Exhibit 4.3
================================================================================
INDENTURE
between
MMCA AUTO OWNER TRUST 1997-1,
as Issuer
and
BANK OF TOKYO - MITSUBISHI TRUST COMPANY,
as Indenture Trustee
Dated as of October 1, 1997
============================
$-------
____% Asset Backed Notes
============================
================================================================================
CROSS REFERENCE TABLE(1)
TIA Indenture
Section Section
------- -------
310 (a)(1).............................................................. 6.11
(a)(2).............................................................. 6.11
(a)(3).............................................................. 6.10
(a)(4)............................................................ N.A.(2)
(a)(5).............................................................. 6.11
(b) ............................................................ 6.8;6.11
(c) ............................................................... N.A.
311 (a) ............................................................... 6.12
(b) ............................................................... 6.12
(c) ............................................................... N.A.
312 (a) ............................................................... 7.1
(b) ............................................................... 7.2
(c) ............................................................... 7.2
(d) ............................................................... 7.4
313 (a) ............................................................... 7.4
(b)(1).............................................................. 7.4
(b)(2).............................................................. 11.5
(c) ......................................................... 7.4; 11.5
(d) ............................................................... 7.3
314 (a) ................................................................ 7.3
(b) .............................................................. 11.15
(c)(1).............................................................. 11.1
(c)(2).............................................................. 11.1
(c)(3).............................................................. 11.1
(d) ............................................................... 11.1
(e) ............................................................... 11.1
(f) ............................................................... 11.1
315 (a) ............................................................... 6.1
(b) .............................................................6.5;11.5
(c) ............................................................... 6.1
(d) ............................................................... 6.1
(e) ............................................................... 5.13
316 (a) (last sentence)................................................. 1.1
(a)(1)(A)........................................................... 5.11
(a)(1)(B)........................................................... 5.12
(a)(2).............................................................. N.A.
(b) ............................................................... 5.7
(c) ............................................................... N.A
317 (a)(1).............................................................. 5.3
(a)(2).............................................................. 5.3
(b) ............................................................... 3.3
318 (a) ............................................................... 11.7
----------
(1) Note: This Cross Reference Table shall not, for any purpose, be deemed to
be part of this Indenture.
(2) N.A. means Not Applicable.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE................ 2
SECTION 1.1. Definitions.............................................. 2
SECTION 1.2. Incorporation by Reference of
Trust Indenture Act...................................... 13
SECTION 1.3. Rules of Construction.................................... 14
ARTICLE II
THE NOTES................................ 14
SECTION 2.1. Form..................................................... 14
SECTION 2.2. Execution, Authentication and
Delivery................................................. 15
SECTION 2.3. Temporary Notes.......................................... 16
SECTION 2.4. Tax Treatment............................................ 16
SECTION 2.5. Registration; Registration of
Transfer and Exchange.................................... 17
SECTION 2.6. Mutilated, Destroyed, Lost or
Stolen Notes............................................. 18
SECTION 2.7. Persons Deemed Owner..................................... 19
SECTION 2.8. Payment of Principal and Interest;
Defaulted Interest....................................... 19
SECTION 2.9. Cancellation............................................. 21
SECTION 2.10. Release of Collateral.................................... 21
SECTION 2.11. Book-Entry Notes......................................... 21
SECTION 2.12. Notices to Clearing Agency............................... 22
SECTION 2.13. Definitive Notes......................................... 22
SECTION 2.14. Authenticating Agents.................................... 23
ARTICLE III
COVENANTS................................ 25
i
SECTION 3.1. Payment of Principal and Interest........................ 25
SECTION 3.2. Maintenance of Office or Agency.......................... 26
SECTION 3.3. Money for Payments To Be Held
in Trust................................................. 26
SECTION 3.4. Existence................................................ 28
SECTION 3.5. Protection of Trust Estate............................... 28
SECTION 3.6. Opinions as to Trust Estate.............................. 29
SECTION 3.7. Performance of Obligations;
Servicing of Receivables................................. 30
SECTION 3.8. Negative Covenants....................................... 32
SECTION 3.9. Annual Statement as to Compliance........................ 33
SECTION 3.10. Issuer May Consolidate, etc.,
Only on Certain Terms.................................... 33
SECTION 3.11. Successor of Transferee.................................. 35
SECTION 3.12. No Other Business........................................ 36
SECTION 3.13. No Borrowing............................................. 36
SECTION 3.14. Servicer's Obligations................................... 36
SECTION 3.15. Guarantees, Loans, Advances and
Other Liabilities........................................ 36
SECTION 3.16. Capital Expenditures..................................... 36
SECTION 3.17. Further Instruments and Acts............................. 37
SECTION 3.18. Restricted Payments...................................... 37
SECTION 3.19. Notice of Events of Default.............................. 37
SECTION 3.20. Removal of Administrator................................. 37
ARTICLE IV
SATISFACTION AND DISCHARGE........................ 38
SECTION 4.1. Satisfaction and Discharge
of Indenture............................................. 38
SECTION 4.2. Satisfaction, Discharge and
Defeasance of the Notes.................................. 39
SECTION 4.3. Application of Trust Money............................... 41
SECTION 4.4. Repayment of Monies Held by
Paying Agent............................................. 41
ARTICLE V
REMEDIES................................. 42
ii
SECTION 5.1. Events of Default........................................ 43
SECTION 5.2. Acceleration of Maturity;
Rescission and Annulment................................. 45
SECTION 5.3. Collection of Indebtedness
and Suits for Enforcement by
Indenture Trustee........................................ 46
SECTION 5.4. Remedies; Priorities..................................... 49
SECTION 5.5. Optional Preservation of the
Receivables.............................................. 51
SECTION 5.6. Limitation of Suits...................................... 51
SECTION 5.7. Unconditional Rights of
Noteholders To Receive Principal
and Interest............................................. 52
SECTION 5.8. Restoration of Rights and
Remedies................................................. 52
SECTION 5.9. Rights and Remedies Cumulative........................... 53
SECTION 5.10. Delay or Omission Not a Waiver........................... 53
SECTION 5.11. Control by Noteholders................................... 53
SECTION 5.12. Waiver of Past Defaults.................................. 54
SECTION 5.13. Undertaking for Costs.................................... 55
SECTION 5.14. Waiver of Stay or Extension
Laws..................................................... 55
SECTION 5.15. Action on Notes.......................................... 56
SECTION 5.16. Performance and Enforcement
of Certain Obligations................................... 56
ARTICLE VI
THE INDENTURE TRUSTEE.......................... 58
SECTION 6.1. Duties of Indenture Trustee.............................. 58
SECTION 6.2. Rights of Indenture Trustee.............................. 59
SECTION 6.3. Individual Rights of Indenture
Trustee.................................................. 60
SECTION 6.4. Indenture Trustee's Disclaimer........................... 60
SECTION 6.5. Notice of Defaults....................................... 61
SECTION 6.6. Reports by Indenture Trustee to
Holders.................................................. 61
SECTION 6.7. Compensation and Indemnity............................... 61
SECTION 6.8. Replacement of Indenture Trustee......................... 62
iii
SECTION 6.9. Successor Indenture Trustee
by Merger................................................ 63
SECTION 6.10. Appointment of Co-Indenture
Trustee or Separate Indenture
Trustee.................................................. 64
SECTION 6.11. Eligibility; Disqualification............................ 66
SECTION 6.12. Preferential Collection of
Claims Against Issuer.................................... 66
SECTION 6.13. Pennsylvania Motor Vehicle
Sales Finance Act Licenses............................... 66
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS...................... 67
SECTION 7.1. Issuer To Furnish Indenture
Trustee Names and Addresses
of Noteholders........................................... 67
SECTION 7.2. Preservation of Information;
Communications to Noteholders............................ 67
SECTION 7.3. Reports by Issuer........................................ 67
SECTION 7.4. Reports by Indenture Trustee............................. 68
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES................... 69
SECTION 8.1. Collection of Money...................................... 69
SECTION 8.2. Trust Accounts, the Reserve
Account and the Yield Supplement
Account.................................................. 69
SECTION 8.3. General Provisions Regarding
Accounts................................................. 70
SECTION 8.4. Release of Trust Estate.................................. 71
SECTION 8.5. Opinion of Counsel....................................... 72
ARTICLE IX
SUPPLEMENTAL INDENTURES......................... 73
iv
SECTION 9.1. Supplemental Indentures Without
Consent of Noteholders................................... 73
SECTION 9.2. Supplemental Indentures with
Consent of Noteholders................................... 75
SECTION 9.3. Execution of Supplemental
Indentures............................................... 78
SECTION 9.4. Effect of Supplemental Indenture......................... 78
SECTION 9.5. Conformity with Trust Indenture
Act...................................................... 78
SECTION 9.6. Reference in Notes to
Supplemental Indentures.................................. 78
ARTICLE X
REDEMPTION OF NOTES........................... 80
SECTION 10.1. Redemption............................................... 80
SECTION 10.2. Form of Redemption Notice................................ 80
SECTION 10.3. Notes Payable on Redemption Date......................... 81
ARTICLE XI
MISCELLANEOUS.............................. 82
SECTION 11.1. Compliance Certificates and
Opinions, etc............................................ 82
SECTION 11.2. Form of Documents Delivered
to Indenture Trustee..................................... 84
SECTION 11.3. Acts of Noteholders...................................... 85
SECTION 11.4. Notices, etc., to Indenture
Trustee, Issuer and Rating
Agencies................................................. 86
SECTION 11.5. Notices to Noteholders; Waiver........................... 87
SECTION 11.6. Alternate Payment and Notice
Provisions............................................... 88
SECTION 11.7. Conflict with Trust Indenture
Act...................................................... 88
SECTION 11.8. Effect of Headings and Table
of Contents.............................................. 89
SECTION 11.9. Successors and Assigns................................... 89
v
SECTION 11.10. Separability............................................. 89
SECTION 11.11. Benefits of Indenture.................................... 89
SECTION 11.12. Legal Holiday............................................ 89
SECTION 11.13. Governing Law............................................ 89
SECTION 11.14. Counterparts............................................. 90
SECTION 11.15. Recording of Indenture................................... 90
SECTION 11.16. Trust Obligation......................................... 90
SECTION 11.17. No Petition.............................................. 91
SECTION 11.18. Inspection............................................... 91
EXHIBIT A....................................................................A-1
SCHEDULE A..................................................................SA-1
SCHEDULE I..................................................................SI-1
vi
INDENTURE, dated as of October 1, 1997, (as amended, supplemented or
otherwise modified and in effect from time to time, this "Indenture") between
MMCA AUTO OWNER TRUST 1997-1, a Delaware business trust (the "Issuer"), and BANK
OF TOKYO - MITSUBISHI TRUST COMPANY, a New York banking corporation, as trustee
and not in its individual capacity (in such capacity, the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the holders of the Issuer's Class A-1
[___%] Money Market Asset Backed Notes (the "Class A-1 Notes"), Class A-2 [___%]
Asset Backed Notes (the "Class A-2 Notes"), Class A-3 [___%] Asset Backed Notes
(the "Class A-3 Notes") and Class A-4 [___%] Asset Backed Notes (the "Class A-4
Notes") and together with Class A-1 Notes, the Class A-2 Notes and the Class A-3
Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as Indenture Trustee for the benefit of the Holders of the Notes, all of
the Issuer's right, title and interest in, to and under, whether now owned or
existing or hereafter acquired or arising (a) the Receivables; (b) with respect
to Actuarial Receivables, monies due thereunder on or after the Cutoff Date
(including Payaheads) and, with respect to Simple Interest Receivables, monies
due or received thereunder on or after the Cutoff Date; (c) the security
interests in the Financed Vehicles granted by Obligors pursuant to the
Receivables and any other interest of the Issuer in the Financed Vehicles; (d)
rights to receive proceeds with respect to the Receivables from claims on any
physical damage, theft, credit life or disability insurance policies covering
the Financed Vehicles or Obligors; (e) rights to receive proceeds with respect
to the Receivables from recourse to Dealers thereon pursuant to the Dealer
Agreements; (f) all of the Seller's rights to the Receivable Files; (g) the
Trust Accounts, the Reserve Account and the Yield Supplement Account and all
amounts, securities, investments and other property deposited in or credited to
any of the foregoing and all proceeds thereof; (h) the Sale and Servicing
Agreement and the Yield Supplement Agreement; (i) all of the Seller's rights
under the Purchase Agreement, including the right of the Seller to cause MMCA to
repurchase Receivables from the Seller; (j) payments and proceeds with respect
to the Receivables held by the Servicer; (k) all property (including the right
to receive Liquidation Proceeds) securing a Receivable (other than a Receivable
repurchased by the Servicer or purchased by the Seller) acquired on behalf of
the Issuer; (l) rebates of premiums and other amounts relating
to insurance policies and other items financed under the Receivables in effect
as of the Cutoff Date; and (m) all present and future claims, demands, causes of
action and choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights
to payment of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the
"Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders
of the Notes, 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 Holders of the Notes may be adequately and effectively
protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1.(a) Definitions. Except as otherwise specified herein or
as the context may otherwise require, the following terms have the respective
meanings set forth below for all purposes of this Indenture.
