDENTURE
This INDENTURE, dated as of __________, 2001 is entered into between
UNITED FIDELITY AUTO TRUST 2001-A, a Delaware business trust, as issuer (the
"Issuer"), and ___________________________________, a ______________________
banking corporation, as indenture trustee (the "Indenture Trustee").
Each party agrees as follows for the benefit of the other parties and
for the benefit of the Noteholders and the Insurer:
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee on the Closing Date,
on behalf of and for the benefit of the Noteholders and the Insurer without
recourse, all of the Issuer's right, title and interest in, to and under, (i)
the Receivables listed on Schedule A to the Trust Agreement, (ii) the security
interests in the Financed Vehicles or in any other property granted by Obligors
pursuant to the Receivables, (iii) any Liquidation Proceeds and any proceeds
from claims or refunds of premiums on any physical damage, lender's single
interest, credit life, disability and hospitalization insurance policies
covering Financed Vehicles or Obligors relating to the Receivables, (iv) funds
deposited in the Spread Account (and any Eligible Investments purchased
therewith) and the Collection Account, (v) the interest of the Issuer in any
proceeds from recourse to Dealers relating to the Receivables, (vi) all
documents contained in the Receivable Files relating to the Receivables, (vii)
all monies paid and all monies due, including Accrued Interest, as of and after
the Cutoff Date (but excluding Accrued Interest paid prior to the Closing Date),
(viii) the rights of the Seller pursuant to the Purchase Agreement and the
rights of the Issuer pursuant to the Trust Agreement to require United Fidelity
to repurchase any such Receivables as to which there has been a breach of the
representations and warranties contained therein, (ix) the benefits of the
Policy with respect to the Receivables and (x) all proceeds (including, without
limitation, "proceeds" as defined in the UCC of the jurisdiction the law of
which governs the perfection of the interest in such Receivables so transferred)
of any of the foregoing. Such property described in the preceding sentence,
together with (a) any and all other right, title and interest, including any
beneficial interest the Issuer may have in the Collection Account and the Spread
Account, and (b) the funds deposited in and from time to time on deposit in such
accounts, and all Eligible Investments and other securities, instruments and
other investments purchased from such funds, shall hereinafter be referred to as
the "Pledged Assets." The Issuer does not convey to the Indenture Trustee, and
the Pledged Assets do not include, any interest in any contracts with Dealers
related to any "dealer reserve" or any rights to the recapture of any dealer
reserve with respect to such Receivables.
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction (except as
provided herein with respect to the subordination of the Class B Notes), and
1
to secure compliance with the provisions of this Indenture and the Insurance
Agreement, all as provided in this Indenture and the Insurance Agreement.
The Indenture Trustee, on behalf of the Noteholders and the Insurer,
acknowledges such Grant, accepts the trusts under this Indenture in accordance
with the provisions of this Indenture and agrees to perform its duties required
in this Indenture to the best of its ability to the end that the interests of
the Noteholders may be adequately and effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
Except as otherwise specified herein or as the context may otherwise
require, (i) capitalized terms that are used herein that are not otherwise
defined herein shall have the meanings assigned to them in the Trust Agreement
(as defined below) and (ii) the following terms have the respective meanings set
forth below for all purposes of this Indenture.
"Accelerated Principal" means, for any Payment Date the lesser of (1)
the Available Excess Funds or (2) the amount necessary to reduce the then
aggregate Note Balances below the Pool Balance as of the end of the related
Collection Period until the aggregate Pool Balance exceeds the aggregate Note
Balances by ______% of the Initial Note Balances or $__________ (the
"Accelerated Principal Amount").
"Act" shall have the meaning specified in Section 12.03(a).
"Administration Agreement" means the Administration Agreement, dated as
of __________ among the Trust, the Administrator and the Indenture Trustee.
"Administrator" means the Administrator under the Administration
Agreement, which is initially United Fidelity, and its successors and assigns
thereunder.
"Affiliate" means, as to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" or
"controlled" have the meanings correlative to the foregoing.
"Authorized Officer" means, with respect to the Issuer, any officer of
the Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized Officers
delivered by the Owner Trustee to the Indenture Trustee on the
2
Closing Date (as such list may be modified or supplemented from time to time
thereafter) and, so long as the Administration Agreement is in effect, any vice
president or more senior officer of the Administrator who is authorized to act
for the Administrator in matters relating to the Issuer and to be acted upon by
the Administrator pursuant to the Administration Agreement and who is identified
on a list of Authorized Officers delivered by the Administrator to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Available Excess Funds" for any Payment Date means the amount of
Available Funds remaining from such Payment Date after paying the amounts
pursuant to Section 8.04(a)(i) through (x).
"Available Funds" has the meaning provided in the Trust Agreement.
"Avoided Payment" has the meaning provided in the definition of
Preference Amounts.
"Basic Documents" means the Certificate of Trust, the Trust Agreement,
the Administration Agreement, the Depository Agreement, the Insurance Agreement,
the Policy and this Indenture.
"Book-Entry Notes" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.08.
"Certificateholders" means the owners or holders of the Certificates
pursuant to the Trust Agreement.
"Class" means all Notes whose form is identical except for variation in
denomination, principal amount or owner.
"Class A Monthly Interest" means the sum of Class A-1 Monthly Interest,
Class A-2 Monthly Interest, Class A-3 Monthly Interest and Class A-4 Monthly
Interest.
"Class A Monthly Principal" means the sum of Class A-1 Monthly
Principal, Class A-2 Monthly Principal, Class A-3 Monthly Principal and Class
A-4 Monthly Principal.
"Class A Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3
Note or a Class A-4 Note.
"Class A-1 Interest Rate" means ______% per annum.
"Class A-1 Monthly Interest" means, (i) for the first Payment Date, the
product of one-three hundred sixtieth (1/360th) of the Class A-1 Interest Rate,
the actual number of days from the Closing Date through the day before the first
Payment Date and the Class A-1 Note Balance at the Closing Date and (ii) for any
subsequent Payment Date, the product of one-three hundred sixtieth (1/360th) of
the Class A-1 Interest Rate, the actual number of days from the previous Payment
Date through
3
the day before the related Payment Date and the Class A-1 Note Balance as of the
immediately preceding Payment Date (after giving effect to any distribution of
Monthly Principal made on such immediately preceding Payment Date).
"Class A-1 Monthly Principal" means that portion of Monthly Principal
to be paid to Class A-1 Noteholders on each Payment Date in accordance with
Section 8.04.
"Class A-1 Note" means a promissory note executed on behalf of the
Trust and authenticated by the Indenture Trustee substantially in the form
attached hereto as Exhibit A-1.
"Class A-1 Note Balance" means, at any time, the Initial Class A-1 Note
Balance minus all payments of Monthly Principal to Class A-1 Noteholders made up
to such time.
"Class A-1 Noteholder" means the Person in whose name the respective
Class A-1 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-1 Note registered in the name
of the Issuer, the Seller, the Servicer or United Fidelity, or any Person
controlling, controlled by, or under common control with the Issuer, 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.
"Class A-2 Interest Rate" means ______% per annum.
"Class A-2 Monthly Interest" means, (i) for the first Payment Date, the
product of one-twelfth of the Class A-2 Interest Rate, the number of days from
the Closing Date (assuming the month of the Closing Date has 30 days) through
the day before the first Payment Date divided by 30 and the Class A-2 Note
Balance at the Closing Date and (ii) for any subsequent Payment Date, the
product of one-twelfth of the Class A-2 Interest Rate and the Class A-2 Note
Balance as of the immediately preceding Payment Date (after giving effect to any
distribution of Monthly Principal made on such immediately preceding Payment
Date).
"Class A-2 Monthly Principal" means that portion of Monthly Principal
to be paid to Class A-2 Noteholders on each Payment Date in accordance with
Section 8.04.
"Class A-2 Note" means a promissory note executed on behalf of the
Trust and authenticated by the Indenture Trustee substantially in the form
attached hereto as Exhibit A-2.
"Class A-2 Note Balance" means, at any time, the Initial Class A-2 Note
Balance minus all payments of Monthly Principal to Class A-2 Noteholders made up
to such time.
"Class A-2 Noteholder" means the Person in whose name the respective
Class A-2 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-2 Note
4
registered in the name of the Issuer, the Seller, the Servicer or United
Fidelity, or any Person controlling, controlled by, or under common control with
the Issuer, 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.
"Class A-3 Interest Rate" means _______% per annum.
"Class A-3 Monthly Interest" means, (i) for the first Payment Date, the
product of one-twelfth of the Class A-3 Interest Rate, the number of days from
the Closing Date (assuming the month of the Closing Date has 30 days) through
the day before the first Payment Date divided by 30 and the Class A-3 Note
Balance at the Closing Date and (ii) for any subsequent Payment Date, the
product of one-twelfth of the Class A-3 Interest Rate and the Class A-3 Note
Balance as of the immediately preceding Payment Date (after giving effect to any
distribution of Monthly Principal made on such immediately preceding Payment
Date).
"Class A-3 Monthly Principal" means that portion of Monthly Principal
to be paid to Class A-3 Noteholders on each Payment Date in accordance with
Section 8.04.
"Class A-3 Note" means a promissory note executed on behalf of the
Trust and authenticated by the Indenture Trustee substantially in the form
attached hereto as Exhibit A-3.
"Class A-3 Note Balance" means, at any time, the Initial Class A-3 Note
Balance minus all payments of Monthly Principal to Class A-3 Noteholders made up
to such time.
"Class A-3 Noteholder" means the Person in whose name the respective
Class A-3 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-3 Note registered in the name
of the Issuer, the Seller, the Servicer or United Fidelity, or any Person
controlling, controlled by, or under common control with the Issuer, 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.
"Class A-4 Interest Rate" means _______% per annum; provided, however,
the per annum rate shall be increased by ______% beginning on the first Payment
Date on which the Note Balances (after giving effect to all payments of
principal on such Payment Date) will be less than 10% of the Initial Note
Balances if the Class A-4 Notes will not be redeemed on such Payment Date.
"Class A-4 Monthly Interest" means, (i) for the first Payment Date, the
product of one-twelfth of the Class A-4 Interest Rate, the number of days from
the Closing Date (assuming the month of the Closing Date has 30 days) through
the day before the first Payment Date divided by 30 and the Class A-4 Note
Balance at the Closing Date and (ii) for any subsequent Payment Date, the
product of one-twelfth of the Class A-4 Interest Rate and the Class A-4 Note
Balance as of the
5
immediately preceding Payment Date (after giving effect to any distribution of
Monthly Principal made on such immediately preceding Payment Date).
"Class A-4 Monthly Principal" means that portion of Monthly Principal
to be paid to Class A-4 Noteholders on each Payment Date in accordance with
Section 8.04.
"Class A-4 Note" means a promissory note executed on behalf of the
Trust and authenticated by the Indenture Trustee substantially in the form
attached hereto as Exhibit A-4.
"Class A-4 Note Balance" means, at any time, the Initial Class A-4 Note
Balance minus all payments of Monthly Principal to Class A-4 Noteholders made up
to such time.
"Class A-4 Noteholder" means the Person in whose name the respective
Class A-4 Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class A-4 Note registered in the name
of the Issuer, the Seller, the Servicer or United Fidelity, or any Person
controlling, controlled by, or under common control with the Issuer, 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.
"Class B Interest Rate" means _______% per annum; provided, however,
the per annum rate shall be increased by _______% beginning on the first Payment
Date on which the Note Balances (after giving effect to all payments of
principal on such Payment Date) will be less than 10% of the Initial Note
Balances if the Class B Notes will not be redeemed on such Payment Date.
"Class B Monthly Interest" means, (i) for the first Payment Date, the
product of one-twelfth of the Class B Interest Rate, the number of days from the
Closing Date (assuming the month of the Closing Date has 30 days) through the
day before the first Payment Date divided by 30 and the Class B Note Balance at
the Closing Date and (ii) for any subsequent Payment Date, the product of
one-twelfth of the Class B Interest Rate and the Class B Note Balance as of the
immediately preceding Payment Date (after giving effect to any distribution of
Monthly Principal made on such immediately preceding Payment Date).
"Class B Monthly Principal" means that portion of Monthly Principal to
be paid to Class B Noteholders on each Payment Date in accordance with Section
8.04.
"Class B Note" means a promissory note executed on behalf of the Trust
and authenticated by the Indenture Trustee substantially in the form attached
hereto as Exhibit B.
"Class B Note Balance" means, at any time, the Initial Class B Note
Balance minus all payments of Monthly Principal to Class B Noteholders made up
to such time.
6
"Class B Noteholder" means the Person in whose name the respective
Class B Note shall be registered in the Note Register, except that, solely for
the purposes of giving any consent, waiver, request, or demand pursuant to this
Indenture, the interest evidenced by any Class B Note registered in the name of
the Issuer, the Seller, the Servicer or United Fidelity, or any Person
controlling, controlled by, or under common control with the Issuer, 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.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Code" means the Internal Revenue Code of 1986, as amended.
"Controlling Party" means the Insurer, so long as no Insurer Default
shall have occurred and be continuing, and the Indenture Trustee, for so long as
an Insurer Default shall have occurred and be continuing.
"Corporate Trust Office" means the office of the Indenture Trustee
located at _________________________________ (e-mail address
____________________), (facsimile no. ____________________), Attention:
Corporate Trust Administration.
"Default" means any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Notes" shall have the meaning specified in Section 2.09.
"Depository Agreement" means the agreement dated __________, among the
Issuer, the Indenture Trustee and DTC, as the initial Clearing Agency, relating
to the Notes, substantially in the form of Schedule A hereto.
"DTC" means The Depository Trust Company, a New York corporation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" shall have the meaning specified in Section 5.01(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
7
"Executive Officer" means, with respect to any corporation or bank, the
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation or bank; and with respect to any partnership, any
general partner thereof.
"Final Maturity Date" means __________ with respect to the Class A-1
Notes, __________ with respect to the Class A-2 Notes, __________ with respect
to the Class A-3 Notes, __________ with respect to the Class A-4 Notes and
__________ with respect to the Class B Notes.
"Final Order" has the meaning specified in Section 9.03(b).
"First Loss Protection Amount" means, for each Payment Date, an amount
(not less than zero) equal to the lesser of (a) _______% multiplied by the
outstanding Pool Balance (such amount to be determined as of the last day of the
Collection Period relating to the prior Payment Date, or in the case of the
first Payment Date, as of the Closing Date) less the amount on deposit in the
Spread Account on such last day of the Collection Period relating to such
current Payment Date (or in the case of the first Payment Date, as of the
Closing Date) less the Overcollateralization Amount, and (b) the First Loss
Protection Amount for the prior Payment Date.
"Fiscal Agent" shall have the meaning specified in the Insurance
Agreement.
"Grant" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create and xxxxx x xxxx upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Pledged Assets or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Pledged Assets and all other
monies payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the granting party or otherwise and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Note Register.
"Indebtedness" means, with respect to any Person at any time, (i)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (ii)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (iii) current liabilities of such Person in respect of
unfunded vested benefits under plans covered by Title IV of ERISA; (iv)
obligations issued for or liabilities incurred on the account of such Person;
(v) obligations or liabilities of such Person arising under acceptance
facilities; (vi) obligations of such
8
Person under any guaranties, endorsements (other than for collection or deposit
in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (vii) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (viii) obligations of such
Person under any interest rate or currency exchange agreement.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indenture Trustee" means _____________________, a __________ banking
corporation, as the Indenture Trustee under this Indenture, and its permitted
successors and assigns.
"Independent" when used with respect to any specified Person, means
that such a Person (i) is in fact independent of the Issuer, the Seller and any
of their respective Affiliates, (ii) is not a director, officer or employee of
the Issuer, the Seller or any of their respective Affiliates, (iii) is not a
person related to any officer or director of the Issuer, the Seller or any of
their respective Affiliates, (iv) is not a holder (directly or indirectly) of
more than 10% of any voting securities of the Issuer, the Seller or any of their
respective Affiliates, and (v) is not connected with the Issuer, the Seller or
any of their respective Affiliates as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
"Independent Certificate" means a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 12.01, made by
an Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Initial Class A-1 Note Balance" means $__________.
"Initial Class A-2 Note Balance" means $__________.
"Initial Class A-3 Note Balance" means $__________.
"Initial Class A-4 Note Balance" means $__________.
"Initial Class B Note Balance" means $__________.
"Initial Note Balances" means $__________.
"Insurance Premium" means Premium as defined in the Premium Side Letter
Agreement.
9
"Insurer Default" means the Insurer is in default under the Policy
after the expiration of any applicable cure period.
"Issuer" means the United Fidelity Auto Trust 2001-A as the issuer of
the Notes under this Indenture and its permitted successors and assigns.
"Issuer Order" and "Issuer Request" each means a written order or
request signed in the name of the Issuer by an Authorized Officer and delivered
to the Indenture Trustee.
"Monthly Interest" means the sum of Class A Monthly Interest and Class
B Monthly Interest.
"Monthly Principal" for any Payment Date will equal the sum of the
following:
(i) the amount by which the Pool Balance declined during the related
Collection Period; and
(ii) the additional amount, if any, which is necessary to reduce the
Note Balance of a class of Notes to zero on its Final Maturity Date.
The amount of Monthly Principal otherwise payable on any Payment Date may
be reduced by the Overcollateralization Amount for such Payment Date
created by payments of Accelerated Principal to the Noteholders pursuant to
Section 8.04(b)(i) if the amount of Available Funds are not sufficient to
fully pay the amounts required in Section 8.04(a)(i) through (vi). For the
purpose of determining Monthly Principal, the unpaid principal balance of a
Defaulted Receivable or a Purchased Receivable is deemed to be zero on and
after the last day of the Collection Period in which such Receivable became
a Defaulted Receivable or a Purchased Receivable. In no event will Monthly
Principal exceed the Outstanding Note Balances.
"Net Cumulative Loss Event" has the meaning specified in the Insurance
Agreement.
"Net Cumulative Loss Percentage" means, for any Payment Date, the
fraction (expressed as a percentage) of which the numerator is the aggregate
Principal Balance of all Defaulted Receivables as of such Payment Date less the
aggregate amount of Liquidation Proceeds received after the Cutoff Date as of
such Payment Date and (ii) the denominator is the Original Pool Balance.
"Net Principal Policy Amount" means the Initial Note Balances minus all
amounts previously drawn on the Policy or from the Spread Account with respect
to Monthly Principal.
"Note" means a Class A-1 Note, a Class A-2 Note, a Class A-3 Note, a
Class A-4 Note or a Class B Note.