"Act" shall have the meaning specified in Section 11.3(a).
"Administration Agreement" shall mean the Administration Agreement,
dated as of October 1, 1997, by and among the Administrator, the Issuer and the
Indenture Trustee, as the same may from time to time be amended, supplemented or
otherwise modified and in effect.
2
"Administrator" shall mean Mitsubishi Motors Credit of America,
Inc., a Delaware corporation, or any successor Administrator under the
Administration Agreement.
"Affiliate" shall mean, with respect to any specified Person, any
other Person directly or indirectly 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 Person shall mean the power to direct
the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.
"Authenticating Agent" shall have the meaning specified in Section
2.14.
"Authorized Officer" shall mean, with respect to the Issuer, any
officer of the Owner Trustee who is authorized to act for or on behalf of the
Owner Trustee in matters relating to the Issuer and who is identified on the
list of Authorized Officers delivered by the Owner Trustee to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter) and, for so long as the Administration Agreement is in
full force and effect, any officer of the Administrator who is authorized to act
for the Administrator in matters relating to the Issuer and to be acted upon by
the Administrator pursuant to the Administration Agreement.
"Basic Documents" shall mean this Agreement, the Certificate of
Trust, the Trust Agreement, the Sale and Servicing Agreement, the Purchase
Agreement, the Administration Agreement, the Note Depository Agreement, the
Yield Supplement Agreement and other documents and certificates delivered in
connection therewith as the same may from time to time be amended, supplemented
or otherwise modified and in effect.
"Book-Entry Notes" shall mean 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 2.11.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which banking institutions or trust companies in New York, New York or
Los Angeles, California are authorized or obligated by law, regulation or
executive order to remain closed.
3
"Certificate of Trust" shall mean the certificate of trust of the
Issuer substantially in the form of Exhibit D to the Trust Agreement.
"Class " means a class of Notes, which may be Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes or the Class A-4 Notes
"Class A-1 Final Scheduled Payment Date" shall mean the _____ 1997
Payment Date.
"Class A-1 Noteholder" shall mean the Person in whose name a Class
A-1 Note is registered on the Note Register.
"Class A-1 Notes" shall mean the $________ aggregate initial
principal amount Class A-1 [___%] Money Market Asset Backed Notes issued by the
Trust pursuant to the Indenture, [substantially in the form of Exhibit A-1 to
the Indenture.]
"Class A-1 Rate" shall mean ___% per annum. Interest with respect to
the Class A-1 Notes shall be computed on the basis of actual days elapsed and a
360-day year.
"Class A-2 Final Scheduled Payment Date" shall mean the _____
Payment Date.
"Class A-2 Noteholder" shall mean the Person in whose name a Class
A-2 Note is registered on the Note Register.
"Class A-2 Notes" shall mean the $___ aggregate initial principal
amount Class A-2 [___%] Asset Backed Notes issued by the Trust pursuant to the
Indenture, [substantially in the form of Exhibit A-2 to the Indenture]
"Class A-2 Rate" shall mean ___% per anum. Interest with respect to
the Class A-2 Notes shall be computed on the basis of actual days elapsed and a
360-day year.
"Class A-3 Final Scheduled Payment Date" shall mean the _____
Payment Date.
"Class A-3 Noteholder" shall mean the Person on whose name a Class
A-3 Note is registered on the Note Register.
4
"Class A-3 Notes" shall mean the $____________ aggregate initial
principal amount of Class A-3 ____% Asset Backed Notes issued by the Trust
pursuant to the Indenture, [substantially in the form of Exhibit A-3 to the
Indenture]
"Class A-3 Rate" shall mean _____% per annum. Interest with respect
to the Class A-3 Notes shall be computed on the basis of a 360-day year of
twelve 30-day months.
"Class A-4 Final Scheduled Payment Date" shall mean the ___ Payment
Date
"Class A-4 Noteholder" shall mean the Person in whose name a Class
A-4 Note is registered on the Note Register.
"Class A-4 Notes" shall mean the $____ aggregate initial principal
amount Class A-4 [___%] Asset Backed Noted issued by the Trust pursuant to the
Indenture, [substantially in the form of Exhibit A-4 to the Indenture.
"Class A-4 Rate" shall mean ___% per anum. Interest with respect to
the Class A-4 Notes shall be computed on the basis of a 360 day year of twelve
30-day months.
"Clearing Agency" shall mean an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" shall mean _______, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and Treasury Regulations promulgated thereunder.
"Collateral" shall have the meaning specified in the Granting Clause
of this Indenture.
"Commission" means the Securities and Exchange Commission.
5
"Corporate Trust Office" shall mean the principal office of the
Indenture Trustee at which at any particular time its corporate trust business
shall be administered, which office at date of execution of this Indenture is
located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Xxxxx Xxxxxxxx, or at such other address as the Indenture Trustee may designate
from time to time by notice to the Noteholders and the Issuer, or the principal
corporate trust office of any successor Indenture Trustee at the address
designated by such successor Indenture Trustee by notice to the Noteholders and
the Issuer.
"Default" shall mean 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 2.11.
"Event of Default" shall have the meaning specified in Section 5.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Executive Officer" shall mean, with respect to any corporation, 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 and, with respect to any partnership, any general
partner thereof.
"Final Scheduled Payment Date" shall mean the _________ Payment
Date.
"Grant" shall mean to mortgage, pledge, bargain, sell, warrant,
alienate, remise, release, convey, assign, transfer, create, and to xxxxx x xxxx
upon and a security interest in and right of set-off against, and to deposit,
set over and confirm pursuant to this Indenture. A Grant of the Collateral or of
any other agreement or instrument shall include all rights, powers and options
(but none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Collateral and all other
monies payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring Proceedings in the name of the granting party or otherwise, and generally
to do and
6
receive anything that the granting party is or may be entitled to do or receive
thereunder or with respect thereto.
"Holder" or "Noteholder" shall mean the Person in whose name a Note
is registered on the Note Register.
"Indenture Trustee" shall mean Bank of Tokyo -Mitsubishi Trust
Company, a New York banking corporation, as Indenture Trustee under this
Indenture, or any successor Indenture Trustee under this Indenture.
"Independent" shall mean, when used with respect to any specified
Person, that such Person (a) is in fact independent of the Issuer, any other
obligor on the Notes, the Seller and any Affiliate of any of the foregoing
Persons, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, any such other obligor, the Seller or
any Affiliate of any of the foregoing Persons and (c) is not connected with the
Issuer, any such other obligor, the Seller or any Affiliate of any of the
foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" shall mean a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1, made by
an Independent appraiser or other expert appointed by an Issuer Order and
approved by the Indenture Trustee in the exercise of reasonable care, and such
opinion or certificate shall state that the signer has read the definition of
"Independent" in this Indenture and that the signer is Independent within the
meaning thereof.
"Interest Accrual Period" shall mean, with respect to any Payment
Date, the period from and including the previous Payment Date (or, in the case
of the first Payment Date, the Closing Date) to but excluding such Payment Date.
"Issuer" shall mean MMCA Auto Owner Trust 1997-1 unless a successor
replaces it and, thereafter, means the successor and for purposes of any
provision contained herein and required by the TIA, each other obligor on the
Notes.
7
"Issuer Order" and "Issuer Request" shall mean a written order or
request signed in the name of the Issuer by any one of its Authorized Officers
and delivered to the Indenture Trustee.
"Noteholder's Monthly Accrued Note Interest" means, with respect to
any Payment Date the sum, for each Class of Notes, of interest accrued for the
related Interest Period at the applicable Note Interest Rate on the aggregate
principal balance of the Notes of each class as of the immediately preceding
Payment Date after giving effect o all payments of principal to Noteholders on
or prior to such preceding Payment Date (or, in the case of the first Payment
Date, the initial principal balance of the Notes).
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes, collectively
"Note Depository Agreement" shall mean the agreement dated _______,
1997, among the Issuer, the Indenture Trustee and The Depository Trust Company,
as the initial Clearing Agency, relating to the Notes.
"Note Interest Rate" means in the case of Class A-1 Notes, ____% per
anum, in the case of Class A-2 Notes, ___% per annum, in the case of the Class
A-3 Notes ___% per annum, and in the case of class A-4 Notes ___% per annum.
"Note Owner" shall mean, with respect to any Book-Entry Note, the
Person who is the beneficial owner of such Book-Entry Note, as reflected on the
books of the Clearing Agency or on the books of a Person maintaining an account
with such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such Clearing
Agency).
"Note Register" and "Note Registrar" shall have the respective
meanings specified in Section 2.5.
"Officer's Certificate" shall mean a certificate signed by any
Authorized Officer of the Issuer, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1, and
delivered to the Indenture Trustee. Unless otherwise specified, any reference in
this Indenture to an Officer's Certificate shall be to an Officer's Certificate
of any Authorized Officer of the Issuer.
8
"Opinion of Counsel" shall mean one or more written opinions of
counsel who may, except as otherwise expressly provided in this Indenture, be
employees of or counsel to the Issuer, MMCA or the Servicer and who shall be
satisfactory to the Indenture Trustee, and which opinion or opinions shall be
addressed to the Indenture Trustee as Indenture Trustee, shall comply with any
applicable requirements of Section 11.1 and shall be in form and substance
satisfactory to the Indenture Trustee.
"Outstanding" shall mean, 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 has been made,
satisfactory to the Indenture Trustee); and
(iii) Notes in exchange for or in lieu of which other Notes
have been authenticated and delivered pursuant to this Indenture
unless proof satisfactory to the Indenture Trustee is presented that
any such Notes are held by a bona fide purchaser;
provided, that in determining whether the Holders of the requisite principal
amount of the Notes Outstanding have given any request, demand, authorization,
direction, notice, consent, or waiver hereunder or under any Basic Document,
Notes owned by the Issuer, any other obligor upon the Notes, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent, or waiver, only Notes that a
Responsible Officer of 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,
9
any other obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons.
"Outstanding Amount" shall mean the aggregate principal amount of
all Notes Outstanding at the date of determination.
"Owner Trustee" shall mean Wilmington Trust Company, a Delaware
trust company, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement, or any successor Owner Trustee under the Trust Agreement.
"Paying Agent" shall mean the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 and is authorized by the Issuer to make payments to and
distributions from the Collection Account and the Note Payment Account,
including payment of principal of or interest on the Notes on behalf of the
Issuer.
"Payment Date" shall mean the fifteenth (15th) day of each calendar
month or, if such day is not a Business Day, the next succeeding Business Day.
"Person" shall mean any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust (including any beneficiary thereof), unincorporated organization,
or government or any agency or political subdivision thereof.
"Predecessor Note" shall mean, 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 purposes of this definition, any Note
authenticated and delivered under Section 2.6 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.
"Proceeding" shall mean any suit in equity, action at law or other
judicial or administrative proceeding.
"Rating Agencies" shall mean Xxxxx'x and S&P. If no such
organization or successor is any longer in existence, "Rating Agency" shall be a
nationally recognized statistical rating organization or other comparable Person
10
designated by the Issuer, notice of which designation shall be given to the
Indenture Trustee, the Owner Trustee and the Servicer.