10
"Note Balances" means, at any time, the Initial Note Balances minus all
payments of principal made to the Noteholders up to such time. The term "Note
Balance" means the Outstanding principal balance of a particular Class of Notes,
depending upon the context. When the term "Note Balances" is used herein with
respect to an issue relating to the consent of or voting of Noteholders, such
term shall refer only to the Classes of Notes then Outstanding such that the
Noteholders will vote as a single class.
"Noteholder" has the meaning provided in the definition of Holder.
"Note Owner" means, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry Note, as reflected on the books of the Clearing
Agency, or on the books of a Person maintaining an account with such Clearing
Agency (directly as a Clearing Agency participant or as an indirect participant,
in each case in accordance with the rules of such Clearing Agency).
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 2.04.
"Officer's Certificate" means a certificate signed by an Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 12.01, and delivered to
the Indenture Trustee.
"Opinion of Counsel" means one or more written opinions of counsel who
may, except as otherwise expressly provided in this Indenture, be employees of
or counsel to the Seller or the Issuer and who shall be satisfactory to the
Indenture Trustee and, if addressed to the Insurer, satisfactory to the Insurer,
and which shall comply with any applicable requirements of Section 12.01, and
shall be in form and substance satisfactory to the Indenture Trustee, and if
addressed to the Insurer, satisfactory to the Insurer.
"Original Pool Balance" means $__________.
"Outstanding" or "Outstanding Notes" means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to
the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture Trustee
or any Paying Agent in trust for the Holders of such Notes (provided,
however, that if such Notes are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision for such
notice, satisfactory to the Indenture Trustee, has been made); and
11
(iii) Notes in exchange for or in lieu of other Notes which have been
authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide purchaser; provided, however, that in determining
whether the Holders of the requisite Outstanding Note Balances have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder or under any other Basic Document, Notes owned by the Issuer, the
Seller or any of their respective Affiliates shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Notes
that the Indenture Trustee knows to be so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that
the pledgee is not the Issuer, the Seller or any of their respective
Affiliates.
"Overcollateralization Amount" means, for any Payment Date, the
positive amount which is equal to the outstanding Pool Balance as of the end of
the related Collection Period, less the aggregate Note Balances as of such
Payment Date, after giving effect to any distributions of principal on such
Payment Date.
"Owner Trustee" means _______________________________, acting not in
its individual capacity but solely as trustee under the Trust Agreement on
behalf of the Trust.
"Paying Agent" means the Indenture Trustee or any other Person that
meets the eligibility standards for the Indenture Trustee specified in Section
6.11 and is authorized by the Issuer to make the distributions from the
Collection Account, including payment of principal of or interest on the Notes
on behalf of the Issuer.
"Pledged Assets" has the meaning provided in the Granting Clause of
this Indenture.
"Policy" means the irrevocable financial guaranty insurance policy
dated as of __________, issued by the Insurer to the Indenture Trustee for the
benefit of the Noteholders and having a maximum amount available to be drawn in
respect of the Monthly Servicing Fee, Monthly Interest and Monthly Principal
equal to the Policy Amount.
"Policy Amount" on any Payment Date means:
(A) the sum of:
(x) the Monthly Servicing Fee;
(y) Monthly Interest; and
12
(z) the lesser of (i) the Outstanding Note Balances on such
Payment Date (after giving effect to any distributions of Available
Funds and any funds withdrawn from the Spread Account to pay Monthly
Principal on such Payment Date) and (ii) the Net Principal Policy
Amount (after giving effect to any distributions of Available Funds and
any funds withdrawn from the Spread Account to pay Monthly Principal).
less:
----
(B) all amounts on deposit in the Spread Account on such Payment Date
(after giving effect to any amounts withdrawn from the Spread Account on such
Payment Date).
"Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Preference Amounts" means any amount guaranteed pursuant to the Policy
which is voided (a "Preference Event") under any applicable bankruptcy,
insolvency, receivership or similar law in an Insolvency Proceeding, and, as a
result of such a Preference Event, the Indenture Trustee or any Noteholder is
required to return such voided payment, or any portion of such voided payment
made or to be made in respect of the Notes (an "Avoided Payment").
"Premium Side Letter Agreement" means the letter dated the Closing Date
as defined in the Insurance Agreement.
"Principal Payment Sequence" means the order in which Monthly Principal
shall be distributed among the Noteholders. The order of distribution of Monthly
Principal is:
(1) to the Class A-1 Noteholders until the Class A-1 Note Balance has
been reduced to zero;
(2) to the Class A-2 Noteholders until the Class A-2 Note Balance has
been reduced to zero;
(3) to the Class A-3 Noteholders until the Class A-3 Note Balance has
been reduced to zero;
(4) to the Class A-4 Noteholders until the Class A-4 Note Balance has
been reduced to zero; and
(5) to the Class B Noteholders until the Class B Note Balance has
been reduced to zero.
13
However, if the amount of Available Funds (together with amounts withdrawn from
the Spread Account and/or the Policy) are not sufficient on any Payment Date to
pay the required payment of Class A Monthly Principal to Class A Noteholders in
full, the amount of such funds available to pay Class A Monthly Principal to
Class A Noteholders will be distributed pro rata to the Class A Noteholders
based upon the relative Note Balance of each class of Class A Notes.
"Proceeding" means any suit in equity, action at law or other judicial
or administrative proceeding.
"Rating Agency Condition" means, with respect to any action, that (i)
__________ shall have been given ten Business Days (or such shorter period as is
acceptable to __________) prior notice thereof and that __________ shall have
notified the Seller, the Servicer, the Insurer and the Issuer in writing that
such action will not result in a qualification, reduction or withdrawal of its
then-current rating of any Class of Notes, (ii) __________ shall have been given
ten Business Days (or such shorter period as is acceptable to __________) prior
notice thereof and copies of all documentation relating to the event requiring
such Rating Agency Condition and (iii) each Rating Agency shall have confirmed
to the Insurer that the shadow risk of the Insurer with respect to the Notes is
investment grade.
"Rating Event" means the qualification, reduction or withdrawal by
either Rating Agency of its then current rating of any Class of Notes.
"Record Date" means, with respect to a Payment Date or Redemption Date,
the close of business on the Business Day immediately preceding such Payment
Date or Redemption Date or, in the event that Definitive Notes are issued, the
close of business on the last day of the related Collection Period.
"Redemption Date" means the Payment Date specified by the Servicer or
the Issuer pursuant to Section 11.01.
"Redemption Price" means an amount equal to the unpaid principal amount
of the Notes redeemed plus accrued and unpaid interest thereon at the respective
interest rates of each Class of Notes being so redeemed to but excluding the
Redemption Date.
"Required Cash Floor" means, on each Payment Date, ______% of the
Original Pool Balance; provided, that on any Payment Date on which a Net
Cumulative Loss Event (as defined in the Insurance Agreement) has occurred and
has not been cured, the Required Cash Floor shall equal ______% of the Original
Pool Balance; provided further, that in the event that a Net Cumulative Loss
Event, an Event of Default, or a Trigger Event shall have occurred and then been
cured and the First Loss Protection Amount shall be greater than zero, the
Required Cash Floor shall equal the greater of (a) _______% of the Original Pool
Balance, and (b) the product of (x) a fraction, the numerator of which is the
amount on deposit in the Spread Account at the beginning of the first Collection
Period commencing after any of such events is cured, and the denominator of
which is
14
the Pool Balance as of the beginning of such Collection Period, and (y) the Pool
Balance as of the end of the Collection Period related to the current Payment
Date.
"Required Spread Amount" means, on each Payment Date, the Required Cash
Floor; provided, that on or after the first Payment Date on which the Excess
Yield Requirement (as defined in the Insurance Agreement) has not been met, the
Required Spread Amount shall be the greater of (a) the Required Cash Floor then
in effect and (b) (i) ________% of the Pool Balance as of the end of the
Collection Period related to the current Payment Date less (ii) the
Overcollateralization Amount. Notwithstanding the foregoing, upon and during the
continuance of an Event of Default or a Trigger Event, the Required Spread
Amount shall be equal to the Policy Amount as of such Payment Date, without
giving effect to amounts on deposit in the Spread Account, after giving effect
to any draws on the Policy, draws on the Spread Account and other distributions
pursuant to Section 8.04 on such Payment Date. Once such Event of Default or
Trigger Event has been cured or discontinued, the Required Spread Amount shall
be determined as otherwise set forth above.
"Responsible Officer" means, when used with respect to the Indenture
Trustee, any officer within the corporate trust department of the Indenture
Trustee including any vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Indenture Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Servicer Default" means an Event of Servicer Default under the Trust
Agreement.
"Spread Account" shall have the meaning specified in Section 9.02(a).
"State" means any one of the 00 xxxxxx xx xxx Xxxxxx Xxxxxx or the
District of Columbia.
"Termination Date" means the latest of (i) the expiration of the Policy
and the return of the Policy to the Insurer for cancellation, (ii) the date on
which the Insurer shall have received payment and performance of all amounts and
obligations which the Issuer may owe to or on behalf of the Insurer under this
Indenture and (iii) the date on which the Indenture Trustee shall have received
payment and performance of all amounts and obligations which the Issuer may owe
to or on behalf of the Indenture Trustee for the benefit of the Noteholders
under this Indenture or the Notes.
"Trigger Event" has the meaning provided in the Insurance Agreement.
"Trust Agreement" means the Trust and Servicing Agreement, dated as of
the date hereof, among the Seller, the Servicer and the Owner Trustee.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
as amended, as in force on the date hereof, unless otherwise specifically
provided.
00
"Xxxxxx Xxxxxx" xxxxx xxx Xxxxxx Xxxxxx of America.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Indenture Securities" means the Notes.
"Indenture Security Holder" means a Noteholder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Indenture
Trustee.
"Obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in the
plural include the singular;
(vi) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection
herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of
agreements or instruments) references to
16
all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and
assigns; and
(vii) the words "hereof," "herein" and "hereunder" and words of
similar import when used in this Indenture shall refer to this
Indenture as a whole and not to any particular provision of this
Indenture; Section, subsection and Schedule references contained in
this Indenture are references to Sections, subsections and Schedules
in or to this Indenture unless otherwise specified.
ARTICLE II
THE NOTES
SECTION 2.01. Form.
(a) The Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes and Class B Notes, in each case together with the Indenture Trustee's
certificate of authentication, shall be in substantially the forms set forth as
Exhibits X-0, X-0, X-0, X-0 and B to this Indenture with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution of the Notes. Any portion of the text of any Note
may be set forth on the reverse thereof, with an appropriate reference thereto
on the face of the Note.
(b) Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in the exhibits hereto are part of the terms of this
Indenture.
SECTION 2.02. Execution, Authentication and Delivery.
(a) The Notes shall be executed on behalf of the Issuer by the Owner
Trustee, as provided herein. The signature of any Authorized Officer on the
Notes may be manual or facsimile. Notes bearing the manual or facsimile
signature of individuals who were at any time Authorized Officers of the Issuer
shall bind the Issuer, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Notes or did not hold such offices at the date of such Notes.
(b) The Indenture Trustee shall, upon receipt of an Issuer Order,
authenticate and deliver for original issue Notes in the amount of the Initial
Class A-1 Note Balance, the Initial Class A-2 Note Balance, the Initial Class
A-3 Note Balance, the Initial Class A-4 Note Balance and the Initial Class B
Note Balance. The aggregate principal amount of the Notes outstanding at any
time may not exceed such respective amounts, except as otherwise provided in
Section 2.05. Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the
17
minimum denomination of $1,000 and in integral multiples of $1,000 in excess
thereof, except that one Note of each Class may be issued in a different
denomination.
(c) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for in the
forms of Notes attached as exhibits to this Indenture executed by the Indenture
Trustee by the manual signature of one of its authorized signatories, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder.
SECTION 2.03. Temporary Notes.
(a) Pending the preparation of Definitive Notes, the Issuer may
execute, and upon receipt of an Issuer Order the Indenture Trustee shall
authenticate and deliver, temporary Notes that are printed, lithographed,
typewritten, mimeographed or otherwise produced, of the tenor of the Definitive
Notes in lieu of which they are issued and with such variations not inconsistent
with the terms of this Indenture as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
(b) If temporary Notes are issued, the Issuer will cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Issuer to
be maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver in exchange
therefor a like tenor and principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.04. Registration; Registration of Transfer and Exchange.
(a) The Issuer shall cause to be kept a register (the "Note Register")
in which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee shall be the initial "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
(b) If a Person other than the Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and the Indenture Trustee shall have the right to rely
upon a certificate
18
executed on behalf of the Note Registrar by an Executive Officer thereof as to
the names and addresses of the Noteholders and the principal amounts and number
of such Notes.
(c) Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.02, the
Issuer shall execute, and the Indenture Trustee shall authenticate and the
Noteholder shall obtain from the Indenture Trustee, in the name of the
designated transferee or transferees, one or more new Notes of the same Class in
any authorized denominations, of a like aggregate principal amount.
(d) At the option of the Holder, Notes may be exchanged for other Notes
of the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, the Notes which the Noteholder making the exchange
is entitled to receive.
(e) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by a commercial bank or trust company located, or having a
correspondent located, in the city of New York or the city in which the
Corporate Trust Office is located, or by a member firm of a national securities
exchange, and such other documents as the Indenture Trustee may require.
(g) No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the Indenture Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.03 or 10.06 not
involving any transfer.
(h) The preceding provisions of this Section notwithstanding, the
Issuer shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to the
Note.
SECTION 2.05. Mutilated, Destroyed, Lost or Stolen Notes.
(a) If (i) any mutilated Note is surrendered to the Indenture Trustee,
or the Indenture Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there
19
is delivered to the Indenture Trustee and the Insurer (unless an Insurer Default
shall have occurred and be continuing) such security or indemnity as may be
required by them to hold the Issuer, the Indenture Trustee and the Insurer
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
the Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same Class; provided,
however, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven days shall be due and payable, or shall
have been called for redemption, instead of issuing a replacement Note, the
Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a bona fide purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer, the Insurer and the Indenture Trustee shall be
entitled to recover such replacement Note (or such payment) from the Person to
whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer, the Insurer or the Indenture Trustee in
connection therewith.
(b) Upon the issuance of any replacement Note under this Section, the
Issuer or the Indenture Trustee may require the payment by the Holder of such
Note of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other reasonable expenses (including the
fees and expenses of the Indenture Trustee or the Note Registrar) connected
therewith.
(c) Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes. In the case of the
registration of transfer of any Note, the Issuer, the Indenture Trustee, the
Insurer and any of their respective agents may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Insurer, the Indenture Trustee nor any of
their respective agents shall be affected by notice to the contrary.
20
SECTION 2.06. Payment of Principal and Interest; Defaulted Interest.
(a) Each Class of Notes shall accrue interest as provided in this
Indenture at the related interest rate for such Class, and such interest shall
be payable on each Payment Date as specified herein, subject to Section 3.01.
Interest accrued on any Note but not paid on any Payment Date will be due on the
immediately succeeding Payment Date, together with, to the extent permitted by
applicable law, interest on such shortfall at the related interest rate. Any
installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.10, with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a Payment
Date, a Redemption Date or on the related Final Maturity Date, as the case may
be (and except for the Redemption Price for any Note called for redemption
pursuant to Section 11.01), which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in accordance
with Section 3.03.
(b) The principal of each Note shall be payable on each Payment Date to
the extent provided in this Indenture and in the form of the related Note set
forth as an Exhibit hereto. Notwithstanding the foregoing, the entire unpaid
principal amount of the Notes of a Class of Notes shall be due and payable, if
not previously paid, on the earlier of:
(i) the Final Maturity Date of such Class;
(ii) the Redemption Date;
(iii) if an Event of Default shall have occurred and be
continuing, so long as an Insurer Default shall not have occurred and
be continuing, the date on which the Insurer shall have declared the
Notes to be immediately due and payable in the manner provided in
Section 5.02; or
(iv) if an Event of Default shall have occurred and be continuing
and an Insurer Default shall have occurred and be continuing, the date
on which the Noteholders representing not less than 66 2/3% of the
Note Balances shall have declared the Notes to be immediately due and
payable in the manner provided in Section 5.02.
All principal payments on each Class of Notes shall be made pro rata to the
Noteholders of such Class entitled thereto. The Indenture Trustee shall notify
the Person in whose name a Note is registered at the close of business on the
Record Date preceding the Payment Date on which the
21
Issuer expects that the final installment of principal of and interest on such
Note will be paid. Such notice shall be mailed within five Business Days of such
Payment Date (or, in the case of Notes registered in the name of Cede & Co., as
nominee of DTC, such notice shall be provided within one Business Day of such
Payment Date) or receipt of notice of termination of the Trust pursuant to
Section 15.01 of the Trust Agreement and shall specify that such final
installment will be payable only upon presentation and surrender of such Note
and shall specify the place where such Note may be presented and surrendered for
payment of such installment. Notices in connection with redemptions of Notes
shall be mailed to Noteholders as provided in Section 11.02. In addition, the
Administrator shall notify the Insurer and the Rating Agencies upon the final
payment of interest on and principal of each Class of Notes, and upon the
termination of the Trust, in each case pursuant to the Administration Agreement.
SECTION 2.07. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Notes may be disposed of by the Indenture
Trustee in accordance with its standard practices.
SECTION 2.08. Book-Entry Notes. The Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes, to
be delivered to DTC, the initial Depository, by, or on behalf of, the Issuer
(except for any fractional units which cannot be accepted by DTC). Such Notes
shall initially be registered on the Note Register in the name of Cede & Co.,
the nominee of the initial Clearing Agency, and no Note Owner will receive a
Definitive Note representing such Note Owner's interest in such Note, except as
provided in Section 2.10. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to Note Owners pursuant to Section
2.10:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of this
Indenture (including the payment of principal of and interest on the
Notes and the giving of instructions or directions hereunder) as the
sole Holder of the Notes, and shall have no obligation to the Note
Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
22
(iv) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants. Pursuant to the Depository
Agreement, unless and until Definitive Notes are issued pursuant to
Section 2.10, the Clearing Agency will make book-entry transfers among
the Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Notes to such Clearing Agency
Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Noteholders evidencing
a specified percentage of the Note Balances, the Clearing Agency shall
be deemed to represent such percentage only to the extent that it has
received instructions to such effect from Note Owners and/or Clearing
Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Indenture Trustee.
SECTION 2.09. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.10, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Noteholders to the Clearing Agency, and shall
have no obligation to the Note Owners.
SECTION 2.10. Definitive Notes.