"Rating Agency Condition" shall mean, with respect to any action,
that each Rating Agency shall have been given prior notice thereof and that each
of the Rating Agencies shall have notified the Seller, the Servicer, the
Indenture Trustee, and the Owner Trustee that such action shall not result in a
reduction or withdrawal of the then current rating assigned to the Notes or the
Certificates.
"Record Date" shall mean, with respect to a Payment Date or
Redemption Date, the close of business on the day prior to such Payment Date or
Redemption Date or, if Definitive Notes have been issued pursuant to Section
2.13, the fifteenth (15th) day of the preceding month.
"Redemption Date" shall mean the Payment Date specified by the
Servicer pursuant to Section 10.1(a) or (b), as applicable, on which date the
Indenture Trustee shall withdraw any amount remaining in the Reserve Account and
deposit the applicable amount thereof payable to the Notes in the Note Payment
Account.
"Redemption Price" shall mean an amount equal to the unpaid
principal amount of the Notes redeemed plus accrued and unpaid interest thereon.
"Registered Holder" shall mean the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Relevant UCC" shall mean, unless the context otherwise requires,
the Uniform Commercial Code as in effect in the relevant jurisdiction, as
amended from time to time.
"Responsible Officer" shall mean, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office of the Indenture Trustee
with direct responsibility for the administration of this Indenture and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Sale and Servicing Agreement" shall mean that certain Sale and
Servicing Agreement, dated as of october 1, 1997, by and among the Issuer, the
Seller and the Servicer, as from time to time amended, supplemented or otherwise
modified and in effect.
11
"Scheduled Principal" shall mean, with respect to any Payment Date,
the sum of (a) collections received during the preceding Collection Period of
principal on Simple Interest Receivables, other than collections of principal
attributable to the Last Scheduled Payment of a Simple Interest Receivable that
is a Final Payment Receivable, and other than any charges for excess wear and
tear and excess mileage, (b) the principal portion of each Scheduled
Payment(other than a Last Scheduled Payment on a Final Payment Receivable) due
on any Actuarial Receivable during the related collection Period., (c) the
Principal Balance (without duplication of amounts taken into account under (a)
or (b) of (i)Receivable prepaid in full during the related Collection Period in
accordance with the Servicer's normal and customary servicing practices and
procedures, (d) the Purchase Amount of each Receivable that was repurchased by
the Seller or purchased by the Service during such Collection Period to the
extent attributable to principal (e) the proceeds of any other sale of a
Receivable (including pursuant to Section 9.2 of the Trust Agreement), to the
extent allocable to principal, and (f) partial prepayments attributable to any
refunded item included in the Amount Financed, such as extended warranty
protection plan costs or physical damage, credit life, disability insurance
premiums, or any partial prepayment which causes a reduction in the Obligor's
periodic payment to be below the Scheduled Payment as of the Cutoff Date;
provided, however, that in calculating the Scheduled Principal, all payments and
proceeds (including Liquidation Proceeds) of any Purchased Receivables the
Purchase Amount of which has been included in Scheduled Principal in a prior
Collection Period (which shall be paid to the Seller or Servicer, as applicable)
will be excluded.
"Schedule of Receivables" shall mean the listing of Receivables set
forth in Schedule A (which Schedule may be in the form of microfiche).
"Securities Act" shall mean the Securities Act of 1933, as amend-
ed.
"Seller" shall mean MMCA Auto Receivables, Inc., a Delaware
corporation, in its capacity as seller under the Sale and Servicing Agreement,
and its successors-in-interest.
"Servicer" shall mean Mitsubishi Motors Credit of America, Inc., a
Delaware corporation, in its capacity as servicer under the Sale and Servicing
Agreement, and any successor Servicer thereunder.
12
"State" shall mean any of the fifty States of the United States of
America or the District of Columbia.
"Successor Servicer" shall have the meaning specified in Section
3.7(e).
"Trust Estate" shall mean all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of this Indenture for the benefit of the Noteholders (including,
without limitation, all property and interests Granted to the Indenture
Trustee), including all proceeds thereof.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of
1939, as amended, unless otherwise specifically provided.
(b) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein have
the respective meanings set forth in, or incorporated by reference into, the
Sale and Servicing Agreement for all purposes of this Indenture.
"Total Required Payment" means, on any Payment Date, the Total
Servicing Fee, the Accrued Note Interest, the Noteholders' Regular Principal.
SECTION 1.2. 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" shall mean the Securities and Exchange Commission.
"indenture securities" shall mean the Notes.
"indenture security holder" shall mean a Noteholder.
"indenture to be qualified" shall mean this Indenture.
"indenture trustee" or "institutional trustee" shall mean the Inden-
ture Trustee.
13
"obligor" on the indenture securities shall mean the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in the
TIA, defined by TIA reference to another statute or defined by Commission rule
have the meaning assigned to them by such definitions.
SECTION 1.3. 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; and
(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 all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
ARTICLE II
THE NOTES
SECTION 2.1. Form. (a) The Class A-1 Notes, the Class A-2 Notes, the
Class A-3 Notes and the Class A-4 Notes, together with the Indenture Trustee's
Certificates of authentification, shall be substantially the form set forth in
Exhibit [A-1], Exhibit [A-2], Exhibit [A-3] and Exhibit [A-4], respectively,
14
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the officers executing
such Notes, as evidenced by their execution thereof. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
(b) The Definitive Notes shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods (with or without
steel engraved borders), all as determined by the officers executing such Notes,
as evidenced by their execution of such Notes.
(c) Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibit A hereto are part of the terms of this
Indenture and are incorporated herein by reference.
SECTION 2.2. Execution, Authentication and Delivery. (a) The Notes
shall be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or fac-
simile.
(b) Notes bearing the manual or facsimile signature of individuals
who were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
(c) The Indenture Trustee shall, upon Issuer Order, authenticate and
deliver Class A-1 Notes for original issue in an aggregate principal amount of $
_______, Class A-2 Notes for original issue in an aggregate principal amount of
$ ______, Class A-3 Notes for original issue in an aggregate principal amount of
$ _________ and Class A-4 Notes for original issue in an aggregate principal
amount of $ _________. The aggregate principal amounts of Class A-1 Notes, Class
A-2 Notes, Class A-3 Notes and Class A-4 Notes outstanding at any time may not
exceed those respective amounts except as provided in Section 2.6.
15
(d) Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes in minimum denominations of $1,000
and integral multiples thereof.
(e) No Note shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.3. Temporary Notes. (a) Pending the preparation of
definitive Notes, 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.
If temporary Notes are issued, the Issuer shall cause Definitive
Notes to be prepared without unreasonable delay. After the preparation of
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Issuer to
be maintained as provided in Section 3.2, 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 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 2.4. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes shall be issued, with the intention that, for federal,
state and local income and franchise tax purposes, the Notes shall qualify as
indebtedness of the Issuer secured by the Trust Estate. The Issuer, by entering
into this Indenture, and each Noteholder, by its acceptance of a 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 and franchise tax
purposes as indebtedness of the Issuer.
16
SECTION 2.5. Registration; Registration of Transfer and Exchange.
(a) The Issuer shall cause to be kept a register (the "Note Register") in which,
subject to such reasonable regulations as it may prescribe, the Issuer shall
provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee initially shall be the "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, (i) the Issuer shall give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
any change in the location, of the Note Register, (ii) the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof, and (iii) the Indenture Trustee shall have the right to
rely upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Holders of the Notes and
the principal amounts and number of such Notes.
(c) Upon surrender for registration of transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.2, if
the requirements of Section 8-401(l) of the Relevant UCC are met 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 transferee, one or more new Notes in any authorized denomination,
of a like aggregate principal amount.
(d) At the option of the Noteholder, Notes may be exchanged for
other Notes of the same class in any authorized denominations, of a like
aggregate principal amount, upon surrender of the Notes to be exchanged at such
office or agency. Whenever any Notes are so surrendered for exchange, if the
requirements of Section 8-401(l) of the Relevant UCC are met, the Issuer shall
execute, the Indenture Trustee shall authenticate, and the Noteholder shall
obtain from the Indenture Trustee, the Notes which the Noteholder making such
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.
17
(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 an "eligible guarantor institution" meeting the
requirements of the Note Registrar.
(g) No service charge shall be made to a Holder for any registration
of transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.
(h) The preceding provisions of this Section 2.5 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 fifteen (15) days preceding the due date for any payment with
respect to such Note.
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes. (a) If (i)
any mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Indenture Trustee such security
or indemnity as may be required by it to hold the Issuer and the Indenture
Trustee harmless, then, in the absence of notice to the Issuer, the Note
Registrar or the Indenture Trustee that such Note has been acquired by a bona
fide purchaser, and provided that the requirements of Section 8-405 of the
Relevant UCC are met, 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 (7) days shall be
due and payable, or shall have been called for redemption, instead of issuing a
replacement Note of the same Class, 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
and the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was
18
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 or the Indenture Trustee in connection therewith.
(b) Upon the issuance of any replacement Note under this Section
2.6, the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
(c) Every replacement Note issued pursuant to this Section 2.6 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section 2.6 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.7. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the 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 Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.8. Payment of Principal and Interest; Defaulted Interest.
(a) The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes shall accrue interest at the Class A-1 Rate, the Class A-3 Rate, and
the Class A-4 Rate, respectively, as set forth in Exhibit [A-1], Exhibit [A-2],
Exhibit [A-3] and Exhibit [A-4], respectively, and such interest shall be due
and payable on each Payment Date as specified in Exhibit A hereto, subject to
Section 3.1. Any installment of interest or principal, if any, payable on any
Note that is punctually paid or duly provided for by the Issuer on the
applicable
19
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; provided that, unless Definitive Notes have been issued
pursuant to Section 2.13, 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 shall 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 or
on the Final Scheduled Payment Date (and except for the Redemption Price for any
Note called for redemption pursuant to Section 10.1), which shall be payable as
provided below. The funds represented by any such checks returned undelivered
shall be held in accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on
each Payment Date as provided in the form of the Note set forth in Exhibit
[A-1], Exhibit [A-2], Exhibit [A-3] and Exhibit [A-4], respectively hereto.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the date on which an Event
of Default shall have occurred and be continuing, if the Indenture Trustee or
the Holders of Notes representing not less than a majority of the principal
amount of the Notes Outstanding have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2. All principal payments on the
Notes shall be made pro rata to the Noteholders 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 Issuer
expects that the final installment of principal of and interest on such Note
shall be paid. Such notice shall be mailed or transmitted by facsimile prior to
such final Payment Date and shall specify that such final installment shall be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemption of Notes shall be mailed to
Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes,
the Issuer shall, on the Payment Date following such default, pay defaulted
interest (plus interest on such defaulted interest to the extent lawful) at the
applicable Note Interest Rate in any lawful manner. The Issuer shall pay such
defaulted interest to the Persons who are Noteholders on the Record Date for
such following Payment Date.
20
SECTION 2.9. 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 2.9, except as expressly
permitted by this Indenture. All cancelled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Order that they be destroyed or returned to it, provided, that such Issuer Order
is timely and the Notes have not been previously disposed of by the Indenture
Trustee.
SECTION 2.10. Release of Collateral. Subject to Section 11.1 and the
terms of the 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 TIA Sections 314(c) and 314(d)(1) or an Opinion of Counsel in
lieu of such Independent Certificates to the effect that the TIA does not
require any such Independent Certificates. If the Commission shall issue an
exemptive order under TIA Section 304(d) modifying the Owner Trustee's
obligations under TIA Sections 314(c) and 314(d)(1), the Indenture Trustee shall
release property from the lien of this Indenture in accordance with the
conditions and procedures set forth in such exemptive order.
SECTION 2.11. Book-Entry Notes. The Notes, upon original issuance,
shall be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Clearing
Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the nominee
of the initial Clearing Agency, and no Note Owner thereof shall receive a
definitive Note representing such Note Owner's interest in such Note, except as
provided in Section 2.13. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to such Note Owners pursuant to
Section 2.13:
(i) the provisions of this Section 2.11 shall be in full force
and effect;
21
(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 2.11
conflict with any other provisions of this Indenture, the provisions
of this Section shall control;
(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 Note
Depository Agreement. Unless and until Definitive Notes are issued
pursuant to Section 2.13, the initial Clearing Agency shall make
book-entry transfers among the Clearing Agency Participants and
receive and transmit payments of principal of and interest on the
Notes to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the principal amount of the
Notes Outstanding, 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 2.12. 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 such Note Owners pursuant to
Section 2.13, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to such Note Owners.
SECTION 2.13. Definitive Notes. If (i) the Issuer, the Adminis-
trator or the Servicer advises the Indenture Trustee in writing that the
Clearing
22
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Book-Entry Notes and the Indenture Trustee or the
Administrator is unable to locate a qualified successor, (ii) the Administrator,
at its option, advises the Indenture Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default or a Servicer Default, Note Owners of the
Book-Entry Notes representing beneficial interests aggregating not less than 51%
of the principal amount of such Notes advise the Indenture Trustee and the
Clearing Agency in writing that the continuation of a book-entry system through
the Clearing Agency is no longer in the best interests of such Note Owners, then
the Clearing Agency shall notify all Note Owners and the Indenture Trustee of
the occurrence of such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, the Note Registrar or
the Indenture Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Notes, the Indenture Trustee
shall recognize the Holders of the Definitive Notes as Noteholders.
SECTION 2.14. Authenticating Agents. The Indenture Trustee may
appoint one or more Persons (each, an "Authenticating Agent" with power to act
on its behalf and subject to its direction in the authentication of Notes in
connection with issuance, transfers and exchanges under Sections 2.2, 2.3, 2.5
and 2.6, as fully to all intents and purposes as though each such Authenticating
Agent had been expressly authorized by those Sections to authenticate such
Notes. For all purposes of this Indenture, the authentication of Notes by an
Authenticating Agent pursuant to this Section 2.14 shall be deemed to be the
authentication of Notes "by the Indenture Trustee."
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, without the execution or filing of any
further act on the part of the parties hereto or such Authenticating Agent or
such successor corporation.
23
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Indenture Trustee and the Owner Trustee. The
Indenture Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
the Owner Trustee. Upon receiving such notice of resignation or upon such a
termination, the Indenture Trustee may appoint a successor Authenticating Agent
and shall give written notice of any such appointment to the Owner Trustee.
The Administrator agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services. The provisions of
Sections 2.9 and 6.4 shall be applicable to any Authenticating Agent.
24
ARTICLE III
COVENANTS
SECTION 3.1. Payment of Principal and Interest. The Issuer shall
duly and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing, the Issuer shall cause to be paid all amounts on deposit in the Note
Payment Account on a Payment Date deposited therein pursuant to the Sale and
Servicing Agreement. On each Payment Date, all amounts on deposit in the Note
Payment Account will be paid in the following order of priority;
(i) to the Noteholders of each class, accrued and unpaid
interest on the outstanding principal amount of the
applicable class of Notes at the applicable Note
Interest Rate;
(ii) to the Noteholders of the Class A-1 Notes in reduction
of principal until the principal amount of the Class A-1
Notes has been paid in full;
(iii) to the Noteholders of the Class A-2 Notes in reduction
of principal until the principal amount of the Class A-2
Notes has been paid in full;
(iv) to the Noteholders of the Class A-3 Notes in reduction
of principal until the principal amount of the Class A-2
Notes has been paid in full;
(v) to the Noteholders of Class A-4 Notes in reduction of
principal until the principal amount of the Class A-4
Notes has been paid in full.
The principal amount of the Class A-1 Notes, to the extent not previously
paid, will be due on the Class A-1 Final Payment Date, the principal amount of
the Class A-2 Notes, to the extent not previously paid, will be due on the Class
25
A-2 Final Payment Date, the principal amount of the Class A-3 Notes, to the
extent not previously paid, will be due on the Class A-3 Final Payment Date, and
the principal amount of Class A-4 Notes, to the extent not previously paid, will
be due on the Class A-4 Final Payment Date. The actual date on which the
aggregate outstanding principal amount of any class of Notes is paid may be
earlier or later than the respective Final Payment Dates set forth above based
on a variety of factors, including those described under "Maturity and
Prepayment Considerations" herein.
SECTION 3.2. Maintenance of Office or Agency. The Issuer shall
maintain in the Borough of Manhattan, 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 shall give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If, at any time, the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 3.3. Money for Payments To Be Held in Trust. (a) As provided
in Section 8.2, all payments of amounts due and payable with respect to any
Notes that are to be made from amounts withdrawn from the Collection Account,
the Reserve Account and the Note Payment 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, the Reserve Account and the Note Payment
Account for payments of Notes shall be paid over to the Issuer, except as
provided in this Section 3.3.
(b) On or before each Payment Date and Redemption Date, the Issuer
shall deposit or cause to be deposited in the Note Payment Account an aggregate
sum sufficient to pay the amounts then becoming due under the Notes, such sum to
be held in trust for the benefit of the Persons entitled thereto, and (unless
the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture
Trustee of its action or failure so to act.
26
(c) The Issuer shall cause each Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section 3.3, that such Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with
respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to
the Indenture Trustee all sums so held in trust by such Paying
Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment
of Notes if at any time it ceases to meet the standards required to
be met by a Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code and any state or
local tax law with respect to the withholding from any payments made
by it on 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
27
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
(e) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Paying Agent in trust for the payment
of any amount due with respect to any Note and remaining unclaimed for two (2)
years after such amount has become due and payable shall be discharged from such
trust and be paid to the Issuer on Issuer Request; and the Holder of such Note
shall thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
a newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than thirty (30) days from the date of such publication, any
unclaimed balance of such money then remaining shall be repaid to the Issuer.
The Indenture Trustee shall also adopt and employ, at the expense and direction
of the Issuer, any other reasonable means of notification of such repayment
(including, but not limited to, mailing notice of such repayment to Holders
whose Notes have been called but have not been surrendered for redemption or
whose right to or interest in monies due and payable but not claimed is
determinable from the records of the Indenture Trustee or of any Paying Agent,
at the last address of record for each such Holder).
SECTION 3.4. Existence. The Issuer shall keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other State or of the United States of America,
in which case the Issuer shall keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and shall obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Trust Estate.
SECTION 3.5. Protection of Trust Estate. The Issuer shall from time
to time execute and deliver all such supplements and amendments hereto and
28
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and shall take such other action necessary or
advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust
Estate against the claims of all Persons.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.5.
SECTION 3.6. Opinions as to Trust Estate. (a) On the Closing Date,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording and filing of this Indenture, any indentures
supplemental hereto, and any other requisite documents, and with respect to the
execution and filing of any financing statements and continuation statements, as
are necessary to perfect and make effective the lien and security interest of
this Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before May 31, in each calendar year, beginning in 1998,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and continuation
statements as is necessary to maintain the lien and security interest created by
this Indenture and reciting the details of such action or stating that in the
opinion of such counsel no such action is necessary to maintain such lien and
security
29
interest. Such Opinion of Counsel shall also describe the recording, filing,
rerecording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that shall, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture until May 31 in the following calendar year.
SECTION 3.7. Performance of Obligations; Servicing of Receivables.
(a) The Issuer shall not take any action and shall use its best efforts not to
permit any action to be taken by others that would release any Person from any
of such Person's material covenants or obligations under any instrument or
agreement included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture and the other Basic Documents.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Estate, including, but
not limited to, filing or causing to be filed all financing statements and
continuation statements required to be filed under the Relevant UCC by the terms
of this Indenture and the Sale and Servicing Agreement in accordance with and
within the time periods provided for herein and therein. 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 or the Holders of at least a majority of the
principal amount of the Notes Outstanding.
(d) If the Issuer shall have knowledge of the occurrence of an Event
of Servicing Termination under the Sale and Servicing Agreement, the Issuer
shall promptly notify the Indenture Trustee and the Rating Agencies thereof and
shall specify in such notice the action, if any, the Issuer is taking in respect
of such default. If an Event of Servicing Termination shall arise from the
30
failure of the Servicer to perform any of its duties or obligations under the
Sale and Servicing Agreement with respect to the Receivables, the Issuer shall
take all reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of
termination to the Servicer of the Servicer's rights and powers pursuant to
Section 8.1 of the Sale and Servicing Agreement, the Issuer shall (subject to
the rights of the Indenture Trustee to direct such appointment pursuant to
Section 8.2 of the Sale and Servicing agreement) appoint a successor servicer
(the "Successor Servicer"), and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed and has
not accepted its appointment at the time when the Servicer ceases to act as
Servicer, the Indenture Trustee, without further action, shall automatically be
appointed the Successor Servicer. The Indenture Trustee may resign as the
Servicer by giving written notice of such resignation to the Issuer and in such
event shall be released from such duties and obligations, such release not to be
effective until the date a new servicer enters into a servicing agreement with
the Issuer as provided below. Upon delivery of any such notice to the Issuer,
the Issuer shall obtain a new servicer as the Successor Servicer under the Sale
and Servicing Agreement. Any Successor Servicer (other than the Indenture
Trustee) shall (i) be an established financial institution having a net worth of
not less than $50,000,000 and whose regular business includes the servicing of
Contracts and (ii) enter into a servicing agreement with the Issuer having
substantially the same provisions as the provisions of the Sale and Servicing
Agreement applicable to the Servicer. If, within thirty (30) days after the
delivery of the notice referred to above, the Issuer shall not have obtained
such a new servicer, the Indenture Trustee may appoint, or may petition a court
of competent jurisdiction to appoint, a Successor Servicer. In connection with
any such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree, subject to
the limitations set forth below and in the Sale and Servicing Agreement, and in
accordance with Section 8.2 of the Sale and Servicing Agreement, the Issuer
shall enter into an agreement with such successor for the servicing of the
Receivables (such agreement to be in form and substance satisfactory to the
Indenture Trustee). If the Indenture Trustee shall succeed to the Servicer's
duties as servicer of the Receivables as provided herein, it shall do so in its
individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI hereof 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
31
under the Sale and Servicing Agreement, the Indenture Trustee shall be entitled
to appoint as Servicer any one of its Affiliates; provided that the Indenture
Trustee, in its capacity as the Servicer, shall be fully liable for the actions
and omissions of such Affiliate in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify
the Indenture Trustee. As soon as a Successor Servicer is appointed by the
Issuer, the Issuer shall notify the Indenture Trustee of such appointment,
specifying in such notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer hereby agrees that it shall not, without
the prior written consent of the Indenture Trustee or the Holders of at least a
majority in principal amount of the Notes Outstanding, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise provided in the Sale and Servicing Agreement or
the Basic Documents).
SECTION 3.8. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture, the Trust
Agreement, the Purchase Agreement or the Sale and Servicing
Agreement, sell, transfer, exchange or otherwise dispose of any of
the properties or assets of the Issuer, including those included in
the Trust Estate, unless directed to do so by the Indenture Trustee;
(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
assert any claim against any present or former Noteholder by reason
of the payment of the taxes levied or assessed upon the Trust;
(iii) dissolve or liquidate in whole or in part; or
32
(iv) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations
with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (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 assets of the Trust or any part
thereof or any interest therein or the proceeds thereof or (C)
permit the lien of this Indenture not to constitute a valid first
priority (other than with respect to any such tax, mechanics' or
other lien) security interest in the Trust Estate.
SECTION 3.9. Annual Statement as to Compliance. The Issuer shall
deliver to the Indenture Trustee, within 120 days after the end of each calendar
year (commencing with the year 1998), an Officer's Certificate 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 its 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 its compliance with any such condition or
covenant, specifying each such default known to such Authorized
Officer and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized
and existing under the laws of the United States of America or any
State and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual payment
33
of the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of the Issuer to be performed or observed, all as provided
herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
(b) Other than as specifically contemplated by the Basic Documents,
the Issuer shall not convey or transfer any of its properties or assets,
including those included in the Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen or a
Person organized and existing under the laws of the United States of
America or any State, (B) expressly assumes, by an indenture
supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and
34
the performance or observance of every agreement and covenant of
this Indenture on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agrees by means of
such supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in
such supplemental indenture, expressly agrees to indemnify, defend
and hold harmless the Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes,
and (E) expressly agrees 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 transaction, 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 transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the Indenture Trustee) to the
effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture Trustee
an Officer's Certificate and an Opinion of Counsel each stating that
such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act).