(a) If (i) the Administrator advises the Indenture Trustee in writing
that the Clearing Agency is no longer willing or able to properly discharge its
responsibilities as described in the Depository Agreement, and the Administrator
or the Indenture Trustee is unable to locate a qualified successor, or (ii)
after the occurrence of an Event of Default or a Servicer Default, Note Owners
representing in the aggregate more than 50% of the Note Balances of all Classes
of Notes advise the Indenture Trustee through the Clearing Agency Participants
in writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of the related Note Owners, then the
Indenture Trustee shall notify all Note Owners, through the Clearing Agency, of
the availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the Note or Notes evidencing the
Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions from the Clearing Agency, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes and deliver such
Definitive Notes in accordance with the instructions of the Clearing Agency.
None of the Issuer, the Note Registrar or the Indenture Trustee shall be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Notes of a Class, the Indenture Trustee shall recognize the Holders
of the Definitive Notes as Noteholders hereunder.
23
(b) The Indenture Trustee shall not be liable if the Indenture Trustee
or the Administrator is unable to locate a qualified successor Clearing Agency.
The Definitive Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.11. Release of Pledged Assets. Subject to Section 12.01 and
the terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with Sections 314(c) and 314(d)(l) of the TIA or an
Opinion of Counsel in lieu of such Independent Certificates to the effect that
the TIA does not require any such Independent Certificates.
SECTION 2.12. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that, for federal,
state and local income, single business and franchise tax purposes, the Notes
will qualify as indebtedness of the Issuer secured by the Pledged Assets. The
Issuer, by entering into this Indenture, and each Noteholder, by its acceptance
of its Note (and each Note Owner by its acceptance of an interest in the
applicable Book-Entry Note), agree to treat the Notes for federal, state and
local income, single business and franchise tax purposes as indebtedness of the
Issuer.
SECTION 2.13. ERISA.
(a) Each purchaser or transferee of a Class A Note that is a Benefit
Plan (as such term is defined in ERISA) shall be deemed to have represented that
the relevant conditions for exemptive relief under Prohibited Transaction Class
Exemption ("PTCE") 00-00, XXXX 00-0, XXXX 91-38, PTCE 95-60 or PTCE 96-23 or
other applicable exemption providing substantially similar relief have been
satisfied.
(b) Neither a Benefit Plan subject to ERISA or Section 4975 of the Code
nor an individual retirement account may purchase a Class B Note.
SECTION 2.14. CUSIP Numbers.
The Issuer in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Indenture Trustee may use such "CUSIP"
numbers in notices of redemption as a convenience to the Holders; provided that
any such notice may state that no representation is made as to the correctness
of such numbers either as printed on the Notes or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Issuer will promptly notify the
Indenture Trustee of any change in the "CUSIP" numbers.
24
ARTICLE III
COVENANTS
SECTION 3.01. Payment of Principal and Interest. The Issuer will duly
and punctually pay Monthly Interest on and Monthly Principal of the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, subject to Section 8.04(a), the Issuer will cause to be distributed
the amount of Available Funds on a Payment Date. The Issuer will cause the
deposits received on Receivables to be deposited into the Collection Account
pursuant to the Trust Agreement for the benefit of the Noteholders. Amounts
properly withheld under the Code by any Person from a payment of interest and/or
principal to any Noteholder shall be considered as having been paid by the
Issuer to such Noteholder for all purposes of this Indenture.
SECTION 3.02. Maintenance of Office or Agency. The Issuer will maintain
or will cause the Administrator or the Indenture Trustee to maintain in The City
of New York, an office or agency where Notes may be surrendered for registration
of transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. The Issuer will give prompt written notice to the Indenture Trustee of
the location, and of any change in the location, of any such office or agency.
If at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Indenture Trustee with the address thereof, such
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Issuer hereby appoints the Indenture Trustee as its agent to
receive all such surrenders, notices and demands.
SECTION 3.03. Money for Payments to be Held in Trust.
(a) As provided in Section 9.02 of the Trust Agreement, all payments of
amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Collection Account or the Spread Account shall be
made on behalf of the Issuer by the Indenture Trustee or by another Paying
Agent, and no amounts so withdrawn from the Collection Account or the Spread
Account for payments with respect to the Notes shall be paid over to the Issuer
except as provided in this Section.
(b) The Notes shall be non-recourse obligations of the Issuer and shall
be limited in right of payment to amounts available from the Pledged Assets and
the Policy as provided in this Indenture and the Issuer shall not otherwise be
liable for payments on the Notes. No Person shall be personally liable for any
amounts payable under the Notes. If any other provision of this Indenture
conflicts or is deemed to conflict with the provisions of this paragraph, the
provisions of this paragraph shall control.
(c) The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee and the Insurer an
instrument in which such Paying Agent shall
25
agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying
Agent, it hereby so agrees), subject to the provisions of this Section, that
such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons by the Paying
Agent or otherwise disposed of as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) in the making of any
payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to
the Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be
met by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
(e) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer upon receipt of an Issuer Request; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only to the
Issuer for payment thereof, and all liability of the Indenture Trustee or such
Paying Agent with respect to such trust money shall thereupon cease; provided,
however, that the Indenture Trustee or such Paying Agent, before being required
to make any such repayment, shall at the expense and direction of the Issuer
cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such
26
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to or for the account of the
Issuer. The Indenture Trustee may also adopt and employ, at the expense of the
Issuer, any other reasonable means of notification of such repayment (including,
but not limited to, mailing notice of such repayment to Holders whose Notes have
been called but have not been surrendered for redemption or whose right to or
interest in monies due and payable but not claimed is determinable from the
records of the Indenture Trustee or of any Paying Agent, at the last address of
record for each such Holder).
SECTION 3.04. Existence. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States, in which
case the Issuer will keep in full effect its existence, rights and franchises
under the laws of such other jurisdiction) and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Indenture, the Notes, and the Pledged Assets.
SECTION 3.05. Protection of Trust Estate. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Indenture
Trustee on behalf of the Noteholders to be prior to all other liens in respect
of the Pledged Assets, and the Issuer shall take all actions necessary to obtain
and maintain, for the benefit of the Indenture Trustee on behalf of the
Noteholders, a first lien on and a first priority, perfected security interest
in the Pledged Assets. The Issuer will from time to time execute and deliver all
such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
all as prepared by the Servicer and delivered to the Issuer, and will take such
other action necessary or advisable to:
(i) Grant more effectively all or any portion of the Pledged
Assets;
(ii) maintain or preserve the lien and security interest (and the
priority thereof) 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 Pledged Assets;
(v) preserve and defend title to the Pledged Assets and the
rights of the Indenture Trustee and the Noteholders in such Pledged
Assets against the claims of all persons and parties; or
(vi) pay all taxes or assessments levied or assessed upon the
Pledged Assets when due.
27
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute all financing statements, continuation statements or
other instruments required to be executed pursuant to this Section, which are
prepared and delivered to the Indenture Trustee.
SECTION 3.06. Opinions as to Pledged Assets.
(a) On the Closing Date, the Issuer shall furnish to the Indenture
Trustee and the Insurer an Opinion of Counsel to the effect that, in the opinion
of such counsel, either (i) all UCC financing statements and continuation
statements have been executed and filed that are necessary to create and
continue the Indenture Trustee's first priority perfected security interest in
the Pledged Assets (subject to the rights of the Insurer under the Insurance
Agreement) for the benefit of the Noteholders, and reciting the details of such
filings or referring to prior Opinions of Counsel in which such details are
given, or (ii) no such action shall be necessary to perfect such security
interest.
(b) Within 90 days after the beginning of each calendar year beginning
with the first calendar year beginning more than three months after the Cutoff
Date, the Issuer shall furnish to the Indenture Trustee and the Insurer an
Opinion of Counsel, dated as of a date during such 90-day period, to the effect
that, in the opinion of such counsel, either (i) all UCC financing statements
and continuation statements have been executed and filed that are necessary to
create and continue the Indenture Trustee's first priority perfected security
interest in the Pledged Assets (subject to the rights of the Insurer under the
Insurance Agreement) for the benefit of the Noteholders, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (ii) no such action shall be necessary to perfect such
security interest.
SECTION 3.07. Performance of Obligations; Successor Servicer.
(a) The Issuer will not take any action and will use its best efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's material covenants or obligations under any instrument
or agreement included in the Pledged Assets or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in the Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the assistance of
other Persons (including, without limitation, the Administrator under the
Administration Agreement) to assist it in performing its duties and obligations
under this Indenture, and any performance of such duties by a Person identified
to the Indenture Trustee and the Insurer in an Officer's Certificate shall be
deemed to be action taken by the Issuer. The Indenture Trustee shall not be
responsible for the action or inaction of the Servicer or the Administrator.
Initially, the Issuer has contracted with United Fidelity as the Administrator
to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements
28
included in the Pledged Assets, including but not limited to filing or causing
to be filed all UCC financing statements and continuation statements required to
be filed by the terms of this Indenture and the Trust Agreement in accordance
with and within the time periods provided for herein and therein. Except as
otherwise expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without the
consent of the Indenture Trustee, the Insurer (unless an Insurer Default has
occurred and is continuing) and the Holders of at least a majority of the
Outstanding Note Balances of the Notes.
(d) If the Issuer shall have actual knowledge of the occurrence of a
Servicer Default, the Issuer shall promptly notify the Indenture Trustee, the
Insurer and each Rating Agency thereof, and shall specify in such notice the
action, if any, the Issuer is taking with respect to such default. If a Servicer
Default shall arise from the failure of the Servicer to perform any of its
duties or obligations under the Trust Agreement with respect to the Receivables,
the Issuer shall take all reasonable steps available to it to remedy such
failure.
(e) Upon the resignation or termination of the Servicer pursuant to
Section 12.05 or 13.01 of the Trust Agreement, the Indenture Trustee shall
appoint a successor Servicer acceptable to the Insurer. If the Indenture Trustee
shall succeed to the Servicer's duties as servicer of the Receivables as
provided in Section 13.02 of the Trust Agreement, it shall do so in its
individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article Six shall be inapplicable to the
Indenture Trustee in its duties as the successor to the Servicer and the
servicing of the Receivables. In case the Indenture Trustee shall become
successor to the Servicer under the Trust Agreement, the Indenture Trustee shall
be entitled to appoint as Servicer one of its Affiliates; provided that it shall
not be liable for the actions and omissions of any such Affiliate in such
capacity as successor Servicer appointed with due care.
(f) Upon any termination of the Servicer's rights and powers pursuant
to the Trust Agreement, the Issuer shall promptly notify the Indenture Trustee
and the Insurer. As soon as a successor Servicer is appointed, the Issuer shall
notify the Indenture Trustee and the Insurer of such appointment, specifying in
such notice the name and address of such successor Servicer.
(g) The Issuer agrees that it will not waive timely performance or
observance by the Servicer or the Seller of their respective duties under the
Basic Documents: (i) without the prior consent of the Insurer (unless an Insurer
Default shall have occurred and be continuing) or (ii) if the effect thereof
would adversely affect the Noteholders.
SECTION 3.08. Negative Covenants. Until the Termination Date, the
Issuer shall not:
(i) except as expressly permitted by the Basic Documents, sell,
transfer, exchange or otherwise dispose of any of the properties or
assets of the Issuer, including those included in the Pledged Assets,
unless directed to do so by the Indenture Trustee with the prior
written consent of the Insurer (unless an Insurer Default shall have
occurred and be continuing);
29
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of the Notes (other than
amounts properly withheld from such payments under the Code or
applicable state law) or assert any claim against any present or
former Noteholder by reason of the payment of the taxes levied or
assessed upon any part of the Pledged Assets;
(iii) (A) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien created by this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations
with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other than
the lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Pledged Assets or any part thereof or any
interest therein or the proceeds thereof (other than tax liens,
mechanics' liens and other liens that arise by operation of law, in
each case on a Financed Vehicle and arising solely as a result of an
action or omission of the related Obligor), (C) permit the lien
created by this Indenture not to constitute a valid first priority
security interest (other than with respect to any such tax, mechanics'
or other lien) in the Pledged Assets; or
(iv) dissolve or liquidate in whole or in part.
SECTION 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee and the Insurer, on or before April 30 of each
year, beginning on the first April 30 that is at least six months after the
Closing Date, an Officer's Certificate dated as of December 31 of the preceding
year stating, as to the Authorized Officer signing such Officer's Certificate,
that:
(i) a review of the activities of the Issuer during such year and
of the Issuer's performance under this Indenture has been made under
such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in the compliance of any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc. Only on Certain Conditions.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall (A) be a Person organized and
existing under the laws
30
of the United States or any State, (B) expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture
Trustee and the Insurer, in form and substance satisfactory to the
Indenture Trustee and the Insurer (so long as no Insurer Default shall
have occurred and be continuing), the due and punctual payment of the
principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture and each
other Basic Document on the part of the Issuer to be performed or
observed, all as provided herein, and (C) expressly agree by means of
such supplemental indenture that such Person (or if a group of
Persons, then one specified person) shall make all filings, with the
Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately after giving effect to such consolidation or
merger, no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such consolidation or merger;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Indenture
Trustee and the Insurer to the effect that such consolidation or
merger will not have any material adverse tax consequence to the
Trust, the Insurer, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Insurer an Officer's Certificate and an Opinion of Counsel (which
shall describe the actions taken as required by clause (v) above or
that no such actions will be taken) each stating that such
consolidation or merger and such supplemental indenture comply with
this Article Three and that all conditions precedent herein provided
for relating to such transaction have been compiled with (including
any filings required by the Exchange Act); and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Insurer written notice of
such consolidation or merger at least 20 Business Days prior to the
consummation of such action and shall have received the prior written
approval of the Insurer of such consolidation or merger and the Issuer
or the Person (if other than the Issuer) formed by or surviving such
consolidation or merger has a net worth, immediately after such
consolidation or merger, that is (A) greater than zero and (B) not
less than the net worth of the Issuer immediately prior to giving
effect to such consolidation or merger.
31
(b) The Issuer shall not convey or transfer all or substantially all of
its properties or assets, including those included in the Pledged Assets, to any
Person (except as expressly permitted by the Basic Documents), unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer shall (A) be a United States
citizen or a Person organized and existing under the laws of the
United States or any State, (B) expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee
and the Insurer, in form and substance satisfactory to the Indenture
Trustee and the Insurer (so long as no Insurer Default shall have
occurred and be continuing), the due and punctual payment of the
principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture and each
other Basic Document on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agree by means of such
supplemental indenture that all right, title and interest so conveyed
or transferred shall be subject and subordinate to the rights of
Noteholders, (D) unless otherwise provided in such supplemental
indenture, expressly agree to indemnify, defend and hold harmless the
Issuer against and from any loss, liability or expense arising under
or related to this Indenture and the Notes and (E) expressly agree by
means of such supplemental indenture that such Person (or if a group
of Persons, then one specified Person) shall make all filings with the
Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately after giving effect to such conveyance or
transfer, no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such conveyance or transfer;
(iv) the Issuer shall have received an Opinion of Counsel which
shall be delivered to and shall be satisfactory to the Indenture
Trustee and the Insurer (so long as no Insurer Default shall have
occurred and be continuing) to the effect that such conveyance or
transfer will not have any material adverse tax consequence to the
Trust, the Insurer, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Insurer an Officer's Certificate and an Opinion of Counsel (which
shall describe the actions taken as required by clause (v) above or
that no such actions will be taken) each stating that such conveyance
or transfer and such supplemental indenture comply with this Article
Three and that all conditions precedent herein provided for relating
32
to such transaction have been complied with (including any filings
required by the Exchange Act); and
(vii) so long as no Insurer Default shall have occurred and be
continuing, the Issuer shall have given the Insurer written notice of
such conveyance or transfer of properties or assets at least 20
Business Days prior to the consummation of such action and shall have
received the prior written approval of the Insurer of such conveyance
or transfer and the Person acquiring by conveyance or transfer the
properties or assets of the Issuer has a net worth, immediately after
such conveyance or transfer, that is (A) greater than zero and (B) not
less than the net worth of the Issuer immediately prior to giving
effect to such conveyance or transfer.
SECTION 3.11. Successor Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all or substantially all the
assets or properties of the Issuer pursuant to Section 3.10(b), the Issuer will
be released from every covenant and agreement of this Indenture to be observed
or performed on the part of the Issuer with respect to the Notes immediately
upon the delivery of written notice to the Indenture Trustee and the Insurer
stating that the Issuer is to be so released.
SECTION 3.12. No Other Business. The Issuer shall not engage in (i) any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the other Basic
Documents and activities incidental thereto or (ii) any other business or
activities as contemplated by Section 1.03 of the Trust Agreement.
SECTION 3.13. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with the Servicer's obligations under the Trust Agreement.
SECTION 3.14. Restricted Payments. Except as expressly permitted by the
Basic Documents, the Issuer shall not, directly or indirectly, (i) pay any
dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value
any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; provided, however, that
the Issuer may make, or cause to be made, distributions to the Servicer, the
Indenture Trustee, the Owner Trustee, the Insurer, the Noteholders and the
Certificateholder as contemplated by, and to the extent funds are available for
such purpose under, the Trust Agreement. The Issuer will not, directly or
33
indirectly, make payments to or distributions from the Collection Account except
in accordance with this Indenture and the other Basic Documents.
SECTION 3.15. Notice of Events of Default. The Issuer agrees to give
the Indenture Trustee, the Insurer and each Rating Agency prompt written notice
of each Event of Default hereunder and each default on the part of the Servicer
or the Seller of their respective obligations under the Trust Agreement.
SECTION 3.16. Further Instruments and Acts. Upon request of the
Indenture Trustee or the Insurer, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 3.17. 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 Notes, this Indenture or any
other Basic Document.