SECTION 3.11. Successor of Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person
35
formed by or surviving such consolidation or merger (if other than the Issuer)
shall succeed to, and be substituted for, and may exercise every right and power
of, the Issuer under this Indenture with the same effect as if such Person had
been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties
of the Issuer pursuant to Section 3.10(b), the Issuer shall be released from
every covenant and agreement of this Indenture to be observed or performed on
the part of the Issuer with respect to the Notes immediately upon the delivery
of written notice to the Indenture Trustee stating that the Issuer is to be so
released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, acquiring, owning and pledging the Receivables in
the manner contemplated by this Indenture and the Basic Documents and activities
incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes, the Certificates and the Final Payment
Certificate.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with the Sale and Servicing Agreement, including Sections
3.9, 3.10, 3.11, 3.12, 3.13, 3.14 and 4.9 and Article VII thereof.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by this Indenture and the other Basic Documents, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
36
SECTION 3.17. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer shall execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) 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, (x) payments to the Servicer, the
Owner Trustee and the Certificateholders as contemplated by, and to the extent
funds are available for such purpose under, the Sale and Servicing Agreement or
the Trust Agreement and (y) payments to the Indenture Trustee pursuant to
Section 1(a)(ii) of the Administration Agreement. The Issuer shall not, directly
or indirectly, make payments to or distributions from the Collection Account
except in accordance with this Indenture and the Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and of each default on the part of any party to the Sale and
Servicing Agreement or the Purchase Agreement with respect to any of the
provisions thereof.
SECTION 3.20. Removal of Administrator. For so long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection therewith.
37
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12 and 3.13 hereof, (v) the rights, obligations and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee under
Section 6.7 and the obligations of the Indenture Trustee under Section 4.3), and
(vi) the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them,
and the Indenture Trustee, on demand of and at the expense of the Issuer, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to the Notes, 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 provided in Section 2.6 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
3.3) have been delivered to the Indenture Trustee for cancellation;
or
(2) all Notes not theretofore delivered to the Indenture Trustee for
cancellation have become due and payable and the Issuer has
irrevocably deposited or caused to be irrevocably deposited with the
Indenture Trustee cash or direct obligations of or obligations
guaranteed by the United States of America (which will mature prior
to the date such amounts are payable), in trust for such purpose, in
an amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Indenture Trustee for
cancellation when due to the applicable Final Scheduled Payment Date
or Redemption Date (if Notes shall have
38
been called for redemption pursuant to Section 10.1(a)), as the case
may be;
(B) the Issuer has paid or caused to be paid all other sums payable
hereunder and under any of the other Basic Document by the Issuer;
(C) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or
the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable
requirements of Section 11.1(a) and, subject to Section 11.2, each
stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been
complied with; and
(D) the Issuer has delivered to the Indenture Trustee an Opinion of
Counsel to the effect that the satisfaction and discharge of the
Notes pursuant to this Section 4.1 will not cause any Noteholder to
be treated as having sold or exchanged any of its Notes for purposes
of Section 1001 of the Code.
SECTION 4.2. Satisfaction, Discharge and Defeasance of the Notes.
(a) Upon satisfaction of the conditions set forth in subsection (b)
below, the Issuer shall be deemed to have paid and discharged the entire
indebtedness on all the Notes Outstanding, and the provisions of this Indenture,
as it relates to such Notes, shall no longer be in effect (and the Indenture
Trustee, at the expense of the Issuer, shall execute proper instruments
acknowledging the same), except as to:
(i) the rights of Holders of Notes to receive, from the trust
funds described in subsection (b)(i) hereof, payment of the principal of
and interest on the Notes Outstanding at maturity of such principal or
interest;
(ii) the obligations of the Issuer with respect to the Notes
under Sections 2.5, 2.6, 3.2 or 3.3 hereof;
39
(iii) the obligations of the Issuer to the Indenture Trustee
under Section 6.7 hereof; and
(iv) the rights, powers, trusts and immunities of the
Indenture Trustee hereunder and the duties of the Indenture Trustee
hereunder.
(b) The satisfaction, discharge and defeasance of the Notes pursuant
to subsection (a) of this Section 4.2 is subject to the satisfaction of all of
the following conditions:
(i) the Issuer has deposited or caused to be deposited
irrevocably (except as provided in Section 4.4 hereof) with the Indenture
Trustee as trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Notes, which,
through the payment of interest and principal in respect thereof in
accordance with their terms will provide, not later than one day prior to
the due date of any payment referred to below, money in an amount
sufficient, in the opinion of a nationally recognized firm of independent
certified public accountants expressed in a written certification thereof
delivered to the Indenture Trustee, to pay and discharge the entire
indebtedness on the Notes Outstanding, for principal thereof and interest
thereon to the date of such deposit (in the case of Notes that have become
due and payable) or to the maturity of such principal and interest, as the
case may be;
(ii) such deposit will not result in a breach or violation of,
or constitute an event of default under, any other agreement or instrument
to which the Issuer is bound;
(iii) no Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit or on the
ninety-first (91st) day after such date;
(iv) the Issuer has delivered to the Indenture Trustee an
Opinion of Counsel to the effect that the satisfaction, discharge and
defeasance of the Notes pursuant to this Section 4.2 will not cause any
Noteholder to be treated as having sold or exchanged any of its Notes for
purposes of Section 1001 of the Code; and
40
(v) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the defeasance contemplated by this
Section 4.2 have been complied with.
SECTION 4.3. Application of Trust Money. All monies deposited with
the Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Holders of the particular Notes for the
payment or redemption of which such monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest, but such monies need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.4. 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 to such Notes shall, upon demand
of the Issuer, be paid to the Indenture Trustee to be held and applied according
to Section 3.3 and thereupon such Paying Agent shall be released from all
further liability with respect to such monies.
41
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default. "Event of Default," wherever used
herein, means the occurrence of 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 (5) days or more; or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due
and payable; or
(iii) default in the observance or performance of any material
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 5.1 specifically
dealt with), or any representation or warranty of the Issuer made in
this Indenture or in any certificate or other writing delivered
pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall
have been made, and such default shall continue or not be cured, or
the circumstance or condition in respect of which such
misrepresentation or warranty was incorrect shall not have been
eliminated or otherwise cured, for a period of sixty (60) days or in
the case of a materially incorrect representation and warranty
thirty (30) days, after there shall have been given, by registered
or certified mail, to the Issuer by the Indenture Trustee or to the
Issuer and the Indenture Trustee by the Holders of not less than 25%
of the principal amount of the Notes Outstanding, a written notice
specifying such default or incorrect representation or warranty and
requiring it to be remedied and stating that such notice is a notice
of Default hereunder; or
42
(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 Trust Estate in an involuntary case under
any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the Trust
Estate, or ordering the winding-up or liquidation of the Issuer's
affairs, and such decree or order shall remain unstayed and in
effect for a period of sixty (60) consecutive days; or
(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 Trust Estate, or the making by the Issuer of
any general assignment for the benefit of creditors, or the failure
by the Issuer generally to pay its debts as such debts become due,
or the taking of any action by the Issuer in furtherance of any of
the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five (5) days after
the occurrence thereof, written notice in the form of an Officer's Certificate
of any event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii), its status and what action the Issuer is
taking or proposes to take with respect thereto.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. (a)
If an Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee or the Holders of Notes representing not less than a
majority of the principal amount of the Notes Outstanding may declare all the
Notes to be immediately due and payable, by a notice in writing to the Issuer
(and to the Indenture Trustee if given by Noteholders), and upon any such
declaration the unpaid principal amount of such Notes, together with accrued and
unpaid interest thereon through the date of acceleration, shall become
immediately due and payable.
43
(b) At any time after a declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the amount due has been
obtained by the Indenture Trustee as hereinafter provided in this Article V, the
Holders of Notes representing a majority of the principal amount of the Notes
Outstanding, by written notice to the Issuer and the Indenture Trustee, may
rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on all
Notes and all other amounts that would then be due hereunder or upon
such Notes if the Event of Default giving rise to such acceleration
had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee and its agents and counsel and
other amounts due and owing to the Indenture Trustee pursuant to
Section 6.7; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five (5) days, or (ii) default is made in
the payment of the principal of or any installment of the principal of any Note
when the same becomes due and payable, the Issuer shall, upon demand of the
Indenture Trustee, pay to the Indenture Trustee, for the benefit of the Holders
of the Notes, 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 rate borne by the Notes and in addition thereto
such further amount
44
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee and its agents and counsel and other amounts due and owing to
the Indenture Trustee pursuant to Section 6.7.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and collect
in the manner provided by law out of the property of the Issuer or other obligor
upon such Notes, wherever situated, the monies adjudged or decreed to be
payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) 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 Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or 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:
(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 neces-
45
sary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the
Indenture Trustee and each predecessor Indenture Trustee, and their
respective agents, attorneys and counsel, and all other amounts due
and owing to the Trustee pursuant to Section 6.7) and of the
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee,
a standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to pay all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee or the Holders of Notes allowed in
any judicial proceedings relative to the Issuer, its creditors and
its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, 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 amounts due and
owing to the Trustee pursuant to Section 6.7.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
46
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or Proceedings
instituted by the Indenture Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment, subject to the payment of the
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also
any Proceedings involving the interpretation of any provision of this Indenture
to which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make any
Noteholder a party to any such Proceedings.
SECTION 5.4. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or more of the
following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then 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 Trust
Estate;
(iii) exercise any remedies of a secured party under the
Relevant UCC and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee and the
Noteholders; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
47
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, other than an Event of
Default described in Section 5.1(i) or (ii) and other than if required to sell
the Trust Estate pursuant to the Trust Agreement as a result of the occurrence
of an Insolvency Event with respect to the Seller, unless (A) the Holders of
100% of the principal amount of the Notes Outstanding consent thereto, (B) the
proceeds of such sale or liquidation are sufficient to pay in full the principal
of and the accrued interest on the outstanding Notes and Certificates or (C) the
Indenture Trustee determines that the Trust Estate will not continue to provide
sufficient funds for the payment of principal of and interest on the Notes as
they would have become due if the Notes had not been declared due and payable,
and the Indenture Trustee obtains the consent of Holders of 66-2/3% of the
principal amount of the Notes Outstanding. In determining such sufficiency or
insufficiency with respect to clauses (B) and (C) above, the Indenture Trustee
may, but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out the money or property in the following
order:
(i) first, to the Indenture Trustee for amounts due under
Section 6.7;
(ii) second, to the Servicer for amounts due and unpaid in
respect of Total Servicing Fees;
(iii) third, to Noteholders for amounts due and unpaid on the
Notes in respect of interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Notes for interest;
(iv) fourth, to Holders of the Notes for amounts due and
unpaid on the Notes for principal, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Notes for principal, until the outstanding amount of the Notes
is reduced to zero; and
48
(v) fifth, to the Issuer for amounts required to be
distributed to the Certificateholders and the Final Payment
Certificateholder pursuant to the Trust Agreement and the Sale and
Servicing Agreement.
The Indenture Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 5.4. At least fifteen (15) days before such
record date, the Issuer shall mail to each Noteholder and the Indenture Trustee
a notice that states the record date, the payment date and the amount to be
paid.
SECTION 5.5. Optional Preservation of the Receivables. If the Notes
have been declared to be due and payable under Section 5.2 following an Event of
Default, and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Trust Estate and apply proceeds as if there had been no declaration of
acceleration; provided, however, that Available Funds shall be applied in
accordance with such declaration of acceleration in the manner specified in
Section 4.6(c) of the Sale and Servicing Agreement. It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient funds
for the payment of principal of and interest on the Notes, and the Indenture
Trustee shall take such desire into account when determining whether or not to
maintain possession of the Trust Estate. In determining whether to maintain
possession of the Trust Estate, the Indenture Trustee may, but need not, obtain
and rely upon an opinion of an Independent investment banking or accounting firm
of national reputation as to the feasibility of such proposed action and as to
the sufficiency of the Trust Estate for such purpose.
49
SECTION 5.6. Limitation of Suits. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% of the principal amount
of the Notes Outstanding have made written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of
Default in its own name as Indenture Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(d) the Indenture Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity has failed to
institute such Proceedings; and
(e) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of a majority of the principal amount of the Notes
Outstanding.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
50
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the principal amount of the Notes
Outstanding, the Indenture Trustee in its sole discretion may determine what
action, if any, shall be taken, notwithstanding any other provisions of this
Indenture.