SECTION 3.18. Amendments of Trust Agreement. The Issuer shall not agree
to any amendment to Section 16.01 of the Trust Agreement to eliminate the
requirements thereunder that the Noteholders consent to amendments thereto as
provided therein.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.05, 3.07,
3.08, 3.10, 3.11, 3.12, 3.17 and 3.18, (v) the rights, obligations and
immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.07 and the obligations of the Indenture
Trustee under Section 4.02), (vi) the rights of Noteholders as beneficiaries
hereof with respect to the property so deposited with the Indenture Trustee
payable to all or any of them and (vii) the obligation of the Indenture Trustee
to make claims under the Policy, which shall survive the Final Maturity Date of
the Class B Notes and extend through any preference period applicable with
respect to the Notes or any payments made in respect of the Notes, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when
(A) either
(1) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as
34
provided in Section 2.05 and (ii) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such
trust, as provided in Section 3.03) have been delivered to the
Indenture Trustee for cancellation and the Policy has expired and been
returned to the Insurer for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation (i) have become due and payable, (ii) will become due
and payable at the Final Maturity Date of the Class B Notes within one
year, or (iii) are to be called for redemption within one year under
arrangements satisfactory to the Indenture Trustee for the giving of
notice of redemption by the Indenture Trustee in the name, and at the
expense of the Issuer, and the Issuer, in the case of clauses (i),
(ii) or (iii) above, has irrevocably deposited or caused to be
irrevocably deposited with the Indenture Trustee cash or Eligible
Investments for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore
delivered to the Indenture Trustee for cancellation when due to the
Final Maturity Date of the Class B Notes or the Redemption Date (if
Notes shall have been called for redemption pursuant to Section
11.01), as the case may be;
(B) the Issuer has paid or performed or caused to be paid or performed
all amounts and obligations which the Issuer may owe to or on behalf of (1) the
Indenture Trustee for the benefit of the Noteholders under this Indenture or the
Notes and (2) the Insurer under this Indenture and the Basic Documents; and
(C) the Issuer has delivered to the Indenture Trustee and the Insurer
an Officer's Certificate, an Opinion of Counsel and (if required by the TIA, the
Indenture Trustee) an Independent Certificate from a firm of certified public
accountants, each meeting the applicable requirements of Section 12.01(a) and,
subject to Section 12.02, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with and the Rating Agency Condition has been satisfied.
SECTION 4.02. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.01 shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as the Indenture Trustee
may determine, to the Holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Indenture Trustee,
of all sums due and to become due thereon for principal and interest; but such
monies need not be segregated from other funds except to the extent required
herein or in the Trust Agreement or required by law.
SECTION 4.03. Repayment of Monies Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Paying Agent other than the Indenture Trustee under
the provisions of this Indenture with respect
35
to such Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee
to be held and applied according to Section 3.03 and thereupon such Paying Agent
shall be released from all further liability with respect to such monies.
ARTICLE V
EVENTS OF DEFAULT; REMEDIES
SECTION 5.01. Events of Default.
(a) "Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) default in the payment of any interest on any Note when the
same becomes due and payable and such default shall continue for a
period of five days after notice thereof is given to the Issuer by the
Indenture Trustee, the Insurer or the Servicer, or to the Issuer and
the Indenture Trustee by the Holders of at least 25% of the Note
Balances;
(ii) default in the payment of any principal due and payable on a
Class of Notes on the Final Maturity Date for such Class of Notes and
such default shall continue for a period of five days after notice
thereof is given to the Issuer by the Indenture Trustee, the Insurer
or the Servicer, or to the Issuer and the Indenture Trustee by the
Holders of at least 25% of the Note Balances;
(iii) (A) default in the observance or performance of any
covenant or agreement of the Issuer made in this Indenture (other than
a covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), and such
default shall continue or not be cured for a period of 60 days after
notice thereof shall have been given, by registered or certified mail,
to the Issuer, by the Indenture Trustee or the Insurer, or to the
Issuer and the Indenture Trustee by the Holders of at least 25% of the
Note Balances or (B) any representation or warranty made by the Issuer
in this Indenture or in any certificate delivered pursuant hereto or
in connection herewith having been incorrect in a material respect as
of the time made, and such breach not having been cured within 30 days
after notice thereof is given to the Issuer by the Indenture Trustee
or the Insurer, or to the Issuer and the Indenture Trustee by the
Holders of at least 25% of the Note Balances of the Notes;
(iv) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or any
substantial part of the Pledged Assets
36
in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the Issuer or for any
substantial part of the Pledged Assets, or ordering the winding-up or
liquidation of the Issuer's affairs, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(v) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by the Issuer to the
entry of an order for relief in an involuntary case under any such
law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Pledged Assets, or the making by the Issuer of any general
assignment for the benefit of creditors, or the failure by the Issuer
generally to pay its debts as such debts become due, or the taking of
action by the Issuer in furtherance of any of the foregoing;
provided, however, that so long as no Insurer Default shall have occurred and be
continuing, neither the Indenture Trustee nor the Noteholders may declare an
Event of Default under the Indenture. So long as no Insurer Default shall have
occurred and be continuing, an Event of Default shall occur only upon delivery
by the Insurer to the Indenture Trustee of notice of the occurrence of an Event
of Default. The failure to pay principal on a Class of Notes shall not result in
the occurrence of an Event of Default until the Final Maturity Date for such
Class of Notes.
(b) The Issuer shall deliver to the Indenture Trustee and the Insurer,
within five days after obtaining knowledge of the occurrence thereof, written
notice in the form of an Officer's Certificate of any event which with the
giving of notice or the lapse of time would become an Event of Default, its
status and what action the Issuer is taking or proposes to take with respect
thereto.
SECTION 5.02. Rights Upon Event of Default.
(a) So long as no Insurer Default shall have occurred and be
continuing, if an Event of Default shall have occurred and be continuing, then
the Insurer shall have the right, but not the obligation, upon prior written
notice to each Rating Agency, to declare by written notice to the Issuer, the
Servicer and the Indenture Trustee that the Notes become immediately due and
payable, and upon any such declaration the unpaid principal amount of the Notes,
together with accrued and unpaid interest thereon, shall become immediately due
and payable. The Indenture Trustee will have no discretion with respect to the
acceleration of the Notes under the foregoing circumstances. In the event of any
such acceleration of the Notes, the Indenture Trustee shall continue to make
claims under the Policy with respect to the Notes.
(b) If an Insurer Default shall have occurred and be continuing and an
Event of Default shall have occurred and be continuing, the Indenture Trustee
shall, if so requested in writing by the
37
Noteholders representing at least 66 2/3% of the Note Balances, upon prior
written notice to each Rating Agency, declare that the Notes become immediately
due and payable, and upon any such declaration the unpaid principal amount of
the Notes, together with accrued and unpaid interest thereon, shall become
immediately due and payable.
(c) Following any Event of Default, the Insurer may elect to prepay all
or any portion of the outstanding amount of the Notes, plus accrued interest
thereon to the date of payment; provided, however, that the Insurer shall
fulfill its obligations under the Policy.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) The Issuer covenants that, if the Notes are accelerated following
the occurrence of an Event of Default, the Issuer will, upon demand of the
Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders, the whole amount then due and payable on such Notes for principal
and interest, with interest upon the overdue principal, and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue
installments of interest, at the applicable interest rates, and in addition
thereto such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses and
disbursements of the Indenture Trustee and its agents and counsel.
(b) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall (i) if no Insurer Default shall have occurred and be
continuing, at the direction of the Insurer, or (ii) if an Insurer Default shall
have occurred and be continuing, at the direction of the Noteholders
representing at least 66 2/3% of the Note Balances, as more particularly
provided in Section 5.04, proceed to protect and enforce the rights of the
Noteholders, by such appropriate Proceedings as the Indenture Trustee shall deem
most effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
(c) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Pledged Assets, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
38
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to
file such other papers or documents as may be necessary or advisable
in order to have the claims of the Indenture Trustee (including any
claim for reasonable compensation to the Indenture Trustee, each
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all expenses and liabilities
incurred by the Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Noteholders in any election of a trustee, a standby
trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee or the Noteholders allowed in any judicial
Proceedings relative to the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar
official in any such Proceeding is hereby authorized by each of such
Noteholders to make payments to the Indenture Trustee, and, in the
event that the Indenture Trustee shall consent to the making of
payments directly to such Noteholders, to pay to the Indenture Trustee
such amounts as shall be sufficient to cover reasonable compensation
to the Indenture Trustee, each predecessor Indenture Trustee and their
respective agents, attorneys and counsel, and all other expenses and
liabilities incurred by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or bad faith.
(d) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(e) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements
39
and compensation of the Indenture Trustee, each predecessor Indenture Trustee
and their respective agents and attorneys, shall be for the ratable benefit of
the Noteholders.
(f) In any Proceedings brought by the Indenture Trustee (including any
Proceedings involving the interpretation of any provision of this Indenture),
the Indenture Trustee shall be held to represent all the Noteholders, and it
shall not be necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.04. Remedies.
(a) If (i) an Event of Default shall have occurred and be continuing,
the Indenture Trustee shall (subject to Section 5.04(b) below and Section 5.05),
if no Insurer Default shall have occurred and be continuing, at the direction of
the Insurer, or (ii) if an Event of Default shall have occurred and be
continuing, the Indenture Trustee shall (subject to Section 5.04(b) below and
Section 5.05), if an Insurer Default shall have occurred and be continuing, at
the direction of the Noteholders representing at least 66 2/3% of the Note
Balances, take one or more of the following actions as so directed:
(i) institute Proceedings in its own name and as or on behalf of
a trustee of an express trust for the collection of all amounts then
payable on the Notes or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment obtained,
and collect from the Issuer and any other obligor upon such Notes
monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Pledged
Assets;
(iii) exercise any remedies of a secured party under the UCC and
any other remedy available to the Indenture Trustee and take any other
appropriate action to protect and enforce the rights and remedies of
the Indenture Trustee on behalf of the Noteholders under this
Indenture or the Notes;
(iv) sell or cause the Servicer to otherwise liquidate the
Pledged Assets or any portion thereof or rights or interests therein,
at one or more public or private sales called and conducted in any
manner permitted by law and deliver the proceeds of such sale or
liquidation to the Indenture Trustee for distribution in accordance
with the terms of this Indenture; and
(v) maintain possession of the Pledged Assets.
(b) Notwithstanding the foregoing,
40
(i) in the event that the Indenture Trustee is acting at the
direction of the Insurer, so long as no Insurer Default shall have
occurred and be continuing, if an Event of Default specified in
Section 5.01(a)(i), (ii) or (iii) shall have occurred and be
continuing, the Insurer shall not have the right to cause the
Indenture Trustee or the Servicer to, and neither the Indenture
Trustee nor the Servicer shall, liquidate the Pledged Assets in whole
or in part if the Indenture Trustee reasonably believes that the
proceeds of such sale or liquidation would not be sufficient to pay
all outstanding principal of and accrued interest on the Notes; and
(ii) in the event that the Indenture Trustee is acting at the
direction of the Noteholders representing at least 66 2/3% of the Note
Balances, (so long as an Insurer Default shall have occurred and be
continuing), the Noteholders shall not have the right to direct the
Indenture Trustee or the Servicer to, and neither the Indenture
Trustee nor the Servicer shall, liquidate the Pledged Assets in whole
or in part unless an Event of Default as specified in Section
5.01(a)(iv) or (v) shall have occurred and be continuing.
(c) In determining the sufficiency or insufficiency of the proceeds of
a sale or liquidation of the Pledged Assets to pay all amounts required pursuant
to Section 5.04(b)(i) above, the Indenture Trustee may, but need not, at the
sole expense of the Issuer obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Pledged
Assets for such purpose.
SECTION 5.05. Optional Preservation of the Receivables. If the Notes
shall have been declared to be due and payable under Section 5.02 following an
Event of Default and such declaration and its consequences shall not have been
rescinded and annulled, the Indenture Trustee shall, absent direction to the
contrary from the Insurer or the Noteholders pursuant to Section 5.04, maintain
possession of the Pledged Assets.
SECTION 5.06. Priorities.
(a) If the Notes shall have been declared to be due and payable under
Section 5.02 following an Event of Default and such declaration and its
consequences shall not have been rescinded and annulled, any money collected by
the Indenture Trustee with respect to the Pledged Assets or the Notes pursuant
to this Article or otherwise and any money that may then be held or thereafter
received by the Indenture Trustee with respect to the Pledged Assets or the
Notes (excluding any payments made under the Policy), shall be applied as
follows, notwithstanding the provisions of Section 8.04(a) to the contrary:
(i) first, to pay any unpaid Monthly Servicing Fee and
Outstanding Advances to the Servicer;
41
(ii) second, to pay any accrued and unpaid fees of the Indenture
Trustee and the Owner Trustee without preference or priority of any
kind;
(iii) third, to pay Monthly Interest on each Class of Class A
Notes on a pro rata basis based on the interest accrued (including
interest accrued on past due interest) on each Class of Class A Notes;
(iv) fourth, to pay principal on each Class of Class A Notes, on
a pro rata basis based on the Note Balance of each Class of Class A
Notes, until the Note Balance of each Class of Class A Notes is
reduced to zero;
(v) fifth, to pay Monthly Interest on the Class B Notes
(including interest accrued on past due interest);
(vi) sixth, to pay principal on the Class B Notes until the Class
B Note Balance is reduced to zero;
(vii) seventh, to pay amounts owing the Insurer under the
Insurance Agreement; and
(viii) eighth, to the Spread Account, to be applied in accordance
with Section 9.02 hereof and in accordance with the Trust Agreement.
(b) The Indenture Trustee may fix a record date and payment date for
any payment to Noteholders pursuant to this Section. At least 15 days before
such record date, the Issuer shall mail to each Noteholder and the Indenture
Trustee a notice that states the record date, the payment date and the amount to
be paid.
SECTION 5.07. Limitation of Suits.
(a) No Holder of any Note shall have any right to institute any
Proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder shall have previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the Note Balances shall
have made written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
42
(iii) such Holder or Holders shall have offered to the Indenture
Trustee indemnity reasonably satisfactory to it against the costs,
expenses and liabilities to be incurred in complying with such
request;
(iv) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity shall have failed to institute
such Proceedings;
(v) no direction inconsistent with such written request shall
have been given to the Indenture Trustee during such 60 day period by
the Holders of a majority of the Note Balances; and
(vi) an Insurer Default shall have occurred and be continuing.
It is understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Noteholders or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the manner
herein provided.
(b) In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders, each
representing less than a majority of the Note Balances of the Notes, the
Indenture Trustee in its sole discretion may determine which action, if any,
shall be taken, notwithstanding any other provisions of this Indenture and any
such action shall be binding on all parties.
SECTION 5.08. Unconditional Rights of Noteholders to Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payments of Monthly Interest and Monthly Principal on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Indenture
Trustee, the Insurer or any Noteholder shall have instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding shall have
been discontinued or abandoned for any reason or shall have been determined
adversely to the Indenture Trustee, the Insurer or to such Noteholder, then and
in every such case the Issuer, the Indenture Trustee, the Insurer and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the Indenture Trustee and the Noteholders shall
continue as though no such Proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee, the Insurer or to the
Noteholders is intended to be
43
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 5.11. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee, the Insurer or any Holder of any Note to exercise any
right or remedy accruing upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
Five or by law to the Indenture Trustee, the Insurer or to the Noteholders may
be exercised from time to time, and as often as may be deemed expedient, by the
Indenture Trustee, the Insurer or by the Noteholders, as the case may be.
SECTION 5.12. Control by Noteholders. The Holders of a majority of the
Note Balances shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee with
respect to the Notes or exercising any trust or power conferred on the Indenture
Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law
or with this Indenture;
(ii) any direction to the Indenture Trustee to sell or liquidate
the Pledged Assets shall be subject to the terms of Section 5.04; and
(iii) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with such
direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines,
in its sole discretion, might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
SECTION 5.13. Waiver of Past Defaults.
(a) Prior to the declaration of the acceleration of the maturity of the
Notes as provided in Section 5.02, the Insurer or, if an Insurer Default shall
have occurred and be continuing, the Noteholders representing not less than a
majority of the Note Balances, with the consent of the Insurer may waive any
past Default or Event of Default and its consequences except a Default (a) in
the payment of principal of or interest on any of the Notes or (b) in respect of
a covenant or provision hereof that cannot be modified or amended without the
consent of the Holder of each Note, as applicable. In the case of any such
waiver, the Issuer, the Indenture Trustee, the Insurer and the
44
Noteholders shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereto.
(b) Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred,
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit and that such court may in its
discretion assess reasonable costs, including attorneys' fees and expenses,
against any party litigant in such suit, in the manner and to the extent
provided by the Trust Indenture Act; but the provisions of this Section shall
not apply to (i) any suit instituted by the Indenture Trustee, (ii) any suit
instituted by any Noteholder, or group of Noteholders, in each case holding in
the aggregate more than 10% of the Note Balances or (iii) any suit instituted by
any Noteholder for the enforcement of the payment of principal of or interest on
any Note on or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.15. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law or any valuation or appraisement law
wherever enacted, now or at any time hereafter in force, that may affect the
covenants or the performance of this Indenture; and the Issuer (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantages of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Indenture Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 5.16. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Pledged Assets
or upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.06.
45
SECTION 5.17. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so
and at the Administrator's expense, the Issuer shall take all such lawful action
as the Indenture Trustee may request to compel or secure the performance and
observance by the Seller and the Servicer as applicable, of each of their
obligations to the Issuer under or in connection with the Trust Agreement in
accordance with the terms thereof, and to exercise any and all rights, remedies,
powers and privileges lawfully available to the Issuer under or in connection
with the Trust Agreement to the extent and in the manner directed by the
Indenture Trustee, 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 Trust Agreement.
(b) If the Indenture Trustee is the Controlling Party and if an Event
of Default shall have occurred and be continuing, the Indenture Trustee may, and
at the direction (which direction shall be given in writing and may include a
facsimile) of the Holders of 66 2/3% of the Note Balances shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Trust Agreement, including the
right or power to take any action to compel or secure performance or observance
by the 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 Trust Agreement, and any right of the Issuer to
take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.01. Duties of Indenture Trustee.
(a) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee shall exercise the rights and powers vested in it by this
Indenture and with the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs; provided, however, that if the Indenture Trustee
shall assume the duties of the Servicer pursuant to Section 3.07(e), the
Indenture Trustee in performing such duties shall use the degree of care and
skill customarily exercised by a prudent institutional servicer with respect to
automobile retail installment sales contracts that it services for itself or
others.
(b) Except during the continuance of an Event of Default of which a
Responsible Officer of the Indenture Trustee shall have actual knowledge or
written notice:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
46
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture and the other Basic
Documents to which the Indenture Trustee is a party; provided,
however, that the Indenture Trustee shall not be responsible for the
accuracy or content of any of the aforementioned documents and the
Indenture Trustee shall have no obligation to verify, re-compute or
recalculate any numerical information provided to it pursuant to the
Basic Documents.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(i) this paragraph does not limit the effect of Section 6.01(b);
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with
a direction received by it pursuant to Section 5.12.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Indenture Trustee shall not be liable for interest on any money
received by it.
(f) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayments
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
47
(i) The Indenture Trustee shall, and hereby agrees that it will (i)
perform all of the obligations and duties required of it under the Trust
Agreement and (ii) hold the Policy in trust, and will hold any proceeds of any
claim on the Policy in trust solely for application as provided in the Trust
Agreement.