SECTION 5.7. Unconditional Rights of Noteholders To Receive
Principal and Interest. Notwithstanding any other provisions in this Indenture,
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture (or, in the case of redemption, on or after the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.
SECTION 5.8. Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had been
instituted.
SECTION 5.9. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the Noteholders
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission
of the Indenture Trustee or any Holder of any Note to exercise any right or
remedy accruing upon any Default or Event of Default shall impair any such right
or remedy or constitute a waiver of any such Default or Event of Default or any
acquiescence therein. Every right and remedy given by this Article V or by
51
law to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Holders of a majority of
the principal amount of the Notes Outstanding 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:
(a) such direction shall not be in conflict with any rule of
law or with this Indenture;
(b) subject to the express terms of Section 5.4, any direction
to the Indenture Trustee to sell or liquidate the Trust Estate shall
be by Holders of Notes representing not less than 100% of the
principal amount of the Notes Outstanding;
(c) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the Trust
Estate pursuant to such Section, then any direction to the Indenture
Trustee by Holders of Notes representing less than 100% of the
principal amount of the Notes Outstanding to sell or liquidate the
Trust Estate shall be of no force and effect; and
(d) 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 6.1, the Indenture Trustee need not take any action that it determines
might involve it in costs, expenses and liabilities for which it will not be
adequately indemnified or might materially adversely affect the rights of any
Noteholders not consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Notes as provided in Section 5.2, the
Holders of Notes representing not less than a majority of the principal amount
of the Notes Outstanding 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
52
any of the Notes or (b) in respect of a covenant or provision hereof that cannot
be amended, supplemented or modified without the consent of the Holder of each
Note. In the case of any such waiver, the Issuer, the Indenture Trustee and the
Holders of the Notes 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.
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 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder or group of
Noteholders, in each case holding in the aggregate more than 10% of the
principal amount of the Notes Outstanding or (c) 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 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture, and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
53
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be affected
by the seeking, obtaining or application of any other relief under or with
respect to this Indenture. Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Noteholders shall be impaired by the
recovery of any judgment by the Indenture Trustee against the Issuer or by the
levy of any execution under such judgment upon any portion of the Trust Estate
or upon any of the assets of the Issuer. Any money or property collected by the
Indenture Trustee shall be applied in accordance with Section 5.4(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so, and at the
Administrator's expense, the Issuer shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller and the Servicer, as applicable, of each of their obligations to
the Issuer under or in connection with the Sale and Servicing Agreement or by
the Seller of each of its obligations under or in connection with the Purchase
Agreement, and to exercise any and all rights, remedies, powers and privileges
lawfully available to the Issuer under or in connection with the Sale and
Servicing Agreement to the extent and in the manner directed by the Indenture
Trustee, including the transmission of notices of default on the part of the
Seller or the Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Servicer of each of their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and at the direction (which direction shall be in writing
or by telephone, confirmed in writing promptly thereafter) of the Holders of 66-
2/3% of the principal amount of the Notes Outstanding shall, exercise all
rights, remedies, powers, privileges and claims of the Issuer against the Seller
or the Servicer under or in connection with the Sale and Servicing Agreement, or
against the Seller under or in connection with the Purchase Agreement, including
the right or power to take any action to compel or secure performance or
observance by the Seller or the Servicer, as the case may be, of each of their
obligations to the Issuer thereunder and to give any consent, request, notice,
direction, approval, extension, or waiver under the Sale and Servicing Agreement
or the
54
Purchase Agreement, as the case may be, and any right of the Issuer to take such
action shall be suspended.
(c) Promptly following a request from the Indenture Trustee to do so
and at the Administrator's expense, the Issuer agrees to take all such lawful
action as the Indenture Trustee may request to compel or secure the performance
and observance by MMCA of each of its obligations to the Seller under or in
connection with the Purchase 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 Purchase 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 thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by MMCA of each of its obligations under the Purchase
Agreement.
(d) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, and, at the direction (which direction shall be in
writing or by telephone (confirmed in writing promptly thereafter)) of the
Holders of 66-2/3% of the principal amount of the Notes Outstanding shall,
exercise all rights, remedies, powers, privileges and claims of the Seller
against MMCA under or in connection with the Purchase Agreement, including the
right or power to take any action to compel or secure performance or observance
by MMCA of each of its obligations to the Seller thereunder and to give any
consent, request, notice, direction, approval, extension or waiver under the
Purchase Agreement, and any rights of the Seller to take such action shall be
suspended.
55
ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and, if required by
the terms of this Indenture, conforming to the requirements of this
Indenture; however, the Indenture Trustee shall examine the
certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 6.1;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
56
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section
6.1.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing 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
repayment 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 6.1 and to the provisions of
the TIA.
(i) The Indenture Trustee shall not be charged with knowledge of any
Event of Default unless either (1) a Responsible Officer shall have actual
knowledge of such Event of Default or (2) written notice of such Event of
Default shall have been given to the Indenture Trustee in accordance with the
provisions of this Indenture.
SECTION 6.2. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely on any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Indenture Trustee need not investigate any
fact or matters stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in
57
reliance on an Officer's Certificate or Opinion of Counsel unless it is proved
that the Indenture Trustee was negligent in such reliance.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that such action or omission by
the Indenture Trustee does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 6.3. Individual Rights of Indenture Trustee. The Indenture
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with
the same rights it would have if it were not Indenture Trustee. Any Paying
Agent, Note Registrar, co-registrar or co-paying agent hereunder may do the same
with like rights.
SECTION 6.4. Indenture Trustee's Disclaimer. The Indenture Trustee
(i) shall not be responsible for, and makes no representation, as to the
validity or adequacy of this Indenture or the Notes and (ii) shall not be
accountable for the Issuer's use of the proceeds from the Notes, or responsible
for any statement of the Issuer in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes other than the Indenture
Trustee's certificate of authentication.
SECTION 6.5. Notice of Defaults. If a Default occurs and is
continuing and if it is known to a Responsible Officer of the Indenture Trustee,
the Indenture Trustee shall mail to each Noteholder notice of such Default
within ninety (90) days after it occurs. Except in the case of a Default in
payment of
58
principal of or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note), the Indenture Trustee may
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Noteholders.
SECTION 6.6. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information prepared by the
Servicer pursuant to Section 3.9 of the Sale and Servicing Agreement as may be
required to enable such Holder to prepare its federal and state income tax
returns.
SECTION 6.7. Compensation and Indemnity. (a) The Issuer shall, or
shall cause the Administrator to, pay to the Indenture Trustee from time to time
reasonable compensation for its services. The Indenture Trustee's compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall, or shall cause the Administrator to, reimburse the
Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by
it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall, or shall cause the Administrator to,
indemnify the Indenture Trustee against any and all loss, liability or expense
(including attorneys' fees) 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 Servicer to, defend
any such claim, and the Indenture Trustee may have separate counsel and the
Issuer shall, or shall cause the Servicer to, pay the fees and expenses of such
counsel. Neither the Issuer nor the Administrator need reimburse any expense or
indemnity 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 payment obligations to the Indenture Trustee
pursuant to this Section 6.7 shall survive the resignation or removal of the
Indenture Trustee and the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses
59
of administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.
SECTION 6.8. Replacement of Indenture Trustee. (a) No resignation or
removal of the Indenture Trustee, and no appointment of a successor Indenture
Trustee, shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.8. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Holders of a majority in
principal amount of the Notes Outstanding may remove the Indenture Trustee
without cause by so notifying the Indenture Trustee and the Issuer and may
appoint a successor Indenture Trustee. The Issuer shall remove the Indenture
Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
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.
(b) Any 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
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.
60
(c) If a successor Indenture Trustee does not take office within
sixty (60) days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Issuer or the Holders of a majority in principal
amount of the Notes Outstanding may petition any court of competent jurisdiction
for the appointment of a successor Indenture Trustee. If the Indenture Trustee
fails to comply with Section 6.11, any Noteholder may petition any court of
competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
(d) Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section 6.8, the Issuer's and the Administrator's obligations
under Section 6.7 shall continue for the benefit of the retiring Indenture
Trustee.
SECTION 6.9. Successor Indenture Trustee by Merger. (a) If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association without any further act shall be the
successor Indenture Trustee; provided, that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11. The
Indenture Trustee shall provide the Rating Agencies with prior written notice of
any such transaction.
(b) In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture, any of the Notes shall have been authenticated but
not delivered, any such successor to the Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such Notes
so authenticated, and in case at that time any of the Notes shall not have been
authenticated, to any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee. In all such cases such certificates shall
have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee. (a) Notwithstanding any other provisions of this Indenture,
at any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Trust Estate may at the time be located,
the Indenture Trustee shall have the power and may execute and deliver an
instrument to appoint one or more Persons to act as a co-trustee or co-trustees,
or separate
61
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 Trust Estate, 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 trustee under Section 6.11 and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee and such
separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee shall not be authorized to act
separately without the Indenture Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Indenture Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including
the holding of title to the Trust Estate or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property
62
specified in its instrument of appointment, either jointly with the Indenture
Trustee or separately, as may be provided therein, subject to all the provisions
of this Indenture, specifically including every provision of this Indenture
relating to the conduct of, affecting the liability of, or affording protection
to, the Indenture Trustee. Every such instrument shall be filed with the
Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
the Indenture Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate trustee
or co-trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The Indenture
Trustee or its parent shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of condition
and shall have a long-term debt rating of investment grade by each of the Rating
Agencies or shall otherwise be acceptable to each of the Rating Agencies. The
Indenture Trustee shall comply with TIA Section 310(b).
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 TIA Section 311(a) to the extent indicated.
SECTION 6.13. Pennsylvania Motor Vehicle Sales Finance Act Licenses.
The Indenture Trustee shall use its best efforts to maintain the effectiveness
of all licenses required under the Pennsylvania Motor Vehicle Sales Finance Act
in connection with this Indenture and the transactions contemplated hereby until
the lien and security interest of this Indenture shall no longer be in effect in
accordance with the terms hereof.
63
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer shall furnish or cause to be furnished to the
Indenture Trustee (a) not more than five (5) days after each Record Date, a
list, in such form as the Indenture Trustee may reasonably require, of the names
and addresses of the Holders of Notes as of such Record Date and (b) at such
other times as the Indenture Trustee may request in writing, within thirty (30)
days after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than ten (10) days prior to the time such list is
furnished; provided, however, that so long as (i) the Indenture Trustee is the
Note Registrar or (ii) the Notes are issued as Book-Entry Notes, no such list
shall be required to be furnished.
SECTION 7.2. Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.1 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.1 upon receipt of
a new list so furnished.
(b) Noteholders may communicate pursuant to TIA 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 7.3. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (15) days
after the Issuer is required to file the same with the Commission,
copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and
64
regulations prescribe) that the Issuer may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with the rules and regulations prescribed from time to
time by the Commission such additional information, documents and
reports with respect to compliance by the Issuer with the conditions
and covenants of this Indenture as may be required from time to time
by such rules and regulations; and
(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 7.3(a) and by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall correspond to the calendar year.
SECTION 7.4. Reports by Indenture Trustee. (a) If required by TIA
Section 313(a), within sixty (60) days after each March 31, beginning with March
31, 1998, the Indenture Trustee shall mail to 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).
(b) A copy of each report at the time of its mailing to Noteholders
shall be filed by the Indenture Trustee with the Commission and each stock
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any stock exchange.
65
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture and the Sale
and Servicing Agreement. The Indenture Trustee shall apply all such money
received by it as provided in this Indenture and the Sale and Servicing
Agreement. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Trust Estate, the Indenture Trustee may take
such action as may be appropriate to enforce such payment or performance,
including the institution and prosecution of appropriate Proceedings. Any such
action shall be without prejudice to any right to claim a Default or Event of
Default under this Indenture and any right to proceed thereafter as provided in
Article V hereunder.