(j) The Indenture Trustee shall have no discretionary duties other than
performing those ministerial acts set forth in this Indenture to accomplish the
purpose of this Trust as set forth in this Indenture or as otherwise required
under the TIA.
(k) The Indenture Trustee shall not be liable in its individual
capacity with respect to any action taken, suffered or omitted to be taken by it
in good faith in accordance with this Indenture or at the direction of Holders
of Notes evidencing a majority of the Outstanding Note Balances, relating to the
time, method and place of conducting any Proceeding for any remedy available to
the Indenture Trustee, or exercising or omitting to exercise any trust or power
conferred upon the Indenture Trustee, under this Indenture.
(l) The Indenture Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any Default or Event of Default unless a
Responsible Officer of the Indenture Trustee shall have received written notice
thereof. In the absence of receipt of such notice, the Indenture Trustee may
conclusively assume that there is no Default or Event of Default.
(m) Subject to the other provisions of this Indenture, the Indenture
Trustee shall have no duty (i) to see to any recording, filing, or depositing of
this Indenture or any agreement referred to herein or any UCC financing
statement or continuation statement evidencing a security interest, or to see to
the maintenance of any such recording or filing or depositing or to any
rerecording, refiling or redepositing of any thereof, (ii) to see to any
insurance, (iii) to see to the payment or discharge of any tax, assessment, or
other governmental charge or any lien or encumbrance of any kind owing with
respect to, assessed or levied against, any part of the Pledged Assets, or (iv)
to confirm or verify the contents of any reports or certificates delivered to
the Indenture Trustee pursuant to this Indenture believed by the Indenture
Trustee to be genuine and to have been signed or presented by the proper party
or parties.
(n) Anything in this Indenture to the contrary notwithstanding, in no
event shall the Indenture Trustee be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Indenture Trustee has been advised of the
likelihood of such loss or damage, regardless of the form of action.
(o) Notwithstanding the foregoing or any other provision in this
Indenture to the contrary, the Indenture Trustee shall be liable in its
commercial capacity for losses attributable to its failure to make payments on
Eligible Investments issued by the Indenture Trustee in its commercial capacity
as principal obligor and not as Indenture Trustee, in accordance with the terms
of the agreements or instruments governing any such Eligible Investments;
48
(p) The Indenture Trustee shall acknowledge and accept the
Administration Agreement on behalf of the Secured Parties.
SECTION 6.02. Rights of Indenture Trustee.
(a) Except as otherwise provided in the second succeeding sentence, the
Indenture Trustee may conclusively rely and shall be protected in acting upon or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, note, direction, demand,
election or other paper or document believed by it to be genuine and to have
been signed or presented by the proper person. The Indenture Trustee need not
investigate any fact or matter stated in the document. Notwithstanding the
foregoing, the Indenture Trustee, subject to Section 6.01(b)(ii) upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to the Indenture Trustee that shall be
specifically required to be furnished pursuant to any provision of this
Indenture, shall examine them to determine whether they comply as to form to the
requirements of this Indenture.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate (with respect to factual matters) or an Opinion
of Counsel, as applicable. The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on the Officer's
Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of any such
agent, attorney, custodian or nominee appointed by the Indenture Trustee with
due care.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Indenture or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Noteholders, pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Indenture Trustee
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities which may be incurred therein or thereby.
49
(g) The Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by a majority of
Noteholders; 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 it against such cost, expense
or liability as a condition to taking any such action.
(h) The right of the Indenture Trustee to perform any discretionary act
enumerated in this Indenture shall not be construed as a duty, and the Indenture
Trustee shall not be answerable for other than its willful misconduct,
negligence or bad faith in the performance of such act.
SECTION 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Paying Agent, Note
Registrar, co-registrar or co-paying agent may do the same with like rights.
However, the Indenture Trustee is required to comply with Sections 6.11 and
6.12.
SECTION 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the Pledged Assets or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in this Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other
than the Indenture Trustee's certificate of authentication.
SECTION 6.05. Notice of Defaults. If a Default shall have occurred and
be continuing and a Responsible Officer of the Indenture Trustee shall have
actual knowledge or shall have received written notice thereof, the Indenture
Trustee shall mail to each Noteholder and the Insurer notice of the Default
within 90 days after it shall have occurred. Except in the case of a Default in
payment of principal of or interest on any Note (including payments pursuant to
the redemption of Notes), the Indenture Trustee may withhold the notice if and
so long as one of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
SECTION 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as it customarily
provides to enable such Holder to prepare its federal and state income tax
returns.
SECTION 6.07. Compensation and Indemnity.
(a) The Issuer shall cause the Servicer to pay to the Indenture Trustee
from time to time reasonable compensation for its services. The Indenture
Trustee's compensation shall not be limited
50
by any law on compensation of a trustee of an express trust. The Issuer shall
cause the Servicer to reimburse the Indenture Trustee for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection, in
addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses and disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts. The Issuer shall,
or shall cause the Administrator to, indemnify the Indenture Trustee against any
and all loss, liability or expense (including attorneys' fees and expenses)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the
Issuer and the Administrator promptly of any claim for which it may seek
indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder. The Issuer shall, or shall cause the Administrator to,
defend any such claim, and the Indenture Trustee may have separate counsel and
the Issuer shall, or shall cause the Administrator to, pay the fees and expenses
of such counsel. Neither the Issuer nor the Administrator need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
(b) The Issuer's obligations to the Indenture Trustee pursuant to this
Section shall survive the resignation or removal of the Indenture Trustee and
the discharge of this Indenture. When the Indenture Trustee incurs expenses
after the occurrence of a Default specified in Section 5.01(a)(iv) or (v) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
SECTION 6.08. Replacement of Indenture Trustee.
(a) The Indenture Trustee may resign at any time by so notifying the
Issuer, the Servicer and the Insurer. The Issuer, may, with the consent of the
Insurer, and, unless an Insurer Default shall have occurred and be continuing,
at the request of the Insurer shall, remove the Indenture Trustee if:
(i) the Indenture Trustee shall have failed to comply with
Section 6.11;
(ii) a court having jurisdiction in the premises in respect of
the Indenture Trustee in an involuntary case or proceeding under
federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, shall have entered a decree or order
granting relief or appointing a receiver, liquidator, assignee,
custodian, trustee, conservator, sequestrator or similar official for
the Indenture Trustee or for any substantial part of the Indenture
Trustee's property, or ordering the winding-up or liquidation of the
Indenture Trustee's affairs, provided any such decree or order shall
have continued unstayed and in effect for a period of 30 consecutive
days;
51
(iii) the Indenture Trustee shall have commenced 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 shall have consented
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 shall have made any assignment
for the benefit of creditors or shall have failed generally to pay its
debts as such debts become due or shall have taken any corporate
action in furtherance of any of the foregoing; or
(iv) the Indenture Trustee otherwise shall have become incapable
of acting.
(b) If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee acceptable to the
Insurer.
(c) A successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon
the resignation or removal of the retiring Indenture Trustee shall become
effective, and the successor Indenture Trustee shall have all the rights, powers
and duties of the Indenture Trustee under this Indenture. The Issuer or the
successor Indenture Trustee shall mail a notice of its succession to
Noteholders. The retiring Indenture Trustee shall promptly transfer all property
held by it as Indenture Trustee to the successor Indenture Trustee.
(d) If a successor Indenture Trustee shall not have taken office within
30 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of the Outstanding
Note Balances may, at the expense of the Issuer, petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall have failed to comply with Section
6.11, any Noteholder may petition any court of competent jurisdiction for the
removal of the Indenture Trustee and the appointment of a successor Indenture
Trustee.
(f) Any resignation or removal of the Indenture Trustee and appointment
of a successor Indenture Trustee pursuant to the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Indenture Trustee pursuant to this Section and payment of all fees and expenses
owed to the outgoing Indenture Trustee. Notwithstanding the replacement of the
Indenture Trustee pursuant to this Section, the retiring Indenture Trustee shall
be entitled to payment or reimbursement of such amounts as such Person is
entitled pursuant to Section 6.07.
52
SECTION 6.09. Successor Indenture Trustee by Merger.
(a) If the Indenture Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business or
assets to, another corporation or banking association, the resulting, surviving
or transferee corporation without any further act shall be the successor
Indenture Trustee; provided, that such corporation or banking association shall
be otherwise qualified and eligible under Section 6.11. The Indenture Trustee
shall provide the Insurer and each Rating Agency prompt notice of any such
transaction.
(b) In case at the time such successor by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture, any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force and effect of the certificate of the Indenture Trustee
pursuant to the Notes or this Indenture.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee.
(a) Notwithstanding any other provision of this Indenture, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
any part of the Pledged Assets may at the time be located, the Indenture Trustee
shall have the power to and may execute and deliver all instruments to appoint
one or more Persons to act as a co-trustee or co-trustees, jointly with the
Indenture Trustee, or separate trustee or separate trustees, of all or any part
of the Trust, and to vest in such Person or Persons, in such capacity and for
the benefit of the Noteholders, such title to the Pledged Assets, or any part
hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor Indenture Trustee under
Section 6.11 and no notice to Noteholders of the appointment of any co-trustee
or separate trustee shall be required under Section 6.08.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that
under any law of any jurisdiction in which any particular act or acts
are to be performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title
53
to the Trust or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of co-appointment, either jointly with the Indenture
Trustee or separately, as may be provided therein, subject to all the provisions
of this Indenture, specifically including every provision relating to the
conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee. Notwithstanding anything to the
contrary in this Indenture, the appointment of any separate trustee or
co-trustee shall not relieve the Indenture Trustee of its obligations and duties
under this Indenture.
SECTION 6.11. Eligibility. The Indenture Trustee shall at all times
satisfy the requirements of TIA Section 310(a). The Indenture Trustee hereunder
shall at all times be a financial institution organized and doing business under
the laws of the United States of America or any state, authorized under such
laws to exercise corporate trust powers, whose long term unsecured debt is rated
at least Baa3 by Moody's and shall have a combined capital and surplus of at
least $50,000,000 or shall be a member of a bank holding system the aggregate
combined capital and surplus of which is $50,000,000 and subject to supervision
or examination by federal or state authority, provided that the Indenture
Trustee's separate capital and surplus shall at all times be at least the amount
required by Section 310(a)(2) of the TIA. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of a
supervising or examining authority, then for the purposes of this Section 6.11,
the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Indenture Trustee shall cease to be
eligible in accordance with the provisions of this Section 6.11, the Indenture
Trustee shall resign immediately in the manner and with the effect
54
specified in Section 6.08. The Indenture Trustee shall comply with TIA Section
310(b); provided, however, that there shall be excluded from the operation of
TIA Section 310(b)(1) any indenture or indentures under which other securities
of the Issuer are outstanding if the requirements for such exclusion set forth
in TIA Sections 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to Section 311(a) to the extent indicated.
SECTION 6.13. Representations and Warranties of Indenture Trustee. The
Indenture Trustee hereby makes the following representations and warranties on
which the Issuer and Noteholders shall rely:
(a) the Indenture Trustee is a corporation duly organized, validly
existing and in good standing under the laws of its place of incorporation; and
(b) the Indenture Trustee has full power, authority and legal right to
execute, deliver, and perform this Indenture and has taken all necessary action
to authorize the execution, delivery and performance by it of this Indenture.
(c) this Indenture has been duly executed and delivered by the
Indenture Trustee and constitutes the legal, valid, and binding agreement of the
Indenture Trustee, enforceable in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency, liquidation,
reorganization, moratorium, conservatorship, receivership or other similar laws
now or hereinafter in effect relating to the enforcement of creditors' rights in
general, as such laws apply in the event of a bankruptcy, insolvency,
liquidation, reorganization, moratorium, conservatorship, receivership or
similar occurrence affecting the Indenture Trustee, and (ii) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law) as well as concepts of reasonableness, good
faith and fair dealing.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.01. Issuer to Furnish Names and Addresses of Noteholders. The
Issuer will furnish or cause to be furnished to the Indenture Trustee or the
Servicer (i) not more than five days after the earlier of (1) each Record Date
and (2) three months after the last Record Date, a list, in such form as the
Indenture Trustee may reasonably require, of the names and addresses of the
Noteholders as of such Record Date and (ii) at such other times as the Indenture
Trustee may request in writing, within 15 days after receipt by the Issuer of
any such request, a list of similar form and content as of a date not more than
ten days prior to the time such list is furnished; provided, however, that so
long as the Indenture Trustee is the Note Registrar, no such list shall be
required to be
55
furnished to the Indenture Trustee, but shall be provided by the Note Registrar
to the Servicer, upon request, as provided above. The Indenture Trustee or, if
the Indenture Trustee is not the Note Registrar, the Issuer shall furnish to the
Insurer in writing at such times as the Insurer may reasonably request a copy of
the list.
SECTION 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.01 and the names and addresses of Noteholders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
SECTION 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the
Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) which the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee
shall transmit by mail to all Noteholders described in TIA Section
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) as may be required by rules and regulations
prescribed from time to time by the Commission.
56
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
(c) Subject to Section 6.01, delivery of such reports, information and
documents to the Indenture Trustee is for informational purposes only and the
Indenture Trustee's receipt of such shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Issuer's compliance with any of its covenants hereunder
(as to which the Indenture Trustee is entitled to conclusively rely exclusively
on Officer's Certificates).
SECTION 7.04. Reports by Indenture Trustee. To the extent that any of
the events described in TIA Section 313(a) shall have occurred, the Indenture
Trustee shall, within 60 days after each December 15 beginning with the first
December which is greater than three months from the date hereof, mail to the
Issuer, the Insurer and each Noteholder as required by TIA Section 313(c) a
brief report dated as of such date that complies with TIA Section 313(a). The
Indenture Trustee also shall comply with TIA Section 313(b).
ARTICLE VIII
DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDERS
SECTION 8.01. Collection Account. The Issuer shall cause the Seller to
establish the Collection Account with the Indenture Trustee or another Eligible
Bank as a segregated trust account in the name of the Indenture Trustee for the
benefit of the Secured Parties. The amounts in the Collection Account shall be
invested in Eligible Investments that mature not later than the Business Day
prior to the next succeeding Payment Date and such Eligible Investments shall be
held to maturity. The Indenture Trustee (or its custodian) shall (i) maintain
possession of any negotiable instruments or securities evidencing Eligible
Investments until the time of sale or maturity and each certificated security or
negotiable instrument evidencing an Eligible Investment shall be endorsed in
blank or to the Indenture Trustee or registered in the name of the Indenture
Trustee and (ii) cause any Eligible Investment represented by an uncertificated
security to be registered in the name of the Indenture Trustee.
SECTION 8.02. Collections. The Indenture Trustee shall review the
Servicer's Certificate prepared by the Servicer immediately upon receipt thereof
pursuant to Section 8.09 of the Trust Agreement.
For any Payment Date on which there will not be sufficient Available
Funds to make the distributions required pursuant to Sections 8.04(a)(i) through
(vii), the Indenture Trustee shall withdraw or direct the Servicer to withdraw
from the Spread Account, to the extent of the Available Spread Amount, an amount
equal to such deficiency (after consideration of the adjustment provided in
Section 8.04(b)(i)) and promptly deposit such amount in the Collection Account;
or, if the Notes shall have been declared to be due and payable under Section
5.02 following an Event of Default,
57
for any Payment Date on which there will not be sufficient Available Funds to
make the distributions required pursuant to Sections 5.06(a)(i) through (vii),
but excluding any distributions required by Section 5.06(a)(ii) and Sections
5.06(a) (iv) or (vi) in an amount in excess of the amount, if any, required to
reduce the aggregate Note Balances as of the prior Payment Date (after giving
effect to any distributions on the prior Payment Date) to the Pool Balance at
the end of the related Collection Period, the Indenture Trustee shall withdraw
or direct the Servicer to withdraw from the Spread Account, to the extent of the
Available Spread Amount, an amount equal to such deficiency and promptly deposit
such amount in the Collection Account. In either case, if such deficiency
exceeds the Available Spread Amount, the Indenture Trustee shall notify the
Insurer of the amount of such excess deficiency. To the extent the Insurer is
required pursuant to the terms of the Policy to pay the amount of such excess
deficiency of the Monthly Servicing Fee, Monthly Interest and Monthly Principal,
the Indenture Trustee shall promptly (and in any event not later than 1:00 p.m.,
New York City time, on the Business Day preceding the Payment Date) deliver a
Notice for Payment as defined in the Policy (appropriately completed) to the
Fiscal Agent with respect to the Policy.
The Indenture Trustee shall, immediately upon receipt, deposit in the
Collection Account any funds received by the Indenture Trustee in respect of
funds drawn under the Policy from the Insurer.
If the Available Funds for a Payment Date are insufficient to pay
current and past due Insurance Premiums on the Policy, or any amounts owing to
the Insurer pursuant to the Insurance Agreement including, without limitation,
reimbursements, indemnities, fees and expenses, plus accrued interest thereon,
to the Insurer, the Servicer shall notify the Indenture Trustee of such
deficiency, and the applicable Available Spread Amount, if any, then on deposit
in the Spread Account (after giving effect to any withdrawal to satisfy a
deficiency in the Monthly Servicing Fee, Monthly Interest or Monthly Principal,
other than amounts that would be attributable to the Accelerated Principal
Amount) shall be available to cover such deficiency.
SECTION 8.03. Purchase Amounts. Pursuant to the Trust Agreement, the
Servicer and the Seller have agreed to remit to the Collection Account not later
than the Determination Date, the aggregate Purchase Amount for such Collection
Period pursuant to Sections 7.02 and 8.07 of the Trust Agreement. Not later than
11:00 a.m. (New York City time) on the related Payment Date the Servicer shall
remit to the Collection Account the aggregate Optional Disposition Price for
Receivables on such Payment Date pursuant to Section 15.02 of the Trust
Agreement.
SECTION 8.04. Distributions to Parties.
(a) On each Payment Date (unless the Notes shall have been declared to
be due and payable under Section 5.02 following an Event of Default), the
Indenture Trustee shall apply or cause to be applied the Available Funds in the
Collection Account for the prior Collection Period (plus any amounts withdrawn
from the Spread Account or drawn on the Policy pursuant to Section 8.02), to
make the following payments in the listed order of priority:
58
(i) Without duplication, an amount equal to the sum of (y)
Outstanding Advances on all Receivables that became Defaulted
Receivables during the prior Collection Period, plus (z) Outstanding
Advances which the Servicer determines to be unrecoverable pursuant to
Section 9.05 of the Trust Agreement, to the Servicer;
(ii) To the extent not previously distributed to the Servicer,
the Monthly Servicing Fee, including any such overdue Monthly
Servicing Fee, to the Servicer;
(iii) Class A Monthly Interest (including any overdue amounts) to
the Class A Noteholders;
(iv) Class B Monthly Interest (including any overdue amounts) to
the Class B Noteholders, except that such payment will be subordinate
to Monthly Principal payable to Class A Noteholders under clause (v)
to the extent of principal in respect of a Final Maturity Date for a
Class of Class A Notes on any Payment Date on which the amount of
Available Funds, plus funds withdrawn from the Spread Account or drawn
on the Policy will not be sufficient to fully pay the Note Balance of
such Class of Class A Notes.
(v) Monthly Principal (including any overdue amounts) to the
Class A Noteholders, in accordance with the Principal Payment
Sequence;
(vi) Monthly Principal (including any overdue amounts) to the
Class B Noteholders in accordance with the Principal Payment Sequence;
(vii) The Insurance Premium, including any overdue Insurance
Premium, plus accrued interest thereon at the rate provided in the
Insurance Agreement, to the Insurer;
(viii) The amount of Recoveries of Advances, to the Servicer (to
the extent not applied pursuant to (i) above on or prior to such
Payment Date);
(ix) The aggregate amount of all unreimbursed draws made on the
Policy in respect of the Monthly Servicing Fee, Monthly Interest and
Monthly Principal and any other amounts payable to the Insurer under
the Insurance Agreement, plus accrued interest thereon at the rate
provided in the Insurance Agreement, to the Insurer;
(x) The amount, if any, which is necessary to increase the amount
on deposit in the Spread Account to $__________, for deposit to the
Spread Account;
59
(xi) To the extent of remaining Available Funds, the unpaid
portion, if any, of the Accelerated Principal to the Noteholders in
accordance with the Principal Payment Sequence;
(xii) The balance for deposit in the Spread Account. The rights
of the Certificateholder to receive distributions from the Spread
Account are described in Sections 9.02(e) and (f).
(b) (i) If on any Payment Date (other than a Payment Date
after the Notes shall have been declared to be due and payable
under Section 5.02 following an Event of Default) there are not
sufficient Available Funds to pay the distributions required by
Section 8.04(a)(iii) through (vi), then (1) the amount of Monthly
Principal payable on such date shall be reduced by the lesser of
(A) the amount of such shortfall and (B) the amount, if any, by
which the Note Balances as of the preceding Payment Date (after
giving effect to all payments of principal on such date) were
less than the Pool Balance as of the end of the Collection Period
to which that Payment Date relates and (2) if there remains a
shortfall, the Available Funds (together with amounts withdrawn
from the applicable Spread Account and/or the Policy) payable
under Section 8.04(a)(iii) through (vi) shall be allocated first
to Class A Noteholders pari passu for the payment of Class A
Monthly Interest, second to the Class A Noteholders pari passu in
respect of Class A Monthly Principal, third to the Class B
Noteholders in respect of Class B Monthly Interest and finally,
to the Class B Noteholders in respect of Class B Monthly
Principal. The amount of Monthly Interest allocated to Class A
Noteholders shall be based upon the amount of interest due each
Class of Class A Noteholders and the amount of Monthly Principal
allocated to each Class of Class A Noteholders shall be based
upon the relative Outstanding Note Balance of each Class of Class
A Notes.
(ii) Notwithstanding the foregoing, if on any Payment Date,
the Servicer exercises its option to cause a disposition of the
remaining corpus of the Trust pursuant to Section 15.02 of the
Trust Agreement: (a) the Available Funds and amounts withdrawn
from the Spread Account or drawn on the Policy in respect only of
Monthly Interest and Monthly Principal with respect to the
immediately preceding Payment Date as determined in accordance
with Sections 8.02 and 8.04 shall be distributed to the
Noteholders on such Payment Date; (b) the Policy will not be
available to pay any shortfall of Monthly Interest or Monthly
Principal after a prepayment of the Note Balances pursuant to
this Section 8.04(b)(ii); and (c) any remaining Pledged Assets
(including all remaining Available Spread Amounts) shall be paid
to the Noteholders on such Payment Date until the Note Balances
shall have been reduced to zero. Any amounts in excess thereof
shall be remitted to the Certificateholder pursuant to the Trust
Agreement.
60
(iii) In making such payments the Indenture Trustee shall be
entitled to rely (without investigation, confirmation or
recalculation) upon all information and calculations contained in
the Servicer's Certificate delivered to the Indenture Trustee
pursuant to Section 8.09 of the Trust Agreement.
(iv) All monthly payments shall be made by wire transfer of
immediately available funds to the Noteholder of record on the
preceding Record Date. Notwithstanding the foregoing, the final
payment on the Notes shall be made only against presentation and
surrender of the Notes at the office or agency then maintained by
the Indenture Trustee in accordance with Section 2.04 of this
Indenture.
(c) On each Payment Date, if the Servicer has reported to the Indenture
Trustee in the Servicer's Certificate for any Collection Period that an Obligor
or an Obligor's representative or successor successfully shall have asserted a
claim or defense under bankruptcy law or similar laws for the protection of
creditors generally (including the avoidance of a preferential transfer under
bankruptcy law) that results in a liability to such Obligor for monies
previously collected and remitted to the Indenture Trustee and not otherwise
netted against collections pursuant to Section 8.02, the Indenture Trustee shall
make all payments in respect of such claims or defenses out of the amounts on
deposit in the Collection Account with respect to such Collection Period before
making the distributions required by paragraph (a) of this Section 8.04.
(d) If the Servicer has failed to provide the Indenture Trustee with
the notice required pursuant to Section 8.02, the Indenture Trustee may
calculate Monthly Interest and Monthly Principal and apply funds, if any, in the
Collection Account as of the last day of the Collection Period, to make a
distribution of Monthly Interest and Monthly Principal to the Noteholders.
SECTION 8.05. Servicer Advances. The Servicer is required to make
certain Advances pursuant to Section 8.05 of the Trust Agreement. If the
Servicer shall determine that an Outstanding Advance with respect to any
Receivable shall not be recoverable, the Servicer shall be entitled to
reimbursement from any collections made on other Receivables pursuant to Section
8.04(a)(i), and Outstanding Advances with respect to such Receivable shall be
reduced accordingly.
SECTION 8.06. Net Deposits. For so long as United Fidelity is the
Servicer, it (in whatever capacity) may make the remittances with respect to any
Payment Date pursuant to Section 8.02 above, net of amounts to be distributed to
itself or its delegee under Section 12.06 of the Trust Agreement (also in
whatever capacity) pursuant to Section 8.04, if it determines pursuant to
Section 8.02 that there is no deficiency in Available Funds for such Payment
Date. Nonetheless, the Servicer shall account for all of the above described
amounts as if such amounts were deposited and distributed.
61
SECTION 8.07. Release of Pledged Assets.
(a) Subject to the payment of its fees and expenses pursuant to Section
6.07, the Indenture Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the lien of this
Indenture, or convey the Indenture Trustee's interest in the same, in a manner
and under circumstances that are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture Trustee
as provided in this Article shall be bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 and
to the Insurer pursuant to the Insurance Agreement have been paid, release any
remaining portion of the Pledged Assets that secured the Notes from the lien of
this Indenture and release to the Issuer or any other Person entitled thereto
any funds then on deposit in the Collection Account and Spread Account. The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.07(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 12.01.
SECTION 8.08. Opinion of Counsel. The Indenture Trustee shall receive
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.07(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, as a condition to such action, an
Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee
(and not at the expense of the Indenture Trustee), stating the legal effect of
any such action, outlining the steps required to complete the same, and
concluding that all conditions precedent to the taking of such action have been
complied with and such action will not materially and adversely impair the
security for the Notes or the rights of the Noteholders in contravention of the
provisions of this Indenture; provided, however, that such Opinion of Counsel
shall not be required to express an opinion as to the fair value of the Pledged
Assets. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
CREDIT ENHANCEMENT
SECTION 9.01. Subordination. The payment of Monthly Principal to Class
B Noteholders shall be subordinated to the payment of Class A Monthly Interest
and Class A Monthly Principal on any Payment Date and the payment of Class B
Monthly Interest shall be subordinated to the payment of Class A Monthly
Interest and Class A Monthly Principal (i) to the extent of principal owed on a
Final Maturity Date of a Class of Class A Notes, (ii) after the Notes shall have
been declared to be
62
due and payable under Section 5.02 following an Event of Default, or (iii) if
there is a shortfall of Available Funds, as described in Section 8.04(b).
SECTION 9.02. Spread Account.
(a) On or prior to the Closing Date, the Indenture Trustee shall
establish and maintain a segregated trust account with the Indenture Trustee or
in the corporate trust department of another Eligible Bank referred to herein as
the "Spread Account." The Spread Account shall be maintained in the name of the
Indenture Trustee. The Spread Account and any amounts on deposit therein shall
be part of the Pledged Assets and shall be for the benefit of the Secured
Parties, as their respective interests may appear herein; provided, however,
that the interest of the Insurer therein shall be subordinated to the interests
of the Noteholders as provided herein.
(b) Funds on deposit in the Spread Account shall be invested in
Eligible Investments in the same manner and subject to the same requirements and
limitations as the investment of funds in the Collection Account pursuant to
Section 8.01, including the limitation that Eligible Investments mature not
later than the Business Day prior to the next succeeding Payment Date; provided,
however, that no such limitation on the maturity of Eligible Investments shall
apply if the Indenture Trustee obtains the benefit of a liquidity facility or
similar arrangement from a commercial bank with an Approved Rating or other
provider approved in advance in writing by the Insurer and the Administrative
Agent, with respect to funds in the Spread Account (a "Spread Account Facility")
and __________ and __________ confirm in writing that the rating of the Notes
will not be lowered or withdrawn as a result of eliminating or modifying the
limitation on the maturity of Eligible Investments in respect of the Spread
Account. For purposes of determining the availability of funds or the balance in
the Spread Account for any reason under this Indenture, investment earnings on
such funds shall be deemed to be available or on deposit only to the extent that
the aggregate of such amounts, plus the funds on deposit in such Spread Account,
do not exceed the Required Spread Amount.
(c) (i) If on any Payment Date (other than a Payment Date
after an Event of Default shall have occurred and be continuing)
the amount of Available Funds is insufficient to make the
distributions required by Sections 8.04(a)(i) through (vii)
(after consideration of the adjustment provided in Section
8.04(b)(i)), the Indenture Trustee shall withdraw or cause to be
withdrawn from the Spread Account and deposited in the Collection
Account the lesser of (x) the entire Available Spread Amount and
(y) the amount necessary to make up such deficiency to pay any
deficiency in permitted reimbursements of Outstanding Advances
pursuant to Section 8.04(a)(i), the Monthly Servicing Fee,
Monthly Interest and Monthly Principal (prior to making any draw
on the Policy), all as provided in Sections 8.02 and 8.04 and the
Policy.
(ii) Alternatively, if on any Payment Date after an Event of
Default the amount of Available Funds is insufficient to make the
distributions required by
63
Sections 5.06(a)(i) through (vii), but excluding any
distributions required by Section 5.06(a)(ii) and Sections
5.06(a) (iv) or (vi) in an amount in excess of the amount, if
any, required to reduce the aggregate Note Balances as of the
prior Payment Date (after giving effect to any distributions on
the prior Payment Date) to the Pool Balance at the end of the
related Collection Period, the Indenture Trustee shall withdraw
or cause to be withdrawn from the Spread Account and deposited in
the Collection Account the lesser of (x) the entire Available
Spread Amount and (y) the amount necessary to make up such
deficiency to pay any deficiency in permitted reimbursements of
Outstanding Advances pursuant to Section 5.06(a)(i), the Monthly
Servicing Fee, Monthly Interest and Monthly Principal (prior to
making any draw on the Policy), all as provided in Sections 5.06
and 8.02 and the Policy.
(d) On each Payment Date, all distributions made pursuant to Sections
8.04(a)(x), 8.04(a)(xii) or 5.06(a)(viii), as applicable, shall be deposited
into the Spread Account.
(e) If the amount on deposit in the Spread Account, after giving effect
to the distributions set forth in Section 8.04 (including, without limitation,
payment of amounts due and owing to the Insurer) is greater than the Required
Spread Amount on such Payment Date (after giving effect to the payment of the
Accelerated Principal Amount), the amount of such excess shall be distributed by
the Indenture Trustee to the Owner Trustee, or as the Owner Trustee shall direct
in writing in accordance with the Trust Agreement to the Certificateholder.
Amounts properly distributed to the Owner Trustee or Certificateholder pursuant
to this Section, either directly without deposit in the Spread Account or from
excess amounts in the Spread Account shall be deemed released from the security
interest of the Indenture Trustee on behalf of the Secured Parties.
(f) The Servicer is permitted to purchase the Receivables from the
Issuer when the Note Balances have been reduced to 10% or less of the Initial
Note Balances pursuant to Section 15.02 of the Trust Agreement. Upon discharge
and satisfaction of this Indenture pursuant to Section 4.01, amounts remaining
in the Spread Account, after payment of any amounts due and owing to the
Noteholders and to the Insurer, shall be distributed by the Indenture Trustee to
the Owner Trustee, or as the Owner Trustee shall direct in accordance with the
Trust Agreement to the Certificateholder, and such amounts shall not be subject
to any claims or rights of any Noteholder.
SECTION 9.03. Policy.
(a) The Insurer is required under the terms of the Policy to pay the
Monthly Servicing Fee, Monthly Interest and Monthly Principal up to the Policy
Amount in the event of any deficiency of Available Funds to pay such amounts
(after permitted reimbursements of related Outstanding Advances) not covered by
amounts withdrawn from the Spread Account, as determined pursuant to Section
9.02, to the Indenture Trustee for credit to the Collection Account on the later
of (a) 12:00 noon, New York City time, on the Payment Date and (b) 12:00 noon,
New York City time, on the Business Day immediately succeeding presentation to
the Fiscal Agent of the Indenture Trustee's demand therefor. Any demand for
payment pursuant to Section 8.02 to the Fiscal Agent received
64
by the Fiscal Agent on a Business Day after 1:00 p.m., New York City time, or on
any day that is not a Business Day, will be deemed to be received by the Fiscal
Agent at 9:00 a.m., New York City time, on the next Business Day.
Notwithstanding the foregoing, on a Redemption Date, the obligations of the
Insurer under the Policy shall be limited in accordance with Section
8.04(b)(ii). The Indenture Trustee hereby agrees on behalf of the Noteholders
(and each Noteholder, by its acceptance of its Notes, hereby agrees) for the
benefit of the Insurer that the Indenture Trustee shall recognize that to the
extent the Insurer makes a payment under the Policy, either directly or
indirectly (as by paying through the Indenture Trustee), to the Noteholders, the
Insurer will be entitled to be subrogated to the rights of the Noteholders to
the extent of such payments under the Policy. Any rights of subrogation acquired
by the Insurer as a result of any payment made under the Policy shall, in all
respects, be subordinate and junior in right of payment to the prior
indefeasible payment in full of all amounts due the Indenture Trustee on account
of payments due under the Notes pursuant to Section 8.04 hereof.
(b) The Insurer shall pay any Preference Amounts, but only after there
shall have been delivered to the Insurer (x) a certified copy of a final order
of the court exercising jurisdiction in the Insolvency Proceeding to the effect
that the Indenture Trustee is required to return any such payment or portion
thereof prior to the Termination Date (as defined in the Policy) of the Policy
because such payment was voided under applicable law, with respect to which
order the appeal period has expired without an appeal having been filed (the
"Final Order"), (y) an assignment, in the form of Exhibit D to the Policy,
irrevocably assigning to the Insurer all rights and claims of such Indenture
Trustee relating to or arising under such Avoided Payment and (z) a Notice for
Payment in the form of Exhibit A to the Policy appropriately completed and
executed by the Indenture Trustee. Such payment shall be disbursed to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Final Order and not to the Indenture Trustee directly.
The Indenture Trustee, for itself and on behalf of the Noteholders,
agrees that the Insurer may at any time during the continuation of any
proceeding relating to a Final Order direct all matters relating to such Final
Order, including, without limitation, the direction of any appeal of any order
relating to such Final Order and the posting of any surety, supersedeas or
performance bond pending any such appeal. In addition and without limitation of
the foregoing, the Insurer shall be subrogated, to the extent of amounts paid
under the Policy, to the rights of United Fidelity, the Servicer, the Seller,
the Issuer, the Indenture Trustee and the Noteholders in the conduct of any
preference claim, including, without limitation, all rights of any party to any
adversarial proceeding or action with respect to any court order issued in
connection with any such preference claim.
65
ARTICLE X
SUPPLEMENTAL INDENTURES
SECTION 10.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with the
consent of the Insurer and with prior notice to each Rating Agency, the Issuer
and the Indenture Trustee, when authorized by an Issuer Order, and the other
parties hereto at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien created by this Indenture, or to
subject to the lien created by this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Noteholders, or to surrender any right or power herein conferred
upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property
to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture which may be inconsistent with
any other provision herein or in any supplemental indenture or the
Basic Documents or to make any other provisions with respect to
matters or questions arising under this Indenture or in any
supplemental indenture; provided that such action shall not adversely
affect the interests of the Noteholders;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article Six; or
66
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may he expressly required by the TIA.
The Indenture Trustee shall join in the execution of any such
supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with the
consent of the Insurer and with prior notice to each Rating Agency, enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Noteholders
under this Indenture; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material respect the
interests of any Noteholder.
SECTION 10.02. Supplemental Indentures With Consent of Noteholders.
(a) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to each Rating Agency, with the consent of
the Insurer and with the consent of the Holders of not less than a majority of
the Outstanding Note Balances, by Act of such Holders delivered to the Issuer
and the Indenture Trustee, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Noteholders under this Indenture; provided, however,
that, subject to the express rights of the Insurer under the Basic Documents, no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto, or
change any place of payment where, or the coin or currency in which,
any Note or the interest thereon is payable;
(ii) impair the right to institute suit for the enforcement of
the provisions of this Indenture requiring the application of funds
available therefor, as provided in Article Five, to the payment of any
such amount due on the Notes on or after the respective due dates
thereof (or, in the case of redemption, on or after the Redemption
Date);
(iii) reduce the percentage of the Note Balances of the Notes,
the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain
67
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iv) modify or alter the provisions of the second proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Note Balances of the Notes, the
consent of the Holders of which is required to direct the Indenture
Trustee to sell or liquidate the Pledged Assets pursuant to Section
5.04;
(vi) decrease the percentage of the Note Balances of the Notes
required to amend this Indenture or the other Basic Documents; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien created by this Indenture with respect to any
part of the Pledged Assets or, except as otherwise permitted or
contemplated herein, terminate the lien created by this Indenture on
any property at any time subject hereto or deprive the Holder of any
Note of the security provided by the lien created by this Indenture.