SECTION 8.2. Trust Accounts, the Reserve Account and the Yield
Supplement Account. (a) On or prior to the Closing Date, the Issuer shall cause
the Servicer to establish and maintain, in the name of the Indenture Trustee,
for the benefit of the Noteholders and the Certificateholders, the Trust
Accounts, the Reserve Account and the Yield Supplement Account as provided in
Sections 4.1, 4.7 and 5.1 of the Sale and Servicing Agreement.
(b) On or before each Payment Date, the Servicer shall deposit (to
the extent of amounts available therefor) the Total Required Payment with
respect to the preceding Collection Period in the Collection Account as provided
in Section 4.2 of the Sale and Servicing Agreement. On or before each Payment
Date, all amounts required to be deposited in the Note Payment Account with
respect to the preceding Collection Period pursuant to Sections 4.6 and 4.7 of
the Sale and Servicing Agreement shall be withdrawn by the Indenture Trustee
from the Collection Account and/or the Reserve Account and deposited to the Note
Payment Account for payment pro rata to Noteholders on such Payment Date.
66
(c) On each Distribution Date and Redemption Date, the Indenture
Trustee (or any other Note Paying Agent) shall distribute all amounts deposited
in the Note Payment Account pursuant to paragraph 9b) above to Noteholders in
respect of the Notes to the extent of amounts payable on the Notes for principal
and interest in the following amounts and in the following order of priority
(except as otherwise provided in Section 5.4(b)):
(i) the Accrued Note Interest, to the Noteholders; provided
that if there are not sufficient funds received to pay the entire amount of the
Accrued Note Interest, the amounts so received shall be applied to the payment
of such interest on the Notes on a pro rata basis;
(ii) the Noteholders' Principal Payment Amount, to the
Noteholders of the Class A-1 Notes until the principal amount of the outstanding
Class A-1 Notes has been paid in full; provided that if there are not sufficient
funds received to pay the principal amount of the outstanding Class A-1 Notes in
full, the amounts so received shall be applied to the payment of principal on
the Class A-1 Notes on a pro rata basis;
(iii) the Noteholders' Principal Payment Amount, to the
Noteholders of the Class A-2 Notes until the principal amount of the outstanding
Class A-2 Notes has been paid in full; provided that if there are not sufficient
funds received to pay the principal amount of the outstanding Class A-2 notes in
full, the amounts so received shall be applied to the payment of principal on
the Class A-2 Notes on a pro rata basis;
(iv) the Noteholders' Principal Payment Amount, the
Noteholders of the Class A-3 Notes until the principal amount of the outstanding
Class A-3 Notes has been paid in full; provided that if there are not sufficient
funds received to pay the principal amount of the outstanding Class A-3 Notes in
full, the amounts so received shall be applied to the payment of principal on
the Class A-3 Notes on a pro rata basis; and
(v) the Noteholders' Principal Payment Amount, to the
Noteholders of the Class A-4 Notes until the principal amount of the outstanding
Class A-4 Notes has been paid in full; provided that if there are not sufficient
funds received to pay the principal amount of the outstanding Class A-4 notes in
full, the amounts so received shall be applied to the payment of principal on
the Class A-4 Notes on a pro rata basis.
67
SECTION 8.3. General Provisions Regarding Accounts. (a) So long as
no Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Collection Account, the Payahead Account, the
Reserve Account and the Yield Supplement Account shall be invested by the
Indenture Trustee at the direction of the Servicer in Permitted Investments as
provided in Sections 4.1, 4.7 and 5.1 of the Sale and Servicing Agreement. All
income or other gain (net of losses and investment expenses) from investments of
monies deposited in the Collection Account, the Payahead Account, the Reserve
Account and the Yield Supplement Account shall be withdrawn by the Indenture
Trustee from such accounts and distributed (but only under the circumstances set
forth in the Sale and Servicing Agreement in the case of the Reserve Account and
the Yield Supplement Account) as provided in Sections 4.1, 4.7 and 5.1 of the
Sale and Servicing Agreement. The Servicer shall not direct the Indenture
Trustee to make any investment of any funds or to sell any investment held in
any of the Trust Accounts or in the Reserve Account or the Yield Supplement
Account unless the security interest Granted and perfected in such account will
continue to be perfected in such investment or the proceeds of such sale, in
either case without any further action by any Person, and, in connection with
any direction to the Indenture Trustee to make any such investment or sale, if
requested by the Indenture Trustee, the Issuer shall deliver to the Indenture
Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such
effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in
any way be held liable by reason of any insufficiency in any of the Trust
Accounts or in the Reserve Account or the Yield Supplement Account resulting
from any loss on any Permitted Investment included therein, except for losses
attributable to the Indenture Trustee's failure to make payments on such
Permitted Investments issued by the Indenture Trustee, in its commercial
capacity as principal obligor and not as trustee, in accordance with their
terms.
(c) If (i) the Servicer shall have failed to give investment
directions for any funds on deposit in the Collection Account, the Payahead
Account, the Reserve Account or the Yield Supplement Account to the Indenture
Trustee by 11:00 a.m. New York Time (or such other time as may be agreed by the
Issuer and Indenture Trustee) on the Business Day preceding each Payment Date or
(ii) to the knowledge of a Responsible Officer of the Indenture Trustee, a
Default or Event of Default shall have occurred and be continuing with respect
to the Notes but the Notes shall not have been declared due and payable pursuant
to Section 5.2 or (iii) if such Notes shall have been declared due and payable
following an Event of Default, amounts collected or receivable from the Trust
68
Estate are being applied in accordance with Section 5.4 as if there had not been
such a declaration, then the Indenture Trustee shall, to the fullest extent
practicable, invest and reinvest funds in such Trust Accounts, the Reserve
Account or the Yield Supplement, as the case may be, in one or more Permitted
Investments as set forth in Schedule I hereto.
SECTION 8.4. Release of Trust Estate. (a) Subject to the payment of
its fees and expenses pursuant to Section 6.7, the Indenture Trustee may, and
when required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee's interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by the Indenture Trustee as provided in this Article VIII
shall be bound to ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.7 have
been paid in full, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture and release to the Issuer or
any other Person entitled thereto any funds then on deposit in the Trust
Accounts. The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.4(b) only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, 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 11.1.
SECTION 8.5. Opinion of Counsel. The Indenture Trustee shall receive
at least seven (7) days notice when requested by the Issuer to take any action
pursuant to Section 8.4(a), accompanied by copies of any instruments involved,
and the Indenture Trustee shall also require, except in connection with any
action contemplated by Section 8.4(b), as a condition to such action, an Opinion
of Counsel, in form and substance satisfactory to the Indenture Trustee, stating
the legal effect of any such action, outlining the steps required to complete
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 Trust Estate. Counsel rendering any such opinion may rely, without
independent investigation,
69
on the accuracy and validity of any certificate or other instrument delivered to
the Indenture Trustee in connection with any such action.
70
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject
or required to be subjected to the lien of this Indenture, or to
subject to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer, and
the assumption by any such successor of the covenants of the Issuer
herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Holders of the Notes, 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 that may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture which will not be
inconsistent with other provisions of the Indenture;
(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 Inden-
71
ture as shall be necessary to facilitate the administration of the
trusts hereunder by more than one trustee, pursuant to the
requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA;
provided, however, that (i) such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder, (ii) the Rating Agency Condition shall have been satisfied with
respect to such action and (iii) such action shall not, as evidenced by an
Opinion of Counsel, cause the Issuer to be characterized for Federal or any then
Applicable Tax State income tax purposes as an association taxable as a
corporation or otherwise have any material adverse impact on the Federal or any
then Applicable Tax State income taxation of any Notes Outstanding or
outstanding Certificates or the Final Payment Certificate or any Noteholder,
Certificateholder or the Final Payment Certificateholder. The Indenture Trustee
is hereby authorized to join in the execution of any such supplemental indenture
and to make any further appropriate agreements and stipulations that may be
therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an
Issuer Order, may, with the consent of not less than a majority of the principal
amount of the Notes Outstanding and with prior notice to the Rating Agencies,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that (i) such
action shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder, (ii) the Rating Agency
Condition shall have been satisfied with respect to such action and (iii) such
action shall not, as evidenced by an Opinion of Counsel, cause the Issuer to be
characterized for Federal or any then Applicable Tax State income tax purposes
as an association taxable as a corporation or otherwise have any material
adverse impact on the Federal or any then Applicable Tax State income taxation
of any Notes Outstanding or outstanding Certificates or the Final Payment
Certificate or any Noteholder, Certificateholder or the Final Payment
Certificateholder.
72
SECTION 9.2. Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also
may, with prior notice to the Rating Agencies and with the consent of the
Holders of not less than a majority of the principal amount of the Notes
Outstanding, 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 modifying in any manner the rights
of the Holders of the Notes under this Indenture; provided, however, that (i)
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder, (ii) the Rating Agency
Condition shall have been satisfied with respect to such action and (iii) such
action shall not, as evidenced by an Opinion of Counsel, cause the Issuer to be
characterized for Federal or any then Applicable Tax State income tax purposes
as an association taxable as a corporation or otherwise have any material
adverse impact on the Federal or any then Applicable Tax State income taxation
of any Notes Outstanding or outstanding Certificates or the Final Payment
Certificate or any Noteholder, Certificateholder or the Final Payment
Certificateholder; and provided, further, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Note affected
thereby:
(i) change the Final Scheduled Payment Date or the date of
payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof, the interest rate thereon or
the Redemption Price with respect thereto, change the provisions of
this Indenture relating to the application of collections on, or the
proceeds of the sale of, the Trust Estate to payment of principal of
or interest on the Notes, or change any place of payment where, or
the coin or currency in which, any Note or the interest thereon is
payable, or impair the right to institute suit for the enforcement
of the provisions of this Indenture requiring the application of
funds available therefor, as provided in Article V, to the payment
of any such amount due on the Notes on or after the respective due
dates thereof (or, in the case of redemption, on or after the
Redemption Date);
(ii) reduce the percentage of the principal amount of the
Notes Outstanding, 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
73
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the principal amount of the
Notes Outstanding required to direct the Indenture Trustee to sell
or liquidate the Trust Estate pursuant to Section 5.4 if the
proceeds of such sale would be insufficient to pay the principal
amount and accrued but unpaid interest on the Notes;
(v) modify any provision of this Indenture specifying a
percentage of the aggregate principal amount of the Notes necessary
to amend this Indenture or the other Basic Documents except to
increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the Basic Documents
cannot be modified or waived without the consent of the Holder of
each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such
calculation) or to affect the rights of the Holders of Notes to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein; or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of
the Trust Estate or, except as otherwise permitted or contemplated
herein, terminate the lien of this Indenture on any such collateral
at any time subject hereto or deprive the Holder of any Note of the
security provided by the lien of this Indenture.
The Indenture Trustee may in its discretion determine whether or not any Notes
would be affected by any supplemental indenture and any such determination shall
be conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be liable
for any such determination made in good faith.
74
It shall not be necessary for any Act of Noteholders under this
Section 9.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section 9.2, the Indenture
Trustee shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and that all conditions precedent to
the execution and delivery of such supplemental indenture have been satisfied.
The Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture that affects the Indenture Trustee's own rights, duties,
liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of 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 Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.5. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
75
SECTION 9.6. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
76
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1. Redemption. (a) The Notes are subject to redemption in
whole, but not in part, at the direction of the Servicer pursuant to Section
9.1(a) of the Sale and Servicing Agreement, on any Payment Date on which the
Servicer exercises its option to purchase the assets of the Issuer pursuant to
said Section 9.1(a), and the amount paid by the Servicer shall be treated as
collections of Receivables and applied to pay the unpaid principal amount of the
Notes and the Certificates plus accrued and unpaid interest thereon, together
with the unpaid principal amount of the Final Payment Certificate. The Servicer
or the Issuer shall furnish the Rating Agencies and the Noteholders notice of
such redemption. If the Notes are to be redeemed pursuant to this Section
10.1(a), the Servicer or the Issuer shall furnish notice of such election to the
Indenture Trustee not later than twenty (20) days prior to the Redemption Date
and the Issuer shall deposit by 10:00 A.M. (New York City time) on the
Redemption Date with the Indenture Trustee in the Note Payment Account the
Redemption Price of the Notes to be redeemed, whereupon all such Notes shall be
due and payable on the Redemption Date.