(b) The Indenture Trustee may in its discretion determine whether or
not any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
(c) It shall not be necessary for any act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such act shall approve the substance thereof.
(d) Promptly after the execution by the parties hereto of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Noteholders to which such amendment or supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
SECTION 10.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created by
this Indenture, the Indenture Trustee shall be entitled to receive, and subject
to Sections 6.01 and 6.02 shall be fully protected in relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
68
SECTION 10.04. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the parties hereto and the Noteholders shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 10.05. Conformity With Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture Act as then in
effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 10.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
ARTICLE XI
REDEMPTION OF NOTES
SECTION 11.01. Redemption. In the event that the Servicer exercises its
right to require disposition of the corpus of the Trust pursuant to Section
15.02 of the Trust Agreement, the Notes are subject to redemption in whole, but
not in part, on the Payment Date on which such repurchase occurs, for a purchase
price equal to the Redemption Price; provided, however, that the Issuer has
available funds sufficient to pay the Redemption Price. The Servicer or the
Issuer shall furnish the Insurer and each Rating Agency notice of such
redemption. If the Notes are to be redeemed pursuant to this Section 11.01, the
Servicer or the Issuer shall furnish notice of such election to the Indenture
Trustee not later than ten (10) days prior to the Redemption Date and the Issuer
shall deposit with the Indenture Trustee in the Collection Account the
Redemption Price of the Notes to be redeemed whereupon all such Notes shall be
due and payable on the Redemption Date upon the furnishing of a notice complying
with Section 11.02 to each Holder of the Notes.
SECTION 11.02. Form of Redemption Notice. Notice of redemption under
Section 11.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, mailed not less than five days prior to the applicable
Redemption Date to each Holder of Notes, as of the close of business on the
Record Date preceding the applicable Redemption Date, at such Holder's address
appearing
69
in the Note Register. In addition, the Administrator shall notify the Insurer
and the Rating Agencies upon the redemption of any Class of Notes, pursuant to
Section 2.06(b) of this Indenture.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) CUSIP Numbers; and
(iv) the place where such Notes are to be surrendered
for payment of the Redemption Price (which shall be the
office or agency of the Issuer to be maintained as provided
in Section 3.02).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Note shall not impair or
affect the validity of the redemption of any other Note.
SECTION 11.03. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall, following notice of redemption (if any) as
required by Section 11.02, on the Redemption Date become due and payable at the
Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Redemption Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Redemption Price.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee (i) an Officer's Certificate stating that
all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, (ii) an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section and TIA Sections 314(c) and 314(d)(1). Notwithstanding the
foregoing, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture, no additional certificate or opinion need be furnished.
70
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Pledged Assets or other
property or securities with the Indenture Trustee that is to be
made the basis for the release of any property subject to the
lien created by this Indenture, the Issuer shall, in addition to
any obligation imposed in Section 12.01(a) or elsewhere in this
Indenture, furnish to the Indenture Trustee and the Insurer an
Officer's Certificate certifying or stating the opinion of the
signer thereof as to the fair value (within 90 days of such
deposit) to the Issuer of the Pledged Assets or other property or
securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee and the Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to the
matters described in clause (i) above, the Issuer shall also
deliver to the Indenture Trustee and the Insurer an Independent
Certificate as to the named matters, if the fair value to the
Issuer of the property to be so deposited and of all other such
property made the basis of any such withdrawal or release since
the commencement of the then-current fiscal year of the Issuer,
as set forth in the Officer's Certificates delivered pursuant to
clause (i) above and this clause (ii), is 10% or more of the Note
Balances, but such Officer's Certificate need not be furnished
with respect to any property so deposited, if the fair value
thereof to the Issuer as set forth in the related Officer's
Certificate is less than [$25,000] or less than one percent of
the Note Balances.
(iii) Whenever any property or securities are to be released
from the lien created by this Indenture, the Issuer shall also
furnish to the Indenture Trustee and the Insurer an Officer's
Certificate certifying or stating the opinion of each person
signing
71
such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released
and stating that in the opinion of such person the proposed
release will not impair the security created by this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee and the Insurer an Officer's Certificate
certifying or stating the opinion of any signer thereof as to the
matters described in clause (iii) above, the Issuer shall also
furnish to the Indenture Trustee and the Insurer an Independent
Certificate as to the same matters if the fair value of the
property or securities and of all other property or securities
released from the lien created by this Indenture since the
commencement of the then current fiscal year, as set forth in the
Officer's Certificate required by clause (iii) above and this
clause (iv), equals 10% or more of the Note Balances of the
Notes, but such Officer's Certificate need not be furnished in
the case of any release of property or securities if the fair
value thereof as set forth in the related Officer's Certificate
is less than [$25,000] or less than one percent of the then Note
Balances of the Notes.
SECTION 12.02. Form of Documents Delivered to Indenture Trustee.
(a) In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Seller 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 officer or counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
72
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article Six.
SECTION 12.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register and the
record date applicable to any solicitation for an Act of the Noteholders shall
comply with Section 3.16(c) of the TIA.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 12.04. Notices, etc., to Indenture Trustee, Issuer, Insurer
and Rating Agencies.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if
73
such request, demand, authorization, direction, notice, consent, waiver or Act
of Noteholders is to be made upon, given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the
Issuer, it shall be sufficient for every purpose hereunder if in
writing, personally delivered, sent by facsimile transmission and
confirmed or mailed by overnight service, to or with the
Indenture Trustee at its Corporate Trust Office;
(ii) the Issuer by the Indenture Trustee or by any
Noteholder, it shall be sufficient for every purpose hereunder if
in writing, personally delivered, sent by facsimile transmission
and confirmed or mailed by overnight service, to the Issuer
addressed to: ____________________________________________, in
care of ____________________________________________, as Owner
Trustee,
_________________________________________________________ or at
any other address furnished in writing to the Indenture Trustee
by the Issuer; or
(iii) the Insurer by the Issuer or the Indenture Trustee, it
shall be sufficient for any purpose hereunder if in writing,
personally delivered, sent by facsimile transmission and
confirmed or mailed by overnight service, to the Insurer
addressed to: ________________________________________________.
(b) any Notices delivered to the Issuer hereunder shall also be
delivered (by the same means) to the Servicer and the Administrator c/o
________________________________, Attention:
___________________________________.
(c) Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, sent by facsimile transmission and confirmed or mailed by overnight
service, to (i) in the case of __________, at the following address:
______________________________ and (ii) in the case of __________, at the
following address: ______________________________; or as to each of the
foregoing, at such other address as shall be designated by written notice to the
other parties.
SECTION 12.05. Notices to Noteholders; Waiver.
(a) Where this Indenture provides for notice to Noteholders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage prepaid to
each Noteholder affected by such event, at his address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice nor any
defect in any notice so mailed to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
that is mailed in the manner herein provided shall conclusively be presumed to
have been duly given.
74
(b) Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
SECTION 12.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee or any Paying Agent to such Holder,
that is different from the methods provided for in this Indenture for such
payments or notices. The Issuer will furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee will cause payments to be made and
notices to be given in accordance with such agreements.
SECTION 12.07. Conflict With Trust Indenture Act.
(a) If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this indenture by any of the
provisions of the Trust Indenture Act, such required provision shall control.
(b) The provisions of TIA Sections 310 through 317 that impose duties
on any Person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 12.08. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 12.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
75
SECTION 12.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 12.11. Benefits of Indenture. The Insurer and its successors
and assigns shall be third-party beneficiaries to the provisions of this
Indenture, and shall be entitled to rely upon and directly enforce such
provisions of this Indenture so long as no Insurer Default shall have occurred
and be continuing. The Owner Trustee shall be a third-party beneficiary to the
provisions of this Indenture with respect to fees, expenses and indemnity upon
and following the occurrence of an Event of Default. Nothing in this Indenture
or in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Pledged Assets, any benefit or any legal or equitable right,
remedy or claim under this Indenture. The Insurer may disclaim any of its rights
and powers under this Indenture, but not its duties and obligations under the
Policy, upon delivery of a written notice to the Indenture Trustee.
SECTION 12.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 12.13. Governing Law. This Indenture shall be construed in
accordance with the laws of the State of Indiana, without regard to the conflict
of laws principles thereof, and the obligations, rights, and remedies of the
parties under this Indenture shall be determined in accordance with such laws.
SECTION 12.14. Counterparts. This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
SECTION 12.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee and the Insurer) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
SECTION 12.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director,
76
employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, or of any holder of a beneficial interest in the Issuer, or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacities) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles Six, Seven and Eight of the Trust
Agreement.
SECTION 12.17. No Petition. The parties hereto, by entering into this
Indenture, and each Noteholder, by accepting a Note or a beneficial interest in
a Note, hereby covenant and agree that they will not at any time institute
against the 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 Notes, this Indenture or any of the other Basic Documents.
SECTION 12.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee or of the
Insurer, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees and independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee and the Insurer shall and shall cause their
respective representatives to hold in confidence all such information except to
the extent disclosure may be required by law (and all reasonable applications
for confidential treatment are unavailing) and except to the extent that the
Indenture Trustee or the Insurer may reasonably determine that such disclosure
is consistent with its obligations hereunder.
SECTION 12.19. Limitation of Liability of Owner Trustee.
Notwithstanding anything contained herein to the contrary, this instrument has
been countersigned by the Owner Trustee not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer and in no event shall the
Owner Trustee in its individual capacity or any beneficial owner of the Issuer
have any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles Seven, Eight, Ten, Twelve, Thirteen, Fourteen and Fifteen
of the Trust Agreement.
SECTION 12.20. Certain Matters Regarding the Insurer. So long as an
Insurer Default shall not have occurred and be continuing, the Insurer shall
have the right to exercise all rights,
77
including voting rights, which the Noteholders or Certificateholders are
entitled to exercise pursuant to this Indenture, without any consent of such
Noteholders or Certificateholders; provided, however, that without the consent
of each Noteholder and Certificateholder affected thereby, the Insurer shall not
exercise such rights to amend this Indenture in any manner that would (i) reduce
the amount of, or delay the timing of, collections of payments on the
Receivables or distributions which are required to be made on any Note or
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Notes or Certificates, or (iii) alter the rights of any such
Holder to consent to such amendment.
Notwithstanding any provision in this Indenture to the contrary, in the
event an Insurer Default shall have occurred and be continuing, the Insurer
shall not have the right to take any action under this Indenture or to control
or direct the actions of the Trust, the Seller, the Indenture Trustee or the
Owner Trustee pursuant to the terms of this Indenture, nor shall the consent of
the Insurer be required with respect to any action (or waiver of a right to take
action) to be taken by the Trust, the Seller, the Indenture Trustee, the Owner
Trustee or the Noteholders or the Certificateholders; provided, that the consent
of the Insurer shall be required at all times with respect to any amendment of
this Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and delivered as of the day and year first above written.
UNITED FIDELITY AUTO TRUST
2001-A By
_____________________________________,
not in its individual
capacity but solely on
behalf of the Issuer as
Owner Trustee under the
Trust Agreement
By:
---------------------------------------
Name:
Title:
, not in
------------------------------------------
its individual capacity but solely as Indenture Trustee
By:
---------------------------------------
Name:
Title:
78
Schedule A
to the Indenture
DEPOSITORY AGREEMENT
79
EXHIBIT A-1
[FORM OF CLASS A-1 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-1 NOTE IS DISTRIBUTABLE AS SET FORTH
HEREIN. ACCORDINGLY, THE UNPAID PRINCIPAL AMOUNT OF THE FRACTIONAL INTEREST
EVIDENCED HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL PRINCIPAL AMOUNT SET
FORTH HEREIN.
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an interest
herein.
PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
UNITED FIDELITY AUTO TRUST 2001-A
______% CLASS A-1 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the United Fidelity Auto Trust 2001-A, a
Delaware business trust, secured by the Pledged Assets, as defined
below, including a pool of simple interest installment loan and
security agreements and installment sales contracts secured by new and
used automobiles, light trucks and vans.
(This Note does not represent an interest in United Fidelity Finance,
LLC nor an interest in or obligation of any of its affiliates. Neither
this Note nor the underlying Receivables, as defined below, are insured
or guaranteed by any government agency).
NUMBER ___ $__________
CUSIP __________
United Fidelity Auto Trust 2001-A, a Delaware business trust, for value
received, hereby promises to pay to the order of [__________] (the "Noteholder")
or its registered assigns, the principal sum of ______________________
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of __________ (the "Indenture"; such term to
include any amendment, restatement, supplement or other modification thereof or
thereto); provided, however, that the entire unpaid amount of this Note shall be
due and payable on or before __________. However, principal with respect to the
Notes may be paid earlier or later under certain limited circumstances under the
Indenture. The Issuer will pay interest on this Note at the Class A-1 Interest
Rate. Such interest shall be payable in the manner and at the times set forth in
the Indenture.
A-1-1
To the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Indenture. This Note is issued under
and is subject to the terms, provisions, and conditions of the Indenture, to
which the holder of this Note by virtue of the acceptance hereof assents and by
which such holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of a pool of simple interest loan and security agreements and installment sales
contracts for new and used automobiles, light trucks, vans and van conversions
(the "Receivables"), all monies paid thereon, and all monies due thereon,
including Accrued Interest (but excluding Accrued Interest paid on or prior to
the Closing Date with respect to such Receivables), security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof, all
documents contained in the Receivable Files, any Liquidation Proceeds, any
rights of the Issuer in proceeds from claims or refunds of premiums on physical
damage, lender's single interest, credit life, disability and hospitalization
insurance policies, if any, covering vehicles financed thereby and the obligors
thereunder, the interest of the Issuer in recourse to dealers relating to
certain of the Receivables, the proceeds of all of the foregoing and the
proceeds of amounts on deposit from time to time in the Spread Account for the
benefit of the Noteholder, the Policy for the benefit of the Noteholder and
certain other rights under the Purchase Agreement and the Trust and Servicing
Agreement.
Under the Indenture, the Issuer will pay, on the eighth calendar day of
each month, or if such day is not a Business Day, on the first Business Day
thereafter (the "Payment Date"), commencing __________ to the person in whose
name this Note is registered on the related Record Date, the portion of Monthly
Interest and Monthly Principal to which the Noteholder is entitled pursuant to
the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
The Note constitutes an obligation of the Issuer only and does not
represent an interest in the Issuer nor an interest in or obligation of any
affiliate of the Issuer, including United Fidelity Finance, LLC or United
Fidelity. The Note is limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in the
Indenture. In addition to the Class A-1 Notes, the Issuer has also issued Class
A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes. The Class B Notes
are subordinated to the Class A Notes as provided in the Indenture. The
Indenture provides for certain amounts to be deposited into the Spread Account.
In the event amounts available for withdrawal from the Spread Account are
insufficient to make payments relating to this Note and the other notes issued
by the Issuer, the Indenture Trustee will draw on the Policy up to the Policy
Amount to pay such deficiency.
A-1-2
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Noteholder. Any such
consent by the holder of this Note shall be conclusive and binding on the
Noteholder.
This Note is transferrable solely in accordance with Section 2.04 of
the Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to the Noteholder of all amounts
required to be paid to it pursuant to the Indenture. The Servicer may at its
option cause the Indenture Trustee to sell the Pledged Assets at a price not to
be less than the price specified in the Trust Agreement, and such sale of the
Receivables and other property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated: __________
UNITED FIDELITY AUTO TRUST 2001-A
By _______________________________, not in its
individual capacity but solely as Owner Trustee
By:
----------------------------------------
Name:
Title:
A-1-3
CERTIFICATE OF AUTHENTICATION
This is the Note
referred to in the within-mentioned
Indenture.
, solely in
------------------------------------------
its capacity as Indenture Trustee,
By:
----------------------------------------
Name:
Title:
Dated: __________
A-1-4
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:_______
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
------------------------------------------------------------------------------
(name and address of assignee)
------------------------------------------------------------------------------
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints,
_______________________________________________________________________attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated:_________________
Signature Guaranteed:
____________________________________________*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
X-0-0
XXXXXXX X-0
[FORM OF CLASS A-2 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-2 NOTE IS DISTRIBUTABLE AS SET FORTH
HEREIN. ACCORDINGLY, THE UNPAID PRINCIPAL AMOUNT OF THE FRACTIONAL INTEREST
EVIDENCED HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL PRINCIPAL AMOUNT SET
FORTH HEREIN.
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an interest
herein.
PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
UNITED FIDELITY AUTO TRUST 2001-A
______% CLASS A-2 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the United Fidelity Auto Trust 2001-A, a
Delaware business trust, secured by the Pledged Assets, as defined
below, including a pool of simple interest installment loan and
security agreements and installment sales contracts secured by new and
used automobiles, light trucks and vans.
(This Note does not represent an interest in United Fidelity Finance,
LLC nor an interest in or obligation of any of its affiliates. Neither
this Note nor the underlying Receivables, as defined below, are insured
or guaranteed by any government agency).
NUMBER ___ $__________
CUSIP __________
United Fidelity Auto Trust 2001-A, a Delaware business trust, for value
received, hereby promises to pay to the order of [__________] (the "Noteholder")
or its registered assigns, the principal sum of ______________________
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of __________ (the "Indenture"; such term to
include any amendment, restatement, supplement or other modification thereof or
thereto); provided, however, that the entire unpaid amount of this Note shall be
due and payable on or before __________. However, principal with respect to the
Notes may be paid earlier or later under certain limited circumstances under the
Indenture. The Issuer will pay interest on this Note at the Class A-2 Interest
Rate. Such interest shall be payable in the manner and at the times set forth in
the Indenture.
A-2-1
To the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Indenture. This Note is issued under
and is subject to the terms, provisions, and conditions of the Indenture, to
which the holder of this Note by virtue of the acceptance hereof assents and by
which such holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of a pool of simple interest loan and security agreements and installment sales
contracts for new and used automobiles, light trucks, vans and van conversions
(the "Receivables"), all monies paid thereon, and all monies due thereon,
including Accrued Interest (but excluding Accrued Interest paid on or prior to
the Closing Date with respect to such Receivables), security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof, all
documents contained in the Receivable Files, any Liquidation Proceeds, any
rights of the Issuer in proceeds from claims or refunds of premiums on physical
damage, lender's single interest, credit life, disability and hospitalization
insurance policies, if any, covering vehicles financed thereby and the obligors
thereunder, the interest of the Issuer in recourse to dealers relating to
certain of the Receivables, the proceeds of all of the foregoing and the
proceeds of amounts on deposit from time to time in the Spread Account for the
benefit of the Noteholder, the Policy for the benefit of the Noteholder and
certain other rights under the Purchase Agreement and the Trust and Servicing
Agreement.
Under the Indenture, the Issuer will pay, on the eighth calendar day of
each month, or if such day is not a Business Day, on the first Business Day
thereafter (the "Payment Date"), commencing __________ to the person in whose
name this Note is registered on the related Record Date, the portion of Monthly
Interest and Monthly Principal to which the Noteholder is entitled pursuant to
the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
The Note constitutes an obligation of the Issuer only and does not
represent an interest in the Issuer nor an interest in or obligation of any
affiliate of the Issuer, including United Fidelity Finance, LLC or United
Fidelity. The Note is limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in the
Indenture. In addition to the Class A-2 Notes, the Issuer has also issued Class
A-1 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes. The Class B Notes
are subordinated to the Class A Notes as provided in the Indenture. The
Indenture provides for certain amounts to be deposited into the Spread Account.
In the event amounts available for withdrawal from the Spread Account are
insufficient to make payments relating to this Note and the other notes issued
by the Issuer, the Indenture Trustee will draw on the Policy up to the Policy
Amount to pay such deficiency.
A-2-2
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Noteholder. Any such
consent by the holder of this Note shall be conclusive and binding on the
Noteholder.
This Note is transferrable solely in accordance with Section 2.04 of
the Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to the Noteholder of all amounts
required to be paid to it pursuant to the Indenture. The Servicer may at its
option cause the Indenture Trustee to sell the Pledged Assets at a price not to
be less than the price specified in the Trust Agreement, and such sale of the
Receivables and other property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated: __________
UNITED FIDELITY AUTO TRUST 2001-A
By _______________________________, not in its
individual capacity but solely as Owner Trustee
By:
----------------------------------------
Name:
Title:
A-2-3
CERTIFICATE OF AUTHENTICATION
This is the Note
referred to in the within-mentioned
Indenture.
, solely
------------------------------------------
in its capacity as Indenture Trustee,
By:
----------------------------------------
Name:
Title:
Dated: __________
A-2-4
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:_______
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
------------------------------------------------------------------------------
(name and address of assignee)
------------------------------------------------------------------------------
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints,
_______________________________________________________________________attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated:_________________
Signature Guaranteed:
____________________________________________*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
X-0-0
XXXXXXX X-0
[FORM OF CLASS A-3 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-3 NOTE IS DISTRIBUTABLE AS SET FORTH
HEREIN. ACCORDINGLY, THE UNPAID PRINCIPAL AMOUNT OF THE FRACTIONAL INTEREST
EVIDENCED HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL PRINCIPAL AMOUNT SET
FORTH HEREIN.
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an interest
herein.
PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
UNITED FIDELITY AUTO TRUST 2001-A
______% CLASS A-3 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the United Fidelity Auto Trust 2001-A, a
Delaware business trust, secured by the Pledged Assets, as defined
below, including a pool of simple interest installment loan and
security agreements and installment sales contracts secured by new and
used automobiles, light trucks and vans.
(This Note does not represent an interest in United Fidelity Finance,
LLC nor an interest in or obligation of any of its affiliates. Neither
this Note nor the underlying Receivables, as defined below, are insured
or guaranteed by any government agency).
NUMBER ___ $__________
CUSIP __________
United Fidelity Auto Trust 2001-A, a Delaware business trust, for value
received, hereby promises to pay to the order of [__________] (the "Noteholder")
or its registered assigns, the principal sum of ______________________
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of __________ (the "Indenture"; such term to
include any amendment, restatement, supplement or other modification thereof or
thereto); provided, however, that the entire unpaid amount of this Note shall be
due and payable on or before __________. However, principal with respect to the
Notes may be paid earlier or later under certain limited circumstances under the
Indenture. The Issuer will pay interest on this Note at the Class A-3 Interest
Rate. Such interest shall be payable in the manner and at the times set forth in
the Indenture.
A-3-1
To the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Indenture. This Note is issued under
and is subject to the terms, provisions, and conditions of the Indenture, to
which the holder of this Note by virtue of the acceptance hereof assents and by
which such holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of a pool of simple interest loan and security agreements and installment sales
contracts for new and used automobiles, light trucks, vans and van conversions
(the "Receivables"), all monies paid thereon, and all monies due thereon,
including Accrued Interest (but excluding Accrued Interest paid on or prior to
the Closing Date with respect to such Receivables), security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof, all
documents contained in the Receivable Files, any Liquidation Proceeds, any
rights of the Issuer in proceeds from claims or refunds of premiums on physical
damage, lender's single interest, credit life, disability and hospitalization
insurance policies, if any, covering vehicles financed thereby and the obligors
thereunder, the interest of the Issuer in recourse to dealers relating to
certain of the Receivables, the proceeds of all of the foregoing and the
proceeds of amounts on deposit from time to time in the Spread Account for the
benefit of the Noteholder, the Policy for the benefit of the Noteholder and
certain other rights under the Purchase Agreement and the Trust and Servicing
Agreement.
Under the Indenture, the Issuer will pay, on the eighth calendar day of
each month, or if such day is not a Business Day, on the first Business Day
thereafter (the "Payment Date"), commencing __________ to the person in whose
name this Note is registered on the related Record Date, the portion of Monthly
Interest and Monthly Principal to which the Noteholder is entitled pursuant to
the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
The Note constitutes an obligation of the Issuer only and does not
represent an interest in the Issuer nor an interest in or obligation of any
affiliate of the Issuer, including United Fidelity Finance, LLC or United
Fidelity. The Note is limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in the
Indenture. In addition to the Class A-3 Notes, the Issuer has also issued Class
A-1 Notes, Class A-2 Notes, Class A-4 Notes and Class B Notes. The Class B Notes
are subordinated to the Class A Notes as provided in the Indenture. The
Indenture provides for certain amounts to be deposited into the Spread Account.
In the event amounts available for withdrawal from the Spread Account are
insufficient to make payments relating to this Note and the other notes issued
by the Issuer, the Indenture Trustee will draw on the Policy up to the Policy
Amount to pay such deficiency.
A-3-2
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Noteholder. Any such
consent by the holder of this Note shall be conclusive and binding on the
Noteholder.
This Note is transferrable solely in accordance with Section 2.04 of
the Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to the Noteholder of all amounts
required to be paid to it pursuant to the Indenture. The Servicer may at its
option cause the Indenture Trustee to sell the Pledged Assets at a price not to
be less than the price specified in the Trust Agreement, and such sale of the
Receivables and other property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated: __________
UNITED FIDELITY AUTO TRUST 2001-A
By _______________________________, not in its
individual capacity but solely as Owner Trustee
By:
----------------------------------------
Name:
Title:
A-3-3
CERTIFICATE OF AUTHENTICATION
This is the Note
referred to in the within-mentioned
Indenture.
, solely in
------------------------------------------
its capacity as Indenture Trustee,
By:
----------------------------------------
Name:
Title:
Dated: __________
A-3-4
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:_______
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
------------------------------------------------------------------------------
(name and address of assignee)
------------------------------------------------------------------------------
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints,
_______________________________________________________________________attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated:_________________
Signature Guaranteed:
____________________________________________*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
X-0-0
XXXXXXX X-0
[FORM OF CLASS A-4 NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS A-4 NOTE IS DISTRIBUTABLE AS SET FORTH
HEREIN. ACCORDINGLY, THE UNPAID PRINCIPAL AMOUNT OF THE FRACTIONAL INTEREST
EVIDENCED HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL PRINCIPAL AMOUNT SET
FORTH HEREIN.
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an interest
herein.
PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
UNITED FIDELITY AUTO TRUST 2001-A
______% CLASS A-4 AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the United Fidelity Auto Trust 2001-A, a
Delaware business trust, secured by the Pledged Assets, as defined
below, including a pool of simple interest installment loan and
security agreements and installment sales contracts secured by new and
used automobiles, light trucks and vans.
(This Note does not represent an interest in United Fidelity Finance,
LLC nor an interest in or obligation of any of its affiliates. Neither
this Note nor the underlying Receivables, as defined below, are insured
or guaranteed by any government agency).
NUMBER ___ $__________
CUSIP __________
United Fidelity Auto Trust 2001-A, a Delaware business trust, for value
received, hereby promises to pay to the order of [__________] (the "Noteholder")
or its registered assigns, the principal sum of ______________________
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of __________ (the "Indenture"; such term to
include any amendment, restatement, supplement or other modification thereof or
thereto); provided, however, that the entire unpaid amount of this Note shall be
due and payable on or before __________. However, principal with respect to the
Notes may be paid earlier or later under certain limited circumstances under the
Indenture. The Issuer will pay interest on this Note at the Class A-4 Interest
Rate. Such interest shall be payable in the manner and at the times set forth in
the Indenture.
A-4-1
To the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Indenture. This Note is issued under
and is subject to the terms, provisions, and conditions of the Indenture, to
which the holder of this Note by virtue of the acceptance hereof assents and by
which such holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of a pool of simple interest loan and security agreements and installment sales
contracts for new and used automobiles, light trucks, vans and van conversions
(the "Receivables"), all monies paid thereon, and all monies due thereon,
including Accrued Interest (but excluding Accrued Interest paid on or prior to
the Closing Date with respect to such Receivables), security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof, all
documents contained in the Receivable Files, any Liquidation Proceeds, any
rights of the Issuer in proceeds from claims or refunds of premiums on physical
damage, lender's single interest, credit life, disability and hospitalization
insurance policies, if any, covering vehicles financed thereby and the obligors
thereunder, the interest of the Issuer in recourse to dealers relating to
certain of the Receivables, the proceeds of all of the foregoing and the
proceeds of amounts on deposit from time to time in the Spread Account for the
benefit of the Noteholder, the Policy for the benefit of the Noteholder and
certain other rights under the Purchase Agreement and the Trust and Servicing
Agreement.
Under the Indenture, the Issuer will pay, on the eighth calendar day of
each month, or if such day is not a Business Day, on the first Business Day
thereafter (the "Payment Date"), commencing __________ to the person in whose
name this Note is registered on the related Record Date, the portion of Monthly
Interest and Monthly Principal to which the Noteholder is entitled pursuant to
the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
The Note constitutes an obligation of the Issuer only and does not
represent an interest in the Issuer nor an interest in or obligation of any
affiliate of the Issuer, including United Fidelity Finance, LLC or United
Fidelity. The Note is limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in the
Indenture. In addition to the Class A-4 Notes, the Issuer has also issued Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class B Notes. The Class B Notes
are subordinated to the Class A Notes as provided in the Indenture. The
Indenture provides for certain amounts to be deposited into the Spread Account.
In the event amounts available for withdrawal from the Spread Account are
insufficient to make payments relating to this Note and the other notes issued
by the Issuer, the Indenture Trustee will draw on the Policy up to the Policy
Amount to pay such deficiency.
A-4-2
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Noteholder. Any such
consent by the holder of this Note shall be conclusive and binding on the
Noteholder.
This Note is transferrable solely in accordance with Section 2.04 of
the Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to the Noteholder of all amounts
required to be paid to it pursuant to the Indenture. The Servicer may at its
option cause the Indenture Trustee to sell the Pledged Assets at a price not to
be less than the price specified in the Trust Agreement, and such sale of the
Receivables and other property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated: __________
UNITED FIDELITY AUTO TRUST 2001-A
By _______________________________, not in its
individual capacity but solely as Owner Trustee
By:
----------------------------------------
Name:
Title:
A-4-3
CERTIFICATE OF AUTHENTICATION
This is the Note
referred to in the within-mentioned
Indenture.
, solely in
------------------------------------------
its capacity as Indenture Trustee,
By:
----------------------------------------
Name:
Title:
Dated: __________
A-4-4
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:_______
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
------------------------------------------------------------------------------
(name and address of assignee)
------------------------------------------------------------------------------
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints,
_______________________________________________________________________attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated:_________________
Signature Guaranteed:
____________________________________________*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
A-4-5
EXHIBIT B
[FORM OF CLASS B NOTE]
PRINCIPAL IN RESPECT OF THIS CLASS B NOTE IS DISTRIBUTABLE AS SET FORTH HEREIN.
ACCORDINGLY, THE UNPAID PRINCIPAL AMOUNT OF THE FRACTIONAL INTEREST EVIDENCED
HEREBY AT ANY TIME MAY BE LESS THAN THE ORIGINAL PRINCIPAL AMOUNT SET FORTH
HEREIN.
Unless this Note is presented by an authorized representative of The Depository
Trust Company, a New York corporation ("DTC"), to the issuer or its agent for
registration of transfer, exchange or payment, and any Note issued is registered
in the name of Cede & Co. or in such other name as requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner thereof, Cede & Co., has an interest
herein.
PRINCIPAL IN RESPECT OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN.
UNITED FIDELITY AUTO TRUST 2001-A
______% CLASS B AUTOMOBILE RECEIVABLE BACKED NOTE
Evidencing the indebtedness of the United Fidelity Auto Trust 2001-A, a
Delaware business trust, secured by the Pledged Assets, as defined
below, including a pool of simple interest installment loan and
security agreements and installment sales contracts secured by new and
used automobiles, light trucks and vans.
(This Note does not represent an interest in United Fidelity Finance,
LLC nor an interest in or obligation of any of its affiliates. Neither
this Note nor the underlying Receivables, as defined below, are insured
or guaranteed by any government agency).
NUMBER ___ $__________
CUSIP __________
United Fidelity Auto Trust 2001-A, a Delaware business trust, for value
received, hereby promises to pay to the order of [__________] (the "Noteholder")
or its registered assigns, the principal sum of ______________________
($__________), which amount shall be payable in the amounts and at the times set
forth in the Indenture dated as of __________ (the "Indenture"; such term to
include any amendment, restatement, supplement or other modification thereof or
thereto); provided, however, that the entire unpaid amount of this Note shall be
due and payable on or before __________. However, principal with respect to the
Notes may be paid earlier or later under certain limited circumstances under the
Indenture. The Issuer will pay interest on this Note at the Class B Interest
Rate. Such interest shall be payable in the manner and at the times set forth in
the Indenture.
B-1
To the extent not otherwise defined herein, the capitalized terms used herein
have the meanings assigned to them in the Indenture. This Note is issued under
and is subject to the terms, provisions, and conditions of the Indenture, to
which the holder of this Note by virtue of the acceptance hereof assents and by
which such holder is bound.
This Note is secured by the Pledged Assets. The Pledged Assets consist
of a pool of simple interest loan and security agreements and installment sales
contracts for new and used automobiles, light trucks, vans and van conversions
(the "Receivables"), all monies paid thereon, and all monies due thereon,
including Accrued Interest (but excluding Accrued Interest paid on or prior to
the Closing Date with respect to such Receivables), security interests in the
vehicles financed thereby, certain bank accounts and the proceeds thereof, all
documents contained in the Receivable Files, any Liquidation Proceeds, any
rights of the Issuer in proceeds from claims or refunds of premiums on physical
damage, lender's single interest, credit life, disability and hospitalization
insurance policies, if any, covering vehicles financed thereby and the obligors
thereunder, the interest of the Issuer in recourse to dealers relating to
certain of the Receivables, the proceeds of all of the foregoing and the
proceeds of amounts on deposit from time to time in the Spread Account for the
benefit of the Noteholder, the Policy for the benefit of the Noteholder and
certain other rights under the Purchase Agreement and the Trust and Servicing
Agreement.
Under the Indenture, the Issuer will pay, on the eighth calendar day of
each month, or if such day is not a Business Day, on the first Business Day
thereafter (the "Payment Date"), commencing __________ to the person in whose
name this Note is registered on the related Record Date, the portion of Monthly
Interest and Monthly Principal to which the Noteholder is entitled pursuant to
the Indenture.
Payments on this Note will be made by the Indenture Trustee by wire
transfer through the facilities of the Depository Trust Company if this note is
held by Cede & Co. and otherwise by check mailed to the Person entitled thereto
without the presentation or surrender of this Note or the making of any notation
hereon. Except as otherwise provided in the Indenture and notwithstanding the
above, the final payment on this Note will be made only upon presentation and
surrender of this Note at the office or agency maintained for that purpose by
the Indenture Trustee.
The Note constitutes an obligation of the Issuer only and does not
represent an interest in the Issuer nor an interest in or obligation of any
affiliate of the Issuer, including United Fidelity Finance, LLC or United
Fidelity. The Note is limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in the
Indenture. In addition to the Class B Notes, the Issuer has also issued Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes. The Class B
Notes are subordinated to the Class A Notes as provided in the Indenture. The
Indenture provides for certain amounts to be deposited into the Spread Account.
In the event amounts available for withdrawal from the Spread Account are
insufficient to make payments relating to this Note and the other notes issued
by the Issuer, the Indenture Trustee will draw on the Policy up to the Policy
Amount to pay such deficiency.
B-2
The Indenture permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholder under the Indenture at any time by the
Issuer and the Indenture Trustee with the consent of the Noteholder. Any such
consent by the holder of this Note shall be conclusive and binding on the
Noteholder.
This Note is transferrable solely in accordance with Section 2.04 of
the Indenture.
The obligations and responsibilities to the Noteholder created by the
Indenture shall terminate upon the payment to the Noteholder of all amounts
required to be paid to it pursuant to the Indenture. The Servicer may at its
option cause the Indenture Trustee to sell the Pledged Assets at a price not to
be less than the price specified in the Trust Agreement, and such sale of the
Receivables and other property may effect early retirement of the Note.
Although this Note summarizes certain provisions of the Indenture, this
Note does not purport to summarize the Indenture and reference is made to the
Indenture for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Indenture Trustee. In the event of any inconsistency or
conflict between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this Note to be duly
executed.
Dated: __________
UNITED FIDELITY AUTO TRUST 2001-A
By _______________________________, not in its
individual capacity but solely as Owner Trustee
By:
----------------------------------------
Name:
Title:
B-3
CERTIFICATE OF AUTHENTICATION
This is the Note
referred to in the within-mentioned
Indenture.
, solely in
------------------------------------------
its capacity as Indenture Trustee,
By:
----------------------------------------
Name:
Title:
Dated: __________
B-4
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:_______
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
------------------------------------------------------------------------------
(name and address of assignee)
------------------------------------------------------------------------------
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints,
_______________________________________________________________________attorney,
to transfer said Note on the books kept for registration thereof, with full
power of substitution in the premises.
Dated:_________________
Signature Guaranteed:
____________________________________________*
* NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
B-5