(b) In the event that the assets of the Issuer are sold pursuant to
Section 9.2 of the Trust Agreement, all amounts on deposit in the Note Payment
Account shall be paid to the Noteholders up to the unpaid principal amount of
the Notes and all accrued and unpaid interest thereon. If the amounts are to be
paid to Noteholders pursuant to this Section 10.1(b), the Servicer or the Issuer
shall, to the extent practicable, furnish notice of such event to the Indenture
Trustee not later than twenty (20) days prior to the Redemption Date, whereupon
all such amounts shall be payable on the Redemption Date.
SECTION 10.2. Form of Redemption Notice. Notice of redemption under
Section 10.1(a) shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted promptly following
receipt of notice from the Issuer or Servicer pursuant to Section 10.1(a), but
not later than ten (10) 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 or facsimile number
appearing in the Note Register.
All notices of redemption shall state:
77
(i) the Redemption Date;
(ii) the Redemption Price; and
(iii) 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 3.2).
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 10.3. Notes Payable on Redemption Date. The Notes to be
redeemed shall, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1(a)), 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.
78
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions, etc. (a) Upon
any application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section 11.1, except that, in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(A) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(B) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(C) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(D) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b)(i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis
for the release of any property or securities subject to the lien of
this Indenture, the Issuer shall, in addition to any obligation im-
79
posed in Section 11.1(a) or elsewhere in this Indenture, furnish to
the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair
value (within ninety (90) days of such deposit) to the Issuer of the
Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(i) above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to
the Issuer of the property or securities to be so deposited and of
all other such securities made the basis of any such withdrawal or
release since the commencement of the then-current fiscal year of
the Issuer, as set forth in the certificates delivered pursuant to
clause (i) above and this clause (ii), is ten percent (10%) or more
of the principal amount of the Notes Outstanding, but such a
certificate need not be furnished with respect to any property or
securities so deposited, if the fair value thereof to the Issuer as
set forth in the related Officer's Certificate is less than $25,000
or less than one percent (1%) of the principal amount of the Notes
Outstanding.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to
the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair
value (within ninety (90) days of such release) of the property or
securities proposed to be released and stating that in the opinion
of such person the proposed release will not impair the security
under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee
an Independent Certificate as to the same matters if the fair value
of the property or securities and of all other property, other than
property as contemplated by clause (v) below or securities released
from the lien of this Indenture since the commencement of the
80
then-current calendar year, as set forth in the certificates
required by clause (iii) above and this clause (iv), equals ten
percent (10%) or more of the principal amount of the Notes
Outstanding, but such certificate need not be furnished in the case
of any release of property or securities if the fair value thereof
as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent (1%) of the principal amount of the
then Outstanding Notes.
(v) Notwithstanding Section 2.10 or any other provisions of
this Section 11.1, the Issuer may, without compliance with the
requirements of the other provisions of this Section 11.1, (A)
collect, liquidate, sell or otherwise dispose of Receivables and
Financed Vehicles as and to the extent permitted or required by the
Basic Documents and (B) make cash payments out of the Trust Accounts
as and to the extent permitted or required by the Basic Documents.
SECTION 11.2. Form of Documents Delivered to Indenture Trustee. (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 say such Person may certify or give an
opinion as to such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Servicer, the Seller, the Administrator or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Servicer, the Seller, the Administrator or the Issuer,
unless such Authoritzed 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.
81
(c) Where any Person is required to make, give or execute two or
more applications, requests, comments, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
(d) Whenever in this Indenture, in connection with any application
or certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to rely upon the
truth and accuracy of any statement or opinion contained in any such document as
provided in Article VI.
SECTION 11.3. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders 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 herein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.1) conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section 11.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be provided by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
82
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in writing and if 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
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at
its Corporate Trust office; or
(ii) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and
mailed first-class, postage prepaid to the Issuer addressed to: MMCA
Auto Owner Trust 1997-1, in care of Wilmington Trust Company,
Attention: Corporate Trust Department, with a copy to the
Administrator at 6363 Katella Avenue, Cypress, California 90630,,
Attention: Vice President, Secretary and Treasurer, or at any other
address previously furnished in writing to the Indenture Trustee by
the Issuer or the Administrator. The Issuer shall promptly transmit
any notice received by it from the Noteholders to the Indenture
Trustee.
Notices required to be given to the Rating Agencies by the Issuer,
the Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, telecopied or mailed by certified mail, return receipt requested, to
(i) in the case of Moody's, at the following address: Xxxxx'x Investors Service,
Inc., ABS Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
(ii) in case of S & P, at the following address: Standard & Poor's Ratings
Services, 00 Xxxxxxxx (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention of Asset
Backed Surveillance Department.
SECTION 11.5. Notices to Noteholders; Waiver. (a) Where this
Indenture provides for notice to Noteholders of any event, such notice shall be
83
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.
(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 11.6. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Paying Agent to such Holder, that is different from the methods provided for in
this Indenture for such payments or notices. The Issuer shall furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee shall
cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.7. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
84
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control.
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 11.8. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 11.9. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10. Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality, and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or
in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Trust Estate, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 11.12. Legal Holiday. 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
accrued for the period from and after any such nominal date.
SECTION 11.13. Governing Law. This Indenture shall be construed in
accordance with the laws of the State of New York.
85
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Indenture Trustee or any other counsel
reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.
SECTION 11.16. 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, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee 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 capacity), and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting 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
86
connection with any obligations relating to the Notes, this Indenture or any of
the Basic Documents.
SECTION 11.18. Inspection. The Issuer agrees that, with reasonable
prior notice, it will permit any representative of the Indenture Trustee, during
the Issuer's normal business hours, to examine all the books of account,
records, reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with the
Issuer's officers, employees, and Independent certified public accountants, all
at such reasonable times and as often as may be reasonably requested. The
Indenture Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
87
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
MMCA AUTO OWNER TRUST 1997-1
By: WILMINGTON TRUST COMPANY
not in its individual
capacity but solely as Owner Trustee
By:
----------------------------
Name:
Title:
BANK OF TOKYO - MITSUBISHI
TRUST COMPANY
not in its individual
capacity but solely as Indenture Trustee
By:
----------------------------
Name:
Title:
00
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for
said county and state, on this day personally appeared , known to me to be the
person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of the said MMCA AUTO OWNER TRUST
1997-1, a Delaware business trust, for the purpose and consideration therein
expressed, and in the capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of _______, 1997.
----------------------------
Notary Public in and for
the State of New York.
[Seal]
My commission expires:
----------------------------
00
XXXXX XX XXX XXXX )
) ss.:
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for
said county and state, on this day personally appeared , known to me to be the
person and officer whose name is subscribed to the foregoing instrument and
acknowledged to me that the same was the act of BANK OF TOKYO - MITSUBISHI TRUST
COMPANY, a New York banking corporation, and that such person executed the same
as the act of said corporation for the purpose and consideration therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this day of _______, 1997.
----------------------------
Notary Public in and for
the State of New York.
[Seal]
My commission expires:
----------------------------
90
SCHEDULE A
[Provided to the Indenture Trustee at the Closing]
SA-1
SCHEDULE I
List of Permitted Investments
Account(s) Permitted Investments
---------- ---------------------------------------------------
Reserve Account Certificates of Deposit of Mitsubishi Bank Limited,
New York Branch
Collection Account, Time deposits of Mitsubishi Bank
Yield Supplement Limited, New York Branch
Account, Payahead
Account
SI-1
EXHIBIT A
[FORM OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $_____
No. CUSIP NO.__________
MMCA AUTO OWNER TRUST 1997-1
____% ASSET BACKED NOTES
MMCA Auto Owner Trust 1997-1, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co., or
registered assigns, the principal sum of _____________________ DOLLARS payable
on each Payment Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $[INSERT INITIAL PRINCIPAL AMOUNT OF
NOTE] and the denominator of which is $_______________ by
A-1
(ii) the aggregate amount, if any, payable from the Note Payment Account in
respect of principal on the Notes pursuant to Section 3.1 of the Indenture dated
as of October 1, 1997, (as amended, supplemented or otherwise modified and in
effect from time to time, the "Indenture") between the Issuer and Bank of Tokyo
- Mitsubishi Trust Company, a New York banking corporation, as Indenture Trustee
(in such capacity the "Indenture Trustee"); provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the earlier of
the _______ Payment Date (the "Final Scheduled Payment Date") and the Redemption
Date, if any, pursuant to Section 10.1 of the Indenture. Capitalized terms used
but not defined herein are defined in Article I of the Indenture, which also
contains rules as to construction that shall be applicable herein.
The Issuer shall pay interest on this Note at the rate per annum
shown above on each Payment Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Payment Date (after giving effect to all payments of principal
made on the preceding Payment Date), subject to certain limitations contained in
Section 3.1 of the Indenture. Interest on this Note will accrue for each Payment
Date from and including the previous Payment Date (or, in the case of the
initial Payment Date, from the Closing Date) to but excluding such Payment Date.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth
on the reverse hereof, which shall have the same effect as though fully set
forth on the face of this Note.
A-2
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK.]
A-3
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
Date:
MMCA AUTO OWNER TRUST 1997-1,
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Owner Trustee under the Trust
Agreement
By:
-------------------------------------------
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Date:
BANK OF TOKYO - MITSUBISHI
TRUST COMPANY,
not in its individual capacity but solely
as Indenture Trustee
By:
-------------------------------------------
Authorized Officer
A-4
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ____% Asset Backed Notes (herein called the "Notes"), all
issued under the Indenture, to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of the Notes will be payable on each Payment Date in an
amount described on the face hereof. "Payment Date" means the fifteenth day of
each month, or, if any such day is not a Business Day, the next succeeding
Business Day, commencing November 17, 1997.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Scheduled Payment Date and
the Redemption Date, if any, pursuant to Section 10.1(a) of the Indenture.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing and the Indenture Trustee or the Holders of the Notes
representing not less than a majority of the Outstanding Amount of the Notes
have declared the Notes to be immediately due and payable in the manner provided
in Section 5.2 of the Indenture. All principal payments on the Notes shall be
made pro rata to the Noteholders entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of the Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that 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.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Note and of any
Note issued upon the
A-5
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not noted hereon. If funds are expected to be available, as provided in the
Indenture, for payment in full of the then remaining unpaid principal amount of
this Note on a Payment Date, then the Indenture Trustee, in the name of and on
behalf of the Issuer, will notify the Person who was the Registered Holder
hereof as of the Record Date preceding such Payment Date by notice mailed or
transmitted by facsimile prior to such Payment Date, and the amount then due and
payable shall be payable only upon presentation and surrender of this Note at
the Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of New
York.
The Issuer shall pay interest on overdue installments of interest at
the Note Interest Rate to the extent lawful.
As provided in the Indenture, the Notes may be redeemed, in whole or
in part, in the manner and to the extent described in the Indenture and the Sale
and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, and
thereupon one or more new Notes of authorized denominations and in the same
aggregate principal amount will be issued to the designated transferee or
transferees. No service charge will be charged for any registration of transfer
or exchange of this Note, but the transferor may be required to pay a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any
A-6
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee, each in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner 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 under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Trust Estate. Each Noteholder, by its acceptance of a Note (and each Note Owner
by its acceptance of a beneficial interest in a Note), agrees to treat the Notes
for federal, state and local income, single business and franchise tax purposes
as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also
A-7
contains provisions permitting the Holders of Notes representing specified
percentages of the Outstanding Amount of the Notes, on behalf of the Holders of
all the Notes, to waive compliance by the Issuer with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Note (or any one or more
Predecessor Notes) shall be conclusive and binding upon such Holder and upon all
future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of Holders of the Notes issued thereunder.
The term "Issuer", as used in this Note, includes any successor to
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
No reference herein to the Indenture, and no provision of this Note
or of the Indenture, shall alter or impair the obligation of the Issuer, which
is absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of Bank of Tokyo - Mitsubishi Trust
Company, in its individual capacity, Wilmington Trust Company, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal or of interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in
A-8
the Indenture. The Holder of this Note, by his acceptance hereof, agrees that,
except as expressly provided in the Basic Documents, in the case of an Event of
Default under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
A-9
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
--------------------------------------------------------------------------------
(name and address of assignee)
the within 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.
A-10
